I am delighted to be addressing the Transport Ireland Conference today for the first time since taking up the position of Minister for Transport, Tourism and Sport and I would like to thank the organisers for the invitation to do so.
Today’s proceedings come at an ideal time to discuss the future of transport on this island. As the economy recovers, opportunities and challenges are emerging in the transport sector and these are highlighted in the topics that are on your programme.
The focus of transport policy and the issues we face are beginning to change. After a number of years of coping with the various impacts associated with an economic downturn including lower transport demand and constrained funding, we are now moving in to a phase where our transport system must support a growing economy.
While funding constraints remain and important choices lie ahead, the context within which we think about transport on this island has altered considerably.
I would like today to underline the particular issues that arise from renewed economic growth and constrained investment in the transport sector.
I will highlight some important initiatives that my Department is undertaking to ensure that we make smart, sustainable and evidence-based decisions about the future of the Irish transport system so that we can adequately support and facilitate economic development.
LINK BETWEEN ECONOMIC GROWTH AND TRANSPORT
Transport and the performance of the wider economy are naturally linked.
An efficient and fit-for-purpose transport system facilitates and supports economic growth. It provides the crucial link between communities and workplaces; regions and towns; Ireland and international markets.
However, the relationship works both ways. The economic performance of the country determines to a large extent the level of demand that the transport system must cater for. Each job created increases the number of people commuting to work in the morning. Each extra tourist that visits Ireland needs adequate options to visit our many regions and places of interest. Finally, as trade picks up there is a greater demand for freight links from origin to destination.
These considerations are important given the turnaround that has been witnessed in the economy in the last two years. Following a number of very difficult years for Irish people, families and businesses, the economy is moving towards sustained growth.
The choices made by this government and the sacrifices made by the Irish people have driven this shift. Trends across the main indicators are positive:
Ì In GDP terms it is expected that the economy will expand this year by at least 4%, one of the fastest rates of growth in Europe, following on from last year’s figure of close to 5%.
Ì Unemployment has fallen significantly in the last two years and the Government’s recently published Action Plan for Jobs seeks to underpin the momentum towards full employment.
Ì Last year also saw strong growth in the tourism sector with an extra 600,000 visitors in comparison to 2013, and early indications point towards continued increases in 2015.
ISSUES ARISING FROM RENEWED GROWTH
As we can all remember, the years to 2008 presented significant obstacles which the transport sector had to overcome as the economy grew unsustainably.
At that time, car and public transport demand were at record highs. Freight carried by road, sea and air also tested the capacity of our facilities.
The challenges then were in dealing with this increased demand and its associated impacts of congestion, sustainability and financial costs. While the economy was booming, the transport system had to quickly adapt. Through that adaptation we now have a system with high quality motorways, ports and airports.
Decisions made by this Government are taken with a view to ensuring that the future economic development of this country is on a more sustainable basis.
However, challenges that emerged in transport then are relevant lessons for today and there are a number of key issues that will need to be considered in the short to medium term.
Congestion is a growing problem in our major urban areas. As the economy recovers, more people are accessing urban areas for employment and recreation. At peak morning and evening times we are starting to see delays in journeys due to congestion at specific hotspots in our major cities.
Anyone using the M50 at peak times will be very conscious of this. Indeed, traffic levels between Junctions 6 and 7 are now 35% higher than when the toll barriers were removed in 2008.
It’s also noticeable that attitudes to congestion are changing quickly. Given that the absence of traffic had been one of the starkest indicators of the scale of our economic collapse, its return was welcomed by some….. for a while; but
I’m very aware that this will soon turn to frustration and indeed in some locations is already doing so.
PUBLIC TRANSPORT DEMAND
Public transport demand is picking up significantly and is expected to continue an upward trend. 2014 saw a year-on-year increase of 8 million passenger trips on bus, train and light rail. Both bus companies performed particularly well, with 3.8 million more passengers on Dublin Bus and 1 million on Bus Eireann. Irish Rail carried 1.1 million more passengers, and there were 2.1 million more on Luas.
This welcome development presents challenges in terms of ensuring that the appropriate infrastructure is in place to deal with increased demand as well as funding the PSO provisions to these modes.
For the first time since 2008, the level of PSO contribution for bus and rail services is being maintained in 2015 at the same level as the previous year. I also secured €110 million for public transport as part of the 2014 Supplementary Estimate for my Department, which included €45 million for Irish Rail’s network renewal investment and €50m for bus renewal.
Significant progress has been made with the construction of LUAS Cross City. Plans to implement BRT in Dublin are developing. The key role that bus-based public transport is well-equipped to play will form a crucial element of our response.
However, on-going monitoring of the adequacy of our public transport system will be required as demand picks up.
