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Dáil Éireann díospóireacht -
Wednesday, 4 Apr 1979

Vol. 313 No. 7

Local Government (Toll Roads) Bill, 1978: Committee Stage (Resumed).

Question again proposed: "That section 9 stand part of the Bill."

(Cavan-Monaghan): It is understandable that it is not possible to deal with Committee Stage of a Bill in one session without a break but it is unfortunate that we have to have so many bites at Committee Stage of this Bill. We have discussed it for short periods over a long time with the result that it is difficult to deal with it in a coherent manner. It takes a lot more time than if we were dealing with it in a couple of long sessions. We have had a long debate on my amendment to this section. That amendment provided that any agreement must include a clause which would provide for a termination of a tolls agreement. The Minister and I differed over the interpretation of subsection (2). He was of the opinion that the subsection made it obligatory on a roads authority to insist on inserting in any such agreement a clause providing for the termination of the agreement with the other party. I held the view, and still do, that the subsection only enables a roads authority to insert in the agreement a clause providing for its termination but does not oblige the insertion of such a clause. The Minister, after a lengthy debate, agreed to have another look at the matter between now and Report Stage and it was on that basis that I withdrew my amendment.

I have expressed the view that it was a pity that the Minister did not avail of the debate to tell the House all he knows about the proposals for toll roads and bridges throughout the country. It has emerged that the Minister, and the Department, have had inquiries in regard to Dublin, Cork, Waterford, Limerick and a Naas by-pass. I asked the Minister whether those inquiries were from the same people and whether all the situations mentioned, with the exception of the Naas by-pass, were in regard to bridges. I asked him whether the inquiry about the Naas by-pass was from the same source as the inquiries in regard to the cities mentioned and I would be obliged if the Minister would give the House that information. I mentioned that the locations seemed to be prime profitable ones which would not entail any possibility of a loss and pointed out that for that reason it was necessary that the agreements provide very definite terms for the termination of the tolls agreement.

It appears that section 9 (1) enables a road authority to enter into agreement with another person for rather minimal services in some cases. Such an agreement may be entered into by the road authority with another person if the other person agrees to pay some or all of the cost of the provision of the road. That is understandable but I hope it would be read as meaning that the other person would pay a substantial portion of the cost of the provision of the road. Paragraph (b) enables such an agreement to be entered into provided the other person pays some or all the cost of the maintenance and improvement of the road. That is a lesser obligation on the other person. Paragraph (c) enables such an agreement to be entered into if the other person is prepared:

to provide or join or assist in the provision of the road for or with the authority.

I am not too clear what that is. Paragraph (d) states:

to maintain and improve or join or assist in the maintenance and improvement of the road for or with the authority.

That is even a lesser service which is being asked from the third party. Paragraph (e) enables an agreement to be entered into with another person for a very minimal return. The road authority may enter into an agreement with a third person by virtue of paragraph (e) of subsection (1) of this section if the other person is prepared to operate and manage the road for or with the authority, including the provision, supervision and operation of a system of tolls in respect of the use of the road. That means that the road authority may enter into an agreement with a third party if the third party does nothing more than operate a toll checkpoint and collect tolls. That is going too far. If the road authority build the bridge or the road they should go the whole hog and collect the tolls. It is proposed here to enable the local authority to enter into an agreement with a third party to do nothing more than collect the tolls.

Paragraph (f) is an omnibus provision which enables the road authority to enter into an agreement with another person provided that other person does such other things connected with, incidental to, ancillary to or consequential upon the foregoing as may be specified in the agreement. That omnibus paragraph covers anything that has been left out. It is hard to imagine what it would be because paragraphs (a) to (e), inclusive, are fairly comprehensive.

It is good enabling legislation.

(Cavan-Monaghan): It is comprehensive enabling legislation. If the Minister would like to deal with my observations on subsection (1) I will deal with the other sections later.

As we have already emphasised, it is enabling legislation. Deputy Fitzpatrick has asked me to name the people or companies——

(Cavan-Monaghan): I have not. The Minister need not mention their names if he does not want to.

As I said the last day we debated this Bill, there are people who expressed interest, not only the one party which got a lot of publicity in the Dublin area. As I also emphasised we cannot take those expressions of interest to further discussion or negotiation without this legislation. There is no point in getting down to the nitty gritty parts of an agreement or what type of agreement might come forward from such discussions until we have the legislation which will permit the authority concerned to do so. This matter should be borne in mind.

Deputy Fitzpatrick also said that those seemed to be in areas which were the most attractive commercially. Naturally, if the private sector are to be involved in building a bridge, a tunnel or a road they will have to see some possibility of getting back their investment with a reasonable profit or they will not be interested in such a project. The very fact that interest has been expressed in specific areas is quite understandable. I do not see any point in pursuing the line the Deputy is pursuing until such time as we have the necessary legislation to permit the particular road authority to do so. I thought I answered that last week.

Deputy Fitzpatrick referred to paragraph (f). The different paragraphs in this subsection cover the financing of a toll project, the construction of such a project, the maintenance of a project or its improvement, the operation and management of the project and other activities or arrangements relating to these. With regard to the use of the word "may" or "shall", I said I would look into this matter before Report Stage. I have done so and my advice is that the "may" gives far more flexibility with regard to the final approval by the Minister of any particular agreement. If there is no terminal date for such an agreement the Minister has the power to insist on it.

