Oireachtas Joint and Select Committees
Thursday, 19 October 2017
Joint Oireachtas Committee on Transport, Tourism and Sport
European Transport Sector: Discussion with European Commissioner
Dá bhrí sin, is onóir mhór í dom agus is pléisiúr mór é don choiste fáilte faoi leith a chur roimh an gCoimisinéir go dtí an comhchoiste seo. It is a great honour and pleasure to welcome the European Commissioner for Mobility and Transport, Ms Violeta Bulc. She is accompanied by Mr. Gerry Kiely, head of the European Commission Representation in Ireland; Mr. Joshua Salsby, member of the Commissioner's Cabinet; and Mr. Pierpaolo Settembri, assistant at the Directorate General for Mobility and Transport. Ms Bulc has served in her role since 2014, having previously served as a Minister and Deputy Prime Minister in Slovenia.
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 joint 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.
We understand the Commissioner is under significant scheduling pressure and are grateful for the time she is spending with us. I invite her to make her opening statement.
Ms Violeta Bulc:
A cháirde, tá an áthas orm a bheith anseo. I hope members understood that greeting. I thank the Chairman and the joint committee for giving me the opportunity to be here as part of my first official visit to Ireland. I come with a very open mind and ready to listen in the spirit of all the dynamics and changes that are taking place in the European Union. I will begin with an overview of what is ongoing in terms of EU transport policy, including the various challenges facing the transport sector.
Before I jump into policy, I will say a few words about something that is close to my heart. I very much regret the losses Ireland experienced in recent days as a result of Hurricane Ophelia. I pay tribute to all those who have been working hard to get transport, power and water services back to normal. Unfortunately, these events will become the new normal. As the effects of climate change are felt everywhere in the world, we will have to get used to these events and prepare plans to respond actively when they occur.
Last month the President of the European Commission, Mr. Jean-Claude Juncker, gave his annual state of the union address. He spoke of a Europe that had been through a great deal in recent years, as all of us can confirm. It included terrorism, managing the flow of migrants and refugees, the economic crisis, especially its consequences for the social welfare of citizens, and the British decision to exit the European Union, an issue I will address. If that were not enough, the new political stance of President Trump has created many new opportunities and challenges on a global scale. These challenges which would usually occur over a period of ten years are all part of the reality we have had to deal with in the past two and a half years. They have been a serious test for the European Union and its member states. I hope members share my view that the Union reacted in a mature way and developed the tools we needed to respond to these developments. I am confident that we will be able to deal with anything that arises in the future because we gained each other's trust that we can agree on the most essential elements needed for governance and further sustainable development. We have not solved all of these issues, but we are making progress.
I will address transport priorities which have very much been empowered by the positive mood reflected in the speech of the Commission President. Data collected throughout Europe show that people are much more aware of the benefits of the European Union and much more prepared to re-engage with the spirit of union. Since I took office almost three years ago, I have set out clear priorities for transport which I propose to share with the committee. They are very simple and this is a simple story. European transport is focusing on two core objectives, namely, efficiency and connectivity within the European Union, with neighbouring countries and globally. This is empowered by people-focused legislative standards and all other activities related to transport. We put people's needs in the centre, while at the same time doing whatever is possible to encourage all stakeholders to have a global perspective and be able to use scaleability and create value globally. At the same time, we are focusing on two driving forces, namely, decarbonisation and digitalisation. Decarbonisation is required because transport contributes more than 24% of fossil fuel emissions in the European Union and is the second largest emitter behind energy. If transport grows at its current pace without action being taken, it will become the largest polluter. We are strongly engaged for this reason. I will speak also about what we are doing on the issue of decarbonisation.
The second driving force, digitalisation, is completely reshaping the way in which transport is managed and used. I am certain that we will see dramatic changes in this area in the next ten or 15 years. Mobility will be much different in 2030 or 2040 than it is today. I dare to speculate that there will be many interoperability and multi-modality solutions which will be strongly service oriented and based on the needs of customers in contrast with the current highly static transport sector. None of this will be possible if we do not strongly push for innovation and investment, the two areas where one sees many changes at European Union level. The European Union is engaged in a market oriented approach to innovation in which research and development and research and innovation are becoming two different areas. We are trying to address in a very systemic way all phases of innovation processes and cycles and prove that the European Union is not only a good inventor but also a good innovator in that we know how to market our products and scale them globally.
