Oireachtas Joint and Select Committees
Wednesday, 6 February 2019
Joint Oireachtas Committee on Transport, Tourism and Sport
Impact of Brexit on Transport Sector: Discussion
We have completed our consideration of the heads of the Bill. The second part of our meeting will focus on preparations for Brexit and its impact on the transport sector, particularly in the event of a no-deal scenario. I invite the Minister to make his statement.
I thank the committee for asking me to address the second part of the agenda today. There was a unified EU reaction to developments last Tuesday in Westminster. President Tusk reiterated that the backstop is part of the withdrawal agreement and the withdrawal agreement is not open for renegotiation. He reiterated that again today in even stronger and more colourful terms. In a debate held by the European Parliament the following day, President Juncker emphasised that the withdrawal agreement was the best and only deal possible. He said the Commission would continue to support member states’ work on preparedness. Michel Barnier repeated that the withdrawal agreement, including the backstop, would not be renegotiated and that it offers the only realistic solution to the problems created by Brexit.
The Government remains firmly of the view that the best and only way to ensure an orderly UK withdrawal from the EU is to ratify the withdrawal agreement. My Department and indeed all Government Departments have intensively advanced their preparations and planning for a no-deal scenario given the ongoing uncertainty in the UK. I and my Department have been fully engaged on the very wide range of Brexit related transport issues, and tourism issues, ever since the UK invoked Article 50. This includes working closely with other Departments and EU member states, meeting and working with the European Commission, and participating in technical EU level meetings in the area of transport. Stakeholder engagement has also formed a very important part of our preparations and contingency planning. I have met a number of my EU counterparts over the past two years, including recently my French opposite number, with whom I share many concerns. I have also met the UK Secretary of State for Transport, Chris Grayling, on a number of occasions and most recently late last year, as I said during the earlier session today.
I cannot emphasise enough that it would be impossible in a no-deal scenario to maintain the almost seamless arrangements between the EU and UK currently facilitated by our common EU membership. If the UK becomes a third country on 29 March without having ratified the withdrawal agreement with the EU, a very wide range of EU rules in the field of air, road, rail and maritime transport will no longer apply to the UK. Of course, if the withdrawal agreement is ratified before 29 March, many of the preparations and contingency measures that I am about to detail will not be required.
We have already spent the first portion of this afternoon discussing cross-Border rail and bus services. While there are many other Brexit implications for the transport sector, I will focus this statement on the other key risks that have been identified in a no-deal scenario. These are our continued aviation connectivity; the ability of our international road haulage sector to move to and through the UK; the potential impacts on our ports and airports as a result of the significant increase in the control requirements of the Department of Agriculture, Food and the Marine, the Department of Health and HSE, and the Revenue Commissioners to carry out checks on imports at ports once the UK becomes a third country; and the impact on the UK landbridge. We identified our issues early on and have been preparing for a no-deal scenario in parallel with our preparations for the central case scenario. We have made significant progress in recent weeks on some of our biggest and most serious challenges.
Ireland is heavily dependent on aviation links with the UK for trade and tourism. Some 44% of all flights to or from Ireland, approximately 113,000 flights a year, are to or from the UK. The sector contributes more than €4 billion directly to Ireland’s GDP. The tourism sector is critically reliant on aviation connectivity and spending by overseas visitors is approximately €5 billion, of which just over €1 billion is from visitors from Great Britain. Ireland would therefore be uniquely exposed by a no-deal scenario due to our heavy reliance on the Ireland-UK air transport market. Ireland along with a number of other member states strongly made the case to the European Commission for action at EU level to ensure continuity of air services in the event of a no-deal Brexit. The European Commission last year put forward a draft legislative proposal aimed at ensuring basic air connectivity in a no-deal scenario. This proposal is progressing through the Article 50 working party and will ensure continued air access between the EU 27 member states and the UK. It is drafted on the basis that the UK will reciprocate the level of services, albeit for a limited period of 12 months. The measures proposed will, subject to reciprocity, provide a large degree of certainty to the Irish aviation sector and the travelling public. The proposals will help to minimise disruption to air services for business, trade and tourism and have been welcomed by our key aviation stakeholders.
As with all contingency measures that the Commission has put forward, these measures are not intended to, and cannot, mitigate the overall impact of a no-deal scenario, nor can they replicate the full benefits of EU membership or the terms of the transition period as provided for in the withdrawal agreement, but we continue to convey our key concerns through the Article 50 working party. The aviation industry is fully aware of the position that has been reached. While not everything the industry would wish for will be possible, the very real fears that aircraft might not be able to fly are being addressed.
A fundamental legal principle of EU aviation is that air carriers wishing to operate in the single aviation market must be majority owned and effectively controlled by EU nationals. Airlines which may not be majority owned and effectively controlled by EU nationals post-Brexit, when UK shareholders are excluded, could lose their European operating rights. The European Commission has been very clear that it is essential for companies that wish to be recognised as EU air carriers to take all necessary measures to restructure and to ensure that they meet this requirement in time for 29 March. My Department has continually advised our aviation stakeholders of the need to examine their corporate structures to ensure they will comply with the provisions on ownership and control when the UK leaves the EU. That said, it is recognised that the timeframe in a no-deal Brexit scenario is very limited and it will be challenging for community airlines to complete this restructuring as necessary in the time available. In view of these circumstances, it is envisaged that the EU contingency regulation for air connectivity will provide an extension of seven months to allow airlines impacted by the ownership rules to implement their restructuring plans, subject to certain conditions.
Ireland, together with a broad range of other most affected member states, is seeking to address all aviation related issues so that difficulties for community airlines and inconvenience to their customers are minimised to the greatest extent possible while recognising that a no-deal Brexit cannot mean the maintenance of the status quoand the advantages that would bring to the UK and its aviation sector without the obligations of EU membership. Since the UK triggered Article 50, the Department has been engaged in extensive consultations and meetings with other Government Departments and agencies, and other public and private key stakeholders, in particular with the National Civil Aviation Development Forum, NCADF. This increased and regular engagement with the NCADF has assisted both the Department and the industry in planning for and mitigating the risks associated with Brexit for the aviation sector.
Roll-on, roll-off traffic between Ireland and the UK accounted for 966,549 freight units in 2017. Currently this trade into and through the UK by road is facilitated by the EU’s community licence, which allows international hauliers from EU member states to move within EU member states. In a no-deal scenario, up to recently, the Commission had maintained that the European Conference of Ministers of Transport, ECMT, multilateral quota system would be the only fall-back for journeys between the UK and the EU 27. This system would only provide sufficient ECMT licences to cover between 5% and 10% of current UK-EU journeys, which would be wholly inadequate. Following very strong representations from Ireland and a number of other member states, the European Commission announced on 19 December a proposal to temporarily adopt measures for a nine month period from 29 March to allow access for UK hauliers to the EU to ensure basic road connectivity. This is also subject to the UK recognising EU licences and allowing access into the UK for EU hauliers. The proposal represents prudent planning and is very welcome. Ireland is very supportive of the Commission’s proposal and is working closely with other member states and the European Parliament to ensure it is adopted in good time for Brexit. There has been a lot of uncertainty about the legal framework for road haulage in a no-deal scenario. Bringing the Commission’s proposal into force in advance of 29 March would remove much of the uncertainty that has surrounded this issue to date.
