Vol. 697 No. 3
23 Deputy Fergus O’Dowd asked the Minister for Transport if he has received a copy of the Deloitte report into the Shannon Foynes Port Company; if he carried out an internal investigation into alleged irregularities; and if he will make a statement on the matter. [46218/09]
In September 2006, Shannon Foynes Port Company initiated an internal investigation into allegations made against two members of the board. This led to a number of related legal disputes and the investigation was suspended on foot of this. In October 2007, a confidential out of court settlement was reached between the parties. This process was very costly for the company.
In December 2006, the company also engaged Deloitte as internal auditors to the company. Deloitte & Touche carried out a corporate governance review of specific transactions and processes. The company subsequently forwarded a copy of the Deloitte report to my Department.
The report is confidential and is not intended for publication. It contained a number of recommendations for improving corporate governance procedures in the company and the board has confirmed that these have been implemented. The confidentiality of the report must be respected. To make public the Deloitte report would achieve little other than to expose the company potentially to further costly legal proceedings relating to the confidential settlement.
I have also received correspondence from third parties regarding alleged historical inappropriate corporate behaviour which I have forwarded to both An Garda Síochána and the Office of the Director of Corporate Enforcement. If any party has evidence of an alleged breach of the law, they should bring such evidence to the attention of An Garda Síochána.
In September 2008, I appointed a new chairperson and five other directors to the board of the company. These new appointments have provided renewed leadership and strategic direction to the company.
My Department continues to closely monitor the company's performance in accordance with normal corporate governance practice.
Is it not a fact that the Minister is a shareholder in this company along with the Minister for Finance and that the findings of the Deloitte report which the Minister has in his possession states that this site of 16.6 acres is the best site in Foynes Harbour and was sold for €2.1 million to the sole bidder? There was no public auction and no competitive tendering. There was no updated valuation of the site. The Deloitte report finds that corporate governance was not fully complied with, despite legal concerns expressed by the port company solicitor and the code of practice on governance of State bodies was not being complied with. Is this not a gross abuse of the powers of individuals in the company who have not complied with the Ethics in Public Office Act or with proper procurement processes? The taxpayer is out of pocket to the tune of at least €10 million with regard to this site. Is the Minister aware that interest in the site was expressed by a company in early 2004? This interest in minuted in internal company e-mails. While it was sold to a single individual for €2.1 million this other company bought it for €12 million two and a half years later, at a massive loss to the taxpayer. What action will the Minister take?
As I said in my reply to the Deputy's question, what happened at Shannon Foynes Port Company during the course of this period was the subject of much investigation and the subject of a report by Deloitte. It is obvious that all was not well in the port. Weaknesses in corporate governance were identified by Deloitte. As a result, the chief executive officer resigned and new board members have been appointed. The recommendations made to me and the recommendations regarding corporate governance made by my Department to the company, have all been implemented at this stage. There is no doubt that significant difficulties arose as a result of various legal actions taken which cost the company a lot of money. The situation was far from satisfactory. However, the company must run its own affairs. My responsibility was to ensure that a new board was put in place with a new chairperson. Those matters have been dealt with. I am unable to say any more than that because of the legal situation.
I welcome the fact the Minister has sent the report to the Garda Síochána. However, the fact is that the chief executive officer of this port was the sole receiver of tenders into the hiring of a boat over a two-year period and which cost the port more than €100,000. The chief executive officer granted himself that tender. No tenders were produced from anyone else and no contracts existed. It is a shameful and disgraceful issue. What is the Minister doing to ensure this cannot occur in this company or in any other harbour authority? The best way would be to make all these harbour authority companies accountable to the Comptroller and Auditor General and the Committee of Public Accounts.
That is not really the solution to everything and the Comptroller and Auditor General is busy enough as it is. These are commercial State companies. This company in particular had difficulties. They were not operated on a commercial basis previously but this has changed by legislation. As long as such companies are left in a situation where they would be bailed out by taxpayers and where they did not have a commercial remit, there will always be such kind of difficulties. It is now up to the directors and the chief executive officer and the internal and external auditors, to ensure these practices are not continued.
