Enda Kenny
Question:1 Mr. Kenny asked the Taoiseach if he will report on the March 2006 meeting of the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [12892/06]
View answerWednesday, 3 May 2006
Questions (16, 17, 18, 19, 20)
Joe Higgins
Question:2 Mr. J. Higgins asked the Taoiseach the progress made by the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [14273/06]
View answer
Pat Rabbitte
Question:3 Mr. Rabbitte asked the Taoiseach when the cross-departmental team on infrastructure and public private partnership last met; when the committee is due to meet next; and if he will make a statement on the matter. [14447/06]
View answer
Caoimhghín Ó Caoláin
Question:4 Caoimhghín Ó Caoláin asked the Taoiseach if he will report on the work of the cross-departmental team on housing, infrastructure and public private partnerships; and if he will make a statement on the matter. [15168/06]
View answer
Trevor Sargent
Question:5 Mr. Sargent asked the Taoiseach if he will report on the progress of the cross-departmental team on housing, infrastructure and public private partnerships; and if he will make a statement on the matter. [16183/06]
View answerOral answers (45 contributions)
I propose to take Questions Nos. 1 to 5, inclusive, together.
The cross-departmental team on housing, infrastructure and public private partnerships last met on 4 April. The agenda included a presentation on broadband, which gave an overview of the impact of broadband, our objectives and challenges for the future. An overview of developments in the management and delivery of public private partnership was also presented by the Department of Finance. Transport 21 and the team's annual report were also discussed at this meeting. The annual report has just been finalised and will be published and laid before the Houses shortly. At the team's meeting on 1 March the discussion focused mainly on Transport 21, climate change and energy issues, in particular the overall policy directions to be given to the Environmental Protection Agency in preparing its second national allocation plan. The next meeting of the cross-departmental team is scheduled for 10 May 2006. The team continues to assist in progressing and resolving issues relating to infrastructure planning and delivery.
Last week I asked the Taoiseach about advertisements placed in the national media by the cross-departmental team. The Taoiseach responded to the effect that the advertisements were placed for public information and not propaganda purposes. He said if those who designed the advertisements felt they should include a Department's title, a logo or a photograph, that was all right but they should not be used for anything else and should be seen as public information rather than a means of promoting somebody.
That is fair, but I have in my hand the programme for the advertisement for the national development plan. It includes a fine picture of the Minister for Finance and the headline: "Government implements the national development plan." That amounts to promotion rather than public information. Indeed, it can be questioned whether the Government is implementing the national development plan, in view of the regional spending disparities. Does the Taoiseach have a view on these fine pictures?
On the cross-departmental committee on infrastructure and public private partnership, one of the fundamental failures of Government has been its inability to create access to broadband. People who come to Ireland from the US and all over Europe, as well as people in business in the State, are unable to gain access to the broadband communication system. Northern Ireland now has 100% coverage. Has the cross-departmental team discussed local loop unbundling and the obstacles put deliberately in the way of access for businesses and the public to a facility which is, as the Taoiseach said, as important as electricity was many years ago? Will the Taoiseach indicate when we can expect 100% broadband coverage?
Under the national development plan we have seen unprecedented investment in both our economic and social infrastructure. To build on that we are now working on the next national development plan and have initiated a consultation process involving the same range of organisations and groups which were involved in previous plans. There must be consultation and the documents to which the Deputy referred simply advertise the fact that the Government of the day is responsible for these matters.
There was recently a full presentation to the committee on broadband services. All who spoke on that occasion said the relatively late launch of competitive broadband services in this country by telecommunications and cable TV companies resulted in a low ranking in the league tables for take-up. The Government was not satisfied with that state of affairs but significant progress has been made in the past two years and when the figures are scrutinised again, we will be able to determine the current position. It emerged from that discussion and others with chambers of commerce and IBEC that there are now no difficulties for businesses. The Minister for Communications, Marine and Natural Resources set a target in 2004 of 400,000 broadband subscribers by the end of 2006. At that time there were fewer than 100,000 subscribers. It was estimated at our last meeting that there were approximately 320,000 subscribers in the first quarter of this year, so the roll-out of the service is progressing well.
