Oireachtas Joint and Select Committees
Thursday, 3 February 2022
Public Accounts Committee
Transport Infrastructure Ireland: Financial Statements 2020
No apologies have been received. Deputies Carroll MacNeill and Sherlock have advised that they will be late arriving due to other engagements.
I welcome everyone to the meeting. While Covid-19 restrictions have been relaxed, it is open to members and witnesses to attend in person. They should continue to wear face coverings when not addressing the committee. Members of the committee attending remotely must continue to do so from within the precincts of Leinster House. This is due to the constitutional requirement that, in order to participate in public meetings, members must be physically present within the confines of the Parliament. The Comptroller and Auditor General, Mr. Seamus McCarthy, is a permanent witness.
This morning we shall engage with officials from Transport Infrastructure Ireland, TII, to examine its financial statements for 2020. TII has been advised that the committee may also wish to following matters during the course of the engagement: TII's role as a sponsoring authority for MetroLink; public private partnerships, PPPs; and matters relevant to TII's remit in recent correspondence from the Department of Transport to this committee. That correspondence is item R0967.
We are joined in the committee room by the following officials from TII: Mr. Peter Walsh, chief executive; Mr. Nigel O'Neill, director of the capital programme; Mr. Pat Maher, director of network management; Ms Audrey Keogh, director of business services; Mr. Cathal Masterson, director of commercial operations. Attending remotely from outside the precincts of Leinster House are the following officials from the Department of Transport: Ms Ethna Brogan, assistant secretary; Mr. Garret Doocey, principal officer, who was with us last week; Mr. Andrew Ebrill, principal officer in the national roads, greenways and active travel division; and Mr. Dominic Mullaney, principal adviser in the regional and local roads division. They are all very welcome.
When we begin to engage, I ask Members and witnesses to mute their microphones when not contributing so we do not pick up any background noise or feedback. As usual, I remind all those in attendance to ensure that mobile phones are on silent or switched off.
I wish to explain some of the limitations to parliamentary privilege and the practice of the Houses in respect of references witnesses may make to other persons in their evidence. The evidence of witnesses physically present or who give evidence from within the precincts of the Parliament is protected, pursuant to both the Constitution and statute, by absolute privilege. A number of today's witnesses, however, are to give their evidence remotely, from a place outside the parliamentary precincts, and, as such, may not benefit from the same level of immunity from legal proceedings as witnesses physically present do. Such witnesses have already been advised of this and they may think it appropriate to take legal advice on this matter.
Members are reminded of the provisions of Standing Order 218 to the effect that the committee shall refrain from enquiring into the merits of a policy or policies of the Government, or a Minister of the Government, or the merits of the objectives of such policies. Members are also reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against a person outside of the Houses or an official either by name or in such a way as to make him or her identifiable.
To assist our broadcasting service and the Debates Office, I ask that members direct their questions to specific witnesses. If a question has not been directed to a specific witness, I ask each witness to state his or her name the first time he or she contributes. This applies mainly to those contributing online from a remote location.
I now call on Mr. Seamus McCarthy, the Comptroller and Auditor General, to make his opening statement.
Mr. Seamus McCarthy:
TII was formed in 2015 through a merger of the former National Roads Authority, NRA, and the Railway Procurement Agency. TII’s primary function is to provide an integrated approach to the development and operation of the national roads network and light rail infrastructure throughout Ireland.
TII’s income in 2020 totalled €1.435 billion, up from €1.340 billion in 2019. The majority of this income comes from Exchequer grant funding. As a result of the impact of Covid-19-related travel restrictions, road toll income fell from €192.6 million in 2019 to €138.5 million in 2020. There was also a drop in other income due to a fall in passenger numbers on the Luas system. This resulted in TII making a €30 million payment to the Luas operator, which was funded through a public service obligation, PSO, grant it received from the National Transport Authority, NTA.
TII’s expenditure in 2020 amounted to €1.466 billion, of which €1.349 billion was related to expenditure on the road network. The majority of this was in the form of payments to local authorities, including €427 million provided in relation to the national roads system and payments of €546 million made on behalf of the Department of Transport in relation to regional and local roads. The Department retains decision-making power over the allocation of that funding and is responsible for the oversight and monitoring function for those roads. Expenditure related to PPP contracts for parts of the national roads system amounted to €173 million in the year, comprising operating and finance charges.
I certified the 2020 financial statements on 28 June 2021 and issued a clear audit opinion. However, I drew attention to a disclosure in the statement on internal financial control regarding non-compliance with procurement rules in respect of a contract for technical design services. The statement also sets out the actions being taken by TII to address the issue.
Mr. Peter Walsh:
I thank the committee Chairman and members of the committee for the invitation to attend today. I am joined by Ms. Audrey Keogh, director of business services, Mr. Cathal Masterson, director of commercial operations, Mr. Nigel O'Neill, director of the capital programme, and Mr. Pat Maher, director of network management. I understand that the committee wishes to examine TII's financial statements of 2020 and the area of public–private partnerships. Before I make some general comments about 2020 and the area of public–partnerships, I would like to describe briefly the duties and functions assigned to TII through legislation.
The NRA, operating as TII since 2015, was established under the Roads Act 1993. It is the general duty of the authority to secure the provision of a safe and efficient network of national roads, having regard to the needs of all users. TII is the approving authority for national road projects. In 2015, the NRA was merged with the Railway Procurement Agency, and the Roads Act of 2015 added the function of securing the provision of, or providing, such light railway and metro railway infrastructure as may be determined by the NTA. The NTA is the approving authority for metro and light rail projects. In September 2021, TII became the approving authority for greenways.
In relation to 2020, the onset of the global pandemic had a significant impact on TII. In March 2020, the Government classified the national road network and the Luas network as critical transport infrastructure. Luas and national roads continued to operate, without interruption, throughout all the restrictions that Government put in place to combat the spread of Covid-19. All staff who could moved to remote working.
The measures imposed to combat the spread of the virus reduced the volume of vehicles on national roads and passengers on Luas, with a consequent reduction in revenue to TII. Revenue from national road tolls for 2020 was €56 million less than originally forecast. The reduction in toll revenue was managed to ensure that all activities were kept going and fully funded. The Luas revenue shortfall was addressed by the provision of €30 million in PSO payments by the NTA. This was the first time TII received PSO payments since the commencement of Luas services. I am happy to report that the Comptroller and Auditor General expressed an unqualified opinion on the 2020 financial statements.
On PPP contracts, I would like to outline why TII entered into them, how TII's PPP contracts are structured and what the outcome was. Why did TII develop and enter into PPP contracts? In 1999, the Government decided to adopt a PPP approach on a pilot basis in order to fund public capital projects. In the national development plan, NDP, for the period 2000 to 2006, the Government set a minimum indicative target of €1.27 billion for private sector investment into national road projects. The use of PPP contracts was identified as an essential component in contributing to the financing and delivery of the national road improvements. The stipulated that funding structures, including road user tolls, where appropriate, were to be examined.
Section 4.109 of the NDP in question stated that the pilot projects announced by the Minister for Finance in June 1999 would all be developed as PPP projects within the period of the plan, namely, 2000 to 2006. These included, subject to statutory procedures and negotiations where appropriate: a new western river crossing in Limerick on the N7; the Waterford by-pass, including a new bridge over the Suir, on the N25; the second West-Link Bridge on the M50. In addition, the potential for a PPP to develop the Kilcock-Kinnegad section of the N4 was to be actively explored.
The Government established the central public private partnership unit in the Department of Finance at the beginning of 1999, to lead, drive and co-ordinate the process and in mid-1999 the Government established a Cabinet committee on infrastructural development, including public private partnership. The Cabinet committee focused initially on transport, notably the core interurban road network. In response to these policy decisions, TII established a PPP unit and developed a bundle of nine PPP contracts which, following competitive tendering, were entered into during the period 2003 to 2007. Details of the nine projects are in an information note I provided to the committee. In total, €1.75 billion of private finance was raised by the PPP companies and used in the delivery of these nine road projects. The NDP for the period 2007 to 2013 reiterated Government policy that PPPs would have an important role to play in the delivery of that plan. It stated that a PPP approach would be considered for appropriate projects.
On 31 January 2008, the Minister for Transport informed the chair of the NRA that:
... the Government recently reviewed the financing arrangements for Transport 21. Arising from that review it is now proposed that a number of national road projects, involving capital expenditure of the order of €1 billion euro, should be undertaken as unitary payments public private partnerships.
In compliance, TII developed a bundle of four PPP road contracts and two motorway service area contracts. In total, €1.22 billion of private finance was raised by the PPP companies and used in the delivery of these four road projects and six motorway service areas.
How are national roads PPP contracts structured? There are three types of PPP contract that TII has entered into. Eight are road toll concession contracts. Five are availability, design, build, operate, maintain and finance, DBOMF, road contracts and two are motorway service area concession contracts. There are two key features of PPP contracts that make them different from the traditional form of civil engineering contracts which are used to deliver road infrastructure for the State. The first is risk transfer and the second is the commitment to the long-term operation and maintenance of the asset.
In terms of risk transfer, there are two types of risk which are transferred from the state to the PPP company. The first is construction risk. I have been involved with civil engineering for more than 40 years and I know that construction risk does manifest and when ground conditions or weather conditions do not turn out to be what had been anticipated it costs money to rectify or mitigate the consequences. Construction risk is transferred to the PPP company in all 15 of TII's PPP contracts.
The second area of risk occurs where the funding structures include road user tolls. In these contracts, the risk relates to traffic forecasts. Of TII's eight toll concession PPP contracts, the traffic risk has been fully transferred to the PPP company in six and partially transferred in two. The traffic volumes that were forecast by the PPP companies in the years 2003 to 2007 did not materialise.
The second key feature of PPP contracts is the commitment to the long-term operation and maintenance of the asset. TII's eight toll concession contracts have contract durations of 30 years for six of them, 35 years for one and 45 years for the remaining one. TII's five availability contracts have contract durations of 25 years for four and 35 years for one. The two motorway service area concessions have 25-year contract durations. During those years the PPP company must operate and maintain the road or service area. At the end of the period, the road or service area must be handed back with a minimum residual life. The minimum residual life varies for different elements of the asset. For example, for pavements it is ten years. The payments relating to these services are strictly controlled by the contract conditions.
