Seanad debates

Thursday, 7 March 2019

Nithe i dtosach suíonna - Commencement Matters

Transport Costs

10:30 am

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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As ever, I welcome the Minister, Deputy Ross.

Photo of Kevin HumphreysKevin Humphreys (Labour)
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I thank the Minister for attending. He always makes himself available to take transport issues in the Seanad and I thank him for that.

I tabled this matter because of a concern about overruns. In the case of the national children's hospital, which was originally budgeted at €650 million, for example, we are looking at a cost of possibly €1.7 billion or more, an increase of 260%. Hopefully, this will not happen. If overruns of the same scale were to occur elsewhere, the cost of BusConnects would increase from €2 billion to €5.2 billion and that relating to MetroLink would increase from €3.8 billion to a possible €8 billion. There have been significant increases in construction costs and increases of between 12% and 20% in labour costs. Previously, there were substantial overruns when the ticketing system was realigned with the Leap card. The latter is a cashless payment system.

In the context of the core bus corridor project, the National Transport Authority, NTA, originally estimated that the cost of compulsory purchase orders, CPOs, would be between €22 million and €24. That appears to have been a gross underestimate and the new cost is estimated at approximately €32.5 million. In some areas of the Dublin Bay South constituency, the devaluation figure relating to properties is approximately 25%. Without legal fees, valuation and reinstatements, we are looking at approximate devaluation of €500,000 per unit. On the basis of a conservative estimate per unit, the land take could cost up to €500,000.

I am concerned that the Minister should ensure that there are adequate checks and balances in respect of the budgets for BusConnects and MetroLink. We have not seen the estimates relating to the change in the line for the MetroLink on the northside and the impact the latter will have on the overall budget. What I do not want to see is that we go so far and the overruns are so extensive that this project is dropped like a donkey. I certainly do not want to see it dropped like a dead donkey. I am anxious to hear what adequate checks and balances are included to monitor both the budget and to what is happening in the context of overruns.

Photo of Shane RossShane Ross (Dublin Rathdown, Independent)
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I thank Senator Humphreys for raising this issue. I understand his concerns. I hope I will be able to reassure him. I ask the Senator's indulgence for a moment. I will give him my script afterwards. I brought some copies along and I think I left them in the anteroom. I will give the Senator my script afterwards and I will try and answer his questions off-script as well.

I agree completely with the Senator that we need to ensure rigorous and appropriate monitoring of mega-projects, such as BusConnects, the DART expansion and MetroLink. The Government plans to invest billions of euro of taxpayers' money in public transport over the next ten years. Recent events have obviously made us even more conscious of the need to be forensic in our examinations. I know that the investment to which I refer is welcomed by all sides of this House. While we can all have opinions about particular issues within these mega-projects, I would hope we could all agree on their absolute necessity. However, we need to ensure that the funding involved is spent wisely and well and that, ultimately, the taxpayer gets value for his or her hard-earned money.

Delivery of these projects and programmes is led by the State agencies responsible, primarily the NTA in these cases, but with funding provided by my Department. That funding is subject to the public spending code, which sets out the appropriate structures for monitoring and management of publicly-funded capital expenditure programmes. My Department has long had responsibility for significant capital expenditure programmes and, obviously, we have well developed monitoring and oversight systems in place already. We absolutely recognise that these mega-projects bring unique challenges and we need to keep our governance arrangements for the years ahead refreshed and effective. I assure the Senator that my Department is keenly aware of the need to maintain appropriate oversight as these projects really take shape over the course of this year and beyond. We can all recognise that this governance will need to be flexible and will take different forms at different stages - just like the projects themselves.

Not only will there be different phases over the life cycle of these projects in respect of which different skills will be required at various times but also the projects differ considerably from each other. BusConnects and the DART expansion, for example, are both programmes of capital expenditure made up of many different projects, each required to give the overall benefits expected of the programme, whereas MetroLink is in some ways unique. MetroLink is the development of a largely underground link from the city centre to Swords and a connected requirement to increase capacity along the Luas green line.

Delivery of these projects and programmes will be led by very experienced State bodies such as the NTA and Transport Infrastructure Ireland, TII. They are widely recognised as having successfully implemented a number of significant public transport projects through the years.Of course at a departmental level we need to monitor and oversee delivery in line with the public spending code and also advise the Government in its role as the ultimate sanctioning authority at certain key decision points. At the relevant points along the way, we will need to augment our skills with specialised knowledge to ensure we are providing the best advice we can to the Government. We have been discussing what those requirements are with relevant stakeholders in recent months. I assure the Senator, and the House, that the good governance of these, and indeed all projects and programmes in my Department, are of the utmost importance and we will strive to ensure the taxpayers' interests are protected at all times.

