Thursday, 23 April 2015
Roads Bill 2014: Committee Stage
I move amendment No. 1:
I welcome the Minister to the House. I am particularly indebted to him and to the House because they facilitated a rearrangement of the timetable for very busy people. I was not released from the banking inquiry until a few minutes ago. Having taught in this area for a number of decades, however, I thought I could attend the House to assist the Minister. I could have waited for the next Roads Bill but goodness knows when that might be. I do appreciate, however, everyone in the House facilitating this rescheduling.
In page 11, between lines 2 and 3, to insert the following:“(3) The Minister shall require the Authority to publish a cost-benefit analysis of each road project a minimum of six months before approval of the project.”.
I welcomed the discussion we had on Second Stage. I support the Bill virtually in its entirety. Do the two measures before the House improve the legislation? I will try in a few seconds to make the case that they are of value to the task, which the Minister explained to us the previous day, by improving resource allocation in this area and bringing together engineering expertise from two agencies. In a facilitatory frame of mind, that is what I have set before the House.
Section 16 gives the Minister procurement functions. It states that where the Minister considers it would be convenient, expeditious, effective or economical for the authority to arrange various functions, the Minister may allow for that. The second goes on to outline them.I accept the Minister's invitation. My first proposed amendment in that section is to accomplish the goals of ensuring that our decisions are expeditious, effective and economical. As the Minister knows, the technique to evaluate road investment is a cost-benefit analysis developed in the United Kingdom, a technique called COBA, used for the first time on the Naas bypass which was the first piece of motorway built in the State and showing a rate of return. It is a project that has continued to earn that rate of return. We have considerable research in that area but we have limited funds.
We should avoid building motorway capacity, which is up to 55,000 vehicles a day, on routes where that volume is not likely to be achieved. We might say we built the national motorway system under a particular scheme in conjunction with the European Union. That is now in place and nobody would suggest it should be dismantled. The level of service requirement and doing a cost-benefit analysis are important to ensure we do not build motorways in the wrong place at a time of constraint in the public finances.
The techniques exist. The ready rule of thumb would be that if the likely demand at any foreseeable time in the future is considerably less than 55,000 vehicles a day it is not worth taking on the heavy constructions costs of a motorway. The purpose of the amendment is to undertake the analysis before we embark on the project and know whether it is worthwhile. For the extra costs to bring the capacity up to 55,000 vehicles a day, I do not believe there are any extra benefits. One benefit is speed, allowing one to drive up to the speed limit if the same level of service is retained. Another benefit is safety, which is retained once there are grade-separated intersections. Once there is a dual carriage roadway the safety of modern roads improves.
That is the first point I would make in that regard. Let us not plan on building a road with a capacity of 55,000 vehicles a day in a place where there is no possibility of getting to that volume in any foreseeable timeframe. It would improve value for money in the roads budget if we have built in an analysis that advises the Minister and the authority, despite whatever other pressures there might be to build a motorway from A to B, that it does not come up in the cost-benefit analysis as a project other than one that would take money from other projects that the Minister or other Ministers might have in mind.
The purpose of the amendment is that in its procurement functions the authority should carry out an analysis to ascertain whether a project is worthwhile. We should tailor the roads budget to delivering the maximum return.
I thank the Senator for his amendment. When he commented on the Bill on Second Stage he said that we needed to move from advocacy to analysis regarding major projects. I am keenly aware of this point. At a time of continued constraint on our ability to spend taxpayers' money on projects we need to ensure that all available funding is spent and allocated in the most efficient way possible. Of course, that is one of the reasons to have this new body, which will be able to play a very valuable role in the deployment and maintenance of infrastructure throughout the country.
Despite that background agreed between the Senator and me, I am still not in a position to accept the amendment. The need to analyse how money is spent on behalf of the taxpayer is very much accepted across the Government. It is perhaps the main rationale for the creation of the Department of Public Expenditure and Reform, headed up by the Minister, Deputy Howlin. That Department in the first instance deploys appraisal standards and requirements relating to cost-benefit analyses for publicly provided and funded projects. The requirements for doing so are set out in the public spending code published by the central expenditure evaluation unit of the Department of Public Expenditure and Reform. This code incorporates long-established elements of the value-for-money arrangements that have been in place and consolidates the best practice regarding cost-benefit analysis requirements. This is the framework for appraisal of national road schemes. It incorporates the requirements of the public spending code and is very much in line with my Department's guidelines on a common appraisal framework for transport projects and programmes.