While the proposed aviation and road haulage EU Commission measures are only temporary, they eliminate the immediate risk from March and allow time and space to find alternative and more permanent arrangements.
The establishment of the additional controls at ports and at Dublin airport is being co-ordinated by an interdepartmental group under the chairmanship of the Department of Public Expenditure and Reform, with representation from a range of stakeholders across Government. The group has focused on three locations for which we are heavily dependent on connectivity to the UK, namely, Dublin Port, Dublin Airport and Rosslare Europort. The Office of Public Works has been tasked with delivering the required facilities for these agriculture, health and customs checks at these locations. Work is ongoing in respect of both a no-deal and a central-case scenario.
I am concerned about the potential for disruption to, and our reliance on, the UK landbridge. A substantial proportion of our exports and imports, including many time sensitive or perishable goods, are transported by truck on roll-on roll-off, RoRo, shipping services to and from the UK for direct UK trade, but a significant proportion of our goods make their way onwards through the UK road network or landbridge, to reach EU ports. It is estimated that 16% of the RoRo or heavy goods vehicle, HGV, traffic between Ireland and Great Britain is landbridge traffic. Of course, this all takes place at present in a relatively frictionless manner, as is the case across the entire Single Market. However, if the UK becomes a third country from 29 March and there is no agreement in place, then additional customs, agriculture and sanitary and phytosanitary, SPS, controls will be required at EU continental ports that trade with the UK. There has been much speculation that French ports may become congested and that there may be significant delays on the much-relied-upon Dover-Calais maritime route.
The Irish Maritime Development Office, IMDO, carried out a study for my Department concerning the implications of Brexit on the use of the UK landbridge. The study, which was published last year, indicates that 3 million tonnes of merchandise trade with the EU moves between Ireland and the Continent via the UK landbridge. The IMDO estimates that this equates to approximately 150,000 HGVs each year, which constitutes a weekly average of approximately 2,880 HGVs moving between Ireland and the Continent via the landbridge, although there are peak times both weekly and on a seasonal basis. The total value of our trade using the landbridge is estimated to be €21 billion.
Certain sectors are very reliant on the landbridge route - this trade is largely time-sensitive products such as agrifood where the shorter journey times and high frequency of sailings allows a quicker route to market than direct sailings to continental EU ports. The IMDO study concluded that the landbridge is a strategically important route to market for many Irish importers and exporters, including but not limited to agrifood, seafood and other sectors trading in time-sensitive produce. These sectors would be particularly adversely affected by any deterioration in transit times or increase in costs, particularly in a no-deal scenario, and these sectors may not be able to opt for the direct maritime routes to the Continent given the longer journey times involved. Many of these exporters are likely to continue to use the landbridge unless additional delays on this route are such that the route would become unviable. Others may opt to instead transport goods from Ireland on direct shipping services to EU ports. Existing available capacity on direct maritime routes to continental EU ports will mitigate somewhat our reliance on the UK landbridge. This will of course depend on the nature of the product.
The Department of Transport, Tourism and Sport, through its own work and through participation in the landbridge project group, chaired by the Department of Foreign Affairs and Trade, continues to monitor the extent to which Government agencies at the port of Calais in particular are stepping up preparedness for checks on products from and flowing through the UK, which is critical for products that need the time advantage offered by the landbridge. Last month, as part of the Government's preparations for a no deal Brexit, I updated Government on the potential implications for east-west transport connectivity with the UK and our wider EU and international trading partners in the event of a no-deal Brexit. I set out my concerns relating to the landbridge and I also assessed the maritime capacity for direct sailings between Ireland and continental EU ports as a potential alternative route for trade currently using the landbridge while recognising that the longer journey time on direct routes may not offer a viable alternative. Based on consultations with those in the shipping sector and others, I consider that sufficient capacity will be available on direct routes to continental ports from the end of March. If demand for further capacity arises, the shipping sector can respond quickly. I am keeping this matter under review and will report back to Government with a further assessment.
There are many other important issues which the Department continues to address and in respect of which it continues to prepare. I think the ones I have covered are the most pressing, but I welcome questions on everything. I thank the committee.
I thank the Minister. Before I take questions from members, I want to return to the point I raised before the break, namely, that it might be wiser if we could appeal to the Government through the Minister's good offices to recognise existing relationships in the context of insurance policies North and South, with no requirement to have a green card. That would make the most sense of all, for the whole common travel area. The green card would increase bureaucracy and cause significant delays, if somebody wishes to cause a delay. We do not need the green card.
The Minister has this attitude that his own self-importance is far more significant than Brexit. He is deluded if he thinks that. I am from a Border county and I am seriously concerned. The more answers I get from the Minister, the more worried I become. Could we have access to the correspondence from the Minister when he intervened to ask for a form of dispensation?
The Deputy is well aware that I always ensure that people can ask as many questions as they want. There is no issue in that regard. I am trying to set out how we deal with the questions. We normally deal with them in the order in which we always do. That is the only point I want to make.
Could the correspondence to which the Minister referred be furnished to the committee? I can request it under freedom of information if needs be, particularly if the Chairman is going to block it. I am just asking-----
In answer to Deputy Munster's question, I will happily make the correspondence available. An option under the motor insurance directive allows the European Commission to set a date from which the carrying of a green card would not be required. The Commission has not agreed, as yet, to the setting of that date but we and the Department of Foreign Affairs have been pushing it to do so.
I was not talking about the date. We know the date. I was talking about some sort of dispensation. Has the Minister intervened with the British Government and the EU in respect of some form of dispensation to be granted in order that people will not have to carry green cards?
I thank the Minister for the information he has provided on the aviation and road haulage sectors, on the corporate structure of the airlines and on the landbridge. It appears that travel in these sectors between here and Northern Ireland is not going to be as seamless as for rail and bus passengers. A year ago, I asked the Minister whether flights would be grounded in the event of no deal and what he has told us today suggests that will not happen. He mentioned a 12-month transition period, provided the UK reciprocates, a seven-month transition period for the airline companies to restructure and nine months for the road haulage sector to clear its issues. This is very welcome because at least it means we will not fall off a cliff on 29 March. I gather that these periods were granted following representations made by the Irish Government to the EU, and not by the UK, which is interesting and relates to the point made by Senator Ó Céidigh about the suggestion to businesses in the North that they seek information from the South landing in our lap again.
The Minister stated that these arrangements would not mitigate the overall impact of a no-deal scenario. Can he explain what will not be mitigated? He indicated that the aviation industry was fully aware of the position but was also aware that not everything it wished for would be possible. To what does that refer? A change in the corporate structure of the airlines was mentioned. Ryanair has taken steps in that regard. Are many companies involved in such a process at the moment?
How does the Minister envisage the outcome as it affects the landbridge and the road haulage industry? The throughput of road hauliers on the landbridge to the UK is a huge issue, particularly in the context of perishable goods. How does the Minister believe that can be resolved satisfactorily? I welcome the news that there will be transition periods in which to get these issues resolved.
