Speech by Minister for Transport, Tourism & Sport Leo Varadkar to the Transport Ireland Conference 2014 in Chartered Accountants House, Dublin

I am delighted to be back with you for this year’s Transport Ireland Conference. I’d like to thank the organisers and the other speakers for facilitating me by changing the running order this morning. I was answering Parliamentary Questions in the Dáil earlier and couldn’t be here for the opening slot.

As you know this is my fourth year addressing this gathering, and I have always enjoyed this opportunity to reflect on Irish transport policy.

The theme of my address this year is romanticism versus realism. A governor of New York once said that politicians campaign in poetry, but must govern in prose. I suppose the same could be said for how we live our lives. There is always a tension between the romance and idealism of what we would like to do, and the realism of what we can actually achieve. A good politician should be both – pragmatic and realistic, but without losing sight of the ideals that inspired them to enter politics in the first place.

We must remember what incredible changes have taken place in the world of transport over the years. In the nineteenth century it used to take Daniel O’Connell five days to travel from Derrynane in Kerry to his work in Dublin. Today the journey can be made in five less than hours. Parts of the country that were once a challenge to get to can now be accessed much more easily because of better and safer roads, and faster methods of transportation.

Therefore, it is no wonder that transportation – and its advances – has been such a preoccupation for our poets. Recently, I read a wonderful unpublished poem by Seamus Heaney, our late, great poet laureate, about the joys of transport. In this poem – only 4 lines long – he reflected on the joys of travelling by train:

Like carriages ran through our fields at night
Like promises being speedily withdrawn.
Awakened by train-noise, well-placed, suburban,
I ask myself is this where they were going.

When I addressed you last year I was cautiously optimistic that the increase in visitor numbers and passenger numbers was a sign that The Gathering would be a great success. And so it proved. 2013 was a very good year for this country in terms of tourism. The best since 2008 and a record year for North America and the long-haul markets.

Partly this was because of the Gathering, but there was also the Government’s decision to reduce VAT to 9% and introduce a fuel rebate for transport operators alongside important air access. The tourism industry has been one of the key drivers of our economic recovery and of course it depends critically on the range and competitiveness of the air and sea access routes into Ireland.

Visitor numbers to Ireland increased by 7% in 2013. I am similarly optimistic for 2014. Indicators are positive, new air and sea routes have been added, hotels and tour operators are extremely positive about prospects for the coming season, and the latest statistics show that in the three months from December to February, overseas visitors grew by 11%. Our target for 2014 is an increase of 4%. This suggests that, as we hoped, the impact of the Gathering and our other policy initiatives has kick-started a period of sustained growth in visitor numbers. Yesterday the Government honoured our election commitment to abolish the travel tax in response to a major increase in airline capacity. Over 20 new routes have been announced since it was signalled on Budget Day. I’m pleased also that the newly-independent Shannon Airport halted the decline in its passenger numbers, recorded modest growth in 2013 and has added significantly to its routes for 2014. Dublin saw growth of more than 6% and growth accelerated in the final few months of the year.

Turning to roads, you will all know that our ability to invest in roads projects has been very constrained, with severe limits on Exchequer funding and with PPP markets closed off to us for several years. For this reason, we have had to prioritise maintenance and renewal. Nonetheless, since we last met construction began on the first new transport PPP in five years – namely the combined Arklow-Rathnew and Newlands Cross schemes. The Gort-Tuam PPP will start construction this year and more schemes are at earlier stages in the procurement process.

As recent events have shown, I take a strong personal interest in road safety and it was distressing to see an upturn in fatalities last year after seven successive years of decline. The figure is still very low in comparison to what went before – indeed it’s less than half that for 2005 – and I’m glad to say that, so far in 2014, the number of fatalities is again falling. However, there is no cause for complacency. Only vigilance.

All of those who have a role to play – legislators, public authorities, law enforcers, the courts and, most importantly, drivers, cyclists and pedestrians must remain focused on the measures that need to be taken to avoid needless death and injury on our roads.

In public transport we have the start of utility and heritage works for Luas Cross City and I believe this project will make a significant contribution to providing a better integrated transport system in the city.

I am personally chairing a high-level group involving a wide range of stakeholders focussed on ensuring that the work proceeds smoothly while minimising disruption and congestion in the city.

