Noel Dempsey (Meath West, Fianna Fail)

Thanks to this Fine Gael motion, I have the opportunity to report on the progress made by agencies including the NRA and CIE in upgrading our transport infrastructure and on the beneficial impact of the sustained high level of investment in transport; on the arrangements to evaluate and monitor Exchequer funded capital and current expenditure by the NRA and CIE; and on the arrangements to ensure the NRA and CIE are accountable to the Government and the Oireachtas.

Transport 21 continues to provide the strategic framework guiding Government investment in transport infrastructure. The primary purpose of this unprecedented investment programme is to progressively deliver a first class national roads network and a modern, integrated public transport system that provides reduced journey times for commercial activity around the country and facilitates the more efficient movement of people. This is the fourth year of Transport 21. In the first three years Exchequer funding amounted to a total of almost €6.8 billion. Expenditure in 2006 was €1.94 billion; in 2007, almost €2.4 billion; and in 2008, €2.5 billion. The Exchequer allocation for 2009 is €2.1 billion. These are massive amounts of money committed by the Government.

Great progress has been made to date, with many of the projects completed or nearing completion. Over 66% of the major interurban motorways are now open to traffic and the remainder are under construction and on target to open in 2010. The upgrade of the M50 is on target for completion in 2010. By the end of 2010 we will have built a 750 km interurban motorway network, an unprecedented achievement in such a short time.

Good progress is also being made on improving public transport infrastructure and services. The Cork commuter rail line opened earlier this year and both phase 1 of the western rail corridor and the Kildare rail line are due to be completed by the end of 2009 or in early 2010. Work is under way on phase 1 of the Navan line. The Luas extension to the docklands will open in early December. Two other Luas extensions to Cherrywood and Citywest are under construction and will open in 2010 and 2011 respectively.

The Dublin Bus, Bus Éireann and Irish Rail fleets have been renewed and increased, resulting in greater accessibility and improved services on many rail and bus routes. The new regional railcar fleet has allowed Irish Rail to expand services in an economical and efficient way, even in this difficult economic environment. The company recently announced a range of new services to take effect from the end of this month, such as two new early bird Monday to Friday services, from Westport to Dublin and Galway to Dublin respectively. The company is introducing new services on the DART line to provide a service every 15 minutes off-peak.

In addition to capital funding the CIE companies receive an annual subvention towards the cost of loss-making socially and economically necessary services. This subvention is over €303 million in 2009. Along with capital funding, it has enabled the CIE companies to improve the quantity and quality of bus and rail services throughout the country. The result of this investment and increased subvention was a strong growth in passenger numbers up to 2008.

Despite this high level of current funding the companies are now facing a very difficult financial position due to the sharp economic downturn. The companies now face the difficult challenge of lower passenger numbers, higher costs and static subvention. This requires the urgent and vigorous pursuit of cost recovery plans to reduce and eventually eliminate operating deficits.

Given the scale of Transport 21, the Government recognised the need to put in place processes and procedures to ensure a rigorous evaluation, monitoring and auditing regime for the major projects involved. My Department has established detailed monitoring procedures and carries out audits at various levels. At the start of Transport 21, a high level monitoring group was established to oversee the implementation of the programme. The monitoring group oversees an intensive audit programme that is undertaken by independent consultants. These audits review the appraisal and the financial and physical implementation of selected Transport 21 projects. In 2007 and 2008, audits relating to projects with a total estimated capital cost of €2.6 billion were carried out. Six additional audits are being carried out in 2009.

Financial and physical progress audits carried out to date have found that projects are generally being implemented in a satisfactory way. The findings of Transport 21 appraisal audits have verified that the implementing agencies are continuing to appraise Transport 21 projects in accordance with Guidelines on a Common Appraisal Framework for Transport Projects and Programmes, a document developed by my Department, and the Department of Finance document, Guidelines for the Appraisal and Management of Capital Expenditure Proposals in the Public Sector.

All major Transport 21 projects are subject to detailed cost benefit analyses that are carried out as part of the project selection and approval process. The results of cost benefit analyses are published on the Transport 21 website once projects have reached construction stage. Transport 21 is being managed in accordance with best practice and this is delivering dividends for the taxpayer and the transport user. These benefits are particularly evident in the case of the national roads programme. It is a tribute to the great work of the NRA and local authorities that most major road projects, including recent examples such as the Tullamore and Waterford city bypasses, finished within time and within budget.

Projects benefiting from EU Structural Fund assistance are subject to detailed procedures and checks to ensure compliance with the relevant EU rules. As well as checks by the agencies and my Department, audits are conducted by financial control unit within the Department of Finance, the European Commission and the European Court of Auditors. The combination of domestic and EU oversight of the transport investment programme provides a high level of assurance but no level of sample checking can ensure that no mistakes are ever made.

The annual subvention paid to CIE has been subject to independent reviews over the years. The most recent was in 2006 when a value for money review was carried out as part of the expenditure review process of the Department of Finance. That review concluded that good value has been obtained for the subvention, which has supported a better service than would have been the case in the absence of the subvention. The annual subvention paid to CIE is currently administered through a memorandum of understanding with each of the CIE companies. These memoranda have been in place since 2003 and are negotiated annually with the companies. They set out service quantity and quality requirements and require quarterly reporting against targets. In anticipation of the EU regulation relating to compensation for the discharge of public service obligations, due to come into force before the end of the year, public service contracts to replace the memoranda of understanding are being finalised. These contracts will set higher requirements for transparency and performance obligations.

A cost and efficiency review of Dublin Bus and Bus Éireann was undertaken in 2008 on my direction. This report made a number of recommendations to improve bus services to customers, and in the case of Dublin Bus to increase efficiency and save money. The recommendations are being implemented. A value for money study of the €500 million second railway safety programme, published in early 2009, concluded that the programme objectives on projected outputs were broadly met and that the cost of the work delivered was generally economically efficient. Nevertheless, the report into procurement practices in Irish Rail raises serious concerns about the internal arrangements in Irish Rail relating to the purchase of goods and services. I am due to receive a full report from the CIE board on the matter and I will then decide on any further necessary action on my part.

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