I acknowledge the good work that has been done by the Department of Transport, Tourism and Sport to address some of the major challenges we are expecting at the end of March, particularly as regards connectivity for our airlines. While the Minister acknowledged that it was not resolved there is, at least, a temporary arrangement that will ensure our airlines continue to fly.
I recently asked a parliamentary question relating to the TEN-T network. With the UK leaving the EU, the network needs to be changed. It is down for review in 2023 and the Minister replied to my question to the effect that he was liaising with the Commission. Can he provide a further update on this matter? It is very important from the point of view of maintaining connectivity within the EU. I will not labour the point about green cards because the matter has already been discussed. He said we were still awaiting a decision. Is there any timeframe regarding when the decision will be made? What is the processing time for the issuance of a green card? If a decision is made that a card is necessary, is there any fear that we will not be able to process them in time for the people who rely on it?
We received COM (2018) 893 today. What consequences will it have for the aviation sector in Ireland? We acknowledge that connectivity is going to be maintained under the transitional arrangements that have been agreed but my understanding is that these arrangements will not allow any further growth. Can the Minister confirm that is the case? If so, what effect will it have on Aer Lingus and IAG, which plan to expand business between Ireland and North America with Dublin as an international hub? There is no mention in the Minister's statement of the application for maintenance certificates issued under EU law by the European Aviation Safety Agency, EASA. Will Irish firms which conduct maintenance, such as Eirtech, Dublin Aerospace, etc., continue to be able to provide certificates or are we in danger of losing business to Singapore or non-EU eastern European countries which are already competing with us for that business? Irish cargo operators such as ASL have major European and UK cargo distribution contracts. Will the Minister confirm that, under the transitional arrangements, they will not be able to take on any additional work? There is a cap in place on the amount of cargo they can carry to the UK and I am concerned as to the impact that may have on the pharmaceutical industry, which needs distribution capacity to be able to transport what is very sensitive merchandise.
My next question concerns the effects on the road haulage industry and on our ports.
The Minister mentioned that the OPW has been tasked with delivering the required facilities at our ports. I visited Dublin Port recently and, to be fair, the work that must be done to adapt to the new requirements is well under way. Is the Minister satisfied that the infrastructural changes that are required will be in place in time? I have submitted repeated parliamentary questions about the number of officials required but the Minister always refers them to another Department. While the recruitment of officials may not come under the Minister's remit, is he satisfied, from his engagement with Government colleagues, that the necessary number of officials will be in place?
In response to parliamentary questions on the haulage industry, and specifically on capacity in the ferry and shipping sector, the Minister stated that his Department has been meeting ferry and shipping companies to discuss their plans to deal with Brexit. He also stated that he is quite confident that they are going to be able to respond appropriately should the need arise. What shipping companies is the Department in consultation with and from where exactly will the additional capacity come? It is my understanding that currently, between Dublin and Rosslare, there is capacity for 750 lorries per week to be transported mainland Europe. However, from Dublin Port alone, 1,000 lorries use the landbridge every day. If the landbridge becomes problematic and there are large tailbacks meaning that the people who need to get their produce to mainland Europe can no longer use it, from where will the additional capacity come? As stated, approximately 1,000 trucks per day leave Dublin Port for the UK. If 80% of those are using the UK as a landbridge and travelling on to mainland Europe, where are we going to make up the gap in terms of capacity? I wish to know with whom the Department has engaged. I ask the Minister to commit to ensuring that Rosslare Europort will be utilised to the maximum extent possible and that we will have competition within that port to ensure that hauliers who rely on it in order to get to mainland Europe will have options available to them at the end of March.
The British Government has advised that it will not have transit offices established at its ports for at least six months after Brexit. Irish operators must travel under the common transit convention, CTC, in order to get access to continental Europe while avoiding import/export procedures. This programme is reliant on tracking when and where the load enters and exits a third country en routebetween member states. If the UK does not have transit offices set up, how is France preparing to accept Irish loads using the landbridge? I ask the Minister to outline the contingency plan in this regard and to confirm whether the CTC is workable if the UK does not have established transit offices.
The Minister stated that there has been a lot of stakeholder engagement with the Department in recent months. Such engagement is critical in terms of developing effective contingency plans. What meetings have taken place? Has his Department met the Revenue Commissioners, An Garda Síochána, the Department of Agriculture, Food and the Marine, representative bodies including the Irish Road Haulage Association and the Freight Transport Association, as well as importers and exporters? All of these are key in terms of outlining Brexit related concerns and challenges and how they can be addressed.
If there is a no-deal Brexit on 30 March, is the Minister confident that we will be able to carry out the regulatory checks on goods entering and leaving Ireland that will be required? Will we have sufficient staff in place? I do not think so, based on replies to parliamentary questions that I have received thus far and in that context, has there been any engagement on agreeing a transition arrangement for regulatory checks? Will the EU allow a period of months during which we can bring our staffing levels up to those required in order to carry out all of the necessary checks? If it is a hard, fall-off-the-cliff Brexit on 30 March, we will not have the key personnel in place to carry out the required regulatory checks.
Who wrote the briefing document that committee members received? Is there somebody in the room who wrote the briefing document? Mr. Burke has indicated that he was involved, so my question is directed at him. It is stated in the third paragraph on page 2 of the document that a range of other issues arise as a result of a no-deal Brexit but that if the withdrawal agreement comes into force, many of our preparations and contingency measures will not be required. I ask Mr. Burke to outline the range of preparation and contingency measures referred to in the briefing document.
I must interrupt the Deputy for one moment. I want to be fair to everybody. The Deputy is quite right to ask her questions but I just want to ensure that they are answered at the end of, rather than during, the first round of questioning.
Of course. I just I wanted to find the person in the room who wrote the briefing document. I ask for details on the plans and contingency measures. Could those details be sent on to the committee, including for example, minutes of meetings, emails and so on. I ask Mr. Burke to answer that question and to indicate whether all of that information can be furnished to us.
On the issue of infrastructure and controls at ports and airports, we know that the British Irish Chamber of Commerce has identified that the ports at Cork and Rosslare will need additional builds for agricultural checks. Given that we are already aware of that need, how much has been allocated to ports over and above what was estimated in the budget? Will an additional allocation be made in the event of a no-deal Brexit? It is my understanding that the last budget was based on a deal being signed. What extra resources does the Minister intend to bring to the table in the event of a no-deal scenario? If he is not providing additional funding, cuts will have to be made elsewhere. If that is the case, I ask him to outline where those cuts will be made.
I wish to comment on page 4 of the briefing. The Minister's preliminary assessment is that sufficient capacity will be available on direct routes to continental ports from the end of March 2019. Deputy Troy touched on that. Is that based on conversations? What exactly is that based on? The Minister gave the figure for trucks using the landbridge. What percentage of trucks would use the landbridge going through to Dover? What percentage of trucks would use the direct route to Europe? Let us suppose, for example, that anywhere from 75% of truck operators use the landbridge and those operators are not prepared to sit in 17-mile tailbacks. They may have perishable goods or they may have to transport factory parts and get to their destination as soon as possible. If they are not prepared to sit in 17-mile tailbacks and decide to go through Irish ports directly, will there be sufficient capacity at Irish ports? Is the Minister saying there will be no need? I imagine we would have to lease ships. Is the Minister saying there is sufficient capacity and there will be no need to lease ships to deal with the capacity? Has the Minister or the Department looked at the cost of leasing a particular ship to deal with this? I am keen to find out the cost of that and the predicted numbers in the Minister's plan needed to cater for that. Is that capacity in place? This comes back to my first question about preparation measures and contingency plans. Can we see all of that? Can we see how all the plans fall into play?
