Oireachtas Joint and Select Committees
Thursday, 5 November 2015
Joint Oireachtas Committee on Transport and Communications
DART Underground and Expansion Projects: National Transport Authority
The purpose of the meeting is to engage with the National Transport Authority on the business case appraisal for DART underground and DART expansion projects as well as the impact of the Minister's decision to delay the underground tunnel project.
Members of the committee would also like to discuss funding for community transport, such as the Kerry Flyer, which is a charitable company which tenders for school bus contracts at the expense of small private bus operators. On behalf of the committee I welcome from the National Transport Authority Ms Anne Graham, chief executive officer, Mr. Hugh Creegan, deputy chief executive officer, and Mr. Tim Gaston, director of public transport services.
By virtue of section 17(2)(l)of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the chairman to cease giving evidence on a particular matter and continue to do so they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons, or entity by name or in such a way as to make him, her or it identifiable. I wish to advise also that any submission or opening statements witnesses have made to the committee may be published on the committee website after the meeting.
I remind members of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person or persons outside the Houses or an official either name or in such a way as to make him or her identifiable.
I invite Ms Anne Graham to make her opening statement.
Ms Anne Graham:
I thank the Chairman for the invitation to appear before the committee. I understand there are two particular areas of our activity on which the committee wishes to focus. These are the recent decision to defer the DART underground project and issues associated with Kerry Flyer and school transport provision. I will deal briefly with each in turn. To assist me in dealing with subsequent questions I am accompanied by two directors, Mr. Hugh Creegan, deputy CEO, who manages transport investment and also taxi regulation, and Mr. Tim Gaston who manages public transport services and integration measures.
In regard to the decision in relation to the DART underground project, the National Transport Authority carried out a review of the key transport infrastructure projects that were proposed to support the growth of the greater Dublin region. This included the DART expansion scheme which included DART underground, the Fingal-north Dublin study and a study of the orbital movements around Dublin, all designed to inform the draft transport strategy for the greater Dublin area 2016 to 2035, published recently, and which is open for public consultation.
DART underground is a rail link proposal predominantly underground from the northern line, just north of Connolly station, to Inchicore on the Kildare line and with stations proposed at Docklands, Pearse, St. Stephen's Green, Christchurch, Heuston and Inchicore. The project received planning consent in 2011 which became operative in March 2014, following judicial review proceedings taken by a number of third parties. The estimated cost of the currently designed DART underground project is €3 billion and the cost of the currently envisaged DART expansion programme is €4 billion. The DART expansion programme comprises DART underground, as outlined above; electrification of the northern line to Drogheda; electrification of the Cork line from Heuston to Hazelhatch; the completion of four tracking from Park West to Inchicore; electrification of the Sligo line from Connolly to Maynooth, together with the removal of level crossings and resignalling; and expansion of fleet and depot facilities.
The DART expansion programme will provide a DART service from Drogheda to Hazelhatch via the city centre tunnel and a second segregated DART service operating from Maynooth to Greystones. The two segretated services will intersect at Pearse station, which will be the main passenger interchange. The DART expansion programme remains a key project in the delivery of an integrated rail transport network for the Dublin region and continues to feature as a key project in the draft transport strategy for the greater Dublin area. The overall DART expansion programme has been assessed as a positive project from an economic perspective and a benefit to cost ratio of 1:1.4.
While the DART underground project has received planning approval from An Bord Pleanála, the business case for that project, prepared by Iarnród Éireann, indicates that its development alone under the current railway order is not economically justified with a 1:0.8 ratio. The DART expansion programme business case is available on the National Transport Authority website at the link indicated in the written statement.
Given the very significant cost of the DART expansion programme, and recognising that a lower cost alternative for the tunnel element is possible, the authority recommended that the compulsory acquisition powers of the approved railway order for the DART underground project were not activated, that is, that the notices to treat were not issued; that the DART underground project is redesigned to provide a lower cost technical solution for the project whilst retaining the required rail connectivity; that a new railway order is sought for the revised, lower cost DART underground project, together with any remaining elements of the overall DART expansion programme which have not already been approved under separate approval processes; that the design and planning work of the revised DART underground project is advanced in order to be available for commencement of construction after 2020; and that the non-tunnelled elements of the DART expansion programme be progressed in line with available funding. Some alternatives that the National Transport Authority will explore in regard to a lower cost solution for DART Underground include to tunnel to Heuston and not Inchicore; to tunnel only between Heuston and Pearse stations and not Docklands; or to tunnel between Heuston Station and Pearse Station with fewer intermediate stations. The Government’s capital investment plan 2016-21 has made provision for advancing the DART expansion programme commencing with the extension of the DART line as far as Balbriggan and the design and planning to progress for expansion of DART services to Maynooth in the west and to Hazelhatch in the south west.
I will conclude with the Kerry Flyer service and the provision of school transport. The National Transport Authority has no role in the provision of school transport services funded by the Department of Education and Skills. Bus Éireann procures school transport services under an administrative agreement with that Department. Therefore, the authority is not in a position to comment on any school transport contract as we are not a party in their procurement. The authority is responsible for the management of rural transport service provision funded by the Department of Transport Tourism and Sport under the rural transport programme.
Having taken responsibility for the programme in 2012, the authority devised a new organisational framework for these services in mid-2013, reducing the 35 groups to 17 transport co-ordination units based on local authority boundaries. All 17 Local Link offices are now up and running very successfully with many operating from local authority offices, which has been of great benefit in integrating service provision with other services of the local authority. The authority hopes to build on this new structure and, where gaps have been identified, provide new services in 2016.