For all of these reasons it is considered that the proposed amendment would not be appropriate for inclusion in primary legislation. As the Department of Public Expenditure and Reform's public spending code deals comprehensively with the issue of cost-benefit analysis, providing for this matter in primary legislation could have the effect of restricting that Department in any future revisions to the public spending code.
Alongside the requirements of the Department of Public Expenditure and Reform and the way in which it would evaluate spending proposals from the Department of Transport, Tourism and Sport, I also have within my Department a unit providing ongoing assistance on how we can best deploy taxpayers' money and ensure we get the best value for money in road and infrastructure projects. A clear indication of the importance of the point made there came with my Department's preparation of and the Cabinet's agreement to the strategic framework for investment in land transport study. We hope to publish that in the near future. It will provide a macro-framework within which my Department proposes to respond to the constraints on us owing to the need to spend taxpayers' money efficiently and also because there are many competing demands for that money.
I thank the Minister, as always, for his reply. Sometimes other Departments can be abolished. Will the responsibilities of the Department of Public Expenditure and Reform be returned to the Department of Finance by a future government? Will there still be people doing this kind of appraisal and so forth?
I welcome what the Minister said about the strategic framework, which will be most interesting to read. The Minister spoke about constraints. Building roads or other infrastructure in the wrong place becomes, in itself, a constraint because we end up with a debt lodged in the Department of Finance and an asset not generating much in the way of a return. That was the spirit in which I tabled the amendment.
As the Minister has assured me that the point about analysis and appraisals is being dealt with otherwise than in this legislation, I will not press the amendment. I am glad the spirit of what we are trying to do to assist the Minister and his Cabinet colleagues is being addressed. If we have a request for a motorway, the capacity of which is 55,000 vehicles a day, we need to establish what the usage will be to know if it is appropriate or if something else could be tailored. I will not press the amendment and I thank the Minister for his considered reply.
The Senator has made an important point about the consequences for the taxpayer when infrastructure is built for which there is either insufficient demand or when the level of demand for it changes.In my time as Minister for Transport, Tourism and Sport, I have become increasingly aware of the integrated nature of the consequences of building or changing infrastructure over other transport infrastructure already in existence. For example, what happens to railway usage when we improve the road network or what happens to regional airport usage when we improve the rail network? These considerations must be borne in mind when considering how best to spend taxpayers' money in the future.
The role of the Department of Public Expenditure and Reform is now very much consolidated within the architecture of Departments and has demonstrated its value in recent years. I hope that when my Department and I publish our framework on how we believe we should invest in land transport in the future, the Senator will be assured many of the points he has raised have been understood by my Department and are mirrored in the way the Department of Public Expenditure and Reform appraises proposals from my Department.
I move amendment No. 2:
This section Bill concerns advice on services, a matter we discussed in this House with a previous Minister at the Department of the Environment, Community and Local Government. This concerns the maintenance of roads and how we apportion the maintenance costs of roads to individual types of vehicles. There are various rules of thumb used in road track studies. Some 15% of the capital cost is allocated to heavy goods vehicles, based on research by the American Association of State Highway Officials.
In page 11, between lines 9 and 10, to insert the following:“(2) The Authority shall, on receipt of a request from the Minister, conduct research and publish advice on the appropriate taxation of heavy goods vehicles and their road track costs.”.
The key issue is how to allocate the maintenance and upkeep costs of roads. Ultimately, it is a case of how do we deal with potholes that could cost immense damage and which involve an immense repair Bill. I realise that this proposal would take time, but it is worth starting on it. The principle behind the amendment is that if we identify certain kinds of vehicles which cause damage to roads and if these vehicles are not appropriately taxed through the current system of taxation of heavy goods vehicles, we should initiate a change so that we provide a reward system for vehicles that impose less of a maintenance burden on roads authorities and phase out those vehicles that impose a greater burden.