I am highlighting the issues of decarbonisation, digitalisation and investment, but that does not mean other areas are not important. If members have questions on other key priorities, I will be more than happy to highlight them. As I indicated, decarbonisation is one of our focuses. We paved the way for our plan to address decarbonisation with our decarbonisation strategy which we passed last year. The strategy has thee distinctive pillars, namely, clean vehicles, infrastructure for alternative energies and better organisation of transport. Nine new initiatives will be launched in the area of transport in November. I have joined forces with the Commissioner with responsibility for the Internal Market, Ms Elzbieta Bieñkowska, and the Commissioner for Climate Action and Energy, Mr. Miguel Arias Cañete, to develop a full package for the decarbonisation of road transport that contributes more than 60% of all CO2 emissions in transport and is 92% oil-based. This area, therefore, presents the greatest opportunity to make a difference and we will focus strongly on this particular mode of transport. Members will probably have noted that we are supporting this with new, innovative financial mechanisms and tools to boost the deployment of these initiatives at member state level. Moves are also being made towards greater electrification of the road sector on two levels, namely, boosting the deployment and use of electric vehicles and building the infrastructure required to make the energy available to users of electric cars. Ireland is a good example of a country which is learning lessons in this area. Incredible investments have been made in infrastructure but somehow users did not avail of electric cars. The country is now taking further steps which I hope will work and we are using the case of Ireland to further encourage other member states to take bold steps.
The primary driver of digitalisation is to boost efficiency which contributes directly to decarbonisation. We must create new opportunities, including for employment, seize the moment, create blue oceans and lead globally in this sector.
That also contributes directly to decarbonisation. If we lead globally in the digitalisation segment, we will be able to seize the moment by creating "blue oceans", or new opportunities for new jobs. As I have said, everything started on a new level with the strategy in this sector. We focused mostly on roads in our strategy on co-operative intelligent transport systems, which we put forward last year. We are taking further steps towards autonomous transport mobility solutions that involve connected and autonomous vehicles. Road transport is not the only area in which this is happening. Autonomous ships are emerging. Drones and autonomous airplanes have moved from the conception phase to the testing phase. Autonomous trains are being deployed more and more often. This automation is driving a change and a shift in the mobility sector.
Our real motivation, which goes beyond the infrastructure and the vehicles, is safe, integrated, efficient and clean transport. This is probably something the members of the committee want to hear because I am sure it is close to their hearts. I am concerned about the negative effects of transport, including the socioeconomic costs related to it. Development and prosperity always have other sides which are not so prosperous. We need to address such issues. I will explain what I mean by that. Every year, Europe loses over 25,000 people in road accidents. In addition to those 25,000 fatalities, over 135,000 people are seriously injured. It is estimated that the socioeconomic costs associated with that are over €100 billion per annum. I ask members to imagine what could be done if this money could be used for a positive agenda in areas of the social agenda like schooling. Such investment could boost entrepreneurship and create new opportunities. I invite the committee to pay attention to this aspect of the matter. It is estimated that expenses of €120 billion per annum arise from the health issues caused by noise or air pollution, so we are already on €220 billion per annum from these negative effects. In addition, based on our estimates, congestion costs approximately €1 billion per working day. This brings the negative costs to over €500 billion per annum. That should motivate us.
This is about our citizens, the way we live and our future. I invite the committee to join forces with me very strongly so we can address these kinds of issues. Digitalisation can play a really important role in this regard. Approximately 90% of accidents are caused by human factors. That is why we are pushing for automation. We are moving towards more automated mobility solutions so that the human factor can be excluded from transport, or can at least be limited. I would like to draw attention to some of the exciting things that digitalisation can bring. I have already alluded to seamless ships and seamless traffic. We are now creating the new concept of the so-called urban aviation space. By 2019, we will test for the first time flying cars and drones that can be fully integrated as mobility solutions, especially in urban contexts. This will position the EU in a leading role globally in this segment. I hope that will mean business, jobs and growth for the EU economy.
The last part of the strategy I would like to discuss is investment. We have four different ways of funding transport. First, we continue to support grants to address projects that cannot attract private investors but are of strategic importance to bridge development gaps or boost areas which are recognised as having future opportunities but do not yet have market value. Second, all projects that have a high market value can be financed by loans or by private investors. Third, a guarantee scheme has been provided for at EU level for the first time as part of the Juncker plan, which also provides for the readjustment of legal frameworks and project pipelines, in order to bring private investors and banks on board for riskier projects and to reduce the risk factor of projects that have a strategic value for the EU. I am proud of the entire team because since we started to deploy this model less than three years ago, we have succeeded in bringing on board an additional €230 billion of fresh investment in the EU in areas like infrastructure, small and medium-sized enterprises, research and innovation and research and development. We will continue with this in the next multi-annual financial framework, when it will be an even stronger component of our financing investment model. A fourth way of funding transport, in addition to grants, loans and guarantees, has recently emerged. I refer to the so-called blending mechanism, which has been successfully tested. In order to boost investment even further, especially in the cohesion countries where we need to bridge development gaps even faster, we have introduced a blending mechanism whereby a grant can be topped up under the EU guarantee scheme to lower the risk factor dramatically before banks or institutional private investors are brought on board. In our first call, when we dedicated €1 billion to this kind of blending, these high-level projects were over-subscribed to the tune of €1.6 billion. That is a great encouragement to continue with this.