I am taking the opportunity of this conference today to put it on record that I am fully aware that it won’t be enough just to maintain PSO funding levels if we are to deal with the challenges of increased demand.
Improved public transport, whether new services or increased frequencies of existing services, will require additional funding. The commuter cannot be expected to pay for all of this. We will, of course, continue to seek efficiency improvements but we have to acknowledge as well that very significant efficiencies have already been delivered in our public transport companies in their responses to the funding cuts of the past 7 years.
Therefore, one of the objectives for me and for my Department in the medium term will be to secure some increase in PSO subventions so that additional services can be provided where the pressure points are greatest.
I also need to put it on record that I believe that our support for improved bus services should be given in conjunction with an appropriate degree of competitive tension within the market, in the interests of quality and cost effectiveness for commuters.
Investment and competitive tension go hand in hand.
That is why I am committed to the tendering of 10% of bus routes. As you are aware, the NTA has now initiated the tender process and there are ongoing discussions at the Labour Relations Commission so that employee concerns can be addressed.
There is, of course, another issue concerning bus services which has been topical of late. The development of the motorway network has brought huge benefits for inter-urban bus commuters but with a trade-off in terms of the level of service that can be offered to some intermediate locations – bearing in mind that the inter-urban services operate in a competitive market without PSO subvention.
This has led to changes that have worried rural communities with proposed changes on a number of bus routes.
I would like to acknowledge the work of the NTA in recent weeks in developing reconfigurations of services, including PSO routes, to deal with this issue. We are working to maintain access for rural communities, but we will have to look at new ways of delivering this access. The response to the withdrawal of the number 5 route shows how this can be achieved.
Finally, the shift towards sustainable transport is an on-going requirement placed in sharper focus by a growing economy. More sustainable modes of transportation recognise important health and social benefits as well as mitigating carbon emissions.
Transport makes up 33% of Ireland’s primary energy demand and we must play our role in transforming the way the country uses energy.
That will require imaginative thinking – I am aware that this morning you are hearing about compressed natural gas and the benefits its use as a transport fuel could bring to our environment.
Similarly, there may be merit in looking at initiatives like car sharing schemes that have transformed how many people commute in cities throughout the world.
While much of our work in this area is essentially dependent on technological advances, particularly in terms of fuel use, it is important that we put in place adequate infrastructure to allow this transition to occur.
We have supported the roll out of a national infrastructure for electric vehicle charging and we have made a significant investment in cycling infrastructure and sustainable behaviour programmes.
The success of the Dublin Bikes scheme, which has now been implemented in Cork, Galway and Limerick, has shown us what can be achieved. We must continue our efforts to ensure that the growth in transport demand is as sustainable as possible.
FUNDING CONSTRAINTS AND SFILT FINDINGS
Addressing the projected growth in transport demand needs careful planning, analysis and investment.
While transport policy may be shifting towards dealing with growth rather than decline, public finances dictate that funding for transport is likely to be more constrained than we would wish for some years to come.
This only emphasises the need for smart decision making and ensuring that the money we do invest is spent on the right projects.
My Department has carried out an exercise to define a new Strategic Framework for Investment in Land Transport.
This work, which I will bring shortly to Government, was overseen by an expert steering group and included a public consultation to take into account the views of the public and the relevant stakeholders across the country.
Later this morning, Laura Behan will be giving you a detailed presentation on this work. However, it’s an important context-setter for what I have to say so I will give you a very quick summary.
As an overall framework for guiding investment planning in this area, it set out firstly, to provide an evidence base for prioritising the constrained funding we have available for land transport.
Secondly, the work examined current levels of investment spending when set against our historic average, our international competitors and our estimated minimum funding requirement.
What I would like to highlight today are the report’s findings in relation to the current level of underfunding in the transport sector. It is these findings which underscore the challenges we face in meeting the growing pressures associated with economic growth.
Historically, Ireland has invested just over 1.1% of GDP annually on average in land transport. Between 1999 and 2011 the average level grew to 1.4% of GDP as significant improvements were made to the network, most notably the construction of our motorway network. By 2012, however, this had fallen to 0.7% and undoubtedly has fallen further since.
At this moment we are investing in our system at a level well below what we normally do despite the increased pressures that we are encountering.
Part of the work on the Strategic Framework also estimated the steady state cost of maintaining our transport system, the minimum amount of investment required to allow the physical assets relating to the transport network to continue to operate as they currently do.
The report finds that €1.3 billion annually is the minimum amount of Exchequer funding required. In 2015 total Exchequer investment spend on land transport amounts to around €1 billion meaning there is a €300 million gap to just keep things as they are, without any investment in additional capacity.
Therefore, investment in transport in Ireland is below both its long run average and the identified minimum amount to maintain the existing network.