Ireland's per capita broadband penetration is now 8%, while in the EU 25 the maximum is12%. Two households in ten in Ireland have broadband by comparison with three households in ten in the other EU countries. The figure of 320,000 represents 110% growth in broadband in the past 12 months. In fairness to those involved, the figures are improving dramatically. Broadband take-up has tripled since the target was set in 2004. Ireland’s broadband take-up rate is growing at more than twice that of the EU market — 110% as against 48% in the EU 25. That is understandable because of our low initial take-up. By catching up we are moving at a faster than average rate. The latest official figures from ComReg confirm that there were more than 270,000 broadband customers in the country at the end of last year.
In our liberalised and fully privatised broadband market private commercial broadband providers drive the roll-out of the service. The policies pursued by the Government increase both broadband coverage and competition in that market. Broadband is now available to approximately three quarters of the population and the Government has funded new broadband infrastructure through the national development plan, the metropolitan area networks, MANs, which the European Commission has recently endorsed, and the county and group broadband schemes. The figures are impressive. I readily admit they were slow to get started but that is being addressed. Given the number of operators in the field, the competition benefits consumers in that people get good value compared with four or five years ago.
Is the Taoiseach aware of a speech made by his colleague, the Minister for Finance, Deputy Cowen, at the second Irish public private partnership policy forum on 5 April 2006? Is it not clear from that speech and from what the Taoiseach himself says that so-called public private partnership is really a flag under which this Government is relentlessly pushing the privatisation of public services? Is public private partnership not a mechanism to channel lucrative State contracts to private developers and companies, many of whom contribute to right wing political parties?
What does the Taoiseach make of the Minister for Finance's boast that a large number of water projects are now being developed on a design-build-operate basis? Will the Government's next step be to privatise the water supply to homes, thereby reintroducing water charges which a people's movement forced out previously as an unjust extra tax?
Is the Taoiseach satisfied with how Dublin City Council operates the public private partnership policies of his Government? Public housing projects are being effectively turned over to private developers.
Perhaps the Deputy's more detailed questions would be more appropriately directed to the line Minister. General questions may be asked of the Taoiseach.
I am illustrating with one or two examples the effects of Government policy because that is how such matters are perceived locally. I want the Taoiseach to be answerable for that. The only reason the Government is driving public private partnerships is for ideological reasons and to facilitate powerful private corporate companies. The experience of the Jarvis schools shows that if schools were provided in the traditional way, in the long run it would be much cheaper for the taxpayer.
Spending under the public capital programme is at a record level. Many of the projects referred to by the Deputy are being delivered by it. In many cases — I accept not all — PPPs provide services such as water and sewerage schemes and housing and education services in a more efficient and speedy manner.
I have said many times in the past few years in answer to questions that until the Minister for Finance made changes, which he did recently, to the partnership rules, PPPs were not attracting enough of a critical mass of operators. It was not the case that investors saw great financial benefits from the process, rather they did not come here.
PPPs help in the delivery of sound capital projects on top of what the State is doing with its record level of spending under the capital programme. Good progress is being made in those projects under the control of the National Development Finance Agency. Many roads projects have been completed well in time and under budget to the highest international standards. This has also been the case in the provision of clean water and the removal of difficulties with sewerage systems. Dublin City Council has been involved in many of these schemes with the National Development Finance Agency and the Department of the Environment, Heritage and Local Government. Providing many such services would have taken longer if we were working in the traditional way. It does not happen in every case, but in many cases it does.
The Taoiseach has started discussions for a new social contract. In respect of the commitment in the last one to provide 10,000 affordable houses, how many of these have been built? Is the national spatial strategy still Government policy, given that it was ignored during the ill-considered and rushed announcement of the decentralisation programme?
Is the cross-departmental team involved in examining issues other than strategic ones, such as the particular route of the proposed Dublin metro? Is it involved in giving guidance on such matters? With the problems identified in the delivery of public private projects so far, does the team address the issue of waste in the delivery of those projects? Does it consider whether lessons can be learned from past mistakes in projects to ensure they can be delivered more efficiently in the future?
The cross-departmental group has dealt with those issues, mainly through submitting reports to Cabinet sub-committees. I hope there will be greater success in the delivery on a cross-departmental basis of water and sewerage programmes and roads programmes. Most of the issues concerned cover at least four or five Departments. The senior officials group and the individuals concerned work closely together. Departments involved include the Departments of the Environment, Heritage and Local Government, Transport, Finance, Agriculture and Food and Education and Science. In all the areas referred to by the Deputy, the Departments have been engaged in these issues in recent years.
