Vol. 507 No. 1
1 Mr. Deenihan asked the Minister for Finance his views on whether the imposition of road tolls is a necessary consequence of his announcement of projects for public private partnership arrangements; and if he will make a statement on the way in which private investors who become involved in public private partnerships may be rewarded for their investment. [16115/99]
On 1 June 1999, I announced a list of pilot projects which had been agreed by the Government to pilot the public private partnership approach in Ireland. The pilot projects are concentrated in the economic infrastructure sector, including transport and environmental services, with the key considerations being long-term value for money and their priority at national level. A central element in delivering value for money from PPP projects is the proper allocation of risk. One of the risks for the private sector, of course, will be on the return they achieve on their investment.
The Departments directly responsible for the programme areas, in co-operation with the Department of Finance, will develop the selected projects for speedy implementation with particular reference to the potential for private sector finance, with the aim of seeking tenders or other proposals from the private sector as quickly as possible.
When the Government adopted the PPP approach, the potential to generate revenue to remunerate the investment was included as one of the criteria to be used in deciding on the merits of the PPP approach in any particular case. Projects can be financed from private sources, remunerated by user charges or in other ways, by payments from public sources, including the Exchequer, and by a combination of payments from both sources. The relative contributions from both sources will vary depending on the nature of the project and the feasibility of having the private sector implement steps to remunerate its contribution. This is one of the matters which will be examined in developing detailed proposals for the pilot projects.
Any specific proposal relating to road tolls is subject to the relevant statutory provisions. The statutory power to levy tolls on national roads and to enter into toll agreements with private investors is vested in the National Roads Authority under Part V of the Roads Act, 1993. Before a toll can apply to a national road, a number of procedures have to be complied with. These include the making of a toll scheme by the National Roads Authority after consultation with the local authority concerned; the giving of public notice; the submission of the scheme for consideration by the Minister for the Environment and Local Government; and the holding of a public inquiry where objections are received.
I am sure the Minister accepts that we must seek finance from other sources as a result of the scaled back funding from the EU and that in order to attract investment we must provide incentives. Is the Minister in favour of placing tolls on infrastructural development, including bridges and roads?
I agree with Deputy Deenihan that a fair segment of funding will have to be made up by the private sector in terms of infras tructural development in future, something I have signalled on many occasions. The issue of placing tolls and remunerating private operators will evolve over time. The Government has enunciated on many occasions in the past that where a project has already been built with either EU or Exchequer funding, it is not in favour of tolls. However, when PPPs are being developed the question of tolls or other methods through which the private sector can be remunerated will be discussed with account taken of the various policy options.
Who will decide whether there should be a toll? Will it be the NRA or the Government? What policy has the Minister on shadow tolls? Would the Government consider shadow tolls in preference to tolls?
The use of tolls on roads would inevitably be a matter for the National Roads Authority in the first place. This would be followed by consultation with the local authority and with the Minister for the Environment and Local Government. Shadow tolls, which would involve the State paying tolls on bridges, roads, etc., on the basis of usage, have been discussed for some time. I said in response to questions raised at the Committee on Finance and the Public Service that while I do not wish to rule out shadow tolls forever, and while there may be projects where shadow tolls can be considered, I am not overly keen on them. If the shadow toll concept had been agreed for the west link bridge, where PPP has operated in the past, the promoter would be making the exact profits he is now making, but taxpayers from Counties Kerry to Donegal would be paying for it on the basis of usage, which is not appropriate. I think the public is more prepared to accept user charges than in the past, although I am not sure whether politicians are more prepared to enunciate that view. While I do not want to rule out shadow tolls, they are not uppermost in my mind.
Will the Minister indicate whether the Government is actively considering any PPPs in the context of bridges and roads? If a toll is not the way forward, can the Minister mention alternatives?
Recently I announced a list of pilot projects and I will forward a copy to the Deputy.
