Oireachtas Joint and Select Committees
Wednesday, 22 March 2017
Committee on Budgetary Oversight
Review of the Capital Plan: Transport Infrastructure Ireland
I wish to welcome the following representatives from Transport Infrastructure Ireland: Mr. Michael Nolan, chief executive; Mr. Nigel O'Neill, director, commercial operations; Mr. Peter Walsh, director, capital programme; and Mr. Pat Maher, director, network management.
I am sitting in for the Chairman, Deputy John Paul Phelan. The delegates are very welcome. They have been asked to give evidence to help the committee in its review of the capital plan. Before we begin, I remind members and delegates to turn off their mobile phones as they interfere with the sound quality of the transmission of the proceedings.
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. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or an entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.
I invite Mr. Michael Nolan to make his opening statement. When he has concluded, I will call on the various spokespersons to make their comments.
Mr. Michael Nolan:
I thank the Chairman of the joint committee for the invitation to attend.
Before I address the topics tabled by the committee, I will briefly outline what our organisation does. Transport Infrastructure Ireland, TII, was established under the Roads Act 2015 which provided for the merger of the staff and functions of the Railway Procurement Agency and the National Roads Authority. It is a non-commercial semi-State body operating under the aegis of the Department for Transport, Tourism and Sport. It implements policy as determined by the Minister and, accordingly, has operational responsibility for the delivery and maintenance of national roads and light rail-metro infrastructure. Having said that, we are mindful of the key role transport infrastructure plays in diverse policy areas, including economic development, spatial planning, achieving a regional balance, environmental protection, climate action and sustainability. TII actively engages, therefore, through the Department and directly with agencies with responsibilities in these areas. The merging of the organisations has not only brought together management and technical expertise but also significant experience in the management and delivery of the country’s most transformational transport infrastructure. The opening of the Luas cross-city service at the end of this year will provide opportunities for the reallocation of resources to the design and delivery of other TII projects. TII is uniquely positioned, therefore, to respond quickly and effectively in the design and delivery of new transport infrastructure.
I will now address specific matters of interest which come within the remit of TII. The first is the current status of the Building on Recovery programme of works. The capital investment plan, Building on Recovery, provides for the construction of eight major national road projects. It also identifies five other projects to be progressed to construction, subject to achieving planning consent. The total allocation for this investment is €730 million. However, 90% of this funding is profiled over the last three years of the seven-year plan. This funding profile dictates that most projects can only hit construction phase after 2019, with the exception of the widening of the M7 at Naas, which will start earlier. TII's strategy is to advance enabling and de-risking works during the early years of the plan. Under the current PPP programme, three new major roads are under construction. These are the M17-M18, Gort to Tuam motorway; the N25, New Ross bypass and the M11, Gorey to Enniscorthy motorway. This PPP programme is on target and set to deliver significant benefits and value for money. It should be noted that roads have been excluded from the next phase of the PPP programme.
TII is working closely with the Department of Transport, Tourism and Sport on the Government's mid-term review of the capital investment plan. While the detail of submission to the Department forms part of an ongoing deliberative process, the focus of the submission concentrates on increasing funding for maintenance and renewal works, accelerating projects within the capital investment programme, constructing additional projects, progressing the planning of other road projects deemed critical to support a growing population and economic recovery and mitigating some of the potential negative impacts of Brexit. As it can take five years to achieve planning consent for a major road project, there will be a shortfall in the number of projects available for inclusion in subsequent capital investment plans. Failure to prepare for future needs will lead to increased congestion, longer and less reliable journey times, roads that are less safe, higher costs and suppressed economic activity.
In respect of national roads, TII's main priorities are aligned with the three key priorities of set out in the Department of Transport, Tourism and Sport's document, Investing in our Transport Future – A Strategic Investment Framework for Land Transport, which was published in August 2015. They are to achieve and maintain steady state maintenance and renewal of the national road network, to address urban congestion and to maximise the contribution of transport infrastructure to national development. Funding for national road maintenance and renewals has reduced severely since the onset of the financial crisis in 2008. Between 2008 and 2016, maintenance funding reduced by approximately 35%. Infrastructure requires investment in renewals if the network is to be resilient and perform safely and efficiently. Without the necessary levels of investment, the condition of the network will deteriorate and the value of the assets reduce. Sustained under-investment inevitably results in long-term damage and reduced asset value, together with diminished benefits and additional costs for road users. The cost of deferred interventions significantly exceeds that of undertaking timely maintenance and renewals of the strategic asset. This view is shared by the Department which is working towards the restoration by 2020 of the requisite funding for pavement renewals.
TII recognises that alleviating urban congestion will increasingly focus on encouraging a modal shift to public transport, walking and cycling for commuting and short distance trips. It will seek to build on the success of the Luas and continue to support and promote the delivery of high quality public transport in urban areas, including the new metro north and other Luas extensions. However, there remains a need to address sections of urban national roads where existing bottlenecks diminish the strategic function of the network as it serves and facilitates a growing economy. Our studies have identified a number of schemes where enhanced management of and improvements to the key urban national road links are required. Furthermore, the construction of minor improvement projects on the network contributes to the overall safety of the network.
Efficient and reliable transport infrastructure is recognised as a key driver of economic growth. A well functioning transport network secures connectivity between different parts of a country, as well as with the rest of the world, linking people with jobs, delivering products to markets, underpinning supply chains and logistics and supporting domestic and international trade. Given the uncertainty in global economics and the potential impact of Brexit, there will inevitably be a greater reliance on the strategic transport network. Ensuring the free movement of goods and people across Ireland to both domestic and international markets is vital to strengthen the resilience of Ireland's economy. To ensure the transport network does not create bottlenecks in the future expansion of the economy, TII recommends the creation of a modest pipeline of major projects that are "ready to tender" and primed for delivery.
TII welcomes the advancement of the national planning framework. The current absence of a framework for long-term planning has impacted on the delivery of major infrastructural schemes. TII recognises the significance of the national planning framework and will continue to support the Department of Housing, Planning, Community and Local Government through active engagement and access to TII's modelling and analysis tools.
Of all land-based exports to the United Kingdom, between 65% and 80% are destined for markets outside the United Kingdom. Therefore, the introduction of hard borders could have a significant impact on the manner in which land-based exports operate. TII is progressing schemes to improve access to Cork Port at Ringaskiddy and to Foynes and constructing an upgrade to the M11 which will enhance the link between Rosslare and the capital. The continued progression of these schemes will be important in strengthening Ireland's resilience to meet the impact of Brexit. In addition, as the peripherality of Border counties could be increased, strengthening links both within and to the north west will be required to ensure these communities can be sustained. The need to upgrade substandard Border approaches has influenced our deliberations on contributions to the mid-term review of the capital investment plan.