I will outline what was delivered by PPP contracts. The major interurban motorway network, connecting Ireland's five major cities to Dublin was completed by 2010. The PPP contracts delivered key elements of that network. In total, PPP contracts have delivered more than 400 km, approximately one third, of Ireland's motorway network and six motorway service areas. The contracts have proven to be robust, with the successful transfer of construction risk and traffic risk to the PPP companies.
The operation and maintenance requirements are appropriate for the safe operation of the motorways and the maintenance of the value of the assets which will handed back to the State at the end of the contract durations. Today, the PPP companies employ 540 full-time and 400 part-time staff in the operation and maintenance of the 400 km of motorway and the provision of services at the six motorway service areas.
The operating standards have been maintained. The motorway network remained open and safely operational throughout extreme weather events and Covid-19 necessitated public health restrictions. PPP contracts have delivered, and continue to deliver, very good value for money for the Irish taxpayer and have contributed in a very significant way in the creation of a safe and efficient motorway network for Ireland. That concludes my opening statement. My colleagues and I will endeavour to answer any questions that members of the committee may have.
Then there are the original upfront costs in terms of the construction of the road in the first place. Taking all of those factors into account, including the income that is being received by the private contractor, can we say here is a balance sheet outlining how much the road costs, how much it costs to maintain, how much income the private operator received and this is how much it would have cost for the State to have done all of those things and compare the two of them? Has that been carried out for each of the projects at this stage?
In this committee, we have learned that some PPPs deliver cost savings, but many do not. However, we do not know that at the time of the contract; it is only when it is extrapolated over time. It would be very helpful if we could get that in respect of any of the roads for which it is being done.
Transport Infrastructure Ireland, TII, is one of these organisations that finds itself in a bind, because whenever it is doing something that is welcome in a local community, it is the Minister who has delivered that. However, whenever it is postponing or suspending projects, that is on TII. I want to try to figure out where the line is drawn in terms of political decisions versus TII's input. For example, are roads that would be included in the national development plan, NDP, decided by the Ministers and the Department or does TII tell the Department and Ministers which roads need to be included in that NDP based on an objective criteria?
Mr. Peter Walsh:
At the time of the preparation of an NDP, the Department of Transport consults with us and other agencies. We would identify areas of the network that we believe require and warrant intervention. It is a matter then for the Department, the Department of Public Expenditure and Reform and the elected representatives to approve an NDP, which we will then deliver. What we may have submitted does not always come through.
Mr. Peter Walsh:
It is not as straightforward as that. There are policy decisions set down by Government that need to be honoured and followed. For instance, if the commitment to the protection and renewal of the network is placed as a very high priority, then that, obviously, becomes a first priority for us.
Mr. Peter Walsh:
Yes, of the existing network. Therefore, we would need to meet those costs or advise Government and the Department of those costs. Where there is a commitment to projects at construction and there are contracts in place and those bills have to be met, that then becomes a priority that needs to be met. Where there is Cabinet approval to proceed with a project into planning, as part of expending code process, such as, for example, the Galway ring road or Foynes-Limerick, then those projects have a priority because there is a commitment to it. Therefore, the consequences of those need to be dealt with. Where there is a policy that says that we need to upgrade the access to ports, then the likes of Cork to Ringaskiddy, Foynes-Limerick or Oligate to Rosslare has a priority. The current 2022 allocations reflect the upcoming commitment to the Government's Town Centre First policy that is imminent. All of those priority areas, as identified by Government, have to be reflected in the projects that we bring forward.
To clarify, let us say we are at the preparation stage of the NDP, so TII has done all that work. It has brought its analysis of the Government commitments and the projects, I presume, from its own members of staff or input from local authorities. It has outlined other national areas that perhaps the Government would like to consider. However, at the end of the day, it is the Department that sits down with the Minister to decide what will actually include in the NDP from that list. It then comes back to TII, which finds out what the NDP is. There may be, I presume, projects that TII has not considered on the top if its list, but all of a sudden, they are in shining lights in the NDP.
Mr. Peter Walsh:
The priority list that I just went through determines which schemes have a priority in terms of getting allocations. We allocate the funds required to meet the commitments that each of those projects will have in 2022. As things stand, we have quite a number of projects at construction, so they are at first priority in terms of ensuring that all the bills arising out of them are met. Whatever is left after that is what we allocate in accordance with those priorities of connections to ports, Town Centre First and so on.
It is then a matter of how much we have. It could be a case that a particular project is very large and the bills that are likely to arise in the short term in order to do ground investigations or topographical or environmental surveys could be very expensive and we cannot afford it that year. However, as we understand the funding profile from the Department, it improves dramatically in the year 2026. Therefore, those projects will be progressed at that time.
I am trying to identify in the here and now - 2022. For an example that I would know of, the N2, has two pieces, which are Carrickmacross to Ardee and the Clontibret to the Border road schemes. Nobody who has ever driven that road would say anything other than the priority would be the northern end, because that road is in a more dangerous position than the southern road. However, TII made a decision to proceed with the southern stretch. Why was that?
Mr. Peter Walsh:
I do not know if I can give the Deputy absolute reasons here. Both were considered and the one that was better able to progress in 2022, as I recall, was the section to Castleblayney. Clontibret to the Border does not have the same accident history and, as such, the prioritisation was given to the more southern section.
For those projects that were dropped, for example, if the Government made a political decision that these are priority projects and that was conveyed to TII through the Department of Transport, would it then have to revise its annual plans?
Mr. Walsh answered it very fairly. Essentially, what Mr. Walsh is saying to us - and correct me if I am wrong - is that the NDP was launched with bells and whistles, but there was no funding or not enough funding for TII to be able to implement and deliver the roads element of it, and it may have funding in 2026.
Mr. Peter Walsh:
They are valid projects. They are on our books and with the local authority. We are not in a position to fund them in a meaningful way to allow them to progress over the next couple of years. We will pick them up as soon as funding will allow. We have to work within the funding we have.
In cases where delays transpire due to lack of funding, is it Mr. Walsh's experience that the overall cost increases if those delays are prolonged? By the time TII goes back to the project, new planning considerations can mean some of the work that was previously undertaken has to be redone.
Beyond inflationary and natural cycles, are they more expensive? For the eight projects in question, work has already been done to some degree on all of them. That may be feasibility studies or more technical matters. If progress is stalled or suspended and it takes longer to do it, and bearing in mind that general increases happen over time, is it fair to say there will be additional costs as a result of those delays because some of the work will have to be carried out again?
I apologise that I had to remove myself from the room to ask a parliamentary question in the Dáil. I apologise to Deputy Carthy for walking in front of him. The witnesses are welcome. We have met a number of times. Mr. Walsh must be sick of me at this stage. We have many important things to talk about. On a positive note, it is important to acknowledge that many of the points I wanted to make around the finances of TII have in some degree been clarified. That has to be welcomed. I have a couple of points to make about the structuring of the organisation's finances, as a State agency. I strongly believe in seeing an end-of-year budget put in place to allow visibility of all the capital projects being undertaken, to see how much capital is being spent on those projects and to give us a clear idea of which projects are experiencing overruns. I am concerned at the enormous rise in construction inflation, which obviously has a knock-on impact on the work being done by TII and will affect current development plans that are in place. The issue of road construction is important to me. Are the current projects being undertaken, including the Dunkettle upgrade and the Macroom-Baile Bhuirne bypass, on budget? Are they over budget, based on expenditure over the past 12 months? How is that looking?
Mr. Peter Walsh:
We may be mixing up two things. An allocation is given to a project at the beginning of a year but depending on the progress that can be made during the year it may end up as a different number. It could be more, or it could be less. If significant progress is made, if we have a good summer for instance, more money will be spent on that project. For that reason additional funding was provided to Ballyvourney-Macroom during 2021 and Dunkettle because more progress was made than originally forecast. However the overall project for the project is determined at the beginning of the approval to enter into the contract and that remains unchanged. We are within that budget for both projects.
Okay. That is good to hear. My next question relates to the area of the planning process which I spoke about here before. The Attorney General is undertaking a very large project. Has TII had any engagement with him in regard to the reform of the planning process?
I wish to move on to an important point about finances. Over the past year, an issue arose with regard to expenditure on the N73. TII's use of the term "funding uncertainty" has grown over the course of the past six months. Is there any update on the delay that happened in September? Will that project be going ahead? Has Mr. Walsh any information for that committee on that?
Mr. Peter Walsh:
I have information and the project is going ahead. Regarding the uncertainty, the circumstances are unusual. It was a brand new NDP. The annual funding profile had not been clarified. Until we had clarity, we needed to be prudent. It ended up with us not being in a position to approve Cork County Council proceeding to tender with that N73 project. We did this out of caution. We will never leave a local authority stuck with a bill for a contract that we have approved. We do not want to incur cost for the civil engineering industry in tendering for a project with which we cannot proceed. At that time, with the uncertainty prevailing, we could not give approval. We got certainty later and we have profiled accordingly. We have given approval to Cork County Council to proceed this year with the tender for the N73.
My questions about funding uncertainty relate not only to the issues with the N73 which arose earlier in 2021 but also to the current development plans for major motorway projects and new road projects, including relief roads, bypasses and other strategic infrastructure projects on which TII is working. Is TII currently in a financial position to undertake what has been underlined in the NDP as it stands? Does it have the funding to proceed with the projects that are listed? Where do things stand in regard to its budgeting on that?
Mr. Peter Walsh:
-----we are planning for the progression of all of the projects within the NDP in that period. Some of them will have construction periods that will commence within the period but will not be concluded. Therefore, there will be additional costs that go beyond 2030. The Department is fully aware of that. When the NDP comes up for review, which is due in 2025, the next ten-year projection will be the subject of consideration at that time. Am I answering the Deputy's question?
There has been much media commentary in recent weeks about concerns regarding road projects, major capital projects in the country and funding issues relating to them. I wanted to get the opinion of the Mr. Walsh, as the CEO of TII.
