Ministerial Brief

Sectoral Breakdown

July 2014

Index

Tab 1 Maritime

Tab 2 Land Transport

Tab 3 Aviation

Tab 4 Tourism

Tab 5 Sport

Tab 6 Corporate Services

Tab 7 Comprehensive Review of Expenditure 2015 – 2017 / Capital Review 2015-2019

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Maritime Sector

Contents Maritime Transport ...... 3 Maritime Safety Policy Division ...... 8 Irish Coast Guard ...... 9 Marine Survey Office ...... 11 Irish Maritime Administration & Maritime Services Division ...... 14

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Maritime Transport Assistant Secretary: Maurice Mullen Principal Officer: Mary Lally

The Division comprises two distinct units:

 Ports  Shipping

PORTS

National Ports Policy The vast majority of the State’s commercial port infrastructure falls under the control of the nine State port companies, although much of the superstructure and most services are provided by the private sector. The port companies are private limited companies governed by the Harbours Acts and subject also to normal Companies Acts provisions. The Minister for Transport, Tourism and Sport is the majority shareholder with the Minister for Public Expenditure and Reform holding one share in each company. The ports receive no exchequer funding and in fact both Dublin and Cork pay a dividend yearly to the state.

In March 2013 Government approved the publication by the Minister for Transport, Tourism and Sport of a new National Ports Policy. The publication of the new policy concluded a review of ports policy which commenced in September 2010.

National Ports Policy’s core objective is to facilitate a competitive and effective market for maritime transport services. The policy contains a number of legislative and non-legislative measures designed to address not just the issues facing the sector today but also equip all of the current State commercial port companies with governance structures most appropriate to their particular circumstances, role and function.

National Ports Policy categorises the State commercial ports sector into –

 Ports of National Significance Tier 1 (Dublin, Cork and Shannon Foynes)  Ports of National Significance Tier 2 (Rosslare* and Waterford)  Ports of Regional Significance (Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow)

*Rosslare is not a State commercial port company similar to the others but rather due to historical reasons is operated as a business unit of Iarnród Éireann.

One of the key features of the policy as agreed by Government was the re-orientation of national policy focus along those designated Ports of National Significance (Tier 1 and Tier 2). The Ports of National Significance are our key international maritime gateways handling approximately 90% of all tonnage and are of significant importance in terms of our national competitiveness.

This tiered categorisation of the sector is in line with revised European transport policy as evidenced by the approach adopted in the new Trans-European Transport Network Regulation which sees ports categorised as ‘core’ or ‘comprehensive’ ports. In Ireland our Ports of National Significance (Tier 1) fall into the European ‘core’ network while our Ports of National Significance (Tier 2) fall into the European ‘comprehensive’ network. 3

As part of this agreed re-orientation of policy focus, National Ports Policy recommends that the designated Ports of Regional Significance are transferred to more appropriate local authority led governance structures. The five Ports of Regional Significance (Drogheda, Dún Laoghaire, Galway, New Ross and Wicklow) retain important roles as facilitators of their regional economies and in some instances as centres of marine related amenity and tourism activities. However, the scale and nature of these activities are not of a scale that warrant continued central Government involvement and in line with the principles of Putting People First-Action Programme for Effective Local Government the oversight of these regionally significant ports should be carried out at the level of Government most suitable to their role and function. In May 2014 Government approved the General Scheme of the Harbours (Amendment) Bill 2014 which provides for the necessary primary legislative framework to allow for later transfer of control by Ministerial Order. The Scheme has been submitted to the Oireachtas Joint Committee for pre-legislative scrutiny and the Committee has indicated it will now initiate a stakeholder consultation and report back by the first week in October. In light of the Committee’s timelines it was decided to submit the General Scheme to the Office of the Parliamentary Counsel in June and any observations the Committee may have can be incorporated as required once received.

While port capacity is currently not an issue due to the continued existence of surplus capacity across the ports, National Ports Policy clearly states that ‘Government expects the Ports of National Significance (Tier 1) to lead the response of the State commercial ports sector to future national port capacity requirements. There is also a role in this regard for the Ports of National Significance (Tier 2) to develop additional capacity to aid competitive conditions, within the unitised sectors in particular’.

The policy also commits to improving the board appointment process to the Ports of National Significance and the Harbours (Amendment) Bill 2014 will introduce mandatory skillsets, term of office limits, a public expressions of interest system, appearance of Chairpersons designates before the Oireachtas committee and a prohibition on local authority members serving on the boards of the Ports of National Significance.

Port Performance

Tonnage In recent years the Irish commercial ports sector has experienced fluctuating circumstances from the record highs in traffic volumes, which peaked in 2007, to steep declines in the 2008 – 2010 period. The figures for 2011 and 2012 were largely stable while 2013 witnessed a moderate return to growth across the sector. However, while the ports face immediate challenges arising out of the general economic climate, an additional challenge is faced by a number of our ports in respect of their potential to respond to underlying international trends in ports and shipping services.

These trends point toward an ever increasing centralisation of resources in order to achieve optimum efficiencies of scale, with knock-on effects in the size of vessel used, the depth of water required in ports and the type and scale of port hinterland connections required. Such trends present obvious opportunities for growth for some ports and manifest themselves in others through falling tonnage throughput levels, loss of services, reduction in turnover and profitability, and potential ultimate decline.

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These trends are particularly evident in the unitised markets (LoLo and RoRo) and the 2008-2012 period witnessed a number of market changes which resulted in the larger unitised ports (Dublin and Cork) gain market share at the expense of the smaller unitised ports (Waterford (which also handles bulk traffic) and Rosslare). CSO figures for 2013 are not yet available (end- June 2014); however, indicative figures for 2013 show increased growth across all ports reflecting the broader economic recovery.

Financials The 2013 annual accounts of the ports will be laid before the Houses of the Oireachtas in July and will then be published by individual companies on their websites.

The 2013 accounts of the companies as a whole show a notable and welcome improvement on recent years with turnover in the sector increasing by 6% and seven of the nine companies recorded both an operating and net profit.

However both Dún Laoghaire and New Ross recorded losses in 2013. Both of these companies face differing challenges – Dún Laoghaire is seeking to source new revenue streams following the much reduced value of their Stena contract, while New Ross has witnessed a decline in tonnage throughput in recent years.

Two of the three Ports of National Significance (Tier 1) (Dublin and Cork) comply fully with the policy objective of returning a 30% dividend of distributable profits, while Shannon Foynes has indicated it will return its first dividend in 2015.

There are two Ports of National Significance (Tier 2) – Waterford and Rosslare; however, Rosslare is a business unit of Iarnród Éireann rather than a State commercial port company and therefore does not return a dividend to the State, while Waterford has returned to profitability in 2013 but has a significant pension liability which impacts its ability to return a dividend in the medium term.

The Harbours (Amendment) Bill 2014 will provide that for those companies which transfer to a new local authority shareholding arrangements, future dividends will return to the relevant local authority rather than the Exchequer.

Shipping 90% of Europe’s external and 40% of its internal trade goes by sea. The shipping and maritime commerce sectors are the largest direct employers in the Irish maritime economy. It has been estimated that the sector directly contributes over 40% of the total turnover for the entire marine sector.

It is important to note that all shipping companies servicing routes to and from Ireland are commercial companies. It is not government policy to fund international shipping services and any new initiatives to enhance services must be market driven. Competition in the sector is encouraged. In the past, operators have responded to market developments and increased/decreased capacity, when required.

As with most other sectors of the economy, the economic downturn had a significant impact on the shipping industry that has witnessed significant downturns in trade volumes from 2008 to 2012. Fuel costs also rose significantly in this period. This resulted in shipping companies having to re-adjust their routes and capacity in order to reduce their overheads. The consolidation of activities resulted in some job losses in the sector. 5

However activity in the sector has proved positive recently and fuel costs have come down somewhat from an historical high over the previous 4 year period. Irish shipping and port activity rose by 3% for 2013 when compared to 2012, according to the figures produced by the Irish Maritime Development Office (IMDO). Irish shipping and port activity rose by 4% in the first quarter of 2014 when compared to the corresponding period of 2013

In terms of passengers, figures for 2013 show that ferry passengers and tourist car numbers to and from Ireland increased by 1% when compared to the corresponding period last year..

Government policy to promote shipping concentrates on three areas, namely, fiscal, marketing and education.

Fiscal  One of the fiscal reliefs available is a refund of seafarers PRSI contributions to the employer. The current Irish Seafarers’ scheme, first introduced in 1999, was subsequently extended in 2004 for a further 6 years and again in 2010 for a further 6 years.  A tonnage tax scheme was introduced in Ireland from 1 January 2002. Tonnage tax provides an alternative method for calculating the shipping related profits of a company for corporation tax purposes. The purpose is to provide a tax incentive for shipping companies to base their operations in Ireland. Shipping related profits, once calculated using the tonnage tax method, are subject to the 12.5 per cent rate of corporation tax. The profits are calculated by reference to the tonnage of the ships used in a company’s shipping trade. The Scheme was reviewed in 2011 and the Minister approved the continuation of the scheme in its existing form

Marketing Marketing of the Irish shipping industry is carried out by The Irish Maritime Development Office (IMDO) supported by the Department. The IMDO is Ireland’s national dedicated development, promotional and marketing agency for the shipping services sector.

The office was established in 1999 and is part of the Marine Institute which is a state agency responsible for researching the potential of Ireland’s vast marine resources. The Irish Maritime Development Office is funded by DAFF and is charged with the responsibility for undertaking the following activities for DATTAS through its statutory remit:

 To promote and assist the development of Irish shipping and Irish shipping services and seafarer training.  To liaise with, support and market the shipping and shipping services sector.  To advise the Minister on the development and co-ordination of policy in the shipping and shipping services sector so as to protect and create employment.

A new Director Mr Liam Lacey was appointed to the IMDO in May 2014. He took over from Mr Glenn Murphy who stepped down in 2013 having served as the Office’s Director since its establishment in 1999.

Marketing is carried out in a number of ways including via the IMDO website, links with the industry, seminars, and contacts with overseas shipping experts to try and secure inward foreign investment

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and create employment in the shipping sector. This investment can be in the form of ship finance, management, operations and Irish flagged vessels.

 In 2010 and 2012 the IMDO hosted the European Shipping Congress in Dublin. Approximately two hundred delegates, including many of Ireland’s and Europe’s senior port and shipping executives attend this conference.  A significant proposal currently being pursued is to try and establish an International Shipping Services Centre in Dublin. The project proposes housing a cluster of international shipping entities in a dedicated building. If successful, this proposal has the potential to create new jobs in the shipping services sector including finance, ship brokering, leasing and chartering, ship management, insurance, banking, legal and IT services. The docklands scheme, similar to the International Financial Services Centre, is being promoted by a company called ISSC Dublin, along with State agencies the Irish Maritime Development Organisation and IDA Ireland.  The IMDO carry out market analysis and research and publish economic trends in Ports and shipping data on a continual basis.

Education Seafarer education is also supported by the IMDO through:  The management and administration of Seafarer Training Grants for education courses with the National Maritime college of Ireland.  Supporting professional qualification initiatives through bodies such as the Institute of Chartered Shipbrokers.  Liaison with industry to obtain employment and training opportunities for cadets.  Operating the Follow the Fleet schools programme which is used by over 500 schools around Ireland as a teaching aid. It provides school children with a fully integrated on-line and visual teaching aid with lesson plans for a class and a Satellite Tracker System for following Ships.

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Maritime Safety Policy Division Assistant Secretary: Maurice Mullen Principal Officer: Eilish Kennedy

Irish Maritime Administration - Overview Safety at sea is a vital issue in this island nation and while a very good foundation is in place, considerable development continues to be required in the coming years to meet national targets and international obligations. The Department’s approach to maritime administration involves an appropriate combination of policy development, statutory regulation, safety awareness promotion and enforcement. The balance to be struck between regulation and enforcement has a particular significance in Ireland’s domestic sector.

The Irish Maritime Administration was established in 2013 to integrate the planning, coordination and delivery of all the maritime services of the Department under a single national office. Its establishment is central in the Department’s drive for more efficient and effective delivery of maritime services. The IMA comprises 5 Divisions, one of which is Maritime Safety Policy Division.

Role of Maritime Safety Policy Division (MSPD) The Division is responsible for maritime safety policy (other than in relation to the maritime environment and pollution prevention), for the legislative programme to support it, and for both the Commissioners of Irish Lights and the Marine Casualty Investigation Board There are four sections (SP1, SP2, SP3, and SP4) within the Division who work to support the development of national, EU and international policies and to implement legislation relating to maritime safety and security, aids to vessel navigation and marine recreational safety matters. The Division’s work complements that of the Marine Survey Office (MSO) in relation to their regulatory and enforcement role via survey and inspections. The Division also liaises with the Department for Transport in London in relation to the Commissioners of Irish Lights, as one of the 3 General Lighthouse Authorities covering Ireland and the United Kingdom

Description of Activities of MSPD MSPD has a considerable programme of legislation, primarily to meet international obligations from the IMO and the EU, but also to address national issues. The Division supports the development of policies relating to maritime safety and enforcement measures for passenger, cargo, fishing and other classes of vessels, for the training and certification and work conditions for seafarers, for the safety of passengers being carried, and for the market surveillance of recreational craft. It also has oversight of the Commissioners of Irish Lights (CIL), with regard to Aids to Navigation and the Marine Casualty Investigation Board (MCIB) with regard to the investigation of maritime accidents.

The key priorities for 2014 are:  Enactment of the Merchant Shipping (Registration of Ships) Bill 2013  Transposition of 5 EU Directives  Ratification of the Maritime Labour Convention and introduction of supporting Regulations  Completion of Regulations to implement a number of chapters in the Convention for the Safety of Life at Sea (SOLAS).  Preparation of a General Scheme for a Maritime Conventions Bill.

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Irish Coast Guard

Assistant Secretary: Maurice Mullen Principal Officer: Chris Reynolds [Director]

The Irish Coast Guard (IRCG) provides Ireland’s 24/7/365 maritime search and rescue (SAR) service, locating persons in distress or imminent risk, providing first aid or in the case of SAR Helicopters paramedic treatment where required, and evacuating the casualty or casualties to an appropriate place of safety. The Coast Guard maintains three 24/7 marine rescue co-ordination centres whose function is to maintain a listening watch on distress frequencies, respond to alerts and co-ordinate the response at sea. The rescue centres also issue marine safety messages and as a point of contact for marine radio communications.

Search and Rescue Units: To respond to incidents the Coast Guard has volunteer Coast Guard units equipped for coastline search, inshore inflatables for rescue and also cliff rescue teams at various locations around the coast. Today they number 44 teams consisting of approx. 900 volunteers. The Coast Guard also has 4 SAR helicopters on contract from CHC located in Dublin, Waterford, Shannon and Sligo. The RNLI provide substantial support by the provision of inshore lifeboats and inshore life boat service. The RNLI are a declared resource to Coast Guard. Support is also received from the Air Corps and Naval Service.

In addition to SAR and safety prevention services, the IRCG is also empowered to intervene in ship casualty situations for the purpose of preventing, mitigating or eliminating danger from pollution or threat of pollution within the Irish Exclusive Economic Zone.

Fifty six Coast Guard staff are located in its National Maritime Operations Centre (NMOC) in Leeson Lane, two Marine Rescue Sub Centres (Malin Head and Valentia Island), an Engineering and Logistics Centre in Ballycoolin, Dublin 11, and offices in Cork and Castlebar, Co. Mayo.

The 4 IRCG Search & Rescue Helicopters respond to SAR at sea, inland waterways, offshore islands and mountains throughout the 32 counties. They can also be used to assist Principal Response Agencies for example flooding, major emergencies inland, intra-hospital transfers, pollution, and aerial surveillance.

The helicopters are operated under contract with CHC Ireland Limited (CHCI) is based in Shannon, and provides five Sikorsky S92 helicopters, one each of the bases in Shannon, Sligo, Dublin and Waterford, and one in reserve in case of unserviceability. This is a 10 year contract in place since 2012. The State retains an option to exit the contract after 8 years or to extend the contract by an additional three years to 2025. The estimated cost of the contract is 630million including VAT.

The contract covers a period of 10 years from mid – 2012.

Expected annual activity level Key Output

In any one year the Irish Coast Guard can expect to:  handle 2,500 incidents, assist 3,500 people and save about 160 lives;

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 task Coast Guard helicopters on missions around 500 times (40 times to assist in mountain rescues),  task Coast Guard volunteers 900 times and RNLI and community lifeboats 850 times;  evacuate medical patients off our Islands to hospital on 100 occasions;  assist other nations’ Coast Guards about 200 times;  make circa 6,000 maritime safety broadcasts to shipping, fishing and leisure craft users;  carry out a Safety on the Water (SOTW) campaign that targets primary schools and leisure craft users including at sea and beach patrols; investigate approximately 50 maritime pollution reports

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Marine Survey Office

Assistant Secretary: Maurice Mullen Chief Surveyor: Brian Hogan

Overview of the Sector The Marine Survey Office, MSO, is the section of the IMA that fulfils the role of the Irish maritime transport safety regulator. This includes the regulation of Irish ships, Irish seafarers and Irish ports. The sector is very diverse and includes both inland and sea-going vessels including Irish vessels operating abroad and fishing vessels. The MSO also regulates the competency of people engaged in maritime transport activities, security arrangements and waste reception facilities at Irish ports.

The Marine Survey Office is located in the Department’s offices in Leeson Lane, Dublin, with regional offices in Cork and Ballyshannon.

Regulation of maritime transport, commercial fishing vessels and recreational craft both at sea and inland in relation to safety, security, ship sourced pollution prevention, living and working conditions on board vessels and accessibility in relation to ships, Irish seafarers (including fishermen), Irish ports and foreign ships in Irish ports includes ensuring:

 Compliance with the regulations for design, construction, operation and maintenance and recycling of vessels  Vessels and the ports comply with international, EU and domestic standards appropriate to the vessel type and trade.  Compliance with ship source pollution emissions rules in relation to noxious liquid substances, oil, sulphur and nitrogen oxides from engines, greenhouse gas emissions, discharge of ballast water and discharge of garbage.  Employment conditions applicable to seafarers including hours of work, age, pay, leave social insurance, crew accommodation, medical conditions and crew welfare are complied with.

Irish Fleet: The Irish maritime fleet consists of several sectors including international trading merchant ships, fishing vessels, domestic merchant fleet and recreational craft. The current Irish fleet is made up as follows:

 37 internationally trading ships,  a fishing fleet as follows: o Greater than 24m - 54 vessels o Between 15 and 24 metres - 166 vessels o Less than 15m - 1912 vessels

(The Department is responsible for the maritime administration of Ireland’s fleet of fishing vessels while the Department of Agriculture, Fisheries and Food regulates the food aspects associated with the fish).  a domestic fleet of 90 passenger ships which serve offshore islands

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 a domestic fleet of some 19 cargo ships,  a fleet of some 600 passenger boats, which operate as small ferries, tourist excursion boats, “sea-thrill” boats etc.  at least 100,000 recreational craft of all types (the placing on the market of such vessels is covered by the EU recreational craft directive.

The cohort of Irish seafarers, which includes seafarers who hold Irish certificates of competency, seafarers who hold foreign certificates on Irish ships, fishermen, recreational craft users and holders of Irish radio operator qualifications, are regulated. Training bodies and institutions, such as the National Maritime College of Ireland, are also regulated. Similarly, training for fishermen and courses in marine radio are also regulated.

Irish ports engaged in international trade (some 43 such facilities grouped into 17 regional ports) are regulated. Additionally, any pier or landing, which is engaged in any form of maritime activity, must comply with requirements.

Foreign Ships in Irish ports or anchorages are subject to regulatory control (known as port State control) to ensure that they comply with required international, EU and domestic requirements. An annual programme of safety inspections on all roll-on/roll-off passenger ferries which operate to/from Ireland is also undertaken. At present all such ferries are foreign flag. These inspections include announced and unannounced inspections of the vessels.

International Maritime Organisation and EU security regimes in respect of ports and ships are implemented.

Ireland, like all maritime administrations, is subject to various international, regional and domestic benchmarks and external audit and review as shipping in an international industry and for the effective continuation of world trade it is essential that States operate to agreed international standards. Ireland is compliant with the main international benchmarks including:  Ireland has successfully undergone the International Maritime Organization’s (IMO) Audit of Member States.  Ireland is on the IMO “White List” of States which comply with the requirements for maritime education and training  Ireland is on the Paris Memorandum of Understanding “White List” for Flag States whose ships have a very good international inspection record.  Ireland is one of 45 States world-wide whose ships may be regarded as “Low-Risk”.

Topical Issues:  The international maritime transport sector is undergoing significant change with emphasis increasingly placed on reducing ship emissions. These is also more focus on the “human element” of shipping with the introduction of a seafarers “bill of rights” and new training requirements. Each of these changes is significant in their own right.

 There is concern about trans-boundary transport of viruses, pathogens, bacteria and invasive species by the ballast water in ships. Ireland’s is working to develop plans to implement the International Ballast Water Management Convention.

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 The International Labour Organization Maritime Labour Convention, often referred to as the “Seafarer’s Bill of Rights” entered into force by the mid-2012. It requires that all ships are surveyed and inspected to ensure compliance with a comprehensive set of requirements for the living and working conditions on board Irish ships and foreign flagged ships, which call to Irish ports. On 17 June 2014 Government authorised the ratification by Ireland of the Convention.

 The International Maritime community adopted a major revision to the current convention on seafarer training. The amendments are very significant and Ireland is working to meet these.

 The European Maritime Safety Agency (EMSA) will be visiting Ireland in July to establish that a regime is in place for the registration of passengers on board passenger ships to avoid overcrowding.

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Irish Maritime Administration & Maritime Services Division

Assistant Secretary: Maurice Mullen Principal Officer: Michael Harper

Following Value for Money Reports in the areas of maritime safety and emergency response services which were published in 2012, the former Minister brought an Action Plan to Government in July 2013 which addressed a number of findings in the Reports. The Action Plan primarily focuses on internal structural changes, operational arrangements to maximise efficiencies and best use of resources and identifies a programme of technological projects and enhancements to support the changes envisaged.

Among the commitments in the Plan was a re-branding of the maritime functions of the Department as a single entity called the Irish Maritime Administration (IMA). The IMA was established before the end of 2013 and is focused on delivering greater efficiencies and effectiveness through integration and enhanced technologies. The IMA comprises the Maritime Transport Division, the Maritime Safety Policy Division, the Marine Survey Office, The Irish Coast Guard and the Maritime Services Division. Prior to the establishment of the IMA each of the Department’s then 4 maritime divisions operated fairly independently of each other.

As part of the establishment of the IMA a new Maritime Services Division was established in 2013 to bring together the administrative support units of the Marine Survey Office (including the Mercantile Marine Office) and the Irish Coast Guard (IRCG) and will support the co-ordination and delivery of high quality services to these areas, Resources have also been tasked to deliver updated port waste and oil spill contingency plans by end 2014. The new Maritime Services Division acts as the central administrative office for the IMA. The division is also leading an IT modernisation programme currently under way in the maritime divisions.

The Maritime Action Plan announced in July 2013 included a commitment to develop a new national strategy for maritime safety and marine emergency response. The Irish Maritime Administration is preparing a new Maritime Safety Strategy which will focus on reducing the number of deaths and injuries in the recreational craft, fishing, passenger and cargo vessel sectors. The development of the Strategy is being informed by a consultation process in the period June to August 2014 designed to engage a range of stakeholders and the general public. Publication of the new Strategy is planned for Q4 2014.

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Land Transport Sector

Contents Public Transport Division ...... 16 Public Transport Regulation Division ...... 22 Public Transport Investment Division ...... 32 Freight Policy Division ...... 40 Sustainable Transport Division ...... 46 Roads Division ...... 56 Road Safety Division...... 67 Driver and Vehicle Computer Services Division ...... 88

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Public Transport Division

Assistant Secretary: Graham Doyle

Principal Officer: Liam Daly

The role of the Division is as follows:

 To provide analysis and advice on public transport policy, including PSO funding administered by the National Transport Authority (NTA);  Corporate governance of CIE and its bus and rail companies, NTA, Railway Safety Commission (RSC) and the Railway Procurement Agency (RPA).

In the notes below we highlight topical issues that arise as part of the Division’s work.

PSO Subvention of bus and rail services

Arising from the implementation of Council Regulation (EC) No 1370/2007 on public passenger transport services by road and by rail on 3rd December 2009, the provision of public service obligation services by the CIÉ companies is subject to contract between the companies and the National Transport Authority (NTA). The Regulation lays down the conditions under which competent authorities, when imposing or contracting for public service obligations, may compensate public services operators for costs incurred and/or grant exclusive rights in return for the discharge of public services obligations.

It is the responsibility of the NTA to ensure compliance with the contracts and to compensate the CIÉ companies under the direct award PSO contracts. Funding is provided on the basis that such services would not be provided under normal market competition, or to the same extent or at similar fares.

The aid is intended to promote high quality integrated public transport and thereby reduce the negative impacts of the extensive use of private cars.

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The subvention provided in 2013 and the allocation for 2014 is as follows:

2013 2014 Provision

Iarnród Éireann €126.888m €117.409m

Bus Átha Cliath € 64.902m € 60.054m

Bus Éireann € 34.476m € 31.899m

TOTAL €226.266m €209.362m

Dublin Bus operates a comprehensive network of passenger services in Dublin as part of its PSO services. It also operates limited commercial services, which do not benefit from subvention e.g. Airlink and Tours.

Bus Éireann operates 3 types of services - provincial city services, rural services and intercity. Bus Éireann Expressway services are not subvented and are operated in competition with private operators on main trunk routes.

Iarnród Éireann operates Intercity, Commuter and DART services – all benefiting from subvention.

CIÉ Finances (see also more detailed note in key issues)

Since 2008 the financial performance of CIÉ has been severely affected by the economic recession. The CIÉ Group recorded a deficit in 2013 of €11.6m compared with a surplus of €11.7m in 2012. In July 2013 the CIÉ group successfully concluded new funding arrangements with a consortium of banks in relation to re-financing and increasing the banking facilities available to the Group. Committed facilities of €160m were secured. The new facilities contain a number of financial covenants, all of which were met in 2013. The average number of people employed by the CIÉ Group in 2013 was 9,691 a decrease of 392 on the 2012 figure. The Group's net debt increased by €14.9m from €87.9m at the end of 2012 to €102.8m at the end of 2013.

The 2014 budget and 5-year plan contain a number of challenging targets and assumptions. 2013 saw a reduction in payroll costs of €10m with further savings planned for this year. Cost saving measures were agreed in Bus Éireann and Dublin Bus in 2013 but savings need to be made in Irish Rail. Despite the introduction of a number of cost reduction measures Irish Rail has incurred accumulated losses of over €147m in the past six years, a position which is unsustainable.

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CIÉ and subsidiary boards (to be updated following Government meeting on 1st July)

The Government appoints the CIÉ Board. The Minister for Transport, since the introduction of the DTA Act in 2008, appoints the subsidiary boards.

A restructuring of the Boards of CIÉ and its subsidiaries was agreed in 2011. Following conclusion of the term of office of the Chairpersons of CIÉ and its subsidiaries on 28th June, the Government approved, at its meeting on 1st July, the appointment of the following:

The Chairpersons designate will appear before the Joint Oireachtas Committee on Transport & Communications scheduled for Wednesday 9th July and their appointment will be confirmed subsequently.

National Transport Authority The National Transport Authority (NTA) was established in December 2009. The list of Board members is attached.

The establishment of the National Transport Authority brought a more focussed and integrated approach to the planning and delivery of integrated transport infrastructure and services in the Greater Dublin Area and nationally. It also has provided for the procurement of subvented transport services by the Authority in the Greater Dublin Area already mentioned above, the funding of public transport infrastructure projects and sets out a new framework for integration of land use and transport planning. The integrated ticketing project was also transferred from the Railway Procurement Agency to the Authority in 2010.

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Additional functions were assigned to the Authority under the Public Transport Regulation Act 2009, including a new bus licensing regime, the procurement of subvented transport services on a national basis, and the incorporation of the Commission for Taxi Regulation into the Authority.

In April 2012, the NTA assumed a national role for integrated local and rural transport, the Rural Transport Programme. A wide range of other functions have been passed to the NTA since its establishment. These extra functions included:

 Management of the Regional Cities traffic grant programme;  Management of the National Accessibility Programme;  Extension of statutory responsibility for Integrated Information nationwide;  Extension of statutory responsibility for integrated Ticketing nationwide;  Implementation of Public Bikes Schemes in the Regional Cities;  Designation as the National Enforcement Body for rail, bus and coach, and ferry passenger rights; and  Designation as the National Conciliation Body for Electronic Toll Service providers.

The term of office of the current Chief Executive, Gerry Murphy, expires on 14th December 2014 and he will then retire. Arrangements are underway to ensure timely advertisement of the post through the Public Appointments service and to agree the terms and conditions that will apply to the new incumbent.

PSO Contracts (see also more detailed note in key issues)

As signalled in the Key Issues note, the current PSO contracts between the National Transport Authority (NTA) with Dublin Bus and Bus Éireann expire in December this year.

The awarding of subsequent contracts is the statutory responsibility of the National Transport Authority (NTA). The NTA decided in December that all Dublin Bus and Bus Éireann routes will be included in the new five year direct award contracts which the NTA will enter into with the companies next December.

However, the NTA announced that 10% of publicly subvented bus services will only remain within the direct award contracts until the end of 2016. After that they will be operated under separate contracts that will have been competitively tendered. It is open to the two incumbent companies to compete for any tendered routes.

In the case of Bus Éireann not being successful in the competitive process, staff would be protected under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003 (the “Transfer Regulations” or “TUPE”). Minister Varadkar and Minister of State 19

Kelly met with the unions representing Dublin Bus and Bus Éireann workers in November to discuss this matter. Arising from that the NTA put a structured engagement with unions in place and the NTA met with the NBRU and SIPTU unions in January and March this year.

Railway Procurement Agency

The RPA was established as an independent statutory body under the Transport (Railway Infrastructure) Act 2001. The RPA's brief is to:

 Secure the provision of, or to provide, such light railway and metro infrastructure as may be determined from time to time by the Minister for Transport;  Enter into agreements with other persons in order to secure the provision of such railway infrastructure whether by means of a concession, joint venture, public private partnership or any other means;  Acquire and facilitate the development of land adjacent to any railway works subject to an application for a Railway Order where such acquisition and development contributes to the economic viability of the said railway works;  Develop an Integrated Ticketing System for public transport in Ireland, focusing initially on the Greater Dublin Area.

The average number of staff employed by the Agency during 2013 was 193. Staff numbers have reduced significantly in recent years due to less project activity. At present many of the staffing costs are capitalised against capital projects. Exchequer funding of €6.75 million has been allocated for 2014 to meet the administrative costs and expenses of the RPA.

2013 was the ninth full year of operation of the original Luas Red (Tallaght) and Green (Sandyford) lines, the fourth full year for Luas Docklands, the third full year for Luas Cherrywood and the second full year of Luas Citywest. 2013 saw passenger numbers reach a record high of 30.5 million increasing from 29.3 million in 2012. The growing passenger numbers, coupled with the continuing implementation of cost saving measures, resulted in a greatly reduced operating deficit before interest and tax of €2.2m, from €3.4m in 2012. The deficit was fully funded by reserves accumulated during previous years of operation.

Following the Government decision of 12th June 2012 approving proposals for the merger of the National Roads Authority (NRA) and the Railway Procurement Agency (RPA), the Roads Bill 2014 was drafted and published on 10th January 2014. The Bill has completed Second Stage in Dáil Éireann and is expected to go through Committee Stage and be enacted later this year.

The high-level Merger Implementation Group established by the Minister for Transport, Tourism and Sport which is drawn from the Boards of both the NRA and the RPA is continuing its work. The Group has developed plans across a number of work-streams dealing with the new organisational structure, the integration of information systems, arrangements for the transfer of employees and

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the identification of suitable premises. The plans envisage the full implementation of the merger upon enactment of the necessary legislation.

Railway Procurement Agency members are appointed by the Minister and a list is attached.

Railway Safety Commission

The Railway Safety Commission was established with effect from 1 January 2006 under the Railway Safety Act 2005. The Commission’s principal functions are:-  approving and auditing of the safety management systems of the railway operators on the mainline line, suburban rail and Luas networks, and on heritage railways;  assessment of the safety of new infrastructure works and rolling stock before they are constructed, commissioned and brought into service;  enforcement of safety and other statutory obligations in relation to safety.

Legal separation of the Railway Accident Investigation Unit (RAIU), previously a functionally independent unit of the RSC, from the RSC so as to fully comply with EU requirements was implemented recently with the integration of RAIU into the Department.

The RSC has also recently been given new regulatory responsibilities relating to the

 implementation of the Infrastructure Management Contract with Irish Rail; and  the removal of Ireland’s derogation from the EU Rail market access directives.

In 2013, the Commission was funded by Exchequer grant of €860,000 and a levy on railway companies of €1.66m. The Commissioner in his Foreword to the 2013 Annual Report refers to the impact of the embargo on public sector recruitment which, in his view, presented a significant risk to the RSC’s ability in delivering on its regulatory duty to supervise rail safety in Ireland. He mentions the arrangements in place with Engineers Ireland to train and develop graduate engineers to overcome the skills deficiency which will run to the end of Q3 2016. The Commissioner refers to the target to reduce its requirement for high-cost external experts provided agreement can be reached on the retention in the long-term of the professional railway expertise that has been developed with the graduate programme. Work is underway within the Department to address the staffing issues arising in the RSC and the RAIU.

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Public Transport Regulation Division

Assistant Secretary: Graham Doyle

Principal Officer: Fintan Towey

Role of the Division

Public Transport Regulation Division (PTRD) is responsible for:

 policy and legislation on economic regulation of bus, rail and taxi services;  regulation of rail safety;  the policy framework and funding for the Rural Transport Programme.

Rural Transport Programme

Background

The Rural Transport Programme (RTP) was launched in 2007, following an earlier pilot Rural Transport Initiative (2002 to 2006). Up to now thirty-five community transport groups around the country have been delivering the transport services being funded under the Programme to address social exclusion in their rural areas arising from unmet public transport needs. Under a restructuring of the Programme currently underway the 35 RTP Groups are being replaced by 18 Transport Co- ordination Units (TCUs) – see section below on restructuring for more detail.

Despite a reduction in funding from 2011 in line with the Comprehensive Expenditure Review 2012 to 2014, the level of services provided under the Programme, has risen from 40,000 services in 2003 to over 203,000 in 2011, over 217,000 in 2012 and over 224,000 services in 2013. The number of passenger journeys recorded on those services also increased from 151,000 in 2003 to over 1.7 million in the years 2011, 2012 and 2013. The primary cost savings arising from the reduction in funding, have resulted from the administrative overhead of the Programme.

In April 2012 responsibility for managing the RTP was assigned to the National Transport Authority (NTA) as part of new arrangements for integrated local and rural transport approved by Government in January 2012 to deliver on its commitment in the Programme for Government to main and extend the RTP with other local transport services as much as practicable.

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RTP Funding

Funding for the pilot Rural Transport Initiative and its successor the RTP increased significantly over the years, rising from €3 million in 2003 to €11 million in 2011 with a small decrease to €10.62 million in 2011. Overall funding reductions of some 20% for Exchequer funded public transport services, including the RTP, in the period 2012 to 2014 are in line with the Comprehensive Review of Expenditure (CER) 2012-2014. This resulted in an allocation of €9.77 million for the RTP in 2012 and €9.133 million in 2013.

The 2014 allocation amounts to €9.746 which includes €0.950 million in respect of Community Services Programme funding transferred from the Department of Social Protection Vote to this Department’s Vote, so as to consolidate Exchequer funding supports for rural transport within the one Department. The 2014 allocation also includes €0.3 million intended to support the implementation of the restructuring of the Programme as it accelerates this year. The underlying allocation amounting to €8.496 million is in line with the CER.

Additional funding of €0.650 million in 2014 has been approved to honour a commitment to maintain services in 2014 at 2013 levels. This additional funding is to be met from savings elsewhere in the Department’s Vote. The NTA is reviewing cost savings particularly in the areas of staffing and accommodation costs, in the context of the restructuring of the Programme. However, staff cost savings will only come about following the restructuring with the formation of the 18 Transport Co- ordination Units (TCUs) in place of the existing 35 RTP Groups. The NTA also advise that accommodation costs are unlikely to reduce in 2014 below the current levels based on discussions to date with the local authorities who it is intended will house the new TCUs where practicable.

Restructuring On 9th July 2013 Minister of State Alan Kelly announced new structures for the delivery of the RTP. The purpose of the restructuring is to protect the provision of rural transport services into the future by ensuring a more efficient delivery structure that maximises integration with other State funded transport services and by making the Programme a sustainable part of the public transport system. This is in line with the recommendations of a Value for Money and Policy Review of the RTP, published in 2012.

The new structure involves the establishment of 18 Transport Co-ordination Units (TCUs) in place of the existing 35 RTP Groups. The new TCUs will be based where practicable in local authorities with the aim of reducing administration costs and forging the links in local service provision. Each local authority will carry out strategic transport needs assessment for its functional area and will develop annual transport plans in consultation with the respective TCU, for submission to the NTA.

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The NTA will procure the provision of rural transport services by private operators nationwide and will enter into contracts with the operators. The TCUs will manage the contracted services on behalf of the NTA under Grant Agreements.

The appraisal of applications, submitted in response to a Call for Applications confined to the existing 35 RTP Groups, for the selection of the 18 TCUs which was managed by the NTA, has concluded. The NTA is currently engaged in a process with the successful applicants to establish the TCUs on a phased basis.

The main issues arising in winding down the existing 35 RTP Groups and establishing the 18 TCUs relate to the staffing structure of the Units, the associated employment legislation obligations (i.e. Transfer of Undertakings (Protection of Employment) Regulations (TUPE)), salary levels, office location as well as governance and board representation.

The TCU covering the county of Kerry was the first to be established in mid June 2014 and the remaining Units will follow over the coming months as the specific issues to each TCU are worked through.

Taxi Regulation

Overview

The commencement of the Taxi Regulation Act, 2013, and the introduction of new SPSV regulations by the NTA in tandem with that commencement, on the 6th and 7th April 2014 respectively, will deliver a significantly greater level of compliance, improve and streamline the regulatory regime for driver and vehicle licence holders and provide an enhanced degree of professionalism in the industry. Customers of taxi services will also benefit from greater transparency and information availability on licensed services. A range of quality of service actions has been initiated and these will result in a renewed commitment to improving the utilisation of wheelchair accessible taxis.

Taxi Regulation Review Report, 2011

The Programme for Government contained the commitment to review and update the regulation of taxis to ensure that taxi drivers are recognised as a key component of the public transport system and to provide for a forum for discussion between the regulatory authorities and taxi providers.

The Taxi Regulation Review Report, 2011, identified 46 actions to address the key issues in the taxi sector in 7 areas – driver licensing, vehicle licensing and standards, accessible services for people with disabilities, compliance and enforcement, consumer and industry assurance, fleet management and rental controls and a rural hackney service to deal with very limited access in rural areas. Measures of particular significance are set out below.

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The commencement of the Taxi Regulation Act 2013 and the introduction by the NTA of the new SPSV regulations means that only a small number of actions from the Review remain to be implemented and these are being progressed by the NTA.

Taxi Regulation Act 2013

The 2013 Act provides a robust framework for the implementation of the key enforcement measures proposed under the Taxi Review, including . A proportionate system for mandatory disqualification from holding a licence upon having a serious criminal conviction; . A system for revocation or suspension of a licence for contraventions of the SPSV regulations; . A demerit scheme to deal with recurrent breaches of the SPSV regulations; . Enabling powers for An Garda Síochána to issue fixed charge notices with respect to certain SPSV offences; . Powers for the NTA to engage into agreements with service providers for the purposes of increasing its enforcement capacity and capability; and, . Enforcement at taxi ranks involving use of CCTV and other apparatus.

Enforcement

The NTA compliance team carries out enforcement activities nationally in conjunction with An Garda Síochána, whose members are also authorised persons for the purposes of enforcement of the regulations governing SPSV services.

The new powers for the NTA under the 2013 Act to enter into agreements with service providers to carry out enforcement functions, has resulted in 15 additional Compliance Support Officers being appointed to implement the new enforcement powers available to the NTA under the Act, bringing the total number to 23. This together with an increased range of fixed payment offences under the 2013 Act, will lead to a ramping up of enforcements activities in the taxi sector.

In tandem with the commencement of the 2013 Act and the introduction of the new SPSV regulations, a comprehensive enforcement programme ‘Operation Taximeter’ got underway targeting both urban centers and rural towns to address unlicensed operators and licensed operators not complying with the 2013 Act and the new SPSV regulations.

To ensure full enforcement of new penalty provisions under the 2013 Act by An Garda Síochána (AGS), they are progressing with the DPP the coding of offences under the Act and new SPSV regulations. Draft regulations to enable AGS to issue fixed charge notices for SPSV offences have 25

been prepared and are currently the subject of consultations with AGS. When the views of the AGS on the draft regulations have been received, the regulations will be sent to the Office of the Parliamentary Counsel for settling with a view to their submission to the Minister for signing in early Qtr 3 2014.

In line with the recommendations of the Taxi Regulation Review Report in relation to ‘off-street’ enforcement and co-operation, the introduction of continuous tax compliance checking, together with arrangements put in place for data sharing on SPSV licences and drivers involving the key enforcement agencies of An Garda Síochána, NTA, the Department of Social Protection and the Revenue Commissioners, is now enabling effective action to be taken against those SPSV drivers who operate in violation of the relevant rules in these areas.

Taxi Oversupply

The number of small public service vehicles in Ireland has reduced from a peak of 27,429 at the end of 2008 to a total of 21,644 at end May 2014, a reduction of 21%. In terms of licensed SPSV drivers, the reduction is even more significant, down by 37% from a peak of 47,529 SPSV drivers in May 2009 to 29,975 drivers at the end of May 2014.

This issue of the number of taxis in operation was considered extensively as part of the Taxi Regulation Review in 2011. It was also addressed as part of the work carried out by Indecon Economic Consultants as part of that review process. The Indecon analysis did identify that “on a national level, oversupply is estimated to be in the range of 13-22% of the current SPSV fleet.”

Neither the Indecon report nor the Taxi Regulation Review Report recommended the introduction of quantitative controls in relation to the small public service vehicle numbers. The Taxi Regulation Review Report stated: “The Review Group believes that the Indecon findings support the strengthening of qualitative controls of SPSV licensing, improved standards and effective enforcement and do not justify imposing quantitative restrictions in the sector. The Review Group considers that the National Transport Authority (NTA) will have to keep under review its overall approach to regulation of the sector to ensure that the market operates as efficiently as possible in order to encourage a better balance of supply and demand.”