The current system of taxation of heavy goods vehicles is based on the unladen weight. This has been the system historically, but research over a number of decades has suggested that it is not the unladen weight that is significant. It is what is loaded on the lorry that will have an impact on road surfaces and that should be taken into account. What is even more important to take into account is not the weight when laden, but the number of axles. I have some copies of studies done on this and will make them available outside of the Chamber. Examples can be found of where vehicles with the same carrying capacity cause a different impact on the road surface. The key issue in this regard is the number of axles per vehicle. We can show cases where relatively small vehicles are not covering their infrastructure costs, while bigger ones are covering their infrastructure costs because they have more axles. This is called the "fourth power rule", as our engineering colleagues would know.
If we have vehicles that are not covering their infrastructure costs, thereby imposing demands on county engineers and others in maintenance costs and we would like, through the tax system, to persuade trucking firms and others to buy vehicles which do not impose that burden, why do we not include that incentive in this Bill. The studies I have come from the United Kingdom. My amendment proposes to give the Minister the power to ensure that the authority will, on a request from the Minister, conduct research and publish advice on the appropriate taxation of heavy goods vehicles and their road track costs.
Many economists would point out that this UK research has been around for some time and would ask whether it is time for it to influence policy. My amendment allows the Minister, in consultation with the new authority to commission research. Then, when they have that research the Minister and his Cabinet colleagues can decide whether the UK research is valid for Ireland and whether it provides a useful way to save money on the maintenance budget and whether it forms an appropriate basis on which to recalibrate the way we tax heavy goods vehicles. I know of this research from my college research for some time and bring it to the House now for the Government to decide whether it assists in assessing the maintenance costs of Irish roads. That is the reason behind my amendment.
I believe it would be good for the new relationship between the new authority and the Minister that he can ask about research and receive research reports. Perhaps, the reports could be brought here and we could discuss the impact they would have. If there are sensible ways to deal with this issue that do not affect the economy but which ensure we have better performance from our heavy goods vehicles fleet in regard to road maintenance and if there is valid research available from adjoining jurisdictions, let us consider whether it is worth giving those systems a try here and ensure that research is carried out here. That is the purpose of my amendment.
The Minister said previously that we are short on maintenance because of the curtailment in the public finances. In that spirit, this might be one of the routes we could use to tackle that problem.
The National Roads Authority does not have a statutory role or function in regard to taxation policy or the taxation of vehicles, including heavy goods vehicles. Therefore, it would not be the appropriate body to conduct such research or to provide advice on the matter. It should be noted however that section 32(2) of the Roads Act 1993 states that the NRA may provide services to the Minister on such terms and conditions as may be agreed. This will, of course, only apply to the NRA specific statutory functions. To repeat, the National Roads Authority and the new body that will emerge following the passage of this Bill is not a body with a statutory role in regard to taxation policy.
It should also be noted that section 17(1) provides that Transport Infrastructure Ireland shall provide advice or services to the Minister in regard to the functions transferred to the authority under section 7. There is accordingly ample provision in the Bill and existing legislation for the provision of advice on services to the Minister on matters within the remit of Transport Infrastructure Ireland. The Bill, when passed, will provide scope to that body to provide advice on services to me in regard to matters transferred to it. Currently, the NRA does not have a statutory role in this area.
In previous years, it was always open to Oireachtas Members, with a modest amount of support in the Oireachtas, to complete reports in particular policy areas in which they had an interest and for those reports to be debated in committees or on the floor of the Dáil. I would welcome a return of that facility. Sometimes this would happen through the rapporteur model and was a frequent occurrence when I was a Member of the Seanad. This is a model I would like to see restored, because through it Senators with an interest in a particular area could make their views known formally to the Government and the Oireachtas.I regret that I am not in a position to accept the Senator's amendment, specifically because the National Roads Authority does not have a statutory role in regard to tax policy or the setting of tax rates.
