Dáil Éireann - Volume 610 - 24 November, 2005

Other Questions. - Rail Services.

  9. Mr. Boyle asked the Minister for Transport the measures he has put in place to the operators’ licences and for the allocation of rail track access in a fair and unbiased manner following his recent announcement that his Department is in discussion with an international open access freight operator. [36056/05]

  15. Mr. Stagg asked the Minister for Transport if he proposes to reverse his policy in respect of the subsidisation of rail freight business in Ireland. [35892/05]

  19. Mr. Hogan asked the Minister for Transport the progress made to date in 2005 by his Department on the introduction of private operators into the rail freight sector here; his views on the entry of such operators; if he is in talks with such operators; if he is optimistic that private sector involvement in rail freight will happen in the future; if so, when; and if he will make a statement on the matter. [36035/05]

  25. Mr. Boyle asked the Minister for Transport if representations have been made to Iarnród Éireann regarding the recent cancellation of all container trains from Sligo, Cork, Limerick and Mayo to Dublin Port; and the reason unlike other countries in Europe, Ireland provides no incentives to industry to use rail or to operators to enter the market. [36055/05]

  39. Ms O’Sullivan asked the Minister for Transport the structures that he has put in place to provide licences to potential open access freight operators; the organisation that will grant track access to any open access freight train operator and the criteria that will inform decisions in this regard. [35890/05]

  98. Mr. Eamon Ryan asked the Minister for Transport the reason, contrary to EU policy, his Department is actively overseeing the transfer of container traffic from rail to road, of which the closure of the western rail corridor between Limerick and Sligo is symptomatic. [36054/05]

[1910]   Mr. Cullen: I propose to take Questions Nos. 9, 15, 19, 25, 39 and 98 together.

The licensing and allocation of track access for rail operations are governed by two EU directives which have been transposed into Irish law: SI 537 of 2003, the European Communities (Licensing of Railway Undertakings) Regulations 2003 which transpose into Irish law EU Directive 2001/13 establishing a mechanism whereby an operator can apply for a licence to operate as a railway undertaking; and SI 643 of 2004, the European Communities (Allocation of Railway Infrastructure Capacity and the Levying of Charges for the use of Railway Infrastructure and Safety Certification) Regulations 2004 which transpose into Irish law EU Directive 2001/14 providing for the allocation and charges for track access.

These regulations establish a fair and transparent system for granting licences and allocating track capacity and set out the criteria to be considered in awarding a licence and in granting track access. These regulations are to be used where member states decide to open their market. However they do not create an obligation on member states to liberalise services by having more than one railway operator.

Directive 2004/51/EC on the development of the Community’s railways creates an obligation on member states to open their rail freight markets to competition from 1 January 2006 in the case of international freight and from 1 January 2007 for domestic freight operations. Significant progress has been made on the transposition of this directive and it will be finalised in the coming weeks.

As Minister, I am the regulator and I am responsible for granting licences, while Iarnród Éireann, as the operator of the railway infrastructure, is the infrastructure manager and is responsible for the allocation of track capacity. The provisions of the directive will guide me in considering applications for licences. An intending freight operator dissatisfied with the terms and conditions offered by Iarnród Éireann for access to the rail network has a right of appeal to me as the regulator.

While no formal applications have been received for a railway undertaking licence or track access, my Department has received a communication from an operator stating its intention to establish itself as a freight operator. My Department has been in touch with the operator and a formal application is expected in the new year.

I welcome the development of a liberalised rail freight market, as the emergence of alternative fright providers has the potential to increase capacity and choice for freight users. It will also increase choice for Irish exporters moving goods by rail within the rest of the European Union.

[1911] With regard to the subsidisation of rail freight, as I said in reply to Question No. 5, my policy priority remains that additional Exchequer funding should be focused on the expansion of passenger services. However, I am open to considering proposals from interested parties on innovative or new approaches to rail freight where a tangible return on Exchequer investment can be demonstrated and which compares favourably with investment in passenger services.

Iarnród Éireann’s decision to stop proving a single unit container service was a business decision made by the company. Container freight levels had dropped to about 35 containers a day when the service ceased in July of this year. Container freight traffic is only commercially viable on a large scale. Iarnród Éireann estimates that 18 40-foot containers are needed for a commercially viable train load. The company would welcome proposals for full train load container freight services from any quarter.