Measures impacting the number of vehicles in operation, were introduced as a result of the Taxi Regulation Review Report. These included items such as mandatory door signage, which has reduced the potential of illegal operation and provided greater visibility of persons operating in the industry, both full and part-time.

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Rental arrangements have also been over-hauled, with the previous practice of “plate rental” no longer permitted. The reactivation period for “inactive” licences was reduced from the previous five year period to a one year period, which has meant that a considerable number of licences that could potentially be reactivated and re – introduced into the fleet have now become time-expired.

A requirement for a declaration of other employment has also been enacted in legislation, which should ensure that employers become aware of any employee operating an SPSV, which hasn’t always been the case in the past.

Rural Hackney Scheme

Action 46 of the Taxi Regulation Review Report recommended the introduction of a local area hackney licence to address transport deficits in certain rural areas. Regulations providing for the introduction of such licences were made by the NTA with effect from December 2013.

The local area hackney licence which is designed to facilitate the low cost entry to the hackney market for transport provision in rural areas, is being introduced on a pilot basis initially.

The NTA can only issue local area hackney licences where it is satisfied that:

 there is a demand for local area hackney services in the area in respect of which the licence is sought, and  the public transport needs of the area in respect of which the licence is sought are not being adequately met by existing public transport services.

Features of the Local Area Hackney include:  Confirmation of the need for a proposed local area hackney service from either an established body representing local businesses or a Community group which has been granted charitable tax status by Revenue;  An analysis of the need for the proposed local area hackney service, carried out by or on behalf of the relevant local authority and confirmation of need for the service by the relevant local authority;  Specified area of operation – the licence holder cannot advertise the provision of services outside of the specified area of operation;  Low entry cost – vehicle licence fee of €50 and simpler vehicle standards;  Where the applicant is resident in the area in respect of which the local area hackney licence relates, the applicant for a licence to drive a local area hackney is not required to undertake the SPSV Skills Development Programme.

To date [17 June 2014] the NTA has made four offers of a local area hackney licence.

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Taxi High Court Proceedings [Position at 17 June 2014]

In excess of 1,100 individual claims have been made to the High Court for damages/compensation arising from the October 2000 High Court judgment, and subsequent regulations that led to taxi liberalisation, and the manner in which the taxi industry was regulated from 1963. The cases have proceeded on the basis of three test cases. The Defendants in the proceedings are the Minister (formerly Minister for the Environment and Local Government), Ireland, the Attorney General and the local authorities concerned, Dublin City Council and Ennis Town Council.

The cases were heard before Judge Peart from 29 October to 18 December 2013. Judgment was reserved and a decision is awaited.

[Confidential: Previous attempts to secure compensation for reputed loss of taxi licence value have failed. However, if that established legal principle was to be overturned, the State could be faced with claims in excess of €400 million.+

Review of the Large Public Service Vehicle Licensing Regime The regulatory framework for Large Public Service Vehicles (LPSV) under the Road Traffic Act, 1961 was modified through an amendment included in the Road Traffic Act 2014 to clarify that Road Trains (combinations of vehicles) can be issued with a LPSV licence.

The issues that arose in the process of considering that amendment gave rise to the question of whether there may be an opportunity to streamline the regulatory requirements relating to LPSVs. Separately and coincidentally, the Coach Tourism and Transport Council has raised the issue of duplication between the LPSV licensing framework and the commercial vehicle roadworthiness testing requirements.

The current LPSV licensing regime is administered by An Gárda Síochána. The Commissioner in granting a PSV licence must be satisfied that:

 the person is a fit and proper person to hold a licence (having regard to character and previous conduct);  the vehicle is safe for carriage of passengers;  the use of the vehicle as a public service vehicle is covered by insurance;  the vehicle complies with regulations under Section 11 of the Road Traffic Act 1961, except where a permit has been issued under Section 13 of the Act; and  in the case of a vehicle which has been issued with a permit under Section 13 of the Act, that the vehicle complies with the requirements imposed by the permit.

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A person who is required to hold a LPSV for a vehicle is also required:

 ensure that the vehicle complies with the requirements of sections 11 and 12 of the Road Traffic Act, 1961 or alternatively (as in the case of Road Trains) to obtain a special permit from the Road Safety Authority under section 13 of that Act;  register and pay motor tax (which entails a check on motor insurance);  comply with commercial vehicle roadworthiness testing requirements;  obtain a Road Passenger Transport Operator’s Licence for carriage for reward; and  where a scheduled service is to be provided, obtain a route licence from the National Transport Authority and secure permission for stopping points from the relevant Local Authority.

A review of the LPSV licensing regime has been initiated, commencing with the views being sought of relevant state agencies/Departments in relation to the implications of repealing the requirement to hold a LPSV (including any negative implications for road safety in general or LPSV passengers in particular) or as an alternative, whether there are options that might be considered to streamline the regulatory frameworks and reduce overlaps relating to vehicle safety.

Next steps

An assessment of the views received to date from stakeholders is underway and this will inform proposals on a way forward to be developed in early Qtr 3 2014 for discussion with industry stakeholders, as necessary.

EU Rail Regulation

The Public Transport Regulation Division is responsible for the application of a range of EU Directives that relate to the operation of railways. A significant body of law has been developed over the past number of years. Three Rail packages adopted in 2001, 2004 and 2007 provide a legal basis for the operation of railways, the full liberalisation of the rail freight market and international passenger market, third party access to rail infrastructure and fees for that access, the interoperability of railway services across the European Community and the licensing of railway operations throughout the EU. Other initiatives have been progressed in relation to the carriage of dangerous goods by rail and the establishment of the European Railway Agency. In addition, the Division is responsible for legislation to regulate the operation of any element of domestic railway to which EU law is not applied.

Currently, the focus of the Division is on the transposition of Directive 2012/34/EU.

This Directive recasts the provisions of the First Railway Package which provided for the opening of the international and domestic rail freight markets and the international passenger market as well as

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providing for access to railway infrastructure and the charging of fees for such access. Directive 2012/34/EU updates the provisions of the First Railway Package relating to the charging for, and access to, rail infrastructure, access to and competition on the rail market and finally, the regulatory supervision of the rail market.

Ireland held a number of derogations from the First Railway Package, in particular from the requirement to have an independent regulatory body and the requirement to have the functions determining equitable and non-discriminatory access to rail infrastructure assigned to a body not providing rail transport services. These derogations were due to be renewed in March 2013. Following consultation with stakeholders and discussions with the European Commission it was decided in March 2012 not to seek renewal of the derogations. This approach was approved by the Government in March 2012.

The new national Regulations that must be made for transposing Directive 2012/34/EU will include measures to provide for the provisions from which Ireland was previously derogated. In particular, the proposed Regulations will provide for the functions of the Rail Regulatory Body to be assigned to the Railway Safety Commission. The functions relating to the equitable and non-discriminatory access to rail infrastructure will be assigned to Coras Iompair Éireann (CIE).

The European Commission has initiated pilot infringement proceedings against Ireland in relation to the transposition of Directive 2012/34/EU. These proceedings whilst nominally relating to Directive 2012/34/EU are related to Ireland’s failure to make provisions for the elements of the First Railway Package from which we were derogated. A response has been forwarded to the Commission advising that new Regulations for transposition of Directive 2012/34/EU are currently being drafted and highlighting the provisions therein that will address the issues raised by the Commission. A response to this correspondence is awaited from the Commission.

Fourth Rail Package

On the wider European legislation front the main focus at present is the proposed Fourth Railway Package, which consists of six legislative proposals aimed at removing the remaining barriers to the completion of the Single European Railway Area. The package contains three groups of measures, with a view to:

– renewing rules on governance structure in relation to infrastructure management and transport operations (governance pillar);

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– ensuring further opening of the market for domestic passenger transport services by rail (market opening pillar); and

– enhancing the quality and efficiency of rail services by removing the remaining market obstacles and reinforcing the harmonisation of interoperability and safety requirements to ensure a higher level of harmonisation of the EU railway network (technical pillar).

The work at European Council working group level since February 2013 has focused on the two draft Directives and one draft Regulation forming the technical pillar. Political agreement on all 3 proposals was achieved at the Transport and Energy Council held on the 5th and 6th of June 2014.

The focus at working group level will now switch to the two remaining pillars, the market opening and governance pillars. The market opening pillar comprises a Directive to amend Directive 2012/34/EU. This Directive provides for the opening of the domestic rail market and further separation of the functions of Infrastructure Manager and Railway Undertakings. The governance pillar comprises a Regulation amending EU Regulation 1370/2007/EC on the opening of the domestic market. The proposed amendments to this EU Regulation 1370/2007/EC will provide for the mandatory tendering of all Public Service Obligation (PSO) contracts awarded after 2019.

In advance of the opening of the working group negotiations on the market opening and governance pillars a number of policy options regarding the position Ireland could adopt at the negotiations were presented to Minister Varadkar. Minister Varadkar decided that Ireland should support the package in principle, but seek a derogation for Ireland from the market access provisions. His reasoning for this decision was that Ireland’s rail market is too small to support market competition. In addition, he expressed concerns at the cost of having to go through market tests and a tendering process with no real end product being achieved.

The negotiations on these two pillars of the Fourth Railway Package have not yet commenced so it remains to be seen what will emerge from the process in due course. It is expected that the working group negotiations of the market opening and governance pillars will commence in July 2014 under the Italian Presidency.

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Public Transport Investment Division Assistant Secretary: John Fearon

Principal Officer: Doreen Keaney

Overview

The primary objective of the Public Transport Investment Division is to enhance the quality of the public transport system by facilitating the delivery of an affordable investment programme.

Key responsibilities:

 To provide an appropriate policy and funding framework for investment in public transport

 To manage the public transport capital envelope including monitoring, evaluation, communication and reporting on agencies, projects and spend

This is mainly achieved by providing policy support and capital funding for the relevant implementing agencies, i.e. the National Transport Authority (NTA) and Iarnrod Eireann.

The Infrastructure & Capital Investment 2012-2016: Medium Term Exchequer Framework published in November 2011 sets out the current policy and funding for public transport capital investment.

The funding position, based on actual out-turn for 2012 & 2013 figures, and allocations for 2014 - 2016 is as follows:

Expenditure 2012-2013 & Allocations 2014-2016

B8 Public Transport 2012 2013 2014 2015 2016 Total

€m €m €m €m €m €m

Infrastructure - NTA 130.19 146.38 147.20 145.00 150.00 718.77

Safety & Development 109.23 105.40 120.00 115.00 111.00 560.63

PT Projects 14.81 12.81 16.02 15.22 14.92 73.78

Total 254.23 264.59 283.22 275.22 275.92 1,353.18

The current plan, once commitments for projects in progress are set aside, prioritises investment to protect existing assets and maintain safety standards. In allocating any remaining funds, priority was given to those which add value to existing assets, are affordable, have strong business cases and 32

contribute to sustainable economic recovery. Luas Cross City, which is included in the Capital Plan, meets these criteria. Funding is also provided over the period for the purchase of replacement buses for PSO routes, for grants to certain urban local authorities for sustainable traffic management measures and for Leap Card and passenger information systems upgrades etc.

Where appropriate rolling multi-annual programmes are agreed in advance with the Agencies and reviewed on an on-going basis. The funding for heavy rail safety and maintenance is covered by a contract der EU legislation – the Infrastructure Multi Annual Contact (IMMAC).

The significant reductions in Exchequer funding for public transport in recent years arising from the financial crises have led to a much reduced programme when compared with spending proposed under Transport 21) and has led to the postponement in 2011 of a number of public transport projects including Dart Underground and Metro North (see separate notes under ‘Key Issues’).

More detailed information on the Public Transport capital programme under Subhead B of the Departments Vote is as follows:

Subhead B8

This subhead provides funding for the development of public transport infrastructure and the maintenance and renewal of the heavy rail network.

The subhead is made up of 3 budget lines:

Public Transport Infrastructure – NTA: This is capital funding provided to the NTA for Luas/Metro, bus and rail in the Greater Dublin Area (GDA), Leap Card Scheme, RTPI in the GDA & regional cities, GDA traffic management and sustainable transport measures.

Public Transport Safety & Development: This funds the IMMAC (previously the Railway Safety Programme) and Bus & Rail projects outside the GDA

Public Transport Projects: This covers three areas (1) Accessibility (2) Regional Cities Programmes for the Regional Cities of Cork, Galway, Limerick & Waterford and (3) Technical Assistance relating to the Department’s capital envelope.

Further Details of Programmes & Projects are set out below.

Public Transport Infrastructure – National Transport Authority (NTA)

In accordance with the Dublin Transport Authority Act 2008, the functions of the NTA include securing the provision of public transport infrastructure projects in the GDA.

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The NTA funds four programmes under this subhead (i) Heavy Rail, (ii) Light Rail, (iii) PSO bus infrastructure in GDA and nationwide and (iv) integration and sustainable transport investment in the GDA.

The NTA’s capital programme for 2014 amounts to €147.2 million and is allocated as follows:

o Heavy Rail €30.35

o Light Rail €29.50

o Bus Rapid Transit/Bus €41.00

o Integration/Traffic Management/Support €46.35

The NTA manages and delivers these programmes in line with the policy objectives and priorities outlined in the relevant capital plan.

Heavy Rail Programme: Funding to 2016 in the GDA has been prioritised for a small number of integration projects which would deliver increased capacity and improve safety. These are (i) completion of the re-signalling project to eliminate train restrictions in the city centre and increase train paths which will allow the re-opening of the Phoenix Park Tunnel; (ii) replacement on a phased basis of the Central Traffic Control Centre which provides operational and signalling control to large sectors of the rail network; (iii) completion of the level crossing closure scheme at Rathoath on the Maynooth Line; (iv) enhancement of the rail ticketing and revenue management systems; and (v) addressing certain rail station improvements such as Pearse Station roof refurbishment.

Light Rail Programme: This programme provides funding for the maintenance of the existing Luas network and the development of Luas Cross City. The main cost provision in 2015 and 2016 is for the construction of Luas Cross City. Funding will also be required in next capital plan to cover payments in 2017 & 2018.

The Rosie Hackett Bridge - connecting Marlborough Street and Hawkins Street - has been designed uniquely for use as a public transport bridge and will facilitate bus movements and the Luas Cross City project. The bridge opened on 20th May 2014 and is currently being used by buses, cyclists and pedestrians.

Bus/Bus Rapid Transit (BRT) Sub-Programme: This programme covers replacement PSO buses for Dublin Bus and Bus Eireann, PSO bus refurbishment, and bus stop facilities. The allocation is also providing a small funding envelope for initial design and planning of BRT. The current annual funding provision to 2016 is inadequate to maintain an acceptable average age for the PSO bus fleet and to ensure upgrades of bus stops /shelters/ stations.

Sustainable Programme: The NTA operates a sustainable grants programme providing funding to the 7 local authorities in the GDA for the implementation of various sustainable projects of a small

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scale. The Programme facilitates investment in the various cycling/walking, QBCs, safety, integration and traffic management projects throughout region.

Integration Projects: Funding of integration projects by the NTA is designed to make public transport more attractive and efficient and to encourage increased usage. Projects include real time arrival information (RTPI) scheme in the GDA and regional cities, Phone apps , the Leap Card Scheme for journeys in the GDA across bus, rail, DART and Luas (now being extended to the regional cities), the National Journey Planner and the dublinbikes bike rental scheme.

Public Transport Safety & Development Public Transport Safety and Development covers two programmes administered by the Department (i) Heavy Rail Maintenance and Renewal and (ii) Heavy rail development & enhancement outside the GDA.

(1) Heavy Rail Maintenance & Renewal: The bulk of funding is provided to Irish Rail for the maintenance and renewal of the heavy rail network nationwide. The programme funded the Railway Safety Programme up to 2013. This has now been replaced by the Multi Annual Infrastructure Manager Contract (IMMAC) as required under EU Directive 2012/34/EU to provide state funding for the maintenance and improvement of railway infrastructure. Exchequer capital funding for the IMMAC in 2014 amounts to €113.88 from the total allocation of €120m for the two programmes. Analysis has shown that the exchequer contribution to the IMMAC for the heavy rail network is €60m per annum less than required to maintain the existing network – and there is no possibility of this gap being closed through rail passenger revenues. The overall funding for the IMMAC is based on Irish Rail figures, developed with support from AECOM consultants, which have been broadly endorsed by a number of independent reviews (Risk Solutions and Leigh Fisher). The EU rules propose 5 year contracts but due to the need for some further data and financial information it was decided that a 1 year contact would be concluded for 2014 and that the situation would be reviewed mid-2014 when the additional information is available, with the aim of concluding a 5 year contract from 2015 (see separate note re CIE Funding).

(2) Heavy Rail development and enhancement-outside GDA: This covers funds for upgrades or enhancements on the heavy rail network outside the GDA including for ticketing machines, car parks, station upgrades, new stations. There are no funds provided for any new projects given the maintenance (IMMAC) funding deficit. Funding of c€6.12m is being provided in 2014 to cover commitments/close out payments in relation to Western Rail Corridor, passenger information systems, ticketing machines and railcars. A token provision of €1m is being provided for 2015 and 2016.

Amongst the major projects completed in recent years outside of the GDA were, the purchase of new rolling-stock, the re-opening of the line between Cork-Midleton (in 2009) and between Ennis-

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Athenry (Phase 1 of the Western Rail Corridor) in 2010. The passenger numbers on the Western Rail Corridor have been disappointing to date.

Public Transport Projects This budget line encompasses (i) Regional Cities Programme and (ii) the Accessibility Grants Programme nationally. Both are managed by the NTA on behalf of the Department.

(1) Regional Cities Traffic Management: Funding is being provided for the development of sustainable transport projects such as bus lanes, green routes, cycle lanes and safety measures for pedestrians & cyclists in the regional cities of Cork, Galway, Limerick and Waterford. The amounts available are limited and only allow for the construction/implementation of small scale projects to support greater use of public transport and cycling /walking in the cities listed.

(2) Accessibility Grants Programme: Funds are provided for accessibility improvements to existing public transport infrastructure and facilities. Despite significant progress in recent years there is a backlog of accessibility upgrades required for existing rail stations and bus infrastructure. An audit of bus and rail stations is underway (Rail Accessibility Audit now completed). These audits will inform future planning in this area. In addition, details of a new €1m grant scheme to support the wider availability of Wheelchair Accessible Vehicles (WAVs) in Ireland’s taxi fleet has just been announced.

An amount of €0.220 million has been retained under the Public Transport Projects subhead to cover technical studies /consultancies.

Additional Capital Funding under the Jobs Stimulus

In May 2014 details of a €7million investment programme in public transport improvements was announced.

The funding will be used to refurbish busses, add additional RTPI signs for public transport users and include a major investment programme in bus shelters across the country. It will also see improvements to cycling infrastructure and the commencement of construction of a public plaza for Colbert station, Limerick. The bus shelter programme will see investment of €1.5 million providing an estimated 40 additional shelters and will be specifically targeted for rural areas.

Compliance with policies and guidelines

Agencies delivering projects and programmes must comply with the relevant Government and Departmental Guidelines for capital appraisal (mainly the Public Spending Code (PSC) and

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monitoring and adherence to these is confirmed in the annual assurance letters, the PSC QA reports and, where selected, the spot check programme.

The NTA have incorporated the national guidelines into a set of project management guidelines which have different levels of requirements depending on project cost. Apart from large projects over €20 million, the NTA is the sanctioning authority for most public transport projects in the GDA.

For funding for the IMMAC and other projects outside the GDA Irish Rail also comply with the PSC and report directly to the Department on compliance.

Since the start of 2012 the Department’s Finance Unit/Economic Evaluation Unit has responsibility for co-ordinating and overseeing compliance with the overall capital investment guidelines.

Monitoring

There is daily liaison with the transport agencies, as part of the democratic process, and regular meetings are held to discuss and review allocations, progress on project delivery and other relevant issues. The NTA submit a monthly written report which is followed by a meeting to discuss corporate and investment issues.

Under the new IMMAC, Iarnrod Eireann, will be reporting monthly, quarterly and yearly to both the DTTAS and the Railway Safety Commission, which will be the designated Railway Regulator. Additional meetings are held as required eg meetings were held with Iarnrod Eireann in relation to the proposed new Ten-T /CEF Regulations, Ten-T & Interreg funding and the IMMAC Working Group. In addition, Iarnrod Eireann provides joint monthly reports to both the DTTAS and the NTA regarding works on the entire rail network.

Expenditure Drawdown: This is subject to procedures and checks as set down in the Procedures for Internal Financial Control (PIFCo).

Merger of NRA/RPA

Background / Context The merger of NRA and RPA is part of the Government’s overarching efficiency and reform agenda. In November 2011 the Government set out certain commitments in relation to agency rationalisation under the public sector reform plan. The rationalisation programme seeks to ensure that State agencies are lean, efficient and fit for purpose. They must be also flexible enough to deal with challenges and changed circumstances as they arise. The main commitment under the plan was implementation of 48 specific restructuring measures which included the merger of the NRA (a non-commercial State Body) and the RPA (a Commercial State Body).

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Merger of NRA and RPA The rationale behind the merger of the NRA and RPA recognises the changed circumstances and the need to restructure the institutional framework in the transport sector, particularly in the light of the significantly reduced capital investment programme. It also ensures that core technical and professional skills will be retained in the public sector to support the future development of transport infrastructure, particularly as the country now emerges from recession.

The merger is being progressed through the dissolution of the RPA, which is a commercial State body, and the transfer of its functions and staff to the NRA. The newly expanded NRA will use a new name for operational / branding purposes (as yet undecided) to better reflect its expanded functions. However, the statutory name of the National Roads Authority is not being changed and it will continue to be instituted under the Roads Acts as a non-commercial State agency under the aegis of the Department of Transport, Tourism and Sport and its successors. The dissolution of RPA, and the transferring of its functions into the NRA, was considered to be the safest and most effective way of implementing the merger, having regard to legal advice of the Office of the Attorney General.

Although the RPA is being dissolved, the merger with the NRA ensures that the value created over the years by RPA in terms of organisational and project management skills will be retained, leading to the development of a new body. This body will be a leader in Ireland for planning, delivery and management of road and light rail infrastructure. The merger proposals also seek to provide the best and most efficient use of scarce public resources.

The new organisation will benefit considerably from having a range of specialist skills and technical expertise at its disposal. The technical areas of expertise include project management, transport planning, negotiation and management of PPP contracts, engineering design and advice, environmental procedures and property acquisition and management. The expanded range of in- house expertise available to the new organisation should lead to a reduction in the need for procurement of external contractors, often known as consultants. The new body will be encouraged to seek out opportunities to provide technical support, advice and services to other bodies on a commercial basis.

Legislation The legislation for the merger (Roads Bill 2014) has progressed to Dail Committee Stage. The main purpose of the Bill is to merge the Railway Procurement Agency (RPA) with the National Roads Authority (NRA) by dissolving the RPA and transferring its functions and staff to the NRA.

In addition to the merger provisions, we are availing of the opportunity to update existing provisions in the Roads Acts, having regard to current requirements with regard to the public road network and the functions of the NRA.

Proposed Transfer of Asset Ownership of Motorways and Designated Dual Carriageways to NRA

The Minister is also considering making provisions for the transfer of asset ownership of motorways and key dual-carriageways from local authorities to the NRA. The department is currently consulting with the Office of the Attorney General / OPC on the proposal, with a view to the introduction of amendments on Committee Stage. This proposal requires a significant number of committee stage amendments (100+) and this is delaying the passage of the merger legislation through the Oireachtas. 38

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Freight Policy Division

Assistant Secretary: Graham Doyle

Principal Officer: Martin Diskin

Road Transport Operator Licensing Unit (RTOL)

The Road Transport Operator Licensing (RTOL) Unit is responsible for licensing road haulage operators and bus operators along with policy review and development in respect of licensing, drivers’ hours and working time. The Unit licenses all commercial Road Haulage and Road Passenger Transport Operators in Ireland who operate for hire or reward. Own account operators (HGVs and buses owned and operated within a business solely for their own use e.g. Tesco fleet of trucks) are not required to have an operator licence. RTOL Unit is based in Loughrea and has 14 staff comprising 1 AP, 2 HEOs, 4 EOs, and 7 COs. RTOL decentralised to Loughrea in 2007 from Parkwest in Dublin.

EU and Irish law requires all hire or reward operators to hold licences and other documentation in order to ensure minimum standards of competence, probity and safety in those to whom goods are consigned or to whom payment is made by bus passengers. There are currently approximately 3,850 licensed hauliers, and 1,850 licensed passenger operators. To obtain a Road Transport Operator Licence, which is valid for five years, there are four key requirements:

1. Professional Competence, as demonstrated by holding a Certificate of Professional Competence (CPC), obtained after sitting an exam run by the Chartered Institute of Logistics and Transport. This qualification ensures that each firm has someone qualified in transport and commercial law, as well as road safety.

2. Good Repute, that is, whether the applicant has convictions that would lead to the refusal of the licence. Certain serious offences (murder, manslaughter, drug offences and sexual offences, and others) must be reported by an operator and may lead to the loss of good repute and the refusal/withdrawal of a licence. Where there are lesser convictions, but a history of persistent offending, then licences can also be revoked or refused. This requirement aims to ensure that only suitable people are permitted admittance to this occupation, given the access that passenger

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operators would have to potentially vulnerable groups, and the access that hauliers would have to the means of trafficking drugs or people, for example.

3. Sound Financial Standing, as demonstrated by the applicant’s capital and reserves or net assets, and the holding of a Tax Clearance Certificate. This requirement aims to safeguard the stability of the sector by ensuring that only financially solvent firms gain admission to it as well as ensuring that operators have the funding to maintain their vehicles in a roadworthy and safe condition.

4. Establishment in the State, that is, the applicant must have a place of business in Ireland where core business documents are kept and where they can be examined if required. Suitable and adequate parking must be provided for all vehicles authorised on the licence.

In addition, every vehicle operated under a road transport operator’s licence must have all of its safety and other documentation in order, before it can be authorised on the licence. All of the above requirements and the vehicle documentation are monitored on both a random and targeted basis by the Department.

The Unit has a customer service target of processing licence applications within 10 working days, and processing changes to licences (mainly addition or substitution of vehicles) within 5 working days. These targets have been continuously met since the unit decentralised in 2007.

The other main work undertaken by RTOL is:

Issuing other required international documentation, including ECMT Licences, Driver Attestations, Conformity of Production documents, Bilateral Permits for humanitarian aid.

Monitoring Licensees to ensure continued compliance – The Unit systematically monitors existing licensees to ensure compliance during their 5-year licence, revokes licences where appropriate, shares information with the RSA on enforcement and compliance issues, monitors new transport companies established, and keeps detailed statistics on licensing and monitoring work in the Unit. All current licensees are subject to monitoring: 10% of all licensees are monitored each year to ensure compliance with licence requirements, 15% of all new applicants who declare no convictions are vetted by the Gardaí, and 100% of all new applicants who declare any conviction are vetted by the Gardaí. In general, the levels of compliance are high.

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Taken together, the licensing requirement aims to provide assurance for industry generally and for the public using passenger transport, that when they use a licensed operator, they are using an operator who is safer and more reliable than an illegal unlicensed operator, and is employing properly qualified drivers and other staff, with proper conditions of work. Unlicensed operators are less likely to be able to meet all the safety, good repute and financial requirements to obtain a licence, and are therefore more likely to be unsafe to use.

Enforcement of the licensing regulations is carried out by the Gardaí and the Enforcement Section of Road Safety Authority, also based in Loughrea. The RSA has 14 Transport officers who, in conjunction with the Gardaí, carry out checkpoints and premises inspections on a regular basis. The RSA also enforces drivers’ hours and the working time issues, and acts in an advisory capacity to the Gardaí on vehicle safety issues. The great majority of infringements tend to be in those areas rather than operator licensing offences.

General overview of sector

1 – Haulage. There are currently approximately 3,850 licensed hauliers in Ireland, with approximately 15,500 vehicles authorised on those licences. This amounts to less than 20% of the entire HGV fleet in Ireland – the other 80% are operated by Own Account operators (such as builders, supermarket chains, furniture manufacturers, or anyone carrying or delivering their own goods) and they are not required to be licensed by this Department. Only one EU member state, the UK, licenses its own account sector.

In Ireland, road transport is the dominant mode of moving goods and is likely to remain so in the future. During the boom, freight traffic volume increased substantially, but it has fallen significantly since 2008, primarily due to a sharp reduction in construction-related work.

The average size of Irish haulage firms is small when compared to the industries of other European countries. A large proportion (over 50%) of Irish firms are one-vehicle operators and the trend towards increased sub-contracting in recent years means that this is likely to continue to be a feature over the medium term.

Challenges facing the sector include increased customer expectations, increased fuel and other costs and greater competition. The industry representative bodies are continually pressing for increased enforcement of regulatory rules governing the sector.

The hire or reward road haulage sector is an intensively competitive industry and, in the current economic environment, margins are being significantly eroded as consignors strive to further reduce 42

costs including those relating to transport. Hauliers’ costs have risen in particular with respect to vehicles, fuel, components and insurance. Profitability in the sector is low as a consequence of surplus capacity, unlicensed haulage, and rising input costs. Those that do not abide by the rules have a significant competitive advantage and that has the consequence of undermining compliant operators and putting legitimate employers at risk.

Key representative bodies in the Haulage sector

 IRHA - The commercial sector in Ireland is principally represented by the Irish Road Haulage Association (IRHA), The Association was founded in 1973 with the purpose of representing and promoting the interests of the licensed road transport industry in Ireland and abroad. The Irish Road Haulage Association has regularly raised issues with the Department such as commercial vehicle road tax, use of agricultural vehicles for general haulage and enforcement of cabotage regulations on out-of-state operators.  FTAI - The Freight Transport Association (FTA - a UK based body) has recently established an FTA Ireland branch. FTAI represent various freight interests and customers and as yet we are unaware of how many haulage operators they represent, although they tend to represent the large own account sector in the UK. A policy goal of theirs is to have own account operators subject to an operator licensing requirement, primarily as a means to help Irish HGVs operating in the UK gain a better image, and operate with fewer checks, and therefore more efficiently. It should be noted that Irish own account HGVs operating outside the State account for less than 1.5% of total activity by all Irish HGVs.

2 – Passenger Transport. There are currently approximately 1,850 licensed passenger transport firms, with over 9,500 vehicles authorised on those licences. This compares very closely with the statistics from the National Vehicle Driver File for the number of large Public Service Vehicles, and this indicates that there is little or no “own account” sector in passenger transport.

The vast majority of those engaged in passenger transport do so for hire or reward, and so require a licence from RTOL. Exempt passenger transport would include non-commercial operations, such as complimentary buses run by hotels for their clients, or buses owned by schools or sports clubs used to carry their pupils or members.

The biggest operators in Ireland are Bus Éireann, with over 1,100 vehicles, and Dublin Bus, with 1,000 vehicles.

Key representative bodies in Passenger Transport

 CTTC - The Coach Tourism & Transport Council of Ireland,

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 Private Coach Bus Owners Alliance

The CTTC is the most active of these, although these bodies do not engage very often with RTOL. They are consulted whenever any sector-wide consultation takes place.

Key Priorities for RTOL in 2014

The key priorities for the Unit during 2014 are:

Online service for Road Haulage Operator Licence applications

The online facility for road transport operator licensing was launched by the Minister on 18th June 2014. During the two month soft launch period 10% of all customer transactions were conducted online and it is anticipated that customers will continue to change over to the online system.

Interconnection with ERRU

The final part of the RTOL computer project that has been ongoing for the past two years is the interconnection of our national electronic register of undertakings (i.e. the RTOL database of licence holders) with the European Register of Road Transport Undertakings (ERRU). The final testing of our connection is at an advanced stage. We have passed the ERRU to Member State tests and are currently working through the Member State to ERRU tests. Once these tests are completed we will be connected to the other Members States’ registers and we will be able to exchange information on operators’ and transport managers’ infringements/convictions electronically.

Other key work areas

 Review of Own Account Operator Licensing Action number 88 in the RSA's Road Safety Strategy 2013-2020 is to review the policy on licensing of road transport operators to assess if own account operators should be included. The DTTAS Secretary General is assigned responsibility for this action, with the support of the RSA and with a completion time frame of Q3 2014. It is to be expected that RTOL will have a role in this review.

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 Assist in the development of a professional Irish Road Transport Industry and policy tools. RTOL Unit meets with industry representatives to address concerns or issues and has proactively consulted with and sought the views of the entire licensed sector on a range of policy issues over the past few years.

 Ensure Ireland is positioned to influence EU and international developments and engage in cross- cutting issues at national level. RTOL officials attend EU Working group meetings and ECMT meetings to represent Ireland’s views. RTOL also participates in the All-Island Freight Forum.

 Working Time and Driving Time policy and enforcement issues – RTOL has recently been given legislative responsibility for this area. Legislation will be required to comply with EU requirements, and a draft SI in this regard is under consideration in conjunction with the RSA.

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Sustainable Transport Division

Assistant Secretary: Graham Doyle

Principal Officer: Martin Diskin

Division’s remit

The Sustainable Transport Division promotes sustainable means of transport – walking, cycling and public transport - through the provision of funding for infrastructure, such as bike lanes, cycle greenways and pedestrian facilities, as well as funding for behavioural change programmes to encourage individuals to use more sustainable transport modes. The Division supports some programmes which promote use of public transport but does not fund public transport services or infrastructure.

The Division is responsible for delivering the 2009 Government’ Smarter Travel – A New Transport Policy for Ireland 2009-2020. The goal of the policy paper is to reduce private car use by increasing the numbers who walk, cycle or use public transport. Implementation of the policy will reduce congestion, with economic benefits from easier movement of goods, reduce transport emissions, to contribute to Ireland’s international obligations to reduce carbon and other emissions and to improve public health and quality of life.

The Division is also responsible for the delivery of the actions set out in the 2009 National Cycle Policy Framework. The Policy Framework sets out actions for the establishment of a cycling culture in Ireland, with a target of 10% of all trips to be made by bike in 2020. This is an ambitious target, but cycling rates have been increasing year on year and the 10% target has already been reached in parts of Dublin eg 10% of all commuters crossing the canal at Portobello travel by bike.

National Transport Authority role in sustainable transport

The Department is responsible for the policy on sustainable transport but delivery of programmes is split between the Department and the National Transport Authority (NTA).

The NTA is responsible for the promotion and funding of sustainable transport in the Greater Dublin Area (counties Dublin, Kildare, Wicklow and Meath) and the regional cities of Cork, Galway, Limerick

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and Waterford. The NTA provides funding directly to the local authorities in these areas for the provision of cycle lanes etc.

Department funding for cycling and pedestrian infrastructure is generally limited to the areas not covered by the NTA (although there are some exemptions). The behavioural change campaigns funded by the Department are operated on a national basis.

This split between funding areas between the Department and the NTA is a consequence of the NTA having responsibility for the provision of subvented public transport services in the Dublin and the regional cities.

Key Priorities for 2014 The key priorities for the division in 2014 are:

 Administration of the following funding programmes: Smarter Travel Areas; Active Travel Towns; and the National Cycle Network;  Oversee the roll out of Regional City Bike-Sharing Schemes by the NTA;  Carry out a review the National Cycle Policy Framework;  Review the Green Schools Travel Programme;  Publish guidelines for the development of cycle infrastructure development in Ireland;  Prepare a draft low-carbon roadmap for the transport sector;

Funding

The Division does not generally directly fund infrastructure or sustainable promotion projects but provides grants to local authorities, under competitive processes. The division was awarded a €65million multi-annual budget to distribute between 2012- 2016.

There are 3 main infrastructure funding programmes:

 Smarter Travel Areas (€23million allocated under the five year budget) , under which funding has been granted to Limerick, Westport and Dungarvan to act as demonstration towns and develop sustainable travel solutions best suited to Ireland. All funding under this programme to 2016 has been allocated;

 Active Travel Towns (€13 million allocated under the five year budget) , aimed at small and medium sized towns, which provides funding for local authorities to develop walking and cycling strategies for towns and provides funding for the delivery of infrastructure or 47

promotion activities to deliver the strategies. All funding under this programme to 2016 has been allocated

 National Cycle Network (€13 million allocated under the five year budget), funds large scale cycle projects which would be trip attractors in their own right, such as the Great Western Greenway in Mayo. All funding under this programme to 2016 has been allocated

Details of the projects funded under these programmes are set out in the attached appendix.

The Division funds a number of sustainable transport promotion campaigns:

 the Smarter Travel Areas and Active Travel Towns are required to promote sustainable travel as part of their grant allocations;

 Smarter Travel Workplaces and Campuses (€600, 000 per annum) is a programme delivered by the NTA under a Service Level Agreement (SLA) with the Department. The NTA provides expert advice and assistance to workplaces to promote sustainable transport by drawing up workplace travel plans. The programme was initially targeted at the 100 largest employers in the State but has since 2012 been extended to third level campuses and to SMEs through engagement with business and industrial parks and the establishment of regional hubs in towns.

 Green Schools Travel (€1, 800, 000 per annum) is administered by the NTA under an SLA with the Department and is delivered in schools by An Tasice as part of their Green Schools Flags programme of environmental education in schools. The programme has been running since 2008 under a direct award grant from the NTA to An Taisce. The purpose of the programme is to educate school children about the benefits of sustainable travel and to cut the number of cars on the school run by encouraging parents and pupils to travel to school on foot, by bike or by public transport. The Department’s Financial and Economic Evaluation Unit is currently carrying out a focused policy assessment of the Green Schools Travel programme, which is expected to report in the summer of 2014. A new Service Level Agreement with the National Transport Authority will be negotiated on foot of the findings and recommendations of the report.

 Bike Week (€375, 000 per annum) is an annual week-long event which celebrates and promotes cycling. National Bike Week is funded and co-ordinated by the Department. Events are organised by local authorities, often in co-operation with local sports partnerships, cycling clubs and community groups. The emphasis on Bike Week is to get people cycling, and to spread the message that cycling is a great way to make short trips.

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Over 400 hundred events were held in 2014 ranging from mass city cycles in Dublin, Galway, Cork and Limerick to smaller events such as guided heritage cycles and bike games for schools. The Bike Week message of giving cycling a go received widespread editorial coverage in local and national media – radio, TV and press. Radio and digital media ad campaigns were run by the Department.

Dublin and Regional City Bikes

The Dublin City Bikes bike rental scheme is funded by the Department and administered by the NTA, with Dublin City Council responsible for the operation of the scheme. Dublin Bikes has been incredibly successful and is currently expended the number of stations and bikes. Under a new sponsorship arrangement with JC Decaux, the current sponsor, an international advertising hoarding space provider, and Coke Zero, a new sponsor.

Regional bike schemes are to be established in Limerick, Cork and Galway later in 2014, branded Coke Zero bikes under a sponsorship arrangement. The NTA will administer the schemes which will be delivered by the local authorites.

Climate change

The Division co-ordinates the Department policy on climate change mitigation measures, through the development of a low carbon roadmap for the transport sector, to underpin effective transition to a low-carbon future by 2050.

Climate Change Policy Context

In order to keep the increase in global temperature below 2 °C (compared to pre-industrial levels), the EU have set an objective of reducing greenhouse gas (GHG) emissions by 80-95% by 2050 compared to 1990 in developed countries as a whole. In 2008, ‘20-20-20’ targets were agreed by European Council and commit to the following by 2020:

 A 20 per cent reduction in overall EU GHG emissions compared to 1990 levels;  Energy savings of 20 per cent through improved energy efficiency (relative to a benchmark of existing trends); and  Renewable energy sources to provide 20 per cent of the EU’s total energy.

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Emissions Trading Scheme (ETS) and other emissions (Non-ETS)

Ireland has demanding targets to meet by 2020 arising from commitments made under the above. A key distinction in EU policy is between emissions covered by the EU’s Emissions Trading Scheme (ETS) and other emissions (non-ETS emissions). The ETS covers the large energy users, including electricity, commercial airlines, cement, and large food, drink and pharmaceutical plants. All other sectors comprise the non-ETS sectors. These include transport, households, industry (excluding energy-intensive industry), agriculture, and private and public services. Through an Effort Sharing Decision across all Member States, Ireland was allocated a target to achieve a 20% reduction in non-ETS emissions by 2020 relative to 2005 (joint highest target reduction among member states with Denmark and Luxembourg)

Low Carbon Roadmap and Adaptation

To ensure that Ireland can effectively and equitably contribute to this objective, it is necessary for Ireland to develop an ambitious low-carbon development strategy. In this context, this Government has developed a Climate Action and Low Carbon Development Bill, which sets out proposed statutory obligations in relation to the development of a National Low Carbon Roadmap, incorporating sectoral roadmaps. The purpose of the roadmapping process will be to set out a pragmatic and holistic approach aimed at pursuing and achieving transition to a low-carbon, climate- resilient and environmentally sustainable economy in the period up to and including 2050. This Department is required to develop a sectoral roadmap for transport. It is anticipated that the draft National Low-Carbon Roadmap will go out to public consultation in late 2014. This Department is also required to develop a climate change adaptation plan for the transport sector. While the deadline for publication for the adaptation plan was mid-2014, an extension to this deadline is currently being negotiated with the Department of Environment, Community and Local Government.

Projections and Challenges

The 2020 targets for Ireland are very ambitious and the Environmental Protection Agency’s latest GHG projections reinforce the economic reality of the challenge facing Ireland. There is now a significant risk of material shortfall in emissions reductions and renewable energy targets by 2020.

Transport emissions are closely coupled to economic growth and the EPA’s projections reflect this with transport emissions projected to show strong growth over the period to 2020 with a 15-23% increase on current levels depending on the level of policy implementation (With Measures v With Additional Measures). By 2030, the EPA project emissions growth in transport of 36% based on an increase in the national car fleet to 2.4 million. This increase is underpinned by an increase in population to 5.2 million and sustained 2-3% annual growth in personal consumption over the period 2020 to 2030.

In terms of emission abatement Ireland's dispersed settlement patterns and lack of urban areas with the critical mass to support efficient public transport systems present a particular challenge. Despite 50

the implementation of measures to reduce emissions, the private car will remain the predominant mode of transport in Ireland and currently contributes to an estimated 60% of overall transport emissions.

With regard to transport measures, the centrality of technology development, such as engine improvements, electric vehicles, gas-based vehicles and ICT is widely recognised. In addition to largely internationally driven technological development the range of potential additional measures that could be deployed to narrow the gap between projected emissions and targeted levels are well known. They include further relative incentivisation of the purchase of lower emissions vehicles, particularly in the area of freight vehicles which has been the slower adaptor; an additional biofuel obligation; additional carbon tax; modal shift to walking, cycling and public transport; further speed reduction measures; ecodriving schemes; and traffic management/demand management/road pricing etc.

Transport sector measures are generally recognised to have high marginal abatement costs compared to other sectors. In addition to investment costs, measures such as increased biofuels and carbon taxes that increase the cost of fuel can carry significant economic costs. Accordingly, the potential for further intervention needs to be considered in the context of costs of measures across the full range of non-ETS activity.

