Dáil debates

Tuesday, 21 February 2006

Ceisteanna — Questions.

Interdepartmental Committees.

2:30 pm

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Question 3: To ask the Taoiseach when the cross-departmental team on infrastructure and public-private partnerships will next meet; the number of meetings of the team planned for 2006; and if he will make a statement on the matter. [39760/05]

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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Question 4: To ask the Taoiseach the progress made by the cross-departmental team on infrastructure and public-private partnerships; and if he will make a statement on the matter. [1861/06]

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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Question 5: To ask the Taoiseach if he will report on the work of the cross-departmental team on housing, infrastructure and public-private partnerships; and if he will make a statement on the matter. [3208/06]

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Question 6: To ask the Taoiseach if he will report on the progress made by the cross-departmental team on infrastructure and public-private partnerships; and if he will make a statement on the matter. [6397/06]

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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I propose to take Questions Nos. 3 to 6, inclusive, together.

The cross-departmental team on housing, infrastructure and public-private partnerships, PPPs, is scheduled to meet next on Wednesday, 1 March. While the agenda remains to be finalised, it will include Transport 21 and housing. These meetings are generally held on a monthly basis and there are eight more meetings planned for the remainder of 2006.

The team's role is to assist in progressing and resolving issues related to infrastructure planning and delivery. Given the significance of cross-departmental co-ordination in securing progress in this area, the team plays a valuable role in identifying appropriate issues to be addressed and, where necessary, in proposing possible solutions for consideration by the Cabinet committee and the Government. Such cross-departmental co-ordination has helped to improve significantly the capacity for the delivery of national infrastructure, especially in terms of time and cost.

Particular issues considered by the team in recent times include Transport 21, housing, the national spatial strategy and waste management. Lead responsibility remains with the relevant Minister and Department in respect of each infrastructure project.

Photo of Enda KennyEnda Kenny (Mayo, Fine Gael)
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Has consideration been given to the continuation of the PPP process as it is currently operated? I made the point previously that it is a very expensive and technically complex tender system and that there is no claw-back for companies who are unsuccessful in tendering. We could end up with a small cartel of influential companies which could give rise to fears of inflated prices. In the case of the Cork School of Music, for example, I understand the cost is some €75 million while the maintenance fee is €8 million for 25 years thereafter. Given the strength of the economy, are we in a position to adopt a design-build approach as distinct from the PPP system as it currently operates?

The Taoiseach mentioned that Transport 21 will be discussed at the meeting of the cross-departmental team on 1 March. The launch of that document was well-flagged and an extraordinary amount of money is involved. It did not, however, include the proposed orbital roue for the greater Dublin area. Based on current estimates, the sum involved will be truly extraordinary, depending on how far from the city boundaries it is built, whether 20 or 30 miles or whatever.

Will the cross-departmental committee make further recommendations about future tolling of roads? This is an issue of great concern to thousands of people, many of whom believe we have arrived at a stage economically where we can develop many of our roads. We have waited a long time to get these roads which are now being tolled. Will the infrastructure committee consider this issue, either at its meeting of 1 March or at subsequent meetings?

3:00 pm

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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Deputy Kenny raised the first issue on a previous occasion at which time I told him the Minister for Finance was working on an initiative. That is now complete and I will give some details of it. It is aimed at accelerating PPP projects for key capital infrastructural projects in central Government areas. A new centre of expertise will be established under the National Development Finance Agency, NDFA, whose role will be expanded to include procurement functions on behalf of Departments. This will be in addition to its existing role as adviser to Departments on PPP procurement. The agency has commenced this new activity on an interim non-statutory basis and the Department of Finance is working with its legal advisers, in consultation with the NDFA, to bring forward any necessary legislative amendments without delay. The Minister for Finance appointed two additional members to the board of the National Development Finance Agency and the appointments are interim and non-statutory in the first instance pending amendment of the National Development Finance Agency Act 2002. The additional board members are Mr. Fred Barry, chief executive of the National Roads Authority, and Mr. Stuart Harrington, chartered surveyor and director of Killeen Properties.

The centre will provide the skills and capacity required to support the procurement of key infrastructural projects by public-private partnership in the central government area. This relates to the point raised by Deputy Kenny. By concentrating initially on three key Departments, namely, the Departments of Education and Science, Health and Children and Justice, Equality and Law Reform, an approved flow of PPP projects will be generated and resources will be focused on bringing these projects to completion. This relates to the point raised by the Deputy whereby companies had to invest in a major outlay for contracts with no return and incurred a sizeable hit in terms of their own costs.

Ministers will continue to be responsible for the assessment and approval of projects, including decisions to procure the project as a PPP, the setting of project budgets, output specifications and other service requirements. The NDFA's centre of expertise will be responsible for procuring the projects within these parameters and carrying out any negotiations needed to the turnkey stage. It will hand over the completed project to the Department concerned after construction.

This development resulted following consultation which, as Deputy Kenny will recall, involved the Minister listening to the agencies and companies concerned make the point about the cost. This development will lead to a much more efficient operation and give a centre of expertise where the process involved will be centralised as opposed to the existing position.