Additional investments are happening through dedicated innovative financial tools. When European cities recognised that they needed support to decarbonise public transport more quickly and asked for help to move towards decarbonised buses, together with the European Investment Bank we created in record time - less than a year - a financial mechanism or tool that is now used to co-finance this kind of shift in cities. I am glad that 63 cities have already joined this initiative. We already have the first actual deployment. This is moving fast. Believe it or not, even the EU can take steps quickly when it is recognised that there are opportunities to create European value.
Members will be familiar with the connecting Europe facility, or CEF, model that is used to support core network corridors. I am glad that Ireland has had some very successful deployment of this model. It was used well in the Dublin Port project and in the Dublin city centre railway signalling project. A total of 19 projects have been approved, which is a good number. Ireland is using its opportunities well. Some €756 million has been dedicated to these projects and this has resulted in €3.2 billion of investment by capitalising on the market. I think that is a fairly good amount. I hope Ireland will continue with that. The CEF model will continue to support Irish initiatives.
I appreciate that I have spoken at length, but I would like to say a couple of words about Brexit before I conclude and the discussion is opened. I would like to make it clear that Ireland is not alone in this.
The European Union is engaging seriously with all stakeholders in Ireland to address the preparations for and the different consequences of Brexit when it happens. It is confusing because we do not have clear signals as to what, when and how things will evolve, but we have the power to be well prepared. I often say, "Let us behave as if nothing will happen but let us be ready for a hard Brexit that will happen tomorrow". In this spirit I invite all business stakeholders to engage with the European Union and to start creating options that we can discuss seriously. There is no point in spreading fear, uncertainty or uneasiness among the Irish population. If we engage in the creation of constructive solutions, then we will feel better because we will feel like we are in charge. The European Union cannot create these options without the input of Ireland. I invite members to engage in a constructive relationship with all of us.
I am very much aware of what the transport sector means for an island country with an open but small economy such as Ireland. As Transport Commissioner, we are trying to find solutions to the transport challenges in the context of North-South co-operation. Again I invite the stakeholders to start planning, to prepare contingency plans and come up with proposals for investments that will be required in order to change the capacity of some of the ports, especially to ensure that connectivity with mainland Europe will remain at the highest possible level based on need.
What will happen to hauliers on the Border with the North? We discussed this issue with them and I will prepare plans and run simulations so that we can really see the alternative routes that hauliers can take. We will need to discuss this further today, not on the day that Brexit happens. There is a need to stimulate widespread discussions on options to deal with the problems that will emerge and then I invite members to forward the solutions they believe can work to me at the Commission. Then let us work together on the options that are more likely to succeed.
A major concern is what will happen to the current policy of the Single European Sky and the hundreds of flights daily. I will not comment on the statement made by the British Minister but this is one of the hottest topics. I can assure members that after the three key elements of borders, finances and people, transport comes fourth in importance.
We meet weekly with the key negotiator, Mr. Barnier, and share our concerns and the emerging solutions that can be put on the table when he starts negotiating. That is why it is so important that Ireland acts now and works with the Commission so that we can prepare options for Mr. Barnier in order that he will know what he can juggle. Ireland's welfare is the most important part of the Brexit negotiations. Of course, the outcome of Brexit is important for all member states, but Ireland is the country most affected. If Ireland can come up with good solutions that work, it means the solutions will work for others as well. I ask members to come on board.
Tomorrow Brexit will be on the agenda of the European Council meeting and the negotiations will continue in the months to come. I know the outcome of the negotiations on Brexit is uncertain but the only certainty is that the date of Brexit, 30 March 2019 is approaching quickly. It is only months away. Brexit will bring a new reality and I hope Ireland is prepared for it. Knowing Irish history, I am aware that Ireland has gone through a number of changes, but somehow has found the internal strength to overcome them. Now Ireland has the 26 other member states behind it. Ireland needs to show how it wants to co-operate with the rest of the member states in the European Union and must try to bridge the challenges that it will face. I am not going to say it will be easy. I am not going to say it will be trivial because it will not be that easy but together we can bridge the challenges. Believe me, the country that I was born in does not exist anymore. The country I know best is doing very well now, in spite of the fact that overnight it lost 70% of all market share when the changes happened.