Appendix

Details of funding programmes administered by the Sustainable Transport division

National Cycle Network Funding Programme (NCN) 2012-2016

The Programme for Government has given a commitment to continue to invest in Ireland’s National Cycle Policy and this is being realised, for the most part, through funding programmes administered by the Department the Department of Transport Tourism and Sport (DTT&S) and the National Transport Authority (NTA).

The National Cycle Network (NCN) Programme is allocating approximately €23.5 million over the period 2012 to 2016 (includes €10 million allocated under the recent stimulus package) to advance routes that will provide valuable transport and recreational infrastructure, with the added potential to enhance tourist activity for the areas concerned. Fifteen cycling projects were completed by local authorities across the country with €7 million in funding provided under the first tranche of NCN

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funding for the years 2012/2013. A further 3 projects shared in funding of €6.3 million under the second tranche of NCN funding for the years 2014-2016.

In May 2014, a €10 million investment package for greenway development was announced by Government as part of the €200 million national infrastructure package, the Stimulus Funding grants. 11 cycling projects were selected to share in this funding.

Stimulus Funding 2014

County Project km Grant amount

Clare West Clare Greenway -Phase 1 - Ennis to Balllymacquiggan 5 400,000

Kerry Cahersiveen to Reenard Point (Phase 1 Fertha Greenway) 5.75 450,000

Kerry Trakee Fenit Trail - Phase 1 Rock Street to Casement Station 0.42 345,000

Kildare Arthur's Way Greenway 25 311,000

Limerick Patrickswell to Limerick City cycleway 4.14 420,000

Mayo Monasteries of the Moy - part funding for project 14 250,000

Roscommon Boyle to Lough Key Forest Park 24 400,000

Tipperary Clonmel to Carrick-on-Suir Greenway 20 1,900,000

Waterford Kilmeaden to Bilberry Greenway 9.6 1,100,000

Westmeath Athlone to Mullingar Greenway 40 4,000,000

Westmeath Coolnahay to the County Boundary 14.4 700,000

National Cycle Network Funding Programme 2014-2016

County Project km Grant amount

Kerry Glenbeigh-Reenard Trail (Phase 2 and Phase 3) 26 3,458,281

Galway Galway to Moycullen Greenway 12.4 2,000,000

Waterford Clonea to Durrow Greenway (Phase 1) 7.2 897,739

National Cycle Network Programme 2012-2013

County Project km Grant amount

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Carlow- Carlow to Paulstown to Kilkenny Cycleway 44.5 463,000 Kilkenny

Clare Ennistymon to Lahinch Cycleway 4 400,000

Donegal Donegal Town to Newtowncunningham Greenway 195.5 497,000

Fingal Ashtown to Blanchardstown Cycleway 3 600,000

Kerry Killarney to Fossa Cycleway 1.2 143,000

Limerick Great Southern Trail - Abbeyfeale to Kilmorna Greenway 3 290,000

Louth Carlingford to Omeath Greenway 6.2 687,00

Mayo Castlebar to Turlough Greenway 8.8 725,000

Meath Drogheda to Oldbridge Greenway 3 500,000

Monaghan Monaghan Town Greenway 4.5 471,000

North Tipp N52 Cycleway extension 2.8 335,000

Offaly Tullamore to Moate cycleway 16.8 400,000

Roscommon Athlone to Ballinasloe cycleway* 20 470,000

Waterford City Tramore Road to Waterford City cycleway 3.2 289,000

Waterford City Outer Ring Road to Tramore 6.4 310,500

Westmeath Royal Canal Greenway 11.3 451,000

*funding to MCC was withdrawn in 2013 due to inability to deliver project

Funding for 3 Smarter Travel Demonstration Areas 2012-2016

In February, 2012 the local authorities of Limerick City & County, Waterford and Mayo, as winners of the National Competition for Smarter Travel Areas, were awarded total funding of €21.7 million over a 5-year period to transform the respective areas of Limerick City & Environs, Dungarvan and Westport into Smarter Travel Areas, promoting, among other measures, cycling and walking, the use of public transport and reducing car travel. The three project areas each present a different range of opportunities and challenges in delivery smarter travel.

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The Smarter Travel Areas will be delivered by each local authority, working in partnership with the Department of Transport, Tourism & Sport, local businesses, schools and communities.

Each project area is being evaluated on an ongoing basis and the resultant data will determine the levels of transport modal shift resulting from investment in investment in infrastructural and behavioural change measures.

The funding approved to each local authority is as follows:

 Limerick Smarter Travel - €9 million  Smarter Travel Go Dungarvan - €7.2 million  Smarter Travel Westport - €5 million

Active Travel Towns principal objective of Active Travel Towns is to achieve modal shift from car to either walking and/or cycling or to secure greater public transport use through facilitating greater walking and cycling access to public transport. It is envisaged that this objective will be achieved in a planned and co- ordinated manner in towns through deliverables such as:

- the provision of safer routes for people to travel by bike or on foot;

- a reduction in short-distance car journeys through the availability of good quality information and alternative infrastructure;

- community involvement; and

- tie-ins with schools/colleges and workplace plans both through existing programmes and new linkages.

The Department is responsible for implementing smarter travel initiatives outside Dublin and the Greater Dublin Area (GDA); the National Transport Authority (NTA) is responsible for Dublin and the GDA.

Funding Funding under the Active Travel Towns programme for the period 2012-2013 was provided under two parallel streams; Stream 1 - the development of walking and cycling strategies for those towns which did not already have a strategy in place, and, Stream 2 – the implementation measures (principally infrastructure but to also include some supporting behavioural change) of local authority strategies, both existing and new. 13 Towns were awarded funding. In respect of Stream 1 30 towns were granted funding.

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This programme has now been successfully completed and a new programme has been launched (see below).

2014 Funding round A multi-annual budget of €6.6m has been approved for the period 2014 to 2016. In April 2014 it was announced that 9 towns were to be awarded funding after a competitive process was held. Two small towns were selected (Birr and Claremorris) and seven medium/large towns were selected (Ennis, Cavan, Sligo, Tralee, Wexford, Thurles and Clonmel) to develop walking and cycling infrastructure and softer measures to support behavioural change with a view to encouraging a modal shift from car to walking and cycling particularly for shorter journeys.

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Roads Division

Assistant Secretary: John Fearon

Principal Adviser: Dominic Mullaney

Key Issues in this area are - 1. Capital Investment Programme (Economic Difficulties and Reduced Allocations), 2. PPPs (Public Private Partnerships), 3. Funding of Regional and Local Roads.

Please see separate Key Issues brief at Section 4.

Road Improvement and Maintenance Funding:

2011 2012 2013 2014 Allocation*

€m €m €m €m

National Roads 722.9 647.3 321.3 371

Regional & Local 452.7 377.4 400.5 351.9 Roads

*Includes Stimulus Funding

 The 2014 improvement and maintenance allocation for national, regional and local roads is just under €723m, down from €1.175bn in 2011 and from €2.3bn in 2008.  Works will be concentrated on the maintenance and repair of the roads network.

National Roads

The National Roads Authority (NRA) was formally established as an independent statutory body under the Roads Act, 1993 with effect from 1 January, 1994. The Authority's primary function, under 56

the Roads Act 1993, is to secure the provision of a safe and efficient network of national roads. For this purpose, it has overall responsibility for planning and supervision of construction and maintenance works on these roads.

N5 Ballaghaderreen Bypass Construction has commenced and the scheme is due for completion at the end of 2014. Construction is, however, ahead of schedule and the N5 main line could be open to traffic in August with some remaining works finished before end of the year. 2014 allocation is €11,200,000.

No significant Exchequer funded new projects are planned to commence in the next number of years. Emphasis instead is on upkeep and maintenance as well as accident reduction measures.

The other major works to take place are:

 N11 Arklow-Rathnew/N7 Newlands Cross PPP: Construction is underway. Expected completion date in 2015.

 N17/N18 Gort/Tuam: Contract signed on 30 April 2014. NRA in process of finalising work programme. Expected completion date 2018.

 M11 Gorey/Enniscorthy & N25 New Ross Bypass: Work is continuing to progress these PPP schemes under the Government’s Stimulus Plan

In May 2014, an additional allocation of €23m was provided to the NRA for additional road maintenance/improvement as part of an overall Infrastructure Stimulus Package (Phase 4). A total of 13 national schemes will receive funding from the extra stimulus.

Regional and Local Roads:

The improvement and maintenance of regional and local roads in its area is a statutory function of each road authority in accordance with the provisions of section 13 of the Roads Act 1993. Works on such roads are a matter for the relevant local authorities to be funded from their own resources supplemented by State road grants. The Minister for Transport has responsibility for regional and local road policy and approves the annual allocation of regional and local road grants to local authorities to supplement their own resources.

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 Funding in 2014 includes €50m for regional and local roads under a Stimulus package (Phase 3) and an additional €20m under the Phase 4 Stimulus Funding package (May 2014).  The Specific Improvement Grant and Strategic Grants Schemes are being curtailed in 2014. Funding will be concentrated on the maintenance and repair of the roads network.

 A limited amount of funding has been provided under the Specific (33 schemes) and Strategic grant schemes (13 schemes) to meet commitments for schemes already under construction and where a commitment of funding has been made to local authorities.

 In lieu of the Specific and Strategic roads programme, grant allocations have been provided to fund bridge rehabilitation works arising out of the current Principal Inspections framework. This is in line with focusing monies on road and bridge maintenance and strengthening.

 Councils have been given additional flexibility this year in relation to the use of grants. The number of grant categories has been reduced with the winter maintenance grant being the amalgamated with the Discretionary Grant.

Councils have also been given about €10 million extra discretionary monies over and above the combined winter maintenance and discretionary grant allocations for 2013 (€70m in 2014 versus €55m + €5m in 2013). In addition, County Councils will have the flexibility to transfer up to 25% of their Restoration Improvement grant (for road strengthening work) to their Discretionary Grant for use on road and bridge maintenance and repairs. Councils can also continue to re-prioritise road programmes as necessary.

 Under the Local Improvement Scheme in local authorities may use up to 15% (up 8% on 2013) of their Discretionary Grant towards works on private roads should they wish to do so. The local contribution for these schemes is 20% of the total cost of the project.

Community Involvement Scheme

The Department and local authorities are working closely to develop new more efficient ways of delivering the best outputs possible with the funding available to them. In 2013, a pilot Community Involvement Scheme (CIS) was operated, based on community contributions within the range of 20% to 50%.

The legislation underpinning local community involvement in road works is provided for in the Roads Act, 1993. Section 13(6) of the Act provides that a person, or group of persons, may with the consent of the road authority carry out maintenance and improvement works on a local road. So the possibility of local involvement in this kind of works was recognised by the then Government back in 1993.

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CIS statistics 2013:

 A total of 299 schemes were completed  Cork County Council completed the most schemes (30) followed by Cavan County Council (29) and Clare County Council (26)  The overall cost of works came to over €8.92 million.  The local contribution averaged at 25% of the overall cost of works. 14% by means of a monetary contribution to the sum of €1.29 million and 11% by value of community work at €994k.  State grants accounted for 75% of the overall cost of works to the sum of €6.63 million.  The scheme resulted in the improvement of over 178kms of road that ordinarily wouldn’t be considered by a local authority until more heavily trafficked public roads are dealt with.

Over €2.3 million was allocated at the start of 2014 to a number of local authorities to complete the original programme and reach the target of 240 km of improved road at 277 locations.

An additional €12.4m (partially funded from additional stimulus) was allocated in May 2014 to fund a further CIS programme this year. This funding covers 465 new schemes and the improvement of over 280 kms of local road.

Severe Weather

Arising from the severe weather in the period 13 December 2013 - 6 January 2014 the Government confirmed additional funding of €16.8 million for repairs to roads damaged during this period. This funding is in addition to the 2014 regional and local road grant allocations made by this Department to local authorities in January.

To date (25 June 2014), a total of €642,417 of the €16.8m has been drawn down by local authorities for severe weather repairs.

Tolling

At present there are eleven toll schemes in operation in Ireland. Ten of these schemes are on national roads while the East-Link Toll Scheme is located on a non-national road and is the responsibility of Dublin City Council. The contracts for the eight privately-operated toll schemes are commercial agreements between the NRA and the PPP concessionaires concerned. They cannot be changed unilaterally by the NRA or the PPP concessionary.

Revenue accrues directly to the NRA in respect of the Port Tunnel and M50 eFlow operations. All net revenue generated from the M50/Port Tunnel will be re-invested in the national roads network and this includes the buy-out of the M50 from NTR which is over €50 million per year (until 2020). In relation to the 8 PPP schemes with private operators tolls accrue directly to these operators under the terms of the contract. There are some revenue share arrangements in place whereby the PPP

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operator is required to pay the NRA a percentage of revenue when pre-defined traffic thresholds are exceeded.

Toll Revenue and VAT

The Revenue Commissioners determined that the NRA must levy VAT (21%) on M50 and Dublin Port Tunnel tolls from 1st July 2010. Up until then only tolls levied by private operators had been subject to VAT. The NRA appealed the Revenue ruling and hearings took place on 25, 26 February and 31 March 2014. The NRA is awaiting the decision by the Appeals Commissioner and there is no outcome pending that final decision. In the meantime, VAT is being levied on the tolls and the NRA is absorbing the costs.

The toll revenue (approximately €110m) which accrues directly to the NRA each year essentially goes to pay for eFlow operations, tunnel operations and the West Link bridge buyout. Projected income from tolls for 2015 is €106m.

M3 and N7 Traffic Guarantee Arrangements

Traffic risk was a critical issue for banks/sponsors in relation to some of the tolled PPP schemes. Traffic Guarantees were introduced on two schemes to address the issue of traffic risk and the worse case banking scenario of “What if no cars drive on the road”:

- the M3 Clonee-Kells PPP (needed due to high debt quantum) - the N7 Limerick Tunnel Scheme PPP (scheme dependent on specific impact of city centre strategy)

Payments to date for Traffic Guarantee

Year Road scheme Traffic Guarantees Paid (€)

2010 Clonee Kells 0 Limerick Tunnel 0

2011 Clonee Kells 1,559,559 Limerick Tunnel 3,629,804 [Total: 5,189,403]

2012 Clonee Kells 2,161,109 Limerick Tunnel 7,038,403 [Total: 9,199,512]*

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2013 Clonee Kells 2,668,017 Limerick Tunnel 2,938,296 [Total: 5,606,313]*

2014 Clonee Kells 3,016,500 Limerick Tunnel 5,939,000 [Total: 8,955,500]**

NOTE:

*In December 2012 an amount of €2,324,523 was prepaid in relation to an amount payable in January 2013. ** 2014 figures are estimates.

Traffic risk and other PPP schemes

 With regard to the remaining PPP schemes, all traffic risk remains with the operator while the State stands to benefit from the revenue share arrangement where average daily traffic (“ADT”) exceeds scheme specific pre-defined threshold traffic.

 It is envisaged that future PPP projects will be funded by way of unitary/availability payments, that is by way of regular payments by the NRA for the duration of the contract. Under this arrangement it is envisaged that availability payments would be made on a regular basis with penalties applying in the event that the road or particular road lanes were not available. Essentially the cost of the road would be paid back through the unitary/availability payments.

Motorway Service Areas

Originally the NRA proposed up to 12 service areas on the Major Interurban Routes as well as two others proposed for the N6/N18 junction on the Western Road Corridor and on the N11 near Gorey. The imperative to have service areas on the network arises as a result of a number of factors;

 The major inter-urban motorway network is largely complete  EU Working Time Directives contain specific requirements for permissible driving/rest times for professional drivers (i.e., hauliers)  The significant road safety benefits of rest areas for other road users  Trans-European Network Transport (TEN-T) policy. Much of our national road network is part of the TEN-T network, and Regulations include specific requirements with regard to parking and rest facilities on the Core Network.

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At present, there are NRA service areas at three locations on the network. Two are located on the M1 Dublin to Belfast route (Lusk and Castlebellingham) and one on the M4/M6 Dublin to Galway route (Enfield). All three of these service areas provide a high range of services including parking, fuel and restaurant facilities.

The current NRA service areas that are in operation were developed as a Public Private Partnership (PPP) project. Overall, the NRA has indicated that there is a high level of public satisfaction with these service areas as evidenced by customer surveys.

A second group of three service areas is currently under development. They are;

 At construction stage: M11 Dublin to Rosslare route (Gorey)  At tender stage: M7/M9 Dublin to Waterford route (Kilcullen) and on the M4/M6 Dublin to Galway route (Athlone).

These service areas which are located on one side with an overbridge, are due to be in operation on a phased basis between 2015 and 2017.

Intelligent Transport Systems (ITS) (Roads Division)

Intelligent Transport Systems, or ITS, in general involve the application of ICT to the transport arena. It is used extensively by national and local authorities to manage the road network. For example using automatic number plate recognition, or ANPR, the NRA can estimate the journey time between two points on the network and display this information on variable message signs or VMS en route. Other examples are:

 The integrated travel ticket Leapcard  Electronic toll collection (including barrier-free tolling on the M50)  Real-time passenger information displays at bus stops  The journey planning website www.transportforIreland.ie which is multi-modal, covers both public and private services and also includes services in Northern Ireland  Co-operative ITS, or C-ITS, which refers to electronic communication between vehicles and between vehicles and infrastructure and can be used for crash avoidance among other things  ITS is heavily embedded in traffic signalisation

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Private sector navigation and journey planning services like those offered by Google, Tomtom or Garmin etc also come under the ambit of ITS and new developments like the Google car would be considered ITS. Much of the visibility of ITS now is in the form of smartphone apps, several of which have been developed the National Transport Authority.

ITS is seen as a tool with a high potential to help achieve policy goals in the area of transport (modal shift, maximising the utility of current infrastructure; road safety); the environment (emissions reduction) and energy policy (electric vehicles).

National ITS Strategy

Minister of State Alan Kelly approved the creation of a strategy last year and it was announced during the ITS European Congress in Dublin that it would be developed.

A tender process is expected to be completed early July 2014 to select a contractor to develop a National Intelligent Transport Systems Strategy by end Q1 2015 as per Action 106 of the Action Plan for Jobs.

The Strategy will support public and private sector initiatives through identifying gaps in ITS development and deployment and putting in place a framework to address them. It will aim also at improving coordination in delivery of ITS infrastructure in Ireland. Finally it will seek to strengthen Ireland’s capacity in ITS and improve capacity for research and development.

European Policy on ITS

Currently European policy is being driven by the ITS Directive (2010/40/EC) which sets out four priority areas (basically on traffic data, logistics, safety and C-ITS). From these, six “priority actions” have led to the development of three delegated regulations so far in the areas of traffic and parking information and eCall.

ECall is a system which, when fully deployed, will automatically generate an emergency call in the event of a serious crash through the activation of an on-board device. Currently Ireland is, like the rest of the European Union, obliged to make our Public Service Answering Points (Emergency Call Answering Service) eCall-ready by Oct 2017. This will require some investment and the Department is engaging with the Department of Communications, Energy and Natural Resources to ensure that Ireland fulfils its obligations in this field. 63

The current Commissioner, Siim Kallas, frequently complains about the lack of an EU-wide multi- modal real-time journey planner and certainly the focus thus far has been on the generation and making available of travel and traffic information in standardised formats. The Commission has very recently produced a road map on the subject.

The Commission supports the relatively new concept of “travel as a service” or TAAS which brings the telecoms concept of “bundling” to the transport market. For example a person might in the future be able to buy minutes or kilometres of travel by various modes (bus, train, taxi, car hire) per month for a fixed fee.

Recently the Commission has also demonstrated an interest in the development of the C-ITS market and is currently making policy in the area though it is not likely to attempt to legislate in the near future.

In last few months the Commission has started to demonstrate a keener interest in ITS at the interfaces between land transport and other modes (maritme, air).

Another ITS related Directive is the European Electronic Toll Service (EETS) Directive (2004/52/EC). This Directive aimed at a one-tag, one bill, EU-wide electronic toll service solution. Ireland has put in place all the administrative structures required by the Directive and subsequent EU legislation. The initiative has stalled somewhat, probably due to the complexity of the problem, and the current approach is currently regional, focussing on a smaller number of countries on the main European landmass.

Stakeholder organisations

The Department is a member of the public-private stakeholder groups ITS Ireland, where it is also a board member, and the European-level equivalent ERTICO. The ITS European Congress, organised by ERTICO and the biggest ITS event in Europe took place in Dublin in 2013 attracting 1,700 delegates.

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Road Management System

The development and implementation of a Road Management System for Ireland is considered to be a high priority to ensure best practice in managing road expenditure, drive efficiencies and consistency in road licencing and utility permits as well as supporting performance management, oversight and audit together with the co-ordination of other areas such as speed limits. Work in that regard is supportive of the Government’s Broadband Strategy as well as the Action Plan for Jobs and is centred on MapRoad.

MapRoad is an integrated, Geographical Information System (GIS) enabled, Roads Management Information System. The system is owned and managed by the Local Government Management Agency (LGMA) on behalf of local authorities and is in operation in all local authorities in Ireland. The Department has funded the development of the system. MapRoad is currently composed of four main elements – (1) a desktop system, (2) a web based interface and (3) a road licencing and control system. In addition, there is (4) an Android App for inspections or field work. Development and enhancement of the various system elements is on-going together with rollout to the local authorities with relevant training support.

While the initial work focused primarily on roadworks and utility permits, consideration is now being given to inclusion of modules relating to bridges, speed limits, public lighting, accidents and traffic.

The foregoing work is being supplemented by updates to a series of related technical guidance documents. The Department is advancing such updates in conjunction with the local authorities and the LGMA.

Road Management Office

The integrated Road Management Shared Services Office (RMO) is part of the drive by local authorities to achieve increased efficiencies and operational cost savings from reducing resources while facilitating a multi-agency approach to tasks. It will be a centre of excellence as regards all aspects of road management systems dealing with Pavement Management and road licensing in the first instance and extending to other areas over time. It will support the work of local authorities and be an asset to them.

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The Public Service Reform Oversight Group (mandated to make decisions for the Local Authority Sector) has agreed the establishment of the RMO subject to full recoupment of set up and capital costs from DTTAS. The Department has confirmed that it will fund those costs following Minister’s approval in that regard (eSubmission No. e2284 of 24 September 2013 refers).

Establishment of the RMO is currently the subject of a bidding process which should be completed by end July. Action 105 of the Government’s Action Plan for Jobs 2014 envisages the RMO being established in Quarter 3 of 2014 and this is currently on target.

Design Manual for Urban Roads and Streets (DMURS)

A whole new approach to road and street design in urban areas was launched in March 2013. It is a joint initiative of the Department of Transport Tourism & Sport and the Department of the Environment Community & Local Government and was launched by the Minister for Transport Tourism & Sport in conjunction with the Minister for Housing and Planning. DMURS emphasises the role of streets as social spaces where people come first and it is available on the websites of both Departments. The Manual sets out design guidance and standards for constructing new and reconfiguring existing urban roads and streets in Ireland incorporating good planning and design practice. Its use is mandatory.

The Department has facilitated a number of training sessions to assist local authorities with implementation.

Public Transport Accessibility Accessibility improvements to public transport services are being advanced in the context of Transport Access for All, the Transport Sectoral Plan under the Disability Act 2005. This is being done as extensively as possible having regard to the availability of resources with delivery being realised primarily through the Department’s agencies.

The Plan sets out a series of policy objectives and targets for accessible public transport across all modes and significant progress has already been achieved. While the Plan does not include tourism and sport accessibility matters, these are addressed in the Government’s National Disability Strategy Implementation Plan (NDSIP) together with Transport Sectoral Plan actions. A monitoring committee, which includes representatives of people with disabilities, is in place to ensure delivery of the Department’s NDSIP actions.

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Road Safety Division

Assistant Secretary: Graham Doyle Principal Officer: Maurice Treacy

Role

The primary function of the Road Safety Division is to promote and advance safety on the roads, through the implementation of specific elements of the Road Safety Strategy. The Division has responsibility for road safety policy and legislation, and works closely with its agencies, the Road Safety Authority (RSA) and the Medical Bureau of Road Safety (MBRS). The Division oversees the operation of the law on compulsory motor insurance and is responsible for the implementation of EU Motor Insurance Directives.

The Division also works closely with the Department of Justice and Equality, the Courts Service, and An Garda Síochána which have a major role in the enforcement of road safety measures. The current framework for road safety is set out in the Fourth Road Safety Strategy 2013 to 2020.

The Division liaises with the Northern Ireland and UK authorities on road safety on a cross-border basis, within the frameworks of both the North South Ministerial Council and the British Irish Council.

Road fatalities

Fatalities on our roads have fallen in recent years – from 415 deaths in 2001 to a dramatic reduction to 162 in 2012. Unfortunately, this figure rose to 190 deaths in 2013. The number of fatalities in 2014 to date (27 June) is 87, which is an increase of 1 as on this date last year.

Number of Road Deaths 2007 – 2014

Month 2010 2011 2012 2013 2014

January 15 21 10 19 15

February 14 18 13 14 12

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March 12 15 12 15 16

April 19 8 16 12 14

May 28 11 13 17 18

June 11 15 26 13 12*

July 22 18 15 18

August 19 16 12 19

September 13 13 10 17

October 36 15 15 13

November 13 18 8 16

December 10 18 12 17

Total 212 186 162 190 87

*As of 27th June 2014

Road Safety Strategy

Road Safety Strategy 2013 to 2020

The Road Safety Strategy 2013 to 2020 was launched at the EU Presidency Road Transport Safety Conference on Serious Injuries on Thursday 28 March 2013. The Strategy, which was agreed by the Government, identifies 144 Actions to be implemented by key partners in the eight-year period that will lead to a further significant reduction in fatalities.

The Strategy’s two main objectives are:

 A reduction of road collision fatalities on Irish roads to 124 (25 per million population) or less by 2020.  A provisional target for the reduction of serious injuries by 30% from 472 in 2011 to 330 or fewer by 2020 (or 61 per million population).

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The new Strategy is based on the Safe Systems approach to road safety. This approach reinforces the concept of shared responsibility across organisations, businesses and communities. It seeks to continue to reduce road fatalities, but will also have a new focus on reducing the number and severity of injuries on our roads. It covers a wide variety of sectors that contribute to, and impact, on road safety including education, law enforcement, health as well as the many aspects of transport. The Actions deal with issues such as:

 Distraction by using mobile phones while driving  Work related vehicle safety  Medical Fitness to Drive  Drug driving  Fatigue  Vulnerable road users

A lead Agency for the implementation of all 144 actions is identified in the Strategy, together with a target completion date for each. The bodies/agencies involved include the Road Safety Authority, An Gardaí Síochána, the Health and Safety Authority, local authorities, and Government Departments. The Road Safety Authority holds overall responsibility for overseeing implementation.

The Ministerial Committee on Road Safety, chaired by the Minister, meets twice a year to monitor and facilitate the implementation of the Actions. The last meeting took place on 12 May 2014, and was attended by, among others, the Attorney General, the Minister for Justice and Equality, An Garda Síochána Assistant Commissioner, CEO of the Road Safety Authority, CEO of the National Roads Authority, CEO of the Health and Safety Authority, and the Director of the City & County Managers Association. The next meeting is scheduled for 10 November 2014.

Road Safety Authority

Chief Executive Officer: Moyagh Murdock

Chairman: Gay Byrne

The Road Safety Authority is a statutory organisation created by the Road Safety Authority Act 2006. It has responsibility for:

 Road Safety Awareness and Education  Driver testing 69

 Vehicle standards and related matter  Drivers’ hours and rest periods, including tachographs  Working time directive on the road transport sector  Bus and truck driver vocational training  Enforcement issues relating to bus operator and road haulage operator licencing, drivers’ hours and commercial vehicle standards  Statistical data collection and research functions  National Car Testing (NCT) system

In 2013, the Authority’s functions were expanded to include responsibility for

 driver licensing and  Commercial vehicle roadworthiness testing.

The RSA developed the fourth Road Safety Strategy 2013 to 2020, as outlined earlier, and reports annually to the Minister on progress in its implementation.

Appointment of Chairperson and Board of Road Safety Authority (RSA)

Under the Road Safety Act 2006, (Section 14), the Minister appoints members, including the Chairperson, to the Board of the RSA.

Up to 11 members and not less than 6 may be appointed to the Board by the Minister, to include the Chairperson, who must also be a member of the Board and this appointment must be for a period of 5 years.

Under Section 14 of the Act each member of the Board shall be a person, who, in the opinion of the Minister, has wide experience in relation to road safety, transport, driver education and examination, industrial and commercial matters, local government, the organisation of workers or administration.

Under Section 22, members of the Houses of the Oireachtas, the European Parliament or the local authority are not eligible to be appointed members of the Board.

The current Board Members are: Ainé Cornally, Myra Garrett, Aaron MacHale, Eddie Rock, Ronan Melvin, Dr. Áine Carroll, Sean Finan, Aideen Carberry and John Mulvihill.

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The Minister may wish to note that Gay Byrne, Chairman, has tendered his resignation and will need to be replaced with effect from September 2014. The term of appointment for 3 members of the Board will also expire in September 2014.

Exchequer funding to RSA

Since 2009, the RSA has continually reduced its dependence on Exchequer funding and has an Exchequer allocation of €3.4 million for 2014.

Medical Bureau of Road Safety

Director: Professor Denis Cusack

Chairman: Professor Cecily Kelleher

The Medical Bureau of Road Safety was established in November 1968 under Part V of the Road Traffic Act, 1968. The Bureau is attached to the Department of Forensic Medicine at University College Dublin and moved with that Department to purpose built premises at UCD Belfield at the end of 2007. UCD provide the staff of the Bureau on a secondment basis.

The Bureau plays a crucial forensic role in prosecutions for intoxicated driving. The Bureau’s principal function is to carry out analyses for alcohol content and/or the presence of drugs in specimens of blood, urine and breath provided for the Gardaí by people suspected of driving while intoxicated. The Bureau issues certificates in respect of the results of these analyses, which may be used as evidence in prosecutions for such offences, and members of staff often have to attend court cases as expert witnesses.

Other functions of the Bureau include analyses of blood/urine specimens for the presence of a drug or drugs, the provision of equipment to the Gardaí for the taking of such specimens and the approval, supply and testing of apparatus for indicating the presence and the concentration of alcohol in breath (i.e. Evidential Breath Testing (EBT) machines and breathalysers). The Bureau also conducts research on intoxicated driving.

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Primary Functions of the MBRS

The primary activities of the MBRS can be classified into the following main programmes:

Blood and Urine Alcohol Analysis

In 2012 (the latest figures available), the total number of blood and urine specimens analysed for alcohol concentration was 8,913, representing an overall decrease of 11.5% over 2011.

Drug Analysis

The Bureau analyses all blood and urine specimens found under the limit for alcohol, for the presence of seven different classes of drug or drugs. The number of 2012 specimens analysed for the presence of drugs was 1,484, an increase of 21% on 2011.

Evidential Breath Testing (EBT)

The Road Traffic Act 1994 provided for the introduction of EBT by the Gardaí under which drivers may be required to undergo a breath test in a Gardaí Station (instead of a blood or urine test) following arrest for drink driving. The Bureau is centrally involved in this programme. It calibrates and supplies the machines, and oversees Gardaí training.

Appointment of Chairperson and Board of MBRS

The Board comprises five members, including the Chair, appointed by the Minister. All members are appointed for their specialised knowledge in the area.

Exchequer Funding to MBRS

The budget summary indicates that the cost of running the Bureau in 2014 will be approximately €4.455m. The Exchequer will provide 100% of the funding requirement.

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Legislation

Vehicle Clamping Bill 2014

Current legislation on clamping only deals with clamping on-street, by or under contract to local authorities but not to the activity of clamping on private land. In accordance with the commitment in the 2011 Programme for Government to legislate to regulate clamping, the Government approved the drafting of a Bill on the 26th March 2013.

The Minister announced the publication of the Vehicle Clamping Bill 2014 on June 9th last. The principal provisions of the Bill include the establishment of the National Transport Authority (NTA) as regulator for the activity of clamping, the provision of appropriate advisory signage in locations where clamping is in operation, setting of maximum clamp release periods and fees, and establishment of an independent two-tier appeals process. The provisions of the Bill will apply to clamping activities on all property where the public has an invitation to park as of right or subject to terms and conditions. The Bill is scheduled to be introduced in the Seanad on July 16th next.

Road Traffic Bill 2014

Work is under way to prepare the heads for this Bill. The principal focus will be on testing of drivers at the roadside for the presence of drugs similar to mandatory alcohol testing which is currently in place. In addition, there will be a variety of measures to amend legislation on commercial vehicle roadworthiness testing, driver licensing, penalty points, and written-off vehicles, among other matters. As work is at a relatively early stage, it is anticipated that the Bill will be published towards the end of 2014.

Road Traffic Act 2014

The Road Traffic Act 2014 was signed into law by the President in February of 2014. The key elements of the Act include :

 provision of a number of graduated driver licensing measures;  revision of the penalty points system in line with a review undertaken in 2012;  provision of non-technological tests for intoxication(cognitive impairment tests);  provide for testing for intoxicants of incapacitated drivers following road traffic collisions;  provide for a number of miscellaneous matters and technical amendments.

The Minister has signed an order under which most provisions of the Act have been commenced or will commence from 1 August 2014. 73

Provisions yet to be commenced are:

 Penalty points changes;  Intoxication testing and testing of incapacitated drivers;  Requirement of learner drivers to log a specified number of hours’ driving experience before a driving test.

Commencement of penalty point changes is dependent on agreement on timing with An Garda Síochána. This should be possible very shortly. Preparatory work on the intoxication issues is almost complete and the provisions should be ready for commencement in the near future. The driving logbook will require regulations, which are being drafted by the RSA. The provisions and the regulations will be introduced together when ready.

Commencement of Parts 3 and 5 of the Road Traffic Act 2010 and the extension of the Fixed Charge and Penalty Points Systems

The Road Traffic Act 2002 provides for the operation of the Penalty Points System and the Fixed Charge System in Ireland. Over 69 offences are scheduled in the 2002 Act to be penalty point offences, which have been increased by further amendments to the legislation. To date, over 60 of these offences have been made fixed charge offences and 48 attract penalty points.

Parts 3 and 5 of the Road Traffic Act 2010 provide for enhancements to the Fixed Charge and Penalty Points systems. The commencement of these parts is delayed pending agreement between the Gardaí and the Courts Service regarding the operation of a 3rd payment option for dealing with fixed charge notices. On receipt of a fixed charge notice, the offender has 28 days to pay the fine. If payment is not received in 28 days, the offender has a further 28 days to pay, but the fine increases by 50% e.g. a fine of €80 now becomes €120. If no payment is received a summons to court is issued. The 3rd payment option will give the offender a third chance to pay the fine not later than 7 days before the court date. The fine will now be 100% greater e.g. the original €80 fine is now €160. The Department makes regular contact with these bodies regarding the conclusion of a suitable arrangement.

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Drug Driving

Enforcement of the law on drug driving is a matter for An Garda Síochána. Currently, where a member of the Garda Síochána is of the opinion that a person in charge of a mechanically propelled vehicle in a public place is under the influence of a drug or drugs to such an extent as to be incapable of having proper control of that vehicle, he or she may arrest the driver and require that person to go to a Garda station and further require that person to submit to a blood test or to provide a urine sample.

The influence of drugs, including legal medication, on driving behaviour is an issue of increasing concern but the process of identifying the presence of drugs is more complex than it is for alcohol.

The Department commissioned the MBRS to undertake a considered study of all aspects of roadside drug testing, including reference to and analysis of any equipment currently in use or anticipated to be introduced for carrying out such tests and indication of the likely timescale involved in reaching an acceptable solution to the problem.

The MBRS report “Report on Roadside Drug Testing and Equipment and Related Matters” was published in June 2012. Its Recommendations were to:

1. Continue the current position with the addition of Roadside Impairment Testing to be made operational as soon as practicable. 2. Introduce roadside chemical testing as soon as practicable.

The MBRS has been working to identify devices which may be used to identify the presence of certain drugs. Intoxication impairment tests, as set out in the 2014 Act, will also act as a preliminary means for identifying intoxication in cases where drugs may be involved. The introduction of roadside impairment testing is awaiting a commencement order, while tender documents are being prepared by the MBRS for the selection and introduction of the devices. Enabling legislation will be provided in the 2014 Road Traffic Bill to further strengthen legislation on intoxicated driving and to deal specifically with drug driving and the introduction of suitable equipment to detect a range of certain commonly used drugs at roadside checkpoints.

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Cross-Border Co-Operation on Road Safety

Mutual Recognition of Penalty Points with Northern Ireland

The mutual recognition of penalty points between Ireland and Northern Ireland is being dealt with under the auspices of the North South Ministerial Council. This work has focussed on the mutual recognition of penalty points in each jurisdiction for the four road traffic offences of speeding, drink/drug driving, non – wearing of seatbelts and using a mobile phone while driving. Progress has been made in advancing this challenging work and some key policy and operational issues have already been agreed. However, the discussions have been temporarily halted to allow for the resolution of a difficulty in relation to the prosecution, in absentia, of non-resident drivers, charged with road traffic offences. The Department is working with the Department of Justice and Equality, the Gardaí and the Attorney General’s Office with a view to resolving the problems.

Mutual Recognition of Driving Disqualifications with the UK

Mutual recognition of driving disqualifications (MRDD) between Ireland and the UK has been in place for almost five years, based on the 1998 EU Convention on Driving Disqualifications and primary legislation in both jurisdictions. The UK has given notice to the EU under Article 10.4 of Protocol No. 36 of the Treaty of Lisbon that the Convention, and a large number of other measures in the police and criminal justice cooperation area, will cease to apply to it as an from 1 December 2014. However, as the UK and Ireland wish to continue to recognise MRDD after the UK opts out of the Convention, discussions have been ongoing between Ireland and the UK regarding an international agreement and primary legislation to implement MRDD after that time. It is acknowledged that there will be a period after 1 December 2014 when no arrangement on MRDD between Ireland and the UK will be in place. At present, formal legal advice is awaited from the Attorney General’s Office on the matter, including regarding the extent to which Ireland has the competence to enter into a MRDD agreement with the UK, particularly in circumstances where it is proposed that the agreement will differ somewhat from what is contained in the Convention.

Penalty Point and Fixed Charge Systems

The penalty points system for certain driving offences was introduced in Ireland on 31 October 2002. The offences selected for inclusion in the system all relate either directly or indirectly to road safety and the principal focus of the system is to influence and improve driver behaviour in Ireland and reduce the levels of death and serious injury on our roads. The Fixed Charge System applies to a range of non-penalty point offences as well as penalty-point offences and has been extended to

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almost 60 offences. The total number of road-traffic offences attracting penalty points is now 48. The legislation governing penalty points is set out in the Road Traffic Act 2002 (as amended).

A Review of the Penalty Points System was completed in 2012. The review took into account the main causes of road deaths and made comparisons with penalty points systems in other jurisdictions. The views of the Joint Oireachtas Committee on Transport and Communications on the Review were sought and received. The Review recommended a number of adjustments to the current system. It also included proposals to bring additional road traffic offences into the Penalty Points System and to bring certain offences that were previously dealt with by a direct summons to court into the fixed charge payments system. These changes have now been implemented through the Road Traffic Act 2014.

An inter-agency group was established by the Courts Service to report on, among other issues, the measures to be put in place to enable section 44 of the Road Traffic Act 2010 to be commenced. This section provides for a final option of payment of a fixed charge ("a third payment option") on receipt of a court summons, to avoid the matter going to court.

The Penalty Point Working Group and its work were subsumed into the Criminal Justice Working Group, established in March 2014 on foot of a recommendation in the Garda Inspectorate Report on the Fixed Charge Processing System. The Group is jointly chaired by this Department and the Department of Justice and Equality and comprises representatives of the Garda Síochána, the Courts Service, the Road Safety Authority, the Director of Public Prosecutions and any other State agency that the Group considers necessary for the fulfilment of its role such as the Revenue Commissioners and the Department of the Environment, Communities and Local Government. The function of the Working Group is to oversee and facilitate the implementation of the recommendations of the Report of the Garda Síochána Inspectorate into The Fixed Charge Processing System. In carrying out its function, the Group will have particular regard to the Action Plan agreed between the Minister for Justice and Equality and the Garda Commissioner. Progress reports will be made to Government on a six monthly basis, beginning in July 2014.

Speed limits

The Road Traffic Acts set default maximum speed limits at 120km/h for motorways, 100km/h for rural national roads, 80km/h for rural regional and local roads and 50km/h for built-up areas. The Acts also enable individual county councils and city councils to make bye-laws (a reserved function) to apply a special speed limit in lieu of the default speed limit. The range of special speed limits that

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can be applied under bye-laws is 100, 80, 60 or 50 km/h. Special speed limits of 120km/h or of 30 km/h may be applied also but these latter two values can only be applied in accordance with Ministerial statutory guidelines. Speed limits also links in with the Smarter Travel agenda, in relation to both sustainability issues and management of traffic for cyclists and pedestrians.

The Minister initiated a review of speed limits in 2012. The primary purpose of the review was to improve the consistency of the application of speed limits nationwide so as to contribute to a reduction in speeding, which is a key cause of road collisions and fatalities. The Speed Limit Review Group’s final report containing 18 actions was published on November 21st 2013. The recommendations contained in the Report are planned to be implemented over a two year period. The Minister has asked the Chief Executives or equivalents of the bodies involved in implementing the recommendations to participate in a Steering Group which will monitor and ensure the implementation of the key actions of the report.

The Group held its first meeting in February 2014 at which it was decided to request local authorities and the NRA to survey the road network within their administrative areas in order to determine the number and cost involved in replacing current inappropriate speed limit signage with revised signage, including the new Rural Speed Limit signs. The information gathered from this survey will also feed in to the proposed Map-Road Speed Limit application which will assist the Department in gathering data on speed limits currently in force on each road in the State, as well as determining when they were last audited. It is intended to review speed limits on the national road network at no longer than five-year intervals. It is expected that local authorities will begin erecting new signage in Q3 2014. In addition to these measures, a number of other key initiatives were identified in support of the implementation of the published report’s eighteen lead actions.

Driver Licensing and the National Driver Licensing Service (NDLS)

The RSA has responsibility for issuing driver licences nationally via the National Driver Licensing Service (NDLS), which came on stream in 2013. Before this, the task was undertaken by more than 30 local authorities.

Irish driver licensing law operates within the framework of EU law. The basis for driver licensing law is Directive 126 of 2006, as amended. The Directive required all Member States to move to a standard plastic format of driving licence by 19 January 2013. Ireland decided that this provided an opportunity to review the delivery of driving licences and see if a more efficient system could be devised.