I will add to that because I want to give more specific information to Senator Humphreys in response to what he said. When we get a business case in such situations, we normally tear it apart and then we go to the Government with the budget. If one takes, for example, the Irish Rail situation at the moment where there is €480 million budgeted for it for the coming year, the independent Commission for Railway Regulation, CRR, meets with my Department every quarter. The National Transport Authority, NTA, on the other hand, on projects like the ones mentioned by the Senator, namely, the metro and BusConnects, meets on a monthly basis to discuss the budgets. It looks at all the expenditure, tracks it and it reports to the Department of Public Expenditure and Reform if there is any diversion beyond a margin which I think is about €100,000. The Senator should not quote me on that but it is something of that order and that is reported to the Department of Public Expenditure and Reform if there is any diversion or wavering outside the set parameters. Expenditure is monitored strictly, on a monthly basis in the case of the NTA, while Irish Rail monitors its projects on a quarterly basis. Senator Humphreys can be absolutely certain that we are looking out for any kind of diversions from the original budgets and they will go straight back to the Department of Finance-Department of Public Expenditure and Reform.

Photo of Kevin HumphreysKevin Humphreys (Labour)
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As the Minister mentioned Irish Rail, I compliment it as it has brought a number of significant projects in on time and within budget. Irish Rail's record in that regard may be a good example for the rest of the public sector.

I am a little cautious in response to the Minister saying it is the responsibility of the NTA to report to the Department of Public Expenditure and Reform. It must be the responsibility of the Minister. It is a significant investment in public transport, which is badly needed, and we must monitor the budget extremely carefully. I believe there have already been significant overruns. Could the Minister refer in his response to the significant overruns that have already been indicated in relation to the core bus corridors? I imagine the overruns have already exceeded €100,000.

An amount of money has already been spent on those projects and concern has been expressed in regard to that. I understand they relate to Government policy in terms of the 2040 plan. I am also concerned by the fact that some Fine Gael Ministers and backbenchers have said they have no confidence in BusConnects and that they will resist any further progress on it. If Fine Gael is saying it no longer has confidence in BusConnects then let us stop spending further money on it. I have extensive quotes from various Fine Gael Ministers and Deputies saying BusConnects is not going ahead. If the project is not going to proceed because the Minister's partners in government no longer have any faith in it then for heaven's sake let us not spend taxpayers' money and flush it down the drain. If the project is to proceed, let us make sure that there is support for it from the Government parties.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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The Senator has had an extra minute.

Photo of Shane RossShane Ross (Dublin Rathdown, Independent)
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I will respond to that extra minute. You are very indulgent, a Leas-Chathaoirligh.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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I assure the Minister that I will be equally indulgent with him.

Photo of Shane RossShane Ross (Dublin Rathdown, Independent)
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I know that. Of course you will. In fact, I would rather you would cut me off very quickly given what Senator Humphreys said.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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I will oblige the Minister if he wishes.

Photo of Shane RossShane Ross (Dublin Rathdown, Independent)
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BusConnects is going ahead. Let there be no doubt about that. The Senator should be aware that a consultation process is going on. Many people, including Ministers, are not terribly comfortable with what is happening in their constituencies, which is inevitable in a project of this sort. I have said to my colleagues, I have even said it at the Cabinet meeting, and I say it openly here, that it is open to them to go to the public consultations and I hope they will. They can suggest improvements to some quite radical steps which are being taken in their area, which are not universally popular. It will be difficult in certain circumstances for a project of this sort to go ahead and there will be resistance in certain places, but for the greater good BusConnects will go ahead. It will reduce the commuting times for getting people to work and it will hopefully get more people not just into buses but also on their bicycles. In the meantime, the public consultation on BusConnects is going ahead on both the network and on the corridors and there will be continuous consultations. We will not have the last ones-----

Photo of Kevin HumphreysKevin Humphreys (Labour)
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What about the overruns?

Photo of Shane RossShane Ross (Dublin Rathdown, Independent)
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I cannot comment on the initial cost overruns.

Photo of Paul CoghlanPaul Coghlan (Fine Gael)
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I thank the Minister and Senator Humphreys. I was equally indulgent to both of them. That concludes the debate on Commencement matters.