It is an important point. There needs to be degree of clarification on it. I take it from Mr. Walsh that in regard to Ireland 2040 he is on track to get those projects finished, constructed and commenced, and he has the funding for all of them.
Mr. Peter Walsh:
There was a note issued. In fact it was the Deputy's query to the Joint Committee on Transport and Communications that prompted us to issue the note.
There was some confusion about what the status of an allocation was. We operate under section 19 of the Roads Act to deliver on our mandate through the local authorities. Allocations are given to local authorities for specific projects that reflect what we believe to be the progress that can be made on that project in the coming year. In their original selection, the projects reflect the prioritisation given by Government and set out in the national development plan. For an individual year, the allocation reflects what we believe - in conjunction with the local authority - is achievable within the next 12 months. That allocation is the one that goes into our allocation book and is communicated to the local authorities.
I have a few concerns around the national investment framework for transport in Ireland, NIFTI. This framework is being implemented by the Department of Transport. Does Mr. Walsh have any concerns about this affecting TII's work programme and budgets? Is there potential for that to defer projects for further cost-benefit analysis?
I am not asking Mr. Walsh to criticise but does he have any concerns about its implementation? As a lot of people are quite concerned that it could have a very significant impact on new roads being constructed and the work for which TII has responsibility, it is a fair question.
I thank Mr. Walsh for his correspondence regarding the matter with which we engaged at our last meeting. At that time, I raised the issue of roadside parking of heavy goods vehicles, HGVs, in Rosslare. My next comment is not aimed at Mr. Walsh. In general, the solution is not very satisfactory. I know it is an interim solution. We continue to park these vehicles on the roadside albeit they are off the main thoroughfare on a link road. We have a serious commercial driver shortage. It is a worldwide shortage. As an island nation, Ireland depends very much on road transport. None of the stakeholders that have been engaged in this - everybody from the Office of Public Works, OPW, to Wexford County Council to TII, the NRA, Rosslare Europort and even Revenue - have given consideration to the health, safety and well-being of the driving population. That no consideration is given to their sanitary provisions is a poor reflection on how we regard what I would regard as front-line workers. If you were to enter the OPW facility and tell the customs officers they would not be able to use a toilet, you would not get the same level of co-operation. I want it on the record that we are doing nothing as a country to support our front-line workers in that regard. I thank Mr. Walsh for his engagement because it is not his primary responsibility. TII is a stakeholder and I expect that there will be further engagement but my criticism is not aimed solely at Mr. Walsh.
I refer to what previous speakers have raised. Mr. Walsh will have received a letter from the chair of the South East First Citizens' Forum regarding projects on the N24 and N25. It appears that the next phase of funding will not go ahead. Is this correct?
Regarding the stage both of these projects are at and bearing in mind that, unfortunately, I can report that there was a fatality last November on one of these projects involving the section of the road we are talking about, €5 million has been spent. Should we not get funding up to 2025? We might as well just flush that money down the toilet. Would Mr. Walsh agree with that?
Really? My experience of it is the N11. In three years, environmental progress would dictate that we do new studies and all of those routes may be cast aside because of some new regulation or legislation. This is what tends to happen. We have spent €5 million and what is required here is €1.5 million to ensure that phase 2 of the N24 goes ahead and €2 million to ensure that phase 4 of the N25 is completed. It is completely counterproductive not to fund phases 2 and 4 of these respective projects when we have already invested €5 million. This is the region that is now supporting a 400% increase in traffic out of Rosslare Europort. These are the connecting roads. It does not seem as though due consideration has been given to this.
Yes, it was. Due consideration was not given. We are in the throes of Brexit. We are now hearing that the Northern Ireland protocol is not going to be operated. There has been a substantial increase in traffic on these routes from Rosslare Europort and yet these routes are being sidelined. I do not understand the methodology. These are primary routes to the development of what is now Ireland's busiest and most strategic port and yet they are being sidelined for the want of €3.5 million. It makes no sense.
Mr. Peter Walsh:
The decision was based on the fact that primary access to Rosslare Europort is from Rosslare village into the port. That is the new access road in. That would facilitate the movement of all HGVs in and out of the port. The second is the continuation of the N11 from Oilgate to Rosslare.
I appreciate that this is very important. The provision for the continuation of the N11 has received significant funding but Mr. Walsh must appreciate and agree that we had carried out all of that study previously and it was literally wasted money because we had to just do it all again because it was done so long ago.
Is that not the case?
That is what I just said, which Mr. Walsh disagreed with. What I am saying is that this is about value for money for the Exchequer, about road safety and about critical roads infrastructure to support an entire region, the south east, and it is €3.5 million. I think it is foolhardy, and I mean foolhardy, of TII to think that if it waits until 2025 to provide this funding, we will still be at €3.5 million. Would Mr. Walsh agree with that?
Mr. Peter Walsh:
The thing to bear in mind is that the development of a project goes through a number of phases. If there is a commitment to funding in 2022, it is to carry the project on to the next phase of development, which has a higher bill associated with it. We are profiling to 2025, and the profile to 2025 will not allow us to progress to grand investigations, topographical surveys and the more expensive elements of the development. These are the ones that would potentially have to be done again. The expenditure that has been incurred to date on those two projects will be largely reusable. Some stuff cannot be reused but some stuff can. I appreciate the frustration.
It is not so much frustration. It is the level of the lack of consideration for the public purse and value for money. The reality is that Mr. Walsh just commented to one of my colleagues that the longer projects are delayed, the more they cost. Whether we are talking about them being in construction phases or not, that is the reality. We have seen it with the N11. What we are calling climate greening is changing rapidly, and every day is a different day and every study is different. There are many incidents of having to undergo new environmental studies which are putting down routes we have already determined as being available. They are no longer available because there is a snail or a bird or just a new environmental study to be carried out. We are just flushing money down the toilet.
I come to the roads budget.
Mr. Peter Walsh:
We have provided an explanation note with the allocations this year in respect of prioritisation that was given to the manner in which the money that was made available to us was distributed. That is comprehensive. I cannot do that for each individual project. I cannot say for a given project that there was something offensive about it or something that did not make sense. The full explanation of meeting the prioritisations as set out in the NDP and within the policies of the Government is set out in that explanation. I am happy to go through it.
I welcome our guests. I will focus initially on national roads improvements and maintenance. Payments to local authorities for road construction and improvements in 2020 amounted to €405 million. Does TII have to hand a breakdown of that sum between new construction and actual improvements? How is that €405 million broken down for 2020?
Yes. How are they qualified by TII as to how funding is allocated to each project? I would like to get an understanding of that in the context of the condition of our national routes and what is required. How does TII make that assessment?
Mr. Peter Walsh:
I can describe that for the Deputy while the numbers are being looked up. The condition of each route, the network, is surveyed. Mr. Maher, our director of network management, can give detail on that. Our funding reflects the state of the network. We assess the structural capacity, the skid resistance and so on and then the funding is allocated in response to the need as identified through that survey.
Mr. Peter Walsh:
There are a number of different assessments on the network. From a safety point of view, there are two programmes of work. One is reactive and the other is proactive. As for the reactive one, we take all the accident statistics and analyse them, identifying accident clusters and then reporting those back to the local authorities for them to comment as to whether an engineering intervention is an appropriate way of responding to that particular circumstance or whatever other comment they wish to make on it. That informs our safety programme, and that could then end up in either a minor improvement, which could be a realignment of the road or a much lower level intervention or a widening of sight lines or whatever the issue might be. That is one programme of work.
The second is a proactive one, whereby we undertake an investigation. We inspect the routes and pick up what we think might be hazardous circumstances, which then make their way into a programme of works. The structural or operational performance of the network is something Mr. Maher and his people in network management survey continually. That is largely done by machines. A vehicle drives the road and picks up everything from cracking to deflection to surface deformation and so on. Those are all indicative characteristics of pavement in distress and warranting intervention.
Mr. Walsh mentioned the minor works. As for the breakdown for minor works projects, what I am trying to understand is, out of that €405 million that was allocated in 2020, how much was accounted for by minor works, how much was to address bottlenecks and how much was to address safety concerns? It is important we understand this. Is that €405 million separate from what is currently being allocated to NDP projects or is it part of the whole pot?
Mr. Peter Walsh:
It is part of the whole pot. My colleague Mr. O'Neill might be in a position to elaborate on the numbers, but basically they break down in the following way, and probably the easiest way to see this is in our annual plan and budget. The protection and renewal money is identified, and that includes minor projects because it is part of the safety programme. The new roads money for significant interventions, that is, major schemes, is a separately identified number. Would the Deputy like us to give him those numbers now?
Mr. Nigel O'Neill:
In 2020, out of the €405 million, a sum of €220 million was for what we would now call new roads, and €185 million was for what we would now call protection and renewal. Protection and renewal and new roads are new categories that have come in for 2022. That is also how we interpret what we did in 2021. We use different terminology there.
In terms of local authorities trying to start projects or complete projects, the most available option to them is probably the minor works element or an alternative, certainly for projects of significance in reducing bottlenecks. One project on the N84 bypass in Ballinrobe has stalled for the past number of years due to issues around getting allocated funding through TII and the selection of a preferred route. In order to get that project up and running - it is now back at phase zero - it needs to get to a stage where they can allocate resources and get early planning in place as well as going for the existing plan. How does TII support local authorities in getting past phase zero and getting the project up and running?
Mr. Peter Walsh:
We fund the Mayo road design office in Castlebar. It is staffed by Mayo County Council personnel and they take projects through the various phases. Our regional manager and regional inspector meet with them on a monthly basis. Projects that can be brought forward within the capacity of the office are identified and brought forward. Westport-Turlough was a major scheme that required a significant level of resource commitment and there is only so much an office can take on. We got that project up and running thankfully. The N59 from Westport to Mulranny project has been on the books for quite some time. They successfully got planning for that. We have been delivering that under a series of minor projects. I think we are now on our fourth one with them. Again, that is a significant requirement. We have Cloongullane bridge on the N26. We are aware of projects of that nature. We want to bring them forward. Some have more of an imperative. The Westport-Turlough project was definitely one that was part of the NDP and needed to be delivered as quickly as possible and that requires a lot of resources. There is only so much they can do in the office and that is part of the issue.