Following a study of options, the Government decided in May 2011 to centralise driver licensing in the RSA. The study showed that centralisation would offer greater efficiencies, a more streamlined 78

service, and improved security. The necessary legislation to give effect to this was passed in the Road Safety Authority (Commercial Vehicle Roadworthiness) Act 2012.

The NDLS, designed by the RSA, consists of a central unit in the RSA and three outsourced contractors procured by the RSA through open competition. These are:

 Front office for engaging with customers;  Back office for processing applications;  Card licence producer.

The RSA formally became the national driver licensing authority in January 2013. Local authorities continued to perform some front office functions until October 2013, when the NDLS took over full operation of the driver licensing system.

There were teething problems in the early days of the NDLS which led to significant delays in processing applications and the build-up of a backlog. In response the RSA identified and addressed a number of problems, fixing IT difficulties, providing extra training for staff, and providing extra staff for particularly busy front offices.

As a result, the backlog was dealt with and applications which are fully in order are being turned around in five days. There are and will always be some applications which are not fully in order and where further contact with the applicant is necessary.

Graduated Driver Licensing

The Road Safety Strategy 2007 – 2012 outlined a range of measures to be considered in relation to a Graduated Driver Licensing System (GDLS). Graduated Driving Licensing (GDL) systems provide for a progression of driving licence privileges during instruction, following qualification and as experience is gained.

In October 2007, driver licensing regulations were made that provided for the introduction of a learner permit to replace the provisional licence and some other measures. These regulations were the first step towards introducing GDLS.

Following a consultation process, the RSA presented proposals for a GDLS for Ireland to the Minister, who considered and approved them. The RSA published its proposals on 1 September 2010.

The RSA proposals, with their current status, are:

1. Strengthen the role of accompanying driver – provided for in Road Traffic Act 2014, not yet commenced. 79

2. Role of Driving Instructors – compulsory basic training with an approved driving instructor – now in place.

3. Lower Alcohol levels for learners – now in place.

4. Faster Accumulation of penalty points for learner drivers – provided for in Road Traffic Act 2014, not yet commenced.

5. Hazard Perception Test – not yet in place; RSA examining details.

6. Enhance the Driving Test – now in place; may be further enhanced.

7. Require novice drivers to display an R plate – provided for in Road Traffic Act 2014, commences from 1 August 2014.

8. Material for the Driver Theory Test should be reconfigured to make it more effective as a learning tool – now in place; may be further enhanced.

9. That the range and combination of sentencing options available to the courts for driving offences be expanded – under study by RSA.

Driver Testing

The RSA has overall responsibility for the driver theory tests, which is operated by an outsourced provider. The current contractor is Prometric.

Delivery of driver testing services for the practical driving test is managed directly by the RSA, which employs driver testers and conducts driving tests at 52 centres through the country. The driver testing service operates in accordance with EU and Irish legislation.

The RSA is in the process of rationalising the driver testing service and reducing the number of driver testing centres. The principle on which this is based is that 90% of the population should be no more than 35 miles from the nearest test centre.

Regulation of the Driver Instruction Industry

From 30 April 2009 a person giving driving instruction for hire and reward must be an Approved Driving Instructor (ADI). The ADI examination process consists of 3 stages, a theory test, a test of

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driving ability and a test of ability to give instruction. This process is managed and operated by the RSA.

Traffic Signs Manual

The Minister may issue statutory directions in relation to the form, provision and use of regulatory, warning and information traffic signs. This takes the form of a published 2010 Traffic Signs Manual which is available for download from the Department’s website.

Disabled Person’s Parking Scheme

In July 2010 the Department launched a review of the Disabled Parking Scheme which made a number of recommendations for the improvement of the Scheme. The key change is to refocus the medical criteria for eligibility for a Disabled Person’s Parking Permit from type of condition to degree of mobility impairment. This change, which has the support of the Disabled Drivers Association of Ireland (DDAI) and the Irish Wheelchair Association (IWA), will ensure that the Scheme benefits only those it was originally intended to benefit. The new system came into effect in February 2011.

The scheme is managed and operated jointly by the DDAI and the IWA.

Vehicle Standards and Testing

Commercial Vehicle Roadworthiness Testing Under the Road Safety Authority (Commercial Vehicle Roadworthiness) Act 2012, the authorisation and supervision of commercial vehicle testing was centralised under the Road Safety Authority to ensure consistency of testing across the country.

The RSA is now responsible for the overall supervision of the commercial vehicle roadworthiness testing system. This is part of the overall implementation of the Commercial Vehicle Roadworthiness (CVR) reform program. 2013 saw the introduction of a series of reforms aimed at bringing about a step change in the roadworthiness of our commercial vehicles in three key areas - commercial vehicle testing, operator obligations and roadside enforcement. The reform programme came about following concerns arising in relation to the roadworthiness of some public service and heavy goods vehicles involved in serious road traffic collisions including the Kentstown and Clara school bus collisions where 6 school children tragically lost their lives.

It is still the case today that roadworthiness standards need to be improved. In 2013, RSA Vehicle Inspectors participated in 1,616 roadside checkpoints with An Garda Siochana. This represents an increase of 54% over 2012. Roadworthiness checks almost doubled to 14,269 vehicles when 81

compared to 2012 and these checks revealed that 7,961 vehicles or 56.5% had defects. A total of 521 vehicles were dangerously defective and warranted immediate action, such as impoundment, repair on site or a new test. In 2014 to date around 2,000 commercial vehicles have found to be so defective at the test that a fail dangerous notice has been placed on the vehicle.

A number of milestones were achieved in 2013. In March, the Road Safety Authority took over responsibility from the Local Authorities for commercial vehicle testing. In September 2013, new repair and maintenance obligations on road transport operators were introduced. In October, a new single testing system which will support the delivery of a high standard of consistent testing was rolled out across 147 test centres. Throughout 2013 the RSA and the AGS worked to increase the level of roadside enforcement. The new system aims to support compliance by targeting non- compliant operators and minimising disruption to complaint operators as they go about their daily business.

Operation of the National Car Test (NCT) The RSA have a contract in place since 4 January 2010 with the Applus+ Car Testing Service to carry out NCT testing. This contract requires the contractor to meet a number of specific performance standards in a wide range of operational areas including: customer waiting times, customer satisfaction and test integrity. The contract sets out the penalties that can be imposed in the event that the contractor fails to meet the performance requirements. The RSA monitors the performance of the NCT continuously. The NCT operates 47 test centres across the country.

In 2013 the NCT carried out a record 1.17m full tests on private cars. When the NCT was first introduced, in the year 2000, just 309,434 full tests were undertaken. At that time the pass rate on the first attempt was just under 4%, compared to over 70% in 2013 for cars that are four years old. The NCT is a key contributor to the roadworthiness of vehicles and also is an important preventative road safety measure that ensures vehicles, particularly older vehicles; using Irish roads are in sound working order.

RSA Contract with Applus [+]

Financial Penalties

The RSA has frequent meetings with the contractor to discuss performance and issues arising. In 2010 performance of the contract was assessed based on performance over the course of a full year. Since 2011, the performance of the contractor is assessed on a quarterly basis. The contract put in place by the RSA sets out the penalties, which can be imposed in the event that the contractor fails to meet the performance requirements.

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Waiting Times

It is the case that there is significant demand for NCTs in the early part of each year. This is attributable to the registration system in Ireland and the level of new car sales in the early part of the year. While the registration system changed in 2013, it is still the case that the vast majority of vehicles are registered in the first half of the year. For example, this year 51% of cars due for testing are registered in the first quarter and circa 80% in the first 6 months. In addition, the fall in new car sales over the last few years means the proportion of used vehicles has risen and, due to the introduction of penalty points in 2009, timely compliance has improved. It is good news for road safety that more cars are having their roadworthiness test earlier however the consequent demand for testing puts pressure on the NCTS in the early part of the year.

For the vast majority of motorists booking a car test, lead times are around 14 - 28 days. Any owner who requires a test quickly should receive an appointment within 28 days. To meet this standard, in some cases, requires the company to hold requests on a waiting list until suitable slots are found. In the majority of cases, customers are given a slot within the required timescale. However, if a slot is not found within 28 days the test will be provided free of charge. Having said that, customers who contact the company at busy times are often happy to accept a firm booking at a longer lead time, rather than go on the priority waiting list. To accommodate this, Applus[+] makes booking slots available further in advance. Applus[+] also offers test slots which become available through cancellations to facilitate customers who need an earlier test date.

Consolidating and Amending NCT Regulations The conduct of compulsory periodic roadworthiness testing of private passenger cars is currently governed by S.I. 567/2009 Road Traffic (National Car Test) Regulations 2009 (as amended). The Minister has decided to consolidate these regulations and to make amendments to allow, inter alia, for the:

Introduction of voluntary testing: This will enable NCTs to be carried out more frequently than the current bi-annual or annual mandatory test. Owners will have the opportunity to bring their cars in earlier than the test due date and to obtain a certificate with an expiry date 2 years (or 1 year in case of cars over 10 years old) from the date of testing. The test due date for vehicles tested on-time (i.e. within 3 months in advance of the test due date) or late would however remain unaffected by this change. This initiative will promote road safety, enhance NCTS customer service, benefit vendors and purchasers of cars in regard to odometer readings and assist the motor trade in enhancing the sale of second hand cars.

Verification of the odometer reading by the presenter of the vehicle: Currently the odometer reading recorded at the last test is available on the NCT certificate and on the Vehicle Inspection

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Report. This change will allow for the recording of the current odometer reading on the NCT disc and, going forward, prior readings to be printed on the Roadworthiness Certificate – to a max of 3 prior readings. This will make prior readings readily available to potential purchasers and will deter odometer fraud.

Removal of entitlement to test up to 6 months in advance on first test; Very few vehicle owners avail of this facility – only 3,218 in 2013 when 1.17m vehicles were tested. Owners due for first test will still be able to test up to 3 months in advance. If they test prior to 3 months it will be a voluntary test.

Amendment of Schedule 3 (test items) and Modification Report: Schedule 3 is being amended under several test items to allow for refusal where there is an obviously unsafe repair or modification. Also, where a safety critical modification e.g. chassis lengthened or shortened, goods vehicle converted to passenger car, modifications to braking, steering, suspension systems, has been carried out since the last test, the owner will be required to present a Modifications Report in a particular format (set out in the NCT Manual) completed by the manufacturer or a Suitably Qualified Individual.

Establishment of a trade management solution for trade vehicle NCTs: The management of NCT bookings for trade vehicles is made difficult by the fact that vehicles presented by trade customers are rarely, legally associated to them, i.e. they are not the owners of these vehicles. As part of the Applus[+] Fraud Management Plan it was agreed that a mandatory Trade Management Solution would be put in place, the objective of which, is to provide a systematic approach to trace inspection activity to the trader who prepared/presented a vehicle for inspection, and therefore to provide an ability to perform “trade inspection” analysis.

The necessary regulations to give effect to the Minister’s decision have been drafted and are in the process of being legally settled before being submitted to the Minister for signing into law. The scheduled commencement date for these new regulations will be the 28th July 2014.

Vehicle Weights

In May 2013 the Minister signed legislation to increase the maximum gross weight of articulated combinations to 46 tonnes when carried on a six axle (3+3) vehicle combination. Following the commencement of this legislation representations were received from haulage industry representative bodies seeking increased gross vehicle weight allowances for differing classes of vehicle and trailer combinations; i.e. 6 axle drawbars, tipper vehicles, tri- axle and livestock vehicles. Rather than address such requests in a piecemeal fashion, the Department tasked the NRA with conducting a comprehensive survey of the road infrastructure network in order to determine what weight tolerances the network’s roads and bridges could tolerate. Once the NRA’s final report is forwarded to the RSA, the RSA will update their 2008 Vehicle Weights Study in light of the findings 84

received. On-going commitments preclude the RSA from commencing work on this project until early in 2015, after which time they will submit their recommendations to the Minister upon completion of the project.

Revised Standards for Agricultural Vehicles on Irish Roads

The Minister recently signed into law new regulations introducing revised standards for agricultural vehicles which come into effect on the 1st January 2016. These new standards are being introduced following a comprehensive review, including a public consultation, undertaken by the Road Safety Authority (RSA) over a prolonged period in 2008-2009 which examined the current legislation, as well as policy and practice relating to the use of agricultural vehicles on public roads.

The current regulations are in place for more than half a century during which time agricultural vehicles have become bigger, faster and more powerful, and their use has been expanded to include a wide variety of tasks outside the scope of the current regulations. Agricultural vehicles are now widely used on our roads, they are generally constructed to very high standards and it is important that the regulatory regime reflects the developments in agricultural vehicle technology and requires them to comply with recognised vehicle standards in relation to a number of key safety areas, i.e. braking, suspension systems, tyres and lighting as well as the weights for which the vehicles are designed.

The majority of correctly maintained tractors already in use comply with the revised standards being introduced. Those that do not comply are likely to need only minor remedial works carried out such as fitment of a flashing amber beacon and/or a replacement manufacturer’s plate indicating their design axle weights and maximum permitted towable masses.

Trailers already in service will also be able to continue in use, but, due to varying construction standards, some will need remedial work if they are intended to be used at higher weights and at speeds of more than 40 km/h.

Tractors and trailers operating at higher speeds and weights will also be required to be appropriately plated and speed rated.

A summary of the improvements applying from 1st January 2016 is as follows: 85

 More powerful braking systems will be required for agricultural vehicles operating at speeds in excess of 40km/h. Most of the correctly maintained tractors which have come into use in the past 30 years already meet these requirements.

 Agricultural vehicles will need to be equipped with appropriate lighting systems, flashing amber beacons and reflective markings.

 Trailers operating at weights exceeding 19 and 22.5 tonnes for tandem and triaxle trailers respectively, or at speeds exceeding 40 kilometres per hour, will require fitment of both a weights and dimensions plate and a speed disc.

 New national weight limits are being introduced. These will enable tractor and trailer combinations which are unplated to continue in use at limits which are safe for such vehicles, i.e. combinations of agricultural tractors and trailers, where either of them is unplated, will have their maximum towable mass capped at 3 times the tractor’s unladen weight. Plated tractors and trailer combinations will benefit from being able to operate at higher weight limits of up to 24 and 34 tonnes for tandem and triaxle agricultural trailers respectively that meet certain additional requirements:, i.e. they must be plated, they must be fitted with a flexible suspension system, they must be fitted with flotation tyres for operation at 10 tonnes per axle in the case of a tandem axle trailer or 9 tonnes per axle in the case of a triaxle trailer, and finally they must be fitted with a steered or steering axles if they have an axle spacing of 1.8 metres or greater.

 Exemptions from compliance with the revised national weight limits are being provided for certain types of interchangeable towed equipment such as slurry tankers, manure or fertiliser spreaders and grain chaser bins.

The RSA are currently engaging with the agricultural sector in order to effect the effective promulgation of the new arrangements.

MOTOR INSURANCE

Motor Insurance and the Motor Insurance Bureau of Ireland

Since 2002, the Department of Transport, Tourism and Sport has the lead role in relation to policy and legislation on the availability and cost of motor insurance and any related inter-Departmental coordination.

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The Motor Insurers’ Bureau of Ireland (MIBI) Agreement is an agreement between the Minister for Transport, Tourism and Sport and the Bureau, representing all insurers who underwrite motor insurance in Ireland. The Agreement provides a mechanism whereby innocent victims of accidents involving uninsured and unidentified drivers may obtain compensation. This Agreement was last revised in January 2009.

Motor Insurance Legal Cases

There are a number of legal cases outstanding against the Department, arising from a time when European Motor Insurance Directives were found to have been incompletely transposed into Irish law. A headline motor insurance case, Farrell vs Whitty, has been referred to the Supreme Court for a decision regarding the liability of the Motor Insurance Bureau of Ireland to pay 3rd party claims for personal injury or damage to property. These cases fall into three categories:

1. Uninsured Back of Van cases – in which an agreement has been reached with MIBI pending an appeal in the headline Farrell vs Whitty case in the Supreme Court.

2. Insured Back of Van cases – in which the Department has been negotiating an agreement with MIBI pending an appeal in the Farrell vs Whitty headline case.

3. Motorcycle pillion cases – which are being settled on a case by case basis.

The Department is exposed to a liability of some €19.7 million in these cases, some of which will have to be met in 2014.

European Court of Justice

A number of motor insurance cases concerning the interpretation of the EU Motor Insurance Directives come before the European Court of Justice (ECJ) on a regular basis. The interpretation of the insurance directives and the decisions reached by this Court can have far reaching effects on motor insurance law. The Department monitors such cases as they arise and presents arguments to the court when required.

Proposed Motor Insurance Bill

Motor insurance under the Road Traffic Acts is based on the 1961 Act, as amended. It is considered desirable to review the legislation to clarify and update it as necessary. To commence this process it is proposed to commence a consultation in 2014 with a view to the drafting of a Motor Insurance Bill.

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Driver and Vehicle Computer Services Division Assistant Secretary: Maurice Mullen

Principal Officer: Gerry O’Malley

Role

The Driver and Vehicle Computer Services Division located at Shannon, Co. Clare with a current staff of 64 has responsibility for the National Vehicle and Driver File (NVDF).

NVDF Role

The National Vehicle and Driver File (NVDF) constitute the national driver and vehicle registers and has a legal basis in Section 60 of the Finance Act 1993. The NVDF database contains details in respect of the registered vehicles (2.4 million currently taxed) and 2.65 million licensed drivers in the country. The NVDF also plays a critical role in the collection of motor tax where over €1.1 billion was collected in 2013 (motor tax office and online transactions) with a further estimated €500 million derived from other activities such as parking enforcement where NVDF data is essential. The NVDF also fulfils legal obligations in relation to the recording of penalty points and provides vehicle and driver related statistical analyses to assist with the business objectives of a range of stakeholders.

The NVDF technical environment comprises a computer infrastructure covering core systems in Shannon, a Disaster Recovery site in Ennis, local systems spread throughout the country as well as online services most notably the online motor tax service www.motortax.ie which is among the most successful and prominent e-Government initiatives. Driver licence transactions, which are processed by National Driver Licence Service (NDLS) service providers to the Road Safety Authority (RSA) in 34 Agent Network (AGNE) offices and 1 central processing office are entered in real-time to the system. Technical support of the NVDF infrastructure is achieved through contracted external service providers in partnership with Department staff.

The role of the NVDF may be summarized as follows:

 It provides the strategic national vehicle and driver registers.  It is central to the delivery on motor tax policies and provides the infrastructure through which all motor tax revenue (over €1 billion/annum) is collected.  It provides local motor tax services at local Motor Tax Offices.  It delivers the online motor tax and vehicle ownership notification services. 88

 It provides a data interface service to a range of stakeholders covering regulatory enforcement and road safety objectives, including penalty points.  It provides the basis for driver and vehicle related statistical analyses and reports  It provides the infrastructure to support services on behalf of the Road Safety Authority (driving licence and roadworthiness testing) and the Department (road transport operator licensing).

During 2013 the NVDF was central to the following activities:

 €1.1 billion in motor tax receipts of which €605.87 million was paid via the online motor tax service.  4.73 million Motor Tax Discs issued (2.56 million. through the online motor tax service)  530,000 Driving Licences (including Learner Permit) processed.  970,000 Vehicle Registration Certificates issued.  878,000 Change of Ownership notices processed (343,000 through the online change of ownership service)  365,000 Penalty Points Notices issued.  84,000 Roadworthiness Certificates for commercial vehicles

NVDF systems have, in recent times, been extended to a ‘Service Provider’ role, and this role has continued to broaden. This is a significant departure from a more limited role whereby the Division worked almost exclusively in partnership with Local Authorities to one where it is now increasingly relied upon by our customers to provide the IT infrastructure and support to enable them deliver business obligations, which we do not have direct involvement ourselves. These include the following:

 critical to the delivery of the driving licence transform program and is central in the transfer of driving licence services from local authorities to the RSA and the creation of the National Driver Licence Service (NDLS).

 central to the delivery of services associated with the upgrade of the roadworthiness test system for commercial vehicles (Covis system). Test results are now fed back to a central system and the Certificate of Roadworthiness Certificate (CRW) is issued by the offices of the DVCSD, Shannon, on the next working day

 IT Infrastructure and Support to the Road Transport Operator Licensing Unit of the Department for their recently introduced IT (including online) system, which enables vehicle hauliers to apply for and manage their licenses. The new system also enables this country to comply with obligations in relation to an EU data exchange requirements in this area.

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 International exchange of vehicle and driver information - the NVDF contains the national registers of vehicles and their drivers and consequently it provides the role for the Irish focal point for the international exchange of vehicle data

 Delivery of any changes to the motor tax regime introduced by the DECLG, including any further anti- evasion measures, changes on taxing of goods vehicles on the basis of Gross Design Vehicle Weight (GDVW) etc

 The system will also assume a hosting/support role for the registration of ships following enactment of the Merchant Shipping (Registration of Ships) Bill

Organisation of Motor Tax

Responsibility for the motor tax system rests with the Department of Transport and the Department of the Environment, Communities and Local Government as follows;

Department of the Environment, Communities and Local Government (DECLG) have responsibility for the Local Government Fund, for motor tax policy (increases in motor tax fees etc.) and for the delivery of motor tax services by local authorities through the network of motor tax offices,

Department of Transport is responsible for motor tax computer services including the online motor tax service and the National Vehicle and Driver File (NVDF). NVDF expenses related to delivery of motor tax services are paid from the Local Government Fund. From 2014 onwards the RSA will contribute to the costs associated with delivery of NVDF related components of the NDLS.

Impact of Motor Tax ‘Gapping’ Measures

The Non-Use of Motor Vehicles Act 2013 introduced stricter measures against untaxed motor vehicles including the elimination of the practice of retrospective declarations that vehicles were not in use on the public roads – commonly referred to as ‘gapping’. It is believed that this type of evasion contributed substantially to an estimated motor tax evasion level of 5% (approx. €50 million in financial terms. Overall motor tax receipts for 2013 was €1.18bn, a 7% increase on the 2012 comparative figure of €1.04bn. However, the increase for the period from 01 July 2013, when the Act commenced, to the end of December 2013 was 12.67% higher than for the same period the previous year (€533m vs. €491m). *It should be noted that in addition to the gapping measures the 2013 figures are also influenced to some degree by the increase in motor tax rates announced in the December 2012 Budget as well as some impact from the once-off payment of arrears as vehicles were brought in under the new arrangements (i.e. conversions from 'gaps' to 'arrears')]

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Comparisons for January to May 2013 vs. 2014 are the first months where the 2012 Budget increases are not a factor in comparison with the same months the previous year. The overall average increase for the period is 6.77% (€518m to the end of May 2014 vs. €485m to the end of May 2013). Effectively this is the best guage of the influence of the gapping measures and the performance is more remarkable when account is taken of the on-going year-on-year reduction in income from the private vehicle fleet due to the switchover from motor tax based on engine capacity to that based on CO2 emissions with vehicles taxed under the latter regime carry a lower average annual tax.

NVDF analysis also indicates that for the six months following the end of the transition period following the legislation which ended in Sept 2013, in the period from October 2013 to end March 2014, there was an increase of €19m paid in tax arrears over the same period the previous year. Over a 12 month period it is estimated that €50 million in additional tax receipts will be collected as result of the measures.

The overall number of vehicles taxed at the end of May 2014 was 6.26% higher than at the end of May 2013 (2,524,015 vs. 2,375,392). In addition, there were 148,744 vehicles declared off the road at 31 May, bringing the overall number of vehicles with a 'current' status in the vehicle fleet to 2,672,759, an increase of over 12.5% over the May 2013 figure. This is the figure that the Dept would regard as the definitive size of the national fleet and gives clarity to the issues raised by the C&AG 2012 report with regard to the volume of vehicles on the NVDF which had not been taxed for a considerable period. It is also expected that new arrangements currently under consideration by the DECLG with regard to End-of-Life vehicles will also assist with greater definition of the 'current' vehicle fleet.

Motor Tax Enforcement and Safety Cameras

Motor tax and insurance compliance is enforced through manual check-points assisted the Garda Automatic Number Plate Recognition (ANPR) system which involves an interface between mobile cameras in Garda vehicles and files containing details of vehicles which are untaxed (NVDF extract) and uninsured (Irish Insurance Federation extract).

It is accepted that enforcement might be could also be assisted through the use of NVDF data in conjunction with data relating to circulating vehicles which is available from two primary sources

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(toll operators and safety cameras) to alert offenders that they have been detected and to impose penalties.

During 2013 all energies were devoted to the logistics of implementing the motor tax 'gapping' measures which involved considerable adjustment to NVDF systems. It was decided to await experience on the impact of the measures (which have been successful as demonstrated above) before proceeding with other strategies. There is evidence that the new measures have had the desired impact, some samplings analized by the NRA on M50 traffic, on behalf of the Dept., indicate that there is negligible abuse of the off-road declaration system whereby motorists who have declared that the vehicle is off the road continue to use the vehicle.

NVDF E-Government Services

Online Motor Tax

The Online Motor Tax (OMT) service at www.motortax.ie enables vehicle owners to pay their motor tax by secure link over the internet thus avoiding attendance at local motor tax offices or making application by post which can involve delays and inconvenience. Some 98% of vehicles can have their motor tax renewed online. In addition to renewal of motor tax the online service also facilitates first licensing (taxing) of new and second hand imported vehicles. Work is continuing to integrate the small number of vehicle whose owners currently cannot avail of the online facility (primarily because of associated paper based procedures).

Take up of the overall OMT facility (renewal and first licensing) is excellent. At this stage, some 66% of vehicle owners nationally who are eligible to do so are taxing their vehicles online. The total number of online discs issued from Shannon in 2013 was over 2.55 million generating tax revenues of over €605.8 million from that source which represents approx 55% of overall motor tax income.

Online Change of Vehicle Ownership

The online change of ownership service at www.motortrans.ie enables approved motor dealers notify vehicle ownership changes to the NVDF over the internet as an alternative to sending completed vehicle ownership documents to the Departments office in Shannon for manual processing there. The service also incorporates a facility whereby Authorized Treatment Facilities may notify vehicle end-of-life (ELV) instances in accordance with EU requirements.

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Over nine hundred motor dealers are now processing change of ownership transactions online. The returns for 2013 indicate that of a total of 870,000 change of ownership notices received some 344,000 (40%) were notified online. This equates to an average 6,600 online transactions per week and has resulted in significant cost savings for the Department. At this stage the vast bulk of change of vehicle ownership notices involving motor dealers are processed online. There is however a significant number of inter-personal changes not involving dealers (approx 60%) and work including necessary legislative changes is progressing to enable these transactions avail of online services also.

Electronic Motor Tax Renewal Notices

There are arrangements in place whereby my Department, through the National Vehicle and Driver File (NVDF) system, remind motorists that motor tax is due through the issue of a motor tax reminder notice, some 3-4 weeks before the due date. These notices are generated automatically and some 400,000 issue at the end of each month, involving significant operational costs.

The Division now issue approx 50% (200,000) of such notices each month by email, delivering annual savings of over €700,000 per annum.

The NVDF and Road Safety

Penalty Points – Foreign and Unidentified Drivers

Penalty point offences are required to be endorsed in accordance with section 2 of the Road Traffic Act of 2002 on the Irish driving licence record held on the NVDF. The Garda Síochána Inspectorate Report, entitled The Fixed Charge Processing System A 21st Century Strategy, published on 12th March 2014 represents the findings of a review conducted by the Inspectorate at the request of the then Minister for Justice and Equality in May 2013 into allegations of irregularities in the operation of the fixed charge processing system (FCPS) and the related report by the Garda Síochána Professional Standards Unit. The Inspectorate Report referred to significant deficiencies in the FCPS which need to be corrected and found that there were technical, administrative and management problems, which had built up over the years, and that the system needs to be overhauled through a coordinated process involving all stakeholders. A Criminal Justice Working Group has been established, consisting of the Department of Justice and Equality, the Department of Transport, Tourism and Sport, the Courts Service, the Garda Síochána and the Road Safety Authority, to oversee and facilitate the implementation of the recommendations in the Report (jointly chaired by the Department of Justice and Equality and the Department of Transport, Tourism and Sport). Certain recommendations relating to data and information technology matters relating to the FCPS and penalty points systems have implications for the NVDF and other stakeholder systems and issues identified will be addressed as part of the implementation process. 93

Penalty points related initiatives including stricter arrangements for learner/novice drivers contained in the Road Traffic Act 2014 are currently being applied to NVDF systems in readiness for commencement on 1 August 2014.

Supply of Penalty Points to Insurers

Information on penalty points based around a system of verification of self declared particulars is already available to insurance companies, if they so request it, from the NVDF. One insurer (Aviva) currently obtains this information. Release of this information is covered in Regulations made under Section 60 of the Finance Act, 1993 and is subject to stringent data protection controls.

Section 53 of the Road Traffic Act 2010 and Section 5 of the Road Traffic Act 2014 enables the supply of data on penalty points and endorsements arising from penalty points to the insurance industry and facilitates supply on a broader base than merely verification of self declared particulars. The arrangements will enable insurers to access information on the nature of the offences, thus allowing insurance companies to distinguish between those who have points for serious driving offences like driving dangerously, and those who have points for less serious offences. This should lead to lower premiums for safer drivers and higher premiums for more dangerous drivers. Work is at a very advanced stage for the sharing of the information and the Dept is currently awaiting final sign-off on behalf of the insurance industry (Irish Insurance Federation)

NVDF Data Release and Exchange

NVDF and international data exchange Because the NVDF contains the national registers of vehicles and their drivers it is appropriate that it should become the Irish focal point for the international exchange of vehicle data in servicing requirements under the PRUM Decisions and the EUCARIS Treaty.

PRUM Decisions

Prum (Council Decision 2008/615/JHA and Implementing Council Decision 2008/616/JHA) relates to measures on the stepping up of cross-border cooperation, particularly in combating terrorism and cross-border crime and include conditions and procedures for automated exchange of DNA, Fingerprint and vehicle registration data. Overall responsibility for implementation of the Decisions in Ireland rests with the Department of Justice, Equality and Law Reform and An Garda Siochana and the Forensic science laboratory will be responsible for implementing the fingerprint and DNA components respectively. The Department of Transport through the NVDF will become the National Contact Point (NCP) for vehicle data under Prum.

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EUCARIS EUCARIS (European Car and Driving Licence Information System) is an initiative underpinned by the EUCARIS Treaty and can be described as a co-operation between several national vehicle and driver registration authorities. The cooperation is focused on the data-exchange regarding vehicle registration, driving licences, related personal data and other information where road safety and law enforcement considerations are involved. This Department and the Road Safety Authority have an interest in participating in EUCARIS to combat cross-border movements of insurance write-offs and stolen vehicles and to validate foreign national driving licence applications. The computer arrangements for the exchange of data under Prum are based on the EUCARIS model and this will provide the opportunity to participate in both exchange arrangements.

Exchange of vehicle ownership particulars with Northern Ireland The Department, together with the Department for Regional Development in Northern Ireland commenced a cross-border project in March 2010 to facilitate the exchange of vehicle data between both jurisdictions for the purpose of traffic law enforcement, including parking offences and toll evasion. The National Roads Authority (NRA) obtains data on Northern Ireland vehicles who commit toll offences. This is an important initiative both in a North-South as well as in a wider EU context. The facility is confined to data exchange of vehicle ownership details and does not cover arrangements for recovery of the penalties. Such matters will continue to rely on legal redress in the jurisdiction where the offence takes place. . There is agreement on all sides that the arrangement has worked well.

The NI vehicle database will be integrated with the GB vehicle register under DVLA in Swansea as part of vehicle licensing rationalization by July 2014. Insofar as the data exchange arrangements are concerned the existing technical means of obtaining NI data will no longer be appropriate and an alternative way of obtaining the data from the GB database has been identified.

While these proposed alternative arrangements should be satisfactory to enable the data exchange facility to continue in the short/medium term, all parties will monitor these arrangements and examine any other proposals which could possibly be more suitable for the licensing authorities and transport agencies involved over the longer term.

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Aviation Sector

Table of Contents Airports Division ...... 97 Aviation Services Division ...... 112 Air Accident Investigation Unit (AAIU) ...... 122

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Airports Division

Assistant Secretary: John Fearon Principal Officer: Mary Dunning

Role/Responsibilities

The main role and responsibilities of the Airports Division include:-

 the formulation and implementation of Irish Airport’s policy,  corporate governance of the three State Airports,  the administration of a number of financial support schemes for the regional airports (Donegal, Ireland West Airport Knock, Kerry and Waterford) and  regional air services serving Donegal and Kerry airports. The overall objective is the sustainable development of airports to ensure appropriate levels of connectivity to support Ireland’s economic and social goals.

1. State Airports Overview

Under the relevant legislation, the Dublin Airport Authority (DAA) has statutory responsibility to manage, operate and develop Dublin and Cork Airports. Since its separation from the DAA in December 2013, the Shannon Airport Authority (SAA) has similar responsibilities for Shannon Airport. Passenger numbers at State airports over the last 5 years are outlined in the table below.

Airport 2013 2012 2011 2010 2009 Dublin 20,167,783 19,099,649 18,740,593 18,431,064 20,503,677 Cork 2,258,005 2,340,115 2,361,947 2,425,131 2,769,048 Shannon 1,400,032 1,395,402 1,656,504 1,755,885 2,794,563 Total 23,825,820 22,835,166 22,759,044 22,612,080 26,067,288 Overall passenger numbers at the State airports stabilised in 2013 at 23.8m following continuous falls from 2009 when the figure was 26.1m.

DAA Passenger numbers at Dublin Airport increased by 6% to 20.2 million last year, as an extra 1.1 million people used the airport. The significant growth in passenger numbers was led by a record-breaking performance on transatlantic traffic, which saw a 13% increase during 2013. As a result of the strong growth in passenger numbers, Dublin Airport Authority (DAA) is paying a €5.6 million rebate in airport charges to a total of 40 airlines that increased their business at Dublin Airport during 2013. Under its Growth Incentive Scheme, which has operated since 2011, DAA pays an airport charges rebate to each airline that increases its passenger numbers at Dublin during the year. This is the third successive year of the Growth Incentive Scheme payments at Dublin Airport and during that period, DAA has rebated a total of €8.6 million in airport charges to its airline customers. DAA has recently decided to renew the Scheme for a further three years up to 2016. The new scheme will apply to all scheduled airlines using Dublin Airport, and will operate alongside DAA’s existing generous route incentive schemes.

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Dublin Airport Authority Accounts 2013

The DAA has recently published (7 May) its Annual Report and Accounts for the year ended 31 December 2013.

After a number of difficult years, Dublin Airport’s performance, in line with the performance of the wider economy, is starting to improve. A summary of the key financial results, which for comparative purposes exclude Shannon Airport (SAA separated from SAA on 31 December 2012) is set out below:

2013 2012 Total Total €m €m Turnover 501 535 Group Operating Profit 62 59 Share of profits arising from Joint Ventures & Associated 38 53 Companies Group profit before interest & tax 110 85 Group profit for the financial year 38 18

EBITDA* 161 159

*EBITDA: Earnings before interest, taxation, depreciation and amortisation.

While overall turnover declined by 6%, this was due mainly to the Group’s withdrawal from certain overseas markets. Group turnover in Ireland increased by 5% during 2013. The Group recorded a profit before exceptional items of €28m and a profit after them of €38m. The main exceptional items were the profit on disposal of investments, the release of part of the contingency provision set aside for the Shannon restructuring and an increase in the provision for voluntary severance. Group EBITDA increased by 1% to €161m, due principally to increased revenues from aeronautical charges and continued stringent management of the Group’s cost base. In May 2013, Standard & Poor’s (S&P) affirmed DAA’s credit rating at BBB and removed it from Outlook Negative to Outlook Stable on the basis of the Company’s improving financial performance. Following the March 2014 rating review, S&P have maintained the BBB rating but have improved the outlook to Positive.

Overall, DAA’s focus for 2014 is on resolving the difficulties in relation to the Irish Airlines Superannuation Scheme (IASS), dealing with the CAR draft Determination which is out for consultation at present and will be finalised in September 2014, debt reduction and cost management.

Dividend

The DAA 2013 Annual Report and Accounts do not provide for the payment of a dividend. The last time a dividend was paid was in 2009 when one of €19.4m was paid to the Exchequer in respect of

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the financial year 2008. The Company’s Business Plan assumes a resumption of dividends upon a return to airport profitability.

In October 2013 the Minister put DAA on notice of his intention to seek payment of a dividend from 2014 onwards. Accordingly, DAA is planning a resumption of dividend payments in 2014 based on a return to profitability at levels which would sustain dividend payments. The possibility of a modest level of distribution before the end of 2014, in response to the Minister’s objective, is under consideration and will take account of all factors relevant to the commercial trading results, the costs of resolving the IASS difficulties and the outcome of the regulatory determination.

Cork Airport

Policy in relation to the future of Cork airport was decided by Government in November 2013 in the context of the decision to separate Shannon Airport form the DAA. The Government decided at that time that the existing ownership of Cork Airport by the DAA would be maintained for the present. That decision is consistent with the 2011 Booz and Co. Report on the future ownership and operation of Cork and Shannon Airport that found that Cork airport performs well under DAA ownership and management and operates to a sustainable business model. In the context of this government decision, the Shannon Group Bill provides, inter alia, for the dissolution of CAA and its re-establishment if so decided by Government in the long term.

Cork Airport 2013 Performance

Cork Airport is Ireland’s busiest airport after Dublin. Sixteen airlines served 54 separate routes from Cork last year. It welcomed 2.3 million passengers during 2013, which was a decline of 3.5 % over 2012. Issues that have contributed to the falling numbers at Cork include increased competition, the withdrawal of some carriers, improved road and rail networks which have led to the serious decline in domestic air travel and weaker local demand. While EIBITA at Cork was €7m for 2013, it contributed a loss of €14m to the DAA Group, mainly due to its high level of debt.

DAA and Cork Airport management are working hard to return Cork Airport to passenger growth this year and are actively engaged with existing airline customers and potential new entrants to help expand traffic at the airport. A high level stakeholder body – the Cork Airport Development Council – has also been established to provide a forum for stakeholders from a range of sectoral and geographic backgrounds who have an interest in the development of Cork Airport to engage with airport management and to help contribute to traffic and route growth.

Cork Airport continues to work to reduce its cost base. A significant organisational restructuring was undertaken at the Airport during 2013 which included a voluntary severance programme and more flexible working arrangements to further improve operating efficiencies.

The focus for Cork Airport in 2014 is to stabilise traffic, develop new routes and services and actively engage with local stakeholders and airlines to develop initiatives that support sustainable traffic in 2014 and beyond.

Shannon Airport Independence/Passenger Performance

In November 2012 the Government confirmed an earlier decision in principle to separate Shannon airport from the DAA and to establish a new State-owned commercial entity, Shannon Group plc, incorporating the now independent Shannon Airport Authority (SAA) and a restructured Shannon Development.

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The legislative basis for separation of the airport is contained in the State Airports Act 2004. Separation took place on 31 December, 2012. On that date, the assets, business and employees of Shannon airport was transferred to the Shannon Airport Authority (by way of a dividend in specie of €105.5m) while DAA retained all the then existing group debt. The debts attributable to Shannon Airport (€110m approx.) were DAA’s debts and they remained with DAA on separation.

A major consideration for the Government in its decision to separate Shannon airport from the DAA was the serious decline of passenger traffic at the airport over recent years. Shannon airport was loss making since 2008 and passenger numbers plummeted by over 60% from 3.62 million in 207 to 1.39 million in 2012. A consistent decline on this scale was always going to be challenging to address.

The board of SAA was re-constituted in 2013 and the immediate priority for the new board and for management was to halt this decline. With the initial focus, first and foremost, on arresting the previous annual traffic decline, the overall outturn for 2013 of 1.4 million passengers matched (and indeed marginally exceeded) 2012’s outturn of 1.39m. This reversal of the serious slide of the previous five years is a major achievement for Shannon in its first year as an independent airport.

For 2014, SAA has secured route commitments from a number of airlines which point to renewed growth for this year. The expected growth in 2014 is due in part to the decision by Ryanair to expand capacity at Shannon and also to additional transatlantic capacity (which was introduced on foot of the strong 2013 results in that market). Overall, SAA is currently forecasting that passenger throughput will be up this year by over 10% on 2013.

SAA Financial Performance The 2013 Accounts show that SAA have effectively turned the business around from loss making to a small profit in 2013. SAA recorded turnover of €39.1m, profit after tax of €152,000 and achieved earnings before interest, tax, depreciation and amortisation (EBITDA) of €3.4m. These are very significant results for Shannon in its first year as an independent airport Shannon Airport is debt free and has cash reserves to meet its operating and recurring capital expenditure needs. SAA’s forecast for 2014 is targeting revenues of about €42m, operating profit of about €3.6m and profit after tax slightly ahead of 2013 at €200,000. The focus for Shannon Airport in 2014 is on continuing to grow its passenger numbers, prepare for the establishment of Shannon Group and work on developing and expanding aviation–related services.

Shannon Development Shannon Development currently comes under the aegis of the Minister for Jobs, Enterprise and Innovation. However, following enactment of the State Airports (Shannon Group) Bill 2014 it will, together with Shannon Airport Authority, become a wholly-owned subsidiary of Shannon Group. Shannon Development was restructured in 2013 ahead of its incorporation into Shannon Group. Shannon Development’s functions in relation to indigenous enterprises and foreign direct investment were transferred to Enterprise Ireland and the IDA respectively and its tourism functions were transferred to Fáilte Ireland. (The main benefits of this restructuring included the streamlining of Shannon Development’s activities; the elimination of duplication of work by public bodies in the region; and a more focused role for the remaining part of Shannon Development, namely, managing and developing its property portfolio including the Shannon Free Zone adjacent to the airport.) Staff moves from Shannon Development to Fáilte Ireland, Enterprise Ireland and the IDA and redeployments to other public bodies in the Limerick/Shannon were completed last year as part of the restructuring. There was also a good take-up in Shannon Development of a Voluntary Redundancy/Voluntary Retirement scheme with 25 staff electing to take voluntary redundancy. 100

(Apart from approximately 20 staff who will remain in Shannon Development as part of Shannon Group, just 2 staff members - out of an original total of 123 - had to be placed on the Redeployment Panel i.e. suitable postings remain to be identified for them.)

Development of an International Aviation Services Centre (IASC) at Shannon

In a report of November 2012, the Shannon Aviation Business Development Task Force (which was established pursuant to a Government decision of May 2012 to, inter alia, assess the feasibility of creating an international aviation services centre (IASC) of excellence centred on Shannon Airport) stated that it was satisfied that, as an independent airport, Shannon could develop and grow passenger traffic and the route network at the airport. The Task Force was also satisfied that, coupled with a restructured Shannon Development, the airport could create new employment opportunities over a five-year timeframe in aviation related services in and around airport ‘campus’.

The Task Force pointed to the opportunities to develop and grow an internationally-recognised centre for aviation services at Shannon, drawing on its geographical location, good airfield facilities, ample adjacent land, an existing foothold in aircraft leasing and maintenance operations with a skilled English speaking workforce and US Preclearance facilities.