I will now address capacity to ensure the delivery of major transport projects. As stated previously, following the merger and through our partnership with local authorities, TII is uniquely positioned to respond to ensure an increase in activity in the design and planning of major transport projects. Based on our experience of ramping up previous infrastructural programme and our in-depth knowledge of the sector, TII is comfortable regarding the capacity of the construction and engineering design sectors or the risk of cost inflation.
I have kept my opening remarks brief, but we will be happy to answer questions about any issue raised or any other matter of interest. Should we not have the information requested to hand, we will follow up with a written response.
I thank the Chair for allowing me to come in first. I will have to leave shortly after my questions are answered. It is a pleasure to have the officials in attendance. This is one of a series of presentations at this committee in the run-up to the budget and the wider capital review. Mr. Nolan said that a number of roads projects are ready for tender and primed for delivery. Could he give me a rough indication of how many roads projects are in that category and what the approximately budget for them might be? I presume they all involve public private partnership, PPP, in which case it is hard to know exactly what the contracts will entail. Can Mr. Nolan give me a rough outline of how many projects will be pursued within a five-year or seven-year timeframe and, based on the three PPP projects that are being developed at present, what sort of budget will be involved? I would appreciate it if Mr. Nolan could also outline to me what public transport projects are in the same category of ready for tender and primed for delivery. What public transport projects are being considered for Cork, Galway, Limerick and Waterford, in addition to the metro north and Luas extension projects in Dublin that have been mentioned? I would be interested to know what Luas extension projects are being considered. I would appreciate it if the Chairman were to allow me to come back in with a second question after Mr. Nolan has answered this one.
Mr. Michael Nolan:
For the avoidance of doubt, we are saying we are recommending the creation of a modest pipeline of projects which are ready for tender and primed for delivery. At the moment, we have just one project outside the capital investment plan that is ready to go to tender on the roads side. On the public transport side, we do not have any schemes that are ready to go to tender. That is where we are. We are saying we need to invest more money in the forward planning of roads schemes and public transport schemes because we need to ensure they are ready for future capital investment plans. At the moment, the number of schemes in our preparation pool is quite low. We have just one small scheme ready to go.
Has TII projected the approximate levels of expenditure on roads, public transport or both over the next five to seven years? Does it have an outline business-as-usual budget figure under the existing capital plan?
Okay. I would like to make a broader point. When representatives of IBEC made a presentation before this committee, my heart sank from an environmental perspective because they seemed to want motorways and roads everywhere. It was clear to me when I looked at our national climate mitigation plan last week that we are doing nothing on the transport side for climate mitigation. Our emissions are increasing sharply and we are facing a bill of at least €500 million in the near future. It seems that there are no plans in the Department of Transport, Tourism and Sport. Every time we talk to people on the inside, we are told that nothing is happening. There is no ambition to do anything on climate. When I see the roads proposals of groups like IBEC, there seems to be an even smaller prospect of us cutting emissions. It is slightly disappointing that the presentation we have heard this afternoon, like the submission we received from TII in advance of today's meeting, is all about roads and has no vision for public transport. Even though the national planning framework is open for consultation, TII seems to be all about roads and not about the investment in public transport, walking and cycling that is required if we are to build up our cities, towns and villages. When people told me at the time of the merger that it was, in effect, an NRA takeover of the RPA, I did not know whether that was a bit harsh. It seems from the presentation that has been made here today that we are back to looking at an old-fashioned roads programme with no acknowledgement of the congestion that is happening, the crisis that is facing our cities and the gridlock that is about to ensue. There is no acknowledgement whatsoever of the climate change challenge we face. Mr. Nolan did not refer to that challenge in his presentation.
Mr. Michael Nolan:
The Deputy has asked about the provision for public transport. We are working closely with the National Transport Authority, NTA, which has set out a vision for public transport within the greater Dublin area. The Department of Transport, Tourism and Sport has signed off on that strategy, which was published by the NTA last year. We do not stray into policy areas with regard to the public transport arena. That is a matter for the NRA. I acknowledged in my statement that public transport is the solution for much of the congestion around Dublin at the moment.
Mr. Peter Walsh:
Public transport policy falls under the remit of the NTA. That is why Mr. Nolan did not stray into that area. We will deliver the projects as mandated to us by the NTA. The Luas cross-city project is currently being progressed on the ground. The new metro north project is in planning. One of the other projects we hope to start this year is the extension of the Luas to Lucan, which is part of the greater Dublin area transport strategy. We are suggesting that we should look at the possibility of further extending the green line to Finglas. I will mention another area that might be of interest. As a result of the adoption of the Galway transport strategy, we have been asked to take on the requirement for bus routes in the western part of the city. We will be starting into that this year as well.
I understand the difference between the NTA and TII. I think Deputy Ryan is driving at the setting of policies and goals. TII has not been given any particular material goals outside the two projects Mr. Nolan has mentioned - the metro north project and the Luas cross-city project, which is under way at the moment.
Mr. Peter Walsh:
The project that money is currently being spent on is the development of the metro north. We will be progressing other projects. We have done some work on the Luas Poolbeg project, which is likely to be a long way into the future. We have been asked to leave it as it is at present, having identified its feasibility. The Luas line to Lucan will be given the most focus.
I am sorry, but I think we are. We are asking witnesses about matters for which they are not responsible. We are going into areas of transport policy and development that may or may not be worthy of the interest of the Chair and other members of the committee. We are supposed to be fulfilling the role of the Committee on Budgetary Oversight. In all honesty, it is a bit of a reach to bring in a particular sectoral area as we have done today. Obviously, that was agreed to by the committee. With due respect to Deputy Ryan and the Chair, when the conversation starts to move into transport policy areas for which various agencies that are not represented at this meeting are responsible, I think we are going way beyond where this committee should be going.
I completely object to Deputy Brophy's remarks. While I thank TII for its superbly detailed submission, the contents of the documents we have received are utterly depressing. I have a different perspective on the need for roads projects, particularly in the part of the country I come from. We shared our views beforehand. As a committee, we are preparing a review of the capital programme. Projects are part of the capital programme. It is completely within our remit to have this discussion. If Deputy Brophy has a problem with it, he should have raised that before the start of the committee's business. The detailed submissions that were e-mailed to us early last week are focused on projects. The frustrations of this agency with regard to PPPs have been very well articulated. I intend to pursue that matter further. I think we are completely within our remit.
I objected to the merging of the two agencies because I thought the remit of each of them was better overseen as a stand-alone agency. I would like to ask questions about staffing and costing, etc. The issue is what kind of funding we can get for the agency on the capital side. Therefore, I think it is fair enough to ask questions about the projects. The depressing thing is that there is no pipeline. We want to get a pipeline. We want to find out how we can get the money to do that.