My other point relates to international road haulage. I read about the European Commission announcement on 19 December of a proposal to temporarily adopt measures for a nine-month period from 29 March to allow access for UK hauliers to the EU to ensure basic road connectivity. Is this regardless of a no-deal Brexit or is it part of the overall deal, as such? I am curious about that. If there is a no-deal Brexit and this does not stand, what is our plan? Where is our plan?
I will call Deputy Fitzmaurice presently but first several points strike me. The first is that the more I hear about a hard Brexit, the more difficult it will become and the more traumatised our economy may well become. I welcome the progress the Minister and his Department have made in discussions thus far.
Another point that strikes me is that even if we had sufficient capacity in Rosslare, most of the time-sensitive goods that would otherwise have gone through the landbridge are going to perish unless we reach a significant concession with the United Kingdom. That is of major importance. That would be in the interests of the UK as well because no one wants perishable goods to be held up on entry to Europe or in coming across. The whole thing is fraught with complexities. People talk about going off a cliff, and that is exactly what it is.
I am keen to make some other points. The committee has agreed to visit Rosslare, Dublin Airport and Dublin Port. We will have a Border visit in the coming weeks. We are concerned about all of this.
I have a question on the sports side. I understand the future of Down Royal Racecourse may be in jeopardy. There are concerns about Irish horses, which are the mainstay of that course as regards the free movement of horses up and down. That is only a small indicator but it is significant for the people concerned.
Deputy Fitzmaurice is next. The air issue was raised by Deputy Troy. He referred to COM (2018) 893, which we got today, and how it has serious implications for the aviation industry. Have arrangements already been made between carriers in the United Kingdom and Ireland, for example, between British Airways, Aer Lingus and Ryanair?
The Minister is probably aware of this but I am unsure whether the officials are aware of it. On 10 January this year at the European Council a transport amendment was put to include more parts of Ireland in trans-European transport network or TEN-T funding. The amendment came from the European Commission and set out Brexit mitigation proposals relating to the Atlantic corridor. It includes the ports of Shannon Foynes, which was always included, as well as Dublin, Rosslare, Waterford and Cork. They link to Brest, Roscoff, Cherbourg and four or five more places in France and other countries.
I presume the Minister will be in Brussels later. The amendment did not go to a vote, which was unusual. It was fully agreed and is not going to a vote of MEPs. The Minister will be in Brussels for the trilogue – if that is the correct term – in the coming weeks with the European Commission. Can the Minister make a commitment on this? As has been pointed out by all Deputies, the likes of Donegal and the west of Ireland have been badly affected. I presume the Minister is accepting the amendment to include Rosslare, Waterford and the other areas. This comes under the same plan proposed in 2012 for the Atlantic corridor or the western arc. Can the Minister confirm whether that is the case? When the Minister goes to Brussels to discuss that amendment will he give an undertaking to include the rest of the west of Ireland? This is something that has been committed to in the programme for Government. My understanding is that in recent weeks the Minister received an email or letter from the Atlantic economic corridor task force to get the area included in the TEN-T maps. Will the Minister comment on that and confirm that the area will be included?
We have to remember that this is relevant for Donegal, Monaghan, Sligo and other areas along the periphery of the Border. Louth is included because it comes between Newry and Dublin. If there is a hard Brexit, those areas will be hit ferociously. Will all these areas be included, as in 2012 and as per the programme for Government commitment of some years ago?
With your permission, Chairman, I will refer TEN-T questions to Mr. Burke because he has expertise in the area that I do not have. I can talk to him and then talk back to the committee, but it might be better to refer those questions to him. There were questions from Deputy Troy and Deputy Fitzmaurice on TEN-T. Deputy Troy asked about the network changes and updating with the Commission. Mr. Burke may deal with those questions and the questions from Deputy Fitzmaurice.
I want to get this right and I do not want people to be giving out or suggesting I am not being fair to everyone.
We will then move to Deputy Munster if Senator O'Mahony is not present. Senator Ó Céidigh will make his contribution if he returns.
Mr. Eddie Burke:
On the Connecting Europe Facility and TEN-T, there are three elements to what is happening in Brussels. One is a proposal linked directly with Brexit and involving a realignment of the North Sea-Mediterranean corridor from Ireland to the United Kingdom, through the Benelux countries, into France down to Marseilles. With the exit of the United Kingdom, consideration is being given to how that corridor might be realigned such that it would be coherent. The Commission proposed that there be links from Dublin and Cork ports. We have accepted this but have requested that Shannon Foynes Port also be included. It would link into ports in northern France, Belgium and the Netherlands.
Mr. Eddie Burke:
Separately, funding for TEN-T from 2021 is being renegotiated. As part of a regulation that is being brought forward, we have also asked to be linked with Le Havre on the Atlantic corridor. Thus, we would be linked with two corridors. The Commission has accepted that proposal and the French Government is very much in favour of it. Under the regulation as proposed, there will be a link with certain French, Dutch and Belgian ports on the North Sea-Mediterranean corridor and another with Le Havre on the Atlantic corridor. We can only connect to ports that are on the core network and they are the ports that are on the core network.
As part of the renegotiation of the funding mechanism for 2021 onwards, with Malta and Cyprus, we have sought to vary the initial Commission proposal only to fund cross-border projects on the comprehensive network. The vast majority of the network in Ireland is part of the comprehensive network and would not receive funding. With Malta and Cyprus, we have sought funding to be provided for the comprehensive network of any member state without a land border with another member state. The Commission has accepted that proposal. That means that in the next round funding will continue to be available for the comprehensive network, although it did not form part of the original proposal of the Commission.
On the remainder of TEN-T, we have asked the Commission to carry out a review of the network in the light of Brexit. We have yet to submit a full request in that regard, but we have also raised it at a working party level. In our discussions with the Commission we are conscious that Brexit has particular implications for connectivity from the island of Ireland to continental markets and that the withdrawal of the United Kingdom will mean that some parts of Ireland, particularly in the west and north west, will become more peripheral in getting to markets. The Commission has been forthcoming in that regard, but we have asked for that review at working party level. We must formalise the request by means of a formal submission that will take account of what we consider the implications of Brexit will be.
Yes. The amendment would allow for the inclusion of Waterford and Rosslare ports and the other areas I mentioned. In 2012 Waterford was connected by rail to Galway and Ballina. The amendment will come under discussion at a trilogue in the coming weeks. Is "trilogue" the correct term to use?
