Eamon Ryan (Dublin Bay South, Green Party) | Oireachtas source

I thank the Chair and members of the committee. I am glad to be here. It is quite an innovation that we have an opportunity, mid-year, to review the Estimates for these two key areas: communications and transport. I intend to present the 2021 mid-year Estimates for the Department of Transport, and for programme A of the Department of Environment, Climate and Communications.

As members will be aware, the budget for 2021 was set under conditions of uncertainty due to the ongoing Covid crisis. Nonetheless, my priority as Minister is to ensure that the funding needed to progress the Government’s objectives under the programme for Government, the climate action plan and the national development plan, NDP, is in place, and to take the necessary steps to ensure that this funding is well spent, getting value for money for the citizen.

My Department will continue to accelerate out spending programmes towards the end of the year, in line with spending profiles. My Department expects to spend €3.31 billion this year, up 24.5% on last year, largely reflecting the Department’s increase in capital spending, and I am particularly pleased that the structure of spending has changed in line, with double the amount expended on active travel, for example, compared with the previous year. It is anticipated at this stage that due to a combination of the tapering of Covid emergency expenditure and factors outside of our control such as planning and Covid-related delay, the overall underspend for 2021 will be circa €247 million, or 6.9% of the overall Vote.

One of the sectors most impacted by Covid is aviation. In the Department’s voted budget for 2021, programme A, relating to civil aviation, is forecast to show a net underspend of circa €12 million in terms of current expenditure as contingency for customer compensation in the event of a commercial failure of a tour or travel operator business was largely not required.

Programme B, relating to land transport, is forecast to show a net underspend for 2021 of almost €70 million. This reflects the initial increase in public health restrictions and the subsequent gradual removal of restrictions on public transport and the recovery in passenger numbers and fare revenue. The need for emergency Covid funding is starting to taper as passenger numbers recover, and I expect this trend to continue into 2022.

Programme C, relating to maritime transport and safety, is forecast to remain within budget.

Turning to capital investment, I expect there will be an underspend in 2021 of circa €165 million, or 6.5% of voted capital expenditure. It is my Department’s intention to apply to the Department of Public Expenditure and Reform to carry this capital into 2022. Programme A, relating to aviation, primarily funds small scale projects in regional airports through the regional airports programme. The two most significant projects under the aviation programme are the completion of the hold baggage screening project at Shannon Airport at a cost of €6.1 million, and the Cork runway overlay project, with a funding allocation of €10 million. Much of the programme for 2021 was funded via capital carryover from 2020 and an application for carryover of circa €7 million into 2022 will now be made.

Programme B, relating to land transport, constitutes the bulk of capital investment. I expect the roads construction programme to remain on track, with no significant underspends for 2021. Construction work will continue on projects such as the Dunkettle interchange, and commence on the Ballaghaderreen to Scramogue road. Significant capital is being invested in protection and renewal of the network. Almost €1 billion, or 40% of the Department’s entire capital allocation for 2021, will be invested in public-private partnership payments and in protection and renewal of the existing road network.

Subhead B6, carbon reduction, will almost certainly require a supplementary Vote towards the end of the year. This is due to the growth in electric vehicle sales in 2021, which has exceeded the capital allocation for grant support schemes. Electric vehicles now represent almost 15% of new car registrations and sales for 2021 show a year-on-year increase of 226% on the previous year. This may lead to sales and grant drawdown in 2021, which exceed allocated capital by almost €38 million, but that is a positive development, given our target of almost 1 million electric vehicles by 2030 as a key step towards carbon neutrality by 2050.

With the recent press comments on MetroLink in mind, I will comment on the overall shape of sustainable mobility investment. I currently see investment here as occurring in two broad strands. One strand comprises large numbers of small- to medium-scale projects that can be rolled out steadily and consist of moderate challenges that can be worked through either at a technical level or local government level. Citizens should be able to see the increasing impact of these programmes in their daily lives, be it a new low-emission bus, a new greenway link, a new footpath shortcut or a safe new cycle track or network for commuting, leisure or getting to school. These are all changes that are happening now and happening rapidly.

The second strand of sustainable mobility investment constitutes large-scale projects that take longer to design and deliver and the impact of which will be proportionately greater upon delivery. There has been steady progress on major projects in 2021, with the preliminary business cases for the construction components of the three Dublin mega-projects - BusConnects, Dart+ and MetroLink - due to go to the Government before the end of the year. This is the basis for cost estimates, risk management and future procurement strategies, so these are major milestones in project design and analysis. There is no lack of commitment to delivering on these projects but it is essential that we take the time now to ensure they meet the needs of citizens in terms of effective design and that we learn from the lessons of large-scale capital investment projects in other sectors so that the public finances are not put at risk.