I have a final question. It is important for us to look at what we prioritise. We cannot make such decisions until we get some of the details.
I become depressed when I hear the agencies say that we do not need to look at a Luas extension to Poolbeg because that is some way off. As a representative of that area, in a city facing a housing crisis and absolute gridlock, I believe it should be a priority. There should be an urgency on the part of the agency represented here in the context of doing the design research. I was involved with the Dublin Transportation Office in the late 1990s and early 2000s. I remember our priority then, its clear, demonstrable signal, was that whatever you do, build public transport first, build metro first - this was 17 years ago - and then do the roads. We did the exact opposite and as a result the city is gridlocking and we have a crisis. This is a hugely significant funding issue.
How many staff does TII have actively working on design for new Luas or metro projects in Dublin? I presume it is nothing for Cork, Galway, Limerick or Waterford. Of the €700 million that TII has to spend, how much will go to public transport?
Mr. Nolan could send that to me afterwards. Is it possible to obtain breakdown of the numbers of staff in the TII engaged in design for new public transport projects compared with the numbers on design for roads?
I thank Mr. Nolan for the information supplied.
I appreciate the Chairman letting me make the point. The point I was trying to make in the context of the interjections is that it is important, when asking about the areas to which one can contribute, to focus on the areas in which one has the direct knowledge and ability to contribute and not to other people's area.
I have a specific question regarding congestion on the M50. The matter is referred to in the TII submission. There is a reference to multi-point tolling and the management of the M50 but I am interested in discovering what alleviation work, apart from tolling, can be considered in the context of the M50? Is that something on which the TII representatives can comment?
Mr. Pat Maher:
As Deputy Brophy points out, the M50 demand management study of 2014 identified a number of initiatives which could be employed on the M50. Ultimately, fiscal measures were identified as the only long-term effective means of managing congestion on the M50. A number of other areas were identified as short and medium-term measures.
We have undertaken a number of initiatives relating to the M50. It is important to point out that traffic on the M50 has been growing very much in line with the rebound in the economic sphere. For example, last year there was 7% growth, 6% the previous year and 5% the year before that. Take, for example, the section between the Lucan and Blanchardstown exits, where the existing toll is approximately 135,000 vehicles daily. To deal with that we have improved junction layouts in terms of merging, to smooth the flow of traffic in and that has helped. We work closely with our colleagues and counterparts in different agencies including the Garda Síochana, the local authorities and the fire service, in relation to expediting and improving responses to incidents as they occur. One of the key things is that as there is more congestion, there is a disproportionate increase in incidents such as rear-end collisions, and when traffic is on a knife-edge in its capacity the consequences of those incidents can be very severe. We have a very active inter-agency co-ordination group on traffic management and that has contributed significantly to improvements in efficiency in the way we deal with incidents as they occur. Recently, we have put up new signage identifying signed diversion routes for traffic if an incident occurs. All of this is helpful to the road user when faced with a significant delay on the M50.
We have also commenced work on a scheme for the deployment of variable speed limits on the M50. That involves, first, the installation of lane-control signalling, which allows us to better manage the traffic in the event of incidents and it also allows for us to more safely manage the M50; in other words, if an incident occurs in a lane we can close it down. It protects the people involved and the emergency services. As part of that, the intelligence transport system infrastructure, ITS - the variable message signs - will allow for the deployment of variable speed limits. As congestion builds, if one reduces the speed of the traffic, then counter-intuitively, one allows a greater capacity to get through. The primary benefit is safety but there is a benefit to capacity; when one slows down the traffic and increases headway, one avoids stop-start traffic. This is something that has been employed quite effectively in the UK and other European countries. We are working on a scheme with the intention of having it up and running in 2019. That will buy us some time in relation to the performance of the M50. Ultimately, if traffic volumes continue to rise as they are, we will experience further congestion. At that point, a decision will have to be made in respect of the M50 as to the implementation of fiscal measures such as additional tolling, to achieve a better management of demand. Before that happens, the necessary public transport alternatives need to be in place, but we do need to look at that scenario. The year 2023 was identified as the horizon in the April 2014 demand management report. By next year we will be more or less at the traffic volumes that were envisaged in 2014.
I take on board much of what Mr. Maher said. I am a daily user of the M50 and anyone who uses it can see the economic recovery in the country is directly correlated to the level of traffic on the M50. It is probably the best barometer one could have of it.
I am sure the Chairman will agree with my next point. We represent the same constituency and we made it previously to colleagues of the witnesses. I was very pleased to hear TII's final contribution regarding the development of public transport alternatives within the context of developments relating to the M50. The major concern for people who live directly adjacent to the M50 relates to the introduction of multi-point tolling and the financial implications of moving traffic off the motorway and into surrounding areas.
It would, on a social level, be unacceptable to the communities living there. It would also have knock-on implications for businesses trying to operate in the immediate vicinity of the M50. There is an inherent design problem with the M50. We built it and then opened up development on every single junction on it that in a very short period of time made it go from a circulatory ring road, which people used to circumnavigate the city and cut out the traffic, to a distribution road for local traffic.Mr. Maher made the point about public transport and other considerations before tolling would ever be considered. It might solve the M50 problem but it would be devastating for areas immediately adjacent to it.
I have a follow-up question to the one asked by Deputy Brophy. Is the scheme for the moderation of speed funded? I live right beside the M50 and I agree that moderating the speed will improve the capacity and reduce the potential for accidents, of which there are many and which bring it to a standstill.
I reiterate my thanks to the TII delegation for its various presentations, albeit not so much for the content, which was utterly depressing for those of us trying to develop balanced regional development and for those of us who live in the region. The luxury of having a Luas to Lucan is lovely but there has to be adequate road surface. The presentation was incredibly frustrating; I was getting madder and madder as I read it. I want to bring the witnesses through a couple of areas their presentations. In their submission, they say the current rules of the Department of Public Expenditure and Reform state that PPPs cannot be used for roads in future. Why is that? Deputy Eamon Ryan asked a question about TII's pipeline. If PPPs could be used, what would that change in the delivery capacity of the pipeline, given that the only projects being delivered at the moment are three PPP projects?
I can ask all my questions or go through them one by one, whichever the Acting Chairman prefers.
In the context of the PPP issue, I want to ask about the availability of the Juncker plan funding, which for instance has financed the re-equipment of rail stock in Poland. We have used that funding for primary care centres this year. TII is precluded from accessing Juncker plan funding for roads here because of the Department of Public Expenditure and Reform rules on PPPs.
Mr. Nigel O'Neill:
The Deputy is referring to the Department of Public Expenditure and Reform's investment policy framework for PPPs, which mandates that the annual aggregate cost of all expenditure on PPP projects will not exceed 10% of the overall aggregate capital allocation available to the Government in any individual year. In the area of national roads, we have quite a few PPPs. We have delivered 14 PPPs to date, including the three currently under construction.