24 Deputy Thomas P. Broughan asked the Minister for Transport if his attention has been drawn to the impact of reductions in passenger volumes on airline carriers and new aviation infrastructure including Dublin Airport’s new terminal two; and if he will make a statement on the matter. [46096/09]
The aviation sector has been cyclical in nature and in the past decade or so, has been significantly adversely affected by events such as the September 2001 terrorist attacks, the SARS outbreak in 2003 and the record peak in oil prices in 2008. The current global recession is the latest crisis to hit the sector which historically, has had low profitability and is also known to be structurally weak due to general over-capacity.
This year is proving to be an exceptionally difficult year for the industry. The International Air Transport Association's, IATA, latest forecast is that the global air transport industry will suffer losses of $11 billion in 2009. It has revised this estimate upwards twice since the start of the year as the effect of the recession on air travel has been more severe than initially envisaged.
Many airlines are currently undertaking radical restructuring or, in some cases, going out of business and some Irish carriers are also experiencing significant difficulties, particularly those whose cost bases are out of line with their competitors. Airports are also being deeply affected as airlines are cutting back on capacity and routes in response to falling demand for air travel. The impact is being experienced across the world and is not unique to Irish airports.
The continued roll-out of the Dublin Airport Authority's investment programme, including the completion of terminal two which is designed to strengthen airport capacity for the long term, and the introduction of US preclearance facilities, will provide airlines with opportunities to develop and grow new services and attract new carriers to Dublin when trading conditions improve.
My question to the Minister was to do with events in Aer Lingus, the joint largest domestic Irish aviation employer but the reply does not reflect my question at which I strongly protest.
Has the Minister received a copy of the Project Greenfield plan for Aer Lingus from his three nominee directors on the board? We are facing the loss of between 676 and 1,000 jobs, according to the new chief executive, Christoph Mueller. Is the Minister aware of the major plan to outsource pilots and cabin crew outside the Republic which is being undertaken by Aer Lingus and aeroplanes have left Belfast in Aer Lingus colours without a single Irish crew member aboard because of a deal with Astraeus? Does the Minister agree with the Aer Lingus proposal to register on the United Kingdom civil aviation register and effectively become a British company and off-source its pilots and cabin crew as private subcontractors based, if the company follows the Ryanair model, in Gibraltar on terms and conditions that are at variance with our Revenue and social welfare rules? This is my third attempt to ask the Minister——
Before allowing the Deputy to continue, as he will be aware, under Standing Orders the Minister answers only in his area of responsibility. The Tánaiste and Minister for Enterprise, Trade and Employment is responsible for industrial relations matters. I understand the Deputy raised this issue on the Adjournment last week. While I wish to be as flexible as possible, the Minister is not accountable for the industrial relations aspects of the original question which, unfortunately, was not in order.
He is the Minister with responsibility for transport. This is one of the problems with the rules of the House.
What are the implications for connectivity if Aer Lingus follows Ryanair in a race to the bottom and becomes a pale copy of its competitor? As Christoph Mueller stated in today's edition of the Financial Times, the company will have to link up and become part of a broader company. Is it not a bad outcome that we seem destined to lose many jobs in Shannon, Cork and Dublin? Will this not have a negative effect on connectivity?
Any loss of employment is bad for the country and the individuals affected. Anything that can be done to avoid job losses should be done. However, it would be an even worse outcome if we were to end up with one airline operating in and out of Ireland. Competition and connectivity are cornerstones of aviation policy. The former must be supplied by at least two airlines. If one airline costs itself out of the market, we will only have one airline, which would be a bad day for the country.
Despite the current difficulties and the potential loss of 676 jobs at Aer Lingus or 1,000 jobs if pilots do not agree to the package put forward by the company, if Aer Lingus does not secure the savings it requires, we will end up with only one airline operating in and out of this country. I do not want to contemplate such an outcome nor, I am sure, does the Deputy. I accept this is a difficult matter which has employment implications. Notwithstanding this, costs must be brought into line. Aer Lingus operates on a commercial basis and must compete. If it fails to do so, one cornerstone of our aviation policy, namely, competition, will be removed.
While I do not wish to pre-judge the debate on budget 2010, has the Minister received a copy of the cost benefit analysis of €10 travel tax prepared by Amsterdam Aviation Economics on behalf of the three major airlines operating here, namely, Aer Lingus, Ryanair and CityJet? Irrespective of whether the travel tax is abolished this afternoon, as I hope it will be, will the Minister provide the Opposition with a copy of the analysis?