Substantial progress continues to be made in the provision of social housing under Sustaining Progress. Some 70 projects on State and local authority lands are planned. Together with Part V housing provision, more than 10,000 housing units will be provided. Many of the units have yet to be delivered and in many cases it may take another few years. Suitable lands have been identified. The affordable housing initiative process which was established last year is working to deliver the units. It is reckoned that between 2006 and 2008, 15,000 housing units will be provided. The Affordable Homes Partnership Agency is considering in several areas swapping land for housing units, following the Harcourt Street model. That would be the fastest way to achieve housing provision.
The 2004 legislation facilitates direct sale of affordable housing from builders to eligible persons nominated by the planning authorities. That matter is being pursued by the Irish Home Builders Association with a view to ensuring accelerated delivery in Part V areas and affordable housing. On many of the State lands, the planning process, local authority commitment and approval and service delivery will take time. More housing units will be rolled out this year, but it will take until 2008 before the figure of 15,000 is reached.
The national spatial strategy is still Government policy. It is taken into account in the national development plan and in other planning initiatives.
Does it include the decentralisation programme?
We are taking it into account in all those areas.
The proposed metro route has been discussed by the cross-departmental team. Its report on the authority for the greater Dublin area has been completed and discussed at the relevant Cabinet sub-committee. The structure presented in the report to the Minister will be discussed and decisions will be made in the next few months.
I recognise Mr. Robert McBride in the Distinguished Visitors Gallery. He is a former member of the post-apartheid South African Government, a former political prisoner and ANC activist. He is a grandson of the executed 1916 Rising leader, Major John McBride. I extend our welcome to him.
What proportion of the cross-departmental team's work is focused on the issue of housing? We have addressed this issue in the past. Does it address, for instance, spiralling house prices? The Taoiseach recently stated there is no great problem with the property market, that we should not be concerned with the relentless rise in borrowings for overpriced houses and that there was no indication of a downturn in the property market. Does he stand over these views, particularly in the context of the warning from the Irish Financial Services Regulatory Authority to banks to set more money aside for mortgage defaults? What is the Taoiseach's view of the concern expressed by the ESRI, the OECD and the Central Bank about the dangers of an over-valuation of the property market? In the first three months of 2006, average national house prices have risen by 3.5%, compared to just 1% in 2005.
Sorry, Deputy, the question might be better addressed to the line Minister.
The Taoiseach recently spoke on this issue from a particular viewpoint. Is the Taoiseach aware the average house price across the State in the first three months of this year increased by almost €10,000 on the figure recorded for December 2005? Many people find it difficult to balance the Taoiseach's recently expressed views and these facts. Will the Taoiseach ask the cross-departmental team, in its remit for infrastructure, to address the displacement of so many young people from this city into neighbouring counties in Leinster and beyond, with the infrastructural demands that places on our system? Will the team consider the reality of the contribution of the spiralling cost of housing to the infrastructural demand beyond this city's limits?
Apart from repeating the mantra that increasing supply will bring down the price of housing, does the Government have any other proposals that will bring some solace and relief to young couples who are struggling to secure a home?
That question is more appropriate to the line Minister.
The Deputy asked if the cross-departmental team spends much time on housing — it does and it spends much time on housing, roads and other essential infrastructure. The Minister and Ministers of State have spelt out a range of issues in these areas and there is no need for me to go into them.
The Deputy knows I did not say I was satisfied with the rate of increase in house prices. That is why I talk about supply — the greater the supply, the more likely it is there will be control on the demand side and that there will be areas where house prices do not go up. When the population and the standard of living is rising, and people are working, demand will exist.
The point I was making was that the value of housing stock is estimated at €500 billion while the mortgage value is €100 billion. That is not to say I do not wish for prices to moderate, for supply and balanced regional development, but with those figures anyone looking at a balance sheet would ask how that adds up to a difficulty.
That does not take away from all the initiatives that are under way. The cross-departmental team is primarily interested in an affordable housing partnership, with mortgage finance from private lending agencies available for affordable housing applicants and it has made good progress there. On the direct sale of affordable housing, it has co-ordinated the delivery of affordable housing between the four local authorities in the Dublin area and Kildare, Meath and Wicklow. It has brought forward additional land and been involved in a host of areas to make it easier for people to get affordable homes and it continues to do that.
Admittedly, as I said to Deputy Rabbitte, some of the schemes it has introduced take time. The affordable homes partnership was only set up in August and has now asked the industry for ideas about this. It is examining the submissions it received in this area at Christmas. It is actively engaged and communicating efficiently so that young people will have better information about affordable housing options and streamlining the process for young people making applications for affordable housing. In fairness to those involved, they are doing a good job.