Mr. Nigel O'Neill:
Yes, it is a very significant contribution. It is €3 billion in private finance which all has to be paid back through tolls or availability payments. That €3 billion has delivered €5 billion worth of infrastructure. It is very hard to see how we would have the network we have today without PPP as without it there would be huge gaps. When many of the PPP projects were mandated, at a time when the country was quite well off and during the second national development plan, it was quite clear that PPP funding was additional to what was being provided by direct Exchequer funding. There was a very large direct Exchequer funded infrastructure programme as well. A key thing for us when talking about PPP is additionality. It is very hard to see how, without PPP, that gap in funding would have been filled with direct Exchequer funding for what has been achieved to date. The 10% cap is an aggregate across all expenditure headings. TII has got quite a large PPP programme and some other areas have much smaller PPP programmes. The 10% cap applies on a whole-of-Government spending basis. That is something to bear in mind. It is pro-cyclical because the 10% cap is leveraged off the current annual capital allocations. Where the capital envelope reduces, the 10% cap also reduces. It is pro-cyclical. We are at a time of quite low capital expenditure at the moment and it reinforces that. During the height of the fiscal crisis, the European Investment Bank and, slowly but surely, foreign commercial banks started lending back into PPP projects in Ireland at a time when there was no head room for increasing Exchequer funding for infrastructure. We were sourcing and with the second PPP programme, that is, the stimulus programme that was announced in 2012, there was some significant investment coming in funded through PPP. That was a countercyclical funding stimulus at the time. If this rule applied then, it would rule out those PPPs. It is a policy issue. It has a significant impact on what we can bring in terms of PPP procurement.
TII is constrained because it is competing for funding with health and other agencies. By cutting off this source of funding, TII cannot address the pressures referred to about the M50. Are TII's European counterparts similarly constrained? Is it an Irish policy decision? Is it connected to EU fiscal rules?
Mr. Nigel O'Neill:
Whoever came up with this policy is probably best placed to answer questions on where it came from. There are PPP programmes elsewhere in Europe. Germany is currently procuring a €7 billion roads PPP programme. They will be availability PPPs. Norway has started three roads PPP projects. Other countries are doing PPP now but I do not have the exact figures of how much they are allocating to PPP.
If TII had access to PPP funding, how many more projects could it get under way in addition to the three projects currently under way, bearing in mind the concerns expressed in the presentation about the lead time? That includes public transport projects as well.
Mr. Nigel O'Neill:
PPP procurement is something that comes in when schemes have gone through their planning phase. The planning phase also requires a significant amount of capital. The PPP essentially funds the construction phase of the project and then the operation and maintenance. Typically, approximately 60% to 70% of the total cost of a project is addressed by the PPP. The other costs such as getting through design, planning and acquiring land are always for the direct Exchequer funding line.
We have such a thin pipeline of future projects that it is really hard to see where we could apply a public-private partnership, PPP, procurement right now. I will hand over to Mr. Nolan, who looks after the planning side.
Figure ten in the presentation illustrates the kilometres of lanes under construction. This would make a person cry. We will be building fewer kilometres of road in 2025 than we are building at the moment. We are told that the country is going to recover and there will be capital available and infrastructure available. There are grand plans for the M50, a Luas line to Lucan and a Luas line to Poolbeg but, in terms of the projected plans, we will be building fewer kilometres of road in 2025 than we are at the moment. We are building a lot less now than we were in 2008 or 2009.
Mr. Michael Nolan:
I presume the Deputy is looking at the graphic on page 23. That is probably depressing viewing at the moment. However, we are working closely with the Department of Transport, Tourism and Sport on contributing to the mid-term review of the capital investment plan. One of the challenges that we have is the low level of schemes being prepared and going through the preparation pool to have them ready for any subsequent capital investment plan. The Department is conscious of that. They are working closely with us. We have submitted a list of schemes that we think could go forward. They are high value schemes with a lot of benefits such as closing gaps on the network. If we could get three or five years funding we would have them ready for any subsequent capital investment plan and then have them ready for construction.
At the moment, we only have two schemes ready to go to An Bord Pleanála at the moment, subject to getting approval for the business case. Those are the Listowel bypass and a scheme on the N5 between Scramogue and the Ballaghaderreen bypass. We have a number of schemes listed in the capital investment plan that are going through the planning phase. Those are the Galway city transport project and ring road, the N28 Cork to Ringaskiddy road, the N29 Limerick to Foynes road, the Slane bypass and the Mallow inner relief road. There are a few schemes outside that which were prepared before the capital investment plan was published. Beyond that, we have very little activity in preparing schemes to go to An Bord Pleanála. That is the focus of our submission to the Department on the mid-term review. We are hoping that flat line going to 2025 will never materialise.
Mr. Michael Nolan:
It is down to what the economy can afford. Maybe it is down to what the economy cannot afford not to be happening in view of the growing population. The national planning framework which is to come out at the end of this year or early next year will put an emphasis on re-balancing regional growth and sharing the benefits of a rising economy. We realise that we are running out of schemes to present to the Department for any new capital investment plan. The Taoiseach mentioned that we should be looking at ten year rather than five year capital investment plans. We have not provided a graphic to illustrate the life cycle of a major project. It takes between five and 13 years to bring a scheme from conception through to opening and operation.
Mr. Michael Nolan:
It is not dissimilar. We are working to the same EU rules on environmental protection legislation, procurement directives and remedies. People can bring challenges to projects at any stage from conception right through to scheme close-out. Major projects are challenging and they are becoming more challenging. A new European Economic Area, EEA, directive will be issued in May which will bring in more parameters to protect the environment, particularly the human environment. The bar is set quite high, but it is a bar that is set across Europe. This means that we need to plan now for what our needs will be ten years from now. The journey on those projects needs to be started now rather than discovering in five years that we have very little to work with.
In that context, there is a very interesting document, the Impact of Improvements in the Road Network on the Accessibility and Economic Potential of Counties, Urban Areas, Gateways and Hubs. It is in the context of the national planning framework and projects being submitted to the Department. Does TII use this document to advise or guide it in those projects? I refer the witness to 5.12 on page 19. I make no apologies for making------
Page 19, point 5.12. "Turning to gateways and hubs, a very similar story emerges. Most gateways and hubs have enjoyed significant increases in employment accessibility." That refers to the last major investment in roads and road upgrades. "Ballina, Castlebar and Sligo experienced negligible improvements." However, I see nothing in any of the documents here that deals with the N26 or the N4. Is the N4 programme in planning or is it coming near to planning? The Ballaghaderreen to Scramogue project is mentioned. That goes back to the other document about the impact of road programmes on employment. There are 3,500 jobs depending on the N5 scheme. Those jobs are provided by multinationals in Mayo who are experiencing product damage because of the poor surface of that road. In the context of the national capital review, protection of employment in regions is a priority because it is very difficult to get new employment there. Does the TII take that into account in the lists it is currently submitting to the Department? I do not see anything about the N26 or the N4 in the plans here.