I did not do the cost benefit analysis; it was done by the airlines. Obviously, they are trying their best to have the €10 airport departure tax removed. If the tax is causing such grief, perhaps they will examine some of their own charges, for instance, the on-line check in charge of €10 for each leg of a journey, the €5 administration fee for credit cards, priority boarding fees of €5, the €40 charge for reissuing airport boarding cards, infant fees of €20 and checked baggage fees. In light of this incomplete list of airline charges, anyone who seriously expects me to state that the airport departure taxes are the cause of the decline in passenger numbers, he or she is living in cloud cuckoo land.
Fares are still cheaper than they were in the past. The Minister needs to learn a little about economics.
25 Deputy Shane McEntee asked the Minister for Transport the way he will finance local authorities sufficiently to improve the conditions of roads, in view of the fact that 70% of all road deaths take place on rural roads, and improvements required in respect of recent flood damage; and if he will make a statement on the matter. [46219/09]
Since 1997, the Exchequer has provided €5.6 billion for regional and local roads. This major investment, coupled with spending from their own resources, has enabled local authorities to make major improvements in the condition and safety of these roads. When Exchequer grants for regional and local roads are allocated each year my Department does not hold back a reserve allocation at central level to deal with weather contingencies such as flooding. Holding back such an allocation would mean a reduction across all local authorities in the road grant allocations made to them at the beginning of each year.
The allocations made to local authorities are inclusive of a weather risk factor. Local authorities are expressly advised in the annual roads grant circular letter that they should set aside contingency sums from their overall regional and local roads resources to finance necessary weather related works. Local authorities are still assessing the extent of the flood damage in their regions.
The Deputy will appreciate, therefore, that I cannot at this time indicate what funding may be needed or available to address damage caused to the regional and local road network by the recent flooding. I am monitoring the position in the affected local authorities and will take their needs into account when deciding the 2010 road grant allocations early in the new year.
The Minister cited the large allocation to local authorities. As the Fine Gael Party spokesperson on road safety, I supported many popular and unpopular measures he has introduced. We must not kid ourselves. The condition of rural roads has deteriorated throughout the country. Having visited practically every county this year, some rural roads will shortly be closed on health and safety grounds.
The Deputy must ask a question.
One can argue that local authorities are being provided this or that amount but none of the local authorities I have contacted has the price of a shovel of sand, not to speak of tarmac. How does the Minister intend to ensure that Ireland's road safety record continues to improve from being among the worst in Europe to among the best? If we do not mend our roads, our road safety record will be the worst in Europe again.
While the overall amount allocated for local and regional roads was reduced last year, I maintained the level of grant aid to local authorities in the specific area of road safety. Despite the more straitened financial circumstances, about which we will hear later, I hope to be able to maintain the amount provided for accident blackspots, etc., in this year's allocation. The allocation is based on accident data and the inspection of sites and locations that have been shown to be hazardous. The Department will consult the local authorities and National Roads Authority to try to ensure the allocation is spent in the most effective manner possible.
I concur with the Minister on the identification of accident blackspots and so forth. However, as every Deputy is aware, the condition of some rural roads has deteriorated to the extent that some will be closed for health and safety reasons in the coming spring. The Minister has a responsibility to ensure county councils are properly financed. He referred to the money that has been allocated. Either the allocation is not sufficient or the councils are holding back money. I do not believe the latter possibility is the case because, as everyone knows, county councils are broke. Last week, the first black frost of the year resulted in a number of unnecessary road traffic fatalities and a large number of cars were written off in accidents around the country.
As I stated, local authorities are told at the beginning of the year, when they receive their allocation, that they should make provision for weather conditions, including the requirement to grit roads when there is frost. The local authorities should have done this. The role of the Minister for Transport is not to finance local authorities but to supplement the grants they use on roads. In this case, "supplement" is the operative word. It is up to the local authorities to finance their roads. We pay for approximately 80% of the work local authorities do on roads but it is not my job to finance local authorities. That is the job of another Minister.
We know the Minister does not do that anyway.