In advance of the establishment of Shannon Group, work on this initiative is already underway with SAA currently in discussions with prospective new tenants and they are also maintaining and developing relationships with existing aerospace firms located in and around Shannon. They are working closely with other stakeholders to ensure that their goals are aligned. SAA are confident that their current and future business development discussions will result in the establishment of new activities within an aviation services cluster at Shannon and the creation of new jobs in the medium term.

State Airports (Shannon Group) Bill 2014

This Bill was published in April this year and was passed by the Seanad on 12th June. It is currently before the Dáil and it is hoped to have the Bill enacted by the summer recess.

The main purpose of this Bill is to give effect to the Government decision of November 2012 to establish a new State-owned commercial entity comprising Shannon Airport Authority (SAA) and a restructured Shannon Development. (This decision followed-on from the Task Force report referred to in the previous section.) The concept behind the new commercial entity is that it will exploit the combined assets of those two companies as a catalyst for the development of strategic sectoral opportunities, particularly in the aviation sector, including the expansion and development of an aviation services centre.

Other elements of the Nov. 2012 Government decision which are relevant to the Shannon Group Bill were that:

 the existing ownership of Cork airport by the DAA is to be maintained for the present;  the Dublin Airport Authority is to be renamed as ‘daa’; and  Shannon Heritage (currently a subsidiary of Shannon Development) will remain within Shannon Group pending a review of its most appropriate permanent location.

The Bill also provides for amendments to existing superannuation provisions governing the State airport authorities (see 3. below).

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Structure of Shannon Group plc

Considerable attention was given to the optimum legal structure for the merger of Shannon Airport Authority and Shannon Development. A number of different options were considered and we worked closely with the Office of the Attorney General in this regard.

Shannon Group will be the parent or holding company for Shannon Airport Authority and the restructured Shannon Development. Under the Bill, Shannon Group will acquire all the shares of these two companies from the Minister for Public Expenditure and Reform. Both will maintain their separate legal identities as wholly-owned subsidiaries of Shannon Group. In the new scenario, the restructured Shannon Development, which will be renamed Shannon Commercial Enterprises Limited, will have a commercial remit.

This structure has a number of advantages. Keeping the businesses of Shannon Development and Shannon Airport Authority separate from each other will impose financial discipline on each of them and ensure that both will pursue a commercial ethos. The success of Shannon Group will be enhanced by ensuring that its two main subsidiaries are each commercially successful in their own right.

This structure will also facilitate greater transparency in the application of State aid rules by Shannon Group and its subsidiaries. Any business arrangements between them will be on a commercial basis and will involve no cross-subsidisation of operations at the airport. (In providing advice on the optimum structure for Shannon Group, the AGO had regard to a complaint lodged by Senator Marc MacSharry in January 2013 with the Competition Directorate of the EU Commission alleging that the proposed merger constituted illegal State aid for Shannon airport. In its response on that complaint to the EU Commission in June 2013 the Department highlighted inter alia the proposed legal structure as above and emphasised that any business arrangements between the two subsidiaries, or between them and their new parent company, would be on a commercial basis.)

In the case of the SAA, the proposed structure avoids another transfer of staff from the airport authority to Shannon Group. (In December 2012, all staff in Shannon airport were transferred from DAA to SAA.) Similarly, the staff that manage and deal with the property portfolio in Shannon Development will also remain in that company.

Establishment of Shannon Group plc

Subject to enactment of the Bill, it will be a priority to formally establish the new company, appoint its board, transfer ownership of SAA and Shannon Development to it and carry out all other legal and administrative procedures to ensure that the new company structure is ‘bedded-down’ as soon as possible and in a way that causes minimal interference in the on-going day-to-day operations of the existing companies.

Shannon Group will be incorporated as a public limited company by the Companies Registration Office on submission of the appropriate documentation including details of the directors of the new company.

The Memo and Articles of Association of Shannon Group must be drawn up by the Minister for Transport, Tourism and Sport and approved by the Minister for Public Expenditure and Reform. In addition, both SAA and Shannon Development must amend their Memo and Articles to ensure conformity with the new Act and these amendments are subject to approval by both Ministers.

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The Bill provides that the board of Shannon Group will comprise no more than 10 members including the CEO and two employee representatives. The intention is that the current 10-person board of SAA, chaired by Ms Rose Hynes, will become the board of the new company. The board of Shannon Group will then appoint the directors of the boards of its subsidiaries, SAA and Shannon Development, which are limited to six members under the Bill. (There is provision in the Bill for the Minister, if he wishes, to require his approval for appointments to the boards of subsidiaries.)

A plc is required to have a minimum share capital of €38,100 and at least 25% of the issued share capital must be paid up at incorporation. This amount c.€9,500 will be paid by the Department on behalf of the Minister for Public Expenditure and Reform. A plc must also have a minimum number of seven members.

The Bill requires Shannon Group to issue €38,100 shares to the Minister for Public Expenditure and Reform and to issue one share to each of the remaining six subscribers to the Memorandum of Association, who will hold those shares in trust for that Minister.

2. Airport Charges at Dublin Airport

The Commission for Aviation Regulation (CAR) regulates airport passenger charges levied at Dublin Airport since 2001. CAR establishes the maximum charge per passenger that the Dublin Airport Authority (DAA) can levy over a period of time, usually four years. Within the limits of the overall price cap, DAA sets variable annual charges in respect of specific services such as aircraft landing and parking, etc. Under regulations introduced by the Minister on 15 March 2011, DAA is required to consult on proposed changes to the annual airport charges. Following this annual consultation process with airport users, DAA has indicated that there is no increase in airport passenger charges at Dublin Airport for 2014. All charges will remain the same as in 2013 with the exception of a reduction of six cent in the persons with reduced mobility (PRM) charge. The provisional 2014 price cap at Dublin Airport is €10.68 per passenger. In early 2013, CAR published its preliminary timetable for the next determination of airport charges at Dublin airport. This, the fourth CAR determination, will govern the maximum level of airport charges that the DAA may levy at Dublin Airport starting from January 2015. CAR published a draft determination on 29 May 2014. The draft determination proposes lowering charges at Dublin Airport by 22% over the next five years. The DAA have issued a press release outlining their initial reaction to the draft determination, in which they state, “the regulator’s proposed airport charges regime will lead to stagnation” and that “this would leave them at unsustainable and uneconomic levels”. The DAA go onto say that, “the regulator’s draft proposal disallows many investments which are essential to grow passenger numbers at Dublin Airport on a sustainable basis over the next five years. These include the provision of a new dedicated transfer facility, a range of airfield improvements aimed at increasing capacity of the existing runway, and upgrades to Terminal 1, which is now more than 40 years old”. The DAA will submit its formal response to the draft determination in the coming weeks ahead of the July 31 deadline for responses. A final determination is due in September 2014. In line with the draft National Aviation Policy document published on 21 May 2014, the Department intends to commence a process for the review of economic regulation of airports starting with the procurement of appropriate advisors later in the year.

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3. Pensions - Irish Airlines (General Employees) Superannuation Scheme (IAS scheme)

The IAS scheme dates from the 1950s and is a multi-employer pension scheme involving most employees of Aer Lingus (69%), Dublin Airport Authority (DAA) (26%) and the now defunct SRT Technics (5%). There are around 14,800 members (divided approx. a third between pensioners, deferred members and active employees) in the scheme which is closed to new members since 2009. All issues concerning the IAS scheme such as the scheme rules, provisions, contribution rates, benefits, etc. are matters for the Trustees of the scheme, its members and its participating employers, along with the Pensions Authority.

The Minister for Transport, Tourism and Sport has no function in relation to the administration of the IAS scheme.

Under the IAS scheme, fixed contributions are payable by the employers and members regardless of the funding position of the IAS Scheme. Both the benefits and the contributions are defined within the scheme rules. The scheme is registered and operated as a defined benefit scheme under the Pensions Board criteria due to the benefits it seeks to provide and accounted for as a defined contribution scheme by the sponsoring employers due to the fixed funding covenant. One of the difficulties of the scheme is that the rules can only be changed with the agreement of the employers and members. Given the range of employers involved and the different categories of members, it has not been possible for the Trustees to effect any changes in the scheme for some time.

As at 27 March 2013, the IASS reported a deficit on the statutory Minimum Funding Standard basis of €769m (up from €344m in March 2011). The deficit in the scheme has arisen over the years as the companies and the members did not put enough into the scheme to match the benefits that were expected. Resolution of the issues will involve contributions from all the parties involved. Because of the priority position of pensioners under the Pensions Act 1990 (prior to the December 2013 amendment), the residual funds available for active and deferred members in the event of a wind-up of the scheme would be about 5% of benefit expectations. This is clearly not a sustainable position and the employers and unions held extensive negotiations under the auspices of the LRC and the Labour Court in relation to the way forward leading to a Labour Court recommendation in May 2013.

Trustee Proposals

The Trustees of the IAS scheme issued fresh proposals to the employers and unions on 14 February, 2014. The aim of these proposals is to “Freeze and De-risk” the scheme, which essentially means freezing the benefits accrued to the members as at 31 December 2014. The “De-risk” element relates to the adoption of an investment strategy which seeks to reduce all investment risks to the fullest extent possible. It is proposed that this will be achieved by investing the scheme resources largely in French, Italian and Spanish bonds, the maturities of which match the pension outflows to be paid by the Scheme. The measures include a number of cuts to the accrued benefits of both active and deferred members and also to pensions which are already being drawn down (the latter is permitted under the Social Welfare and Pensions (No 2) Act 2013).

Industrial Action

Efforts to resolve the difficulties in the IAS scheme have been going on for over four years and it represents the biggest industrial relations issue in DAA and Aer Lingus.

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In March, SIPTU members at Aer Lingus and the three State airports voted overwhelmingly to take industrial action, including all out strike, to bring about an acceptable resolution to the pension issue. This culminated in strike notice being served by SIPTU for action over St. Patrick’s weekend but the DAA secured a High Court injunction preventing the action taking place.

Expert Panel

Following consultation between the Department of Transport, Tourism and Sport, the Department of Jobs, Enterprise and Innovation, IBEC and ICTU, it was decided on 3 March that an Expert Panel would be established to carry out an investigation of how a final resolution of the industrial relations issues relating to the IASS could be secured.

The Expert Panel examined the complex industrial relations issues that remained to be resolved from the Labour Court Recommendations of 2013 on the IASS and the terms and impact of the Trustee proposals of 14 February on those recommendations. It engaged extensively with all the parties involved during its investigations and presented its final report on 16 June 2014. The Panel also issued a statement outlining the main recommendations made in its report.

The Ministers for Transport, Tourism and Sport and Jobs, Enterprise and Innovation issued a joint Statement welcoming the report and urging all the parties to the Scheme to give the report very careful consideration and use its recommendations as the basis for timely, constructive engagement and achieve a resolution in the best interests of all parties.

The problems with this scheme have long been recognised and an opportunity now exists to resolve them. The situation regarding the IAS scheme is very complex and the Expert Panel has stated that it considers that its recommendations represent the best possible outcome that can be achieved.

It is now incumbent on all parties to the scheme - the companies involved, the trade unions, the individual members and the Trustees - to carefully consider the Panel’s report and to recommend acceptance of its recommendations. While some of the decisions that will be required will be challenging, the report presents a final opportunity to bring this issue to a conclusion in a fair manner. This is in the interests of employees, pensioners, deferred members and employers. The potential consequences for all parties are stark should this initiative fail.

State Airports (Shannon Group) Bill 2014

The State Airports (Shannon Group) Bill 2014 includes provisions aimed at facilitating whatever solution is agreed among the parties to resolve the IAS scheme difficulties. Any agreed solution will involve a ballot by unions of their members in Aer Lingus and DAA/SAA. It will also require shareholder approval in Aer Lingus.

4. Queues at Passport Control/Immigration at Dublin Airport

There has been an issue over the last year with staffing of passport control in Dublin Airport. This service is provided by An Garda Síochána through the Garda National Immigration Bureau (GNIB) which comes under the remit of the Department of Justice and Equality (DJE). That Department is in the process of civilianising passport control with the advent of the Irish National Immigration Service (INIS). 105

In 2013 the Dublin Airport Authority (DAA) outlined to this Department the difficulties being experienced by passengers passing through passport control particularly in the summer peak period. They cited delays of up to two hours in processing passengers. The problem appeared to be particularly acute in Terminal Two and thereby it disproportionately affected long haul passengers who had already spent many hours travelling before they joined the passport control queue. These delays also had a major impact on passengers who were in transit to another flight.

In November last year, this Department set up a sub-group to deal with airport immigration matters made up of representatives of this Department, DJE, GNIB, DAA and the Department of Foreign Affairs (DFA). At the first sub-group meeting, this Department raised the issue of queues at passport control with DJE who agreed that the current service is less than ideal but stated that it is being addressed in the context of the civilianisation process. DJE submitted a Business Case to the Department of Public Expenditure and Reform (DPER) for approval which addresses the manpower issues at Dublin Airport. This Department has written to DPER supporting the DJE business case and in recent weeks has met with DJE and DPER. Indications are that DPER will approve the deployment of the additional staff to fully civilianise INIS. This will deal with the problem in the long term. There are also arrangements being put in place to deal with the queues in the short term over the summer peak season with contributions to be made by all parties. These include some additional temporary CO’s from DJE up to September 2014, flexibility from GNIB to meet demand, additional hosting staff from DAA along with agreement on the provision of a detention centre for GNIB at Dublin Airport to hold passengers in violation of immigration laws.

5. Preclearance

US Preclearance in Ireland allows US-bound passengers to clear all US entry controls (immigration, customs and agriculture) into the United States prior to departure, such that on arrival there they have the same status as passengers arriving from a US domestic airport and thus face no further entry controls. This has benefits for both passengers and airlines. It also has obvious benefits for Dublin and Shannon Airports in terms of their efforts to retain and promote transatlantic services as they are the only airports in Europe that have these services on offer to passengers. Preclearance is carried out by officers of US Customs and Border Protection (CBP) in Dublin and Shannon Airports. This service is provided in custom-built facilities in those airports under the provisions of the Ireland - US Preclearance Agreement and the Aviation (Preclearance) Act 2009. This Act gives legal effect to the Preclearance Agreement which was signed by the Minister for Transport and the Secretary of the US Department of Homeland Security in Washington on 17 November 2008. The Act provides for the duties and responsibilities of travellers, including the right to withdraw from the preclearance area at any time, the functions of preclearance officers, the functions of Irish law enforcement officers in the preclearance area, restricted entry access to the area, seizure of certain goods etc. US preclearance commenced in Shannon in 2009 and in Dublin in 2011. In accordance with the Agreement, a US/Ireland Preclearance Consultative Group (PCCG) with representatives from both sides was established to meet at least annually to review any issues arising related to the Agreement. If the Group fails to resolve issues, the affected side may request a meeting of the parties to the Agreement. US representatives on the Group include officials of the Department of Homeland Security, Customs and Border Protection and the Transportation Security Administration. On the Irish side, representatives include officials of the Department of Transport, Tourism and Sport (DTTAS), the DAA and the SAA. On occasion, officials of the US State Department and the Irish Department of Foreign Affairs and Trade also attend. The Group last met on 7 May 106

2014 in Shannon. In general, preclearance operates very well to the mutual benefit of Ireland and the United States. There had been difficulties with CBP manpower resources and hours of operation in Dublin, which led to a situation where certain flights (all Aer Lingus) were not being precleared. As a result of continuous pressure from DTTAS, CBP significantly increased their staff numbers in Dublin Airport at the end of 2013. DTTAS also encouraged DAA to work with CBP to increase the advance notice that airlines provide with respect to their preclearance requirements. As a result of these developments, CBP indicated in January that all flights are now being precleared and that all flights notified to them will be precleared this year. Cargo preclearance at Shannon Airport The issue of cargo preclearance is expressly excluded from the provisions of the 2008 Preclearance Agreement. However, while it is unclear as to what benefit would be gained by it, the issue is regularly raised by Shannon Airport Authority and bodies such as the Irish Exporters Association. Accordingly, the Irish side raises the issue with the United States at meetings of the Preclearance Consultative Group. At the last PCCG meeting the US authorities indicated that cargo preclearance remained a very difficult issue for them to deliver on because it would require statutory changes along with resolving significant issues in relation to security and industrial relations. Both sides accepted that cargo preclearance is not something can be progressed anytime in the near future, certainly not in the next five years. General Aviation Preclearance US preclearance is also available at Shannon Airport for general aviation aircraft. These are mainly leased business jets and privately owned jet aircraft en route to the United States. While the take-up of the service has not been what was expected, this can represent a significant business opportunity to grow the business aviation base by using Shannon, as the location for new foreign direct investments (FDI) which will be enhanced by the existing cluster of corporate aviation companies. Shannon is the only airport in Europe to offer this service to general aviation aircraft. Military Preclearance For a number of years, there had been on-going discussions between DTTAS and the US authorities in relation to the preclearance of US military transiting through Shannon. Both administrations made considerable efforts in recent years to identify acceptable options to give effect to military preclearance. Despite this, because of difficulties on each side, a resolution to a number of difficulties was not possible. Therefore, the Minister decided in December 2013 to end efforts to secure US preclearance for US military transiting through Shannon Airport and to concentrate resources on strengthening and promoting preclearance generally. This decision was noted at the time by the Government. The US authorities were notified accordingly.

6. Regional Airports

Current Support

Following a Government Decision in June 2011, which arose from a Value for Money review published earlier in that year, the Exchequer currently provides financial support to four regional airports (Donegal, Ireland West Airport Knock (IWAK), Kerry and Waterford), where previously it supported six. That financial support is administered by the Department through three separate schemes –

 a Regional Airports Capital Expenditure Grant (CAPEX) Scheme, and  a Core Airport Management Operational Expenditure Subvention (OPEX) Scheme  a Public Service Obligation (PSO) air services Scheme operating between Kerry Airport and Dublin Airport and Donegal Airport and Dublin Airport. 107

Expenditure on the Regional Airports Programme amounted to over €13m. in 2013 which comprised Capex €3.5m, Opex €2.2m and PSO subvention €7.6m. The current Schemes (2011 – 2014) come to an end this year (3 November for the PSO Scheme and 31 December for the OPEX and CAPEX Schemes) at which time it is expected that the Exchequer will have paid €40m in total over the three years. Tables on passenger numbers and Exchequer support at regional airports are attached.

Capital Expenditure Grant Scheme (Capex) Funding for capital projects at the four regional airports is provided through the Regional Airports Capital Expenditure Grant Scheme (Capex). This Scheme as approved by the European Commission, covers safety and security related projects necessary to ensure compliance with domestic and international regulations. Operational Expenditure Subvention Scheme (Opex)

Opex subvention is paid to compensate the regional airports for costs incurred in providing core airport services, insofar as these costs cannot be fully met by prudent commercial management and from any surpluses generated by non-core activities such as car parking and catering.

Essential Air Services Programme - Public Service Obligations (PSO)

The Department provides subvention to contracted air carriers for the operation of essential air services under the EU Public Service Obligation (PSO) regime between Dublin and Kerry and between Dublin and Donegal regional airports. Aer Arann/Stobart Aer are contracted to operate the Kerry service and Loganair the Donegal service. The most recent contracts were awarded in 2011, running from 3 November 2011 to 2 November 2014 at an average annual cost of €7.5m.

Regional Airports post 2014 Regional airports in Ireland were developed in the 1980s to provide for improved connectivity both nationally and internationally. It was recognised that regional airports could deliver significant social and economic benefits to the regions that they serviced, particularly at a time when rail and road connections were poor.

The development of the major interurban roads programme and improvements to the rail network has reduced the importance of regional airports for connectivity within Ireland. Their current importance lies with the level of international connectivity that they bring to a region for tourism and business.

It is accepted that regional airports should be given the opportunity beyond 2014 to grow to a viable, self-sustaining position, particularly considering the contribution that they make to their regional and local economy. As a result exchequer support (Opex and Capex) for the four regional airports will continue beyond 2014. This decision will facilitate the airports in developing and implementing new business plans leading to self-sufficiency within a ten-year period. Central to these will be the need for regional and local business investment. A framework (Regional Airports Programme 2015 – 2019) is currently being developed by the Department for approval by the EU Commission for implementation at the end of the current Regional Airports Programme. That framework should provide a level of certainty around support over a multiannual period, where regional airports can provide a business plan leading to stand-alone commercial viability within a ten year period. It is envisaged that future funding post 2014 will ultimately be provided from a mix of local authority, local business and exchequer sources. While the Action Programme for Effective Local Government Putting People First published in October 2012 focuses on the widening of the role of Local Government particularly in the context of

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supporting local and community development, it does not specifically mention regional airports. However, the Minister for Transport, Tourism and Sport believes that greater involvement by Local Government in the oversight of supports for regional airports would be consistent with the general direction of the Programme.

Public Service Obligation Air Services Schemes The current Public Service Obligation (PSO) Air Services Scheme, which includes the Donegal – Dublin and Kerry – Dublin routes, ends in November this year. No decisions have yet been made in respect of future PSO supports for any route at this stage. It is intended that a PSO tender competition for the Kerry/Dublin and the Donegal/Dublin service post 2014 will be organised later this year. The final decision on whether or not to maintain PSO supports will only be taken when the outcome of the tender process is known.

The necessary work will now commence involving the European Commission for the PSOs to Kerry and Donegal and a tender competition in respect of these two routes will be organised shortly. In line with EU rules, it is anticipated that this process will take up to 6 months.

It will be necessary to extend the current Scheme on a temporary basis until 1 February 2015 until the new contracts are in place.

There is a limited budget of some €12m per annum available for the regional Airports programme post 2014, with an average cost per annum for the two PSO routes from Kerry and Donegal of over €7.5m, based on existing figures. Best use of that limited budget must be made in the context of maintaining and developing the four regional airports.

Passengers Regional Airports 2014 to Date 2013 2012

Donegal 20,941 33,768 29,326

Kerry 173,923 305,822 286,442

Knock 387,077 665,393 685,781

Waterford 22,020 28,169 76,554

Derry - - -

Total 603,961 1,033,152 1,078,103 Percentage Change Year-on-Year* -2.2% -4.2% -7.3% *2014 % compares with same period in 2013

Reg Airports PSO Passengers (Public Service Obligation) 2014 to Date 2013 2012

Donegal 5,726 21,404 19,796 Kerry 32,887 31,003 109

9,188

Total 14,914 54,291 50,799 Percentage Change Year-on-Year* 6.3% 6.9% -30.3% *2014 % compares with same period in 2013

CAPEX (Capital Grants ) 2013 €,000 2012 €,000 - Donegal 339 ------

Kerry 741 1,634

Knock 2,013 699

Waterford 362 1,334

Total 3,455 3,667

OPEX (Operational Expenditure Support) 2013 €,000 2012 €,000

Donegal ----- 111

Kerry 437 550

Knock 655 590

Waterford 1,121 1,233

Total 2,213 2,484

PSO 2013 €,000 2012 €,000 Donegal 3,599 3,452 Kerry 4,021 3,918 Total 7,620 110

7,370

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Aviation Services Division Assistant Secretary: John Fearon Principal Officer: Ethna Brogan

The main roles and functions of the Division are:  Policy on access to the market for air services, aviation safety, aviation security, aviation/environment issues and air navigation and airspace management;  Developing and presenting the national position on EU legislative proposals in these policy areas and implementing adopted measures in domestic law;  Representing Irish aviation interests in European and international fora including the EU Council, Eurocontrol, the European Aviation Safety Agency, the European Civil Aviation Conference and the International Civil Aviation Organisation;  Functions associated with the State’s significant minority shareholding in Aer Lingus:  Corporate Governance of the Irish Aviation Authority and the Commission for Aviation Regulation  Granting traffic rights for commercial air services into and out of Ireland under bilateral air service agreements and relevant provisions in domestic law; and  Administration of exemptions granted by the Minister from the prohibition on the carriage of munitions of war in Irish airspace and on Irish registered aircraft.

Description of activities 1. Access to the Market for Air Services As an island nation on the western seaboard of Europe, international air links are of much greater importance for Ireland than for countries with land transport connections to their neighbours and trading partners.

The sector in Ireland is very competitive – two major airlines and other niche operators with further competition from overseas bases of foreign airlines. This resulted in a wide range of air services being introduced at the three State Airports (Dublin, Cork and Shannon) and six regional airports (Waterford, Kerry, Galway, Knock, Sligo and Donegal), in the last decade or two, which assisted economic growth over that period. As a relatively small country Ireland enjoys a high level of international connectivity.

The past number of years has been difficult for all airlines in terms of declining passenger numbers as demand for air travel fell during the recession. Between 2009 and 2013 Aer Lingus passenger numbers fell from 10.74m to 9.63m. Ryanair’s passenger numbers have nonetheless held up and in 2013 the airline carried 81.3 million passengers. In the last year the decline in passenger numbers at Irish airports has been reversed and there has been a slight increase in passenger numbers with over 20 million passengers at Dublin airport in 2013.

Authorisations process for air services into Ireland The market for air services in the European Union is completely liberalised so no authorisation to operate services is required. Carriers must, of course, have an operating licence (attesting to 112

financial fitness etc.) and an Air Operator’s certificate (effectively a safety licence) in order to operate services within the European Union. Once these criteria are met, EU carriers can freely operate intra–community services. In the last 15-20 years this policy has seen a dramatic increase in routes and services operated, and it has facilitated the emergence and growth of low cost airlines such as Ryanair and Easyjet.

For services from outside the EU, the Division grants traffic rights to airlines to fly into Ireland under bilateral air service agreements with other countries and relevant provisions in EU and domestic law. The EU has negotiated a number of aviation agreements with third countries/regions, e.g. EU-US Open Skies Agreement which governs air traffic rights between the EU and USA.

State’s shareholding in Aer Lingus

The State’s shareholding in Aer Lingus stands at 25.11%. The State retained a 25.11% ownership in Aer Lingus to protect strategic interests. The primary concern in this context was to provide a basis to oppose a takeover of the company that may not have been in Ireland’s strategic interests. The value of the State’s stake in this context has already been demonstrated. As a minority shareholder, the Government has no role in the day-to-day management of the company.

In addition to providing a basis to oppose takeovers, a stake of over 25% also allows a shareholder to block special resolutions. One notable example of where such a resolution is required is for the purpose of making changes in the Memorandum and Articles of Association of the Company. This provides a protection for two specific interests of the State. It means that the relevant provisions of the Memorandum and Articles of Associations that (a) ensure that the State will have the right to appoint up to three directors (as long as 25.1% shareholding is maintained)1 and (b) provide for a safeguard against any disposal of Heathrow slots, cannot be changed without the approval of the State.

State-nominated Directors

The State’s shareholding of 25.11% entitles the Minister, acting through the Minister for Finance in his capacity as shareholder, to nominate up to three persons as “Minister’s Nominees” on the Board of the Company. At present there are two directors serving as Ministers Nominees on the Board - Mr William Slattery and Mr Frank O’Connor.

Ryanair takeover bids Immediately following the privatisation of Aer Lingus, Ryanair announced that it had acquired a substantial stake (initially 16%) in Aer Lingus and launched a hostile takeover bid. Ryanair currently holds a 29.82% stake in Aer Lingus.

1 The Memorandum and Articles of Association provides that the number Minister’s Nominees on the Board shall be dependent on the percentage of shares held by the Minister – 25.1% = 3; more the 5% but less than 25.1% =2 and more than 1 and less than 5% =1. 113

The European Commission prohibited the takeover in 2007 following an extensive investigation under the EU Merger Regulation. Ryanair appealed the decision but the Commission’s decision was upheld by the European General Court in July 2010.

In June 2012 Ryanair made another takeover offer for Aer Lingus. The offer was also referred to the European Commission for clearance under the EU Merger Regulation. In December 2012 the Government stated that it was not prepared to support any offer for the company that would significantly undermine employment, connectivity and competition in the Irish market. Clearance was subsequently refused by the European Commission in February 2013. In June 2013, Ryanair lodged an appeal with the General Court of the European Union against the Commission’s decision. The State has been granted leave to intervene in the case in support of the Commission’s decision and this intervention is being progressed in accordance with the Court’s timetable.

2. Aviation Safety

The Irish Aviation Authority (IAA) has responsibility for safety regulation of civil aviation in Ireland. The Authority advises the Department and the Minister on aviation safety issues in accordance with its statutory remit.

International Oversight

The IAA regulates civil aviation safety in accordance with standards set down by the International Civil Aviation (ICAO), the European Aviation Safety Organisation (EASA), Eurocontrol, and the European Union. The performance by the IAA of its safety oversight function is, in turn, subject to monitoring and audit by these organisations.

In this regard the most recent ICAO universal safety oversight audit programme (USOAP) of Ireland’s safety oversight regime was conducted in 2010. ICAO’s report was published in 2011 and returned a very positive rating for Ireland - Ireland was 3rd highest of the 21 EU States audited at that time. This positive safety record has assisted in Ireland’s high standing in the global aviation community.

EU Legislative developments relating to aviation safety

The main body of legislation governing aviation safety in the EU stems from Regulation 216/2008 of the European Parliament and of the Council. Under this ‘framework’ Regulation which, inter alia, established EASA, the European Commission and Member States have developed a body of implementing rules on aviation safety in areas in which EASA and the EU has competence. The European Commission has recently launched a stakeholder consultation process on a policy initiative on aviation safety and a possible revision of Regulation (EC) No 216/2008 so developments on this front are expected in the next year or so.

A new Council Regulation 996/2010, updating Regulation 94/56/EC, concerning the investigation and prevention of accidents and incidents in civil aviation, came into direct effect in December 2010. This relates to the responsibility of the Air Accident Investigation Unit (AAIU) and the Department is 114

examining certain safety of the EU Regulation with regard to implementation of provisions for assistance to families in the event of accidents and the auditing of airlines contingency programmes.

Domestic Initiatives

The State Airports (Shannon Group) Bill, 2014 contains provisions aimed at making it a criminal offence to dazzle or confuse by shining a laser at the aircrew or air traffic control staff. Penalties range up to 5 years in jail and/or €250,000 in fines. This initiative was taken following increased reports of incidents of lasers being pointed at aircraft in Irish airspace, particularly on approach to landing. In 2013, some 153 laser attacks were reported on aircraft in Irish airspace. The Bill was passed by the Seanad on 12 June 2014 and is before the Dáil at present.

3. Air Navigation/Airspace Management

In addition to regulating safety standards of civil aviation, the IAA is also responsible for the provision of air traffic management, engineering and related air traffic technological infrastructure in Irish controlled airspace; for communications and associated technological infrastructure on the North Atlantic. These services are provided in an area of some 451,000 sq. mms. The Authority advises the Department and the Minister on safety and air navigation issues in accordance with its statutory (IAA Act 1993) dual role as safety regulator and the provider of air navigation services in the State.

EU Single European Sky (SES)

EU policy aims to rationalise the arrangements for the provision of air traffic management services in Europe. Air traffic management in Europe is fragmented with over 70 air traffic control centres operating in the pan European airspace. In addition, in anticipation of traffic growth, significant capacity constraints are foreseen for the medium term in the absence of pre-emptive action to reform the existing system. The envisaged rationalisation is the prime motivation of the Single European Sky (SES) initiative, which started in 2004 with the adoption of the 1st SES legislative package and updated in 2009 with the 2nd legislative package.

The SES aims to create an air traffic management system designed, managed and regulated in a harmonised way at EU level to ensure efficient utilization of airspace for all users, a reduction in delays and congestion, lower fuel consumption and an overall reduction in the costs of flight operations. This agenda will inevitably result in the closure of some air traffic control centres around Europe and is prompting industrial unrest, for example the recent action undertaken by French air traffic controllers. Further industrial unrest around Europe is probable over the coming months as the implementation of the SES is stepped up through the finalization by year-end of new stretching performance targets to be achieved by air navigation service providers over 2015-2019.

Further change to the SES legislative base is also on the horizon, the so-called SES 2+ package, essentially a further strengthening of the rules to force the pace of SES implementation. This dossier is now being discussed at Working Group level in the Council and also in the European Parliament. It 115

is likely to feature at the October Transport Council. A contentious and difficult debate is foreseen as many Member States, including Ireland, consider that the Commission’s recent decision to take nearly all Member States to court (see next section) over an alleged failure by Member States to properly implement the SES is not conducive to building trust and maintaining the partnership approach need to implement such a difficult policy.

Functional Airspace Blocks

One of the cornerstones of the SES initiative is the creation of Functional Airspace Blocks (FABs), defined as an "airspace block based on operational requirements, reflecting the need to ensure more integrated management of the airspace regardless of existing boundaries”. The IRL-UK Functional Airspace Block (FAB) was the first FAB to be established in Europe. It was formally established in mid-2008 and is working well. The underlying objective of the UK-Ireland FAB is to provide added value to its airline customers through the development of seamless airspace management arrangements and procedures throughout Irish and UK airspace. Notwithstanding the good practical benefits being delivered from the FABs operation, the European Commission is pushing for even quicker progress and, as indicated in the previous section, is planning to take legal proceedings against both Ireland and the UK as well as nearly all other Member States on various grounds. It is understood that the key issue of concern as regards the UK-Ireland FAB is its exclusion of North-Atlantic airspace from its geographical scope.

The FAB is underpinned by agreements at three levels – an Inter-State Agreement between Ireland and the UK and two further agreements between the Regulatory Authorities (UK CAA and IAA Safety Regulation Division) and the Service Providers level (NATS and IAA). The UK and Irish Governments’ convene biannual State meetings.

Economic Regulation of Aviation

Existing domestic structures for the economic regulation of aviation will require some change over the next year or so, the precise extent of which has still to be settled. Economic regulation in Ireland is currently undertaken by the Commission for Aviation Regulation (CAR). Aviation economic regulation includes both airport charges (Dublin Airport only) and aviation terminal service charges at the three State Airports (Dublin, Cork and Shannon). From the beginning of 2015, regulation of the latter charges will be undertaken by the Safety Regulation Division of the IAA as the designated national supervisory authority under the EU SES regulatory framework. It is envisaged that changes in primary legislation will require to be introduced during the course of 2015 to effect this transition (see next paragraph).

A draft new Aviation Policy was published on 21 May 2014, with an accompanying launch of a consultation process scheduled to conclude on 31 July 2014. The draft policy includes a proposal for an independent review of aviation economic regulation and the associated appeal system. The outcome of this review, likely to commence shortly after finalisation of the new aviation policy later this year, will also inform the restructuring of the provision of safety and economic regulatory oversight of the aviation sector by the Irish Aviation Authority and the Commission for Aviation Regulation.

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4. Aviation Security

RESTRICTED INFORMATION FOR MINISTER NOT TO BE DISCLOSED UNDER FOI OR TO ANY UNAUTHORISED PARTIES

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5. Corporate Governance – Irish Aviation Authority and Commission for Aviation Regulation

Irish Aviation Authority

IAA Functions The Irish Aviation Authority was established as a commercial state body on 1 January 1994 under the Irish Aviation Authority Act 1993. It is responsible for the provision of air traffic management, engineering and related air traffic technological infrastructure in Irish controlled airspace; for communications and associated technological infrastructure on the North Atlantic; and for regulating civil aviation safety and security in Ireland.

The IAA is essentially a cost recovery organisation, generating its revenue largely from the provision of air traffic control services and through its regulatory functions. It is a profitable State body and has paid dividends of circa €5 million in each of the last two years. This satisfactory dividend policy is expected to persist although the increasing pressure under the SES for cost reductions may put some pressure on the IAA’s bottom line.

Commission for Aviation Regulation The Commission for Aviation Regulation was established on 27th February 2001 under the Aviation Regulation Act 2001, in order to provide independent regulation of certain aspects of the aviation and travel trade sectors in Ireland. Currently, the Commission regulates airport charges at Dublin Airport, aviation terminal services charges levied by the Irish Aviation Authority at the three State airports. It also discharges certain functions in relation to slot allocation under EU rules, approves groundhandlers and licenses Irish airlines, Irish based tour operators and travel agents.

The State Airports (Shannon Group) Bill 2014 contains amending legislation to ensure that Ireland avoids Infringement Proceedings by complying with its obligations under the EU Services Directive. The Directive does not require tour operators and travel agents established in other Member States 118

to be licensed in Ireland. The Bill was passed by the Seanad on 12 June 2014 and is before the Dáil at present.

CAR enforces certain air passenger rights under EU legislation also, please refer to Consumer Issues under section 6 below.

The Division has a corporate governance role in relation to the Commission for Aviation Regulation. This involves ongoing liaison with the Commission and monitoring compliance by the CAR with the Code of Practice for Governance of State Bodies.

Commissioner Following the expiry of the term of office of the most recent Commissioner (Mr. Cathal Guiomard) in May 2014, the Public Appointments Service is currently engaged in a recruitment process for a new Commissioner for Aviation Regulation. In the meantime, Mr John Spicer, Deputy Commissioner, is currently carrying out the functions of Commissioner in accordance with the 2001 Act. It is anticipated that a new Commissioner will be in place by the end of September.

6. EU Environmental and Consumer initiatives in aviation

EU Directive 2008/101/EC on the inclusion of aviation emissions in the EU Emissions Trading Scheme

From 1 January 2012, aviation was brought under the scope of the EU Emissions Trading Scheme. Under Directive 2008/101/EC, the scheme is intended to apply to all flights arriving at or departing from an EU airport from that date. The Environment Protection Agency (EPA) has been designated as the competent authority in the State for the implementation of the Directive.

From the outset, there has been a hugely negative reaction in the international aviation community to the unilateral approach adopted by the EU on this issue with many arguing that emissions from civil aviation can only be effectively and fairly dealt with by the International Civil Aviation Organisation (ICAO). Following much pressure from virtually all non-EU trading blocs, the scope of the EU ETS aviation scheme has been temporarily (until 2016) scaled back to cover only internal EU/EEA flights i.e. departing and landing at EU/EEA airports. This is intended to give space and momentum to current talks on-going at ICAO to develop a global scheme for implementation by 2020.

Regulation (EC) No 261/2004 (Air Passenger Rights)

This Regulation came into effect on 17 February 2005 and sought to combat practices that had arisen in some parts of the airline industry of overbooking and denying boarding to passengers, following the large expansion in air travel in recent decades. Under Regulation 261/2004, the

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European Court of Justice has determined that airlines must pay compensation for all long delays and cancellations at short notice, even if this is for reasons beyond the airline’s control.

In March, 2013, during Ireland’s Presidency of the EU, the EU Commission published its proposals for the revision of the Regulation and an associated Regulation (Reg (EC) No 2027/97 on air carrier liability in respect of the carriage of passengers and their baggage by air). The revision will clarify a number of legal grey areas including rights to information on delayed or cancelled flights, what constitutes “extraordinary circumstances” in the context of the Regulation, rights in relation to assistance/compensation for long delays and tarmac delays, etc. The proposal also introduces a number of new passenger rights including rights in the case of a flight having been re-scheduled; rights to have misspelt names corrected free of charge; new rights with regard to mishandled baggage and transparency requirements for cabin and checked luggage.

In light of the disproportionate burden falling on airlines in situations beyond their control, the new proposal aims to share out the economic burden among airlines, airports and other stakeholders.

Discussions on the Commission’s proposal to revise the Regulations are continuing in the EU Council and Parliament and it is expected that a final push to conclude these discussions will be made after the summer.

7. Shannon airport and Foreign Policy issues

Use of Shannon by US military

Arrangements for the overflight and landing of US military aircraft have been continuously in place under successive Governments for over fifty years. Under the Air Navigation (Foreign Military Aircraft) Order 1952 foreign military aircraft must seek the permission of the Minister of Foreign Affairs to fly over or land in the State. However the majority of US troops which pass through Shannon Airport annually are carried on chartered commercial flights. Prior permission must be obtained from the Minister for Transport, Tourism and Sport for commercial aircraft carrying weapons to land in or overfly Ireland, in accordance with the Air Navigation (Carriage of Munitions of War, Weapons and Dangerous Goods) Order 1973. The number of troops transiting through Shannon Airport has dropped in recent years in light of troop drawdown from Iraq and Afghanistan.

Carriage of weapons/munitions of war

The carriage of weapons or munitions of war on civilian aircraft either landing in, or overflying, Ireland, is prohibited under Irish law (S.I. No. 224 of 1973) unless an exemption from this statutory prohibition is given by the Minister for Transport, Tourism and Sport. US troops transiting through Shannon airport en route to Iraq and other destinations are generally transported on civilian aircraft and weapons are carried on the majority of these flights. The operators of these flights must apply 120

for an exemption from the Minister from the prohibition on the carriage of weapons and munitions of war in all such cases. In the period 2004-2011 approx. 1300 – 1500 exemptions per year were granted from this prohibition. These numbers have fallen recently due to the US withdrawal from Iraq and Afghanistan and in 2013 the number of exemptions issued was 714. At one point approximately 90% of these flights landed at Shannon - that figure is now around 50%, the rest are flights flying through Irish airspace (overflights).

Before the Minister issues an exemption under SI 224 of 1973, the Department consults the Department of Foreign Affairs (in relation to foreign policy), the Department of Justice (in relation to security) and the Irish Aviation Authority (in relation to aviation safety) and also informs the Department of Defence.

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Air Accident Investigation Unit (AAIU) Assistant Secretary: Ray O’Leary Chief Inspector of Air Accidents: Jurgen Whyte Description of activities: The Air Accident Investigation Unit (AAIU), which was formed in 1994 as an independent investigative body, is part of the Department of Transport, Tourism and Sport and is responsible for the promotion of aviation safety through the investigation, reporting and publishing of aircraft accidents, serious incidents and incidents that occur within the state including its territorial waters. In addition, international obligations requires;  the AAIU to support and cooperate with foreign accident investigation bodies that conduct investigations into Irish registered and/or operated aircraft abroad.

 where a foreign state does not conduct an investigation into an occurrence of an Irish Registered or Operated aircraft abroad that the AAIU investigate as the State of Registry/Operator (Delegation).

 where an Irish Registered or Operated aircraft crashes in international waters, that the AAIU conduct an investigation as the State of Registry/Operator.

 where it is agreed between the Minister of Defence and the Minister for Transport, Tourism and Sport that an accident to a state aircraft is the subject of an AAIU investigation.

The Chief Inspector reports directly to the Minister for Transport, Tourism and Sport.