Much of the role to which I referred was previously performed by An Foras Forbartha Teoranta before it was abolished by a previous Government. As I understand it, some parts of its function were subsequently transferred into the NRA. There was a distinguished record of publication by people at An Foras Forbartha Teoranta such as Peter O'Keeffe, Patrick McGuinness and Colm McCarthy, the latter being familiar to anyone who has read the report of an bord snip nua. An Foras Forbartha Teoranta did a lot of work of the type described by the Minister. When the reallocation of functions and jurisdictions occurred, that particular function seems to have fallen through the holes in the system.
We must have some response to the issue of the impact of heavy goods vehicles on the cost of maintaining our roads infrastructure. Unless Deputies and Senators get a group together, we will not have that response under the model the Minister is proposing. I would have liked to see the NRA take on that role for its own purposes of discovering which factors most impact the maintenance budget. If there are a lot of inappropriately taxed heavy goods vehicles which might be replaced by more appropriately taxed vehicles, it would be worth finding out about that. Given that the UK authorities have already done the research, it would not be rocket science for the NRA to read it and report back to the House.
The authority might be more open to such a prospect than was suggested in the Minister's response. However, if it is a good idea, I do not mind who carries it out. It seems silly to keep on with a rising bill for road maintenance costs without even being willing to consider the links between that and how we tax heavy goods vehicles. I realise it is the model of a standard reply to say that the taxation of heavy goods vehicle is a matter for someone else. However, if the expert evidence in this matter points in a particular direction, then we should have that discussion. We are not trying to take functions or responsibilities away from any other one.
We need new ideas in this area. I am not satisfied that the role An Foras Forbartha Teoranta used to carry out has been replicated in any other organisation. I am surprised by the reluctance of the NRA even to consider doing it. One calls to mind the observation of John Maynard Keynes that ideas of goodwill are far more powerful than the powers of vested interests. I hope the NRA will reconsider the niggardly reply it has given to the Minister. We had the same resistance from the Department of the Environment, Community and Local Government, which is difficult to understand. I do not have an interest in one type of truck over another, but if the research tells me that more axles per truck is a good thing, that the bulk of maintenance requirements is caused by heavy goods vehicles and that we can make substantial savings in this area, the fact that certain people in certain offices do not like even to think about it is disappointing. We were elected to this House in 2011 with the objective of introducing reforms in a range of areas. This is a simple reform and the obstructionism on the part of others that is indicated in the Minister's reply does not seem appropriate. We have many things to remedy in this country and this is not one of the most pressing ones. However, if we do not press for these types of changes, we will end up in the same type of trouble we were elected four years ago to address. I may opt to re-table this amendment on Report Stage.
Senator Barrett has brought forward two very worthwhile amendments. One of the burning questions facing councillors in every local authority is how to budget for road maintenance, fixing of potholes and so on. In looking at the overarching issue of what causes our road infrastructure to break down, Senator Barrett is posing a key question and one to which we should have the answer. If heavy trucks are having a major impact on road infrastructure, it seems logical to consider whether we might devise a scheme based on research that has been carried out elsewhere such that by changing the dynamic of the trucks on our roads we might see a reduced burden on infrastructure. These are issues one hears being discussed at the fireside in a wake house, but we are not getting any answers. Senator Barrett has come forward with a potential solution which would give powers in this regard to the organisation charged with allocating taxpayers' resources for the repair and maintenance of roads. That body should be armed with the research that is available in order that it can find the answers we are seeking.
The Minister referred earlier to the public spending code. That is an excellent document which places responsibility on all Departments and State bodies to engage in more advanced procurement techniques and provide more value for money from taxpayers' contributions. It should be fundamental to this code that there be a mechanism by which bodies can research better ways of doing their business. In this case, that would involve an investigation into what is causing the deterioration of our roads, including national, regional and county roads. If we can find a way, by means of a new tax scheme, of imposing a lesser burden on that infrastructure by incentivising truck owners to purchase vehicles that are less impactful, it is an option that should be considered. There is merit in what Senator Barrett is proposing, as there was in his previous amendment. If we are interested in achieving the objectives of the public spending code across all Departments, this proposal should at least be considered.