Kerry Flyer is one of the operators which provides rural transport services under contract with the National Transport Authority and the Kerry Local Link office, managed by Kerry Community Transport Limited. Many of these contracts were novated from Kerry Community Transport Limited to the National Transport Authority. In 2014, Kerry Flyer received €172,899.50 as a contracted operator for the delivery of 26 rural transport services all of which were wheelchair accessible. The majority of this funding came from the National Transport Authority through the rural transport programme.
This week we intend starting the re-tendering of all rural transport services provided by private bus operators with the publication on the e-tender website of a call for interested operators to register their interest in future tender competitions for rural transport services. Currently there are approximately 290 contracts in place which now need to be refreshed. These will be tendered by the authority over the next 12 months.
I trust that we can answer any queries from members.
I thank Ms Graham for the presentation. My only concern about the DART underground decision is to do with the decision making process itself. If we look back to 2010 when there was an initial cost benefit analysis done on DART underground, the business case suggested a 4.23:1 ratio when measured using the traditional cost benefit analysis - considered to be approximately a €13.3. billion return on investment over a 60 year period. This was using standard criteria for carrying out that benefit to cost ratio. When one factors in the figures from 2010 of the wider economic benefits of €4.7 billion, it generated a 5.38:1 ratio. When the Minister came to making a decision it appears that there had been some further work done by the National Transport Authority. I do not know whether this was done on its own initiative or at the suggestion of the Department or the Minister.
I would like the witness to take the committee through the process of how the authority revisited that cost benefit ratio. The Minister said it was a 1.5:1 ratio. Using the 2010 figures, where the sensitivity testing shows a worse case scenario of virtually no growth from 2010 and a 1.99:1 ratio, I am confused as to how the initial data gets transposed later and provides a different outcome. If we compare the baseline level of expected growth and activity in 2010, a period of economic uncertainty, to any analysis now it would show a much more positive outlook and envisage a potentially much greater benefit to cost. I would appreciate comment from the representatives on the business case reported in 2010 compared to the situation today.
Mr. Hugh Creegan:
The base case work that was done in 2010 had a 2:4 ratio, when the wider economic benefits are excluded. That business case covered the full DART expansion programme, the DART underground tunnel and all the other ancillary pieces. The Deputy asked what was the impetus to update the business case. It was because there was a new capital plan to be developed this year - which had been flagged for a number of years - and it was necessary to revisit, revise and update the 2010 business case to produce the current information in order to inform the new capital plan.
When the authority started work on the updated business case it identified that with the new circumstances, the DART expansion programme would have, as the Deputy has pointed out, of approximately 1.4:1 to 1.5:1. The Deputy has asked why this was different from the previous business case. There are a number of reasons. One is that the distribution of population and employment projections, or the density of population close to stations, is a bit different now than it would have been seven or eight years ago. The current business case also had to consider other factors, such as the Phoenix Park tunnel link which is now going to open next year. That would not have been a consideration in 2009 or 2010 when the original case was made. That tunnel does not have a huge impact but it does have some impact on the benefits that one can say are truly delivered by DART underground and DART expansion.
The third reason why the current business case is different from the 2010 case is there are things that could be done outside of the DART expansion project such as higher frequencies on DART. It is hoped to introduce ten minute DART services next year. They had been assumed to be part of the DART expansion programme a number of years ago but now they will be delivered outside of the programme. They do no need the DART expansion project in order to be delivered and some of those benefits cannot truly be tied to the project.
I will conclude with the fact that in the intervening period there have been some technical changes in the way cost benefit analyses are conducted. The Department of Public Expenditure and Reform has provided clear guidance under the public spending code, elements of which are technical such as discount rates, and some of which have changed in a way that would bring down the benefit side of most of these equations. It is a more thorough process now than previously.
What Mr. Creegan is saying is that the system of establishing the cost-benefit has changed and that is where the figure comes from. Is that correct? I have some information before me which I believe I got from the National Transport Authority through the freedom of information process. It sets out the appraisal sensitivity test. The base case involves high growth and a 60-year appraisal. The figure is 4.23. On a 30-year appraisal the figure is 3.19 and on a no-growth scenario it is 1.99. The most pessimistic scenario had no growth over a 30-year appraisal. It included a two-year delay and a 25% cost over-run. Even the figure for that is 1.36. The Minister seems to suggest that the re-worked case brings the figure down to 0.8 BCR, benefit-cost ratio - Mr. Creegan has already highlighted it. In the revised case in 2015 that involves only the DART underground without the DART extension.
I get and understand the notion of the DART extension being a fundamental part of getting to where we will really get activity on the line. However, I am confused about how the numbers could change so much. The same changes do not seem to have come on the same BCR or with the same cost-benefit on the metro project. There does not seem to have been the same step change from 2010 to 2015 with the new analysis. Perhaps Mr. Creegan could help me to understand that a little better.
Mr. Hugh Creegan:
There are various sensitivities one can apply. There are what are known as wider economic benefits. These are sometimes disputed in respect of whether they are truly capable of careful quantification. Therefore, the guidance that exists suggests that we should be cautious about adding on other wider benefits.
Is Mr. Creegan suggesting that the business case analysis being done on various public projects can change based on a given view, for example, the view of the Minister, the Department or the authority? It seems to me that one can change the criteria to lend to a given person the outcome he desires, within reason. If we change certain fundamentals, the numbers will obviously change. That leads someone like me to believe that if the Minister or the Government take a decision not to proceed with the project and rework the business case - it is effectively the same raw data - then they can get a different outcome. Is that correct?
Mr. Hugh Creegan:
That has changed in the intervening period. Some projects would have been following the methodology set out in that code, while others might not have. There is a codified process in place now.