There is no new discussion on the tolling issue other than the decisions that have already been made. Only a small number of the roads, in respect of which €1.5 billion will be invested, are tolled.

With regard to Transport 21 issues related to the orbital route, the Deputy will recall that the National Roads Authority has carried out preliminary work on the orbital route but has not yet decided on a route. It has broadly indicated that it wants to proceed on an outer line but the exact location of it and the related cost specifications of it will take some time to establish. It has said it will report back but it will take some time before it does that in a meaningful way in terms of it being costed. It is important to commence preliminary work on the orbital route for the longer term.

Photo of Joe HigginsJoe Higgins (Dublin West, Socialist Party)
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Does the Taoiseach agree that the use of public-private partnerships is not economically justified but politically motivated and that the Government, in its philosophy, essentially favours big business interests in major infrastructural projects for ideological reasons and because of the political closeness of Fianna Fáil and the Progressive Democrats to big business interests which also finance those parties?

Does the Taoiseach agree that in respect of group schools there is no great experience in this country as of yet of the alleged economic benefits of public-private partnership and that in the case of the provision of six schools which were agreed in 1999, the Comptroller and Auditor General found they were 8% to 13% more expensive to deliver than if they had been delivered under public stewardship? Does the Taoiseach agree that the effect of this process is that the taxpayers, in other guises as ordinary people, consumers, users of roads etc., will be hit for more to provide for the profits of the friends of the Government?

When the public-private partnership process gives a company a stake or a right in terms of the provision of a public service for up to the 20 or 25 years, does the Taoiseach agree that it is inevitable that many of those companies will move on, or may run into difficulties or have to offload their contracts and those public services become the subject of speculation in the capitalist marketplace? Is that any way to deliver public services on a secure basis for our people?

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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I do not agree with the Deputy's thinking on this matter. Public-private partnerships here and elsewhere are designed to involve the private sector more efficiently and speedily because it has expertise in undertaking such projects and to try to complete projects more quickly. There is a cost effect too because the State will always be able to make better loan arrangements than anyone else, provided its rating is healthy. The State, however, cannot do everything in one year or period.

There will always be a significant backlog of capital investment projects required. The State can engage the private sector through public-private partnerships, with proper procurement standards and arrangements which work well internationally. There is a good range of examples. The Deputy is correct to say we were late into this area. We can, however, see where others have made mistakes or where there are good models, and use proper procurement arrangements to enable strategic developments.

Whether in schools in 1999, or in some other areas, this involves a learning curve. Deputy Kenny mentioned the Cork School of Music which got into difficulties mainly because the original company pulled out and other companies were not interested in coming in. By and large people are interested in coming into road, sewage and water treatment projects. These are good examples of design, build and manage contracts which are good for the State. We have a range of these and they will build up over time. The State will not always have the expertise to carry out these projects within its ambit. If there are good quality private sector companies, Irish or other, which have international acclaim, which can carry out and finance these projects it is a good way to work. A relatively small element of the overall capital programme is under public-private partnership but it is good to deal with part of the capital programme in that way.

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The Taoiseach referred earlier to tolling. Has the cross-departmental team addressed this in any substantive way? There is already an extensive demand on road users through vehicle registration tax, car tax, income tax, excise duties on fuel consumption and now tolling is an ever-increasing feature of our road infrastructure. Would it not be appropriate for the cross-departmental team to address this matter? What does the Taoiseach have to say to us on this issue?

Housing is one of the responsibilities of the cross-departmental team. Will the Taoiseach confirm that the team has addressed the issue of Traveller accommodation? I refer to the case brought by the elderly Traveller couple, one aged 70 the other 74, who are trying to ensure their squalid conditions are brought up to an acceptable standard in the twilight years of their lives. If the cross-departmental team has not addressed the issue of Traveller accommodation will the Taoiseach in light of this case bring the issue to its attention?

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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This committee does not deal with that particular issue but the committee on social inclusion deals with the housing and infrastructural programme for Travellers. The Deputy should put down a question to the Minister of State at the Department of Health and Children, Deputy Fahey. There have been several discussions over the past six months not only at the Cabinet committee on that issue but also with the local authorities and the NGOs representing the Traveller community. The Minister of State would be glad to outline this process.

The questions submitted on the issue of tolling refer to the number of roads designated for this and the Minister for Transport, Deputy Cullen, will be glad to furnish those numbers. There have been no new discussions on the issue. The policy has been outlined and the Minister will deal with any questions. Nothing has changed in respect of tolling.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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The Taoiseach referred to the agenda for the cross-departmental team on infrastructure as including issues such as the Transport 21 plan and housing. Will a re-examination of the strategic infrastructure Bill be on the agenda? Has the Taoiseach and the Government any plans for a thermal power station or any other combustion installation with a total energy output of 300 MW or more?

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I suggest the Deputy table a question to the appropriate line Minister.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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I ask whether this matter is on the agenda for the cross-departmental team. It has been suggested to me that such a proposal could cover a nuclear power station.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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The Deputy should confine himself to a question as there are a number of Deputies waiting.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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I am confining myself by being very specific. The agenda of the cross-departmental team is a subject which the Taoiseach has raised. The question of whether a nuclear power station is on the agenda would be of considerable interest to people. Will the Taoiseach amend the Bill to clarify the matter as people will want to know if this is what he has in mind?

