Mr. Seamus McCarthy:

The National Transport Authority was established in December 2009. Its first set of financial statements covered a 13 month period ending in December 2010. Its 2011 financial statements are the subject of today's committee discussion. Clear audit opinions were issued on both the 2010 and 2011 financial statements.

The authority has responsibility for public transport capital investment in the greater Dublin area and projects promoting sustainable transport nationwide. During 2011 it also assumed responsibility for licensing of public bus passenger services and taxi regulation, as provided for in the Public Transport Regulation Act 2009. Its activities are largely funded by the Exchequer with funding from the Vote for the Department of Transport, Tourism and Sport. Some income is received from its bus and taxi licensing activities, but it has two main programmes of expenditure - capital investment grants paid to the CIE group companies, the Railway Procurement Agency and local authorities; and public service obligation, PSO, compensation payments to the three transport companies, Iarnród Éireann, Dublin Bus and Bus Éireann.

In 2011 the authority provided a total of €204 million to fund capital investment in transport. Just under two thirds of this funding - €130 million - went to the CIE companies to fund capital investment within the greater Dublin area. Most of the rest of the capital funding was provided for the Railway Procurement Agency and local authorities. The majority of the large projects funded in 2011 had already been sanctioned and under way when the authority came into being. Some of the projects funded in 2011 and earlier years have been deferred as a result of a Government decision in November 2011. Significant expenditure has been incurred on some of these projects, including metro north, metro west and the DART underground.

On its establishment in December 2009, the authority took over responsibility from the Department of Transport, Tourism and Sport for providing and overseeing public service obligation funding for the CIE group. Public service obligation services are defined as "socially necessary but financially unviable public transport services". The three CIE companies provide such services under contract to the authority. The contracts set standards of operational performance and customer service and contain penalties for under-performance. The current service contracts were signed in December 2009 and are for a period of five years in the case of bus services and ten years in the case of rail services.

The authority also has responsibility for integrating payment and information systems for public transport. One of the main projects in this area is the integrated ticketing system. In September 2010 responsibility for this project transferred to the authority from the Railway Procurement Agency. When the integrated ticketing project began in 2002, the Railway Procurement Agency planned that it would be delivered by 2005 at a cost of just under €30 million. When my office reviewed the project in 2006, it was found that the budget and project timescale were unrealistic and they were subsequently revised. In the event, the Leap card was launched for Dublin Bus, Irish Rail and Luas in December 2011. Phase 2 of the project includes the roll-out of integrated ticketing to other operators and the modification of the Leap card to take account of free travel. Work on these aspects is ongoing. The chief executive will be able to brief the committee on progress.