Mr. Michael Nolan:
In terms of the Sligo-Dublin road, the N4, our submission to the Department is part of a deliberate process. Schemes like the N4 and the N5 make up that submission to the Department. We fully appreciate the benefits and the drawbacks of the N5 in its current state. I am quite familiar with that 35 km. Anyone going to the west would be.
It is the equivalent of the M50 for me. It is hard to understand the level of surplus investment that is being put into the N4 - there is a section in Mullingar that seems to get done every year - while the surface on the N5 is getting worse every week.
The submission says that €140 million is needed per annum for pavement renewals. What is the TII getting for pavement renewals?
Is there an understanding within the Department of Transport of how serious PPPs are? If we are going to be €400 million short in respect of pavement renewals by 2020 the Department must realise that the inability to access PPPs is strangling TII's ability to do its job, before it even gets to the Department of Public Expenditure and Reform.
Mr. Michael Nolan:
The first priority is more money for investing in asset renewals as we have a network valued at €32 billion, of which €12 billion is invested in pavement - the part of the road network that keeps us on the straight and narrow but which degrades the most. We need to repave 400 km of the national road network, some 10%, on an annual basis but we are not even getting to 25% of that. We should be spending €140 million per year and the longer the deficit goes on the longer it takes to return the network to a certain condition. Network renewals and maintaining assets are our first priority.
The second priority would be a sufficient number of schemes for the next capital investment plan to deal with an increasing population growth and to connect regions, spreading the benefits of infrastructure more evenly around the country. The other area is congestion in urban areas, relieving localised bottlenecks and dealing with public transport.
On depreciation and road maintenance, it was said that if we spend only €40 million per year then, by 2033, half the road network will be very poor. The cost of depreciation each year is, therefore, at least €100 million.
Mr. Pat Maher:
We need to replace or resurface over 400 km of the network each year. If we do not do that the network pavements will progressively degrade over time. The problem with pavements is that they do not depreciate in a linear way but are fine for a while before, quite quickly and severely, degrading towards the end of their lives. If we do not get in before that happens the consequences are very severe and we end up having to spend a great deal more to bring them back to their former state. Since the financial crisis and over the past six years, we have experienced a deficit of funding for pavements which we can manage for a while and we have done that but, eventually, one cannot do any more as one is trying to plug too many holes at the same time. In these cases there is a significant deterioration in the overall condition of the network. This does not happen overnight but we need to look at it on a 20-year horizon, based on a knowledge of how pavements deteriorate and what the costs and consequences are when one goes beyond a certain point.
This question applies more to urban areas but does TTI have an analysis of the cost of concrete roads, such as our predecessors built way back, in comparison to tarmac roads? It seems to me that, in the city council area, concrete roads last very well.
Were there cost benefits to the merger of the organisations following austerity? Did the staff of the procurement agency and roads authority simply merge? Different Oireachtas committees, such as the committee on transport, invigilated both.
Does CIE have a separate track of possible capital projects? The Railway Procurement Agency seemed to deal with Luas and the Metro systems but does CIE operate as another transport capital agency, distinct from TII?
Mr. Michael Nolan:
There were synergies in a number of areas. One is that we are now headquartered in one place, on Parkgate Street behind Heuston Station. We have combined the IT and finance functions, among others. We had a deficit of expertise in roads and were not able to recruit new staff for some nine years but the national roads authority was a fully functioning non-commercial State agency. In addition, people from Luas Cross City are ideally placed to fill in some of the gaps in terms of roads and we see a lot of synergies coming when people come off that scheme. We had 287 staff at the time of the merger and we are heading towards 250 in two years' time.
Is there a combined costing in the capital investment plan for roads ready for construction? As for roads in planning, when might the N72-73 Rathmore to Mitchelstown roads be reconstructed or a major national road be built there?
Mr. Michael Nolan:
I will give the Deputy some of the context for the minor projects. The graph shows a sharp downturn from the peak in construction in 2005, 2006 or 2008 to a very low point in 2010. We started a programme of minor schemes which included the N71, N72 and N73. These minor schemes addressed 2 km or 3 km of really nasty pieces of national secondary, normally legacy, roads. Our 50 worst bends programme was kick-started in 2010. We have undertaken about 60 to 70 minor projects since 2010. This year I believe we have seven under construction. Unfortunately, with our funding at its lowest level ever, we will only have one or two such schemes next year. The minor schemes programme will come to an end next year. We are still trying to have a preparatory pool of about 50 minor schemes ready to bring to the next stage when funding becomes available.
Mr. Michael Nolan:
From 2019 onwards. Part of our submission to the Department on the mid-term review was that we could do more on the minor schemes. We had a target of delivering 150 minor projects in the seven-year life of the road safety strategy, as published by the Government. We will probably get to about 43 or 44 of those schemes. Because of funding constraints, we will be well short of that target. These minor schemes are low cost and high value because we will be taking out some really nasty pieces of the network that have been long-fingered for a long time. There is a big safety dividend and they are very well received locally. The planning applications go through An Bord Pleanála quite easily because there are very few objections to such projects. We would like to keep that programme of work going because we have developed an aptitude and local authorities are well skilled in delivering small schemes. It entails considerable discussion and consultation with local communities and landowners and local authorities are well placed to do this. It has also meant that many small contractors have had a lifeline since 2010 during the recession. Such projects do not really attract the big players; they attract small family-based companies that employ locally. They are of a scale that they can handle.
Mr. Michael Nolan:
The average cost of these schemes would be in the range of €5 million to €8 million. We are short 100 schemes to meet our target in the road safety strategy. The cost of these 100 schemes would come to €500 million to €600 million, which is a considerable amount of money. It was an ambitious target, but such schemes bring many benefits. They are targeted, with 90% being on national secondary routes - low volume roads in peripheral areas with low density populations.
I return to metro north. The Luas cross-city project is close to completion and will be another great asset for the capital city. Dublin Airport has reached the figure of 28 million passengers and is heading towards its cap. It could be heading to become a Gatwick-sized airport. What is its status? When he was here a few months ago the Minister for Public Expenditure and Reform, Deputy Paschal Donohoe, had us hopping on metro north around 2026 or 2027, which seems like an incredible time into the future. What work has been done so far? As Mr. Nolan knows, Fingal County Council is now 100% behind the project which will assist the county. The local authority received the accolade from the chambers of commerce of being No. 1 in the country for its economic and social planning and so on. What steps are we taking? Is it possible to expedite the project to have some system in place to assist Dublin's north side, in particular Fingal and the airport which is such a driver of economic growth?