Let me repeat that Ireland has the advantage of support from the other 26 member states who really care about Ireland. Let us be active and be in preparatory mode and try to anticipate as much as we can. Let me highlight that the Government has dedicated €300 million scheme for start ups to help them to readjust their businesses to the new conditions. That is a good move by Ireland. We should look for other solutions in the same spirit.
Life always provides challenges and once you win the challenge, it is incredible how many new opportunities arise. Please do not be discouraged. It is just another step in the history of the European Continent.
I thank Commissioner Bulc. I welcome the content and the scope of her remarks, particularly on Brexit, which is the major issue facing Ireland. Like some of my colleagues present, I come from a Border constituency and we face serious problems. There are 40,000 jobs relying on trade with the United Kingdom at present; therefore, whatever happens will be of major significance. I invite members to contribute in the normal manner, and if possible I would like to comment at the end. Time is limited as voting begins at 12.45 p.m. and Commissioner Bulc must leave at 12.50 p.m. I will call members in the usual fashion, leading with the Fine Gael speaker.
I thank the Chairman.
Commissioner Bulc is very welcome to Ireland. I represented this committee in Tallinn recently, where Ms Bulc addressed the meetings of all of the transport committees throughout Europe. That meeting was very informative on the progress that is being made. Today, with Brexit in the offering, we are talking more about problems than solutions, but it is important to acknowledge the many good things that are happening in the transport sector in connecting Europe.
That said, the solution everybody wants is a soft Brexit. All of the different stakeholders want it but it seems it will be very difficult to achieve. We must plan for the situations the witness outlined. Some of the policies of the European Union at present - I mentioned this issue in Tallinn also - are based on Britain being part of the Union. One example is the TEN-T policy. Part of that policy, which was finalised in 2014, was that it could not be examined again until 2020. Obviously, if there is a soft Brexit everything will be okay but if there is not we will have a difficulty in that regard. That is the first issue.
The second issue is connectivity with Ireland and the European Union. Mainland Europe is hugely important but we have issues with connecting Ireland. We have the Ireland 2040 plan. When the collapse occurred a number of years ago much of the work on road infrastructure stopped. Most of those projects were about connecting Ireland. I am from the western part of Ireland and that infrastructure is vital. I hope matter that will be addressed in the capital spending plan for the future that will be announced shortly. We talk sometimes about the disconnection between the member states and the European Union. One of the issues is state aid rules. There is a reference in the briefing documents to regional airports. There is a vital regional airport in western Ireland. The number of passengers is 1.1 million and 750,000 of them relate to Ireland West Airport Knock. It is very difficult, and this is part of the disconnection, that when the Government might wish to help it cannot do so because of state aid rules. We should continue to connect Europe but it is also important that we facilitate connections within our country that require support also.
I welcome the European Commissioner. She is appearing before the committee at a highly opportune and appropriate time given the challenges that face us as a consequence of Brexit. Being pro-European we must ask ourselves why the United Kingdom voted to leave the European Union. How we deal with how the United Kingdom leaves the European Union will be a testament to the Union. In the case of how this country is dealt with, we must see the benefits of being a fully paid up and engaged member of the European Union.
I will refer to the key areas the witness mentioned. One is the transport infrastructure and the funding streams under the EU investment plan or the Juncker fund, as it is commonly known. At present, Ireland has the second lowest level of capital spending in the European Union. Is the Government using this funding effectively to increase our net infrastructure outside the parameters set down by the fiscal rules? In her contribution the European Commissioner complimented the use of public private partnerships in respect of our fabulous road infrastructure. What is her opinion on the Department of Finance cap which limits PPP investment to 10% of total annual capital expenditure? Does she think this is too arbitrary or does she think we should relax that and avail of the Juncker funding? As yet, this country has not put forward a single transport proposal for this funding. Perhaps the Commissioner will comment on that issue.
With regard to the challenges of Brexit and the funding for the European transport network, the European Commissioner referred to the Connecting Europe Facility, CEF, as the main source of funding from Europe. Will there be an opportunity to review the comprehensive TEN-T network in the light of the fact that Northern Ireland will be leaving the European Union? The only rail infrastructure at present is from Belfast to Dublin and to Cork. Will we be able to avail of the CEF funding if that connection or network is broken? Can we consider new networks and new connectivity, such as the Rosslare Europort? At present, 80% of our exports go through the landbridge. Should we be considering investing in Rosslare Europort to make a direct link to mainland Europe and will there be a facility to review the TEN-T network in the future?