When I tabled a question on the cross-departmental team on housing, infrastructure and public private partnerships, I was thinking about the report of the National Economic and Social Council, Housing in Ireland, Performance and Policy, which recommended in 2004 an additional 73,000 social housing units to be produced between 2007 and 2012, roughly 10,000 a year. Will the Taoiseach acknowledge that he just cannot keep his word on that? In 2005, 6,477 social housing units were provided, slightly up on 2004.
The Taoiseach cannot keep his word on the quantity so what will he do about the quality? Will he insist upon energy efficiency as a requirement for local authorities, an area where Fingal County Council has given leadership? Is the Taoiseach considering the need to reverse the decision the Government made to allow developers to pay cash to local authorities instead of building social houses? Has the Taoiseach evaluated that decision?
That is a question for the line Minister.
The cross-departmental team will have a strong influence on that decision.
It is still a detailed question that should be addressed to the line Minister.
I also asked about renewable energy infrastructure. Is the Taoiseach embarrassed that the European Union has decided to prosecute the Government for its failure to implement a renewable energy strategy? It must be acknowledged that as a State we have not delivered on our potential in this area.
The most damning evidence is that Dr. James Wickham, director of the employment research centre at Trinity College, Dublin, in the business section of The Irish Times, stated that Dublin workers are totally car dependent. He is talking about getting from Jobstown to Lucan or Balbriggan to Blanchardstown. Will the Taoiseach address that in terms of public transport? Dr. Wickham describes political inertia as being responsible.
Again, that is a matter for the Minister for Transport.
It will require more than the Minister for Transport because the Minister for Finance, sitting beside the Taoiseach, has a lot to do with it.
I suggest the Deputy submits a question to the Minister for Transport.
The team we are asking about must provide a more integrated, holistic approach than the Government has been able to provide. Will the political inertia mentioned by Dr. Wickham be shifted?
The commitment on affordable housing was that we would give over 10,000 housing units in total that were projected for delivery under the initiative and that will be achieved. It was never envisaged that it could be achieved over the short period of the programme but that the State would identify sites and hand them over. There are now 70 projects with State and local authority lands where this is planned. I would like to see it happen faster but the affordable housing initiative is playing its part, taking into account all it must contend with in terms of planning and other difficulties. The Deputy knows there are often difficulties as a result of objections to social and affordable housing in some areas. Some Members of this House could help us to press on in many of the projects because it is disheartening for those involved with the affordable housing initiative when they are trying to make progress.
Including members of the Green Party.
We have never opposed social housing.
Check south Dublin.
Everyone should work with them to make progress in this area.
We would build them if we were in Government.
We are doing that.
The Minister for Communications, Marine and Natural Resources has launched an initiative to increase the use of renewable energy technology in electricity production to reach an initial target of 400 megawatts of new renewable energy-powered electricity generation plants. That programme will more than double the contribution of renewable sources of electricity production from 5% two years ago to over 13% at the end of the decade. That is in line with the EU directive on the promotion of electricity from renewable energy sources and will increase the total capacity of renewable energy technologies built to 1,450 megawatts. That capacity requires a total investment of more than €400 million. The Deputy asked one other question.
What is the position in regard to car dependency?
Transport 21 is a €34 billion programme dealing with public transport. The Dublin Transport Authority is a new agency to manage all transportation in the greater Dublin area in the years ahead. For decades this country could not afford any capital programme. As the country develops we have to develop that programme. Transport 21 is the biggest public transport programme that has ever been produced here.
And the motorways.
Substantial costs relate to the metro, extension of the Luas lines on which 20 million passengers travelled last year in its first year of operation, doubling the number of DART carriages, and enormous expenditure on the rail lines, work on which has finished. These are all huge public transport projects.
Is the Taoiseach saying the Government is satisfied with the take-up of public private partnerships and about the process that must be gone through? Is he satisfied that the State is able to discriminate between the kind of projects the State ought properly to undertake and could properly undertake more cheaply than through a PPP? I wonder if I understood the Taoiseach's rebuttal of Deputy Sargent's point about the housing stock being worth €500 billion while credit is at €100 billion. Is it not fair to say that there are a great many wealthy people in housing worth €500 billion who have long since retired their mortgages and that it is those with more recent mortgages who, if there were a wobble, would be at risk in terms of the extent of credit available for that segment of the market?