I have to compliment the team that is there, including Mr. Paul Dolan, for the magnitude of projects they are delivering. This has to be complimented. There are projects that are of significant importance. I refer to a speed-reduction project in Breaffy, which I am sure Mr. Walsh is aware of.
Recently, there was another fatality in that area. We have had a feasibility report. We have had input from TII. We are looking for the members in the local authority to move forward with Part 8 and try to get that safety concern addressed.
On speed reduction and TII's input, what is TII's approach to reducing areas of real safety concern? I know it is very reluctant to reduce the speed limit in some areas to 60 km/h but in other areas there is inconsistency on that route towards urban areas or to Dublin.
It is no surprise that I will ask Mr. Walsh about both the metro and the Luas given that we are probably one of the only constituencies in Dublin that does not have a fixed-line rail running through it. We are entirely dependent on buses for public transport. Therefore, these projects are keenly awaited. Last October, reports emerged that the Government was to make a strategic decision to delay the construction of the metro for ten years. That subsequently proved not to be true. It emerged there were delays in the metro project and it has been quite difficult for public representatives to get to the bottom of that. What are those delays and what are the reasons for them? I will concentrate on that. Will Mr. Walsh outline how much has been spent on the metro project to date?
Mr. Walsh can imagine how a lot of people are very alarmed that after €88 million we do not have a metro and that a figure far north of that compounds that frustration. Can he understand that frustration?
I will let Mr. Walsh answer his own point. In what way? Does he not believe that after €88 million has been spent and when we stand up and ask questions in the Dáil of Ministers that we are not told when that project will be delivered?
In 2018, TII published a timeline for the delivery of the metro. Let us look at that timeline. TII stated that in quarter 4 of 2017 the alignment options study identification on an emerging preferred route would be published. Did TII meet that target?
I will get to that as well. Before Covid and before there were any possible delays arising from Covid, regarding the metro north which was essentially a year or so after the timeline was published, TII fell at the first goal. When TII gave the deadline of quarter 3 of 2019 for the railway procurement order and the 2027 operation date, why did TII publish those two dates and did it believe they could be met at that time?
Mr. Peter Walsh:
We were starting into the project from a standing start. We were working with the NTA to reflect the aspirations of the NDP as published and the building on recovery plan. It was felt that these should be the targets aimed for because they were the targets set before we ever opened a book at all on where we were going with the project.
The decision to now not provide an operation date - which seems to be the policy of both TII and the NTA and, to some degree, of Government Ministers - why has that changed? Why was it okay to publish an operation date in 2018 and now TII is not willing to publish an operation date?
I will go back to this point. Why was it okay to publish a timeline in 2018 with an operation date in 2027 and it is not okay to do so now? Mr. Walsh said that TII wanted to reflect the aspirations of the NDP.
Is that code for there being pressure on TII to deliver a deadline?
There is question that has to be asked. TII published the deadline in 2018 and immediately failed to deliver on those timelines. Was it ever a realistic timeline or was it not resourced to the point where TII could deliver within that deadline?
I can now see why there would be reticence to publish a new operation deadline because then TII would only get questions at the next Committee of Public Accounts meeting and thereafter. Unfortunately, TII leaves us in a very difficult position. By not publishing any deadline, there is no way to hold project to account.
Mr. Peter Walsh:
For the parts that are within our control, the kinds of durations that should be borne in mind are that from the time the Government gives us approval, which we hope will be in quarter 1 of this year, we should be in a position to submit the project to An Bord Pleanála in the quarter 2 of this year. How long it takes through the planning process is a matter for An Bord Pleanála and the challenges there. If there are any judicial review challenges, that will add a period of time that we cannot determine either.
Mr. Peter Walsh:
I hope we would get through An Bord Pleanála within two years. We could then commence the procurement process. The procurement process would take at least two years. We are suggesting that an element of the project could be in a public private partnership, PPP. In our experience of PPPs is that they have quite a long procurement period because there is a lot of due diligence and it is a complicated contract. It is important to get that right. One would want to be thinking in terms of two or two and half years for procurement. To commission and construct the project then would take between eight and nine years.
I had to sit the leaving certificate but I am still struggling with the numbers, which is not Mr. Walsh's fault but my fault. With an optimistic version, we are talking about 2024 to come out of planning and 2026 to 2027 to come out of procurement. It would then take another nine years, at most, so we are talking about 2035 for an operational date. Is that a ballpark date given that it could also be longer if there is a judicial review?
It is hugely frustrating. The Government has not made a decision to delay this project by ten years but it looks like it will be delayed by ten years. This comes to the very core of these projects. Across north Dublin people have completely lost faith in the metro north project. The reason is that this saga has been going on for 20 years. The decision is out of the hands of TII because it was delayed in 2012 when a decision made, which I imagine added costs to the project. There was the route alignment, which I would love to investigate further with Mr. Walsh. I imagine increased costs arose as a result of representations made by me and many other people about that route. I would also say they arose because an unresearched proposal was made to locate a station on St. Mobhi Road. All of that said, and for all of those good reasons, the people of north Dublin are facing a situation where at best we are talking about 2035 for the delivery of a project that the Government is willing to fully fund now. Does Mr. Walsh accept that people are frustrated about this and have lost faith in this project? They will then lose faith in all of the other good projects that TII may deliver in our area, for example, a Luas line, which I believe will have a much faster track, but nobody believes that.
Mr. Peter Walsh:
It is incumbent on me to give the Deputy my honest opinion as to the durations the various elements of a project of that scale and complexity will take. The approach we have taken and put in the business case that is with the Government, in terms of, say, cost forecasting around it, is as comprehensive as we can bring to it. We engaged in a reference class forecasting exercise for the project, engaging with Oxford Global Projects, to give the Government the best understanding of what the cost forecast might be. We have engaged with the construction methodology to the extent of having a good understanding of that construction period. People are entering this with their eyes open.
I accept all that but I do not see how any of this was not visible to Transport Infrastructure Ireland in 2018 when it provided a very clear timeline of 2027. Now we have a timeline of at least eight years after that. Effectively, this is a doubling of the duration of the project. I do not see from the significant information Mr. Walsh has given me anything to indicate this information was not available when TII published the timeline in 2018. Therefore, we compound the disappointment again by having a timeline that was not realistic in the first place.
I welcome the refreshingly honest answers to the questions we are posing, even if they are not necessarily the answers we want to receive. I will continue in the vein of asking very straight questions. I will start by asking about the N73, especially the stretch between Mitchelstown and Mallow. Has Mr. Walsh ever travelled that road?
May I cordially invite Mr. Walsh to travel that road as soon as he possibly can? It is only then that he would realise just how awful a stretch of road it is. It is arguably one of the worst national secondary routes in the country. Be that as it may, I welcome that there is an allocation in respect of Annakisha South, Clogher Cross and Waterdyke. I am disappointed, however, that the parcel for 2022 is only €900,000. I am seeking reassurances that a notification will be sent by TII to Cork County Council to give formal notice that Cork County Council can move to go to tender on that project. Is that the case?
Mr. Walsh will appreciate the point I am making. If TII is only allocating €900,000 this year out of a budget line of approximately €10 million, the fear is that Cork County Council will get stuck in the gap.
Let me just finish the point, which I am making in good faith and respectfully. If Cork County Council gets stuck in the gap, having spent €900,000, but cannot go to tender, it cannot proceed to spend up to the figure of €10 million. I am seeking a commitment that following 2022, we will see the tender issued, boots on the ground, a shovel-ready project and that TII is proceeding with the commitment. That is what I am seeking here.
Mr. Peter Walsh:
I can give that commitment. As I explained to Deputy O'Connor earlier, the reason we hesitated, or did not give approval in the third quarter of last year, was to have certainty around the funding. We have that now. For that reason, we will be approving Cork County Council to go to tender, and it can rest assured that we will be with it as partners in the delivery of the project. Once we are committed to it, we are committed to it.
I thank Mr. Walsh. He could not be any clearer than that, which I appreciate. That gives us great hope.
I refer again to the N73 and other such projects. Has TII given consideration to the budget line for major schemes in relation to County Cork? For instance, the Ballyvourney to Macroom project is coming in this year at approximately €60 million, or €61 million if one wants to round it up.
The perception held by people like me is that the effect of all of the moneys going into the Dunkettles and Macroom bypasses of this world, which are the subject of national priority, is to suck the marrow out of the bone for other smaller projects. I acknowledge that they are smaller roads and lesser priorities, but this means that people like me are fighting on our backs for projects that are in abeyance for five, ten, 15 or 20 years. Is it not incongruous that, if a road is a national priority under a national development plan and so on and it is politically prioritised at Government level, it should have a negative bearing on a local authority's ability, in partnership with TII, to deliver on national secondary routes, tertiary routes and so forth? Does Mr. Walsh believe that there should be a rebalancing of priorities so that Exchequer funding for national secondary routes, which are usually the main routes serving counties, do not get caught up in a Samson versus Goliath struggle where, for example, the N73 is completing with the Macroom bypass?
Mr. Peter Walsh:
There is only one pot of money and the intervention required on the N22 is the appropriate one. It will provide a safe and efficient network element that bypasses Ballyvourney and Macroom. It was necessary to deliver the project that is being constructed; there was no alternative. A lesser intervention would not have performed the functions and met the objectives required. It is expensive.
I will move on. The Minister, Deputy Eamon Ryan, has made mention of the efficacy of relief roads. I hail from the great town of Mallow. There is a budget allocation of €900,000 for the Mallow relief road, which is welcome and we are delighted. It has been a long-running campaign, as has the N73 campaign. These are decades-old campaigns. What will the €900,000 that TII has allocated for the Mallow relief road get us? Once spent, will it buy a further commitment that the relief road will actually be delivered? This is a bit like my N73.
Mr. Peter Walsh:
I cannot say because I am not familiar enough with the Mallow relief road, which is being funded separately. My colleague Mr. O'Neill could provide more detail if required. The notion that major projects are in some way taking from the minor ones is something that the Department is addressing to a certain extent, in that protection and renewal work is a classification of funding that is protected as of this year's allocations. It is the first time we have come to this level of designation. Bearing in mind that the Department has determined that there should be a specific amount for protection and renewal and a specific amount for new roads, the split in the funding we are receiving for the years 2021 to 2025 is 54% for protection and renewal, including minor interventions, and 46% for new roads. The significant increase in funding in the second half of the national development plan will change the balance to 29% versus 71%.
