Mr. Michael Nolan:

I thank the committee for the invitation to appear before it to discuss TII's 2016 financial statements. Following the August 2015 merger of the National Roads Authority and the Railway Procurement Agency, our remit in respect of national road infrastructure has been expanded to also include light rail infrastructure.

Light rail infrastructure activities within the greater Dublin area are determined by the National Transport Authority, NTA, which provides the strategic framework for the planning and delivery of public transport infrastructure and the provision of passenger services in the greater Dublin area. The NTA has assigned its functions in securing the provision of light rail passenger services and the management of the Luas operating contract to TII. Since the commissioning of the initial lines in 2004, Luas has been operationally self-sufficient in ongoing operating costs, including maintenance, which are met without the need for a Government subvention.

TII is managing the programme of works associated with the extension of the Luas Green Line northward from its current terminus at St. Stephen's Green. When the Luas cross city extensions come into operation this December, the Luas Red Line and the Luas Green Line will cross in the city centre, with an easy passenger interchange between the two. The Luas Green Line will at that point extend from Brides Glen to Broombridge, adjacent to Irish Rail's Broombridge station in the north west of the city.

The Government's seven-year capital investment plan includes provision for a new metro project for Dublin. The project is defined as a high-speed, high-capacity, high-frequency public transport link from the city centre to Dublin Airport and Swords, with an underground city centre section. It is anticipated that the metro will ultimately tie into the existing Luas Green Line rail system, enabling the through-running of metro trams from Swords to Brides Glen. TII is engaged, in collaboration with the NTA, in the process of developing the design of the new metro north project with the stated objective of the commencement of construction in 2021, subject to a number of positive outcomes, including the securing of planning approval, funding and the procurement of various works packages.

TII has succeeded in modernising much of the national primary road network in recent years, bringing significant economic and other benefits, including much safer driving conditions on the improved roads, reduced journey times, reduced wear and tear on travellers and vehicles, as well as environmental improvements. The completion of the major inter-urban motorway network marked a tipping point as TII's activities have become increasingly focused on managing and maintaining the road assets in place and improving safety, as well as removing bottlenecks where resources allow. Current funding levels for investment in the national road network are historically low. There is now a gap between the funding allocation and what is actually required to maintain the existing network in an adequate condition.

The Department of Transport, Tourism and Sport's study Strategic Investment Framework for Land Transport acknowledges that the road network should be maintained to a sufficient standard to ensure the value of the original capital investment will not depreciate prematurely in the coming years. The framework states, "Amongst the main priorities over the medium term will be ensuring adequate maintenance of the National Road Network in order to protect the value of previous investments and target the improvement of specific road segments where there is a clear economic justification". The replacement cost of the network is in the order of €30 billion and, on the basis of a 20 to 30-year average life cycle, it would deteriorate to the extent of €1 billion per year in the absence of this investment. Within this context and mindful of the limited funding levels earmarked for the national roads programme in the early years of the Government's infrastructure and capital investment plan 2016 to 2021, TII's priorities in 2016 were as follows.

Priority No. 1 is asset management, network rehabilitation and network operations. The first priority beyond existing liabilities is to maintain the asset value of the network and ensure its safety, reliability and functionality. This is critical to ensuring the network performs efficiently and safely and continues to support national economic growth and competitiveness.

Priority No. 2 is national secondary road improvements, bottleneck improvement projects, safety projects and traffic management projects. It is the case that most of the national secondary network routes are deficient in terms of capacity, safety and alignment. TII will seek to implement improvements as funding permits.

Priority No. 3 deals with major improvement projects. The investment in the national road network in recent years has vastly improved the level of service provided on many of the country’s busiest and most strategic national roads. However, there remain many improvement schemes that are highly desirable and would generate significant economic, safety, regional growth and environmental benefits, and these schemes will be advanced as the capital investment plan funding profile permits. These priorities were reflected in TII’s work programme for 2016 and will continue to form the strategic framework for our national road activities in the coming years.

I would like to highlight two particularly positive developments. The M17-M18 motorway PPP scheme opened for use two months earlier than expected on 27 September 2017. This was one of three national road projects that was included in the Government’s PPP stimulus programme. The use of the PPP funding mechanism, with the support of the European Investment Bank, for these major national road infrastructure projects allowed us to get them started at a time when Ireland’s capital investment capacity was greatly constrained by the fiscal crisis.

The second major development that I would highlight is that the contractor for the Luas cross city extension of the Green Line achieved an early handover of the tracks to the Luas operator on the weekend of 9 September. This allowed the operator’s driver training programme to commence on time, which is a precursor to the system coming into operation in December. In the context of benefits realisation, the early handover of these motorway and light rail projects is a significant milestone for these complex and challenging projects.

We have, as requested, submitted a briefing paper which contains some detail on the delivery of national road and light rail projects under the capital investment plan, investments in asset renewals and minor roads realignment safety projects. We are pleased that the Comptroller and Auditor General, who audited our 2016 financial statements, noted that the statements give a true and fair view of the assets, liabilities and financial position of TII as at the 31 December 2016, and of its income and expenditure for the year then ended, and that the financial statements have been properly prepared in accordance with generally accepted accounting practice.

We will, of course, be happy to answer the committee’s questions. If there are any questions that we cannot answer today we will, as always, follow up with a written response.