Mr. Michael Nolan:
We are working on it and have been for the past year. We are effectively starting with a clean page for metro north which will have to connect Dublin city centre with the airport and on to Swords. Beyond that, no particular constraint was put on us. We are obliged to look at it afresh, which we are doing. The elements that need to be teased out fully are where we will tie into the green line south of the city centre; where we will interact with the city centre and the DART underground service; and the positioning of stations within the city centre. The positioning at Dublin Airport is fixed and we know exactly where we are going. The manner in which we will interact with Swords is still being looked at. The programme is to have the alignment, the preferred route, selected by quarter one of next year. The public consultation phases will start at the end of this year, in engaging with Fingal County Council, the other local authorities and other interests such as the Dublin Airport Authority prior to that. By July we will probably be clear on a number of the engineering questions relating to the alignment and can then progress from there. The plan is to be at An Bord Pleanála by 2021 and have construction complete by 2026 or 2027. I know that it might seem like a long way away, but it is a very big project.
We have been working on this or at least thinking about it since the early 1990s. It has gone on for a quarter of a century or more. Has TII totally ruled out using a Spanish-type system? During the years people have been impressed by how the Spaniards created an amazing metro system in Madrid, Seville, Malaga and various other Spanish cities. Have we ruled it out completely?
Mr. Michael Nolan:
We have been engaged in fact-finding in other cities, including Madrid, Barcelona, Oporto and Copenhagen. We have been informing the process with the experience the developers of those networks have had. The notion of having an extensive network would be the subject of a policy decision outside our remit; we are delivering metro north. We have studied the methodologies used and the costs incurred. We will seek to exploit whatever advantage we can.
Mr. Michael Nolan:
Certainly not. We would very much like to use the technologies used there. We are just concluding a tunnelling option study that has looked at single-bore, twin-bore and mono-bore and the manner in which the various stations can be constructed. We need to get to the end of that process and have more clarity on the alignments through the city centre before we can start engaging meaningfully with the local authorities and other agencies. We have not ruled out and would seek to exploit every new method of construction used in-----
Mr. Michael Nolan:
It is to connect with mainline rail services in the city centre, including the DART underground service. The mainline rail station that will serve the DART underground service will be a major area of interaction and connection for metro north.
However, one could not come off a flight in Dublin and theoretically take metro north northwards to Swords and connect with the Dublin-Belfast train.
Members may put any questions they want to Transport Infrastructure Ireland, TII. However, as they are as enthusiastic as everybody present to get projects done, these are not the people to bash because projects are not being completed.
I did not come to this meeting to bash or to thrash anybody. I am absolutely delighted to get the opportunity to put questions to these gentlemen on infrastructure projects.
First, members have attended presentations in Buswells Hotel by organisations such as IBEC. In the view of IBEC, Ireland has the lowest level of infrastructure per capitathan in any other country in Europe. I want to ascertain the reason for that. Is it that the TII does not have the projects shovel ready? Is it that the Government will not fund it even though we are being told that money was never cheaper to borrow than at present? It is not as if the work is not there to be done, because my county is completely destroyed for the want of proper infrastructure. We cannot attract jobs, investment of any kind, creed or description. Where did Kerry Co-op, our own jewel in the crown, finish up? A few miles out the road on the side of the motorway in County Kildare, because we did not have the proper infrastructure to keep that technology project in Kerry. The infrastructure is not there.
Is the Government not making an attempt to provide the funding to source it? We have been waiting for more than 30 years for the Macroom bypass and the precursor of TII, the NRA, gave a fine presentation with maps in the Malton Hotel, Killarney, in 2004 about the Killarney bypass. That was 13 years ago and it was about to start at that time but there is no account of what happened to those plans. Were the plans binned?
I was interested to hear Deputy Broughan speak about the N72, and he mentioned as far as Rathmore, but between Rathmore and Killarney there is a bridge that is a couple of hundred years old; it is like a nest going around it and the railway goes under it. What is the plan for that bridge? There are bends at Gortahaneboy about which we have been asking at county council meetings for years. Our renowned footballer and now dancer, Aidan O'Mahony is very local to Gortahaneboy and the stretch of bends where people have been killed. When will funding for road works be provided? Does TII have its part of the programme ready? Is it a matter of getting funding from the Government? Let me mention three bridges, Listry Bridge, Caragh Bridge and Curraheen Bridge on the Ring of Kerry, which were built approximately 250 years ago and on which traffic is reduced to one-lane traffic. They were built in the days of the horse and cart and two horses and carts could pass but now two motor cars cannot pass. The bridges were narrowed to ensure that it is one-way traffic, with traffic in the other direction having to stop.
The TII witnesses referred to Dublin which has the Luas, the DART and the railway tracks to the North, but in fairness the people in rural Kerry need a fair crack as well. We have not been getting it and the way things are going, I do not know if we ever will. I ask the Chairman not to blame me for highlighting the needs of County Kerry, which were brought to our attention by IBEC.
Has the TII a sufficient number of shovel-ready projects because the west is lacking proper roads and motorways? The people have come up to Dublin but they cannot buy a house because they would not be able to pay for it. One hears reports every morning of a person or two who has been murdered. There is no law or order here because the authorities cannot manage the number of people in the city.
Mr. Michael Nolan:
On the question of funding, the TII is a fully funded non-commercial semi State company. We take the money from the Exchequer and it is routed through the Vote of the Houses and it comes through the Department of Transport, Tourism and Sport. We can only spend according to the funding we receive from Government. We know we are under funded. We have been doing more. On the capital funding side, we are down to 20% of what we were funded back in 2007 or 2008.
Mr. Michael Nolan:
We are down to 20%, so we are 80% short of where we were. That was at the peak, the really high point. There is a great deal of work to be done. We are very conscious of schemes around the country.
In County Kerry, there are two schemes that people from Kerry County Council tell us will have a big benefit to Kerry, namely, the N22 scheme from Macroom to Ballyvourney and then the Limerick-Adare-Foynes scheme. These are two big schemes to deal with bottlenecks in getting to County Kerry. The Macroom-Ballyvourney bypass will go to construction in 2020 or thereabouts. We are at the design stage of the Limerick to Adare to Foynes scheme. We hope to get that to An Bord Pleanála by year end or early next year. We recognise the Adare bypass as one of the last big bottlenecks in the country outside the urban areas.
We have been active in County Kerry in the past few years. Since the recession we have built the Castleisland and Tralee bypasses, two major projects.