This approach can be interpreted as protecting the protection and renewal money, including for minor interventions. If there is anxiety that new roads are in some way drawing away from those interventions, let me say that we do not swap between pots. Where we have an annual allocation under the protection and renewal element, we make every effort to ensure that those moneys are spent within that classification and do not go to subvent expenditure on major projects. We budget for the major projects elsewhere.
I wish to raise a number of issues. First, I have looked up the figure in respect of metro north that was provided by the NTA under a freedom of information request. The figure is €165.6 million in addition to the €83 million that TII has spent. I wanted to put these figures on the record. We are at nearly €250 million. There have been political changes and commitments have changed, but we must at some point take a meaningful look at this entire project from beginning to end and see what lessons we can learn. I am unsure as to how much of the €165.6 million can be carried forward into the project. I am sure that some can, but if there is waste, we will not have learned lessons.
One local authority area in one part of the country - Fingal - doubled its population between 1996 and 2016. We have not undertaken a more recent census. In terms of climate change, it is difficult to see how TII can deliver on some of the transport obligations in a part of the country that is expanding so rapidly.
I am just making a point about the metro project. Some of it predates the establishment of TII-----
-----and some of it has political aspects, but the money involved is sizable. I imagine there are people around the country who are not familiar with that part of Dublin who believe that the project has been partly delivered already and the almost €250 million is just some sort of augmentation, but it is being spent without a single shovel having gone into the ground. At some point, it would be worthwhile to examine this matter in a little more detail to see where we can learn some lessons.
Regarding tolls, it is what TII does not say that sometimes raises questions. Mr. Walsh mentioned that revenue from tolls was €56 million less than originally forecast and that this was "managed to ensure that all activities were kept going and fully funded." The word "managed" jumped out at me. What does it mean for the taxpayer? Mr. Walsh also mentioned that, of TII's eight toll concession PPP contracts, "the traffic risk has been fully transferred to the PPP company". How does one align with the other? Do we retain an obligation in respect of any of the toll roads, tunnels or bridges to compensate for a shortfall in the traffic volumes forecasted?
Mr. Peter Walsh:
Okay. That seven-week shutdown produced a reduction in the projected expenditure on those 20 sites. We changed allocations and moved them around - we could do 2,000 changes of allocations in the past six weeks, or the latter part of last year - to ensure we would avail of the funding and keep the projects moving that were moving. We were lucky, in a way, that the CIF made huge efforts to put in place operating procedures the Government regarded as suitable for suppressing the transmission of Covid-19 and they were able to get up and running again after seven weeks, on 18 May. As such, they nearly balanced each other out-----
What impact was there where there was a shortfall in tolls? Was any compensation paid for that, and if so, how much? Will residual compensation have to be paid on roads where compensation is built into the contract where the forecast is lower?
Mr. Cathal Masterson:
To set this in context, these variable operating payments are linked to those traffic guarantee mechanisms and the two contracts Mr. Walsh mentioned. In 2019, the value that was payable on those schemes was €3.9 million excluding VAT, while in 2020, it moved from €3.9 million to €13.2 million excluding VAT. That was, obviously, linked to the decline in traffic during the pandemic. In 2021, although we have not finalised the accounts, we expect the figure to be in the region of €10.4 million, which would reflect some recovery in the traffic in 2021 versus 2020. There is-----
I am not wild about public private partnerships, PPPs, but I hope we never again sign a contract with that kind of compensation tied into it. Apart from anything else, it is completely at odds with our climate obligations. It is a very sizeable sum. The figure of €3.9 million is effectively the baseline, while the figure for 2020 is almost €10 million higher and for 2021, over €6 million higher. That is what the taxpayer will have paid in compensation for those two years.
On value for money, I am sure we will all raise examples with which we are familiar. I refer to the M7 project and the widening of that road. In addition, there was the Sallins bypass, which was built in tandem with the M7. Kildare is the gateway to the west and the south, and I imagine there is more motorway in Kildare than in any other county. Certainly, there are very high traffic volumes. Those roads are Kildare local roads as well as being national primary roads. The Sallins bypass was originally expected to cost €61.7 million and it came in at €85.5 million, an increase of about 39% in what was forecast. There was a contractor dispute, there were design amendments and there was Covid, although that was only for part of it because the road was already largely in place. The road that was delivered has no public lighting and has only part of a cycleway and a footpath. Is TII satisfied that what is being delivered for that money is satisfactory in that context? I accept this went to conciliation, but can the witnesses give a view on whether they believe that was value for money? It is a significant overrun.
Mr. Peter Walsh:
I hate to be avoidant about this but the Sallins bypass element is not the national road element. The part of that contract that was TII's responsibility was the M7 element. I will have to hand over to the Department to take questions about the Sallins bypass because we worked together to have a single contract and delivered both projects under the same contract. We worked together to deliver it, but the Sallins road element is non-national and, as such, I should not comment on it.
Mr. Dominic Mullaney:
I agree the final bill was more than we would have liked to pay. There were a number of factors, including the ones the Deputy mentioned, so I will not reiterate them. As for the design, there are further plans regarding active travel and linkages for the cycle network, so I would suggest there is unfinished business there.
Mr. Dominic Mullaney:
No, I would not blame the management of it. A lot of difficulties were encountered on site. I do not really want to start talking about the contractor or who might be to blame for the difficulties. There was a lot of confrontation and there were a lot of issues we felt could have been managed better by the contractor. That is as far as I can go.
I refer to the supervision of the project. The design was inadequate, given it had to be amended, so that was a fault that would have added to the costs. There was also a dispute between two contractors. How are we to learn lessons in respect of management if we cannot identify what the conflict was?
Mr. Dominic Mullaney:
It may get back to the issue of whether we should always take the lowest price. There is a lot of pressure to take the lowest price. That is a major factor in any contract. TII has examined the issue of trying to take a median price and I think it has that in two contracts. The outcomes from those two contracts will be very useful in determining whether that is a better approach for the future.
I welcome our guests. I do not intend to go over some of the questions that have already been asked. I agree with the comments Deputy McAuliffe made about the perception of delays in the MetroLink project and what that means for its delivery. I remember a lot of publicity about the Metro green line. I also remember going to various public consultations. Can our guests tell us how much has been spent to date on that public consultation? How detailed were the plans in the end?
Mr. Peter Walsh:
I do not have the figure to hand but I am sure we can isolate that and come back to the Deputy. On the question of how detailed the plans were, we had to look at the impact of the construction on the existing green line because it is a valuable piece of infrastructure that carries an awful lot of people. We needed to identify the length of time it would be disrupted and the mechanism by which we could facilitate the onward journey of passengers. Such a project would be done in pieces and people would have to be bussed around. The detail of that had to be worked out and it was through that process that we were able to be definitive about the level of risk we were bringing. There was also the fact that we were going to an automated system. In the original thinking, the use of line-of-sight vehicles, similar to the Luas, was envisaged. The efficiency and appropriateness of the automated system then changed that.
That is fair enough. Mr. Walsh might come back to us with a note on that. I would like to know the cost expended in recent years on that particular proposal. Is there a timeframe for the extension of the existing green line Luas to Fassaroe or Shankill We know the line will run south although we are unsure of where it will ultimately go. Is there a timeframe for when that will be decided and constructed?
That is fine. There are passenger figures for the Luas on the TII website for 2004 to 2014 but the figures have not been updated since. Our guests might send the committee a note on that point because I would be interested about the capacity of the Luas and the numbers of passengers as we exit the pandemic compared to the numbers pre-pandemic. Some people may have got used to trams being less packed. We need to ensure we have the correct capacity. The passenger numbers would help so Mr. Walsh might send those on.
I have a number of questions about the national road network. Mr. Walsh mentioned motorway service areas. I note the M1, M6, M9 and M11 are included. There are 25-year leases or contracts associated with those. As I understand it, they will come back to Transport Infrastructure Ireland and will be subcontracted out again. What plans are there for further service stations or service areas along the motorway network?
Mr. Peter Walsh:
We have no plans at the moment. We have a motorway service area policy in development. The original thinking was that private enterprise would provide those services. It did not materialise and it was felt necessary that the State should intervene. That is where our current six come from. There have been significantly increased levels of provision from private enterprise and if that continues and is meeting the need, we have no intention of competing with it. A number of possibilities have been looked at. It would be a matter for our board and for the Department to identify what progresses.
We might come back to that point. I would argue there are gaps in the network which is a cause of concern for people who travel. In the same vein, there are issues around charging points for electric vehicles. These all feed into a common and recurring theme, which is that people need those service areas.
I have another question about rest stops and lay-bys, which came to me via a constituent. I ask our guests to review the safety of those lay-bys. That is a concern, particularly from a female perspective. The complaint made by my constituent was that she would not use lay-bys, even if she had to, because they are isolated and dark. There is no lighting, public toilet facilities or even something as practical as a tyre pump. Nothing is provided in those lay-bys and I ask our guests to review that as a matter of urgency. A landline telephone would also be useful. I am talking about the practical necessities for people who might be travelling on their own, who may be vulnerable and need those lay-bys. They are well placed but there is nothing in them. We need to examine that.
I note that fines and evasions of the M50 tolls are mentioned in the report. I thank our guest for that documentation. How many evasions or non-payments of tolls have there been for the M50, in particular, over the past three or four years? Do our guests have those figures to hand?
Mr. Masterson might send on those numbers in a note. I noted that TII's legal fees have doubled since 2018. The figures I have are €1.7 million for 2019 and €2.5 million for 2020. What was the reason for the increase in legal costs?
Ms Audrey Keogh:
We have had an increase, year on year, and the bulk of that relates to the MetroLink project. We have taken advice on MetroLink. We are entering the railway order phase. We have received advice around the environmental impact assessment report, contract development and procurement strategy. There are a lot of costs in that area and that is predominantly the cause of the increase.