  Mr. Eamon Ryan: I will be brief, in recognition of the fact that the Minister has dealt with part of this issue during Priority Questions. Could the Minister make a bold move in this area rather than waiting for operators to come to him with expressions of interest? Can he advertise and set out a policy framework to encourage interest, rather than inquiring about a European directive regarding compulsion or requiring operators to come to us? Can he not spell it out that the Government is trying to encourage, support and develop this area? I am interested to see if he is willing or able to take that approach rather than wait to see who comes along and makes an application.

On the Minister’s statement that he does not want to support rail freight service because he wants to concentrate on passenger services, does he agree that the connected issue about road safety is increasingly important in this area because road freight helps create accidents, so there is motivation for us to subsidise, support and develop rail freight which is a safer transport mode which also has environmental and social benefits? What will it take for the Minister to revise the policy he has of not supporting rail freight services when most other EU countries are quite willing to support them?

  Mr. Cullen: That is not the case. I have enunciated my priority to the Deputy but I am not going to start liberalising the market by suggesting to the market generally that there is a pot of taxpayers’ money to be shovelled out to it willy nilly. That is not the route I am taking, and I hope the Green Party will support me in that. New and innovative ideas may well come forward which may involve new ways of looking at support for rail freight and, if so, I will be happy to consider [1912] them. However, at this point I am not going to make the opening gambit of market liberalisation by asking the market to come to us with a promise of a great deal of taxpayers’ money. I will not approach the issue in that manner.

Regarding the active participation or pursuit by my Department or me in encouraging rail operators to the Irish market by setting out a framework, we are well ahead of some countries in embracing the directives. It is known that the directives take effect in two ways from 1 January 2006, just a few weeks away, and 1 January 2007. I have made it clear that the Government welcomes any additional carriers onto the rail network. Already there are indications of at least one company being interested.

  Mr. Eamon Ryan: Investors look at the overall climate, so the problem is that anyone looking at this country now would see that those in power have only been interested in organising the demise of rail freight and an exit from it. In those circumstances the Green Party would support financial assistance to encourage new entrants to the market and to set a market which would attract them.

The Minister says he would consider this, so how would he do so? Has he commissioned a study? Has he asked the Department to look at the options, is he looking at international examples or should the Opposition parties suggest specific means?

  Mr. Cullen: As I said earlier, perhaps when Deputy Ryan was not in the House, what the Irish rail freight market offers is clearly very limited. Rail freight is only viable over long distances. The island of Ireland, being the size it is, does not provide that type of capacity in its network.

  Mr. Broughan: How can the Minister know that?

  Mr. Cullen: Unlike most other European countries, which are connected to each other, we are not. We are quite isolated in the context of the international rail freight market. While I encourage entrants to the Irish market, it is not rocket science to figure out why there is not a great interest in the market.

  Mr. Broughan: How does the Minister know that? He does not seem to have a strategy. Is anyone looking at a situation where subsidies might be beneficial, given the overall cost benefit to the economy? How does the Minister know? He is simply shaking his head and saying it is not possible. After Christmas, the ports, which are part of the portfolio for which I have responsibility in the Labour Party, will come within the Minister’s Department. Can the Minister come up with some innovative ways of using maritime and rail [1913] freight to move vast amounts of goods by public transport?

The Minister said there has been one expression of interest in the Irish rail freight market. Clearly, I am strongly in favour of Iarnród Éireann as the infrastructure operator but as the regulator, how will the Minister shape the pricing structure, charging mechanisms and so on? Does he envisage a situation where there will be a regulator mechanism, perhaps arising from the comments he made earlier regarding Professor O’Mahony’s work? Is that what we are expecting? Down the line, is it possible that some of the likely disputes about limited rail space and charges will end up in the courts, as happened with telecom companies?

  Mr. Cullen: I wonder if people listen to me. I have been saying all along that a major, substantial international operator is very interested in coming onto the Irish market. That is terrific news. Are we saying that one such operator is not enough, that there should be ten or 20? One substantial competitor would have a dramatic effect on the Irish market.