I presume Ireland will accept the amendment because it will create a core node, which is to be welcomed. I presume Ireland could table a further amendment proposing the inclusion of places such as Killybegs, Galway Port and Ireland West Airport, Knock. The latter can receive special status as it is in a peripheral area and because of the implications of Brexit, that is acceptable in Europe. Will the Department consider tabling such an amendment to get things moving in the coming weeks, rather than having to wait a few years?
Mr. Eddie Burke:
Part of the difficulty is that only areas on the core network can be considered for inclusion in the corridors and realignments. Some of the areas to which reference was made are not on the core network and, therefore, cannot be part of the realignments. The corridors were set based on key urban roads in a territory, which, on the island of Ireland, are those from Belfast to Dublin and Dublin to Cork. There is an offshoot to Shannon Foynes because of the maritime connection. My understanding of what the Parliament has proposed is that the areas referred to by the Deputy are not eligible for inclusion in the core network. We have raised this issue with the Commission.
I ask Mr. Burke to undertake to consider the amendment. If Rosslare Port is to receive the same status as Shannon and Dublin ports, consideration should be given to the inclusion of places such as Killybegs which is right beside the Border, Galway Port and Ireland West Airport, Knock in order to improve the infrastructure of more of Ireland. Ireland West Airport, Knock should be included it its peripheral area status. I ask Mr. Burke to submit an amendment for their inclusion.
That is why we have been seeking a review of the TEN-T network. The programme for Government committed to seeking such a review long before Brexit. However, in the light of the imminency of Brexit, it is more crucial than ever that the TEN-T network designation be reviewed. It is regrettable that no formal application for a review has been made, although I acknowledge the matter has been raised informally. Perhaps the Minister might inform us of when it is intended to make a formal application to accelerate the review of the TEN-T network. As Deputy Fitzmaurice stated, such a review would enable other ports and airports to be designated as part of the core network.
When the European Commissioner for Transport, Ms Violeta Bulc, appeared before the committee approximately 18 months ago, she stated the review would be carried out in 2023. However, as Deputy Troy stated, it should be brought forward because of Brexit and to take into account the matters we are discussing. I presume Ireland would be pushing an open door in seeking a review because there will be a crisis in the coming weeks. The ruling out of areas not connected to the core area needs to be reconsidered. There is a saying one should always make use of a crisis. The commitment of the Commissioner to undertake a review should be revisited in the context of-----
I acknowledge that Senators O'Mahony and Ó Céidigh were absent owing to a vote in the Seanad.
We took Deputy Troy's questions in the interim. Senator Ó Céidigh will have an opportunity after the Minister has finished responding to Deputy Troy.
Mr. Eddie Burke:
The proposal on the North Sea-Mediterranean corridor will call for a review. Member states, including France and ourselves, have pushed for this. We will also make a formal submission to the Commission seeking it.
Waterford and Rosslare are not on the core network but are still eligible for funding under trans-European networks. As recently as Monday, we talked with Rosslare in relation to the next funding call. There is currently a call for funds and Rosslare is looking to see if there are projects it might do that would be eligible.
It has a unique ownership structure, then. We will not get into that. However, if one looks at the amendment, it is now being put in under TEN-T and will become a core node. If that can be done there, then surely in the context of Brexit, as Deputy Troy pointed out, it can be done on the west and north west with a core node including Killybegs, Galway and places such as Knock included in the frame. This might be done through an amendment as they seem to have done in Brussels, and I assume that Ireland would welcome this with open arms.
I can assure the Deputy that it will happen very shortly.
Deputy Troy asked about a timeframe for green cards. I do not have a firm indication. The insurance companies plan to begin issuing green cards in March in the event that no agreement has been reached between the UK and the EU. A period of one month's advance notice will be required for the delivery of individual green cards. The Motor Insurance Bureau of Ireland, MIBI, will undertake a public communications campaign in the event that it proceeds with the issuing of green cards. I share the Chairman's desire that they should not last forever and that the earlier we can take them out of existence, the better. However, I have no indication that they cannot be done.
Several members referred to COM (2018) 893, which was referred to in a note provided to the committee today. It is just a revision. On 19 December, the European Commission published a draft proposal for a regulation of the European Parliament and of the Council on common rules ensuring basic connectivity with regard to the withdrawal of the UK from the Union. The objective of this unilateral measure is to lay down provisions to govern air transport between the EU and the UK following the latter's withdrawal from the EU. The measures are subject to reciprocity with the UK and will only apply for a period of 12 months or until such time as a comprehensive air transport agreement between the UK and EU has been concluded under the future relationship. The proposal provides for a unilateral grant of first, second, third and fourth freedom air traffic rights to UK air carriers. These rights enable carriers to overfly and make technical stops in EU territory, as well as to serve direct routes between the respective territories. It is currently the subject of discussions at the ad hoc working group on Article 50. As the proposal is evolving, elements such as the inclusion of fifth freedom traffic rights for all cargo services, co-operative marketing arrangements such as code sharing and issues related to aircraft leasing are still being teased out.
Under the current proposal, the vast majority of flights to and from Ireland to the UK would still be able to operate post Brexit. Furthermore, I understand that charter flights operated by UK charter airlines to other EU member states or beyond would no longer be possible under the current proposal as it does not cover services between two foreign states, that is, seventh freedoms. Relevant charter operators and tour operators have been advised of this by officials from the Department and the Commission for Aviation Regulation.
The Department met representatives of ASL yesterday. They have no real concerns about air freight. There was a cap on freight at summer 2018 levels.
Yes, it is on freight, not on passengers.
On OPW facilities, I have no reason to doubt that the OPW will not be able to provide the necessary measures on 31 March. It will be difficult. The Government has tasked the OPW with establishing the necessary infrastructure based on the requirements of the Departments of Agriculture, Food and the Marine and Health and another Department, and the Revenue Commissioners. Dublin Airport has been assessed and its current facilities as they stand deemed adequate for a no-deal Brexit. In addition to the permanent facilities that are being developed, separate central case sites have been identified for the no-deal scenario. Implementation work is commencing to provide these sites. At Dublin Port this involves refurbishment works for inspection facilities and cold storage, parking and checking area, staff accommodation and traffic management systems within the port. Works in Rosslare Europort are to a smaller scale. They will provide for inspection areas, parking, staff accommodation, modifications to existing buildings and traffic management systems within the port. The OPW is already on site in Rosslare and Dublin ports. My colleagues are working to ensure that sufficient staff in customs etc. are there to implement what will be necessary at the end of March.
No one can say they are happy with the situation but I am very confident that everything will be done that can be done to ensure that we are in an optimal position on 30 March.
There have been meetings with haulage companies. The Department has kept in close contact with road haulage stakeholders throughout the Brexit negotiations, such as the Irish Road Haulage Association, Freight Transport Association Ireland, IBEC, the Irish Exporters Association, and the British Irish Chamber of Commerce. The Department also has been liaising with these bodies in respect of the Commission's no-deal road transport proposal. On Monday, 21 January, the Department hosted a stakeholders' forum for road transport and maritime interests, including industry representative bodies in haulage to inform them of the latest Brexit developments. The Department, together with the Departments of Foreign Affairs and Trade and Agriculture, Food and the Marine and the Revenue Commissioners addressed the group stressing the importance of attendees disseminating the information provided as widely as possible. Similarly, departmental officials took part in a Brexit seminar for local chambers of commerce hosted by Chambers Ireland on 10 January, in order that local chambers could in turn brief their members on developments. On Tuesday, 29 January I met representatives of Freight Transport Association Ireland.
