Mr. Seamus McCarthy:

The appropriation account for Vote 31 records gross expenditure of €2.7 billion in 2020. This represented an increase of 17.4% compared to expenditure in 2019. The expenditure is divided into three expenditure programmes: civil aviation; land transport; and maritime transport and safety. The majority of the expenditure in 2020 was under programme B, land transport, which accounted for 95% of the gross spending amount. This comprised mainly investment in roads and on road safety and regulation, and current and capital spending on public transport. As I proposed previously, given the imbalance in programme size, it may be timely for the Department, with the Department of Public Expenditure and Reform, to consider splitting up programme B in future.

In 2020, the Department provided substantial funding to several public bodies operating under its aegis. These include: Transport Infrastructure Ireland, TII; the National Transport Authority, NTA; the Road Safety Authority, RSA; the Medical Bureau of Road Safety, MBRS; and some other smaller bodies. The Department also oversees several commercial State bodies, such as the CIÉ group, the Dublin Airport Authority, DAA and the Irish Aviation Authority, IAA.

Receipts into the Transport Vote are modest, with appropriations-in-aid in 2020 amounting to €17.8 million. There was a substantial underspend on the Vote for 2020, of just under €386 million. Much of this related to the impact of Covid-19 on normal schemes and projects, but underspending also occurred because additional financial provision made for Covid-19 was not required on the scale originally envisaged.

With agreement from the Minister for Public Expenditure and Reform, €151.5 million in unspent capital allocations was carried over for spending in 2021. This related mainly to capital spending shortfalls under the subheads for: airports; regional and local roads stimulus; heavy rail safety and development; public transport infrastructure; cycling and walking; and greenways. The remainder of the surplus for the year, €234.4 million, was liable for surrender to the Exchequer.

I issued a clear audit opinion in relation to the appropriation account.

Members may wish to note that the statement on internal financial controls discloses non-compliant procurement by the Department of €1.1 million worth of goods and services.

In addition to its Vote-funded activities, the Department of Transport has responsibility for the motor tax collection system. Receipts of motor tax are accounted for in a special departmental account, separate from the Vote, and are transferred directly to the Central Fund of the Exchequer. The 2020 motor tax account prepared by the Department records receipts of €939 million. This was down 2.5% on the 2019 level.

I also issued a clear audit opinion in relation to the motor tax account 2020.

The Irish Coast Guard, ICG, is organisationally part of the Department of Transport, and its expenditure is directly charged on the Vote. I have presented reports on two matters relating to the operations of the Coast Guard, arising from audit work on the 2019 and 2020 appropriation accounts. One report relates to the helicopter search and rescue, SAR, service, which is contracted out to private sector providers, at an annual cost of around €60 million. The other report relates to procurement for the cliff rescue service, which is provided substantially by volunteer service members.

As I outline in chapter 5 of the Report on the Accounts of the Public Services 2020, the Department paid €4.305 million to the search and rescue service provider in 2013 to fund an upgrade of the five search and rescue helicopters then in use to equip them with night vision technology. In addition, in November 2015, the Department bought 24 sets of night vision goggles for €527,000. In November 2018, the Department made an initial payment of €1.714 million for the provision of training in the use of the night vision technology. That training commenced in November 2019 and it is still ongoing. As at June 2021, only one of the four Coast Guard search and rescue bases had been approved to operate the technology and to provide a night-vision enabled service. It will be some time before the other three search and rescue bases are operating in the same way.

On the basis that significant payments were made as long ago as 2013, and that the planned capability has not yet been delivered across the service, I am not persuaded that good value for money has been achieved from this expenditure.

In the special report, I deal with the procurement of vehicles by the Irish Coast Guard for use by the cliff rescue teams. The Department signed a contract in November 2015 for the supply and fit-out of a number of vans to carry crew members and equipment. Between 2016 and 2020, the Department purchased 18 vans, costing almost €1.4 million, under this contract. The average all-in cost was around €76,500 per vehicle.

The examination found that the vehicle requirements had not been adequately set out in advance of the procurement process. There were also major gaps in the Department’s records of the tendering process, in particular in relation to the evaluation of bids. As a result, we found there is no reasonable basis to conclude that the Department conducted a fair and impartial procurement process for the vehicles.

This report makes four recommendations aimed at strengthening the Department’s procurement procedures for the future. These are that a strategic plan for equipment requirements be developed; that all procurements of equipment should involve technical and user input at the planning stage; that all significant procurements be based on a formal assessment of operational needs; and that the Department carry out regular reviews of its procurement procedures and processes. I am glad to report that the recommendations have been accepted by the Department.