My officials, advisors and I have worked closely with the CIE companies in stabilising their finances. The measures taken gave rise to strike action in the bus companies, but the reality is that reductions in cost base are an essential element of what is required to secure the future of both the companies. Relying only on fare increases is not sustainable and there is no capacity for increased Exchequer subsidies. The companies also need to grow their businesses again. I have set a 2014 target of a 2% increase in passenger numbers or 5 million passenger journeys across the public transport sector as a whole and Alan Kelly and I are meeting monthly with the NTA and the public transport operators to monitor their efforts to achieve this.

In recent months, the NTA announced its plans for the future operation of the bus PSOs, including the tendering of 10% of routes – specifically to Dublin local and orbital routes, Waterford and some midland routes.

Contracts will go to the tenderers that can provide the best service, be they Dublin Bus, Bus Eireann or any other provider. This is not about saving money, but rather it is about providing a better service for passengers at the same cost to the taxpayer. It will also create a benchmark for the State-owned bus companies in terms of costs and quality of service.

In terms of policies, we have made some breakthroughs. The National Ports Policy, after a very long period in gestation, has finally emerged and we now have a clear framework for the future structure and governance of our commercial port sector.

Over the coming months, we will complete our work on the first national Aviation Policy for Ireland in over 20 years. The new national aviation policy will chart the road ahead for the expansion of Irish aviation, making it more competitive, and tackling barriers to growth and entry.

The new aviation policy will guide decision making on aviation over the next 20 years or so and will provide the industry with certainty and an incentive to plan and invest for the future.

I will shortly publish a draft of the policy to provide a further opportunity for stakeholder input before finalising and adopting the policy later this year. We will be re-stating some elements of existing policy, for example on airline competition and making new proposals in other areas for example future funding arrangements for regional airports, regulation, ownership and access.

The draft policy will be published on my Department’s website shortly and I encourage those interested to use this opportunity to help shape the future of aviation in Ireland by providing us with your views on the draft.

A source of ongoing tension between Aer Lingus, the state airports and their employees at the moment is the aviation pensions scheme. I do not control the scheme and cannot direct or impose a solution though I am kept aware of all the issues. A resolution needs to be found by agreement among the members of the scheme, the employers, the Trustees and the Pensions Board – but the Government has, along with IBEC and ICTU, nominated an Expert Panel to provide some assistance by examining the IR and financial complexities. Ultimately, the companies will have to put in more money and the beneficiaries will have to accept that they will receive less from the scheme that they were promised or expected – just as has been the case in all defined benefit schemes which became underfunded in the private and semi-state sector. IASS is no exception. I hope that the work of the Expert Panel will enable the parties to move towards an agreement and help find a solution.

But I don’t want this speech to be all about the last year or so. It’s an easy temptation now, we are more than half way through the Government’s term of office to seek to justify one’s work or contribution.

My preference today is to look forward rather than back, and to share with you some thoughts on what’s going to happen, and indeed on what I’d like to see happen.

Last year I made a number of specific commitments at this conference. For example, I promised that within the year the troika would be gone, that unemployment would fall below 12% and we would restore our economic sovereignty. We have kept that promise.

Today I will make some other commitments.

First of all, I am strongly considering a major change in the funding model for regional and local road maintenance. I have already given local authorities more flexibility than ever before to target funding to appropriate repair and rehabilitation schemes in local areas. In principle, I would like to give them even greater, perhaps even full, discretion over their spending of State grants for roads in 2015. I believe local authorities and their elected members are best placed to decide where best to deploy resources locally.

This would be in keeping with the Government’s overall programme of local government reform. Funding could take form of a block grant and local authorities would have a free hand on how to spend it provided they operated within guidelines laid down in national roads policy. My Department would continue to fund strategic schemes that would be too expensive for a local authority. The details of how all of this might work are being teased out at present by a group of officials from the relevant Departments. The final decision will be taken in the context of wider Government consideration of the funding needs of local authorities and the various revenue sources which they now have.

One of the most important issues in transport policy is the need to plan properly for the long-term public transport needs of the Greater Dublin Area. We’ve had to have a fresh look at this, following the deferral of previously-planned major projects as a result of the fiscal crisis. The underlying requirements haven’t changed – our capital city and the surrounding area needs to have an efficient, integrated transport system that will underpin competitiveness, sustainability and the quality of life of the two million people who live or work here.