Ms Bulc talked about the challenges faced by the freight industry and complimented the establishment of the €300 million fund in the most recent budget. However, that is a fund that offers a low interest rate. Has the European Union considered relaxing the state aid rules? A certain number of our export dependent companies will need direct capital investment and grant aid funding, not just the ability to avail of low interest rates. I would welcome Ms Bulc's opinion on that matter.
The aviation sector will be severely impacted in that regard. The European Commissioner spoke about the hundreds of flights. There are thousands of flights every week between Ireland and the United ingdom. It is the second busiest intercity connection in the world and the busiest in Europe. In that context can the witness confirm, due to the wider economic importance, that an aviation deal will be dealt with separately under a separate agreement? It must be dealt with earlier and independently of the wider trade negotiations. As the European Commissioner said, the date of exit is fast approaching. Seats are sold one year in advance so it is critical that a deal is done in the near future. Some of our key players made this point recently at an EU committee meeting in the European Parliament.
Would the Commissioner support maintaining the current aviation market access arrangements? Would she support the retention of the open skies policy? Would she support the reintroduction of duty free sales on EU-UK routes as soon as the European Union becomes a third country as a means of softening the Brexit blow for the industry? Has she learned from any of her experiences with the lengthy approval process required for Norwegian airlines to get an operating licence recently? How does she envisage the United States evolving in respect of the open skies policy? It took almost two years to get a route opened between Cork and the United States and now the United States is imposing extraordinary taxes of 30% on the Canadian Bombardier Inc. company. Is the European Union going to press the United States to deal in a more open way with the Union with regard to the open skies policy? In addition, there are standards across the European Union with regard to aviation. How does the witness envisage those standards being maintained? Does she envisage the United Kingdom being able to retain the same standards as Ireland?
The European Commissioner referred to decarbonisation and a suite of measures or packages. Given the negative cost of €500 billion per annum, there is a real incentive to roll out initiatives to make people transfer. I am conscious of some of the measures introduced in the recent budget.
The reply to a parliamentary question I tabled recently indicated there are more than 6,000 vehicles currently in State ownership but only six hybrid or electric cars were purchased on behalf of the State last year. We are not leading by example in this matter. Will the Commissioner comment on that matter?
I welcome the Commissioner. Ms Bulc noted that she is from a large country which subsequently became a smaller one. That political experience will serve her well and will be for the good of Europe in the context of the Brexit negotiations.
Every time there are changes in climate agreements, the transport sector immediately experiences the greatest hit. For how long can that continue to be the case? Soon cars will be stripped down to something that no longer resembles what they used to be. In the case of motor cars, we have good tax incentives in place in this country, but until we get the heavier goods vehicle to adjust to cleaner energy use, we will not succeed in meeting our targets. Some EU countries, most notably Germany, are very dependent on the automobile industry. We are talking about getting rid of the diesel engine altogether. Brexit, in whatever form it takes, will impact on Germany's exports, Britain being a major importer of luxury cars. Will compensation measures be put in place for those companies? Such compensation has been provided in the past for the agriculture and food sector. The ending of the sugar beet industry, for instance, saw compensation being awarded to some manufacturers. Does the Commissioner envisage the same happening in respect of the motor trade, whereby there would be compensation for loss of business?
What is the status of the major EU infrastructural initiatives such as TEN-T? Some three or four years ago, the European Union presented a lovely diagram showing the various infrastructural projects being undertaken across the Union, including in Ireland and Britain. Is all of that work on hold until we know where we stand in regard to future connectivity?
The Commissioner is very welcome. I was going to ask whether she has seen much of Ireland but she indicated in her opening statement that this is her first visit. If she had a chance to travel around the place, she would have seen that infrastructure, right across the island, is in dire need of investment. The rail network, for example, requires an input of €500 million in the next five years. The level of under-investment in our national rail network is so dire that serious safety concerns are being raised. The motorway network is incomplete and regional and secondary roads need an investment of €3 billion just to bring them up to a steady condition. I expect and hope the Commissioner will accept that, in the main, it is EU fiscal rules that are preventing us from investing in our infrastructure. With Brexit coming down the tracks in 18 months, many sectors right across the island require significant investment.
The Commissioner referred to the usefulness of public private partnerships. I respectfully disagree that such arrangements facilitate the efficient delivery of infrastructure. In fact, they are more expensive in the long run because they require a greater investment on the part of the State. PPPs are popular with right-wing Governments in this country because they allow them to keep spending off the balance sheet. The reality, however, is that they ultimately are more expensive for the State and place a burden on taxpayers by way of the additional taxes they require to be levied in order to compensate the Exchequer. The contracts entered into under these arrangements leave a lot to be desired, with private companies being compensated at every turn for contracts lasting 30 years.