(Cavan-Monaghan): Yes, but he may not insist.

We must trust the judgment of the Minister, whoever he is that if he thinks it should be done he will insist on such a date being in the agreement.

I do not wish to attribute any disrepute to this Minister but our job here is to trust the law rather than any Minister of any particular administration. I accept that there are certain constraints in regard to this Bill and that there are certain things the Minister cannot reply to. Am I correct in assuming that if a local authority decide they want to finance a particular part of their road programme they can take section 9 as their enabling licence to do so? They could then approach a group of commercial banks or any other major finance organisation and with them work out a scheme so that this financial body would provide the capital required. They would work out what the necessary return would be and bring that into their toll scheme. Would a local authority be enabled to do that? Would it be subject to critical review by the Department of Finance in terms of public sector borrowing?

It appears to be clear that the private sector which has money can approach a local authority and offer money to them on the basis of terms to be agreed. It is not clear whether the Minister in giving approval would have to have regard to the overall constraints on public sector borrowing if the local authority decided that they needed the money and wanted to finance it by way of tolls. The capital sums involved are very hefty.

There is virtually nobody in the private sector who has the capital sums involved to build a decent stretch of road. We are talking of £10 million to £20 million for any reasonable stretch of road on which one could legitimately charge tolls. The people, or even the consortiums, who have that kind of money are limited and even if they had the money it is questionable whether they would want to tie it up in such a long-term project. It appears that the local authority have the power to approach the banks directly but it is not clear whether they would be subject to other legislation or to a veto under the public sector borrowing requirements.

It is quite in order for a local authority to make the approach mentioned by the Deputy. On the question of approaching people such as those whom we are led to believe have vast sums in pension funds and so on, that should not present any problem with regard to borrowing. In the event of a proposal coming before me or the Minister of the day, the question of borrowing and where the money would have to be found would have to be considered. The Deputy asks what would be the effects of such borrowing with regard to overall Government policy on borrowing. That matter would have to be looked at also.

With regard to the borrowing by the local authority in that context for what would obviously be deemed to be a commercially viable operation because the tolls would be deemed to be pitched at such a level so as to repay the capital and interest, would that automatically be considered as part of the overall public sector borrowing or would it be consideed separately?

The amount involved would have to be a consideration. The one in Dublin that has got so much publicity would involve a relatively small amount of money. It would depend very much on the amount involved.

This enabling legislation is designed to facilitate the private sector. As we have learned in the past, the private sector essentially is concerned with river crossings and short-cuts of one kind or another that are outside the road programme. If the private sector get involved with the orthodox road programme of any local authority—and what is concerned is a road as distinct from a bridge—given current prices the scale of capital required for any kind of decent by-pass of ten or 15 miles would be enormous. I do not see that this will be enabling legislation for a local authority unless they are borrowing in the public finance market, either from the EIB or from the privately owned commercial banks here. Will that be deemed to be an exercise by the private sector making money available to the local authority as distinct from the latter adding further to the public sector borrowing requirement? I should like the Minister to tell us the position on Report Stage. If there will be constraints by the Minister for Finance I do not think they will be able to finance projects in the way that it is partially the intention of the Bill. I realise this is a complex area and the Minister may want to consult on the matter. I suggest that otherwise there should be some reference in section 9 to the role of the Minister for Finance in relation to approving such schemes. The capital involved will be very hefty.

(Cavan-Monaghan): I think that the section is wide enough to enable the roads authority to enter into an agreement with anybody to do what is mentioned in subsection (1) provided the toll scheme has been approved by the Minister beforehand. As the section is drafted an agreement could be entered into by anybody in the country or outside it. There is no limitation on the work that may be covered by the agreement provided a toll scheme has been approved.

With regard to subsection (2), the Minister and I are ad idem at last. I am not going to criticise him for having a wrong view about it. I have some legal experience and training that the Minister has not had but that does not mean that he is not qualified to be a Minister. On the last occasion the Minister said he was advised that any such agreement as might be entered into under section 9 must have a termination clause. I said in my opinion that was not so and the Minister, having sought further advice, now agrees with me that the road authority may or may not insist on a termination clause in the agreement. I appreciate that when it comes to the Minister for approval, as it must do, he may or may not insist on a termination clause. My view is that we should write into the section that any agreement must provide for a termination clause. The Minister said today that it would be reasonable to expect that if the private sector are going to interest themselves in road construction, road maintenance or road management they will do so where it is profitable. That is what I would expect. The Minister agrees with me that such inquiries as have been received in his Department have been in respect of very profitable sites.

I should like to add that we have no wish unduly to hold up the Bill. If we had a reasonable session on it, not just in ten-minute instalments, we could make considerable progress.

We will be resuming on this Bill at 3.30 p.m. and we should have a reasonable amount of time then.

Progress reported; Committee to sit again.
Business suspended at 1.30 p.m. and resumed at 2.30 p.m.
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