Róisín Shortall (Dublin North West, Labour)

I welcome the opportunity to highlight again this Government's negligent use of taxpayers' money. I wish to concentrate on chapter 13 of the Comptroller and Auditor General's report which deals with the West Link toll bridge. I commend the Comptroller and Auditor General and his staff for their ongoing work. In his latest contribution, Mr. John Purcell has found €2 million for the taxpayer arising from the accounting discrepancies in respect of the accounts of National Toll Roads which resulted in the company's underpayment of royalties due to the State. That such a finding is no longer shocking says much about the prevailing attitude in the Government. It is an attitude that treats Government funds like loose change in a Minister's pocket.

This reckless attitude has been particularly true of the transport area. It would be more of a shock had the report not included a transport issue of some kind. Already, we have seen over-runs on roads projects of billions of euro, a €171 million over-run on the port tunnel project and a major accounting discrepancy in the Department of Transport in 2002. Now we can add a serious accounting error in respect of the West Link toll bridge. It is incredible that neither NTR's internal audit function, nor KPMG, the firm's external auditors, nor the National Roads Authority nor the Department of Transport, including its internal audit function, spotted an accounting error which would have resulted in €2 million of taxpayers' money ending up in the pockets of NTR. Let us face it, when NTR is sitting on a nest-egg that will have netted it €434 million, it hardly needs a €2 million tip from the Government to help it along.

The failure by KPMG to spot the underpayment is particularly disturbing in light of the fact that according to the Department's Accounting Officer, the provision of a certificate from NTR's auditors confirming the accuracy of the payment is an important part of the control system for the validation of the licence fee. It would seem that KPMG was extremely negligent in its auditing responsibilities in this case. The real question is how did this happen. KPMG is one of the largest accounting firms in the country, with a wealth of experience in auditing. I note from last weekend's Sunday Independent that there is likely to be an investigation into the firm by the Institute of Chartered Accountants in Ireland. This is the least that should happen in the circumstances and I look forward to hearing the outcome of that investigation. However, I ask the Minister if there is a role for the newly established Irish Accountancy and Audit Standards Authority in investigating this shoddy and negligent auditing.

The two State parties involved are the National Roads Authority and the Department of Transport. Both parties have already had wake-up calls in recent years. In particular, it would appear that the Department has learned nothing from its embarrassing accounting error in 2002. The 2002 annual report of the Comptroller and Auditor General pointed to a serious error in the appropriation accounts for that year due, in part, to a failure to carry out monthly reconciliation between bank records held by the paymaster general and the Department's accounting records. The correction of that mistake was meant to have heralded a new corporate governance regime in the Department where senior staff would have a greater monitoring role in financial control, with clear reporting lines.

I am not sure how far that new corporate governance regime extended but surely it should include its roads section and the National Roads Authority. It is not unreasonable to expect it to investigate whether the taxpayer or motorist is overpaying NTR for the privilege of being ripped off at its toll bridge. The Minister needs to explain to the House how it is that for the second time in three years serious accounting errors went unnoticed by his Department. He now needs to outline what level of monitoring the NRA applies to such compensation payments and how that is monitored by his Department. He should thank the Comptroller and Auditor General and his staff that many more millions did not go down the drain under his watch as it was caught early due to a level of vigilance clearly deficient in his own Department. However, there is a danger that the discovery of this €2 million will distract from the real story in the report. The real revelation from the report is just how big is the rip-off at the West Link bridge. The report tells us that for every €1 it costs to construct and run the bridge, the ordinary motorist pays €4.76 in tolls. In other words, the first 38 cent of the €1.80 toll charge will cover the costs of constructing and maintaining the bridge, while €1.42 is taken in profit by the company or in taxes by the Government. Motorists are paying almost five times the cost of providing the bridge, a rip-off in anyone's language.

What the report clearly demonstrates yet again is that PPPs are not the Holy Grail of infrastructure procurement and provision. Recently, the Minister heralded a new form of contract, the so-called fixed price contract. However, fixed price contracts relate only to the original specification and changes, additions, changes of mind and so on are one of the main features of the shambles that is the Government's record on project cost overruns. We can have all of the fixed price contracts in the world but where professional competence is lacking and political accountability dodged they amount to no change. There is another even more fundamental point. Traditional government borrowing is likely to be the cheapest source of State funds. In other words, old-fashioned borrowing is likely always to be the cheapest source of funding for investment. So what is the point of PPPs? They may have a role in some circumstances but Government and ministerial proposals need to be benchmarked and evaluated, always against the traditional borrowing test. In addition, while cost estimates for projects procured through a PPP may seem more attractive initially, when 30 years of tolls are taken into consideration they are anything but attractive. PPPs are a Government accounting wheeze and a gravy train for consultants, accountants and bankers.

The West Link bridge deal was one where the contractor took all of the construction risk, but without a formal tender process of the kind that is legally required today. The NTR West Link procurement was of the old kind. One had to be inside the tent and once inside, all the old faces and friends were there — people like Pádraig Flynn, George Redmond, Tom Roche and so on. Due to a ready-up of toll revenue between the State and NTR, the West Link will end up costing the taxpayer and motorist €1.1 billion, while the cost to NTR was a mere €231 million in today's prices. If this is the sort of sweet-heart deal allowed by PPPs, then they are costing the taxpayer dearly. There is a long way to go before PPPs can be trusted as a value for money solution to transport problems. I sincerely thank the Comptroller and Auditor General for his work, and commend the motion to the House.

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