Of course, there is more to transport infrastructure investment than just these three projects, so, in tandem with them, there is active travel management investment under subheads B8.1, B8.5 and B8.6. The investment agencies and local authorities are continuing to scale up to invest the available capital and ensure that the project design and delivery framework is in place to deliver. The allocated capital increased from €180.6 million in 2020 to €335.13 million in 2021 under the same active travel subheads, which represents an almost doubling of capital. Carryover into 2022 will be circa €90 million. Half of this capital carryover is due to delays in the progression of greenways due to the impact of Covid on construction, as well the utilisation of capital carried over from 2020, but these projects will continue to be advanced.

Under B8.2, the contract for maintenance of the rail network continues to deliver in accordance with Iarnród Éireann’s maintenance schedules. The new Dart fleet preferred bidder has been identified and contracts will be awarded on Government approval of the preliminary business case. The Intercity railcar project will now see railcar delivery in quarter 3 of 2022. I was pleased to see Pelletstown rail station opening last weekend, the first new station for eight years, and construction of the national train control centre continues.

Under B8.3, the new low emission buses are starting to appear on Dublin streets as the BusConnects project continues to be rolled out. One spine of BusConnects has been launched, with another due before the end of the year. I remind Deputies that BusConnects is a three-strand project comprising low emission vehicle fleets and new capacity, reconfiguration of the entire network to make it more efficient, better connected and easier to use, and the construction phase. The Luas capacity enhancement project is complete and the preliminary business case for MetroLink is expected to go before the Government before the end of the year. A new Bus Éireann fleet is being rolled out and detailed analysis of the transport requirements of regional cities in advance of significant investment in the years to come is under way. I expect combined carryover under B8.2 and B8.3 to be circa €40 million, or 5% of the allocation to the subheads.

Finally for transport, touching on the maritime programme, delays to the construction of two new Coast Guard stations at Greystones and Westport mean that it is unlikely that the capital allocation under subhead C3 will be spent in 2021. As a result, I anticipate a carryover application of approximately €8 million. While most of the underspends relate to planning and Covid, I remain committed to further developing the systems across the transport sector to minimise underspends in future years. The proposals in the NDP review to be published next week, which will include a significant increase in funding for transport, will facilitate more active competition between agencies for use of the funding available for large-scale transport investment on a timely basis.

I will now turn to the communication programme of the Department of the Environment, Climate and Communications. This programme has a key role in delivering my Department’s vision for a climate neutral, sustainable and digitally connected Ireland. The goal of the programme is to support universal access to high-speed broadband for better-connected communities while ensuring that service providers are properly regulated and strengthened with cybersecurity. Overall, more than €233 million has been allocated to the communications programme in 2021, of which almost €15 million is current and €218 million is capital. An additional €15.2 million capital was carried over from 2020 for the delivery of the national broadband plan, NBP.

By mid-year, my Department incurred current expenditure of €5.6 million and capital expenditure of €62.4 million under the programme. This represents 88% of planned current expenditure and 79% of planned capital expenditure for the period. Current expenditure mainly relates to the Department's governance over key programme deliverables, including eircode and the NBP.

By far the biggest item of capital expenditure within this programme is the NBP at €212 million, with an additional €15.2 million carried over into the year. The Covid-19 pandemic has highlighted the importance of high capacity and reliable broadband to ensure that people, communities and businesses across Ireland can avail of the opportunities presented by the digital economy. National Broadband Ireland, NBI, commenced connections to the new fibre network in January of this year and build work is progressing across the 19 deployment areas, with 251,000 premises now surveyed. Expenditure to mid-year was €60 million. The Covid-19 pandemic has again impacted the delivery of the network and NBI has revised its target for premises passed by the network to 60,000 by the end of 2021, a 40% reduction in the target for the year. The Department is working closely with NBI to put in place a remedial plan and mitigation measures under the contract to address the impact of the pandemic on the project for 2021 and into the future, and to ensure that momentum in the build programme gets back on track.

Expenditure on the Digital Hub Development Agency and the National Digital Research Centre was on profile at mid-year. Additional funding was allocated in the 2021 Estimates for the development of a temporary facility for the National Cyber Security Centre and the Office of Public Works, OPW, has identified a suitable location. Work on design and procurement for the fit-out of this facility is under way and my Department anticipates that the full allocation will be spent by year end.

The communications programme is a cornerstone of the delivery of the Department's strategy through to 2023. While the Covid-19 environment has created some challenges in the roll-out of the NBP, all options available are being considered with a view to bringing delivery back in line with planned levels.