That illustrates Deputy McAuliffe's point about it being under way. I noted TII receives a quarterly report on road traffic collisions and fatalities. TII meets with the Road Safety Authority, RSA, and the Garda. How frequently does TII meet with the Garda and the RSA? In their documentation, our guests referred to high collision locations. How are they dealt with and how fast are they dealt with?
Mr. Peter Walsh:
I have met Sam Waide of the RSA and Assistant Commissioner Paula Hilman almost weekly of late. Our teams meet on different elements around information and the delivery of the actions that are attributed to TII within the road safety strategy.
There was a fairly intense level of engagement coming up to the finalisation of the ten-year road safety strategy. It will now settle down to a more routine engagement with quarterly meetings with the Minister and with a lot of-----
Keeping with security, I notice that TII has provision for security on the Luas line. That is under its remit. I raised this with the NTA last week. We are aware of incidents on the Luas. While there is good security, they do not have powers of arrest or detention. The engagement that Mr. Walsh spoke about with the gardaí is important. I would argue that there is a need for a dedicated Garda transport unit covering all sorts of transport, including bus, Luas and rail. Has TII had any discussions with An Garda Síochána around deploying gardaí on the Luas, for example?
Mr. Peter Walsh:
I have, yes. Mr. Masterson will have more detail. There were discussions around concerns with the assistant commissioner, particularly when the patronage levels dropped. It became quite a matter of concern for our board, our operators and ourselves. The gardaí were very good at increasing occasional walk-throughs on the vehicles. We are very pleased with the engagement with An Garda Síochána.
I will follow on with some questions around the PPPs and particularly the risk profile. Mr. Walsh advised that the risk related to toll income or road volume as well as construction costs that had been removed from the State and placed within those companies. What are the total potential unforeseen costs or losses of income that ended up being borne by these PPPs rather than by the State arising from the projects?
Mr. Peter Walsh:
I certainly do not have the figure off hand. It is possible I can have those numbers calculated. There are a couple of different ways of doing those sums. One would involve comparing what they projected at the time of entering into the contract with what has materialised in the intervening years. We had projections at the time of entering into the contract which were different. There are different ways of providing numbers; they relate to what might have happened if something else did not. We might need some clarity from the Deputy on what is required.
Perhaps we can get in totality the total potential unforeseen costs or losses of income. Mr. Walsh said that the risk associated was placed on these companies and removed from the State. Can we find out the loss of income that ended up being borne by the PPPs?
Mr. Cathal Masterson:
On each scheme the PPP company is entitled to the tolls when we are talking about the tolls scheme. We have those details per annum for each of the contracts we have entered into. We can get that calculated and pass it to the committee.
On the Deputy's previous question, we have the original financial model of each PPP scheme, and the forecast or business case. We can see where they are trending or projecting against that business case. That would give some sense of the level of performance that they are achieving versus what they would have hoped to achieve. In most cases it is under what they would have hoped to achieve in their original business cases. We have that trajectory but it is probably a bit detailed to run through it.
I ask TII to forward it on to us. This committee is interested in ascertaining the actual savings to the State and the costs that were incurred to these PPPs.
I understand the version of TII's accounts that was laid before the Oireachtas differs from that on TII's website. It relates to salaries in particular. The CEO salary on the website version is different from that certified by the Comptroller and Auditor General. How did this arise? Have the corrected accounts been laid before the House?
Ms Audrey Keogh:
We gave a version to the Department to lay before the Houses which was laid. Unfortunately there had been one change to our financial statements which had been approved by the Comptroller and Auditor General. It was only on one particular note, 7C. The version that we have on our website is the correct version. It just came to our attention very recently that the original version laid had not been updated. We apologised for that but it has been updated now.
Okay, I thank Ms Keogh for that. On the former CEO's salary, it was €183,000 in 2019. The payment of €165,000 in the accounts initially laid would imply that when he left in September he had, I am assuming, nearly six weeks worth of holidays accrued. Is that correct?
Ms Audrey Keogh:
Two factors impacted on the number. I can clarify that when Michael Nolan retired, his closing salary would have been €186,000, pro rata, year-on-year. The €183,000 would have increased by the 2% public sector pay rise that happened in the interim. Mr. Nolan was CEO up to 30 September. Given that we had gone through Covid, we had received approval for an extension to his contract. He was due to retire on 31 July but to give us time to have a replacement CEO and a short handover period, we were granted a six-month extension for Mr. Nolan. It ended up lasting three and a half months. Therefore, the figure of €194,000 for Mr. Nolan that was disclosed in 2020, which is the correct figure as approved by the Comptroller and Auditor General, would be the pro ratabase of €186,000 salary for the year, along with a six-week additional payment for his term after Mr. Walsh took over as CEO and holiday pay in addition to that. In the year under review, the Covid pandemic meant he was not able to take leave until we had a new CEO in place so we made a holiday payment to him for annual leave approved.
Ms Audrey Keogh:
No, it is not my understanding that he carried forward his entire complement because he did not actually leave. He finished his term as CEO on 30 September but he continued in employment until mid-November. Therefore, he still had leave accruals up to that date. He would have entered the year with some holiday leave carried forward - I do not have that figure to hand - and then he would have accrued leave for the year under review in addition to that.
There was another thing. I know that Mr. Nolan began on a salary on €166,000 and it increased to €183,000 over the seven years. In September 2020, the Department of Public Expenditure and Reform recommended that the role should command a salary of €190,000. How was that review instigated? Was it unsolicited from the Department of Public Expenditure and Reform or did Transport Infrastructure Ireland request it and why?
Ms Audrey Keogh:
No. When we appoint a CEO, we use the template of the Department of Public Expenditure and Reform contract for a CEO and we are provided with a salary through the Department of Transport and the Department of Public Expenditure and Reform. We do not solicit such figures. My understanding is, and I cannot remember back to the original salary that was in place-----
Ms Audrey Keogh:
Michael Nolan retired on a salary of €186,000. Peter Walsh took over the following day. Mr. Nolan retired from that position on 30 September on €186,000 and Peter Walsh took over on 1 October on €190,000. That represented the 2% Government pay increase on 1 October. There was no inflation or additional inflationary reason for the change in salary. It was purely the 2% pay rise.
Can I ask in general about the regional road payment. TII had said earlier, in a response to my colleague about the national roads projects, that TII sits down with the Minister and says what it wants included in the national development plan and that TII might have made recommendations for particular things but they were not necessarily included. On regional payments then, has TII recommend what roads should be considered or does it have insight into the condition of individual roads across the State?
Mr. Peter Walsh:
No, our role on regional local roads is purely an administrative one. We use our payment facilities to transfer money but the allocation of money, the inspection of works that should take place and the determination of which projects get funded is all handled by the Department of Transport.
I want to raise some questions as a result of a recent freedom of information request from the Dublin Commuter Coalition around the Luas Finglas line. I should start by saying, with no disrespect to our witnesses, but between TII, the National Transport Authority, NTA, Dublin Bus and Bus Éireann, even I find it hard to keep track of what the plans are. It is very useful when groups like the Dublin Commuter Coalition engage in the way they have on the detail of these plans. My understanding is that TII had originally planned a walking and cycling infrastructure route along much of the new Finglas route but that the NTA have asked that much of the Luas side walking and cycling infrastructure be removed from the plans. Is that a fair assessment and summary of what has happened?
Mr. Peter Walsh:
A fair assessment would be that the cycling strategy for the greater Dublin area is being developed by the NTA. The co-ordination of the provision of cycling infrastructure within our project, the Luas extension to Finglas, with that cycling strategy is something that we will do and have done. That has resulted in a change in the amount of cycling and walking provision in the Luas Finglas project. It reflects the completion of the NTA's cycle and walking strategy for the greater Dublin area and we will comply with that.
I thank Mr. Walsh for that reply. In fairness, the Chair is pulling me up on getting into policy. I have the maps here, Chairman. This is not necessarily about policy. This is a very direct route and I would describe the 2013 plan as a network or warren of routes. As we are discussing a great deal about female use of public transport and of active travel, a direct well-lit route on a public transport avenue is completely different to a warren of back streets and cycle lanes. I would be very interested to know if any of the organisations involved costed the impact of building all of the infrastructure in one go versus having it built in pieces by various organisations? Has anyone done that work? Has there been a decision where this provision has been taken out of their very direct route. I am wondering, therefore, if there has been a cost-benefit analysis of this choice in doing it in one go along a direct route or doing this network, much of which has not been built.
One would think, where we talk about this in respect of roads all of the time, where, if there are two plans on the same route and road, that there would be a significant amount of communication between both organisations. Perhaps the Department could speak on that, please.
That would be useful. Perhaps the Department could outline how much of that greater Dublin cycle area network from 2013 has been built in that particular area, which is the Finglas Luas line district. Who in the Department would be able to answer that question, please?
Where those kinds of decisions are being made, is the Department facilitating communication between these two public bodies so that we are not coming out worse both in terms of taxpayer expenditure on active travel and the Luas, and in terms of the experience and access to active travel.
Ms Ethna Brogan:
The overall strategy is what will determine the individual projects that fall out of that. The review of the GDA strategy, as the Deputy is aware, is under way. That will determine what future projects will proceed within the overall strategy. That would be the framework for the next six years when it is approved.
Ms Ethna Brogan:
It is at public consultation stage, or has just concluded on it now and the outcome of the public consultation will be considered by the National Transport Authority and will then be sent to the Minister for approval in due course, which I expect will be in the next couple of months.
If the Luas side walking and cycling elements are being removed from the TII plan, when can we then actually see proper cycling infrastructure that provides the kind of network, the warren as I have described it, of cycle infrastructure on the ground?
Ms Ethna Brogan:
On the ground, it will depend, of course, on funding. We have provided allocations for active travel infrastructure for 2022 to all local authorities. The Minister announced those before Christmas.
As the Deputy is aware, there is a very significant increase in funding available for the active travel infrastructure nationally. There is more than €100 million for the greater Dublin area and I think €289 million nationally.
I am very aware of the extra funding. The departmental officials may wish to answer this and representatives of TII may wish to row in. If we take the cost-benefit aspect and the money side out of the conversation, when the decisions are made, is there a view on the suitability of the options in the provision of walking and cycling along, in this case, the Luas route in comparison with the greater Dublin area cycle network when it comes to security to guard against gender-based violence, for example? Do we do that work? We do not.