The AAIU is located on the 2nd floor of the Leeson Lane building where it is co-located with the Marine and Rail safety investigation bodies and shares the same administration offices, facilities and security systems. AAIU staff consists of (2) general administration staff and (6) technical aeronautical officers (including the Chief Inspector). Technical staff is drawn from both the military and commercial aviation sector, requiring a minimum of 15 years operational experience as a Pilot or an Aeronautical Engineer. The AAIU operates a 24 hr/365 day on-call roster for immediate response to notifications of air accident, serious incidents and incidents. The AAIU conducts its investigations in accordance with the International Standards and Recommended practices of Annex 13 to the Convention on International Civil Aviation, Aircraft Accident and Incident Investigation, Regulation (EU) No 996/2010 of the European Parliament and of the Council on the investigation and prevention of accidents and incidents in civil aviation, and Statutory Instrument No. 460 of 2009, Air Navigation (Notification and Investigation of Accidents Serious Incidents and Incidents). The fundamental purpose of such investigations is to determine the circumstances and causes of these events, with a view to the preservation of life and the avoidance of similar occurrences in the future. It is not the purpose of such investigations to apportion blame or liability. Nor is it the purpose of the investigation to support entities or interested parties who seek to apportion blame or liability. Approximately one month after a high profile accident investigation has been initiated, a Preliminary Report is published, outlining the basic facts, but not providing any analysis of those facts. The AAIU endeavors to complete and publish its reports within one year. If this is not possible, an interim report may be published. Prior to the publication of a Final Report a confidential draft Final Report is issued to any undertaking or person (interested parties) likely to be adversely reflected on by its

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findings. Following consideration of any comments received from such parties a Final Report (with possible Safety Recommendations) is published on the AAIU website. During 2013, over 9,000 mandatory occurrence reports (MOR’s) were received by the AAIU through the Safety Occurrence Tracking System (SOTS) which is administered by the Irish Aviation Authority (IAA). Of these occurrences, 115 fell within the remit of the AAIU and required follow-up with varying degrees of investigation. A total of 25 investigations (12 national and 13 foreign state occurrences) will be formally reported on in due course. These included 6 accidents, 16 serious incidents and 3 incidents.

Recent trends in the AAIU are such that International investigations now exceed the number of National investigations undertaken. This is indicative of the ever increasing number of commercial aircraft coming onto the Irish register. By the end of 2013 there were 1,221 aircraft on the Irish register comprising 745 large aircraft and 476 small aircraft. This is an increase of 88% since 2001.

Furthermore, during 2013 Ryanair (largest airline operating in Europe) announced firm orders for an additional 180 Boeing 737-800 NG aircraft (total 485) and Norwegian Air International Limited (NAI) was issued with an Irish Air Operators Certificate (AOC) with a planned expansion of 100 aircraft, some of which will be put on the Irish register.

While a significant proportion of the current large aircraft Irish fleet operates throughout Europe, the reality of the ever increasing Irish registered “dry leased” fleet (315 at years end) is such that we now have many large Irish registered commercial transport aircraft operating on a global basis. Apart from the requirement for the AAIU to provide support to foreign states who investigate occurrences associated with these aircraft, if a state is unable to investigate the occurrence or decides not to investigate, the responsibility returns to the state of registry/operator to investigate. Furthermore, if an Irish registered aircraft crashes in international waters, International Convention requires that the responsibility to investigate goes back to the state of registry. In such an eventuality, the AAIU would have to commit to sending an investigative team abroad for a prolonged period, while still retaining sufficient man-power resources at home to cope with the daily national obligations.

A business case relating to increasing demands and staffing requirements in the AAIU was submitted to higher authority in October 2013. Sanction to fill one vacant Pilot/Operations post and one pending retirement (Aug 2014) of a Pilot/Operations post was received in April 2014 and the AAIU presently awaits the PAS competition to take place. In addition the AAIU has sought the appointment of a Data Manager due to the increasing number of databases which the AAIU is statutorily required to maintain and provide with data, both nationally and internationally.

In 2013, the AAIU published a total of 26 reports made up of 17 national and 9 international investigations and issued a total of 31 safety recommendations.

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Tourism Assistant Secretary: Ray O’Leary Principal Officer: John Kelly

Tourism in the Broader Economy

 Tourism is one of Ireland's most important economic sectors and continues to play a key role in Ireland's economic renewal.

 The most recent CSO Quarterly National Household Survey reported that seasonally adjusted employment among ‘Accommodation and Food Services’ sector increased by 14,000 from the first quarter of 2014 when compared to the equivalent period in 2013. That is an increase of 11% in the year to Quarter 1 2014. It is also equal to the highest ever employment figure for the sector in the first quarter, which was recorded in Q1 2007. Seasonally adjusted employment in the sector has increased by 20,900 since the introduction of the 9% VAT rate on 1st July 2011. Fáilte Ireland estimates that total tourism employment (when other parts of the sector such as conferencing, attractions and festivals are included) is now approaching 200,000.

 The continuation of the 9% VAT rate has been very well received by the tourism and hospitality industry and has been one of the most successful job creation measures implemented by Government to date. It has helped drive an increase in overseas tourist numbers and revenue, and increase employment in the tourism sector.

 Tourism's contribution is not confined to directly generating employment, economic activity and exports. It also contributes by encouraging social inclusion and access to the labour market. It increases the payback from infrastructure and facilitates the efficient use of services. Tourism has played a vital role in reshaping North/South relationships through the joint marketing and promotion of the island of Ireland in international markets.

Role of the Department and Agencies  The role of the Department in relation to tourism lies primarily in the area of national policy. The Tourism agencies, under the aegis of the Department, are established to deal with the implementation of that policy and delivery of related services.

Tourism Policy Review

 In his priorities for 2013, Minister Varadkar announced that he would carry out a comprehensive review of tourism policy. The review commenced in September 2013 with the launch of public consultation document raising a series of questions regarding policy priorities and inviting comments and responses. A series of regional seminars was also arranged (with Ministerial representation) to give a further opportunity for tourism stakeholders to feed into the consultation process. 124

 Over 170 written submissions were received to the public consultation including responses from Government Departments, state bodies, local authorities and private enterprises.

 A draft new policy statement has now been prepared and submitted to Minister Varadkar for consideration. The intention is that the draft policy will be circulated with a memo for the information of Government to allow for further consultation with relevant departments and state agencies. Once this process is complete, the intention is that a Tourism Leadership Group will be formed to formulate a series of priority actions to be implemented in the short term. It is hoped to have this work complete by year-end.

1. Profile of Tourism Industry

Tourism Performance

 After a decrease in the total number of overseas visits in three consecutive years (2008 - 2010), the numbers have increased in each of the three years since then. Figures published by the CSO show that in 2013 there were 6.986 million overseas visits to Ireland – an increase of 7.2% on the 2012 total.

 Total international Tourism and Travel earnings (including carrier receipts) in 2013 amounted to €4.127 billion – an increase of 9.4% on the 2012 total.

 Figures for the early part of 2014 are also very encouraging with overseas visit numbers up 7.5% in the February to April quarter when compared to the corresponding period of 2013.  The targets for 2014 are to achieve growth in both overseas visit numbers and foreign revenue earnings by 5% and 8% respectively.

 In relation to the main markets, Great Britain was up by 5.6% from 2.77 million to 2.93 million, Mainland Europe was up by 4.9% from 2.34 million to 2.46 million; North America was up by 13.9% from 1.017 million to 1.158 million and other long haul markets were up by 15.1% from 378,600 to 435,900.

 Tourism Ireland is targeting a total growth rate of 15% in overseas visit numbers and 24% in foreign revenue earnings over the lifetime of the agency’s approved Corporate Plan 2014 to 2016.

Overseas Visitor Numbers 2001 – 2013

‘000 2007 2008 2009 2010 2011 2012 2013

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8,012 7,839 6,927 6,037 6,505 6,517 6,986 TOTAL

Great 4,032 3,872 3,257 2,738 2,878 2,774 2,929 Britain Mainland 2,590 2,610 2,382 2,045 2,283 2,347 2,463 Europe North 1,073 1,005 980 935 987 1.016 1,158 America Other 317 352 308 317 356 378 436

Expenditure by Overseas Visitors 2001 – 2013

‘000

2007 2008 2009 2010 2011 2012 2013

Total* 4,902 4,781 3,879 3,556 3,675 3,771 4,127

Great Britain 1,388 1,355 1,038 859 830 819 847

Mainland Europe 1,400 1,503 1,342 1,134 1,120 1,068 1,234

North America 806 660 722 695 679 742 822

Other 326 315 309 287 271 288 359

* Total includes carrier receipts and cross-border expenditure. Main markets exclude carrier receipts.

Domestic Figures – 2013

 The most up-to-date official figures available in regard to the domestic tourism market refer to 2013, and these are shown in the table below. 2013 Change over 2012

Domestic Trips – Total (000) 7,111 +1.1%

Domestic Trips – Holidays (000) 3,460 +2.5%

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Domestic Nights – Total (000) 20,649 +2.6%

Domestic Nights – Holiday (000) 11,933 +10.7%

Domestic Expenditure – Total (€m) 1,373.2 +2.1%

Domestic Expenditure – Holiday (€m) 840.3 +7.1%

Tourism and Hospitality Sector Employment

 The most recent CSO Quarterly National Household Survey reported that seasonally adjusted employment among accommodation and food providers increased by 14,000 from the first quarter of 2014 when compared to the equivalent period in 2013. That is an increase of 11% in the year to Quarter 1 2014. It is also equal to the highest ever employment figure for the sector in the first quarter, which was recorded in Q1 2007. Fáilte Ireland estimates that total tourism employment (when other parts of the sector such as conferencing, attractions and festivals are included) is now approaching 200,000.

Tourism Accommodation Capacity Type As at 1st 2009 2010 2011 2012 2013 Jan Hotels Premises 920 903 885 856 835 Rooms 60,548 60,138 59,464 57,859 57,362 Guest Premises 337 304 284 264 253 Houses Rooms 4,080 3,661 3,421 3,243 3,119 Irish Premises 2,465 2,251 1,980 1,825 1,616 Homes Rooms 10,299 9,345 7,767 6,896 B&B's Caravan & Premises 98 95 93 93 93 Camping Pitches 5,733 5,553 5,432 5,509 5,519 Hostels Premises 135 133 127 126 121 Beds 8,269 8,242 7,865 8,056 8,424 Registered Units 4,646 3,625 3,990 3,624 3,499 Self Catering* Listed Self Units 2,400 2,180 1,549 1,310 1,295 Catering** * Groups of 8 or more units

** Individual units

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Summary of Overall Accommodation Performance Statistics for the period January to October 2013 show hotel occupancy rates of 64%, an increase of 1% on the same period in 2012. Hotel room capacity remained unchanged between 2012 and 2013. Occupation rates for other forms of accommodation are lower with the next highest being guesthouses at 53% in the period January to October 2013.

These statistics indicate that the country as a whole has a sufficient stock of tourist accommodation to meet the needs of the industry. However, there is a possible undercapacity issue emerging in Dublin with tour operators and some other industry representatives expressing concern that there is now a shortage of hotel capacity in the city centre area. In order to maintain the competitiveness of the sector, there would appear to be scope for investment in hotels and other tourist accommodation in Dublin, particularly in the city centre where demand is highest.

Global Outlook for Tourism Tourism has demonstrated remarkable resilience. The challenges posed by the global crisis, political turmoil, natural disasters and rising oil prices have not prevented tourism from becoming one of the largest and fastest growing sectors in the world economy. G20 countries also recognise it as a vehicle for job creation, economic growth and development. International tourist arrivals are projected to surpass 1.8 billion by 2030, on the back of rapid growth in emerging tourism economies.

Tourism Divisions The Tourism Divisions of the Department of Transport, Tourism and Sport advise Government on national tourism policy, providing the strategic direction required to support the growth of a competitive and sustainable tourism industry, through the development, implementation and influencing of a range of policy actions and programmes by the Department, its Agencies and other Government Departments, in consultation with industry partners. The tourism agencies, operating under the aegis of the Department, deliver and implement that policy.

The Department also oversees the legislative framework for operation of the tourism agencies. The body of legislation includes the Tourist Traffic Acts 1939 to 2003 which set out the legislative framework for tourism development in Ireland and the National Tourism Development Authority Act, 2003 which provided for the establishment of the National Tourism Development Authority (Fáilte Ireland) and related matters.

The Department negotiates the budget for tourism services on an annual basis with the Department of Public Expenditure and Reform, engages with them through the year to report on that expenditure and seeks sanctions where necessary for staffing, financial matters or other issues where consent is required under the legislation e.g. land disposal by Fáilte Ireland. The Department’s

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entire tourism budget is channeled through the agencies and the Tourism Divisions do not dispense any financial support to individual enterprises or projects.

In relation to oversight of the agencies, the Tourism Divisions ensure that tourism agencies’ corporate and business plans and operational programmes adequately reflect/address policy objectives and are reviewed to reflect changing circumstances and value-for-money objectives. Furthermore, the Tourism Divisions also facilitate co-operation between State tourism bodies and other State bodies which promote economic activity in Ireland, to leverage opportunities for the promotion of Ireland generally and as a tourism destination during overseas trade missions and other activities.

Given the strategic economic importance of the tourism sector and the interdependent nature of developments in the sector with the wider economy, the Department continually monitors and seeks to influence relevant external policies, including economic and other framework documents (such as those produced by other Departments and bodies, and at EU level). This is reflected in the work which the Divisions do, in assisting the Minister to advocate at Government level for the appropriate level of recognition as well as resources for effective delivery of tourism policy.

It is also a role of the Divisions to support tourism development, innovation and sustainability. This is achieved by assisting Fáilte Ireland in its implementation of the Tourism Capital Investment Programme, and facilitating the continued efforts of the tourism agencies to support indigenous events and attract major events (business, sport, conference, festivals, etc.), to Ireland, particularly in the context of the improvement in facilities that has taken place in recent years, e.g., the Convention Centre Dublin, the Aviva Stadium and Thomond Park. It also seeks to maximise tourism product development opportunities arising under other Government funding programmes, and advocates and supports policies and measures that foster innovation in tourism, in co-operation with State tourism agencies. It works to maximise the contribution that tourism can make to improving the skill set of the labour force through encouraging maximum utilisation by tourism enterprises of available initiatives.

A central aspect of tourism policy is the pursuit of all-island tourism co-operation. Tourism Division's role involves engaging with the Northern Ireland authorities to strengthen and deepen practical co- operation in tourism where mutual economic and social benefit can be secured, building on the good relations already developed. Staff of the Division also facilitate the work of the North/South Ministerial Council (NSMC) in both the Tourism Sectoral format and Transport Sectoral format, through organising and servicing of meetings, as required. Tourism Division also ensures Ireland's on-going engagement with the EU and OECD on tourism matters.

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Tourism State Agencies

 There has been a major reform of Irish tourism structures over a number of years since the establishment of Tourism Ireland in 2000 and Fáilte Ireland in 2003. In 2006, the regional tourism authorities were dissolved and their staff, assets and responsibilities transferred to Fáilte Ireland. In keeping with those reforms and the new Government’s programme for the rationalisation of State agencies, Dublin Tourism was dissolved in January 2012 and its staff, assets and responsibilities also transferred to Fáilte Ireland. Most recently, responsibility for Shannon Development’s tourism activities, and the related staff and assets, was transferred to Fáilte Ireland in June 2013.

 There are occasional calls by some in the industry to merge Fáilte Ireland and Tourism Ireland. Substantive changes made to the statutory or North/South frameworks underpinning the two tourism agencies, Fáilte Ireland and Tourism Ireland Ltd, could only progress within a wider political and institutional framework and it is not just a matter of tourism policy. The current structure has delivered very significant efficiencies over the past decade and is the minimum of agencies that can be achieved within the current wider institutional framework. In addition, by adding marketing investment from the Department of Transport, Tourism and Sport with investment from the NI Department of Enterprise, Trade and Investment, Tourism Ireland gains greater purchasing power and voice in the overseas markets. Nonetheless, it is important to keep under review and ensure that all resources, North and South, are best marshalled to support tourism on the island and in the State. There is also a significant Northern Ireland contribution to Tourism Ireland (€15.5m in 2014) and Tourism Ireland’s status as a North/South body can be a help in arguing the case for protecting tourism marketing spend.

Fáilte Ireland

The National Tourism Development Authority – Fáilte Ireland – was established under the National Tourism Development Authority Act 2003, following the amalgamation of Bord Fáilte Éireann and CERT, to encourage, promote and support tourism as a leading indigenous component of the Irish economy.

Fáilte Ireland's principal functions are the development of quality tourism product, domestic tourism marketing, tourism standards, enterprise support, capability building and human resource development for the tourism industry.

What they do

Fáilte Ireland’s activities are divided into a number of programme areas, as follows:

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1. Irish Tourism Experiences There is a portfolio of Tourism experiences which determine the travel decisions of the target overseas consumer, and so need to be developed, packaged, presented and interpreted to the highest standard in order to grow overseas numbers. Fáilte Ireland actively supports the development of these experiences in partnership with the trade, communities, local authorities, local development companies (LEADER) and national agencies (OPW, Coillte, Údarás na Gaeltachta, Waterways Ireland, etc.) across a range of initiatives including research, benchmarking, sectoral support and the mentoring of businesses both individually and in groups.

Tourism businesses are encouraged to view their business as part of an experience they are offering visitors. This will help to focus the trade on selling these experiences to the international market.

Key Initiatives being focused on by Fáilte Ireland in 2014:

a) The Wild Atlantic Way  The development of a new major tourism initiative for the western seaboard – “The Wild Atlantic Way” – a 2,500km route off which key tourism experiences can be enjoyed. The Wild Atlantic Way, as a proposition of scale, is designed to allow Ireland to better compete in the international market and appeal to overseas visitors. The proposition is already proving a hit in key overseas markets such as Britain, the US, France and Germany. b) East and South – Heritage and Culture  The development of a unique thematic brand proposition for Ireland’s East and South which will be rooted in attracting the international visitor to explore and experience the heritage and culture assets of the region.  The proposed area to be considered is marked by a right-angle triangle between Carlingford, Cork and Waterford/Wexford (consideration of the geographic scope will be a key part of the proposition development). c) Dublin  A new strategy for tourism growth in the capital, developed by the Grow Dublin Taskforce (GDT), was launched in January of this year. It offers a roadmap for growing Dublin's tourism in the years ahead: including identifying those market segments with most promise; outlining the need for a new brand; and stressing the need for all interests in Dublin to come together to achieve the targets set.

2. Events Based Tourism Fáilte Ireland supports and promotes events (e.g. in business, cultural and sport areas) likely to attract a significant number of overseas tourists and deliver a large number of bednights as well as supporting smaller events likely to drive domestic tourism. 131

The Events Tourism programme is a key driver of high yield, high value international visitors to the country a fact recognised in the Programme for Government. It is a central component in the promotion of the country as a world-class tourism destination, and is a strong generator of international publicity and exposure for Ireland. The events programme is made up of three components: Corporate Events, Sports Events and Cultural Events.

Festivals and events are an important part of the tourism experience. €1.837m was allocated to 204 festivals throughout Ireland in 2014, 29 events through the National programme and 175 through Fáilte Ireland’s regional programme.

In 2014 Fáilte Ireland continued to invest in identifying, attracting and securing more international conferences and meetings for hosting in Ireland. International association and society delegates are valued at between 2-3 times that of a leisure tourist.

Major events being supported in 2014 include the St Patrick’s Festival, Giro D’Italia, the Croke Park Classic American Football game, Irish Open Golf, Dublin Horse Show and the Adventure Travel World Summit.

3. Home Holidays Fáilte Ireland leads the marketing effort to promote Irish holidays to the domestic consumer. 2013 saw the number of domestic trips grow by 2% with the number of holiday nights growing by 10%. Fáilte Ireland’s new domestic marketing campaign ‘#ThisIsLiving’ aims to influence the domestic market to holiday at home in 2014. The campaign includes 3 TV ads and an extensive digital campaign.

4. Business and Management Supports and Skills Training The Department resources Fáilte Ireland to support the development of knowledge, skills and competencies in the tourism sector.

Since 2013, Fáilte Ireland’s range of business supports have become focused on improving the ability of tourism enterprises to move from a business survival mode to business growth, with a particular emphasis on realising overseas market potential. The range of business supports being provided includes a focus on improved financial management, sales and marketing strategies (particularly for 132

overseas markets), enhanced digital capability and innovation (for example, in the area of mobile readiness), and management and business excellence generally, all designed to improve business performance.

In addition, Fáilte Ireland contributes approx. €3.7 million per year to the training and education of 1,500 students every year (full and part time) in mostly culinary craft programmes in the Institutes of Technology. They also support approx. 5,000 participants on work-based training programmes each year. Fáilte Ireland is reviewing its role in this regard in line with the development of Solas and the ETB’s.

5. Digital Presence Fáilte Ireland’s digital programme has three main components which are as follows:

 The management of the National Tourism Database, the Tourism Content System (TCS). The TCS is the national database for tourism content, featuring 14,000 listings on accommodation, activities, attractions and events, as well as data on Irish locations, cities, towns and villages.  Operation of key Irish domestic and international tourism information websites – www.failteireland.ie, www.discoverireland.ie, www.meetinireland.com, www.visitdublin.com, www.golf.discoverireland.ie and www.promotionsireland.ie.  Industry web enablement.

6. Registration and Grading Fáilte Ireland is responsible for ensuring accommodation standards meet visitor needs. It sets the minimum requirements for the various categories of accommodation and monitors the standards in hotels and all other forms of approved accommodation. Responsibilities include implementation of accommodation legislation, monitoring of product quality and customer relations, and the management of appointed sub-contractors for the assessment, registration and approval of accommodation categories.

The Fáilte Ireland Authority is currently engaged in an examination of the issues and challenges relating to its role in the regulation of the accommodation sector particularly with the changes in consumer buying behaviours in recent years and the advent of sites like Trip Advisor etc. The examination is considering whether some revision of the legislation and/or current regulations is required in order to encourage innovation in the sector and lessen the regulatory burden.

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7. Visitor Engagement Fáilte Ireland operates a programme of ‘visitor engagement’ in order to provide accurate, relevant and timely information relating to a holiday experience in Ireland, through its network of Tourist Information Offices, Apps, Touch Screens and licensed Strategic third parties

In re-aligning available resources, Fáilte Ireland has sought to support alternative models of tourist information provision to meet the needs of the local tourism sector, particularly in areas where Fáilte Ireland can no longer operate Tourist Information Offices. These include strategic partnerships with local voluntary and community groups, greater use of technology, and new arrangements with local authorities.

8. Product Development Government support for capital investment in tourism is provided through Fáilte Ireland’s Tourism Capital Investment Programme, which is intended to assist the development of certain types of tourism infrastructure, visitor attractions, and visitor activities, but not visitor accommodation. In 2013, €19 million was provided to Fáilte Ireland to operate the Tourism Capital Investment Programme, for existing approved projects. A further €24.2 million is being provided in 2014 including a special Budget allocation of €8 million for the Wild Atlantic Way. The high level of existing commitments means that there is virtually no scope within existing allocations for additional project approvals between now and 2016.

Tourism Ireland

Tourism Ireland is the all-island tourism marketing company established under the Good Friday Agreement by the then Bord Fáilte and the Northern Ireland Tourist Board (NITB). Tourism Ireland Ltd was formally incorporated on 11th December 2000. Its Memorandum and Articles of Association govern its operations and it is accountable to the North South Ministerial Council (NSMC) established under the Good Friday Agreement.

The Company has responsibility for all-island destination marketing, Tourism Brand Ireland, the delivery of regional and product marketing and promotion activity on behalf of Fáilte Ireland and the NITB and the overseas office network. Programmes are funded on a 2 : 1 South : North ratio while administration costs are funded on a 3.4:1 ratio.

Key Functions: International marketing of island of Ireland as a tourism destination, overseas office network.

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What they do

Tourism Ireland's role is to help grow overseas tourism revenue and visitor numbers to Ireland, and to help Northern Ireland to realise its tourism potential.

Tourism Ireland devises and delivers marketing programmes across the world and works in close co- operation with industry partners in Ireland as well as with the travel trade, online operators, media, air and sea carriers overseas.

It also assists the development of tourism by influencing product development in Ireland, by sharing its insight on global tourism trends and the changing need of overseas consumers with other tourism agencies, particularly with Fáilte Ireland and the Northern Ireland Tourist Board and with industry partners.

Tourism Ireland operates directly in Great Britain, USA, Canada, France, Germany, the Netherlands, Denmark (serving the Nordic markets of Denmark, Norway and Sweden), Belgium, Italy, Spain, Australia, and the UAE (this is Tourism Ireland’s Asia hub), and has representation in Austria, Switzerland, South Africa, New Zealand, China and India. It also has limited representation in Brazil and Russia.

 Tourism Ireland is undertaking an extensive marketing campaign to build on the success of 2013 and continue to grow visitor numbers to Ireland in 2014. Priority markets are the United States, Great Britain, Germany and France, which together deliver almost three-quarters of all our overseas visitors, but promotions continue in 17 other markets across the world.

 This year, Tourism Ireland is placing a major focus on car touring holidays – in particular highlighting the Wild Atlantic Way. Tourism Ireland is also promoting key events, including Limerick City of Culture, the ‘Grande Partenza’ of the Giro d’Italia and the Croke Park Classic.

 Tourism Ireland is also capitalising on important access developments – maximising the promotion of new, as well as existing, flights and sailings to continue to grow overseas tourism to Ireland. The organisation is also building on the legacy of the Gathering, continuing to reach out to the Diaspora across the world.

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Outlined below are the key points from the Tourism Ireland Corporate Plan 2014-2016 which was approved by the NSMC earlier this year:

1. An entirely new focus on promotable revenue. Tourism Ireland will focus its resources on increasing tourism revenue from promotable visitors. (Promotable visitors are those who come to the island of Ireland for a holiday, English Language Training or for a conference and corporate incentive trip). 2. An ambitious target to win a greater share of European tourism revenues. Tourism Ireland is targeting +24% growth in revenue from promotable visitors delivering €7.6/£6.5 billion for the economy of the island of Ireland over the lifetime of the corporate plan. 3. A new investment approach that prioritises ‘best prospect’ revenue-generating markets. This means a stronger focus on Mainland Europe and North America which research has shown offers greatest potential. 4. A new way of identifying target consumers who are most likely to visit the island of Ireland and presenting the most relevant holiday offering to them. Tourism Ireland will take a new global approach to consumer segmentation and brand architecture. 5. A new sales-focused strategy for Northern Ireland. Tourism Ireland is creating a dedicated strategy and fund to support a strengthened co-operative sales approach with the tourism industry at home and with overseas trade. This will be underpinned by a continued focus on access development and maximising positive PR opportunities. 6. A strong commitment to building global leadership in digital marketing. Tourism Ireland is taking a new digital approach to their marketing communications. The agency is targeting to grow the potential reach of its digital activity to more than one billion social connections by 2016. 7. A shared vision for growth across agencies on the strategic priorities for tourism on the island of Ireland. Tourism Ireland will align its plans and work more closely with other agencies and with the industry on areas including product and experience development to ensure they appeal strongly to best prospect consumers.

2. Key Industry Groups

Irish Tourist Industry Confederation (ITIC)

ITIC is the representative body for the diverse elements of the tourism industry, dealing with Government on issues influencing tourism policy and performance, investment strategies and funding priorities, particularly for international marketing and product development.

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Chair: Paul Carty (Guinness Store House)

Chief Executive: Eamonn McKeon

Irish Hotels Federation (IHF)

Founded in 1937, the Irish Hotels Federation (IHF) is the national organisation of the hotel and guesthouse industry in Ireland. The primary functions of the Federation are to promote and defend the interests of its members. The IHF represents almost 1,000 hotels and guesthouses nationwide, employing over 57,000 people.

President Stephen McNally (Deputy CEO of Dalata Hotel Group)

Chief Executive: Tim Fenn

Restaurants' Association of Ireland (RAI)

The RAI is the representative group for the Irish Restaurant Industry. The organisation was founded in 1970 and has over 500 members. The Association provides a series of benefits and services to restaurant owners including a comprehensive package of training programmes for restaurant owners, managers/supervisors and operatives, covering a wide range of skills and disciplines.

President: Pádraic Óg Gallagher (Gallaghers Boxty House, Temple Bar)

Chief Executive: Adrian Cummins

Incoming Tour Operators’ Association (ITOA)

The Incoming Tour Operators' Association (ITOA) consists of over 30 companies that operate incoming travel and tours to the island of Ireland. Its members package and promote various elements of the Irish tourism product for marketing overseas, and provide value-added services that require expert knowledge, marketing know-how and project management.

ITOA's membership includes:

 Ground handler or handling agencies, which provide full and comprehensive land arrangements or specific partial services of an overall land programme for group tours, individual travel and other large movements of passengers such as cruise ships and also act as direct representatives to the market suppliers’ brief.

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 Destination management companies (DMCs), which provide total management services for corporate meetings and incentive programmes in a destination. A DMC will be involved in designing, planning and delivering a programme to meet the client’s objectives  Professional conference organisers (PCOs), which manage all aspects of large international conferences and congresses.

President: Sue Uda (A Touch of Ireland)

Chief Executive: Ruth Andrews

B&B Ireland

B&B Ireland promotes almost 1100 family run homes in Towns, City, farm & Countryside locations throughout Ireland. It promotes and markets the B&B product in Ireland and overseas.

Chair: Michael McLoone

Chief Executive: Helena Healy

3. Policy Framework

Tourism Policy In his priorities for 2013, Minister Varadkar announced that he would carry out a review of tourism policy. The purpose of reviewing tourism policy is to develop a policy statement, setting out the Government’s priorities in terms of:

A. the contribution tourism is to make to national economic and social goals, B. how that contribution will be measured and benchmarked, and C. in what manner tourism can best make its contribution.

Based on these, the policy will set parameters for allocation and deployment of the resources available to Tourism through this Department, to achieve those priorities (through the agencies or otherwise).

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The Tourism Policy Review commenced with the launch in September 2013 of a consultation document, raising a series of questions regarding policy priorities, and inviting comments and responses. The questions were grouped under a number of headings covering:-

 Tourism Marketing  Tourism Product Development  Human Resources and Training/Enterprise Support/Innovation and Competitiveness  Implementing Policy and Service Delivery Mechanisms

The consultation document was placed online on the Department’s website and comments sought from tourism industry stakeholders. The consultation process was also progressed by means of a series of regional seminars (with Ministerial representation), involving an invited group of regional tourism actors, designed to maximise constructive discussion of the questions raised. These seminars included a workshop for national bodies in Dublin.

Over 170 submissions were received in response to the consultation document, from a wide variety of interested parties, including Government departments, state bodies, tourism industry representative groups, local authorities, regional development bodies, private enterprises, and individuals. Reflecting the diverse nature of tourism itself, a wide range of issues emerged from the consultation process.

Following examination of the submissions, a policy statement has been prepared for Ministerial approval. The Policy Statement sets out a vision of the Government’s priorities in terms of Irish tourism (in both qualitative and quantitative terms) that will allow the agencies, other departments and the industry to have a clear view of Government intent.

The key headline goals in the policy statement are as follows:

 By 2025, revenue from overseas tourism, excluding air fares, will be €5 billion per year (at 2014 prices i.e. adjusted for inflation between now and 2025). The comparable figure for 2013 is €3.3 billion.

 By 2025, employment in tourism will reach 250,000 (around 200,000 at present).

 A clear restatement of the purpose of State expenditure on tourism marketing in terms of addressing possible market failure, while assessing the scope for the industry to contribute to such promotion and/or promote itself where such failure may not exist.

 There will be a switch in focus from targeting growth in overseas visit numbers to targeting growth in overseas visitor revenue (the substantive economic impact)

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 A new fund to support capital investment in tourism will be launched in 2016.

 An enhanced role for local authorities and the volunteer sector for tourism purposes (capitalising on the lessons learned from The Gathering initiative).

 Addressing the potential of events to further assist tourism growth, including consideration of funding arrangements to support longer term growth plans.

 Setting out how agencies can support the skills development in the sector, in the context of the new policy framework (especially in further education and apprenticeship).

The Draft Tourism Policy Statement was brought to Cabinet by Minister Varadkar on 8 July and published on the Department’s website. Tourism stakeholders have an opportunity to provide feedback by 31 July, following which the Tourism Policy Statement will be finalised, and the Minister will be expected to bring it to Cabinet for approval in September

Follow-up to the Policy Review

Following completion and launch of the policy review, the Department along with industry and the agencies will bring together a Tourism Leadership Group of key stakeholders to identify a series of priority actions in a strategy to support the development of tourism along the lines set out in the policy statement. The indicative timeline to complete that work is the end of 2014.

The incoming Minister will be expected to approve the members of the Tourism Leadership Group and to meet with them at their inaugural meeting, to emphasise the Government’s support for tourism and the need to advance the goals in the Policy Statement. The Group will report to the Minister later in 2014 with a detailed Action Plan for Tourism, which the Minister will be expected to launch.

Broader Economic Policy – Role of Tourism  When the Government came into office in 2011, it identified the tourism and hospitality as a key sector in Ireland’s overall economic recovery and committed itself to various actions to support the sector, rebuild competitiveness, grow business and increase employment.

 In particular, the continuation of the 9% VAT rate has been one of the most successful job creation measures implemented by Government to date and is recognised as evidence of the Government’s strong commitment to job creation in a labour-intensive, export-oriented service 140

industry. Having helped to drive an increase in overseas tourist numbers and revenue, it has helped to create and sustain thousands of jobs.

 The Department has ensured that tourism has taken a more central role across economic, employment and trade policy in the past two years, in the face of the difficulties facing the Irish economy.

Export Trade Council/Government Trade, Tourism and Investment Strategy

 The Export Trade Council, chaired by the Tánaiste, oversees the implementation of the Government Trade, Tourism and Investment Strategy and ensures the close coordination of Ireland’s economic, trade, tourism and investment promotion overseas.

 In 2013, a short, focused review of the Strategy was undertaken. The review contains targets for 2015 of 7.2 million overseas visits, visitor revenue of €3.6 billion, and promotable visitor revenue of €2.3 billion. The Strategy also includes a specific target of creating 15,000 additional jobs in tourism. The attainment of these targets will be an important early indicator of progress towards the 2025 goals.

Government’s Medium Term Economic Strategy (MTES)

 The MTES recognises the potential for further growth in tourism and emphasises its role in job retention and creation across the country, in both urban and rural areas, as well as the extent to which Irish-owned SMEs are at its core. The principal actions being taken this year to address competitiveness issues are set out in the 2014 Action Plan for Jobs.

2014 Action Plan for Jobs

 In addition to measures affecting either overall economic competitiveness and actions to make improvements in other sectors that would have a positive knock-on effect on tourism, the 2014 Action Plan for Jobs contains the following tourism-specific actions: - Deliver a programme of supports to businesses in the tourism sector, including developing visitor experiences, growing digital presence and international sales, to help them grow earnings and jobs (Action 332). - Establish if there is a suitable project and partner available to develop a National Diaspora Centre (Action 334). - Work with local communities to translate the Gathering’s legacy into sustainable employment opportunities (Action 336). - Develop greater collaboration between Fáilte Ireland and Enterprise Ireland in a number of areas, including the fast growing English language training sector (Action 337). - Review the accommodation registration and classification framework to lower the regulatory burden on business and encourage innovation (Action 338).

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- Improve the Tourism Offering through capital investment of €24.2 million in 2014, in particular through the development of international scale attractions such as the Wild Atlantic Way (Action 339). - Complete a review of tourism policy leading to a detailed tourism strategy and action plan to assist the industry to realise its growth potential.

4. Issues on the Horizon

2013-2014 Tourism Performance

 In 2013, there were 6,985,900 overseas visits to Ireland, a rise of 7.2% on 2012. Expenditure (excluding fares) by overseas visitors in 2013 was €3,262m, an increase of +11.9% compared to 2012.

 According to the latest figures available from the Central Statistics Office (CSO), there were 1,566,600 overseas visits to Ireland during the 3-month period from February to April 2014 – up 7.5% compared to the same period in 2013. Comparing Feb-Apr 2014 to Feb-Apr 2013, visits from Britain grew by 15.2%; Mainland Europe was up 3.1%; North America was down by 4.6%; and Other (i.e. long-haul) markets were up 7.0%.

 The 4.6% reduction in visitors from North America should be viewed in the context of 2013 witnessing the highest ever number of visitors from that region. However, prospects for the North American market are strong as we enter the peak summer season, with carriers and tour operators reporting growth in bookings and a further increase in the level of available air capacity.

 For 2014 as a whole, Tourism Ireland is targeting 4% growth in visit numbers and 7% growth in visitor revenue.

Tourism & Employment

 Growth in visitor numbers and revenue has translated directly into additional employment.

 According to the CSO, seasonally adjusted employment in the accommodation and food services sector in the last quarter of 2013 was just over 137,000 – higher than at any time since the economic crisis began.

 Comparing the first quarter of 2014 to the same period in 2013, seasonally adjusted employment was up 11% or 14,000 jobs. Standing at 136,400 jobs, this equalled the highest first quarter employment figure for the sector, previously recorded in Q1 2007. Seasonally adjusted employment in the sector has increased by 20,900 since the introduction of the 9% VAT rate on 1st July 2011.

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 Fáilte Ireland estimates that total tourism employment (when other parts of the sector such as conferencing, attractions and festivals are included) is now approaching 200,000.

Competitiveness & Value for Money

 Reducing the VAT to 9% on tourism services (including hotel accommodation and meals in restaurants) has enhanced the competitiveness of the industry.

 This measure has been complemented by a radical change in our approach to visitors from developing markets through the Visa Waiver Programme and its successor, the British Irish Visa Scheme (announced on 16 June 2014), as well as further positive developments in the broader visa regime.

 The zero rating of the Air Travel Tax, announced in Budget 2014, has had a welcome impact in terms of additional capacity. There has been a very positive response to the initiative from airlines with Ryanair and Aer Lingus both announcing details of new routes and increased services from Dublin, Shannon, Cork and Knock. A total of 23 new services have been announced commencing in 2014 along with additional capacity on 21 existing routes from the four airports.

 Key public investments, like the Wild Atlantic Way, are also assisting competitiveness by providing a better tourism experience for visitors.

 Visitor numbers continue to rise, visitor satisfaction levels are consistently good and ratings of poor or very poor value for money are falling. Whereas in 2009, 41% of visitors surveyed found Ireland to be poor or very poor value, this fell to 17% in 2012 and 13% in 2013. The perception of Ireland as a destination that provides good value for money has improved considerably.

 Having restored Ireland’s competitiveness and regained trust internationally as a good value destination, the challenge now is to continue to offer quality, good value, memorable hospitality to our tourists. It is critically important that the tourist industry matches the Government’s commitment to continued competitiveness. Although it is understandable that tourism businesses will seek to recover margins and generate income following a very difficult trading period, increasing returns must be done at an appropriate rate and in a way that visitors perceive as reasonable, for example through adding value to the product, rather than simply increasing prices for short term gain at long term expense.

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Impact of Public Sector Cuts

Funding Reductions

 Excluding once-off provisions in any given year and assigned Departmental administration overheads, the total tourism services budget has fallen from €152.543 million in 2008 to €107.25 million in 2014 – a decrease of 30%.

 The non-pay provision for Fáilte Ireland (i.e. its programme budget) has fallen 42% in the same period:  2008 = €50.105m - 2009 = €46.990m - 2010 = €38.490m - 2011 = €35.864m - 2012 = €31.345m (excluding €5 million for The Gathering) - 2013 = €29.844m (excluding €7 million for The Gathering) - 2014 = €29.228m

 After successive cuts, industry support services are now under severe pressure.

 The Tourism Capital Investment Programme has been crucially important in developing attractions, activities and tourism infrastructure to meet the requirements of today’s visitor. In order to remain competitive, continue to attract visitors from overseas and increase Ireland’s market share, it is vital that Ireland continues to support capital investment in tourism. The high level of existing commitments means that there is virtually no scope within existing allocations for additional project approvals between now and 2016.

 The total Tourism Marketing fund has decreased each year since 2011: - 2011 = €46.083m - 2012 = €39.354m - 2013 = €37.245m - 2014 = €35.476m The allocation for 2014 represents a reduction of 5% on the 2013 figure.

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 Furthermore the grant for administration and general expenses for Tourism Ireland has been cut in each of the last six years including 2014 in line with “efficiency savings” agreed for all North/South bodies. In fact total funding to Tourism Ireland has fallen by over 20% in this period.

Staffing Reductions/ ECF/VRS

 The reductions in tourism funding have been compounded by significant reductions in staff in recent years. Fáilte Ireland has amalgamated with two other bodies (Shannon Development and Dublin Tourism) and taking on 88 (FTE) additional staff from same. Its staffing complement in 2006 following its amalgamation with five Regional Tourism Authorities was 406. If it reaches its Employment Control Framework (ECF) target of 335 by end-2014, its staffing numbers will have fallen by a third between 2006 and 2014 (494 (406 + 88) down to 335).

 To assist the organisation reduce its employee numbers in line with ECF targets, Fáilte Ireland introduced a targeted Voluntary Redundancy Scheme (VRS). This VRS was approved by the Department of Public Expenditure and Reform and its terms are consistent with previous public sector VRS schemes (e.g. HSE). 34 applications from permanent staff and nine from seasonal staff have been accepted, which would give an employment figure of 344 WTEs by end-2014, thus assisting Fáilte Ireland meet its ECF target of 335.

 As a North/South Body Tourism Ireland is not strictly covered by ECF targets but has agreed, on a voluntary basis, to cut its numbers from a current staff complement of 160 to 148 by the end of 2014 and is on target to achieve this.

Conclusion

 Clearly, the pressure on the staffing and financial resources of Irish public bodies will impact on tourism – not just through limiting funding and staffing for the tourism agencies to market, invest or support enterprises – but also through the range of public services that are essential to maintain a competitive tourism product. These include the maintenance of public transport and roads (including signage); water/wastewater service to maintain bathing and drinking water quality; and services at tourism, heritage and cultural attractions.

 In relation to tourism capital investment, public sector grantees that develop tourism product must provide both own funding and assurances that they have the resources to operate and maintain it. In addition, investment requires significant staff time if it is to be delivered on time and on budget. This can limit their capability to develop new product.

 The continuing difficulty of securing loans is severely limiting the private sector's capacity to bring forward projects and new projects have tended to be concentrated in the public sector e.g. local authorities and the OPW.

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Visa Regime: Common Travel Area Visa for Ireland and the UK

 On 16th June, 2014, the Minister for Justice and Equality, Frances Fitzgerald, T.D., announced that the ‘British Irish Visa Scheme’ between Ireland and the United Kingdom will commence this autumn starting with China and India. The British Irish Visa Scheme will replace Ireland’s Short- stay Visa Waiver Programme, introduced in July, 2011, which has proved to be a significant success. That Programme allows nationals of 18 countries to travel from the UK to Ireland using their UK visa. The number of visitors from the countries in question grew by 68% from 2010 to 2013. The British Irish Visa Scheme will allow travel throughout the UK and Ireland, whereas the Irish Visa Waiver Programme allowed travel in one direction only.

 The British Irish Visa Scheme will allow for travel to and around the Common Travel Area (CTA) on a single visa. As matters stand, many overseas tourists and business visitors who wish to visit both Ireland and the UK, including Northern Ireland, need separate Irish and UK visas.