Will the 1998 Aarhus Convention be on the agenda? This convention allows for public participation in decision-making. Is the cross-departmental team planning to ditch that convention or will the Taoiseach find a way of transposing it into Irish law as was supposed to happen by last month?

Is the Taoiseach aware of the report on broadband——

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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The Minister responsible will follow shortly with his replies to questions.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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I do not wish to rain on the Minister's parade, I simply wish to ask the Taoiseach whether the matter is on the agenda.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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That matter does not arise out of these questions.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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The issue of broadband arises. Am I to receive a reply?

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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The Deputy will receive replies to three questions.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Broadband issues are on the agenda of the committee.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I seek clarification of the announcement made by the Taoiseach about the new centre for excellence.

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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It is the centre for expertise.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Is it an organisation, a quango, a committee or people? Is it the case that the National Development Finance Agency is responsible for identifying and driving infrastructure projects, whether by PPP or otherwise? Is there interaction between the agency and the cross-departmental team? Is the cross-departmental team merely trying to solve or flag problems? Where does the centre for expertise sit between the two? Is it reposed in the National Development Finance Agency? Does it consist of a number of people with expertise, whether in engineering, finance or accountancy?

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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What is the situation regarding the affordable housing projects to be built on State lands requisitioned from the Army, which the Taoiseach announced with great fanfare a few years ago? Is this project on target? When will the housing be available and what will be the selling price of the houses?

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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The Minister for Communications, Marine and Natural Resources will answer the question on broadband. The issue regarding the directive is being discussed and the Minister for the Environment, Heritage and Local Government, Deputy Roche, will shortly bring forward proposals on that matter. The Government is totally opposed to nuclear power and has no proposals on that.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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The Taoiseach should put down an amendment.

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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I note that many of the Deputy's European colleagues, the Greens, are beginning to press for nuclear power.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Many of the Taoiseach's colleagues are as well.

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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However, I will resist it and hope that I can hold off the pressure as best I can from the Greens to bring nuclear power to Ireland——

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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Does the Taoiseach have an amendment then?

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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——since it has been strongly forced by them.

On Deputy Rabbitte's question concerning the centre for expertise, Departments still have responsibility for identifying the project. The difficulty is that all of them went to different locations to get advice, with no co-ordination. It is brought together around the Cabinet sub-committee on infrastructure but, by and large, officials and public servants do not have the expertise. Issues that arose in examining public private partnerships included the appropriate expertise on how best to undertake a project, as the Deputy correctly said, how best to finance it, the engineering solution, where we could examine the model for best international practice and who could do so. To say the least it was not very coherent.

It has been decided that this centre for expertise will be located in one place, the National Development Finance Agency, whose role will be expanded to include a procurement function on behalf of the Departments. On an agency basis, therefore, the NDFA will be able to procure on behalf of Departments. Until now, it had an advisory role to Departments on PPP procurement and, as I said, the agency has started that work on a non-statutory basis.

The legislation governing the NDFA allows for far more flexibility to hire expert staff and interact at home and abroad with the appropriate people. The agency has taken on extra board members and will be able to hire additional experts in various areas. It will have a significant effect in being able to assist Departments to move the project forward. That is the idea. My understanding is that legislation will be required but the centre is being established on a non-statutory basis, at this stage at least.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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Is it a stand-alone entity or is it part of the NDFA?

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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It is part of the agency but involves an extension of the powers of the NDFA. Until now, the NDFA was able to give advice on the financing of the project, including relevant issues such as how best to finance it and the timescales involved. Now it will have a role in procurement. In some cases it has expertise but in others it will be able to bring in expertise and source the best place to do so. This is being done on some of the PPP projects the Deputy and I would know best, including the redevelopment of rundown areas, such as Fatima Mansions, O'Devaney Gardens and other places. Compared to the other system, the timing of this one has been quite focused and very beneficial.

Deputies will be aware that the Minister has published the major infrastructural Bill, which will bring about greater efficiency in the consent process for major infrastructural projects in addition to providing a better service for stakeholders through a single agency.

As regards Deputy Connaughton's question on affordable housing, very good progress is being made in that regard. To date, over 70 projects are planned on State and local authority lands. Together with the projected 2,500 houses under Part 5 of the Planning and Development Act, the total projected delivery under the initiative is over 10,000 housing units.

Photo of Paul Connaughton  SnrPaul Connaughton Snr (Galway East, Fine Gael)
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How many of them are built?

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Please allow the Taoiseach to continue. He has gone well over the time allocated.

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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The initiative has delivered over 1,100 units to date, including those through Part 5.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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They are units, not houses.

Photo of Bertie AhernBertie Ahern (Dublin Central, Fianna Fail)
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It is estimated that over 2,000 houses will be provided under the initiative this year and 3,000 in 2007. Unfortunately, we have not yet found a way where one can hand over State land on Monday, get planning permission on Wednesday and build them on Friday. We have not yet found that mechanism.