It is clear that issues are emerging as a consequence of the welcome growth of the economy including congestion, meeting public transport demand and dealing with increased freight. It is also clear that there is underinvestment in transport without likely relief from this constraint in the short term.
More than ever, we need evidence-based decision making, creativity and innovation and even further efficiency. Difficult choices will have to be considered by all stakeholders in the transport sector.
It is in this context that I would like to briefly outline two key forthcoming developments: the Rail Policy Review and the Capital Investment Plan.
RAIL POLICY REVIEW
The proposed strategic framework for investment in land transport recommends the development of a new rail policy. A new policy needs to have regard to social and environmental considerations uniquely addressed by rail, as well as the economic and investment context established in the Framework.
My Department is working with the NTA to progress this proposal. I envisage thata public consultation process will take place in the coming months on the current and future role of rail in Ireland.
We need to communicate clearly to the broader public where rail’s greatest strengths lie and where rail is perhaps less effective, as compared to bus services. We must also communicate the extent of investment required for the rail network.
I expect the process to focus on issues such as current usage, transport needs, competition from other modes, wider associated benefits and financial constraints. All of these issues will have to be taken into account in formulating our new rail policy.
CAPITAL SPENDING PLAN
I turn now to the new Capital Investment Plan, which the Government will finalise before the Summer. For obvious reasons, the level of funding available in recent years for road and rail projects had to be significantly reduced. For the most part funding allocated for land transport under the current capital plan to 2016 has been used to protect existing road and rail assets and maintain safety standards.
This level of funding available, if maintained over the medium term, is insufficient to adequately meet required standards and will lead to more costly renewal at a later stage.
Notwithstanding the reduced resources, some funding has been set aside for some essential projects which have a sound business case and add value to the existing network such as LUAS Cross City.
Funds have also been made available for the on-going development of smarter technologies such as the Leap card, Real Time Passenger Information (RTPI) and the National Journey Planner.
These projects are helping to make public transport more attractive and support a modal shift from the private car to more sustainable transport modes, an essential response in urban areas.
Roads funding over the last few years has been mainly focused on the maintenance and rehabilitation of road pavements and bridges. Some minor works projects including safety schemes have also been advanced.
Despite very challenging financial circumstances the Government did commit itself to a PPP Infrastructure Stimulus Programme in 2012 which is now coming to fruition with a good market response to the projects.
Two road PPP projects are currently under construction and two further projects are at an advanced stage in terms of procurement.
The Government is now preparing for a new medium-term capital plan to commence in 2016. Given the improving economic situation I will be making a strong case for additional funding for land transport.
Using the evidence we have assembled in preparing our Strategic Framework, I will be pointing to the current underfunding of our steady state maintenance coupled with emerging constraints arising from increased demand in the growing economy.
The case is strong for a substantially larger transport funding envelope.
In preparation for the capital plan the public transport requirements for the GDA are currently under review. I expect to have a report shortly from the NTA on the review of the Fingal /North Dublin corridor.
That output will then require careful consideration in tandem with other analyses being undertaken, including the updating of a business case for the DART Underground project and the work being carried out by the NTA in the preparation of a draft Transport Strategy for the GDA. Iexpect to finalise this analysis by mid-year.
If any major project is prioritised then the cost and availability of funding will be a key determinant of timing of delivery. I would hope to include funding to progress at least the planning and design in the capital plan.
Any additional funds in the immediate term will be prioritised to improve performance and increase capacity of bus services (including development of Bus Rapid Transit). This will include funding to increase bus fleets, for additional bus lanes and for other bus priority measures.
I am also committing funds to open the Phoenix Park Tunnel in 2016 to bring some scheduled passenger services on the Kildare Line to Connolly Station, to improve the DART service increasing frequency and capacity, to build additional and improve existing cycle lanes and to continue with the smart technological upgrades which enhance public transport.
I will also be seeking to increase funding for the regional cities to build on public transport, cycling and walking developments there over recent years.
For roads the priority for additional capital funding will be on maintenance and renewal of the network. Any additional investment will be focussed on addressing bottlenecks and safety issues, improving access to major ports and airports and addressing the needs of industry.
It will also be linked to public transport investment where required so as to ensure that transfers between different modes of travel are as seamless as possible.
CONCLUSION
The analysis and work we are undertaking in these areas is an example of how key strategic transport policy is evolving. The paradigm has shifted from dealing with economic decline to supporting growth. These developments present different challenges and opportunities, some of which we have faced before.
In the face of these challenges, and on-going constraints in funding, it is imperative that the decisions we take today, to enhance transport’s role in this country’s development, continue to be smart and evidenced-based. Moreover, it is clearer than ever that there is a strong case for more well-targeted investment in the transport system. Such investment is critical to keep Ireland moving.
Thank you.