 From the autumn the objective is that visitors from China and India will be able to travel freely within the Common Travel Area using either an Irish or UK visa. This will mean that tourists, business visitors etc. will be able, for the first time, to visit both Ireland and the UK, including Northern Ireland, on a single visa.

The Gathering Ireland 2013: Success – including Legacy Benefits

 The Gathering Ireland 2013 was highly successful in achieving its core objective of increasing the number of overseas visitors to Ireland. It is estimated that is that the Gathering delivered between 250,000 and 275,000 incremental tourists which would not have otherwise visited in 2013 and that these additional overseas visitors spent up to €170 million in Ireland.

 The Gathering was a critical factor in helping to make the case for additional air access to Ireland during 2013. In this regard, available air seat capacity increased by 4% for the peak summer season and by 7% for the winter period. Almost all of this additional airline capacity has been retained for 2014. Extensive media engagement was undertaken to promote the initiative and it is estimated that the domestic media coverage had an Equivalent Advertising Value of over €40 million while the corresponding figure for overseas coverage amounted to €75 million.

 The Gathering has created a number of legacy benefits. The engagement with the Irish Diaspora which took place during the Gathering year has created a network of contacts which can be leveraged for future tourism and investment initiatives. It has also created a new level of community engagement in tourism, which will be reflected in the review of tourism policy. Many of the events which took place for the first time during the Gathering year are taking place again in 2014, and may become annual events. A new Tourism Initiative for the Diaspora, a joint partnership between Fáilte Ireland, IPB Insurance and the 34 Local Authorities (under the auspices of the County and City Managers Association), will provide an annual fund of €1m over the next three years to support up to 700 local community-based events and festivals each year.

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Skills Training for the Hospitality Sector

 In the area of skills training, approx.1,500 students receive funding annually through Fáilte Ireland to allow them pursue Hospitality Craft and Tourism courses including Culinary Arts in the Institutes of Technology. Fáilte Ireland is contributing €3.7 million in 2014 towards these costs.

 A number of the representative bodies in the hospitality sector (Irish Hotels Federation and the Restaurants Association of Ireland) have been arguing that there is a need for lower level skills training to be introduced. They argue that the introduction of such training would facilitate them in creating additional jobs suitable for persons on the live register.

 Consideration will have to be given to the appropriate balance of direct enterprise support, entry level training and advanced/professional training. SOLAS, employers, further and higher education providers - particularly the Education and Training Boards (ETB’s) - and Fáilte Ireland will all have complementary roles to play in that regard. Fáilte Ireland is working with Solas and the ETB’s in this regard.

 The Action Plan for Jobs 2014 also provides that the Expert Group on Future Skills Needs (EGFSN) will commence a detailed assessment of the skills and competency requirements of the hospitality sector in 2014. A clearer picture of the future skills needs of the sector should emerge following the completion of that assessment.

Hotels: Capacity Issues

 There were issues several years ago regarding excess capacity in the national hotel stock, with consequent pressure on margins/room rates and very harsh competition. With several non- viable hotels having been sold on, others managing to secure refinancing deals and demand for hotel rooms increasing as visitor numbers have continued to rise, overcapacity nationally is no longer an issue and available statistics indicate that the country as a whole has a sufficient stock of tourist accommodation to meet the needs of the industry.

 Notwithstanding this national position, there are signs of strain in Dublin – particularly in the city centre, where demand is highest. This appears to be translating into increasing room rates, which can affect Dublin’s competitiveness compared to other city-break or business conference destinations.

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 Analysis of recent trends and future demand indicates that we will soon require additional capacity –particularly in Dublin – but there is anecdotal evidence of investors now looking to acquire sites, not just built hotels, in and around Dublin.

Rugby World Cup 2023

Background Based on the experience of the 2011 RWC in New Zealand and after prior discussions with Ministers in Northern Ireland and Ireland, the IRFU engaged the Sports Business Unit of Deloitte UK in November 2012 to carry out the feasibility study on Ireland hosting the Rugby World Cup in 2023. This feasibility study was paid for by the IRFU, with partial funding support from Fáilte Ireland and the Northern Ireland Tourist Board.

Examination by Government

Further analysis was carried out by Fáilte Ireland and the Department and in November last the Government considered a Memorandum on the next steps to a potential bid to host the Rugby World Cup in 2023. While the Memorandum identified a number of challenges, the great potential of the event is also clear and hosting the Rugby World Cup on a cross-border basis in 2023 would be a great opportunity for Northern Ireland and Ireland. Aside from the potential economic boost from the number of overseas visitors coming for the tournament, the RWC would raise Ireland’s international profile, not just in terms of sport and tourism, but also more widely in terms of business, trade and investment. Attracting major international events is a key element of tourism strategy on both sides of the border and cooperation between north and south can enhance such events. In response to the Memorandum, the Government expressed strong support for the proposal and for the conduct of further work to get to the stage of making a formal decision to bid.

In order to progress the matter further, Minister Varadkar and the Minister of State met with Minister Arlene Foster, who is the Minister responsible for tourism in the Northern Ireland Executive, and Minister Carál Ní Chulín, who is responsible for sport in the Executive, in Armagh on 22 January. At that meeting it was agreed to establish a working group to examine some key issues further and to report back to Ministers in the Summer.

The group consists of representatives from the Department of Culture, Arts and Leisure and the Department of Enterprise, Trade and Investment in Northern Ireland and the Department of Transport, Tourism and Sport, the three tourism bodies (Fáilte Ireland, Tourism Ireland and the Northern Ireland Tourist Board) and the IRFU. The group is independently chaired by Hugo MacNeill, Director of Goldman Sachs and former Irish rugby International. The group will prepare a report for Ministers that would assist them in their decision on whether or not to submit a formal bid. The working group held six meetings since 25 February.

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It is anticipated that the group will complete its task by the end of Summer 2014 with a decision from both Governments expected before the end of 2014.

Bid Timeline

Diaspora Centre

The Government’s Infrastructure and Capital Investment Framework 2012-2016, published in November 2011, includes a commitment of support for a Diaspora Centre or Diaspora Museum, should a suitable project and partner be available. In February 2012 the Minister asked Fáilte Ireland to carry out a feasibility study on the development of such a centre and the most suitable means by which it could be financed, developed and managed.

The conclusion of the study was that a National Diaspora Centre appears to be a significant opportunity to add to Ireland’s tourism product which would have strong appeal to the Irish Diaspora, to overseas visitors to Ireland and to the local Irish Market. It could provide a focal point for the fragmented genealogical market and a centre for contact with and from the Irish Diaspora, strengthening ties to mutual advantage.

To achieve that outcome, the study concluded that a project of substantial scale would need to be developed. This could be approached in a number of different ways, as either a new-build landmark attraction or inserted into an existing building. Exhibitions would have to be of international standard with appropriate quality and number of staff.

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The Minister has decided that, in line with the Infrastructure and Capital Investment Framework 2012-2016, expressions of interest should be sought to establish if there is a suitable project and partner available to develop a Diaspora Centre. In considering proposals under the call, positive weighting will be attributed to those proposals which most closely meet the criteria set out in the feasibility study. However, it is recognised that potential projects and or partners may not fulfil all of these recommended criteria. The call also emphasised that funding under the Tourism Capital Investment Programme administered by Fáilte Ireland to the end of 2016 is virtually fully committed. Accordingly, at this point there is currently no capital funding available from the State to assist the development of a National Diaspora Centre.

The call was made by Fáilte Ireland in May last on the e-tenders website. This a two stage process and following the closing date of 11th July for receipt of completed Qualification Questionnaires and evaluation of these responses, a number of participants will be invited to participate in detailed discussions via dialogue meetings. It is anticipated that these meetings will take place during the week commencing 28th July 2014.

These proposals will be assessed by a committee comprising an independent Chair and representatives of relevant Departments and other interested parties. They will report to the Minister who will advise the Government if there are suitable projects or partners available having regard to the findings of the feasibility study. In the event that public funding would be required for a suitable project or partner and such funding subsequently become available, there should then be no undue delay in proceeding.

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Appendix

Possible Overseas Tourism Events with Ministerial Representation Market Date Visit/Event Notes Great Britain Junior London, ExCel 3-4 Nov World Travel Market Leading global event for the Minister travel industry. A unique opportunity for the global travel trade to meet, network and conduct business under one roof

United States Junior Milwaukee 14-17 Milwaukee Irish Festival Largest Irish cultural event in Minister Aut the US, holiday village etc Minister Chicago and 20-23 World Routes World Routes in Chicago Boston Sept conference, Chicago; brings together the largest and Jump into Ireland sales range of airlines, airports, 24-27 blitz and iFest events tourism authorities, civil Sept (Chicago and Boston aviation authorities and more 24&25th) from all corners of the world; JITI 2014 showcase and participation at new iFest event Junior LA (18th), 18-20 Jump into Ireland sales Jump into Ireland sales blitz. Minister San Francisco Nov blitz (19th), Seattle (20th)

Mainland Europe Minister Paris 23-26 IFTM/Top Resa The Minister’s attendance at Sept IFTM (International French Travel Market), the major French Trade event attended by thousands of Travel Trade reps specifically in the leisure groups business, could be combined with a Trade, Media and Business Tourism lunch/dinner.

Minister Madrid 7-9 Oct MRO Europe Aviation conference TBC Australia & 151

Developing Markets Junior China 15-19 China Trade Mission Tourism Ireland and industry Minister Sept partners will promote in key Chinese cities. Minister ADM – 1 Oct ‘Flavours of Ireland’ Evening workshop and London event promotion and workshop networking dinner – platform for top GB-based for Irish industry partners to incoming tour operators promote direct to top who specialise in long performing GB-based haul markets incoming tour operators who specialise in long haul markets Minister Russia Late Possible Trade Mission to Possible Trade Mission to Oct/Nov Russia Moscow and St Petersburg – contingent on access developments Minister NZ/Australia 24 Nov- New Zealand/Australia Tourism Ireland and industry 3 Dec Trade Mission partners will promote in NZ/Australia

Ireland Minister Dublin Thur 27 Tourism Ireland Launch to 600 industry and Junior Nov TBC Marketing Plans 2015 representatives of Tourism Minister Ireland’s 2015 Marketing Plans

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Sports

Contents Sports Policy and Campus ...... 154 Sports Capital Programmes Division ...... 167

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Sports Policy and Campus

Assistant Secretary: Donagh Morgan Principal Officer: Tim Scully

Overview The primary role of Sports Policy and Campus Unit is to facilitate the use of public funds to promote increased participation in sporting activity and improved levels of performance at competitive and elite levels and to meet the Department's responsibilities in relation to sporting issues as required by the European Union, the Council of Europe and the World Anti-Doping Agency (WADA) and to facilitate the development of a National Sports Campus at Abbotstown, Blanchardstown.

The main responsibilities of the Unit are as follows;  Development of Sport Policy  Liaison with the Irish Sports Council (ISC) and the National Sports Campus Development Authority (NSCDA)  Facilitating and overseeing the development of the National Sports Campus at Abbotstown, Blanchardstown  International sport issues – EU, Council of Europe and WADA  Sports Policy Statement  Introduction of the Sport Ireland Bill  National Physical Activity Plan  North/South sport issues

1. IRISH SPORTS COUNCIL

Since its establishment under the Irish Sports Council Act, 1999, more than €593m has been provided to the ISC towards initiating, developing and enhancing a wide range of programmes aimed at increasing participation and raising standards in Irish sport. Although the 2014 allocation to the ISC is a reduction of 2% on the 2013 provision, it will allow the ISC to prioritise the following key areas of the Council’s activities in their strategy for the period 2012 – 2014:

 Advancing the Participation Strategy  Developing the capacity of the National Governing Body sector  Sustaining the High Performance System

Current expenditure funding for Sport is provided by the Department to the Irish Sports Council (ISC) and delivered through the ISC under the provisions of the Irish Sports Council Act, 1999. The current allocation to the Irish Sports Council provides for expenditure on sports programmes, including grants to National Governing Bodies of Sport; Local Sports Partnerships; the International Carding Scheme; and support for other sporting bodies and institutions (Institute of Sport, Olympic Council of Ireland, etc.). It also provides for expenditure on specific Council programmes such as the High Performance Strategy; Anti-Doping Programme; Buntús Programme; Women in Sport Initiative; Go for Life; Irish Trails Strategy; Code of Ethics; and Research.

Administration costs, including staff costs, and other general expenses incurred by the ISC in discharging its statutory role are also met from this allocation. 154

The ISC has six functions under the Act, namely; improving standards in high performance sport; increasing participation rates in sport; facilitating standards of fair play; combating doping; producing research and communicating information on sport.

High Performance The ISC is responsible for the improvement of standards in high performance sport. There are 18 disciplines in which Ireland has the potential to compete successfully at the highest international level: the Olympic disciplines, the Paralympic disciplines, golf and cricket. 2013 was an exceptional year for Irish high performance sport with a record 67 medals achieved at World and European events. By comparison in 2006, the number of medals won was 10, in 2010 the number was 31.

In 2014, the ISC is investing over €8.7m directly into high performance sports. €7.1m will be invested in High Performance Sports Programmes with a further €1.6m supporting 85 athletes under the International Carding Scheme.

The High Performance Plans, which included specific targets for the year, were approved by the Council’s High Performance Committee. This Committee oversees the investment of the Irish Sports Council in elite sport. The remit of the Committee is to:

 Advise on the strategic and operational planning for the High Performance Programme and the Irish Institute of Sport (IIS)

 Advise on key initiatives within the High Performance Programme and the Institute to include:  The coordination of NGB Performance Planning  The delivery of services through the International Carding Scheme  The coordination and delivery of sports science and medicine services  The provision of athlete career and performance lifestyle support  The provision of elite coach development and education

 Advise on national and international policies and requirements in conjunction with the High Performance Unit and the IIS.

Irish Institute of Sport

The Irish Institute of Sport was established following this key recommendation of the Athens Review (the Athens Olympic and Paralympic review), with a vision of providing world leading service to elite Irish athletes. This includes sports science and medicine co- ordination, athlete career and performance lifestyle support, and elite coach development and education. The Institute reports directly to the ISC.

In 2005, a comprehensive review of the Athens Olympic and Paralympic Games was undertaken through the Athens Review, in which all high performance structures and processes of the Irish Sports Council (ISC), National Governing Bodies (NGBs) and all related agencies were evaluated and recommendations made. The first critical element was to continue with the Performance

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Planning system with focus sports. The second was the delivery of a world class support structure to elite athletes by an Institute of Sport.

Coaching Ireland

Coaching Ireland was formerly the National Coaching and Training Centre. It is located on the campus at the University of Limerick and is an all-island body charged with improving the standards of coaches and coaching. Coaching is recognised as critical to the advancement of sport at every level and in every aspect. Coaching Ireland merged with the Irish Sports Council in December 2012 and the staff of Coaching Ireland became staff of the Council.

Coaching Ireland works in partnership with 60 National Governing Bodies of Sport (NGBs) in the delivery of the Coaching Development Plan for Ireland (CDPI) within the context of the policies of the ISC and Sport Northern Ireland (SNI) and the All Island Coaching Strategy. Within the CDPI is the Coach Development Framework which comprises of four levels ranging from an apprentice coach up to master coach.

Working with its partners Coaching Ireland develops, implements, manages and quality assures coach certification, accreditation, continuing professional development and licensing systems on an all-island basis.

In 2013, 22,803 coaches qualified along with 104 tutors while 1,921 courses were approved.

Participation Increasing Participation in Sport is a key strategic goal of the ISC. The Council seeks to get more people more active more often and has a multi-dimensional approach to increasing participation.

The Code of Ethics and Code of Practice for Children’s Sport in Ireland, an all island approach to creating a safe environment for young people in sport and the essential ethical foundation for sport.

The Irish Sports Council supports the schools’ PE curriculum by offering the Buntús programme to every primary school in the country. Buntús Play and Multi‐Sport have been developed to support the primary Physical Education curriculum. Supported by the Department of Education & Science, Buntús assists teachers in introducing young people to sport, with the aim of fostering a life‐long relationship with sport. The programme is delivered through the Local Sports Partnership network. This network also delivers the Buntús Start programme to crèches and pre-schools to develop fundamental motor skills. Over 2,700 schools and nearly 2,600 pre- schools have received the programme.

The Council works with the three major field sports (GAA, FAI & IRFU) to provide participation programmes in every community in Ireland with an emphasis on young people. Funding of almost €7.5m is being provided in 2014 for these organisations. These three sports will invest an additional €30.6m in participation and games development initiatives in 2014.

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In 2013 and 2014, grants of almost €0.9m were awarded to inter-county GAA players under the Gaelic players grant scheme. As with the Scheme in previous years the Irish Sports Council will provide grant aid to the GAA who will then work with the Gaelic Players Association for the appropriate disbursement of the money to teams, players and programmes

The Council is involved in the direct delivery of participation programmes aimed at increasing the numbers participating in sport among specific target groups namely; women, older people, disadvantaged communities and people with a disability.

Sports Inclusion Development Officers (SIDOs) have been employed by Local Sports Partnerships. Their specific remit is to engage with people with a disability and bring them into the community of sport. The appointment of the SIDOs originated from special funding from the Dormant Accounts Fund. The ISC agreed a funding mechanism to ensure the continuation of the SIDO scheme beyond the dormant accounts funding. The SIDO programme commenced in late 2007 and within a year it was reported that 4,424 new participants had engaged in sport and physical activity through the programme. In 2013, 14 Sport Inclusion Officers were supported to encourage participation for people with disabilities.

The Local Sports Partnership initiative lies at the heart of the Irish Sports Council’s participation strategy. Key tasks that the Partnerships are involved in include:

 The creation and implementation of plans for long term local sports development.  The establishment of a sustainable structure to assist all those involved in local sports development to face the associated challenges -e.g. recruiting and managing volunteers, providing quality training supports.  Delivery of projects and programmes aimed at increasing participation in sport, recreation and physical activity particularly amongst key target groups of older adults, people with disability, disadvantaged communities and women/girls.  Establishing networks at local level and liaising with existing initiatives.

The Partnerships report their activities annually in the SPEAK Report. Some highlights from the 2012 Report (the most recent report) include:

 Over 157,000 individuals contacted the LSP network in order to access general or specific sport-related information.  LSPs provided 9,975 sports clubs, groups and organisations throughout the country with important information and advice in the area of funding.  255,225 people participated in 838 locally delivered participation programmes.  LSPs planned and delivered 193 training and education courses, workshops and seminars with their partner agencies. 9,136 people participated on these training courses.  1,027 primary school teachers in 93 schools received Buntús Generic training  1,241 childcare practitioners in 300 childcare centres received Buntús Start training  5,889 participants completed 404 Code of Ethics Basic Awareness courses  616 participants completed 52 Club Children’s Officer Courses  29,543 female participants took part in 172 local Women in Sport programmes.

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In 2014, over €5 million will be allocated to the National Network of Local Sports. The Partnerships offer a variety of Programmes including Women in Sport, Code of Ethics, Go for Life, Link2BActive and the An Post Cycle Challenge.

The LSPs are involved in delivering mass participation programmes for people of all ages. In 2013, over 16,500 took part in the An Post Cycle Series which is organised and delivered by five Partnerships since 2009. Over 21,500 took part in the walks and runs organised for Operation Transformation.

National Governing Bodies The 60 National Governing Bodies of sport are the essential infrastructure of Irish sport. While not every sport will make a major impact in terms of numbers, each has a valuable role to play within the Irish sports community. The Council invests in their development and supports them with advice and practical support across all operational areas.

Over €11 million is being invested in the core activities of NGBs in 2014 including administration, participation programmes, coach development, hosting events, implementing strategic plans and employment of professional staff. A further €0.58 million is allocated under the Women in Sport programme.

The ISC provides other supports and services to the NGBs with a focus on improving governance within sports bodies. Support for strategic planning, internal audit and financial management is provided.

National Trails Office The National Trails Office (NTO), under the direction of ISC’s National Trails Advisory Committee (NTAC), has been centrally involved in supporting the development and promotion of walking and cycling trails (waymarked ways etc) in Ireland over the past 13 years. The ISC published its Irish Trails Strategy in 2007 and the NTO currently maintains a register of all developed trails in Ireland, sets standards in respect of trails and coordinates an annual inspection programme to ensure standards are maintained. The NTO also administers a public liability insurance policy for landowners and manages the public information website www.irishtrails.ie.

The ISC and Fáilte Ireland, in conjunction with the agencies and departments represented on the NTAC, are currently developing a new Irish trails strategy for the period 2015-2020. The Strategy aims to reposition and further develop Irish trails to attract both increased usage domestically and by overseas visitors. While the tourism and domestic participation figures for both walking and cycling have grown steadily over the past number of years, recent tourism research indicates that there is a very significant potential to attract more visitors to Ireland for outdoor activity holidays.

The budget for ISC’s National Trails programme for 2014 is €0.4m. The National Trails Advisory Committee (NTAC) oversees this area of work. There are now 729 trails listed on the national trails register. The Irish Trails website received over 116,300 unique visits up to end May 2014 with 142,000 unique visits in 2013.

The ISC continues to work with a large number of State Agencies, National Governing Bodies, Local Sport Partnerships and other health promotion agencies to plan and develop recreational trail infrastructure and promotional initiatives. 158

Research The Council’s Research Programme has a particular emphasis on investigating sports participation in Ireland. It provides the evidence base for the development of sports policy through the research programme, in collaboration with organisations such as the ESRI, CSO and 3rd Level Institutions (principally DCU, UL, UCC and WIT).

The Council introduced the Irish Sports Monitor (ISM) in 2007 to track participation in sport among Irish adults (aged 16+). The ISM was administered by the Economic and Social Research Institute on behalf of the Irish Sports Council from 2007 to 2009. To date reports have been published for 2007, 2008, 2009, 2011 and the first six months of 2013. The 2013 half year report shows that adult participation in sport is continuing to increase i.e. from 45% to 47% since 2011. The 2013 full year report is due to be published shortly.

The ISM reports examine participation in sport by type of sport played, by demographics (age, gender, socio-economic status, region, etc.) as well as the social aspects of participation (volunteering, membership and attendance).

According to the ISC, recreational walking remains the most popular activity, with 65% having participated in this in the previous seven days (Irish Sports Monitor, 2013 half yearly report). Following increases identified by the previous two studies, this represents a slight decline of 2% in the proportion participating in 2011.

Women in Sport In 2005, the Women in Sport initiative was established to address the clear gender gap in sports participation. Figures from the Irish Sports Monitor are showing an increase in the number of women participating in sport/physical activity. In 2009, 26.9% of women participated compared to 41.2% of men. The number of women increased in 2011 to 39% of women compared to 50.9% of men. There was a further increase in 2013 with 42.7% of women participating in sport/physical activity compared to 52% of men. €0.95m was provided by the ISC in 2014 under the women in sport initiative to NGBs and LSPs.

Anti-Doping Programme The Irish Sports Council has operated the Irish Sport Anti-Doping Programme since its establishment in 1999. It is an essential ethical foundation to Irish sport and a central pillar of the Council’s work which is committed to developing healthy, fair, and enjoyable sport. The main visions of the programme are:

 Education: To facilitate the development and delivery of quality education programmes for all major stakeholders.

 Testing: To provide an effective, quality-driven testing programme.

 Research: To establish a long-term research programme which compliments and progresses anti-doping research nationally and internationally.

 International: To keep abreast of international best practice and to collaborate with relevant international initiatives.

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 Administration: To develop and maintain quality standards to ensure correct and transparent administrative procedures.

In 2008 the Government ratified the UNESCO Anti-Doping Convention. The Irish Sports Council’s Anti-Doping Committee is an advisory committee established under the Irish Sports Council Act of 1999 and is chaired by Professor Brendan Buckley.

The World Anti-Doping Agency (WADA) was established in 1999 as an international independent agency composed and funded equally by the sport movement and governments of the world. Its mission is to lead a collaborative worldwide campaign for doping free sport. Its key activities include scientific research, education, development of anti-doping capacities, and monitoring of the World Anti-Doping Code – the document harmonising anti-doping policies in all sports and all countries. WADA is composed of a Foundation Board, an Executive Committee and several Committees. The 38-member Foundation Board is WADA’s supreme decision making body and is composed equally of representatives from the Olympic movement and governments.

The ISC has a strong working relationship with WADA and endeavours to be at the forefront of all WADA initiatives. It believes that the multi-lateral approach to combating doping, as promoted by WADA, is the best way to ensure long term success.

Minister Varadkar served as one of three EU representatives to the WADA Foundation Board with effect from 1st January 2013 for a period of 18 months. Ireland’s annual contribution to WADA is paid through the Irish Sports Council – in 2014 this was approximately €45,000. The share split of each country is based on population and GNP.

Legal Case

John Byrne v ISC ISC Board member, John Byrne, took a high court action in relation to the decision by the ISC to hold an investigation following receipt of complaints from the FAI. The ISC had appointed Mr Paul Appleby to investigate the matter. In his judgement, Judge Peart found that the decision by the ISC to appoint an investigator to investigate Mr Byrne was ultra vires their statutory powers and he ordered that the decision be quashed.

Following the High Court Judgment of Mr Justice Michael Peart on the 6th of August 2013, the Minister received requests from the FAI, IRFU, GAA and Special Olympics Ireland to conduct an investigation into allegations made against certain members of the Irish Sports Council (ISC). Subsequently, the Chairman of the ISC informed the Minister that these National Governing Bodies were now satisfied that there had been no interference or undue influence in the allocation of grants to NGBs. Nonetheless the Minister asked Mr Paul Turpin, a Governance Specialist with the Institute of Public Administration, to carry out an investigation. His Terms of Reference were:

 To examine the Irish Sports Council’s procedures in relation to conflicts of interests on the part of members of the Council and to assess whether these meet the requirements of good corporate governance, and  To make such recommendations in relation to improved corporate governance in the Irish Sports Council as may arise from the examination.

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Mr Turpin's report submitted his report in December 2013. Having considered the report, the recommendations made by Mr Turpin were accepted by the Department and the ISC. The Report is published on the Departments website along with Mr Mulvey’s letter confirming the Council’s acceptance of the recommendations.

2. NATIONAL SPORTS CAMPUS DEVELOPMENT AUTHORITY

The principal functions of the National Sports Campus Development Authority are to:

 Develop a sports campus on the Abbotstown site;  Furnish and equip the sports campus;  Manage, operate and maintain the sports campus; and  Encourage and promote the use of the sports campus by professional and amateur sports people and members of the public.

In June 2011, the Government approved proposals for the development of the National Sports Campus at Abbotstown/Blanchardstown on an incremental basis.

Capital funding to NSCDA provides for the Sports Campus project at Abbotstown. Current funding to the NSCDA provides for the running costs to develop and manage the project. The Campus running costs are inclusive of a subsidy from the Campus Authority to its subsidiary, NSCDA (Operations) Limited, in charge of the National Aquatic Centre.

National Sports Campus – Progress

 Irish Sport HQ was completed in April 2013 and is now the administrative headquarters of almost 20 NGBs.  Work has been completed on the development of multi-sport all-weather floodlit pitches, together with an associated pavilion and car park for the facility. These pitches have been open to the public since 2 December 2013.  NSCDA has commenced the development of 2 multi-sport turf pitches for community use, which are due to be completed in 2014.  The National Horse Sport Arena was officially opened on 9 October 2013. A National Modern Pentathlon Training Centre, accommodating the fencing and shooting aspects of Modern Pentathlon was also completed at the same time – offering Irish athletes the opportunity to train for all 5 disciplines of the sport at the Campus.  A new National Diving Training Centre was also completed in September 2013 and complements the diving programmes at the National Aquatic Centre.  Agreements are in place between the NSCDA and the FAI, GAA, IRFU and IHA to develop field-sport facilities for each of their respective sports. Work on the GAA and FAI pitches commenced in March this year with completion dates estimated at March 2015. NSCDA continues to work with IRFU and Irish Hockey to progress their respective developments. A new access road was completed in 2013 which has opened up the site for the development of these facilities.  Further preparatory works associated with the development of the National Indoor Arena have been commenced with a view to substantive works commencing in the third quarter of 161

2014. NSCDA are currently in the process of procuring contractors for the substantive build works.

National Indoor Arena Funding of €13m was allocated to the National Sports Campus subhead from the proceeds of the sale of the National Lottery licence to commence work on the development of the National Indoor Arena.

The Arena is one of the final pieces of major sporting infrastructure in Ireland that is still outstanding, and will incorporate:

 National Indoor Athletics Training Centre (including 200m running track; 60m competition sprint track; 110m sprint track; jump pits; throw area; pole vault; and spectator seating).  National Gymnastics Training Centre;  National Indoor Training Centre – which will cater for approximately 26 sports. With a wide flexibility of layouts and temporary (roll-out) seating this centre will allow smaller NGBs the potential to host their competitions at local, regional, national and international levels.  Covered synthetic training pitches;  Sports science & medical facilities (to be fast-tracked through extension of the existing Irish Institute of Sport HQ); and  Ancillary facilities (some of which are intended to be fast-tracked in the development of a Campus Pavilion Building close to the FAI HQ).

Planning permission is already in place, and NSCDA has appointed technical advisers to assist the development. The procurement of building contractors is underway at present. It is intended that works on the core National Indoor Arena will commence in third quarter 2014 and be completed by mid-2016.

A proposal has been submitted to the Minister for Public, Expenditure and Reform to fast-track the Irish Institute of Sport Performance Centre and Pavilion Building elements of the Arena, from within the €13m provide in 2014. Work on these elements can commence in July, if sanctioned.

3. NATIONAL AQUATIC CENTRE (NAC)

 The National Aquatic Centre was the first element of the National Sports Campus and was opened in March 2003 in time for the Special Olympics World Games.  Despite the continuing difficult trading conditions brought about by the economic climate, visitor numbers in 2013 were maintained with a total of 858,000 visits recorded at the Centre during the year – compared to 813,000 for 2012. This represented a record year for footfall at the Centre. Total visits since its opening in 2003 are approximately 8 million.  The performance of the Swim, Diving and Synchronised Swimming academies at the Centre saw new records with over 2,000 enrolments in each of the four academy sessions.  Following the use of the Centre by a number of international squads and individuals in the run-up to the London 2012 Olympic Games, Campus management are in the process of marketing the Centre (and Morton Stadium) as a potential training venue for countries participating in the 2014 Commonwealth Games.

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 A subsidy of €1.175m was paid to the NAC in 2013 (825k plus a supplementary amount of €350k to meet exceptional costs) and a similar amount will be required in 2014.

The National Aquatic Centre is operated by NSCDA (Operations) Ltd., a subsidiary company of the National Sports Campus Development Authority. All day-to-day operations of the National Aquatic Centre are a matter for the Authority and the operations company. Following the restoration of possession of the National Aquatic Centre to CSID on 1 December 2006, an extensive capital programme was undertaken to restore the Centre to its original condition. Much effort has gone into rebuilding the reputation of the Centre and increasing its customer base.

Swim Ireland / Swim Academy As part of the National Aquatic Centre's remit for promoting aquatics in general and its position as the “National” Aquatic Centre, agreements were put in place in place to provide Swim Ireland with free access to the 50 metre pool for training and competition purposes. Some of this free time is devoted to elite/high performance training and competitions run directly by Swim Ireland, as well as usage by other affiliated clubs.

In 2013, the performance of the Swim, Diving and Synchronised Swimming academies at the Centre saw new records with over 2,000 enrolments in each of the four academy sessions. The National Aquatic Centre provides Learn to Swim classes through its Swim Academy.

Legal Matters Legal matters relating to the National Aquatic Centre:

Abuse of Process Claim Dublin Water World Ltd. (DWW) has commenced proceedings against NSCDA seeking damages for alleged abuse of civil process and interference with the plaintiff’s business relations and economic interests, with the damage allegedly suffered being in the region of NSCDA has lodged a motion for security of costs – the hearing of this motion commenced in the Commercial Court on 13th May and is scheduled to be concluded 26th/27th June (matter should have been dealt with in May, however, was postponed after 1 day as the judge was taken ill).

Further correspondence/motions/rulings on discovery etc. will be dealt with after the security of costs issue and that phase is not likely to commence until after the summer. A full trial was originally estimated for April/May but this is now likely to be after the summer.

This matter relates to previous legal actions taken by the then CSID against DWW for alleged breaches of the lease of the National Aquatic Centre which included the non-payment of VAT on the lease. The invoice for VAT on the lease of the NAC was issued in 2003, while the CSID proceedings were initiated in 2005. The VAT element of the claim was referred to Arbitration, which resulted in an award in CSID’s favour which was subsequently endorsed by the High Court. However, on appeal by DWW, the Supreme Court found that the Arbitrator had erred in law in his award. CSID was successful in the substantive proceedings, which resulted in the vacating of the Centre by DWW and the return of the Centre to the direct control of the State and CSID.

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CSID v DWW A lease for the operation of the National Aquatic Centre was signed between CSID and Dublin Waterworld Ltd. on 30 April 2003. However the tenant failed to comply with its obligations under the lease and this necessitated CSID initiating legal proceedings against Dublin Waterworld Ltd in March 2005. Among the obligations was a failure to pay VAT of €10,254,600.00. It emerged on the eve of the commencement of the proceedings before the High Court that Dublin Waterworld Ltd. had transferred the beneficial ownership of the lease to a Limerick businessman, Mr. Pat Mulcair, without the permission or knowledge of CSID on the same day that it had entered the lease with CSID. The trial commenced in July 2005 and concluded in November 2005.

When the lease on the National Aquatic Centre was signed on 30 April 2003, VAT of €10.254m became due. It was paid by CSID and Dublin Waterworld Ltd. were invoiced but failed to pay the amount. The High Court ordered that the VAT issue should be referred to arbitration. On 1 July 2005 the Arbitrator found “that the amount of VAT of €10,254,600 charged by CSID on the capitalised value of the lease to DWW was correctly charged.” At the commencement of the High Court proceedings on 26 July 2005 Dublin Waterworld Ltd. challenged the Arbitration award. Mr. Justice Gilligan heard this on 29 July and gave his Judgment on 26 September 2005 upholding the Arbitrator’s finding.

The High Court Judgment was appealed to the Supreme Court by DWW and the case was heard on 26 January 2010. Judgement of the Court was issued on 30 April 2010. In a further hearing on 11 May 2010, the Supreme Court ordered, inter alia, that the costs of the High Court and Supreme Court hearings be awarded to Dublin Waterworld Limited. The level of such costs has yet to be determined. Any such costs will fall to be met by NSCDA which in turn receives its funding from the Department.

The issue was pursued by Dublin Waterworld Ltd who wrote several letters to the Chairman of the Public Accounts Committee of the previous Dail. The Public Accounts Committee published all of this correspondence and the Department's responses to it.

DIAL v CSID Arising from the report of the Attorney General into the award of the contract for the National Aquatic Centre legal proceedings were taken by Dublin International Arena Limited (DIAL), one of the underbidders for the project. DIAL sought a Judicial Review of the decision taken by Campus and Stadium Ireland Limited (CSID) to award the contract.

The Judicial Review commenced in the High Court before Judge Budd on 17 November 2009. A settlement was agreed between the parties on 25 November 2009. The Terms of the Settlement provide, inter alia, that "the Applicant and the Respondents agree to keep these terms of settlement confidential and agree not to disclose these terms of settlement to any party other than as required by law." The matter was struck out in the High Court on 8 March 2010. There has been some media speculation about the amount of the settlement but the figures published are incorrect.

4. MORTON STADIUM On the initiative of the Department, the NSCDA (through its subsidiary company NSCDA (Operations) Limited) took over responsibility for the day-to-day management of Morton Stadium in May 2010. As well as hosting the National Senior Athletics Championships, during 164

2013 the Stadium also played host to a number of other local, regional and national athletics events. The Stadium also hosted a very successful European League athletics meet in June 2013.

NSCDA developed a website for Morton www.mortonstadium.ie. Bookings forms and the stadium’s terms and conditions are available to download from the website.

6. GRANTS FOR GAELIC PLAYERS The issue of grants for Gaelic players arose from the introduction in the Finance Act 2002 of tax relief for professional sports persons on income from participation in sport. Over the years the Gaelic Players Association (GPA) made representations and had meetings with the Minister for Finance, the Department of Finance, the Minister for Sport and the Department of Sport on this issue seeking a similar arrangement. The GPA is the representative body for inter-county Gaelic footballers and hurlers dedicated to player welfare and the protection of rights of players. It represents over 2,000 inter-county players.

Two schemes were agreed in November 2007 that provided for “vouched expenses (including but not limited to appropriate mileage expenses)”. It was agreed that the schemes would be funded through the ISC and that the implementation of the schemes was a matter for the ISC and the GAA. The schemes commenced in 2008 and were paid for each of the three years to 2010. The majority of the funding was to cover player expenses specifically the difference between the GAA mileage rate and the Civil Service mileage rate.

An amount of €3.5 million was provided to the ISC in 2008 to fund the schemes. However, in 2009 and 2010, due to the drastically changed economic circumstances it was not possible to sustain or fund the original schemes and an amount of €1.05 million was provided by the ISC in each of those years. No additional funding was made available and the ISC was required to make provision for the schemes within existing resources.

Since the initiation of the schemes, the GAA has formally recognised the GPA and the two bodies put in place an agreement for the period 2011 to 2015 with regard to Player Welfare. Additionally, the GPA has adopted in their Constitution a commitment to the GAA’s amateur ethos.

The original agreement was put in place for three years. A revised Inter-County Players Support Schemes was agreed in 2012 with €900,000 provided in 2013 and in 2014. As with the Scheme in previous years the Irish Sports Council provide grant aid to the GAA who then work with the Gaelic Players Association for the appropriate disbursement of the money to teams, players and programmes.

7. NATIONAL AWARDS FOR VOLUNTEERS IN SPORT Sport benefits enormously from the contribution of individual volunteers and the fourth programme of National Awards to Volunteers in Sport was launched earlier this year. The awards are an initiative of the Department and are administered by the Irish Sports Council and the Federation of Irish Sport. The awards have been running since 2007, and are designed to recognise the contribution, commitment and dedication of the estimated 500,000 volunteers who donate their time and energy to sport every year.

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Over 350 nominations have been received for this year's awards. Ten winners will be selected from the nominations received, with a lifetime achievement award also to be presented. The winners will be chosen by a selection committee, chaired by Olympic gold medallist Ronnie Delany. The awards will be presented to the winners at a ceremony in the Aviva Stadium in October.

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Sports Capital Programmes Division

Assistant Secretary: Donagh Morgan Principal Officer: Sylvester Carruth

The Division deals with the Sports Capital Programme and the Local Authority Swimming Pool Programme.

Sports Capital Programme

The Sports Capital Programme is the primary means of providing Government funding to sport and community organisations at local, regional and national level throughout the country. It operated on an annual basis up to and including 2008. There was a Programme in 2012 and the 2014 Programme has recently concluded with allocations announced on 3 July 2014. A total of €825m has been allocated in sports capital funding since 1998 in 9,139 allocations. Capital funding of €107m was provided towards the redevelopment of Croke Park during the same period, as well as €191m for the redevelopment of Lansdowne Road.

There is continuing demand for SCP funding. The 2012 round saw the highest number of SCP applications ever (2,170). The corresponding figure in 2014 was 2,036.

2014 Round of the Sports Capital Programme Key dates:

 OSCAR (IT) system launched 26 September, 2013  2014 SCP announced 21 December 2013  2014 SCP open for applications 12.00pm Friday 17 January 2014  Deadline for registrations 5.00pm Friday 7 February 2014  Original Deadline for Applications 5.00pm Friday 28 February 2014  Extended Deadline for Applications 5.00pm Monday 10 March 2014  Allocations announced on 3 July 2014

Aims and Objectives of the SCP The Programme aims to foster an integrated and planned approach to developing sports and physical recreation facilities throughout the country. In particular, its stated objectives are to:

 Assist voluntary and community organisations, national governing bodies (NGBs) of sport, local authorities and ETBs and schools to develop high quality, safe, well-designed, sustainable facilities in appropriate locations and to provide appropriate equipment to help maximise participation in sport and physical recreation.  Prioritise the needs of disadvantaged areas in the provision of sports facilities.  Encourage the sharing of local, regional and national sports facilities by clubs, community organisations and national governing bodies of sport.

How Applications are assessed

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Every application is assessed by one official and reviewed by another. Given the number of application received and the detail contained in these the assessment process takes a number of months. The assessment process has 3 stages.

Stage 1: Is the application valid? An application can invalid for one or more reasons. The reasons an application can be deemed invalid include:

1 Insufficient quotations/estimates submitted 2 Evidence of own funding not provided in the correct format 3 Insufficient own funding 4 Insufficient evidence of planning permission, planning application, or exemption from planning 5 Title/Access requirements of the Sports Capital Programme not satisfied 6 Insufficient sporting content 7 Work on project already started 8 Application for personal equipment only 9 School/College/ETB application not made jointly with local club/community group 10 Private/commercial Organisation 11 Organisation is currently banned from applying under the SCP 12 Routine Maintenance 13 Other e.g.: application is from an ineligible organisation such as a hospital; facility is not located in the Republic of Ireland; the application is for works to a swimming pool which is not covered by the SCP.

Stage 2: Initial Assessment If an application meets the minimum requirements it is assessed against 5 criteria:

1 Likelihood of increasing participation and/or improving performance and sharing of facilities 2 Level of socio-economic disadvantage in the area 3 Technical merits of the project 4 Level of own funding available 5 Level of Sports Capital Programme funding received in the past

For each criterion a score from 0-3 is awarded and this is multiplied by the weighting for that criterion to give a weighted score for that criteria. All 5 weighted scores are added together to give a total assessment score.

These criteria are designed to give higher scores to applications that will increase participation, where facilities will be shared, that are from designated disadvantaged areas, that have not received significant funding in the past and are ready to be developed as soon as possible.

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Stage 3: Final Assessment and Allocation In deciding the final allocations of funding to projects within each county Minister Varadkar and Minister of State Ring also had regard to additional criteria.

Main changes for the 2014 Round of the SCP  Applications could only be made online – including all supporting documentation o The online system guided applicants to upload certain documentation o The online system also carried out validation of the certain application information  The amount of supporting documentation was substantially reduced to make the application and assessment process more streamlined (for example feasibility studies, 6 months of bank statements and evidence of non-discrimination were not required).  The maximum grant that can be applied for was reduced from €300,000 to €200,000 for local projects and €500,000 for national/regional projects.  The recommendations of the Internal Audit report into the 2012 SCP also led to some administrative changes to tighten up the application and assessment process o Greater use of templates to ensure that information is provided in a consistent format o Stricter enforcement of deadlines (for example – no late applications accepted) o A reduced number of assessment criteria and a standard rationale for each possible score.

Level of Outstanding Commitments The total level of outstanding commitments on hand at the end of 2013 was €59m

The total level of outstanding commitments on hand at the end of 2012 was €71.2m (the corresponding figure at the end of 2008 was €191m).