Mr. Michael Nolan:
The financial return on those schemes has been excellent. There is a lot more to be done. With regard to the Killarney bypass, that scheme unfortunately has been suspended. We have approximately 60 schemes in the country that have been suspended and unfortunately Killarney is among that number.
With regard to the bridges on the Ring of Kerry, and obviously for safety reasons these bridges are not wide enough to take two lanes of traffic passing safely. It is down to one-lane traffic on a number of bridges around the country. If the current funding level persists, unfortunately we probably will be doing a lot more of that. We are spending some money on the Ring of Kerry, and there are a number of schemes on the Ring of Kerry that are in our minor works programme and in the preparation pool. We have an excellent national roads office, manned and staffed by Kerry County Council and that office is based in Castleisland. There is an excellent team there that has a fantastic record of delivering many major projects, not just in Kerry but also in the region. That level of experience and knowledge is still residing in Kerry County Council in the national roads office. They have another design office in the headquarters. The staff in Kerry are well positioned to avail of any additional coming in the next few years. They have the capacity to deliver on major and minor projects
Like Deputy Danny Healy-Rae, I am not here to bash anybody. However, as politicians, we are getting a serious bashing with regard to our roads, particularly in west Cork. If we want to create employment and bring jobs to rural communities, we need good roads, but the roads in west Cork, to be honest, are in an appalling condition and have been for quite some time. I am talking about the main routes. Local area engineers have been working very hard to repair many of the local roads that were seriously damaged last year but the condition of the main routes into west Cork, the N71 in particular, is worse than scandalous. The journey from Clonakilty to Skibbereen, which should be a 20 minute drive, could take 45 minutes because if there is a lorry or tractor on the road, one is held up behind it for the whole way. We need simple passing bays and I have suggested that in a meeting with the Minister for Transport, Tourism and Sport, Deputy Ross, and members of Transport Infrastructure Ireland, TII, recently. Passing bays should be considered and they are not being considered. We are looking for simple solutions. I am here to urge the witnesses to look at simple solutions for west Cork and to consider bigger solutions as time goes on.
How do the witnesses determine what area gets funding? Why have we been left at the very tail end of any funding? We get a little bit of repair money if a road collapses, as happened in Ballydehob last year. It was almost six months before the road was repaired. One section of it was closed off and there was not one day when my phone was not hopping with people wanting to know what I would do about it. Overall, why are we not on the map, as such, when it comes to serious funding for our roads - the N71 serving Innishannon, Bandon, Clonakilty, Skibbereen and Ballydehob and the R586, serving Bandon, Dunmanway, Drimoleague, Bantry and Castletownbere? These are roads that need investment if we are serious about trying to open up rural Ireland for business. I would appreciate it if the witnesses would answer some of those questions.
Mr. Michael Nolan:
I acknowledge that we are not doing enough work in west Cork but we have constraints. Cork has not been bypassed. Two of the biggest schemes that are included in the capital investment plan are in Cork, namely, Dunkettle and the N22 from Ballyvourney to Macroom. The Cork to Ringaskiddy project is going through the planning process and it is hoped that will be brought to An Bord Pleanála in the next month or two. We have not taken our eye off the ball with regard to Cork schemes. Three of the very low number of schemes in the capital investment plan are based in Cork. We could be doing an awful lot more on the N71 and the scheme to west Cork. There is probably more traffic on the section of the N71 into Cork city than on some of our national primary routes throughout the country. It is a really busy route and we recognise that. Maybe we will look at interim solutions such as passing bays. We will have a look at that and take the Deputy's suggestion on board. I thank the Deputy for that suggestion. Given that we cannot build greenfield complete realignments, we may have to resort to short and medium-term measures on some routes, if we have the funding.
We recognise that we have a valuable outfit in Castleisland under the stewardship of Paul Neary and others. We are very grateful for their expertise and knowledge over the years and we want to recognise that. They are a powerful unit.
The witnesses said that the Killarney bypass has been suspended because there are financial constraints in the country. There were two parts to that project, the first from Farranfore, bypassing Killarney town and on to the N22. There was another section going from Lissivigeen across to the Muckross road. If that scheme could be halved, that would only be about a quarter of the total cost of the entire Killarney bypass. That would mean an awful lot to the town of Killarney, which is choked in the summertime. As the witnesses will appreciate, traffic coming from the south west, from Waterville, Sneem and Kenmare, must go through the centre of Killarney town to go to other parts of the country, like Tralee, for example. They have no business whatsoever going into the town of Killarney, and likewise when they are going back. It has the effect of choking the town. While we are grateful for and appreciate so much business in Killarney, traders are afraid that people will get annoyed about being parked on the Muckross road for an hour to an hour and a half and will go to other places and other towns throughout the country.
Yes, and in terms of the N22, many parts of that route are cracking, between Killarney and the county boundary. What is going to be done to save the infrastructure? It has been there for almost 20 years now without much maintenance. It needs to get attention and funding.
Mr. Michael Nolan:
We will take the Deputy's comments on board and have a look at that but it is a question of funding. As I said, it is not just the Killarney bypass that has been suspended or even a portion of it. There are approximately 60 schemes throughout the country that have been suspended. We just do not have the funding that we require. As we said earlier, we have a very low level of schemes going through the planning pool and a very low level of funding to enable us to bring more schemes to that pool. That is one of the big challenges we are facing a the moment. As the economy turns around, recovers and that recovery is sustained, we will not have enough schemes to present for construction. That is one of the challenges and is part of the conversation we are having with the Department of Transport, Tourism and Sport as we speak. It is not just Killarney; it is widespread.
Regarding the surface of the N22 from Killarney to the county boundary, we do condition surveys every year on the entire road network. As I said earlier, we are only spending between €40 million and €50 million on paving restoration and paving renewal, but we should be spending about €100 million more than that. Again, in terms of asset renewal, we are way behind where we need to be on resurfacing and I am sure this is one of those national primary routes that is suffering because of that.
The witnesses said in their presentation that alleviating urban congestion will increasingly focus on encouraging a modal shift to public transport, walking and so on. I am interested to hear their perspective on park and ride facilities, especially in urban settings. Many Dublin Deputies represent areas where, despite being in the city or suburbia, not everybody lives close to a bus stop. If people are living half a mile from a bus stop, they are not going to be enthusiastic about walking to it and it is not always practical to do so. At the same time, we punish people who attempt to park and ride, with double yellow lines, parking meters and so forth. I see it in my own constituency, in Rathfarnham, Templeogue and so on. While that was legitimate and justifiable, we put those people back on the roads, more than likely in their cars. I am not looking for funding but am wondering if it is part of TII's plans. Park and ride facilities could play a huge part in terms of encouraging those who do not live directly on a bus route to use buses.