In regard to Brexit, I am from the Border county of Louth and we will not accept any return to a physical hard border. We are looking to the European Union to support us in this matter because the Brits do not know what they are doing. They are going from crisis to crisis with no comprehension of what is ahead. We hope and expect the European Union will recognise that Ireland needs a special designated status to protect it from the impact of Brexit. Has the Commissioner or her colleagues given consideration to loosening up the fiscal rules to allow us to invest, in the context of our unique position with respect to Brexit? What is the status of existing agreements to address the cross-Border infrastructural deficit? Will the Commissioner give a commitment to honour those agreements? What, if any, work has been done in her office on this issue and will she help us to deliver the investment necessary to honour those cross-Border initiatives, which include the A5 road project and the Narrow Water Bridge project. These are all vital infrastructural developments and an integral part of the agreements that were delivered following on from the Good Friday Agreement.
Has the Commissioner given any consideration to the requirement for further investment in Irish ports and airports in the context of the EU directive regarding state rules and exemptions and our reliance on Britain as a land bridge?
Will the Commissioner comment on the aviation sector, specifically the attempts to secure an open skies agreement and the impact of Brexit on regional airlines? If there is a failure to reach agreement, will it require a legal framework in order for those airlines to operate? What effect might this have on EU passengers travelling to Britain and on EU nationals living in the United Kingdom?
I appreciate the Commissioner's indulgence given the constraints on her time, but I am anxious, too, not to fall out with any members. I propose to take questions from Deputy Mick Barry and Senator Neale Richmond, after which the Commissioner might reply to all the questions. Is she agreeable to that proposal?
I welcome the Commissioner. I have only one question, concerning privatisation in the transport sector, which is under way in Ireland. In the case of provincial bus services, for instance, recent Governments have positively encouraged the arrival of private operators onto the scene and have hamstrung the semi-State company.
Recently, under a EU diktat, 10% of Dublin Bus services were put out to public tender. Incredibly, even though Dublin Bus, the State provider, had submitted the lowest bid, the tender was awarded to the other competitor, a private company from the United Kingdom called Go Ahead. We touched on the matter of Brexit this morning. The British Prime Minister, Mrs. Theresa May's vision for Britain is of a bargain basement Brexit with US style regulation and a lack of workers' rights. Go Ahead is a company which typifies and personifies bargain basement Britain. We know that more privatisations are under way in this field owing to the EU diktat. The privatisation of transport services in other European countries happened before it happened in Ireland. Other countries have had many years of experience of what happens when one goes down the road to transport privatisation. It has been a fairly bitter experience for many countries and led to a rethink. In recent years there has been a reversal of policy away from privatisation towards remunicipalisation and renationalisation of services. As the Commissioner will be familiar with them,I will just instance a few. In Portugal, in Lisbon and Porto, the country's two biggest cities, there has been remunicipalisation where privatisation has been reversed. The same process has occurred in London and Tyne and Wear in the United Kingdom, in Kiel and Solingen in Germany; while in France in Toulouse and Clarement-Ferrand, Nice and Cannes there has been a move away from privatisation and towards remunicipalisation. In Austria it has happened in Vienna and Niederösterreich, while in the United Kingdom there is a question of renationalising rail services.
Why has this happened? Dr. Tom O'Connor of Cork Institute of Technology recently presented a conference paper in which he highlighted three issues, the first of which was private sector failure, in which regard he instanced the collapse of transport public private partnerships in London. The second was greater efficiency and lower costs, with public authorities being almost always able to borrow at lower rates than private companies. There is also the cost of tendering and monitoring tendering which can add 10% or more to contracts. Third, there is the achievement of public service objectives. It is easier to do this when a utility is publicly owned rather than when it is in private hands serving shareholders by maximising profit. One cannot control what one does not own.
Given that the experience of transport privatisation in Europe has been a bitter one and that governments and cities have drawn lessons and are moving away from privatisation towards renationalisation and remunicipalisation for sound reasons, why is it that the European Union and the Commission continue with this privatisation mantra and drive it under the guise of tendering, although we know from the Dublin Bus experience what tendering means which is more privatisation, even though it has been seen to fail?
What is the Commission and the European Union doing to encourage the manufacture of buses to make them more accessible for people with mobility issues and a visual impairment?
I will be very brief and appreciate the Chairman's indulgence as I am not a member of the committee, but as I am aware that we will probably be called away for a vote in the Seanad shortly, I apologise in advance.
