Séamus Kirk (Louth, Fianna Fail)
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I thank the Leas-Cheann Comhairle and the Ceann Comhairle for giving me the opportunity to raise this important matter. The Narrow Water Bridge project has been a long-running saga for the people of County Louth and south Down. However, we are now entering a critical phase and it is time for all stakeholders to put their money where their mouths are. Louth County Council confirmed in early July that the construction of the proposed cross-Border bridge had been put on hold after tenders received from construction companies for the project ran substantially above the allocated budget. Tenders received ranged from €26 million to €40 million, plus VAT, some €15 million over the allocated funding. In the meantime, the council pledged an additional €2 million for the project in August. It accepted the EU funding, but the final financial package remains unsecured. The €17.4 million in EU INTERREG funding allocated for the project means a decision needs to be made in the coming weeks. If the project does not progress, a contingency plan may be put in place that is deliverable and will achieve a full draw-down in the remaining timeframe which ends in December 2015. We need to act quickly to get the project off the ground and resolve how we are to proceed.

The extremely disappointing news about the overruns comes only two months after the Northern Ireland Executive agreed to put forward its part of the funding. The Government's decision in the past few weeks not to provide additional funding is a further blow to the viability of the project. The bridge over the Newry River at Narrow Water has the support of the Governments of the Republic and Northern Ireland. The project won approval last year from An Bord Pleanála and the Northern Ireland planning authority. The funding deficit must be tackled and it is vital that the Government take the lead in addressing the issue by meeting the councils involved and creating a new source of funding to make progress on this decades-long project.

The development of the bridge will greatly assist in the growth of tourism, economic regeneration and enhancing social relationships in the respective areas. The completion of the project after decades of lobbying by the local communities will mark an important symbolic leap forward for North-South relations in the Border region. I am calling on the Government to revise its disastrous decision not to work with the Northern Ireland Executive to provide additional funding. The Government must ramp up support for the joint committee between Louth County Council and the Newry and Mourne District Council and co-operate with the Northern Ireland Executive to find a workable solution to secure funding and get the project off the ground.

Fianna Fáil has been a consistent advocate of this project and after so much progress has been made in terms of planning and securing funding from Europe, it would be a tragic decision to scupper matters at this advanced stage. I exhort the Minister of State, Deputy O'Sullivan, to convey the very strong feelings and sentiments of the people of the Cooley Peninsula and the Mourne region of south Down on the vital importance of this project to them and to the region. It is hugely symbolic and the bridge will open up an area of the country that has been severely underdeveloped as far as tourism is concerned. The potential to create jobs and to get additional spending power into the region is obvious. The bridge would be a very important leap forward and I exhort the Minister of State to convey those sentiments to the relevant Department.

Jan O'Sullivan (Limerick City, Labour)
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I thank Deputy Kirk for the opportunity to address this issue. Unfortunately, the Minister for Transport, Tourism and Sport, Deputy Varadkar, is unable to be here as he is in London at a number of tourism promotional events but this is a project the Minister is well aware of and has engaged with significantly over the past year.

As I am sure all Members of this House will now be well aware, the improvement and maintenance of regional and local roads is the statutory responsibility of each local authority, in accordance with the provisions of section 13 of the Roads Act 1993. Works on those roads are funded from local authorities' own resources, supplemented by State road grants. The initial selection and prioritisation of works to be funded is also a matter for the local authority.

In 2011, Louth County Council in conjunction with its Northern Ireland project partners, East Border Region and Newry and Mourne District Council, decided to submit the Narrow Water Bridge project for INTERREG IVA funding. Prior to this, the Department of Transport, Tourism and Sport had indicated that due to budgetary constraints and the need to prioritise road maintenance, it could not provide funding to progress the project by itself.

The project partners submitted an application for funding of €17.4 million based on a project cost of €18.3 million. The Special EU Programmes Body, SEUPB, approved the €17.4 million funding on 24 October 2012. The SEUPB indicated that given the amount of funding involved, project approval was dependent on financial support from the relevant Northern and Southern authorities.

After the SEUPB approved the project in principle, it sought confirmation from the Department of Transport, Tourism and Sport and the Northern Department of Finance and Personnel of the required financial support before issuing a letter of offer to the project promoters. In January this year the Department of Transport, Tourism and Sport confirmed its upfront contribution of €3.91 million. Confirmation of funding was also sought at the same time from the Northern Ireland Department of Finance and Personnel. The project was approved for funding by the Northern Ireland Minister in late May, subject to the letter of offer from SEUPB, including a number of specific conditions. These conditions included a commitment by Louth County Council that it would have sole responsibility for any cost overruns within the eligible spend time frame and in the event that the project extended beyond that period. In addition, Louth County Council was also required to meet all the maintenance and associated costs related to the upkeep of the bridge and its service area.