Mr. Michael Nolan:
Yes, and in Carrickmines. We also have a very successful park and ride facility at the Red Cow, where the green bus pulls in very frequently. It has become a major bus station, as well as allowing for interaction between the different modes. On the development of the new metro north, park and ride will be a serious consideration in terms of taking people off the M50 and the M1. Mr. Peter Walsh will speak to that.
Mr. Peter Walsh:
I would just confirm that the provision of park and ride facilities is part of the scope of the project and in whatever elements of the transport strategy for the greater Dublin area that the NTA wishes to deliver, we would be happy to do so. There are several park and ride commitments within that.
Mr. Walsh is referring to large-scale facilities, which would be a matter for discussion with the NTA. However, I am referring to more localised facilities, a good number of which we see on the Continent, whereby people can drive and park close enough to public transport and not be penalised for doing so. Does Deputy Barrett wish to comment?
I apologise for being late. I was at another meeting next door.
We live in a small country in which many roads have been built. That is welcome. The journey time to Galway is now, by and large, two hours if one gets out on to the motorway system. The journey to Cork is two and half hours. The problem has been the linking of public transport to the road network to make it more attractive for people to move outside of cities and live in towns within a reasonable distance. This will not be achieved unless there is an integrated plan involving working with those in transport, road networks and so on. Substantial investment should be made now when interest rates at practically at zero. As we all know from our days on local authorities, it takes a very long time from the planning stage to the building of any development. By the time we get around to the dream that I have, interest rates will have increased and we will back to the response being that there is no money available. I do not receive complaints from people about the paying of tolls. Tolling is an accepted practice now, provided the tolls are reasonable. This small country could be transformed. We could transform towns that are dying. Young married couples are paying €500,000 to €600,000 for three-bedroomed semi-detatched houses in places I represent in Dún Laoghaire and other parts of south County Dublin when they could buy mansions for that amount 20 miles away if they could get quickly to and from their places of work.
We cannot talk about road-building in isolation from other factors. Perhaps the committee could examine the type of integration to which I refer. We could use the expertise already available and have papers, in which simple language would be used, submitted to us from which we could work out a programme that would allow us to encourage the Government to use the opportunity that exists to invest in building up towns - whether they be outside Cork, Killarney, Galway, Dublin or into Wicklow - in which house prices would at least be somewhat affordable for young couples trying to get a start in life. We could also encourage the creation of a reasonable public transport system or a tolling system to facilitate this. Such provision would be a key part to the development of this country and not only one region of it and would improving people's quality of life.
If I was to drive by car from Killiney to Leinster House at peak times, the journey could take an hour. I am fortunate that I can get the DART. People who know the Rock Road will be aware that one could be caught in a traffic jam and that a journey of eight or nine miles could take an hour to complete. There is an opportunity to invest now when interest rates are so low, when we have borrowing capacity and when our finances are, to a reasonable extent, back up and running. Now is the time to put in place an overall plan. Projects should not be completed in isolation. Rather, they should be integrated into an overall plan that would lead to the development of towns and villages throughout this country, that would lead to these places being brought back to life and that would improve people's quality of life.
Mr. Michael Nolan:
It is very hard to argue with that. Integration is a major point. One of the bonuses of merging the Railway Procurement Agency and the National Roads Authority is that we have new thinking in-house on the integration for our networks and to assist in a modal shift. That is important. We control and manage the M50 and in terms of the new metro line across the M50. We recognise the importance of integration. To continue widening the M50 is not the solution to the congestion on it. The solution is the provision of public transport, changing the way planning is conducted around Dublin and examining the position regarding area plans. We see the integration of the networks and the transport modes being critical. In terms of smart cities in the future, rather than being on transport system, the focus will be on the customer having a seamless journey time aspiration to minimise waiting periods and delays. There is a major upside to that.
Mr. Peter Walsh:
I would like to add one comment. To have a viable public transport system, population densities are required. Hopefully, this issue will be addressed in the national planning framework but it needs to be borne in mind that the distribution of population militates against an efficient public transport system.
I do not want to delay proceedings by getting into a philosophical discussion. We cannot have it every way. We must be prepared to subsidise a public transport system in order to achieve other things that are far more important in terms of quality of life. I refer, for example, to relieving the burden of heavy borrowings on young people, ensuring higher wages, etc. There is an idea that such provision would be costly in public transport terms. In my book, however, provided the overall picture is rosy, I would be prepared to put up with subsidising a decent public transport system to have the other benefits. This issue cannot be viewed in isolation; we have to consider the broader picture of people's quality of life, regardless of whether they are young or old. Subsidising public transport is an acceptable practice provided it is within reason, but I would not shelve any good ideas because of the cost involved in terms of public transport.
Mr. Nigel Walsh:
Deputy Barrett mentioned low interest rates. I wish to provide some facts. The N25 New Ross bypass is an availability PPP and is funded by a project bond involving a pensions company, Allianz, which is the senior lender. The all-in interest rate for the senior debt is 2.68%, with a debt tenure of 27 years. The interest rate of 2.68% for that length of term is fixed. We are hedging that risk and we are also transferring significant risk, whereas with traditional procurement we were otherwise having to self-insure against it. We acknowledge that the sovereign can borrow for approximately 30 years at approximately a 2% interest rate, so there is that premium. However, there is additionality with the PPP in terms of the risk transfer and the fixing for the period involved.
I am told that the committee will be coming back to it. The principal thrust of the submissions and evidence from TII today has been to the effect that now is the time to invest or we will pay the price in terms of deterioration. Moreover, TII has numerous projects that it is keen to get working on. TII also has many projects that it wants to get to planning stage in order that when a bounce in funding comes, those projects are shovel ready, to echo one of the Deputies.
I have one final question and then we will hear any other comments before we wrap up. My question is parochial to some degree and relates to the Luas. TII has joined the red and green lines in Dublin city. It would make a good deal of sense to do more. I disagree with TII on the density issue. There is much evidence to suggest that if we built it, they will come, especially in city and suburban areas. I realise there are examples that contradict this view. Are there proposals anywhere in the pipeline? I know the idea of connecting the green and red lines on the southside was examined ten years ago. Are there proposals to connect Tallaght and Dundrum? That would link up a great swathe of population across Dundrum, Ballinteer, Ballycullen, Rathfarnham, Templeogue and parts of Old Bawn. These are vast population bases and it would connect them and allow them access to the overall Luas.
Mr. Peter Walsh:
The transport strategy for the greater Dublin area is the document that gives us the framework within which to develop any project for which we receive sanction. Within that document, the Luas network is confined to radial routes. No orbital route is suggested in the document. There are other plans for orbital movements within that strategy, but not for the Luas. That document sets out the integrated transport plan for the greater Dublin area. Any questions the Acting Chairman might have about planned connections are well set out in the document.