Factors like discount rates, which represent the cost of money and investment, vary from time to time. Reviews must be carried out on a regular basis and they can change. However, the overall methodology has not changed.
What happened in the past was that project sponsors and developers might have taken an overly optimistic view of the wider economic benefits, for example, the non-transport benefits of a project. Now, we have a codified system in place to control that.
What has happened in this case is that we have updated the business case in accordance with the current rules. We are getting a benefit-cost ratio of approximately 1.4. That is different from the figure of 2.4 produced previously. Among the reasons is the fact that the Phoenix Park tunnel provides some benefits that would have been provided otherwise by DART underground. That needs to go into the equation. A ten minute DART service, which would have been in the equation previously, is going to materialise so it should not be counted as one of the benefits of the project. Some of the more technical things, like the discount rate, have increased from one number to another number over a period.
Let us consider the business case produced by Irish Rail. We were part of that and we reviewed it. Irish Rail set out a step-by-step comparison on how the number in the original business case moved to the new number. The explanations include those I have just set out for Deputy Dooley.
It can undermine public confidence in the way the State does its business. In 2010, when we were at the height of an economic crisis, projections would have been at an all-time low and the general outlook was uncertain, to say the least. Yet, we still get a higher turnout on the basis of the investment. Let us move on to 2015 when things are looking far brighter. We are understood to be the fastest-growing economy in Europe. We are now getting back to the same level of pressure on housing and an ever-increasing demand for public transport. The M50 is rapidly reaching its capacity. As the deputation will know, sections of the M7 are at breakneck point at certain points of the day. Yet, there is a change in the methodology and a significant infrastructure project, which would alleviate some of the constraints I have referred to relating to other surface transport options, seems to deliver less value to the State. It is hard to comprehend that in real terms.
A person can write an algorithm to give an output for whatever he wants. That is not a problem. Calculus is fantastic when we decide to use it in a particular way. However, in real terms it will take more to convince me, and many others who find themselves in gridlock on a daily basis, that this is anything other than a political sidestepping of an important issue.
The establishment of the authority was the right thing to do at the time. It created an independence from the old adage, practised by all political parties, of having key projects that delivered certain political benefit. It was a question of separating that and ensuring public transport was delivered on the basis of need rather than political realities. The same situation relates to water. This is why, the Government would tell us, Irish Water was established. It was to take out that prioritisation by politicians.
The difficulty is that it tends to undermine things. Give the case where a scenario changes, it tends to undermine public confidence in the work that the authority does. I am not accusing the authority of anything. I am simply pointing out how I believe the authority needs to do more to convince all of us about how the DART underground and its wider implications are of lesser importance and lesser benefit to the State now than in 2010.
Ms Anne Graham:
We do not disagree with the Deputy about the importance of DART underground and the DART expansion programme in particular. As we have indicated, it is a key project in our draft transport strategy. It will deliver benefit to the region if it is constructed. However, many other elements need to be developed to reduce the level of congestion throughout the region.
We agree that it is still a very important. It is a key project and programme that needs to be delivered over the 20 year horizon of the strategy to reduce congestion and provide for the travel demand that is increasing throughout the region. We are an independent agency that evaluates these business cases on behalf of the Department. We are required to evaluate them. We retain our independence in that regard.
Mr. Hugh Creegan:
No, I can clearly state that the business case is simply a question of what the benefits would be if the project was built. It does not get into the moneys available. That is a separate decision. The business case was carried out. The question was what would the benefits be if this project was built.
I welcome and thank the representatives of the authority for coming before us today. The issue I am keen to raise with the authority relates to the Kerry Flyer and what I see as the displacement of private operators from school transport routes by this publicly-funded organisation. I thank the authority for making reference to this issue in the opening statement.
I note that there is an air of "it's not our problem" about the statement, but I certainly feel that it is the NTA's problem. I know, Ms Graham, that we have discussed this previously. In my view, what is going on here is completely unacceptable. We have private entrepreneurs, business people, who are effectively being put out of business by a body that is heavily subsidised by the State. Our efforts to date, over the last number of months, to try to get answers and hold somebody to account, have been met with a collective "pass the buck" from a range of organisations. Members of the Oireachtas from County Kerry feel that there has been buy-in from everyone here in terms of saying that what is going on is completely wrong.
Is Ms Graham concerned about what is happening here? Is this how she envisaged from the outset the use of funding that she is giving under the rural transport programme? Is this how she envisaged it being spent?
What level of investigation has Ms Graham engaged in to ascertain where the money that she is delivering has been spent? Has she investigated precisely what activities are covered by the money she is giving here to this company? Does she see this as the role she was expecting this company to deliver? What does she say to the private operators who have been forced out of business or are in fear of being forced out of business because of the actions of a body that her authority is funding? Could I get answers to those initial questions? I have further questions, Chairman.
Ms Anne Graham:
I have to make it very clear what we are responsible for, so I need to repeat that we are not responsible for the procurement of the recent school transport contracts. We would be aware of what they are, but the decisions relating to that have nothing to do with the authority. Therefore, we cannot comment on any outcome relating to that procurement because it is not part of the statutory role that we have.
We do have a responsibility for the rural transport programme. We took over the management of that programme in 2012. At that time there would have been a number of contracts in place between Kerry Flyer and Kerry Community Transport Limited in regard to rural transport provision, the provision of public transport services. They would have been procured by Kerry Community Transport at that time. Those contracts, as with other contracts throughout the country, were novated in that we became the client for them in order to keep them in place and the services running until we were in a position to re-tender them. Therefore, I can only respond concerning those particular contracts for rural transport services. They would have been procured by Kerry Community Transport Limited back in 2009.