When two organisations and the Department are involved and decisions are being made over which projects will go ahead, is it correct that there is no set of tests for equality testing, diversity testing or gender testing?
Mr. Peter Walsh:
There is a very clear hierarchy of decision-making around it. TII is a sponsoring agency and we are at the bottom of it. We bring forward our project and we put within it what we believe to be the features required to meet the objectives of the scheme. The next layer up in the governance is the National Transport Authority, NTA, which will co-ordinate it across all the public transport and active travel projects within the greater Dublin area. The next layer up is the Department.
This may be beyond TII's scope, but maybe the departmental officials can tell me. Is there a scoring document somewhere whereby the NTA took TII's plan and did that work? If so, can we access that and see it?
I am not asking about the greater Dublin area. I am asking about the decision to remove walking and cycling facilities from the Luas Finglas project as opposed to doing the greater Dublin area. One is much better than the other and I want to understand why we are not getting the good version.
I thank our guests for their presentations and all the information they are providing to us. When many of the public private partnership agreements were put in place in recent years, interest rates were far higher. Given that money is cheaper now, is there any provision in those agreements to look at those costs as part of the overall agreement? We also need to look into this issue for future agreements. For example, in 2008 and 2010, the cost of borrowing was extremely high and it is now a much lower figure. Regarding the cost of projects, obviously the public private partnerships would now be paying out a return on the investment. Is that taken into account? Is there any process to review that cost as an overall part of the agreement?
Mr. Peter Walsh:
I will pass this over to Mr. Masterson who has a lot of detail on this. What I can say is that in general there are mechanisms within the contract for refinancing the project. The refinancing benefit is shared with the State through the provisions of the contract. For the details on that, I will hand over to Mr. Masterson.
Mr. Cathal Masterson:
That is correct. In that case, where the PPP company believes it can access a better value funding package for the remaining term of the contract, it may seek to do that. As the contracting party, we are entitled to a share of any of the benefit it gets from that, what might simply be called a remortgage. That is a provision within all the contracts.
Is there not now a need to look at that whole issue? As interest rates are low now, it may be to our advantage to have a review. Would Mr. Masterson accept it is a fault in the system that neither TII nor anyone else has the power and only the beneficiaries do?
Mr. Cathal Masterson:
I do not think it would be an attractive term in any of our contracts if we were to put that out from the start, going back to the early 2000s. The counterparties would not be keen for the contracting authority to have that type of power or mechanism. If we were to try to insist on something like that, we would find they would price that into their proposals back to us. I do not think, from our experience anyway, that that would have worked very well in our favour.
Mr. Peter Walsh:
We have had refinancing of projects and we have had benefit to the State in that regard. We have had other ones where there has been refinancing because the PPP company has had significant losses and has had to refinance, in which case there is no benefit but it does restructure. Generally, we will not resist that. We have to facilitate it if it is regarded as reasonable. We did regard it as reasonable and we did facilitate it.
I refer to two projects. The route for the Ringaskiddy bypass was announced in 2014 and we are now eight years on. I know many of the delays were outside TII's control. Are there lessons to be learned on the planning processes and the entitlement to judicial review? I accept people have a constitutional right to judicial review. Does Mr. Walsh believe there can be a better way than the current process?
For instance, on the Cork to Limerick road, I recently spoke to someone in the office in Limerick. Once the route is announced, there will be a full consultation of about 12 to 18 months to engage with individuals and organisations along the route. Once the route is signed off on, there is a further process, the planning process. If someone decides they are not happy with the planning process there is the judicial review process. Does Mr. Walsh believe we could do a better job in the way we are progressing projects? After eight years no real work has been done on the Ringaskiddy bypass.
Mr. Peter Walsh:
In terms of the procedures TII follows, I believe we have a very good set of procedures, with seven phases of delivery. It is pretty much the same project management process we have used since 2000. We were getting projects through and constructed in a five-year period at times then; it is now taking significantly longer. The Cork to Ringaskiddy project was submitted to An Bord Pleanála in 2017. There was a result in 2018 and it took until March 2021 for that approval to be finally free of the court system.
We suggested in a submission to the NDP that properly resourcing the courts might be one aspect of it. There is definitely a constraint there. I would not for a moment suggest we should be curtailing people's rights to challenge processes but the burden on the courts seems to be quite significant and seems to take quite a long time to get through. I can only assume that is a constraint of resources but I do not know for sure.
In fairness, there are some delays in courts but there is also the complexity of these cases. As it takes up quite a bit of time before all the documentation from each side is put together, that must be taken into account. I am in no way saying anyone who wants to take a judicial review should be restricted. It is a constitutional right. However, it is about the whole process. From the time the route was decided, which I think was November 2014, it took seven years, as Mr. Walsh said it was signed off on in 2021. Surely we are able to put something in place? For instance, it was 2017 before it went to An Bord Pleanála. Why could that not have been done at an earlier stage?
Mr. Peter Walsh:
In fairness, to go from a preferred route to a fully-designed project and fully-developed CPO by July of 2017 was a very good level of progress. That was a quick turnaround by Cork County Council. I would not suggest that could have been done any more quickly. That is a very complicated scheme. You were going through many properties and there was an awful lot of detail to be worked out. I think the council performed very well there. It would compare with any of the projects. I should point out there was never any fault found with the project. It is not as if the challenges resulted in any changes. However, the decision by An Bord Pleanála in 2018 to approve the project went through a process of challenge that took until March 2021, so no progress could be made during that period.
I return to the issue of projects that were sidelined. Take the Cork-Limerick road for instance. A decision was taken to not proceed with it. Then, when it was decided to proceed with it, it appears as though we started with a clean sheet and went through the whole process all over again. Is there a mechanism for dealing with that? If a project is parked, why must we start with a clean sheet if we go back to it two or three years later, as if there had been no work of any description done? I ask that with particular reference to the Cork-Limerick route.
Mr. Peter Walsh:
The environmental requirements and planning requirements are such that it had to be done from a starting point of looking at the objectives set for the project and then the manner in which those objectives could be met. It was a different process. It was a multimodal process. We had to look at public transport, as well the road options, or I should say Limerick City and County Council had to. These directives and the requirements for investigations are there for very good reasons. I would be reluctant to suggest we could skip any of those.
I thank Mr. Walsh. Members should indicate if they want to come in for the second round of questions.
I have a few questions for Mr. Walsh myself. On the eight major road projects scheduled for this year being delayed, why would there be insufficient funding? What has happened to the funding for them? Has it been transferred to other areas such as greenways, blueways, cycleways and active travel?
Mr. Peter Walsh:
The difficulty, if there was one, was probably around the change from one NDP to the next. When Building on Recovery was announced in 2015 the Department of Transport gave us a multi-annual programme and a multi-annual funding profile and we developed all the projects in accordance with that. There was then a mid-term review of that and there was a profile of funding. In the original one, it was funding until 2022.
I know the history of that. I have limited time, several questions and a few members who want to come back in for the second round. On the eight projects, I understand the competition and the logic for why we need greenways, cycleways, blueways and all that but I am asking whether the provision of active travel impacted on some of those falling back. It is a "Yes" or "No" question.
Okay. However, there has been a substantial shift in funding with a greater emphasis being put on active travel. I get that but there is a balance as well because we must get goods to and from ports, people have to get to work and there are long distances as well.
I raise the N80 bypass at Mountmellick. By the way, the Maidenhead work is complete. That was a good job. That was going on for a long time. On Mountmellick, two routes were proposed back in the 2000s. One was a very long one that started back way out in Derrycloney and went a long way cross-country. It was too long. Then there was a very short one that came in over the bridge into Irishtown in Mountmellick. However, it cut across through the car park of a restaurant and a business. It was not good. It had a right-angle junction on it. That was too short. TII has come up with another route which is better. This is what I wanted to ask about. The feasibility studies have been done and I am concerned there may be a move away from providing those relief roads. This relief road shortens the journey distance and the journey time. It is not getting traction in the sense of getting the priority it needs. Mountmellick itself is congested with trucks. There is a junction at Glanbia with Pearse Street where the road comes into the centre of town. There are trucks trying to manoeuvre around that from both directions. It is very difficult. They are travelling up and down narrow streets. It is a very difficult situation.
I refer to Rosslare Europort and Brexit, which Deputy Verona Murphy obviously will have a special interest in. Instead of a lot of west of Ireland and midlands freight going to Dublin, it is now travelling down the N80 through Mountmellick and on to Rosslare. I live further down on the N80 and have no complaints about that. Does Mr. Walsh believe that now needs greater priority in terms of ramping up the need for that because this will go on forever? The feasibility study will be out of date and so will the preferred route. There is talk of a second bypass linking the road over to the Portarlington and Emo road. That is important within the greater scheme of things but it is the N80 project that is really the big deal for shortening journeys and getting traffic, especially HGVs, out of the town centre. Would Mr. Walsh see this as a major priority when it comes to carbon reduction and also trying to deal with the impact of Brexit and the greater importance Rosslare Europort now has? That is my question.
Mr. Peter Walsh:
Okay. There a number of national secondary routes we recognise as being of particular importance. The N52 and N80 are two of them. The transfer of traffic to Rosslare Europort from Dublin is real. That said, the proportions are small. Rosslare is tiny by comparison with Dublin but it is happening nonetheless. The town centre first policy which will, I believe, issue soon will create a policy context we will have to respond to. We have the feasibility report on what we might call the Goldilocks route that seems to be meeting a number of needs. It is certainly one we will be looking at in the context of those considerations.
The county council management, the council members and the joint policing committee that I sit on are all in favour.
There has also been some serious road accidents in the Derrycloney area, as one goes into Mountmellick. I do not want to be too local because it is local details I am talking about. Mr. Walsh might come back to me with a little bit more information. I know exactly where it is at because I have got his replies before. What is the cost for that type of inner relief road in Mountmellick where there is a bridge?