My Department continues to work with the industry representative bodies to keep hauliers and enterprises informed of developments and prospects, in keeping with our long-established practice. We will continue to update the information on the Department's website as further developments occur.
On the issue of the land bridge, there was a question about where capacity would be provided. The land bridge is a problem. We may well sort out all of the other problems to a certain degree, but this is a problem, particularly in the transport of perishable goods, as has been mentioned. We do not quite know how bad it is going to be, but we have taken a lot of measures and precautions and done a lot of work in looking at the alternatives. We are talking about ferries and the capacity to which Deputy Troy alluded. If people stop using the land bridge for various reasons such as that it is too crowded or there are delays, where will they go instead? My officials have met many of the ferry groups, including Irish Ferries, Stena, CLdN, Doyle Shipping Group - I think virtually every one - Brittany Ferries and P&O, to see what capacity is like. Their conclusion is that there is certainly the capacity to substitute for the land bridge, if alternatives are needed. Everybody knows about the W.B Yeats. There is another ferry being bought also. It is thought, therefore, that there will be plenty of spare capacity. However, it is not an exact science because we cannot predict how many are going to move from the land bridge and what the effect will be. They have looked at it very carefully and are confident that there is no need for a more dramatic intervention such as leasing, budgets or anything like it and that there will be capacity. We will have to see how the individual companies will respond to what happens at the land bridge and whether there will be a danger to perishable goods, but there is obviously a difficulty and there will be disruption. The land bridge is shorter and quicker as it stands, but there will be longer journeys on ferries. Let there be no doubt, however, that this issue has been gone into in very great detail. I think I will report back to the Cabinet in the month of February.
The shortest route between Ireland and mainland Europe is to depart from Rosslare. What will happen if there are problems with the land bridge, time delays, backups or long queues? I have outlined the number of vehicles going from Rosslare to mainland Europe and the number of trucks per day which leave from Dublin Port and use the land bridge. There is a significant number of trucks using the land bridge. If there are problems, how confident is the Minister that there will be alternatives in place? He says his officials have met the relevant shipping companies. If a ship is needed to be put a service in place from Rosslare to France, do we know how quickly they will be able to respond?
I very much regret what happened at Rosslare and the fallout. It was a regrettable, but it was a commercial decision made by a particular group. In terms of its impact on capacity, the company's investment of €150 million in the new W.B. Yeatsto serve the Ireland-France route will still increase significantly its year-round freight capacity between Ireland and France and its summer tourism capacity by 20%. If the capacity is provided, as it will be, as we can see with the W.B. Yeats, we will solve that part of the problem. Of what we are not certain - it would be irresponsible and wrong of me to say otherwise - is that we will have an instant solution to the time problem. I do not know whether we have because I do not know what the delays will be like in Dover. We will have to wait and see. I do not know whether if the transport of perishable goods will be affected at this stage, but we are going to do absolutely everything we can to ensure the alternatives will work.
There are 1,000 trucks a day leaving Dublin Port and using the land bridge. If 80% use the land bridge to get to mainland Europe, that amounts to 800 trucks a day or 4,000 a week. Only 750 trucks are leaving from Rosslare to travel to mainland Europe. How will we increase capacity from 750 trucks a week to in excess of 4,000? That capacity could potentially be needed. The Minister keeps referring to the W.B. Yeats, but one ship will not be able to provide it. What is its capacity?
There is the question of the UK Government. The United Kingdom will have the same problem going the other way. Its produce going to markets elsewhere in Europe will be delayed and what is being imported into it will equally be delayed. I know that there is a different timeline from Ireland and that the UK timeline is more difficult. However, there should be a meeting of minds. Would it be possible for the Minister to seek a special derogation, even in the event that it would run off the cliff? If they do not, there is no doubt that companies will go out of business. Produce, particularly time-sensitive goods, will not arrive.
I would not underestimate the problems the delays might cause. That is possibly the largest problem. Neither would I underestimate our capacity to solve the problem. That is what we are actually doing. The strong view of shipping companies and the Department is that the State should not intervene directly at this time. There would be all sorts of state aid and other implications, which would be very traumatic. There have been responses from the shipping companies. CLdN launched a new roll-on, roll-off, Ro-Ro, freight ferry, the MV Celine, with a capacity of 8,000 lane metres, on the Rotterdam-Zeebrugge-Dublin route in October 2017. The Port of Cork has a new route, since May 2018, operated by Brittany Ferries to Santander. We also have the W.B. Yeats. That is a considerable increase in capacity and evidence of competition on the routes. Shipping services are market driven and ferry operators have in the past responded to economic developments by increasing or decreasing capacity. Any new initiative to enhance shipping services will continue to be market driven. Where they see a gap, they will fill it.
The Minister is comparing apples and oranges when he talks about Rotterdam port. We all know that the shortest route is from Rosslare to France. The Minister is talking about from moving from a 16-hour to a 28-hour sailing on average. Goods that might be transported on one route might not necessarily be transported on another. That is not competition for somebody who needs to have quick and direct access. That is why I am asking about capacity on that specific route. It is the only one that can offer any alternative to the problematic land bridge. Does the Minister accept this?
No. I am not going to say that. That Irish Ferries has pulled a route is deeply regrettable and very unfortunate. It is something I wish had never happened. The Department has not made any final decision. It is monitoring the position on a daily basis and I will report to the Government on the matter before the end of February. We do not want to make commitments that might have implications that might not be beneficial in the long run.
The Senator referred to the nine-month extension for road haulage and the seven-month one for the airlines and asked whether these were a result of representations. Yes, they were. We faced a fairly difficult situation a few months ago when the European Commissioner was taking a line on both haulage and the airlines that nothing much would change and that in a no-deal scenario we would face serious difficulties. That is now past in that we have got more time to come up with a solution, which we hope we will be able to reach in the time made available to us. It will not be identical to the situation at present, but we are perfectly confident that the road haulage business and the airlines will be running a perfectly acceptable service that is very close to what we have at present, as I said. I think that is going ahead.
The Minister makes it clear, though, that it will not be as seamless and that there are certain issues that will not be mitigated and other issues in respect of which the aviation industry would want to see improvements. What is not in there in this period? What would be the practical effect?
The industry would prefer that the ownership and control rules, which the Senator will be aware of, were changed. They will now not be changed in time. The aviation industry is getting an extension as well. I think the Senator asked which companies are in the ownership and control process, which is now extended. I think they are all in it: Aer Lingus, Ryanair, Stobart and the PSO ones. All must fulfil the ownership and control conditions sooner or later. If they are in the process, I think the Commission for Aviation Regulation, CAR, will look at them.
I do not think any company can get a derogation from that. They will all have to be included in it, and that is obviously very serious for Ryanair and IAG, which owns Aer Lingus. They will have to comply with that, as will Donegal and Kerry airports, which are serviced by Stobart. They are all in talks about how they will do it. As far as I know, though, the indications are very strong that they are all in a process which will be successful. I am sure it is not something they welcome but they are prepared to comply with it because they must do so to become European airlines.