We are now going through a process of re-tendering those services. We commenced that process this week with a pre-qualification procedure. It is open to all public transport operators to avail of and go through that process. We cannot comment on the school transport contracts. I can only respond in regard to the rural transport contracts.
In terms of the checks and balances we would have in place, we have an external audit concerning the rural transport programme. The audit relates to the funding that is given to the different groups, the 17 RTP groups. Those auditors would try to ensure that proper public procurement has been used in terms of contracts that are funded through the rural transport programme. There is a rolling series of audits of all the rural transport groups. There were originally 35 rural transport groups. They would have been audited by Pobal which was the agency responsible for the programme in advance.
At this stage, I do not have to hand the date of the last audit undertaken of Kerry Community Transport Limited but I can certainly make it available to the Deputy. However, that would have been an ongoing audit of all rural transport groups, initially by Pobal followed up by ourselves, to ensure that the funding associated with rural transport programmes continues.
I find that remarkable. These concerns that we have and about which Members of the Oireachtas have been in contact with the NTA, go back a number of months. One of our key concerns is that funding administered by the authority is being used incorrectly or is being used to basically give one party an unfair advantage over private operators. Does Ms Graham mean to tell me that since then she still has not initiated any efforts to ascertain what is going on here, and to see if the funding is being used precisely and only for what it is supposed to be used for?
Ms Anne Graham:
What would have happened in regard to Kerry Flyer is that it would have put forward a tender for the running of the rural transport services. At that time, they would have been considered and evaluated by Kerry Community Transport Limited which would have accepted those contracts. It is not appropriate that the contractor or client would then check each expense associated with or related to a particular contract. They accept the contract tender price associated with the delivery of those services which then get delivered by the operator.
The audit that we would do is an audit of funding that goes to rural transport groups that manage those services. We accept that the contracts have been properly tendered and put forward through a public procurement and that those costs are reasonable, related to the operation of those services.
However, the buck stops with Ms Graham. As she knows, these concerns have been flagged for a number of months. It is not good enough to accept what she is being told. Ms Graham she needs to show a lead on this and investigate what is happening here. Ultimately, we are questioning the appropriateness of the NTA's funding. These concerns have been ongoing for a number of months now. How often is it that Ms Graham gets so many Oireachtas Members all with the same concerns? Why is she taking a passive approach to this? Why is she not being proactive to forensically investigate and ensure that the funding the authority is providing is only being used for a specific purpose and for no other purpose, and is not involved in the displacement of private operators? That is certainly the concern of myself and others.
Ms Anne Graham:
Yes but, Deputy, we have at least 290 contracts throughout the country. They are the providers or operators, including Kerry Flyer which is an operator. They have all the licences associated with providing public transport services. In good faith, they tendered for a contract related to rural transport services in 2009 and have been operating the services since 2009 to deliver rural transport services in the Kerry region. I do not think there has been any question about the services that they have been providing. They have been very good quality services to the public of County Kerry.
A different procurement has happened related to a different service that has nothing to do with the rural transport services that are provided by Kerry Flyer. It is not appropriate for us to open up an investigation into funding that we provide related to rural transport services because it is funding that has been delivered to them over a number of years to provide specific rural transport services.
Can Ms Graham confidently say to the committee here today that she is fully confident that not a cent of the funding that she administers is being used in any way to assist in the securing of these contracts by this particular company, therefore displacing private operators? Can she confidently say that?
It is entirely appropriate and relevant for me to ask the question. Ultimately, this is with regard to funding administered by the National Transport Authority and I am asking whether it is confident it is not being used for reasons other than those for which it should be used.
Ms Anne Graham:
I do not think it is appropriate for me to put forward how a private body, which is a charitable organisation, assigns its funding throughout the company. It is a matter for the company. I am assured the moneys put forward by us for rural transport service provision are used for rural transport provision. It is a very reasonable cost in terms of what is provided by the particular company but how it allocates the funding within the company is not something that is appropriate for me to discuss. All I am concerned about is that the services are run for the tendered price put forward and that this is the money paid to the particular body.
What I am getting at here is that there are huge concerns about this money circle. I take it that it is not as straightforward as the National Transport Authority just handing over the money but that it goes through a process. Given the concerns flagged with it, does the National Transport Authority now agree it is not acceptable for it to take such a passive approach and that it needs to take a more proactive approach to investigate this to ensure not a cent is spent in any way that was not originally intended?
Ms Anne Graham:
If we feel it is appropriate to raise it as an issue we can add it to the audit that will be done with Kerry Community Transport Limited at a particular time. We will consider it. I must point out this contract was publicly tendered in 2009 and a price was put forward for the delivery of the services, which was accepted. We inherited the contracts in 2014 and we are confident the service being delivered is that which is being paid for at present.
There is a laissez-faireapproach here and the National Transport Authority needs to change tack. The money leaving its coffers should not be the end of its responsibility. It needs to fully ensure the money is used specifically for the purpose for which it is intended. The authority needs to be concerned if the money has a broader use and consequence and I do not see this concern, which concerns me hugely.
I welcome the representatives from the National Transport Authority and the Kerry bus contractors who are present. The concept of the community rural bus service was to provide a State-funded transport service for unserviced rural areas, with a scheduled timetable if at all possible. This is a huge diversion which has massive consequences for the bus contractors to whom I referred. A total of 43% of their commercial business has been taken from them, with regard to Bus Éireann school contracts. It is quite obvious the playing field is not level and the contractors are up against State subsidies. I estimate that between 2014, this year and next year €500,000 in subsidies will be paid over. The bodies involved include Pobal and the Department of Social Protection through various schemes. I would like confirmation this State funding is provided for vehicle maintenance costs and for insurance and tax payments. The Kerry bus contractors are fully taxed and do not have charitable status.