26 Deputy Thomas P. Broughan asked the Minister for Transport the recommendations he has made on the proposed public service obligation funding for Irish Rail for 2010; if he has been informed by Irish Rail of the service reductions on DART, commuter and other rail services in the new 2010 rail timetable; his plans for improved rail services in 2010, 2011 and 2012; if these plans will include a national rail freight strategy; and if he will make a statement on the matter. [46097/09]
The 2010 provision for the funding of public transport PSO, public service obligation, services provided by the CIE companies will be published shortly as part of the budget. It will then be a matter for the national transport authority to determine, in the context of the direct award public service contracts recently concluded with the companies, the allocation of this funding across the three CIE companies.
The Exchequer subvention to Irish Rail in 2009 towards the cost of loss making services is €175.78 million — an increase of 50% on the 1997 level. Despite this high level of Exchequer support and a fares increase of 10% in 2009, Irish Rail, in common with the other CIE companies, is facing a very difficult financial position in 2009 with a projected operating loss of approximately €16 million. In response, Irish Rail is pursuing a cost recovery plan including service changes that reduce costs while maintaining services at the highest level possible. Service and timetable changes in 2009 and subsequent years are an operational matter for Irish Rail and, in the context of the contract for PSO services, for the national transport authority.
The position in respect of rail freight is that I propose to establish a forum on the movement of goods in 2010, as set out in the Smarter Travel policy paper. My Department is currently undertaking preparatory work on the membership, tasks and timescales for the forum. The potential for rail freight and its role within an integrated freight transport strategy will be among the matters explored by the forum.
Does the Minister ever examine the rail timetables? I have the new timetable before me, effective from November. It is quite clear there has been a significant deterioration in services. I am informed by Rail Users Ireland that the service between Dublin and Drogheda has been especially badly hit. The services from Dublin to Limerick and Dublin to Cork are also badly hit. The journey times are considerably longer. I am informed that during the 1940s the trip from Nenagh to Limerick took approximately 40 minutes but it now takes 62 minutes. In general terms, there appears to have been a significant deterioration. The number of trains in the southside DART network during rush hour has been reduced and the northside network is also a good deal slower. There is a litany of deterioration throughout the country. I refer to the constituency of the Leas-Cheann Comhairle. The trip from Rosslare to Galway requires four changes, which is ridiculous. The rush-hour train service on the Sligo to Dublin line has deteriorated. This timetable shows a litany of deterioration in services for commuters and rail passengers.
Is it not the case that the real author of this timetable is the Minister, Deputy Dempsey? The Minister slashed the PSO by €6 million last year. I presume it will be slashed again this evening, although I hope not. The Minister referred to the PSO but Irish Rail has always had a subsidy of between 42% to 45%, dating back to the period to which the Minister referred, namely,1997. Is the Minister not giving the rail users of Ireland a worse service, despite the fact that only some months ago he stated he sought to get half a million people out of their cars and onto the trains?
The Deputy frequently conveys various powers on me but I do not draw up the timetable.
The Minister cut the money.
Every now and again I examine the timetable to see the services available at various times. Iarnród Éireann is trying to make more efficient use of the capacity in place and there have been changes to services in various areas. The change is based on passenger usage and on trying to ensure in the tightened financial circumstances that it runs the trains at the times sought most by passengers, rather than running them at times when passengers are not using them and losing money.
The Minister is doing the opposite.
The Deputy is unduly pessimistic. As Members are aware, we have added the Midleton line and the western rail corridor will be opened shortly. The Navan line will be opened by the end of next year. We are moving and we will get more rolling stock in 2011. Irish Rail has a very modern fleet and it is not a case of all doom and gloom. However, in the current circumstances there is a necessity to ensure the taxpayers' money we allocate to the various companies is used effectively and well.
I accept that.
Iarnród Éireann has a good record in this regard.
Commuters are hopping mad. I understand there have been large meetings of commuters in Drogheda, who are very angry about the deterioration in the service. The opposite of the Minister's statement appears to be the case. Rush hour trains are less frequent, with greater frequency at off peak times, which no one can understand.
However, there is one good news story. At last, a new station will open in my constituency at Clongriffin but I understand we will have two trains there per hour if we are lucky. I emphasise that the Minister is the author of this timetable.
I am unsure if a question was put.
If the Minister does not wish to reply we will move on.