We talked about road haulage and the resolution of the landbridge in my response to Deputy Troy's questions. I repeat that the resolution of this is being looked at extremely urgently. I do not want to go into too much detail, and the committee will understand why, but there are all kinds of alternatives being looked at and ways of ensuring the landbridge does not become a huge obstacle in any logistical way. Those alternatives are being examined. The ferries are obviously the primary issue, but if they are not fast enough, I think they will look at other ways of doing that. I met the French transport Minister, and I think we were ad idemabout the need to move trucks fairly quickly through Dover and Calais, so there is no reason to despair but there is reason for energy.
I will make just one final point and then finish. Regarding the 12-month extension or whatever to keep the flights moving, what needs to happen in those 12 months to allow that situation to continue into the future in the case of a no-deal? In other words, will we face another cliff in 12 months if certain things do not happen within that period?
I suppose a UK deal with the EU would be some kind of prospect. Obviously, the 12 months are to give us time to do that, and I do not anticipate that we will go over that cliff at any stage. It would just be unthinkable. I think we can be confident that a continuous arrangement will be made, even if it will be difficult. I do not know what the shape of it or any other arrangement will be in the end.
Deputy Munster asked about budget 2019. It was based on a withdrawal agreement and a transition period. In a no-deal scenario, the Government will look at any need for Exchequer funding for the OPW when those costs are clearer and timing is known. The Government will look at that. The Deputy will be aware of the fact that budget 2019 was based on a withdrawal agreement. That is true; she is right.
I have the figures relating to the percentage of trucks that use the landbridge to Dover. It is 16%.
The Deputy asked about haulage as well.
Yes. Some 16% of trucks use the landbridge.
The Deputy asked about haulage and the contingency on road haulage. It is a nine-month contingency. It is for a no-deal scenario. If there is a deal, there is a deal, but if it is a nine-month contingency, it is purely for a no-deal scenario.
My Department and I have pressed hard. There was a critical situation about haulage in recent months when it looked as if the number licences available was, at one stage, only about 5% of what was necessary. This is a no-deal plan. That is exactly what it is.
I do not quite understand the question. Please let me finish. This is the result of some very hard work over a period of time. That is what we have. We have a big change which gives us a lot of breathing space.
I would not like to respond to the details of that. I will say the following. Everything is being looked at and all alternatives to the landbridge are being looked at in order to get goods from one place to another as quickly as possible without too much obstruction. That is absolutely the case. All alternatives will continue to be looked at. At the moment, we have decided that there is no intention for any direct intervention on the part of either the State or the Department. That is under constant review. I will report to Cabinet about that again at the end of February.
I had asked Mr. Burke about furnishing the committee with all the details of the plans and preparations for Brexit, including bilateral discussions, plans and that sort of thing, meetings, of which the witnesses said there were many, emails back and forth and all that correspondence. I understand Mr. Burke probably cannot go into it all now but can the committee be furnished with those?
Mr. Eddie Burke:
The quote Deputy Munster has from the briefing is to the effect that if the withdrawal agreement comes into force, many of our preparations and contingency measures will fall away. The vast majority of the work we have discussed here today will fall into that category and it will all be for nothing, and that will be good because there will be a withdrawal agreement. A withdrawal agreement will mean that we will buy time and a transition period to the end of 2020 and we will go immediately into negotiations with the UK, at EU level, about what the future relationship will look like. Nearly everything we have discussed here today will fall away if there is a withdrawal agreement. As the Minister said, much of this is a no-deal plan. These are all contingency measures for a no-deal scenario. Much of the work that has gone on, particularly over the past few months, has focused on the types of issues we have discussed today.
We have not released those types of documents because this is still an ongoing piece of work and part of the negotiations. That is even the case for freedom of information requests because they are the deliberations of a public body at the moment.
I am not talking about that. We can go down the freedom of information route, but if we did not have to go down that route, would the Minister be happy to furnish us with that information? He just said he would be happy.
I am if the information is not commercially sensitive. We can make everything available where there is no good reason not to. I am in favour of openness and transparency but, in certain circumstances-----
I apologise. I am very open, as a matter of principle, to making most documents available to members. However, if there are compelling reasons they should be made available, I can see the reasons. I will try to be helpful.
Has the Minister's Department consulted with the Department of Agriculture, Food and the Marine? Post Brexit, we could have controls and checkpoints for live exports of cattle, especially calves, that would delay movement. This will have repercussions for animal welfare on the boats and cattle trailers. What measures is the Minister taking to ensure we will have a free flow of exports of live cattle out of this country? Will the movement of livestock be given any preference or priority?
The Minister touched on the transport and travel network and upgraded infrastructure and said he would go to Europe and look for funding to upgrade some of the other ports in the country. Will the Department's section of Project Ireland 2040 in the national planning framework have to be reviewed? For example, Cork Port is dependent on the delivery of the N28 in Ringaskiddy and the Dunkettle interchange at the Jack Lynch tunnel. That project already six months behind. Should we not be bringing that forward and fast-tracking it if there will be extra activity through the port in Cork and to encourage more activity?
Access to infrastructure will play a primary part in the case of a no-deal Brexit and movement of transport would be in a different direction, as such. As opposed to going to Belfast or Louth, transport will be coming down towards Rosslare and Cork. Will the Minister and his Department have to go back and review their plans? Should work on the M20, in the western corridor between Cork and Limerick, be fast-tracked? Would some of the infrastructure and road networks have to be upgraded sooner at the expense of other projects? Will the Minister have to reprioritise the road network infrastructure development programme?
The road between Cork and Limerick is important and I understand that it is particularly important to Deputy O'Keeffe. It is included among a number of major national road schemes identified for development during the period of the national planning framework. Transport Infrastructure Ireland has provided an allocation of €2.15 million to Limerick City and County Council this year to advance planning and design work on the scheme. The council is currently procuring the appointment of technical advisers for the scheme. It is anticipated that this appointment will be made early this year.
The proposed project seeks to link the cities of Cork and Limerick with a high quality transport corridor, as Deputy O'Keeffe knows. The existing route is deficient in both safety and capacity. Agreement has been reached between the Limerick and Cork local authorities for Limerick to be the lead authority for this project. Limerick City and County Council will, therefore, need to assess all feasible options before a preferred route can be identified. The estimated cost of this project is €900 million.
We will co-operate with the Department of Agriculture, Food and the Marine in any way we can on the animals issue that Deputy O'Keeffe raised. The Department of Agriculture, Food and the Marine has set live animal checks and approved live animal hauliers and that is its business. Vehicles that transport live animals attract 100% inspections and compliance is high among approved hauliers.
I hope I have answered Deputy O'Keeffe's questions. We are going ahead with the Cork to Limerick road link. That is a commitment we intend to keep. We will have to look at it again if there are blockages or obstacles because the roads are inadequate.
I welcome the response. I am making the point that Project Ireland 2040 assumed that we were all happy members of the EU but that might change. I give the example of the Dunkettle interchange that is being upgraded at the Jack Lynch tunnel.