The bus contractors would not be here today and would not have had meetings throughout the summer unless they were very concerned about their small businesses, their employees and their families. They have given a top-class service to Bus Éireann down through the years and everybody has been witness to this. They are upgrading their fleets and doing their utmost to deal with all of the impediments they face at present. We are here today at this democratic committee to seek fair play, which is what democracy is all about, but we are not practising it. As Deputy Griffin stated, the National Transport Authority has complete oversight and is the responsible body. The buck must stop somewhere and as far as we are concerned, it stops with it.
Is the National Transport Authority the body which adjudicates on operating licences? On what basis has it granted licences for community bus transport? Are conditions written in from the beginning? I am not speaking about the most current licences or those from 2006 but those from prior to that. In 2000 and 2001, when the scheme was started, what was the situation regarding clauses and conditions in the operating licences for companies? If changes were made, what was the reason?
This is comparable to Dublin Bus, which is also under the jurisdiction of the National Transport Authority. Will the witnesses compare Dublin Bus services to community bus services? Is there any connection or are they in tandem? Is what is given to community bus services different to what is given to Dublin Bus services?
Does the National Transport Authority communicate with the Competition and Consumer Protection Commission and Pobal on this? The authority needs to give further clarification to clear the air and provide transparency. From here on, the authority needs to quickly advance on this and resolve the matter. Genuine people in the transport business are losing their jobs. What is happening at present will mean the closure of some of these businesses in the short and medium-term. These buses also provide a service in villages with regard to licensed premises and public houses but many of these are closing down, which is another loss to the bus service providers. They are up against it.
Ms Anne Graham:
I will make some points in response to the Deputy. We do not have complete oversight of the funding for Kerry Flyer. We are just one of its funders. As the Deputy pointed out, Pobal manages funding through a community services programme on behalf of the Department of Social Protection. We provide funding through the rural transport programme, which is related to particular contracts associated with the delivery of rural transport services in Kerry.
If I understand the Deputy correctly, he is referring to the road passenger transport operating licence, RPTOL, which is administered by the Department of Transport, Tourism and Sport and not by us. That gives an operator the ability to operate as a public transport operator. An operator providing one of our contracted services is required to have this licence, however. It is either a RPTOL or a community licence. That is what is required in order to deliver services for us.
In terms of trying to compare Dublin Bus and the services provided by Kerry Flyer, Dublin Bus services are provided under a direct award contract to the authority. That is where there has not been an open public competition but there is a contract in place for delivery of those services. In the case of Kerry Flyer, it tendered for the services it delivers. It is slightly different in terms of the contracts that are in place. That would be the only comparison. They both receive a subsidy in terms of delivery of the services. Dublin Bus receives a subsidy to meet the operating costs relating to the delivery of those services while Kerry Flyer also receives the cost of operating the services it has tendered for.
We have not been in touch with the Competition and Consumer Protection Commission. If we need to contact the commission, we certainly will. We do not feel that it is necessary at the moment. We have a good working relationship with Pobal and can certainly speak to it in relation to its funding. We only have oversight in relation to our own funding. While I appreciate the Deputy's concerns about the particular companies that have not been successful in school transport provision, we can only consider the rural transport services under the rural transport programme. We encourage those operators to partake in the tender competitions we are commencing this week.
I welcome the fact the CEO stated she will make contact with the Competition and Consumer Protection Commission. Perhaps the European competition authorities also need to be consulted on this on a wider basis. There is a possibility here that funding from Europe is being utilised within the system and we would like to get to the root of all of this to get a fuller picture. For the NTA's own sake, it should also consult with the Minister for Transport, Tourism and Sport. That would be very wise given that this is a very serious matter. At this stage, all the nails must be hit on the head properly and all the relevant authorities approached which are stakeholders in this.
I refer to the extension of the M7 coach service to Tralee and Killarney in the recent past and the decision to disallow pick-ups at towns on the routes from Limerick to Tralee and Limerick to Killarney, including Abbeyfeale, Castleisland and Newcastlewest. The witnesses might come back to me on that.
The second issue will come as no surprise to the Chairman or Mr. Creegan. I am absolutely disgusted with the National Transport Authority. We have been at this for the last four years. The National Transport Authority will say it comes to the Oireachtas, listens and engages with public representatives. However, it engages on its own terms. Its terms when it comes to rural transport services are that one can have whatever one wants as long as it is what the NTA gives one. I have continuously raised an issue here which has fallen on deaf ears and nothing has happened. In fact, the situation has gotten worse in relation to rural hackneys. A sop was created in the not-to-distant past in the establishment of the special rural taxi licence, which was an admission by the National Transport Authority and relevant Government Departments that there was a deficiency in relation to rural hackneys. It was a joke. If one contacts the local authorities which have a role in this, they do not even know what it is. There is supposed to be a transport co-ordinator from whom one can seek information. On the NTA's own website, it suggests that as part of compiling information to show that one can meet the needs, one can contact people like a local priest, shopkeeper or publican. That would all be very well and good if those people were in situ. However, we have parishes in County Limerick, unfortunately, which have been amalgamated and there is no priest. There is often no local shop or pub.
The National Transport Authority has turned this into a bit of a joke but it is no laughing matter. The reason I continue to raise this issue is that in recent correspondence, the NTA has tried to con me into believing that if one is from Mitchelstown, County Cork, and being asked to do a knowledge test for County Cork, one should have no difficulty knowing the name of the street in Castletownbere where the post office is. That street is the same distance from Mitchelstown as O'Connell Street in Dublin. I am getting a bit withered from this-----
-----as there are jobs being held up which cannot be filled in rural hackney companies due to the intransigence of the National Transport Authority.