27 Deputy Joe McHugh asked the Minister for Transport the proportions of the €39.6 million of trans-European cross-border funding that were spent on the Belfast to Dublin and Dublin to Cork sections of the Belfast to Cork railway line improvements; his expenditure of trans-European cross-border transport funding on the nascent DART underground project; if further trans-European transport network cross-border funding will be used to finance the Dublin DART underground project; if he will support an application to the trans-European transport network agency for a cross- border rail project from Derry city into the north-west region; and if he will make a statement on the matter. [46220/09]
Some €13 million has been allocated to Iarnród Éireann under the EU TEN-T, trans-European transport network, programme since 2000. Some €3 million was provided towards safety and upgrade works on the Cork to Dublin to Belfast rail line under the 2000 to 2006 TEN-T multi-annual indicative programme. Of this, approximately €100,000 was spent on the Dublin to Belfast section of the line. A further €10 million was allocated to the DART underground project, which connects the northern or Belfast line to the southern or Cork line, under the 2007 to 2013 TEN-T multi-annual indicative programme. In the case of the DART underground, this funding covers the design and development process, geotechnical investigations and various surveys and studies that include topographical surveys, condition surveys, archaeological surveys and utility surveys.
TEN-T funding, if approved by the TEN-T Executive Agency of the EU Commission, is provided at a rate of 50% of total costs for studies and 10% of total costs for works. For this reason, my Department applied for support for eligible projects contained within the Transport 21 investment framework and for which supporting Exchequer funding was available.
A Derry to Letterkenny rail link was examined as part of the strategic rail review undertaken by transport consultants Booz & Company on behalf of my Department and completed in 2003. The review did not recommend investment in the Derry to Letterkenny rail link. In light of the recommendation contained in the strategic rail review, a Derry to Letterkenny rail link is not a priority for investment in the current difficult economic situation. In such circumstances, it would be difficult to support an application for TEN-T funding in respect of such a rail link.
The next multi-annual programme of TEN-T funding commences in 2013 and consideration can be given at that time to further applications for TEN-T support for studies or works.
I appreciate the Minister's dedication to rail travel. Let us consider the situation in the Minister's back yard and his support for the Navan railway line, which I welcome. My colleagues, Deputies McEntee and English, are very supportive of that project. I refer to the western rail corridor. We are joined in the Gallery today by two former Deputies, Mr. Breen and Mr. McHugh, who would have been advocates of the western rail corridor along with members of my political party.
This summer, I travelled on the Midleton to Cork railway line, which cost a total of €75 million. One cannot question the Minister's dedication to rail travel but the problems lies in connectivity.
The question, please.
I remind the House that €10 million was allocated to the Inchicore to Pearse Street feasibility study which has been indicated as cross-border funding. That is a story for another day, but it is a story my constituents in Donegal find very difficult to fathom because European money for a cross-border project——
Deputy, the question, please.
The true missing link is the TEN-T project between Derry and Letterkenny. All we seek is an appraisal or feasibility study and the examination of a cost benefit analysis. That is all. I welcome the fact that the Minister has indicated that perhaps in 2013 it may be a possibility.
As the Deputy indicated, it is one that can be considered in the context of 2013. The TEN-T funding is not solely for projects across international boundaries or cross-Border in the Irish context. The goal is the better use of existing networks and the completion of missing links, both of which apply to the DART underground project, as do other goals such as crossing natural barriers, for example, the Liffey in the case of the DART underground. I accept the Deputy's point, but in the context that the decision was taken, that it was not part of the Transport 21 proposals at that time, it could not be submitted for funding, but it is open again to people to make a case for that for 2013.
The strategic rail review 2003 needs to be thrown out because it is outdated and completely out of tune with what is happening. This afternoon, the Government is going to load extra costs on private bus companies in County Donegal who are providing public services, and also on car travellers who do not have access to rail transport, as is the case in many urban areas. One has to marry what is happening now with what will happen in the future. One thing about Fianna Fáil-led Governments is that they only look to the long term in the context of the next election. We need long-term thinking and connectivity. Let us consider the possibility of getting on a train in County Kerry, going up through the western rail corridor, which the Minister has funded, and going to the fourth largest city in Ireland, Derry city, and on to Belfast. An all-island rail link is long-term thinking and given that extra costs are coming down in that regard, it has potential for tourism generation.
Again, I am not sure whether a question was asked but, in so far as there was one about long-term thinking, I welcome the Deputy's support for measures that will incentivise people to move from cars to public transport.
That concludes Priority Questions. We now move to other questions.