It is regrettable that we are proceeding directly from Committee Stage to Report Stage of the Bill, because it does not give an opportunity for the Minister to afford amendments proper consideration. I realise this is being done with the agreement of the House, but it does not allow time for a Minister and his or her officials to go off and think about a useful amendment such as this one and perhaps come back at a later date with an alternative wording or some other variation. Consideration should be given to amendments which would serve the public interest and ensure we get better value for money . In this case, the proposal is to incentivise operators of heavy goods vehicles to have a more efficient fleet.
In regard to the taxation of heavy goods vehicles, I draw the Minister's attention to the situation whereby drivers of vehicles from the Republic are being charged €10 by the Northern Ireland Department for Regional Development each time they cross the Border. This is having a detrimental impact on cross-Border business. I am aware of one company which has let go 300 employees in County Donegal and transferred 100 jobs back to Ashbourne in County Meath. Its drivers were being charged €10 each time they crossed into the North at Lifford and again when they exited at Aughnacloy. That was a €20 charge on their journey east and another €20 on their return trip west, which amounted to a levy of €40 per truck transporting finished goods from Donegal to Ashbourne. I realise this is not related to the Bill we are discussing, but it is an important issue.
In responding to Senator Barrett's point regarding the need to review tax policy, the point I was trying to make is that this is not work the NRA was statutorily set up to lead. That does not mean, however, that the work is not happening. In fact, it is happening, but it is not being led by the NRA. The two organisations with principal responsibility for inputting into the development of tax policy in this area are the Department of Finance and the Department of the Environment, Community and Local Government.The previous Minister established an interdepartmental group to review the issue of commercial motor tax and the potential to have road user HGV charges. I inherited this work and I am very much committed to receiving a report from the group. I have met representatives of the Irish Road Haulage industry to discuss the matter. In November 2014 the group launched a stakeholder consultation process which concluded in February and was followed by two further meetings of the interdepartmental group in March and April. I expect to receive its final report in the coming weeks.
I agree that there is a need to examine this issue and that work is happening. The National Roads Authority has been able to have an input into this work. I differ with the Senators on what is the appropriate body to lead the work. Given that the Departments of Finance and the Environment, Community and Local Government have the lead in setting and creating policy in this area, they are the organisations carrying out the work, into which the NRA has an input. I accept the policy need about which the Senators have spoken and emphasise that the NRA has an input to this work. My main reason for not accepting their amendment is that other Government bodies have statutory responsibility for this area and are leading the work. One of the reasons the work is under way was outlined by Senator Brian Ó Domhnaill. I am very much aware of the pressure the local road network is under, as opposed to the national road network. I am also aware that our economic recovery is bedding down. This, combined with the consequences of the abolition of milk quotas and further growth in the timber industry and the type of vehicle that will be on the road, means that there is a need for a policy in this area to be looked at and that work is under way.
On the legislative process, I ask the Acting Chairman to make a ruling. If I do not accept an amendment, will the Bill continue to Report Stage when the matter can be discussed further? If that is the case, I certainly do not have a desire to try to complete the Bill this afternoon. I discussed the matter with the Cathaoirleach and, on the basis of the number of amendments which had been tabled, I thought we would have an opportunity to complete the Bill today, but if Senator Sean D. Barrett wishes to return to these points at a later point, neither I nor, I am sure, anybody else wants to play a role in curtailing his opportunity to do so.
I am indebted to Senator Pat O'Neill and the Minister for what they have said. If we can think of any more ideas to bring forward next week, we will be delighted to do so, within the constraints imposed by the Joint Committee of Inquiry into the Banking Crisis. A thought I had regarding the Minister's second response was that engineering expertise was needed. Is it available in the administration grades in the two Departments the Minister mentioned? It might be something the NRA has, as it is engaged in road design and an expert on the types of vehicle which break up roads, adding to the administrative burden. I will certainly do more thinking in the interim and thank all officers of the House. We will conduct some research during the week to see what we can come back with. I thank the Minister, the officials, Senator Pat O'Neill and the Acting Chairman.