I met the taxi committee of the National Transport Authority and received a very fair hearing from the taxi representatives themselves, especially the rural ones. Lo and behold, after a very positive meeting and engagement, it was nailed by the National Transport Authority which circled the wagons to protect the status quo. I am disgusted with that. Since 2010, the number of hackneys in rural communities has dropped by 50%. The number of people failing knowledge tests is of the order of approximately 80%. I challenge any of the three witnesses or any member here, all of whom are from rural communities, to sit one of these tests. As I have said to Mr. Creegan before, on one of the tests, one is asked on which street in Doon can one find the Allied Irish Bank. There is no AIB branch in Doon because it closed. One is also asked on which street in Abbeyfeale is the Allied Irish Bank. It is not on any street, it is in the square. I am getting withered from it.
I have to go but I only have a brief question on rural transport in the context of the presentation in which reference was made to the new tendering process. Is was stated that all rural transport services are being retendered and that there are 290 contracts in place. In light of some of the comments made by Deputy O'Donovan and the fact the Chairman and others, including myself, have raised in the past the bypassing of certain towns and villages by the national bus company, can the NTA include a criteria, which I do not think it does now, under the new tendering process to provide for co-ordination of timetabling in rural areas? That would allow people who want to access the national bus service, which they cannot do in their local villages, to do so in the larger towns. In my part of the country, that would be Longford. Timetables should be co-ordinated to ensure that those people, many of whom are elderly, could access the national bus routes.
My last point is a comment and it is not being smart. I am a great supporter of plain English. What does "novate" mean? I would be a grateful for a written reply on my specific questions.
Mr. Hugh Creegan:
We have had discussions several times on the hackney driver licence issue. I understand the committee met representatives of the taxi advisory committee, a body which advises us. Their advice to us, ultimately, was not to subdivide the test areas and to retain the test as it was. That was its advice following the committee's discussion with them. That is the advice they gave us. Driver licences for hackneys are still being issued. In the past 18 months 856 licences have been issued to new drivers who can drive any hackney, taxi or limousine.
Mr. Hugh Creegan:
A total of 1,800. The pass rate is 46%. On the first test taken, the pass rate is approximately 23%, but, on average, people pass the driver entry test after 2.5 attempts. The figures in some counties are better than others, but the average figure is 2.5. We have close to an additional 1,000 new licences in the past 18 months. People are, therefore, passing the test and entering the industry.
The Deputy presented the issue of local area hackney licences as though we were somewhat against them.
Mr. Hugh Creegan:
The NTA made the proposal for these licences as part of the taxi regulation review report and we would like to issue more of them, but they are targeted at local areas where there is not the opportunity for a commercial hackney service to be provided. The last thing we or the industry would want is that we use the lesser licence type to displace existing operators. It is important to us in dealing with local area hackneys that they be targeted at a local area and that that area is not served by a number of taxi or hackney operators. Many of the applications we have received to date have been to cover a vast area of a county, not a local area. They cover towns that have multiple operators. Clearly, in these cases we cannot issue a licence. However, we would like to issue more local area hackney licences in places that genuinely need this service.
I will ask the question again. Is it fair that a hackney driver in Mitchelstown who will cover parts of counties Limerick and Tipperary and north east Cork should be expected to know where the post office in Bantry is, given that it is as far away from Mitchelstown as O'Connell Street in Dublin?
Therefore, it does not matter that he or she can drive the hackney in County Limerick and County Tipperary. He or she does not need to know anything about Kilfinane, Cahir, Skeheenarinky or Kilbehenny which he or she will service. The NTA is happy that he or she does not have to know the area he or she is servicing, but he or she has to know about an area almost 200 miles away. If he or she gets a fare to the post office in Bantry, good luck to him or her because it would be the equivalent of winning the lotto if one comes from Mitchelstown. It sums up the intransigence of the NTA in this regard. It is no wonder we came up with a B list hackney licence to make up the deficit. The Minister, the Department and the NTA have failed in this regard.
Ms Anne Graham:
I will respond to Senator Paschal Mooney's questions. He raised an issue about rural transport tendering and trying to schedule services in line with other mainstream services. Before we issue a detailed tender for a particular service, we will take the opportunity to have a look at the services surrounding the rural transport service and try to tweak that service to meet adjoining services, if possible, because it is in our interests to have an integrated transport service.
I would like to come back to the Kerry Flyer issue and the loss of five operators who had served the school transport system excellently for a number of years. As the tendering process is about to commence again, it is possible the other seven contractors may lose their contracts also if this is allowed to continue. The main argument centres on the use of public money by Kerry Flyer. A sum of €172,899.50 was mentioned in the presentation as a contribution. My understanding is this is divided into two sections - staffing and support and operational-non-wage funding. The former includes drivers, driver vehicles, supervisors, passenger assistants and administration, as well as 7.5 FTE posts.
The operational non-wage funding includes diesel costs and other running costs such as vehicle insurance, maintenance services and motor tax. Will the witnesses tell me which of those two sections the money it allocated went into?
Ms Anne Graham:
When any public body tenders for a particular service, it gets a price for that service. In this case, it would have been a single price. It would not have been divided into different aspects. It would probably have been a daily price for the delivery of a particular rural transport service. We would not interrogate where that money is going in relation to the group and we would not be expected to do so. It was an open public tender. At that time in 2009, a price was put forward in a tender for the delivery of a rural transport service. We would have accepted the price for that service and we pay the price for it through Kerry Community Transport Limited, which manages the local office in Kerry. We are required to ensure there has been a public competition relating to the provision of a service and the funding matches the tender price for that service. That is the extent to which we look at the costs.