I agree with the Deputy. It is always those with large mortgages, probably in the first three to five years, who bear the pressures. Given the level of increases we need to do all we can to moderate them. We have an increasing population with a strong disposable income and low money costs. When Jean-Claude Trichet said interest rates could be increased from 0.25% to 0.5% that applies pressure but the reality is that a decade ago people felt that if we could get money under 10% it was viable to have substantial mortgages. The argument I was making is that things changed so dramatically that the public do not see these fears as my generation or a later generation saw them. That is the reason people continue to put their money into property. Even if I tried to put a tax on property it would fail because there would be neither political nor public support for such a tax. Therefore, the incentive is for people to put more money into property which sometimes is all right but much of the time it is all wrong. That is the reality.
What will the Government do about it?
I do not think anybody will bring back a property tax if that is what the Deputy is asking. Deputy Rabbitte raised the issue of public private partnerships. I reported to the House, in answer to him some months ago, that the process of identifying projects in the right categories on the capital programme and getting sufficient people who were prepared to go through the PPP process has been achieved. We did not have the expertise in many areas within the system. The Minister for Finance's initiative aims to accelerate delivery of PPPs in the areas identified and advises on the correct areas for key capital infrastructural projects in central Government areas. The new centre for enterprise is in the National Development Finance Agency. Its role has expanded to include procurement functions on behalf of Departments in addition to its existing role. Up to now it acted as an adviser to Departments on public private partnerships. It has now taken over the procurement function for Departments. The agency has commenced the new activity on an interim non-statutory basis.
The Department of Finance and its legal advisers, in consultation with the National Development Finance Agency, will bring forward amendments shortly to amend the legislation. The Minister has strengthened the board. The centre will have the skills and capacity required to support the procurement of key infrastructural projects in the central Government area. It has decided to work on three Departments to start, Education and Science, Health and Children and Justice, Equality and Law Reform. This should improve the deal flow of PPP projects in those three areas. The view is that it should stay with those three Departments for some considerable time. Obviously they are three major Departments. Ministers will continue to be responsible for the assessment of projects, including the decision to procure the project, but the National Development Finance Agency's centre for expertise will be responsible for procuring the projects within the parameters given to it and bring it all the way up to turn-key stage. This is a big change following much trial and error in some of these areas. The National Development Finance Agency has been able to bring some very good people into the process to deal with these large-scale projects.
Will the Taoiseach give an indication of the number of PPP road projects that are under way? Can he indicate the scale of projects where future road tolls will be involved? In other words, are there a number of PPP road projects in respect of which the Government has decided there should be road tolls? Given that the Taoiseach said the Government was in the process of drawing up another national development programme, when does he expect it will be produced? Given that we are one-third of the way through in respect of motorways and national primary routes and approximately 25 years behind in terms of national secondary routes——
That question is certainly one for the line Minister.
It comes under the Transport 21 programme. Will the national development programme address the fact that long after most people have left this House the infrastructure will still have to be provided?
Deputy Kenny will agree that at the current rate of work each year 15 major projects are being completed, approximately 15 start and approximately 15 are under way. At any one time there are between 45 and 50 major projects under way. Twenty years ago the number of projects under way was three and the timescales were much longer as the country did not have the resources, which was not the fault of anybody. There has been a persistent roll-out of projects during the past decade. The National Roads Authority and the local authority system using the compulsory purchase order and the planning regime are now able to plan the inter-city routes and many other routes on the road network. During the next decade I hope we can continue to put in the resources. If those doing the figures are right in terms of demographics, in ten years' time we will have a population of 5 million and in 25 years' time 6 million. In 2025 the population will approach 6 million compared to 20 years ago when we had a population of approximately 3.25 million. This is an enormous population change. If this growth continues — I am always a bit sceptical of such figures because in the early 1980s the same people told us our population would probably reduce to just above 3 million — we will have to plan on that basis.
This will require a large capital programme for the next 20 years to get the country to the scale required for such a population. The good news is that we have the structures, the agencies, the professional offices and, in many cases, the personnel in the State to undertake the required major civil and engineering works. Where we have a difficulty is in the area of the metro and other such developments. Take, for example, the Transport 21 project we put together recently. Who would be Mr. or Ms metro here? Nobody here has the capacity to take on that kind of project. To identify the leaders for these projects in the next few years will be the big challenge for the system. They will have to be paid accordingly. As in other countries, if we are to get the appropriate people to do these jobs, we are talking about sizeable contracts to attract them here. I do not think there is an alternative. We should do it. If we do not, we will be sorry in the future.