There is a chance of a relatively quick win because the project is not a circular route around the town but will cut across a short enough route. The TII might wrap up the project because there is huge local concern about it. Also, the commercial status of the centre of the town of Mountmellick is not good. If we got the HGVs out of the centre, we might get more people walking and cycling in Mountmellick and get more businesses going because there would be more footfall on the street itself.
Mr. Walsh mentioned that PPPs reduce risk for the public purse, which is good. He mentioned the two areas of construction risk and traffic risk. I will deal with that briefly. On the construction risk, let us say a 10 km or 20 km route must be built and has difficulties similar to what the TII had near Limerick, where the road had to go through a bog, or the tricky territory on the N7 and N8, a construction company would have a fair idea of the implications before submitting a price. Mr. Walsh mentioned weather as well. A lot of these roads were built before climate change became a major factor. I am not convinced of that argument.
Mr. Walsh also mentioned the issue of traffic risk. My understanding is that, for many of those roads, there is a built-in provision, what I think is called a varied operational payment. I have read the advance briefing notes from cover to cover to get to the bottom of this issue. There is a built-in mechanism where traffic volumes fall, for example, because of Covid in 2020. Am I correct in saying in respect of the N7-N8 Kildare-Laois bypass that there is provision for a variable payment clause if traffic volumes drop below a certain point?
When these roads were built at the end of the 2000s, traffic volumes were increasing and were projected to keep going that way. With the exception of Covid, which we hope is a once in a 100 year event, there has not been any reduction and it is unlikely there will be because we are moving freight and goods along those routes. Is if fair to say the risk been talked up a bit too much in terms of construction risk and traffic risk?
Mr. Peter Walsh:
In terms of the construction risk, I will give a couple of examples. The New Ross bypass was more than a year late in construction from the programme the contractor had originally presented and worked to, or tried to. It had various difficulties but it bore all of that cost. Until such time as that road was finished, the taxpayer paid nothing. So the availability of the road was key and it was up to the contractor to manage that, and it did.
I know from our own experience of design-build and in terms of the alternatives, we have gone through various contract forms. We would have had the third edition of the IEI contract first, and there were various clauses there for the claiming of additional costs associated with ground conditions, adverse weather and so on. We had FIDIC, which is an internationally recognised contract type that had areas of allowable risk, areas where the risk fell back on the employer - the State. Those claims were pursued in each case. We always pursued a policy of lowest price tendering so the lowest price won the contract. For that reason they have to price it optimistically. Even under the current public works contract there is a schedule K of compensation events, which if any of those events occur, the contractor is entitled to payment. Now all of that risk transferred.
On page 18 of the TII document it is stated that the Portlaoise-Cullahill PPP scheme cost €300 million, excluding VAT. I do not expect Mr. Walsh to have figures on this but perhaps he could come back to me on how much has been collected in tolls to date? I presume the amount paid to the construction company was 85% of the €300 million plus VAT. hat is my understanding of it.
I ask for a note on the amount collected in tolls, the amount paid, the total annual operational payment, and there were any extra payments in terms of variations or anything like that. It has been said that nothing was paid in terms of the drop in traffic during Covid.
Mr. Walsh might come back to me confirming that. When we get to 2037, which is the expiry date for the contract, is there a bullet payment, which is how it is sometimes referred to, or a completion payment before the asset is handed back to the State?
Perhaps I could get a note on the condition in which a project has to come back. I am trying to get a picture of all of the finances for the overall project from the beginning to the end. I mean in terms of tolls for motorists, the cost to the taxpayer through the amount collected in tolls, the construction costs paid to the company, the operational costs every year, any variables and any variation payments, any final payment, and in what condition the asset must come back.
Mr. Cathal Masterson:
Just to say on the condition, it will come back in good condition. That is a provision of the contract. There are requirements around the residual life. We will pull the other numbers for the Chairman and will summarise that. It is no problem at all. The asset comes back in top quality condition to the TII, and that is monitored by us all the way through. If any remedial works are required, they are funded by the PPP company in the years probably from five years out before the end of the term of the contract.
A good deal of expertise has been built up in the construction of roads but I am concerned about what I heard earlier, and it goes to what the Department said about procurement. Procurement has been an issue with many projects, particularly very big projects, and the national children's hospital is a case in point. I am concerned about what I heard about taking the lowest tender and whether we are properly evaluating that. I think that is something we are going to have to look at.
Regarding a project where we do not have the kind of expertise we have with roads, namely, the metro, will the TII give details on the expertise it has in-house that can evaluate these projects rather than outsource them? Without that expertise, how can the TII properly evaluate what projects come to it, or does the agency have the expertise?
Mr. Peter Walsh:
The expertise we have in-house relates to light rail, and they are very expert in the Luas system, but the expertise we will need in terms of MetroLink relates to metro.
We have made a submission to the NTA and the Department of Transport and it is my understanding that it is understood and supported. We have identified 18 posts within the structure of the client organisation. Let us refer to TII as the organisation that will be delivering the project. We have identified 18 posts, following advice that we got from Sydney, London and other metro operators. These positions should be State employees whose first loyalty is to the State and who will help us build up the rest of the client organisation. We will have to do that under contract with an international service provider of scale.
Where people overpay a toll, that is included in the revenue of the toll operator. Dublin Bus, for example, has a scheme, a community initiative to which overpayments go. This is not legitimate revenue, really. I have received replies indicating that this is happening and the toll operators are putting this money into their own revenue. Will the TII structure into future contracts that this revenue is not retained? This is quantifiable and it is over the amount that is legitimately expected. We fund two organisations operating tolls in Limerick and on the M3 where the forecast is for less. It seems odd that they can collect more and that there are no consequences for that.
Mr. Cathal Masterson:
The matter is that the toll revenue and any overpayment is owned by the PPP companies. Customers can get refunds but I accept what the Deputy says - there are still overpayments. We provided detail on that. To be fair to the companies, they engage in local activities and charity activities but I do not have information to hand. I would not like to characterise all PPP companies as negative in that respect. However, I take the Deputy's point. We can look at that in our own activities too. However, if someone overpays and carries on, it can be hard to make that refund. Refunds are available to customers who want them.
On the Luas, I noticed there were 34 trams purchased at a cost of €22 million, although I do not know in which year. I know there are further trams due. I think they have been ordered, if I am not mistaken.
There are a number of issues in relation to the TII website. I ask the witnesses to look at that because there is some incorrect data on it.
In the time remaining to me, with regard to the internal financial controls, I commend TII on alerting us to the issue with the contract for technical design services and non-procurement. I think the Comptroller and Auditor General referenced that in his opening statement. That should be acknowledged. The internal systems are working, it would appear.
On Project BRUCE, better road user charging evaluation, I ask the TII to send a further note on that. On the board, the TII has responsibility for by-laws for toll schemes and a rail system. When was the last time those by-laws were reviewed?
I am not talking about the TII’s schemes, but the actual roads budget. It was cut back from 2008 onwards. We were getting €18 million in 2008 but that was cut back to €12 million and then to €9 million. Now, we are back up to €18 million. However, in the interim, a deficit of €68.9 million has been accrued.
Mr. Peter Walsh:
The budget for any given county is dependent on the projects and activities in that year. It is not as if we have a county allocation or anything of that nature, whereby the budget used to be X and now we have to get back up to it. It is entirely dependent upon the projects that are projecting within that county.
Mr. Peter Walsh:
Okay, but even in those cases, as we were explaining earlier, the assessment of need for an intervention on the network is dependent on the measurement that we do. It is a physical scientific measurement of the condition of the network. The distribution of funds is done to meet that need.
I would appreciate it if Mr. Walsh would look into that because according to our director of services, we have a huge deficit. We certainly have a huge problem when it comes to the lack of funding. We are told that County Wexford received the same funding per kilometre as counties that have very good roads which and do not have the same number of kilometres of road as Wexford.
I will revert to the N7 and M8 for a moment and mention the Newlands Cross flyover. When that project was announced, I thought it would cause chaos. I was not long elected at the time. A commitment was given on day one that six lanes of traffic would be kept open, except at night-time when that would be reduced to one or two lanes. I acknowledge that work was difficult to do during busy daytime hours when six lanes were kept open. That was impressive.
Moving a little bit further south to the Naas bypass, I am one of those who has been around long enough to remember sitting in a car in Naas for an hour and a half while travelling in either direction. When the bypass was built I was struck by the two-lane carriageway to funnel traffic to Dublin from four cities, namely, Kilkenny, Waterford, Cork and Limerick. From day one, the road became a bottleneck and it was then retrofitted. I suffered as a result of that retrofit. I remarked to somebody earlier that I spent three hours and 50 minutes travelling to the Houses one day. I arrived here at 1.50 p.m. after leaving my office in Portlaoise at approximately 10 o'clock. The road is now much better but from day one it was clear there was going to be a problem. Within a matter of weeks of its opening, traffic was congested. It was better than going through Naas but it was still a problem. How much did the additional lane cost in the retrofit?
It is difficult because when they attempt to retrofit, contractors try to use the lanes that are there already. It means taking them out of use. Contractors try to work around it by using middle aisles and all that sort of stuff. I thought this was a terrible gap in the planning at the time. While the bypass solved the problem by getting the traffic out of Naas town, which was good, there was another problem in the making. Could Mr. Walsh come back to me with that figure?
That is the third question. What did it cost at the time and what would it have cost to provide an extra lane? The bridges were left wide enough, thank God, so space was left to do it. From the point of view of cost-benefit at the time, it would have been a hell of a lot better if three lanes had been provided in both directions from day one.
I acknowledge that magical work was done to keep traffic moving through Newlands Cross. The minute people heard that project was going to happen, they were in dread of it, including the 12,000 commuters from my county. Many people acknowledged it so I pass that on.
It was excellent. The manager of the site and the foremen and workers did great work.
I thank the Comptroller and Auditor General for attending. I thank the witnesses and staff from the Department for the work involved in preparing for the meeting. Is it agreed to request that the clerk to the committee seek any follow-up information and carry out any actions arising from the meeting? Agreed. Is it also agreed that we note and publish the opening statements and briefings for today's meeting? Agreed.
I thank everybody for their efforts. The meeting will suspend until 1.30 p.m. when we will resume in public session to consider correspondence and any other business.