Late this week or next week, I will launch the NTA’s Integrated Implementation Plan which sets out their programme of investment and development in the Greater Dublin Area for the next five years. It has been the subject of public consultation and I have recently approved it as required under the relevant legislation.

Key priorities in capital investment include the completion of Luas Cross City, the purchase of new buses to keep the fleet fresh and the re-opening of the Phoenix Park Tunnel to improve rail access for people travelling between Kildare and the city centre. The Plan will also build on investment in public transport, cycling and walking facilities in key population centres. Within the period of the Plan, the proposed Bus Rapid Transit Network will be designed in detail and brought through the requisite statutory processes.

The NTA is also proposing a technical consultancy to assess the long term transport requirements of the North Dublin/Fingal corridor, extending from Finglas to Malahide and including Dublin Airport and Swords. This review will examine existing proposals as well as other options for a rail-based transport solution to meet the area’s needs.

The NTA Plan also sets out measures to improve services and charts a course for greater integration of all the modes of transport through ticketing and fares, customer information, complementary services and improved accessibility.

The Plan is an important and comprehensive statement of the NTA’s policies and implementation measures for the Greater Dublin Area over the period to end-2018. It’s in line with the policy and funding provisions contained in the Government’s 5-year capital plan to 2016 as well as projected figures for 2017 and 2018 consistent with existing levels of capital funding.

That Plan will also be considered in the context of the Government’s next capital plan. As the current Plan runs to end-2016, one might expect that work on a new Plan would get underway next year with a view to publishing it in 2016. However, my own strong preference, and one which I will be impressing upon my Cabinet colleagues, is that we need to move that timeframe forward.

I would like the preparatory work to be done this year so we could have a new Investment Framework commencing next year. As economic growth returns, so too will the bottlenecks and constraints which prevent us realising our full potential, and we need to have projects in place to tackle these.

We also need to renew existing infrastructure before it requires even more costly reinstatement. Many of these requirements are in transport, but transport projects tend to have a long delivery time. Right now, we have no visibility on what we may be able to invest beyond the end of 2016, which is now just 33 months away. We need to address that.

Whether or not the Government brings forward a new capital plan in 2015, we will certainly have to decide by mid-2015 if we are going ahead with DART Underground. This is a consequence of the recent High Court Judgement that rules that only 18 months rather than seven years can be allowed for the serving of Notices to Treat for the purpose of compulsory purchase of property.

The preparation of a new capital plan will be greatly informed by the work nearing completion in my Department on a Strategic Framework for Investment in Land Transport.

This is intended to ensure that investment decisions in the transport sector will in future have a much more rigorous evidence base than was the case in the past – so that we prioritise the projects which will offer the greatest economic and social return for the resources we can provide.

An integral part of this work is to understand and quantify the scale of future capital investment required to maintain our transport assets to the appropriate standard. In addition to this, we need to understand potential future demand levels and supply constraints – and, in particular, where they are most likely to occur. Only then can we assess the investment levels required to cater for demand growth and demand change. I appreciate that one can’t state objectively that there is a “right” proportion of GDP that should be devoted to transport capital investment. However, I can say that in every year from 2001 to 2010 the figure was over 1 per cent whereas right now we’re at just around one-half of a per cent. That is clearly too low.

The Strategic Framework is exactly what is says on the tin – it’s a framework to help determine the broad investment programme. Specific projects will still be subject to individual appraisal of their costs and benefits.

There will be a public consultation on the draft framework to ensure that wider stakeholder needs and concerns are fully addressed. I encourage you to get involved in that when the draft is published later in the year.

The framework will also assist in determining, over the long term, the most cost effective options for achieving our low carbon objectives. Aligning investment levels with growth in demand will be vital to supporting modal shift and reducing overall dependence on the car, particularly in large urban areas.

I know you have already listened to a presentation earlier this morning on the development of a low carbon roadmap for transport. I am satisfied that the roadmap will help to further embed this low carbon vision for transport and will help to create the right conditions for the vision to be realised by 2050.

I want to finish this address by leaving you with some important thoughts on the future of the railways. I may risk appearing too pessimistic on this subject, but I have a real concern that there is a perception in some quarters that ultimately the Government will protect and fund existing rail services at any cost. That may be the romantic answer, but it is not realistic.

