Vol. 503 No. 1
24 Mr. Stagg asked the Minister for Public Enterprise if she has received a final report in relation to CIE's property portfolio; the revenue anticipated from the sell-off of property; and its bearing on the railway safety programme for the five year period 1999 to 2003. [9296/99]
Because of the substantial requirements for public transport investment, I asked the CIE board in October 1998 to prepare a report on the potential for revenue generation from the disposal of property which was surplus to public transport requirements. I received a report from the board at the end of November which stated that £40 million could be generated from the disposal of surplus property over the period to 2006. The board also identified a further £127 million in leveraged borrowings which could be obtained against income streams from the redevelopment of property.
The CIE board's proposals were reviewed by the Government during its consideration of Iarnród Éireann's five year railway safety programme. The Government approved the implementation of the £430 million programme and decided there should be an annual Exchequer contribution to it. The Government also decided that there should be an independent review of the scope for revenue generation from CIE's property portfolio. When this review has been completed, the Government will decide on the precise amount of Exchequer funding for the programme over the five year period.
I am worried that the case will be reviewed to death. Having said that, I compliment the Minister on taking the initiative to get the safety report completed and put on the agenda. We now have a requirement to find £430 million quickly. From what the Minister is saying, £40 million will be available from the sale of property by CIE by 2006. My impression was that the reason for selling properties, and the Minister might confirm this, was to get money in quickly to put into the safety programme. The year 2006 is a long time away. I am not sure when the income stream can be created that will yield £127 million in loans over a period of time. Would the Minister agree with me that we are looking at an investment strike by the Government which is refusing to invest in the safety programme identified by the Minister? Would she agree that there is no let or hindrance on the State in making that investment? Given that we received £500 million in taxes in the first two months of this year above what was planned, would she agree that the Government has ample money to invest in this programme? Would she consider going along those lines rather than simply selling off patches of land here and there for the next seven years?
I note with interest that previous Ministers for Finance had the same idea.
I said it was the Department rather than a Minister.
Perhaps it was the Department, if the Deputy wishes to change the emphasis. Different political persuasions had the same idea, so it is not just that I or the Minister for Finance, Deputy McCreevy, have had a bright idea. It has been on the books for some time. I thank the Deputy for his compliment about rail safety. Previous Governments did not engage in a root and branch examination of it, as we did, and come up with the sum of money required.
The report from the chairman last November said "up to 2006"; he did not say it would all appear in 2006. At that time, he also mentioned £127 million in leveraged borrowings. However, the Government has decided to have an independent review of CIE property which is surplus to operational transport requirements. We will then proceed on the basis of that review.
CIE is a public transport company which brings people and goods from A to B, safely and efficiently. By its very nature the company is not a public property developer. The original legislation established CIE as a public transport company. It has some good ideas about property involvement, working within the private sector, and where such ideas are in train I have no plan to disturb them. They will be part of the leverage borrowings the company will be able to make against the redevelopment of property. By and large, CIE's main activity is bringing people and goods from A to B, and I want to encourage that. I am glad we are doing it.
It appears from what I can discern that while Ministers for Finance have had the same idea, Ministers for Transport of different hues and political persuasions did not appear very enthusiastic about the matter over the years.
Current safety requirements are so huge – as well as the huge development requirements that we will have – that I want to seek every way to get money for the programme. The Government has decided that there will be a yearly Exchequer input into that programme.
The Minister seems to be saying that CIE is being told to stick to its knitting. I remember Bord na Móna and other companies being told the same thing and when I was in Government I did not like the idea. Would the Minister agree that what we need is a period of intensive investment? Given that the Minister is about to sell off everything in the State sector that is worth a penny, she will have a lot of money arising from that. Would she agree that the Government, which is leading the charge on the matter, should set out how the money will be spent that will be realised from the sale of Telecom Éireann, Aer Rianta, Aer Lingus and the ESB? The Minister intends to sell the whole lot, but at the moment we will just take the example of Telecom Éireann. Does she agree that the proceeds of the sale of Telecom Éireann should be invested in other infrastructure that is required, including the railway infrastructure? Has she looked at that system of doing it, rather than mentioning a figure of £40 million and whatever else can be obtained from the Exchequer? Unless there is a Government decision to use the proceeds of the sales for this, we will not be able to implement this programme. Perhaps the Minister would comment on that.
There is a clear, formal, written Government decision to agree to a £430 million five-year programme as per the book of Estimates which I brought to Cabinet. That Government decision has been made and no matter how one talks about it, it exists. The Deputy wants me to say what we will do with the proceeds of Telecom Éireann. In case we are running around frightening the whole nation, I have no intention of proceeding with disposal in a barnstorming way.