I want to make one point that follows on from those raised by Deputies Robert Troy and Imelda Munster about the EU-US open skies agreement. I hope the Commissioner will return after this visit with an understanding of the importance of achieving a new agreement, not only for the island of Ireland but also the entire European Union after Brexit. I hope this afternoon's Council meeting will be successful and that we are getting closer to being able to move on to deal with the three key issues which will allow the discussion of other matters.
Regarding a new EU-US-UK open skies agreement, Ireland geographically is much more exposed than many countries on the Continent. We are also exposed in the airlines that use our airspace. It would be an easy fix or win for all three parties concerned after Brexit. Unfortunately, there is considerable reluctance in the United Kingdom to admit that there is a problem. I do not believe British Airways has commented on it yet; easyJet has belatedly come out on the matter, while Michael O'Leary and Ryanair have been at the forefront, although I know that Mr. O'Leary is not currently very popular. It is key that we send back that message, that this deal must be sorted out before March to allow airlines to sell into the market.
This relates to the issue we had with the cancellation of Ryanair flights and the tens of thousands of passengers who were discommoded recently. In the Commissioner's presentation she spoke about a review of the air passengers rights Regulation (EC) 261/2004. A review began in 2013, but I understand it has been blocked. Will the Commissioner update us on the review? It is particularly important that when the rights of passengers are not honoured that we know what the issue is.
Ms Violeta Bulc:
I thank members for their questions. There are a lot of them and as I only have ten minutes in which to reply, I may not be able to reply to all of them. I will try to deal with ones of a similar nature together and hope cover most of members' concerns.
On the last question about Ryanair and passenger rights, the European Union is the only political union in the world that has very clear passenger rights. We proposed improvements. As the Deputy pointed out, these got stuck because of the Gibraltar issue, but that does not mean that we do not have the rights; we do and all operators are obliged to follow them and it is up to national authorities to enforce them. We call on the Irish authorities to ensure passenger rights are well respected. The new guidelines have been published and we call on the Irish authorities to follow them. The Ryanair issue is unfortunate, but we need to follow the rules and take care of passengers.
The most common question was related to TEN-T. As members correctly noted, the TEN-T review is coming up in 2023. In other circumstances this would be the dynamic we would follow, but TEN-T has a special legal framework within which changes can take place; therefore, it is not up to the Commission to decide that there will be a change to the TEN-T network or funding. Extraordinary circumstances call for extraordinary actions. The conditions in which Ireland now finds itself and the challenges relating to the corridor with Great Britain qualify as extraordinary. That is why I have already invited all stakeholders today and will continue to do so to come up with proposals for how they may be readjusted in the future. We will talk about this issue. I ask members to, please, be active on it and make sure EU values are considered and that they provide something that will deal with the conditions we are all in.
Please also bear in mind that corridor logic involves many member states. Let us call a meeting as soon as possible. There are co-ordinators for each corridor in the European Union and a meeting should be called where the co-ordinators start to synchronise the activities on the corridor.
Regional airports are a special subject and one of the elements identified in the aviation strategy that was published by the European Union in 2015. We have addressed them already by the accreditation of state aid rules and how they can be applied to regional airports. I am fully aware of the case that Deputy Robert Troy raised as I have been informed about it. We are now taking a closer look at how we can address it in the spirit of Brexit. We will talk about it. I will also discuss the issue with my colleague, Commissioner Vestager, who is in charge of state aid rules, and I will try to explain the special conditions to which Ireland West Airport Knock is subject. However, now I cannot give Deputy Robert Troy a final answer.
Some member states had a very good capacity and tradition for using different mechanisms and picked up really quickly on the mechanism of the European Fund for Strategic Investment, EFSI. Other member states, all cohesion countries, have responded very poorly, or with zero projects. That is why we started with roadshows and special advisory boards that help to build the capacity either through a national promotional body or through the European Investment Advisory Hub. Things are improving. For the first time we have graduates coming on board and I hope Ireland will use this opportunity and also become more engaged, especially because everywhere one sees the revenue flows, this should be used. Please encourage stakeholders to use the EFSI mechanism. At the beginning, people were sceptical of PPPs but new forms of PPPs are emerging. One that we saw in transport was the revenue sharing model. It has nothing to do with ownership but is based on revenue sharing. That is an interesting one also, which we will also put in a bucket of different options.
I will say a few words about ownership, although I may not be the most appropriate Commissioner to discuss this. We really need to distinguish between privatisation and competition. We are very much pushing for competition because we see in a competitive environment that development is better and of higher quality and new opportunities can be implemented and used faster. We rarely interfere with the ownership structures, but sometimes we have ownership and control rules for aviation. It is clear that 49% of foreign capital is in aviation, but that is it. We do not say whether this should be private or public capital. The same thing has happened in the fourth railway passage. We said that we need to decouple infrastructure from services because it is hard to imagine that one could have many competitors in railway infrastructure. That is why we set rules as to how much profit the railway infrastructure can make in order to ensure there is fair competition on a service level. We are not saying, however, who has to own it. We are saying there must be competition in order that there can be German, French, Irish, Polish, Slovenian national operators who can bid for services. It is not about private or public ownership, it is about competition. This was the purpose of the fourth railway packageper se.