When I was a kid growing up a favourite book of mine was Agatha Christie’s ‘Murder on the Orient Express’. I loved my train set, loved old movies and the romance of steam engines pulling into a beautiful Victorian Station and, like many people I dreamed about travelling across beautiful country-sides in the comfort of a train. I still like to travel by train as I did yesterday. I suppose it is no surprise that train journeys have inspired so many of our poets. At the beginning, I quoted from Seamus Heaney. And over the St. Patrick’s Day weekend I visited Atlanta and Savannah, and had the pleasure of visiting the Heaney exhibition at Emory University. There I read some great poems by him about train journeys that had inspired him. In ‘Electric Light’, he revealed his memories of:

‘the brow-to-glass transport of a morning train, the very “there-you-are and where-are-you?” of poetry itself’.

As a child Heaney and his siblings would turn their sofa into a make believe train, and he later reminisced about this in verse, in his poem ‘A sofa in the forties’.

The villain of the Irish railways – at least in the popular imagination – is Todd Andrews. Andrews closed a dozen railway lines that were no longer viable in the age of the motor car, a decision that he is still criticised for today. But Andrews – a student of Patrick Pearse’s at St. Enda’s, and a man who had fought in both the war of independence and the civil war – was a realist rather as well as a romantic.

The story is told of a delegation from Kerry who visited Todd Andrews to complain about the closure of one of its railway lines. After a lengthy discussion of the issues, Andrews asked them how they had travelled, and if they had come by rail. With some embarrassment, they admitted that they had travelled by car. The meeting soon ended, and the railway line was closed.

Andrews’s decision to close the Harcourt Street – Bray suburban railway line proved particularly controversial, and was even viewed with some suspicion by his party leader and Taoiseach, Eamon de Valera. Andrews’s tongue-in-cheek explanation also provoked a reaction – he said he got tired of watching a few privileged Freemasons from Foxrock using it to go to their meetings in Trinity College at the taxpayer’s expense. Closing the Harcourt Street line was probably the only one he got wrong.

The decline of the railways especially the non-commuter lines is a cause of concern. But the question of who is to blame is not an easy one to answer. It is a bit like an Agatha Christie murder mystery.

And if I could return to ‘the Murder on the Orient Express’ – exactly 80 years after its publication – in the book there is no one murderer – everyone did it. The same answer applies to the railways. We all did it.

We all did it by finding other methods of travelling – cheaper or faster or both. We admire the romanticism of the train, but choose the realism of other forms of transport. Express buses can make the journey from Cork to Dublin city centre in under 3 hours. By train it is about 25 minutes faster, but only takes you as far as Heuston Station. The journey from Galway to Dublin is as fast by bus as it is by train.

The romantic in me would like to invest in high-speed trains to make the journey faster, but the realist recognises that the investment cannot be justified especially not when there is no guarantee it would make a difference.

Unfortunately rail is an extremely expensive system to operate and maintain. It takes up 50% of the PSO subvention but only accounts for 15% of passenger journeys. And that’s just the PSO – fuel, payroll and general maintenance. It does not include rolling stock or hard infrastructure. And the cost base remains too high, despite the efficiencies that have been achieved.

There is little scope for fare increases. Nor is there scope for increased subvention and, in any event, if more PSO money were available the figures would suggest it would be far better put into bus services.

Our current policy is to make Irish Rail more cost effective, maintain services at current levels and perhaps make a few improvements if we can.

You’re all aware that there have been protracted negotiations on cost-reduction measures in the company which are now referred to the Labour Court for hearing later this week. I am genuinely worried that the employees, and maybe even the company, do not appreciate what is at stake here. The purpose of our public transport system is not to move buses and trains around the country. It is to get people from A to B, whether by bus, train or taxi. If our current rail services are to survive, they must be competitive with alternative modes. That is clearly a big challenge for inter-urban rail at present.

If the current policy fails because of industrial unrest or because of continuing decline in passenger numbers, we will have to accept that some or indeed many of our rail services are no longer sustainable. As a consequence, we will have to transfer funding away from them and to alternative modes that offer better value to the taxpayer and the farepayer. That will sadden the romantic in me – but the realist in me will know that we may be left with no choice.

I look forward to the discussion.