Pending receipt of project approval, Louth County Council went ahead with seeking tenders from short-listed contractors. The tender assessment process, which was completed in early July, showed a shortfall of the order of €15 million in the funding, as construction tender prices came in at nearly double the estimated cost. As mentioned previously, while Louth County Council had indicated to SEUPB that it was willing to meet any funding shortfall, this was on the understanding that any shortfall that did arise would be small.

On 9 July the council released a statement indicating that the tenders received ranged from €26 million to €40 million plus VAT, which was substantially above the allocated budget for the project, leaving the council with a substantial funding shortfall. The council also stated that while it would try to see if the shortfall could be filled through any combination of additional funding and cost reductions, the project had been put on hold. Unfortunately, on the basis of the tender prices received, the cost of the project is well beyond that projected and bridging the shortfall is very difficult. Furthermore, the increased cost of the project now has significantly reduced the benefit to cost ratio associated with it.

I understand that the SEUPB has been in discussion with Louth County Council and its project partners regarding the financial viability and deliverability of the scheme. This is to be expected given the scale of the cost increase. It is a matter for the SEUPB, taking account of its responsibilities for the allocation of INTERREG IVA funding, to assess the position and satisfy itself as to the deliverability of the project. As part of this process, SEUPB sought clarifications and additional information from the project partners which it is now assessing.

No formal proposal has been made by Louth County Council to the Department of Transport, Tourism and Sport on increasing the Department's funding contribution. Due to budget cutbacks, the Department for Transport, Tourism and Sport has had to curtail investment on major new or improvement projects in recent times in order to focus available funds on necessary maintenance and repair work, based on the current estimates. As the Deputy will be aware, a further reduction of in excess of €100 million in the 2014 budget for regional and local roads is scheduled. It is from this budget that any additional funds for the Narrow Water Bridge would have to come. Notwithstanding this, the Minister has indicated that he would be willing to consider helping to make up some of the shortfall but only in the context that there would be significant contributions from all other parties, including the Northern Ireland Executive. As I understand it, to date such a package of funding has not been put together.

If it does not prove possible to advance this project, there are a number of other transport projects of a cross-Border nature that can be pursued to ensure that this funding is not lost to the island. I wish to stress that the Minister is open to proposals.

Séamus Kirk (Louth, Fianna Fail)
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In response to the reply from the Minister of State, has any initiative been taken by the Department of Transport, Tourism and Sport to get an emergency discussion forum going between the various local authorities and the two Government Departments, north and south of the Border to determine whether a suitable package can be put together to finalise the project? It would be a huge loss if this project does not go ahead. Getting capital spending into that part of the country has been a huge challenge and not much public money has ever been spent in the area. Given the hugely symbolic importance of the project in the context of North-South relations, it would be catastrophic if it were not to go ahead.

The other possibility, in the event of it not being possible to put a package together at this point in time, is to make contact with the SEUPB with a view to extending the period during which the €17.4 million in funding is available from the INTERREG IVA fund. Has the Department determined whether it would be possible to extend the period to allow for a change in economic fortunes to facilitate the approval of the project at some not too distant point in the future? A number of issues must be considered. The reality is that if the INTERREG money is not drawn down now for the project, the project is effectively gone for the foreseeable future. While nobody can look into a crystal ball and predict what will happen in five or ten years time, I greatly fear that the project will be put on the back burner and will not proceed. Tourism in what has been described as the Killarney of the north, the Cooley mountains and Mourne mountains area, which is a beautiful part of the country, is seriously under-developed primarily because the connection between the two areas is not as it should be. The bridge would fill that gap and would be of huge economic benefit. I exhort the Minister of State to go back to the Minister for Transport, Tourism and Sport and tell him that we need the bridge.

Jan O'Sullivan (Limerick City, Labour)
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I was in Carlingford over the summer and it is indeed a beautiful part of the country. I also know that this project is important to this Government and the Government of Northern Ireland. Deputies from all parties in County Louth have been strongly promoting the project for some time. It was Louth County Council, together with its Northern Ireland partners, East Border Region and Newry and Mourne District Council, which put the proposal forward. A proposal has not been put to the Department of Transport, Tourism and Sport so far. I would imagine that such a proposal would need to be put ---

Séamus Kirk (Louth, Fianna Fail)
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Is the Department open to it?

Jan O'Sullivan (Limerick City, Labour)
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I just said the Minister, Deputy Varadkar, has indicated he would be willing to consider helping. He has made the point that there would have to be a contribution from Northern Ireland, helping to make up some of the shortfall, however. My understanding is a proposal needs to be put by the two local authorities to the two governments. I realise funding needs to be drawn down as quickly as possible.

Séamus Kirk (Louth, Fianna Fail)
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This a four-way partnership. They all need to be pulled together.

Jan O'Sullivan (Limerick City, Labour)
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It is not anybody's fault that the tenders came in at a much higher level than was expected. If a proposal can be put together quickly, the Minister has indicated that he is willing to consider it.