Let us be realistic about the scale of our infrastructure in terms of rail. We have invested more than €1.5 billion in recent times and will be spending more in terms of upgrading the quality, track signalling and all the safety issues. In terms of infrastructure, we have made the rail system attractive to operators by putting rolling stock onto it because they know they are getting a very good system in place. Accordingly, we already have a substantial international operator, a name which will be known to everyone internationally, interested in coming onto the Irish market. I have already told the Department that when the opportunity arises early next year, that operator will be seeking a licence. That is very good news.

  Ms O. Mitchell: I agree with the Minister that in the past it seemed that only long distance rail freight was economically viable. However, change is now occurring. Does the Minister accept that this situation will almost certainly change further for environmental reasons? Road freight will become increasingly expensive as petrol costs grow because we will probably have increasing supply instability in the future. It would thus be folly on our part to allow what is currently going on, which in effect is the disposing of capacity by Iarnród Éireann, the selling off of almost new wagons, the removal of track and so on. Will the Minister agree to stop this? It may be five, ten or 20 years before it becomes economically viable but some day we will reap the folly of that if we allow this to go on.

The Minister said that one operator came along and then left because he could not get private sector people interested. Just because one operator fails to do his marketing should not be a reason [1914] to write the market off for everyone. Will the Minister act as a regulator and not refer interested parties to negotiate with CIE, which has made it clear to those who approached it in the past that it does not want competition? It is up to the Minister to ensure the opportunities exist when we have full liberalisation. I am delighted to hear there is an operator interested but it is up to the Minister to ensure that we capitalise on that opportunity.

  Mr. Cullen: I can put on the record, because it is already known, that the company which came and did the deal, and publicly stated that Iarnród Éireann did everything to facilitate it, was the Norfolk Line which runs major railways internationally. I was at the meeting, which was not organised by me, where it made its statement. The problem is that getting the unit load from the factory door to where the railhead is, getting it on, storing it, getting it off and organising its collection at the other end, involves a truck. Those costs become prohibitive. That is the difficulty. The point made by Deputies Ryan and Mitchell is an interesting one and it is correct. As we put more pressure on our environmental issues there may well be a cost benefit to operators looking back to rail. That is the reason we have made huge investment in the infrastructure. No rail infrastructure will ever be removed again, certainly as long as Fianna Fáil is in Government. That is the reason we have invested to date.

  Ms O. Mitchell: Iarnród Éireann is selling off new wagons.

  Mr. Cullen: That is why we have invested up to €900 million.

  Mr. Broughan: It was a Fianna Fáil Government that did it before.

  Ms O. Mitchell: The new wagons that would take these super——

  An Ceann Comhairle: Deputy Cowley has tabled Question No. 10. I would like to take it because he has been sitting patiently in the House all afternoon. There are three minutes left for this question. I am happy to take a short supplementary from Deputy Joe Higgins and Deputy Catherine Murphy and a final reply from the Minister. We will try to facilitate Deputy Cowley but the Chair has no control over it because at 4.45 p.m. I have to call an end to Question Time.

  Mr. J. Higgins: Deputy Cowley should be facilitated.

  Ms O. Mitchell: Why?

  Mr. J. Higgins: My supplementary will take only 30 seconds. In the last two hours in an [1915] astounding development, stormtrooper type security has taken over the Isle of Inishmore and Ulysses ferries and locked in the crew at the behest of Irish Ferries management as part of its campaign to replace the workers with eastern European exploited labour. This is an outrageous development. Will the Minister come into the House before the end of this session today, on behalf of the Government, and make a statement on the Government’s attitude to this incredible act of high sea piracy on foot of Irish Ferries campaign to sack 540 workers and replace them with the most exploited labour from eastern Europe and taking this unprecedented action today on the high seas in Pembroke and in Holyhead? Will the Minister come into the House before the——

  An Ceann Comhairle: This question has nothing to do with Irish Ferries. The Deputy has denied Deputy Cowley a question. I call Deputy Catherine Murphy.

  Ms C. Murphy: The Minister has answered the question I was going to ask.

  Mr. Cullen: I have answered all the supplementary questions relevant to the question before the House. The Government and I are committed to facilitating in any way we possibly can the development of rail freight.