A grand car boot sale.
That was the Deputy's team effort. He will have to change the vocabulary. He did not get anything out of that, by the way.
The Minister could not give that away. She had to pay to give it away.
I do not intend to proceed in a hasty fashion with all the ideas the Deputy has put forward. He said I was going to sell off everything in the State sector, but in order to get that done I would have to be in office for the next ten years.
The proceeds of Telecom Éireann do not come to my Department – they come to the Department of Finance, as I said earlier today in the Seanad. Second, there is a huge overhang and I do not know in what way the Government will deal with this. Information was provided at an Oireachtas committee that the overhang would total up to £700 million or £800 million due on pensions. I do not know if the Government will decide to use some of the proceeds towards that. I do not know what the Government will decide to use it towards. It will not be my call.
The Minister will have a say.
Yes. I would like to see some of it going into public transport infrastructure.
When the Minister put up this kite that one of the solutions was to sell CIE property to raise money for rail safety, CIE came back to her with a report that the amount raised would be only £40 million. I put it to the Minister that she did not like the report she received from CIE and has now commissioned an independent review of CIE property. Does this mean she does not agree with the CIE report on its property portfolio? If so, what elements of the report does the Minister dispute?
As regards Luas, rail safety and the bigger and better plans she launched for rail lines to Navan and commuter lines in Cork—
The Deputy will have to come back tomorrow to hear about that.
—the Minister has stacked up £3 billion of transport investment plans for which she has not received one shilling from the Minister for Finance, Deputy McCreevy.
There is no money.
The Deputy never did anything about it himself for two and a half years.
All plans and no money. No one should take it too seriously.
The Deputy must have missed all the recent announcements about the Cohesion Funds.
I miss very little. I call it confusion PR.
I ask Deputy Yates to allow the Minister to continue without interruption.
I call it confusion PR – lines to Navan and everywhere else.
We must move on. There is still a Priority Question remaining.
Deputy John Bruton is very interested. He is writing to me every day.
He actually believed it. I had to explain it to him.
Deputy Yates, in deference to your colleague, Deputy Currie, who has remained in the House all afternoon for a question which he has tabled, I would like to reach it before 4.15 p.m.
I can wait.
I am going to answer the Deputy's question so the Deputy need not be so magnanimous. The Cohesion funding has already been announced. The Department is drawing up its plans with the ESRI for submission to the Department of Finance which will draw up its plans in consultation with Europe. We are very much involved in that exercise. I will certainly be in at the beginning of a very substantial investment in public transport. When I started off I did not think I would see it but I will be involved in it. We will also see that we get good value for money and that it is done in a properly planned and prudent way. If Deputies come in tomorrow I will tell them about Navan in great detail.
Regarding CIE lands, I am very conscious that CIE sold land for housing in my local commuter town, Maynooth. Is the Minister aware that the effect of this is that there is now no room for car parks for commuters and that Maynooth is now blocked by commuters' cars every day of the week? Will she ensure that when lands are sold, these critical lands are not sold off? They are required for public transport and they will be necessary in the future.
The Minister has partly answered my question, but does she feel it is appropriate or desirable that CIE becomes involved in property development and management other than that ancillary to its own work, such as car parking? A huge public transport task faces that body, and its management of hotels was regarded in the past as a distraction from its main transport task.
Does the Minister agree that there is a fundamental inconsistency in Government policy when capital revenue from the sale of land is to be used essentially for remedial work in improving rail safety? Does she consider it normal to sell off roadways to pay for pothole repairs in the road sector? Is that not an inconsistency, given that there is money in the Exchequer, as other speakers have said? Deputy Stagg men tioned the sale of CIE property. Will the Minister ensure that the evaluation of CIE property will be subject to public evaluation as much as company evaluation in light of the fact that there is an increasing need for facilities such as car parks? As with local authority development plans, the public should be able to offer opinions on the possible use and savings to the State that disposal of such property might entail.
We will be here in 2006 if we go about things in this way. Deputy Stagg cited the land in Maynooth which was sold and which could now be used for car parks and park and ride facilities. I have made it clear to the chairman and other members of the board that anything that is operational now or likely to be operational in the future is not to be sold.
I agree with Deputy Mitchell – that was the point I made. CIE is a public transport company which brings people and goods from A to B and the entire management focus should be on that. It has entered into property portfolios and some have been successful, which is fine. However, I do not think it should have property portfolio development companies; that is not what CIE is about.
Deputy Sargent asked if roadways would be sold to fill potholes. We are not selling railway lines to fill potholes, we are keeping railway lines and we are selling surplus property to help with the safety programme.