It is already six months behind schedule. When there is the potential for a no-deal Brexit, we should be bringing it ahead of schedule by six months.
I refer also to the N28, the road linking the South Ring Road in Cork city with Ringaskiddy, thereby connecting a major industrial estate with the Port of Cork. Will the Minister's Department have to review its delivery programme for major projects in the event that there is a no-deal Brexit?
I see the Deputy's point and share his concern about the road projects falling behind schedule. We will keep the situation under review. If the Deputy likes, I will refer his remarks to Transport Infrastructure Ireland.
Gabhaim míle buíochas leis an gCathaoirleach. Tá brón orm go raibh orm imeacht ar feadh cúpla uair. I will keep my few questions very short because everyone has been here since 1.30 p.m. or earlier.
I will focus on three issues, the first of which is the land bridge which accounts for €21 billion in trade annually. The Minister can correct me if I am wrong. but, from memory, 70% of all imports and exports pass through the United Kingdom. Is that correct? The Minister may or may not have the information with him. Obviously, if that is the case, it is an issue of huge magnitude. I also support Deputies Fitzmaurice and Troy and Senator O'Mahony in making their earlier points about the European Commission. They were very well made.
The second issue relates to VAT which may not directly be a matter for the Department of Transport, Tourism and Sport. Irish coach operators have a big disadvantage. Irish-based coach operators are outside the VAT net, meaning that fuel, maintenance and repair costs are not reclaimable. However, coach companies in Northern Ireland or elsewhere in the United Kingdom and Irish coach companies which only deal with tourists can claim back VAT. That is a significant disadvantage for many coach operators, particularly in rural Ireland where private coaches are very important in connecting communities and getting people from A to B. This question is somewhat separate but related in some ways. I would really appreciate it if the Minister looked at it and got back to me on it.
The third issue is that of EU airlines. The Minister probably knew that I would raise this issue in one way or another. I have a document from the European Commission Directorate-General for Mobility and Transport in Brussels, dated 18 January 2019. It was sent to all stakeholders and relates to the withdrawal of the United Kingdom from the European Union. It states that "as of the withdrawal date, the EU rules in the field of civil aviation safety will no longer apply to the United Kingdom". European Aviation Safety Agency, EASA, rules will not apply to the United Kingdom. We are talking about have two totally different sets of rules and guidelines, which is not the case at present. That will have serious implications from an EU and, particularly, an Irish perspective. On the second page of the document it is stated that, because of these differences, UK licences will no longer be valid from the date of withdrawal from the European Union. This is of particular concern as it means that pilots with UK licences will not have the same standing after the date of withdrawal. It may also mean that licences issued to Irish pilots by the Irish Aviation Authority will not have the same standing in the United Kingdom. The document states pilot licences, pilot medical certificates and so on issued in the United Kingdom will no longer be valid. Certificates for air operators, attestations of cabin crew, engineers and certificates for aerodromes will also be affected. The document lays out a few more areas. This will have deep repercussions for Irish airlines, their employees and, ultimately, passengers in Ireland. It is a very significant issue.
I am sure the Minister has a copy of the document. Will he share his thoughts with us on the issue? Has the Department considered it? Has it helped the aviation industry in Ireland in the transition, perhaps through discussions at EU level? We have a far higher percentage of UK-licensed engineers, pilots and so on employed in the industry here than in France, Germany, Spain or Italy. It will affect us a lot more. It could mean that aeroplanes would have to be grounded because there would not be the proper licences for them to fly. That is a worst-case scenario, but I do not know what the position is or what is happening. The document talks about third country status such as that of the USA from an aviation perspective. We were in a position where a commercial pilot holding a US licence could only fly in Ireland or elsewhere in the European Union for up to 12 months before having to sit examinations to gain a valid European licence. That was pulled and stopped a number of years ago. If the same was to apply to UK licence-holders, it could cause a serious issue for the aviation industry.
The next part of my question is related to ownership, an issue the Minister raised in his earlier deliberations. If the majority of the shareholding - I understand 51% - is non-EU, the airline is not regarded as being an EU airline. Aer Lingus is not Irish-owned and will be outside the net. Ryanair may well be; I do not know. It depends on the percentage of the shareholding held in the European Union. It is a publicly quoted company, but in actual fact there is only one, really small, Irish airline. There is not really any Irish airline in the country. The airlines here are all owned outside the European Union, which could become a particular issue of concern. I would appreciate it, therefore, if the Minister and his colleagues in the Department could consider it because it could be a very significant issue.
Those are my thoughts. Again, I apologise for having to leave earlier.
The Senator is not unfamiliar with the industry. On fuel duty rebates, the situation is not the same for coach operators in Ireland and the United Kingdom. It is not an issue that has emerged in consultations between the stakeholders. I will ask my officials to engage with them on it.
Mr. Liam Keogh:
I will address the points made in reverse order.
On the issue of control and ownership, as the Senator accurately reflected, there is a significant issue with the licensing of the main Irish carriers, Aer Lingus, Ryanair and Stobart. The airlines are aware of it. Regardless of Brexit, the ownership and control issue is a feature of airline licensing, not just within the European market but also across the world. With respect to their articles of association, airlines' bread and butter are keeping their licences in conformity with the regulatory rules for ownership and control. It is nothing new, but obviously Brexit will have a big impact. Airlines are making the necessary arrangements to be compliant from 29 March. They have sought a time extension. Supported by other member states, Ireland has pressed the case for flexibility with the European Commission in order to reflect current circumstances, that we are in the middle of February and still there is still no clarity on status after 29 March.
The Commission has agreed to a new provision within the contingency connectivity regulation to allow a seven-month grace period subject to certain onerous, although not insurmountable, conditions to allow sufficient time. The airlines have welcomed it as providing a little bit of breathing space. There is a commitment on the part of the airlines to remain compliant with the rules. It is a highly regulated sector and the airlines concerned are highly compliant with all of the rules and regulations related to their licensing conditions. We are reasonably confident. We have had many consultations with the airlines concerned through the national civil aviation development forum. We have also consulted the European Commission and CAR, which is the national competent authority, and will continue to do so until we are certain there is no risk involved. We are currently reasonably assured that there will be no disruptions of services as a result of the ownership and control rule.
Mr. Liam Keogh:
The second part of the contingency arrangements for air transport relates to aviation safety. There will be a derogation to allow entities in the UK that do not have the power to change their safety certificates and approvals to apply in advance to the EASA for those certificates to be extended. There are plenty of mechanisms available to aviation entities with the ability to transfer - such as pilots, for example, who can transfer their licences - to transfer licences to any national authority across the EU 27, including the IAA. On the Irish airlines, it is my understanding that the vast bulk of pilots operating Irish routes with the two main carriers are licensed through the IAA. A limited number of pilots holding Civil Aviation Authority licences need to transfer to the IAA or any other national authority in the EU 27 in good time.
There is no issue in regard to pilots with an EU licence working for an airline which has a third country licence. The licences are stand-alone and it is possible that it would be okay to do so. I thank Mr. Keogh for outlining the work and consideration he has put into this matter.