Does Ms Graham not think it would be prudent of the authority to seek assurances regarding how the money in question is spent? I ask that question in the context of the need to examine the unequal playing pitch that is a feature of the tendering process. For example, bus operators who do not enjoy State funding and do not have the ability to enjoy charitable status are competing in a disadvantaged position. Kerry Flyer, which has charitable status, divides the State funding that it gets from the NTA into two sections: staffing and support funding and non-wage funding. Kerry Flyer is at an advantage and the private operators are at a disadvantage. If this is allowed to continue as it has continued without being checked and scrutinised, it has the potential to put more and more private operators out of business.
Ms Anne Graham:
I cannot comment on how the company allocates the income it receives across the different services it provides. All I can say is that there was an open public tender associated with the provision of rural transport services in 2009. The price that was put forward by a company for the delivery of those services was accepted by Kerry Community Transport Limited at the time. The services in question are now under contract with the NTA. Under the similar process we will follow when we are re-tendering those services, we will receive a price. If it is an acceptable price, we will pay that price for the provision of the services in question. That is what public procurement is about.
Is Ms Graham aware that in a letter dated 29 September, the Competition and Consumer Protection Commission said it is preparing practical guidance for policymakers to assist them in assessing proposals which may have implications for competition? I understand that this guidance could relate to instances in which businesses receive assistance under social policy schemes, such as the community services programme, that may place them at an advantage in competing with existing commercial operators. It is intended that this guidance will help policymakers and grant-giving bodies to design and implement schemes in a way that minimises the distortion of competition and allows consumers to reap the benefits of active competition. Has the NTA had any consultation, written or otherwise, with the Competition and Consumer Protection Commission?
I have one further question. Will the NTA consult the European Competition Authority to find out whether the funding that is provided to Kerry Flyer by the NTA and other bodies can be scrutinised to ensure it does not distort the competition between private operators and Kerry Flyer?
Ms Anne Graham:
I do not know whether it would be appropriate for the NTA, as a body, to do that. It would probably be more appropriate for the Competition and Consumer Protection Commission to do that. I do not think it would be appropriate for us to seek that advice directly. Obviously, we would engage with our own national bodies.
I thank the witnesses for their presentation. They spoke about the possibility of the DART going to different areas. The first proposal that was on hand involved going underground and all that. What sort of money has been spent on that project so far? I refer to expenditure on designing and looking at different things.
That €45 million was spent on dreaming a dream and now it is all being changed over. Is this a common occurrence with public funds? Is €45 million regularly wasted by the Department or by Irish Rail on various projects throughout the country before those projects are abandoned? I always argue that someone working in the public service can dream a dream and go do something but the taxpayers have to pay. If someone who is self-employed makes a mistake, he or she has to pay. Is someone accountable for what has gone on? Has someone faced repercussions for spending this amount of money and then abandoning everything?
Mr. Hugh Creegan:
I do not know the start date. The current capital plan says that parts of the overall DART expansion programme will be advanced during the period of the current capital plan which extends to 2021. Parts of the project will advance during that period. I do not know when all of the project will be finished.
When we were speaking earlier about engaging a project, Mr. Creegan spoke about the importance of assessing the need for that project as against the value of it, etc. If it transpires when an assessment is done three or four years from now that the relevant ratio is 1:1.5, as opposed to the ratio of 1:5 that was mentioned earlier, will the project be abandoned then?
Mr. Hugh Creegan:
If it is finally determined at any time in the life cycle of a project that it does not make economic sense because its benefits do not exceed its costs, that project should not proceed. None of us in the NTA is of the view that the project we are discussing does not represent a good project to do. We think it is essential for the Dublin region, but we cannot say exactly when it will be finished.
It seems to me as I listen to what the witnesses are talking about today that everything is based around Dublin. Does the NTA have any plans for rural Ireland to lift it up a bit and give it better services?
Mr. Hugh Creegan:
On the infrastructure side, we are limited to the greater Dublin area in terms of the budget we are given for infrastructure. The remit in terms of public transport outside the greater Dublin area sits with the Department of Transport, Tourism and Sport, although we manage part of it in the cities. As the Deputy will be aware, responsibility for national roads sits with the-----
Ms Anne Graham:
Yes. I will just cover the services side. The Deputy might know that the Minister has announced an increase in public service obligation payments for 2016.
That allows us to look at additional services not only in the greater Dublin area but also in rural areas where there are gaps that we know about and which members know about also. It gives us an ability to start putting back into rural areas the level of service required for them.
Does the NTA have a vision for those rural areas where services have been cut in the past few years? There are many parts of rural Ireland that need services, including small towns. While there is a rural service and I acknowledge that it is a help, there is a need in the different aspects of life in rural Ireland. We have the rural bus link, which is good. It has worked well in Sligo and started well in County Leitrim. However, the NTA needs to look at it. At one time it was the bingo bus and the bus taking people to collect their pensions. That is realistically what it was. In fairness, there has been some new thinking in counties Sligo and Leitrim and it has started in other counties. However, we must ensure the bus we look at is the bingo bus, the bus to take people to collect their pensions and the bus to bring employed youngsters to town who might not have cars as the price of insurance is getting out of hand. We need to ensure it is the bus that goes around an area to bring people to the pub in the evening to keep that side viable. An aspect of rural life has been decimated by different laws and regulations. While one cannot obviously drink and drive, we have not put in place an alternative solution. We need to take an holistic view to ensure we provide the services required to help different businesses with welcome extra funding. Rural isolation has also become a big problem. Dublin is a fine city and everyone loves it, but there is another part of the country and we would like people to turn their eyes to it to ensure it has services too.