If members have more specific questions and have cases, as was mentioned previously, could they submit them in writing and we will go into more detail on the subject?
There are many questions about aviation. I am fully aware of the sensitivity of the topic in Ireland, as Ireland is the front runner in the transformation of European aviation and also the major winner of the Single European Sky. As I mentioned, there are three lead priorities that need to be resolved before we move forward: people, money and borders. Transport comes next and is the fourth priority. Within transport, aviation is the most sensitive and urgent issue because of the policy on a Single European Sky. One may ask whether I can predict anything. I cannot as I do not know how Brexit will evolve. We are getting ready for all scenarios: hard Brexit, soft Brexit, no Brexit. We need to work with Ireland on this issue and I hope it will be a very active member. I want any agreement that is put on the table to be as liberal as possible, because I am liberal, but we will have to deal with constraints within which we operate on this sensitive issue. I cannot predict anything more than that we will work hard to be prepared, that things will not surprise us, and that we will know what to do, based on the outcome of negotiations or based on the results we will get on 30 March 2018.
I am quite proud that we managed to resolve a couple of very heavy duty issues with the United States in a spirit of co-operation. One of them was potential laptop ban on all European carriers. It was a very sensitive issue. We engaged in a dialogue and very constructive negotiations. I am glad we came out with even stronger co-operation between the United States and the European Union, which resulted in a three-phase approach, where we join forces to improve the security and safety of our aviation at the same time, and here all EU member states acted as one together with the Commission. I was very proud of the way we demonstrated our unity and that is why we got a good deal. Technical negotiations and technical co-operation with the US Open Skies treaty is really on a high level. We meet periodically all the time regardless of the new sort of signals that are coming from the United States. At this point I cannot say that they treat us any differently, but one saw an announcement two days ago between Airbus and Bombardier. I think this is an incredible solution that came out of these completely new circumstances. I very much welcome moves of this type. We need to react with wisdom and new business models when new conditions occur. I met the CEO of Airbus, who reconfirmed the commitment to move on and this is a success story for him. He used the new conditions to his advantage.
I am never sceptical. Troubles appear, they are unpredictable, but the strengths we show are to resolve the problem, and so far I can only rely on successful negotiations that have got us out of critical situations. Have faith. If there is a problem, we will solve it. Sometimes it takes a little longer. The issue with Norwegian airlines is typical. We insisted and were insistent and there were numerous negotiations, but now we have a deal that enables Norwegian Air International to fly.
The outlook seems positive to me on this issue.
I would love to, but I am very conscious of respecting the Commissioner's schedule. Of all the members in attendance, I am probably the most experienced when it comes to transport, having been involved in that area for the past 25 years. Unfortunately, the structure of these meetings makes it difficult for Independent members to ask a question.
Ms Violeta Bulc:
As with the regional airlines issue, I am fairly optimistic on this matter. First, cross-border projects are priorities under all our financial mechanisms, including TEN-T and the Cohesion Fund. As I said, cross-border decarbonisation and digitalisation are specific priorities for us. If the worst scenario happens in the case of Ireland and Brexit, we already have good experiences with neighbouring third countries in terms of dealing with TEN-T projects. In the case of the western Balkans and the eastern partnership, we are-----
On a point of clarification, I am talking about the infrastructural projects that were committed to under previous agreements between Britain and Ireland following on from the peace talks. These include such vital cross-Border initiatives as the A5 road project, the Narrow Water Bridge development and the restoration of the Ulster Canal.
Ms Violeta Bulc:
I hope those projects will all be honoured in full. I am standing behind them and saying we want to honour those kinds of commitments after the Brexit negotiations. However, they will form part of the negotiations and will not be exempt. Everything will be agreed as a full package, but I will try to defend the position that we need to honour and complete those projects.
Ms Violeta Bulc:
I cannot discuss the details other than to say we are doing all the research and preparing all the analysis. We have a full team engaged on these issues and our negotiator, Mr. Barnier, is fully equipped with all the information he needs to negotiate well on transport issues. I cannot say anything more at this point.
I thank the Commissioner and her delegation for their constructive and positive engagement with the committee. We thank her for attending the meeting and her responses to members' queries. I understand several members hope to put additional questions to the Commissioner after the meeting.