Ms Anne Graham:
I agree with the Deputy. Our eyes and ears around the country are the 17 local link offices. They assess the need for services and put forward proposals to us for additional services in rural Ireland. While they have to consider the uses of transport - it is not just the bingo bus or a bus to bring people to collect their pensions - they must also encourage public transport use to access employment, education and other services. That is the type of environment in which we want to operate.
In talking to the 17 offices which I acknowledge are making progress I ask the NTA not to focus completely on the larger towns. There may be five or six small communities or small towns in a rural area and everyone is whipped out of them on a Friday and brought to the larger town where there is a Lidl and a Tesco store. However, it is the small trader in the small town to whom the NTA should help local people to get. I ask it to keep a focus on the "shop local" idea to revive smaller towns.
Does the NTA ever talk to the HSE? Some hospitals provide concentrated services in areas, including cancer services and so on. Does the NTA liaise in any way to ensure people from County Leitrim can have their appointments in Galway later in the day because its services might be run in that way? Is there any joined-up thinking? Does the NTA ever sit down with people to ensure the right hand knows what the left hand is doing? In most cases and most walks of life, it does not.
Ms Anne Graham:
We do not do that directly, but our local link offices have been working at different levels with the HSE around the country. In some areas it works very well and the HSE is very open to co-ordinating services with rural transport groups, but in others it has not happened at all. We want to apply the same standard nationally where we can. We have a great deal of support nationally from the HSE, but it needs to operate and work on the ground. We need our local link offices to do that work for us. Many of them are engaged in it.
I think the following matter was raised earlier, but it has also been brought to my attention in recent months. I refer to the rural-urban divide. It has come to my attention in Galway where private bus operators from Tuam, Loughrey and parts of County Mayo operate daily services into Galway which is a university town and has a hospital that the licences or the pick-up points used to be determined by An Garda Síochána but are now determined by the local authorities. What is happening, if it has been described to me correctly, needs attention quickly. A lot of pick-up points are not being approved because of safety issues. What we want to do is keep a link between rural areas and the university and other services in Galway city. I am sure the position is the same around the country. It makes no sense that buses are allowed to pick up primary and secondary school pupils along the way but that does not apply to third level students. I understand a lot of the licences will be up for renewal next year. This is going to be a massive issue down the track if private bus companies are put out of business. If a lot of the places I have heard about are not approved as pick-up points on services from Tuam to Galway city, the services will be no more. The idea is to pick up people along the way. To add insult to injury, primary and secondary school kids can be picked up and one imagines that the danger is to them. I would like to hear the NTA's comments on this issue. It may be a matter that has not hit the national airwaves yet, but it is coming down the track at a fast rate.
Ms Anne Graham:
Operators have to take the lead in this because it is their service. I suggest that well in advance of their licences needing to be renewed they engage with local authorities to see if there are issues associated with their stopping places. If some are identified, both they and the NTA can engage with the relevant local authorities. I am not saying we will necessarily have a solution, but we will certainly have no problem about engaging.
I wish to back up the Chairman. What is happening is that in a lot of cases there are byroads and at one time the bus pulled in at each one along the way. Now the local authority states, "You cannot park there. It is not safe".
However, that is where they get their business. It is safety gone mad. A solution must be found, even if it involves bringing in a digger to make a corner in order that it can pull in. If one includes these places in one's list of stops, one will be refused. Saying the local authorities will do it is not going to solve the problem. What is urgently required is that the delegates and local authorities consult on the different routes and a digger be sent to make an area safe. They are even being blocked on the hard shoulder, but, as the Chairman said, school buses can pull up outside every house along the route. That is sound. Nothing will happen to them because they are different from the ones that are a little older. It has gone a little mad and the end result will be that private bus operators will be driven out of business. The Chairman is 100% correct. I ask the delegates to take the lead on this issue with the local authorities as it must be resolved. It is not just a problem in Galway. It started there, but it will surface throughout the country.
Ms Anne Graham:
We will certainly consider the issue, but the bus stops are a local authority matter. Local authorities are also the roads authorities. We are just the licensing authority associated with the provision of public transport services which are commercial services and we do what we can in that regard. We cannot give a licence to stop at a particular stopping place unless there is approval. We can certainly engage as a stakeholder with them, but I do not believe it would be appropriate for us to drive the issue. However, given that we already have close links with local authorities in dealing with a number of issues-----
Ms Graham is saying the NTA gives the licence, but the local authorities decide whether the stops can or cannot be used. They are stating the stops where the buses have picked people up for the past 50 years cannot be used. Basically, they are stating people can walk. To be honest, one is nearly obliged to walk from Tuam to Galway in view of the local authorities stating one cannot pull in on a road. It is fine to say it is not the NTA's responsibility, but somebody had better take the bull by the horns and decide what is to be done because this problem will fester throughout the country.
I seek clarity on the Kerry Flyer issue for Deputy Tom Fleming and me. Will the committee receive correspondence regarding the NTA's forthcoming correspondence with the Competition and Consumer Protection Commission and also further communications about this issue? Given everything the delegates have heard today about the concerns raised, is this a matter for the Comptroller and Auditor General to investigate?
I understand the re-tendering process is due to get under way this week. Would it be advisable for it to be postponed until there is clarity? We require further clarification on the matters raised. Will the CEO consider postponing the process for three weeks, if possible?
Ms Anne Graham:
The stage we have started is the pre-qualification stage. It only requires operators to apply to be included in issuing tenders in the future. It would not be necessary to postpone that stage. We are only seeking interest throughout the country from operators who may wish to take part in tendering at a future date. We are not commencing the tendering process for individual contracts; we are simply seeking expressions of interest. I would not propose, therefore, to-----