For a variety of reasons it can take grantees several years to draw down allocations. Some of the more common reasons for this include:

 delays in finalising the legalities required to protect the State’s investment  delays in the planning process and/or construction and  difficulties in raising the required own funding

Where delays are excessive, or the project has ceased, the Department seeks to withdraw allocations. This is a labour intensive and time consuming process, although in 2011 it was possible to withdraw €2.8 million of previous years’ allocations from 112 separate projects (some withdrawals are of a complete allocation where projects are not going ahead and others may only be for a small amount where projects have been completed and the grantees cannot draw down the remainder of the allocation).

Due to resource issues there was no withdrawals process in 2012 or 2013 – however one allocation of €500,000 was withdrawn from Basketball Ireland in 2013 at the conclusion of a non-compliance case involving that organisation. In the vast majority of cases grants allocated in a particular year do not fall due for payment during that year. 169

2012 Round of the Sports Capital Programme The 2012 round of the SCP was launched on 28th March 2012. This was the first new round of the SCP since 2008. The Department received 2,170 applications for funding under the 2012 Sports Capital Programme – the highest number ever received.

Allocations Total allocations of €31m were made under the 2012 SCP as follows:

 615 allocations with a total value of just under €26m were made to local projects (e.g. individual sports clubs or community facilities). These allocations were announced on 2 December 2012.  33 allocations with a total value of just over €5m were made to national and regional projects (e.g. large multi-sport facilities, GAA county training centres and National Governing Bodies of Sport). These allocations were announced on 21 December 2012.

Details of all allocations are available on the Department’s website.

Local Authority Swimming Pool Programme Under the Local Authority Swimming Pool Programme (LASPP) grant aid (maximum €3.8m) is provided towards the capital costs of new swimming pools or the refurbishment of existing pools. The closing date under the current round of the Programme was 31 July 2000 and there are 58 projects in this round. Since 2000, the total expenditure under the Programme is almost €169m.

Total expenditure from LASPP subhead 2000 – 2013

Year Expenditure €m 2000-2008 131.1 2009 11.7 2010 3.1 2011 9.5 2012 7.7 2013 5.5 Total 168.6

Outline of the Programme Under the Programme, grant aid to a maximum of €3.8 million is provided towards the capital costs of new swimming pools or the refurbishment of existing pools, subject in both cases to the total grant not exceeding 80% of the eligible cost of the project or, in the case of projects located in disadvantaged areas, 90% of the eligible cost.

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There are four principal stages in a swimming pool project. These, in order of progress, are: Feasibility/Preliminary Report; Contract Documents; Tender and Construction. Grant-aid is allocated only when tenders have been approved for the project and is capped at the time of allocation.

The Department and its technical advisors, the Office of Public Works, evaluate each stage and local authorities cannot proceed to the next stage of a project unless prior approval is given by the Minister.

Where a project is being undertaken by an organisation other than a local authority, the proposal must be considered, supported and submitted by the relevant local authority. Before supporting a project, the local authority would have to be satisfied that the proposal was viable, that the balance of funding required to complete the project was available and that the project, when completed, would have a satisfactory level of public access. The local authority is responsible for making satisfactory arrangements for the management and maintenance of the facility.

Projects are considered on a case-by-case basis and consideration is given to such issues as to whether the area is classified as disadvantaged, the number and geographical spread of projects within and between counties, the viability of the project, particularly in relation to operational and maintenance issues, overall funding package for the project, technical details and the Department's annual estimates provision for the Programme.

Status of pool projects

Under the current round, some 58 applications have or are being dealt with. 49 of these have been completed and the other 9 projects are at various stages in the process as follows:

a. New / replacement pools Formal allocation given - There are no new / replacement pool projects at this stage. Tender document stage - There are no new / replacement pool projects at this stage.

Contract documents stage

Castlebar, Co. Mayo (Replacement) [included in the Programme since 2000]. Detailed contract documents have been submitted to the Department and have been forwarded to the OPW. The OPW has reverted and the Division will be preparing a submission shortly. The amount of the grant will not be known until a tender report has been approved but the maximum possible grant is €3.8m.

Preliminary report stage

Edenderry, Co. Offaly (Replacement) [included in the Programme since 2000]. The Department and the OPW have reviewed the feasibility study and the Department has sought clarification of a number of issues from Offaly County Council. The amount of the grant will not be known until a tender report has been approved but the maximum possible grant is €3.8m. 171

Balbriggan, Fingal (New) [included in the Programme since 2000]. This pool was originally to be based in Skerries but was relocated by Fingal County Council (FCC). In April the Department met with officials from FCC and the OPW. The outcome was that the OPW would assist FCC in drafting an advertisement for eTenders and the OJ seeking expressions of interest on a DBFO basis, and that it is hoped to place such an advertisement shortly. The amount of the grant will not be known until a tender report has been approved but the amount that has previously been discussed is €2.5m.

Ballaghaderreen, Co. Roscommon (New) [included in the Programme since 2000]. The Department has not yet received a feasibility report for this project. The amount of the grant will not be known until a tender report has been approved but the maximum possible grant is €3.8m.

Loughrea, Co. Galway (New) [included in the Programme since 2000]. In April 2012 Galway County Council wrote to the Department advising that it “has no proposal for the construction of a pool at Loughrea.”

b. Pool refurbishments Formal allocation given Clara, Co. Offaly (Refurbishment) [included in the Programme since 2000] - Formal allocation was notified to the Clara pool on 25th October 2013. Construction has not yet commenced. The allocation is €784,000.

De Paul, Navan Road, Dublin (Refurbishment) [included in the Programme in 2010]. In 2010 a grant of €648,000 was allocated towards the much-needed refurbishment of the De Paul Swimming Pool, St. Vincent`s Centre, Navan Road, Dublin 7. In 2013 this grant was increased to €1.261m.

The tender report was approved by the OPW in July 2013 but the Department was awaiting the completion of legalities before approval could be given for this project to proceed. In March the Department was informed by the CSSO that legal requirements had been fulfilled and gave approval for the project to proceed. The Department has now been informed that construction has commenced.

Tender document stage

Dunmanway, Co. Cork (Refurbishment) [included in the Programme since 2000]. The Department has recently given approval to proceed to tender. The amount of the grant will not be known until a tender report has been approved but the maximum possible grant is €3.8m.

Contract documents stage

Buncrana, Co. Donegal (Refurbishment) [included in the Programme since 2000]. The Department was informed by Donegal County Council in early December that it expected the detailed contract documents to be submitted to the Department in the first half of 2014. The amount of the grant will not be known until a tender report has been approved but the maximum possible grant is €3.8m.

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Preliminary report stage

There are no pool refurbishments at this stage.

A small number of projects have been added to the list since 2005 as follows:

In 2005 €3.8m was allocated where a local authority swimming pool in Monaghan had to close, for safety reasons, and Monaghan was the only county in the country without a local authority pool;

In 2006, a special Estimates allocation of €0.3m was made by the Minister for Finance towards the refurbishment of the swimming pool at St Joseph's School for Deaf Boys, in Dublin;

In 2010 a grant of €648,000 was allocated towards the refurbishment of the De Paul Swimming Pool, St. Vincent`s Centre, Dublin. In 2013 this grant was increased to €1.261m;

In 2011 €10.94m was allocated to 56 pools under an energy upgrade and enhanced disabled access initiative. A further €3.36m was allocated in 2012 under this initiative. In total, 60 pools benefited under this initiative.

Total amount outstanding for current LASPP projects The maximum amount outstanding for current LASPP projects is €25m.

Disabled access / energy upgrade initiative In 2011, out of monies arising from savings in the subhead, €10.94m was allocated to 56 pools under an energy upgrade and enhanced disabled access initiative. A further €3.36m was allocated under this initiative in 2012 from savings in the subhead in 2012. This means that the total allocated under this initiative was €14.3m, of which €12.2m has been drawn down, leaving €2.1m outstanding.

Projects Completed

From 2000 to 2008 40 pools were completed under the programme

2009 (5)

Athy, Co. Kildare (Replace) – opened 2 March 2009 Naas, Co. Kildare (Replace) – opened 2 March 2009 Dundrum, Co. Dublin. (Replace) – opened 20 April 2009 Claremorris, Co. Mayo (Replacement) – opened 1 September 2009 Roscrea, Tipperary, NR (New) – opened 14 September 2009 2010 (1)  Ferrybank, Co. Wexford, (Refurbishment) – opened 3 June 2010

2013 (3)  Loughlinstown, Co. Dublin (Refurbishment) – opened 3 May 2013 *Allocation o/s €431,721+  Ballybofey Stranorlar - opened 7 October 2013 *Allocation outstanding €380,922+  New Ross - opened August 2013 *Allocation outstanding €380,922+

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Corporate Services Sector

Contents Human Resources Division ...... 176 Internal Audit Unit ...... 178 Finance Division ...... 180 Information Systems Division (ISD) ...... 184 Policy and Governance Coordination Division (PGCD) ...... 191

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Human Resources Division

Assistant Secretary: Donagh Morgan Personnel Officer: Jean Kelly

Divisional Role: The Division is responsible for:  Human Resources, including staff entitlements, welfare, performance development and training;  Building and Services / health and safety;  Management of staff numbers in line with the Employment Control Framework (ECF), including staff redeployment;  Monitoring and reporting on Department’s implementation of the Public Service (Croke Park and Haddington Road) Agreements;  Monitoring and reporting on implementation of Public Service Agreement and ECF targets by the Non-Commercial State Agencies (NCSA), in consultation with divisions who corporate governance the NCSA.

There are (at end May 2014) 441.84 whole time equivalents (WTE) serving (470 staff in total) in the Department. The Driver and Vehicle Computer Services Division are located in Shannon and the Freight and Logistic Policy division is in Loughrea, Co Galway. The Tourism Division and Sports Division are in Killarney, Co. Kerry. Coast Guard marine rescue co-ordination centres are in Dublin, Malinhead and Valentia. Marine Surveyors are also located in Cork and Ballyshannon. With the exception of the mentioned services most of the staff are located in Dublin.

Departmental accommodation in Dublin is spread over 3 buildings in the vicinity of Kildare Street – viz.  44 Kildare Street - Department HQ that includes Minister’s Office and Secretary General.  25 Clare Street - mainly corporate services.  Leeson Lane – includes Maritime services, Coast Guard, Road safety & Motor Insurance and Public Transport staff.

Division Activities: The overall objective of HR Division is to organise and support staff in delivering in full on transport, tourism and sport objectives. In addition to managing staff engagement, deployment and related matters the division’s agenda includes implementing the HR Strategy 2010-2014, the Training and Development Strategy 2010-2014, focussing on under-performance and absence management, fully implementing the Performance Management Development System, Business Process Improvement, Shared Services and outsourcing where feasible. Planning is currently underway to consolidate the Department’s Dublin accommodation configuration from three buildings to one.

Current key HR activities: Key activities being progressed by HR Division include:

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 Monitoring and tracking implementation of the Integrated Reform Delivery Plan, including the Public Service (Croke Park and Haddington Road) Agreements, by both the Department and its Non-Commercial State Agencies (NCSAs);  Managing staff numbers to meet the annual target staff reductions of the Employment Control Framework and associated staff redeployment;  Monitoring ECF implementation by the NCSAs;  Development and implementation of the Workforce Planning Framework Action Plan for the Department;  On-going implementation of day-to-day HR processes in co-operation with PeoplePoint, the HR and Pensions Shared Services centre;  Implementing a performance management policy to proactively manage underperformance in the Department;  Ongoing implementation of day to day HR policies and industrial relations matters;  Management of accommodation portfolio and health and safety policies in the Department.

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Internal Audit Unit

Assistant Secretary: Maurice Mullen Head of Internal Audit: Ciaran Whelan

Role: The Internal Audit Unit is an independent appraisal function whose role is to objectively examine, evaluate and report on the adequacy, application and effectiveness of the Department's internal control system. The role of the Internal Audit Unit within the Department is primarily to:  give assurance to the Audit Committee, Accounting Officer and Management Board on the adequacy, application and effectiveness of the Department's internal control system.  give assurance to the Head of Internal Audit of the Department of Finance on the adequacy, application and effectiveness of the internal controls system of the Department of Transport, Tourism and Sport in relation to E.U. Funds administered by the Department.  assist line managers by reviewing the elements of the internal control system for which they are responsible. The Internal Audit Unit is responsible for appraising the adequacy, application and effectiveness of the internal control system and making recommendations for improvement as appropriate. The Unit has no direct responsibility for any of the activities or operations that it reviews or for the development or implementation of systems. Responsibility for internal control rests fully with line managers who must ensure that appropriate and adequate arrangements exist within their area of responsibility. The principal responsibilities of the Unit include:

 Review the adequacy and effectiveness of the Department’s systems of internal financial controls governing all areas of income and expenditure, capital and other projects and provide advice and recommendations as appropriate to management.  Review and report on the management and control of major risks that would prevent the achievement of the Department’s strategic objectives.  At appropriate intervals report on whether activities are managed and controlled in a manner that is compatible with Departmental objectives, standards of administrative practice outlined in the relevant government guidelines including EU requirements on procurement and capital investment.  Review the reliability and integrity of financial information and the means used to identify, measure, classify, and report such information.  Carry out value for money reviews of projects and activities.  Be available (in an advisory capacity) for the development of major systems and provide input as appropriate in respect of

- internal controls incorporated in new systems

- systems testing and post implementation evaluations. The Unit operates under a charter and conducts audits/reviews set out in the Annual Audit Plan approved by the Audit Committee. The Audit Plan is derived from the Strategic Internal Audit Plan 178

(the second of which was prepared in 2012, covering the period 2013-2015), which is reviewed annually. The Units prepares a Business Plan each year which incorporates the annual audit plan. The Internal Audit Unit presents the outputs (audit reports, follow-up reports and reports of spot- checks etc.) to the Audit Committee and a report summarizing these outputs and the Audit Committee response thereto is presented to the Management Board as appropriate. The Department's Audit Committee comprises 4 members (2 external-one of whom chairs the Committee and 2 officers from the Department) and meets on at least 4 occasions each year. The Chairman of the Audit Committee corresponds with the Secretary General in relation to matters considered by the Committee and the Committee furnishes an Annual Report to the Secretary General in respect of its activities. Since November the staffing of the Unit has been reduced (from 3) to 1 post (the Head of Internal Audit). The services of contractors are procured to augment the capacity of the Unit to deliver on its annual audit plan.

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Finance Division

Assistant Secretary: Ray O’Leary Principal Officer: Caoimhín O’Ciaruáin

Role: Finance Division is responsible for the financial management of the Department.

Description of activities

Finance Division manages the Vote of the Department of Transport, i.e. it:

 co-ordinates the annual funding requirements of the Department and negotiates with the Department of Public Expenditure and Reform;  makes all payments on behalf of the Department;  reports regularly on the expenditure trends throughout the year to the Management Board and the Department of Public Expenditure and Reform;  prepares the annual Appropriation Account at year end which is audited by the Comptroller & Auditor General and co-ordinates the briefing material thereon for the Secretary General’s appearance before the Public Accounts Committee; and  co-ordinates the speech and extensive briefing material for the Minister’s presentation of the Department’s Estimate to the Select Committee on Transport.

Expenditure and receipts

The gross expenditure provision for the Department in 2014 is €1.670 million, of which €982 million is for capital projects and €687 million for current spending. This represents a 2% decrease on the 2013 budget allocation and is in line with the Comprehensive Expenditure Review targets. A significant portion of the gross budget (25%) is derived from AinA receipts, mainly the Local Government Fund which is currently funded through Motor Tax receipts (this is likely to change in 2015 with a reduced LGF contribution supplemented by an increased Exchequer contribution).

The vote comprises 5 spending programmes – land transport, tourism, sport and maritime and aviation. The administrative programme represents less than 2% of the overall vote.

In 2014, €1.315bn or 79% of the Vote is allocated to the Land Transport programme, which includes roads improvement and maintenance funding – national, regional and local (budget of €751m), the public transport investment programme (€283m) and public service provision payments (at €221m).

While it is down 3% on 2013, the programme has been a beneficiary of successive Government Stimulus funding, particularly the Regional and Local Roads Programme. Apart from the roads programme at national, local and regional level, this programme covers a diverse range of projects, programmes and agencies.

The Tourism Services Programme accounts for 8% or €137m of the budget allocation and provides for the programme and administrative spend of the two tourism agencies – Failte Ireland (at €60m) and Tourism Ireland (at €15m). It includes a €35m contribution to the Tourism Marketing Fund and

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€24m for the Tourism Product Development Scheme, which has been significantly enhanced this year through the Government’s Stimulus programme.

The Sports and Recreation Services programme accounts for 6%, or €95m, of the budget allocation. This programme has actually increased by 28% on 2013, mainly as a result of the additional funding voted under the Government Stimulus programme for the Sports Capital programme (€11.5m) and €13m towards the development of indoor arena at the National Sports Campus. Both the Irish Sports Council and National Sports Campus receive funding through a grant-in-aid subhead of €60m which supports their respective programme and administrative costs.

The Maritime Transport and Safety programme stand at €94m in 2014, or 6% of the Vote. While this is down 7% on 2013, the programme will be supplemented by the allocation of €4.8m unspent capital funding carried over from last year. The main sub-programme is the Irish Coast Guard. I have maintained the budget here in line with their requirements to ensure they can continue to provide an effective maritime emergency service, including the 24/7 helicopter search and rescue. Earlier this month I was pleased to officially launch the Coast Guard’s new state-of-the-art S92 search & rescue helicopter for the Dublin region. This is the fourth Sikorsky S92 helicopter base to come into operation for the Coast Guard and means all four Coast Guard bases now have upgraded helicopters.

Finally, the gross expenditure provision for the Aviation programme is €27.7million, or 2% of the Vote. The largest beneficiary of the funding here is the regional airports programme (€12m), followed by funding ear-marked to cover costs associated with our membership of Eurocontrol, costs incurred by the Irish Aviation Authority for exempt services and subscriptions to international organisations. Aviation has always been recognised as a key element in our economic recovery.

Issues of note

1) Submission on Comprehensive Review of Expenditure / Capital Review

The Department followed the DPER guidelines for the Comprehensive Review of Expenditure (CRE) and Capital Review and made a detailed submission on 6 June We await further formal contacts from DPER in context of overall Estimates process for 2015.

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2) Stimulus Funding Since 2013, there have been 3 Stimulus rounds. In 2013, €50m was allocated to Regional and Local Roads. As part of the same package, the PPP roads programme was allocated €20m in 2014, €26m in 2015 and €25m in 2016. As part of the 2014 Budget, additional Stimulus funding of €82.5m brought the DTTAS capital envelope to €982.5m.

In May 2014, a further stimulus package was announced by MPER increasing the DTTAS capital envelope in 2014 by €97m (subject to a Supplementary Estimate), to include: €50m for road surface improvements and some public transport projects, split as follows: €23m for National Roads, €20m for RLR and €7m for various public transport projects; €10m for further investment in cycling Greenways; €2m towards a tourism initiative in Lough Derg; €30m towards the redevelopment of Páirc Uí Chaoimh, including a centre of excellence / full sized all weather training facility / local Marina Park; and €5m towards the Special Olympics at the Campus Development. It is expected that the funding will be transferred to the DTTAS Vote as part of a supplementary estimate towards the end of the year.

3) Storm Damage Additional funding has been ear-marked for storm–related damage to roads (€16.2m) and other transport infrastructure (€6.8m) based on a report coordinated by DECLG. The Government agreed that the necessity for supplementary funding would be considered later in the year.

4) Expenditure to date in 2014

At time of writing, DTTaS expenditure is just over 2% ahead of profile but there are no issues of concern. Capital expenditure is ahead of profile (by almost €50m), however, this relates to better than expected progress on the roads programme and a revised payment schedule under the new IMMAC on the public investment side. Additional allocations for storm damage and stimulus are not reflected in the official profiles to DPER although money is being spent. These additional allocations will require a Supplementary Estimate in due course.

Current expenditure underspend against profile (of around €10m) relates to slower than expected drawdown on Fáilte Ireland’s VRS fund and LA drawdown on maintenance allocations. Again, no issues of concern here and full allocations should be drawn down by year end.

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Information Systems Division (ISD) Assistant Secretary: Ray O’Leary Principal Officer: Caoimhin O’Ciaruain

The Division is divided into two sub-sections, Information and Communications Technology and Business Information Systems Development. It has a budget of €1.7m approx. for 2014 and staff allocation of 16.5, with a small number of contactors on site.

 Information and Communications Technology (ICT): Core ICT Systems are supported by the Service Desk and Network Team. The Service Desk provides frontline IT support for the Department and delivers day-to-day network, email, application and PC support. The Network Team monitors and maintains an extensive national network, and implements IT Infrastructural improvement and development projects.

 Business Information Systems Development (BISD): Responsible for designing, specifying, contracting out and project management of systems development projects. Generally larger projects are provided under contract but project managed internally, however a significant number of smaller projects are also developed in- house. BISD also provides an advice service to Line Divisions who are taking responsibility for their own ICT projects. At present, a large portion of BISD time is taken with development of Maritime IT projects for the newly established IMA.

Service Desk

ISD provide a dedicated Service Desk (helpdesk) to deal with staff requests, questions and incidents. The Service Desk is the first point of contact when you have an issue or request relating to ICT in the Department. To date in 2014, the Service Desk completed approximately 2,500 calls from staff and replaced 250 workstations. Some of the services provided by the Service Desk are as follows:

 Standard Desktop/laptop provision: On joining the Department all staff are assigned either a Desktop or Laptop, depending on the type of work they do. We also supply laptops for temporary use of staff for meetings, presentations etc.  Mobile phones: The Department uses Windows 8 mobile smartphone handsets as their preferred means for supplying mobile email and calendaring to staff, where required. Standard mobile phones are also provided by the Service Desk where email functionality is not needed. Data cards are also supplied to laptop users who require internet connectivity while away from the office.  Landline Telephones: All members of staff are supplied with their own handset and extension number. Voicemail is provided as standard on all extension numbers. Other functionality provided on these phones includes a Corporate Telephone Directory, conference calling, call forwarding, handsfree speakerphone, caller line ID display.  Faxes/Photocopiers/Printers: The Service Desk provides the fax, photocopy and printing services to staff. They also arrange service and repairs for these machines and the supply of print cartridges and toners when requested.  File & Print Services: access to shared file locations and network printing are supplied as standard by the Service Desk.  Scanning Facilities are available on Multi Function Devices located around the Department. This allows Divisions to scan in Documents and save them to their Divisional Files. 184

 Projectors and Conference Room Audio Visual systems: Projectors are provided in several of the Departments conference rooms (see Conference Room Audio Visual Systems below). ISD also have a couple of projectors that can be loaned out to divisions for meetings etc.  Remote/Flexible working: ISD offers a remote/flexible working by providing the ability to access Departmental files and applications while away from the office.  Web browsing and streaming media access: The Service Desk provide access to the internet for web browsing and streaming media sites (e.g. Oireachtas live Dail Debates) so that staff can keep up to date with happenings as they occur. The web browser Internet Explorer 11 or Google Chrome is supplied on all desktops/laptops by default. However, Firefox can be installed on request.  Online application access: Access to the Ecabinet system (for online Government Memorandum collaboration), Organisation Chart, Risk Management System to name but a few are provided via the Service Desk.  Staff moves: Staff departures, arrivals or moves from one building or office to another are all co-ordinated through the Service Desk who arrange all the necessary ICT setups or changes to be implemented.  Call logging and resolution: If staff have an ICT related problem or issue, the Service Desk is the first point of contact, and can normally resolve a lot of these calls very quickly. If the call needs to be escalated, the Service Desk keeps track of the call and ensures that the customer receives a satisfactory resolution within an acceptable timeframe.  Videoconferencing/ Audio Visual facilities: There is a dedicated video conference room in the Kildare St office and audio facilities available in a few of the Department conference rooms.

Network Team

The Network Team works in the background on a day-to-day basis and is the guardian of the Department’s network ensuring high resilience and availability of systems for staff. Some of their areas of responsibility are listed below.

 Disaster Recovery: Devise and implement ways to ensure that these systems are available when and where staff need them – a combination of high availability, resiliency, diversity and replication: depending on the criticality of the system; also devise and test Disaster Recovery solutions for Departmental systems in order to be prepared for every and any disaster that may arise  Monitoring: Monitor all systems on a minute-by-minute basis, reacting to any anomalies or errors that arise.  Remote Access: Provide remote access solutions to systems for staff (OWA, mobile device access, Remote access SSL VPN)  Security: Monitor the security requirements needed for a network of such size and implement the required solutions to ensure the confidentiality, integrity and availability of the systems and information available on them.  External parties: Liaise with suppliers of software, hardware to facilitate upgrades, installations, fixes when needed  Procurement: Purchase and install servers, applications, databases, websites – meeting the public procurement requirements and additional strict requirements from Department of Public Expenditure and Reform

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 Change control: Control the management of system upgrades and introduction of new applications, services and systems into the ‘live’ production environment, in order to protect the integrity and availability of existing services  System software support: Ensure that the systems running on the network all work for whomever needs them and fix any issues that arise when they don’t work - Email, Anti virus, Firewalls, Web proxies – for internet access, Sharepoint administration, Telephone systems administration, Backup systems.  Hardware support: fix broken components in systems – hard disks, power supplies, cabling, RAM, etc.  Escalation: Escalation point for at least 25% of calls that the Service Desk receives that cannot be resolved immediately – these issues are usually quite complex and time consuming.  Environmental controls: Liaise with electricians, builders, architects to ensure that the environmental infrastructure (electricity, data cabling, air conditioning) are installed correctly, working, maintained/serviced when required and replaced if needed.  Telephony: maintain and provide facility for moves, adds and changes to Service Desk for all telephony requirements  SSI System: Provide ongoing administration of SSI system – which is hosted internally on the Department’s systems, at a significant saving to the taxpayer. This system has a 99.8% uptime requirement – which was met in 2013. The only downtime was due to scheduled maintenance.  Expertise: Provide coaching and training to the Service Desk in order to enhance their skillsets and provide them the ability to progress issues more efficiently with a quicker response time to staff

Optimisation / IT Liaison Officer programme

In order to promote a more structured interaction with line divisions in relation to IT developments, an IT Liaison Officer (ITLO) network has been established. One officer per Division is designated to act as ISD’s first point of contact in relation to the roll-out of new systems and to help us identify how ISD can better deliver IT solutions for business requirements across the Department. The ITLO network creates an environment whereby business users can come together, share ideas, compare notes on how each Division utilises the systems we have available, etc. This network provides an extremely useful two way communication flow between ISD and the business side of the Department and allow ISD to more closely align our efforts with DTTAS’s business requirements. ITLO for the Ministers office is Mary Daly.

WorkSmart Initiative

The Department has an on-going Business Systems Development programme to deliver SharePoint as the central platform for collaboration, knowledge sharing, intranet, document and record tracking and management. The central aim of the project is to deliver efficiencies in these areas. This Department has been successful in achieving major business efficiencies that have been recognised even beyond the Department to facilitate the improvement requirements under the Public Service Reform Plan. To date over 40 applications/sites including the “corporate portal” known as TheHub and numerous surveys have been delivered to enhance the business processes Department wide. The three key applications of relevance to the Minister’s offices are eCorrespondence, ePQs, eSubmissions. Details of these programmes are set out in a separate note hereunder.

The Department’s programme for 2014 and beyond is broken into three streams, larger projects, quick-win applications and minor update and maintenance to existing sites. 186

Under the larger project heading the Department proposes to pursue include:  Development of Department-wide Risk Management system  Utilise features of Sharepoint 2013 to provide collaboration sites to enable closer and secure communication with its external agencies and other stakeholders

OSCAR - Sports Capital Grants The Online Sports Capital Register (OSCAR) launched in September 2013 provides an online channel for all Sports Capital Grant transactions. The online system allows Clubs and other organisations register their interest in the programme, apply for grants, submit queries and apply for payments. Clubs with existing grants can access the history of payments online and request new payments. The system brings together historic and new grant information into a single window for Sports Capital staff, with significantly greater control on allocations, payments and outstanding commitments. It also provides easy-to-use management reporting capabilities.

Supporting the Maritime Sector ISD are currently progressing a suite of ICT projects to facilitate enhanced efficiency and service in the Maritime Division of the Department.

SafeSeas Ireland The Safeseas Ireland (SSI) database system provides a foundation for the Single Window for Electronic Delivery of Services to the Maritime Transport Industry. It provides Ireland with the means of meeting requirements under EU Directive 2002/59/EC and other EU initiatives concerning vessel traffic monitoring, dangerous cargo details, security status, results of ship inspections and information related to ship waste and cargo residue.

In addition, the SSI system has been designed to allow, as necessary, additional service to be provided for a large community of users (e.g. Customs, Gardaí, CSO etc) with the objective of contributing to the implementation of other community policies such as environmental protection, security, immigration etc.

The Safeseas Ireland project also aims to improve the efficiency of the Irish Maritime industry, by simplifying reporting requirements, the ship inspection process and the approval of Pre-Arrival Port Security documents.

In 2014/2015 ISD will further enhance SSI to meet our obligations under Directive 2010/65/EU on the reporting formalities for Ships.

Irish Coast Guard (IRCG) SILAS Call Logging Project The Irish Coast Guard (IRCG) is responsible for response to, and coordination of, maritime accidents which require Search & Rescue and Counter Pollution & Salvage operations. It also has responsibility for vessel traffic monitoring. ISD has worked closely with the IRCG and has previously supported them for example in the upgrade of facilities at all three co-ordination centres (Dublin, Malin and Valentia).

ISD has recently awarded a contract for the provision of a new Shared Incident Logging and Analysis (SILAS) for the IRCG following extensive requirements analysis. ISD are providing the staff resources to manage the project through development, testing and implementation with the contractor Critical Software of Portugal. (Critical Software have extensive experience in the delivery of ICT systems supporting emergency services, delivering and supporting the 999//112 system for Portugal 187

and also the Logging solution for the Portuguese Coast Guard). SILAS will provide a unified logging and analysis system across the three centres leading to greater inter-operability across the service.

Seafarers Information System ISD has completed a detailed requirements analysis for the Seafarers Information System and is currently at the tender evaluation stage of the project. The new Seafarers system will be a single electronic information source relating to the Certification of Seafarers issued by the Irish Administration. This will consolidate multiple electronic and paper based records. The new system will include functionality like automatic verification of Irish issued certificates (e.g. to respond to requests received from other Maritime administrations) and the production of standardised flat- form printed certificates. This will allow the Department to move away from the costly production of certs in hard copy booklet formats. The system will also include improved reporting capabilities to support quality management effort. This will help ensure Ireland’s on-going compliance with International Maritime Organisation (IMO) requirements with a view to retention of “White List” status for Ireland.

Ship Register ISD has significantly progressed the analysis of requirements for a new Ship Register. This will be a single electronic register of Irish Vessels which will encompass the increased number of vessels types coming under the mandatory regime proposed by new Merchant Shipping (Registration of Ships) Bill 2013. This system will provide an electronic channel for the registration of vessels (updates, deletions and renewals) including the ability to submit and store supporting documentation which will provide complete vessel records. It will facilitate improved access to Irish Vessel data, which will be useful for internal stakeholders (e.g. Irish Coast Guard) and external agencies (both national and international).

Governance of ICT Budgets All ICT expenditure for central Government and the non-commercial Semi State bodies are subject to a process governed by the Department of Public Enterprise and Reform (DPER). This process requires the Department and the agencies under its remit to submit a report with their planned expenditure at the start of the year and a statement of actual expenditure at the end of the year. DPER then sanction the various projects and expenditure based upon these submissions, or provide recommendations on how the projects should be implemented. The head of ISD is appointed as the liaison officer and all communication with DPER including that of the agencies is channelled through them.

Key WorkSmart Applications

TheHub The Hub is this Departments intranet site. This is where most of the internal Departmental information sharing and communication happens. The main parts of the system are our knowledge management area ‘Infoshare’, the Notice boards for official and social news / discussions and the Department Calendar. The intranet is monitored and managed by the Hub master in the Policy and Governance Co-Ordination Unit.

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 InfoShare, is our central information repository for sharing information / knowledge / experience about Common department tasks such as PQ, memo for government, legislation, FOI and many other areas.

 There are three Notice boards for discussing/sharing items of interest or requesting information / advice from anyone in the Department. The most important board is the news board this is where the Department inform all staff about upcoming issues and other items of interest etc. The Department do not issue blanket emails to everyone.

 Department calendar holds key department events such as Oral PQ days, PMDS, PAC meetings. The homepage displays the next 3 upcoming events

Worksmart WorkSmart is the name of our main site from where our suite of in-house developed applications hangs. We have built these systems using SharePoint (a developer’s platform useful for automating workflow and creating collaboration sites). Our main three applications of interest are our ePQ, eSubmission and eCorrespondence systems. Most systems use two elements 1. A form to hold the main details of the request and 2. Any attachments that form the decision/reply.

A combined search tool is available on the WorkSmart homepage; this allows searching across the ePQ, eSubmission and eCorrespondence systems at the same time

ePQs The ePQ system is the Departments electronic PQ management system. It provides the Minister’s office with full visibility and management of all PQs. The PQ question and answer (including supplementary information) is saved together in the ePQ system. The Minister’s office are the owners of this system, any changes to the system comes from their office,

The system has been in place for many years and has improved efficiencies in the process across the whole Department. The success of the system in this Department has encouraged other Departments to follow our lead.

Following on from the success of the PQ system, the Department developed a number of other systems. These systems (described below) have given the Department the tools necessary to comply with our obligations under the democratic process more efficiently in a time of reducing staff numbers.

This Department receive approx. 2700 PQ requests a year.

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eSubmission The eSubmission system is an automated centralised system for recording and managing all records relating to Ministerial submissions.

Submissions are generated by the Division and sent for final approval to either the Minister of State or the Minister. All information relating to a request is saved together in one form. At each stage of the process a request can be approved or returned to a previous stage. Final approval (due to the nature of submissions) requires a pin and additional permissions.

This Department deals with approx. 480 Ministerial Submissions in a year. The majority of these come from Public Transport Division and Road Safety Division. eCorrespondence

The ecorrespondence system is an automated records management system for all ministerial correspondence in one centralised system. The system allows all users to track, search and audit requests as they move through the process.

Some features of the system include:  Divisions have an opportunity to make a decision to accept a request for answer; reject the request for transfer OR suggest that a comment be included in the acknowledgement (thereby finalising the request early on)  All deadlines are contained in the various email notifications that issue from the system.  All correspondence (in/out of Ministerial offices) is tagged to one or more division(s) for information purposes. This provides read rights to the correspondence and negates the need send photocopies down to the division  All non-sensitive correspondence is visible across the Department once the request is completed  Divisions need only create one reply where multiple requests for the same information are received; the Ministers office can link these together under one main request.  The eSubmission system has been updated to include a new field to link the submission back to an eCorrespondence item if necessary

This Department deals with over 5000 pieces of Ministerial Correspondence in a year.

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Policy and Governance Coordination Division (PGCD) Assistant Secretary: Ray O’Leary Principal Officer: Eddie Burke

Role The role of PGCD is to contribute to developing a modern, progressive, operating environment that delivers positive outcomes for the internal and external customers of the Department of Transport. The Division has responsibility for the following areas:  Management Services;  Customer Service;  Governance Support, including CEO contracts;  Webmaster/communications;  FOI;  Emergency Planning;  Irish Language;  National Archives;  EU Coordination

Detailed Description of the Work of the Division A more detailed description of the work of the Division is set out below:

Management Services The Management Services role is to ensure that all requests and queries from the Minister’s Office, other Departments, agencies and the public which require a coordinated response across the Department are dealt with effectively; and that the Department's policies and position are accurately portrayed. Specific tasks are:  Providing accurate and timely replies to Dáil Questions, Memoranda for Government and material for briefing and speeches

 Providing accurate and timely reports and briefing on this Department’s commitments progressed under the Programme for Government

 Providing timely and accurate briefing for and replies to queries from other Government Departments, other bodies etc.

 Arranging for appropriate Departmental representation at relevant inter-Departmental meetings

 Management of cross-cutting projects such as, for example, coordinating our response to the EU REFIT Programme which seeks to reduce the perceived burden of EU regulations

 Provision of an Access Officer who is responsible for co-ordinating assistance and guidance to persons with disabilities accessing services provided by the Department.

Customer Service The Customer Service role is to assist in the implementation of the Quality Customer Service (QCS) strand of the public service modernisation agenda. This involves raising staff awareness of the need for high quality customer service; assisting in the identification and implementation of service 191

delivery improvements across the Department and measuring customer satisfaction. Specific tasks are:  Supporting the Change Management Process in the Department

 Publishing the Department’s Customer Service publications such as, for example, the Customer Service Action Plan and Customer Charter

 Co-coordinating the production of the Departments key corporate publications such as the Annual Report

 Managing the [email protected] and [email protected] web addresses

 Seeking to streamline processes through better use of information technology

Specific objectives for this year are to conduct a comprehensive customer survey and, if issues are identified, to put in place an action plan to address these. It is also the intention to review the Customer Charter in the light of the results of the survey.

Governance Support This role is to provide an overall business and governance framework to deliver the Department's strategies, business plans and emergency planning response. Specific tasks are:

 Drafting of the Statement of Strategy;

 Liaising with Department of Finance regarding the approval of CEO pay and contracts, “Hay” related issues and ensuring that the contracts and salaries of the Chief Executives of agencies comply with Department of Finance requirements and guidelines; A number of issues arising in relation to agency CEOs are included in the Key Issues Brief.

 Corporate governance of agencies – promoting best practice and providing advice and support to monitoring Divisions responsible for corporate governance of agencies under the aegis of the Department.

 Coordination of reporting on compliance with the Corporate Governance Code and submission of annual summary report to the Management Board

 Monitoring of 3 % employment of persons with disabilities in Agencies and reporting to Minister and National Disability Authority.

 Reporting to the Management Board on the Department’s Legislative Programme

 Maintaining and publishing on the Department’s website a database of the Boards of all of our State agencies

 Maintaining a database of all persons who have expressed an interest in being a Board member on a State agency.

 Regular publication of Department Expenditure details on the website.

Webmaster/Communications The role is to maintain and enhance effective communication with internal and external stakeholders. Specific tasks are: 192

 Managing and developing the Department’s website and Intranet (The Hub) and participate in the replacement and/or upgrade of these.

 The development and implementation of initiatives in the area of internal communications

EU Co-Ordination

This role involves responsibility for European Union affairs and other International coordination. Specific tasks are:

 Briefing for Transport Council Meetings.

 Ensuring that the Department is well positioned to contribute to the development of EU transport, tourism and sport policy

 Management of cross-cutting EU legislative proposals

Connecting Europe Facility (CEF)

The Department is participating in CEF committees and CEF North Sea Mediterranean Corridor Committees which administer the new CEF financing and Trans European Transport Networks (TEN- t) regulations and is along with agencies considering what projects can be put forward for consideration of co-financing.

Transport Council Meetings 8 October and 3 December 2014

The final Agenda for the 8 October Council will be circulated as soon as it becomes available. A comprehensive briefing document will be prepared for the Minister in advance of the Council.

An Informal Transport Council will be held in Milan on Sept 16 and 17. A workplan for CEF corridors will be presented to Ministers at this informal gathering of Transport Ministers. Ireland participates with France, UK, The Netherlands, Belgium and Luxemburg in one of the nine CEF Corridors, the North Sea Mediterranean Corridor

Infringement Proceedings

There are four infringements. One is at Reasoned Opinion stage and is due to be closed. Two are at Letter of Formal Notice stage. We have been informed that Letter of Formal Notice stage is to be commenced shortly on the fourth

1. 2011/4073 this relates to pre-infringement case 1363 / 10 which closed on 03/09/2010 and concerns Infringement of Article 16 of the Directive 2006/123/EC on services in the internal market ("the Services Directive”).

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State of Play

The Infringement Proceedings regarding this Directive will be closed, subject to two conditions being fulfilled:

a) internal review within DG Internal Market and Services under which the Head of the Unit will so recommend and b) enactment and commencement of the legislation with which the wording of same has been agreed with the DG Head of Unit and the OPC (Draftsman’ Office).

2. 2013/0394 Infringement notice for overdue transposition of Directive 2011/76/EU of the European Parliament and of the Council of 27 September 2011 amending Directive 1999/62/EC on the charging of heavy goods vehicles for the use of certain infrastructures.

State of Play

The SI work has gone out to an external Barrister and full transposition should occur by the end of July. Reply to Letter of Formal notice has been issued but Commission has indicated that it intends to proceed to Reasoned Opinion

3. 2013/2262 This case refers to Regulation (EC) No. 10712009 which requires that all Member States take all necessary measures to ensure that the national electronic measures are interconnected in such a way that a competent authority of any Member State is able to connect to the national register of road hauliers of any Member State. This was due to be implemented by 31 December 2013. (Pilot case 4526/13 refers).

State of Play

The Commission’s Letter of Formal Notice of Infringement No. 2013/2292 was acknowledged on 28th April 2014. Ireland has worked through 29 of the 35 tests between the member State and EUCASIS hub (ERRU). The department is awaiting feedback on the results of the first 29 tests and the provision of a dedicated test window by ERRU-MOVE for the last 6 tests. On 08Apr at the ERRU working group meeting the Commission indicated that it is happy to avoid court proceedings in this regard. Once the above Tests are complete the functional testing will be completed. We will then be into the production connectivity phase of the Exit Criteria

Pilot pre-infringement

There is a Pilot pre-infringement case that the Commission have now closed and have indicated that they intend to proceed to issue a Letters of Formal Notice. This Pilot case pre-infringement concerns non-ratification of the Convention concerning International Carriage by Rail as amended by the Vilnius Protocol of 3 June 1999 (COTIF 1999) by Ireland. This requires Primary Legislation and will take up to 15 months. Commission had been looking for a shorter implementation timeline

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Freedom of Information (FOI) The Department receives an average of 120 FOI requests per annum. The role of the Division involves overseeing the implementation of the Freedom of Information Acts 1997 and 2003 within the Department; registering all FOI requests received by the Department and managing the processing of these requests by line divisions. Specific tasks are:

 Liaising between persons and organisations making FOI requests and the relevant Divisions within the Department each of which have appointed a Decision Maker (HEO level) to process FOI requests

 Providing advice to Divisions on the interpretation and implementation of the FOI Acts

 Identifying the need for the appropriate training for officials concerned with implementing the FOI Acts and facilitating the provision of this training in conjunction with the HRD (training) Unit

 Publishing and maintaining the Department’s Section 15 and 16 FOI manual and related obligations under the Acts

Emergency Planning This involves the co-ordination of the Departments responses to the Government Emergency Task Force and the support of the framework for the actions necessary to respond to emergencies across the transport sector that effect the Department and its Agencies. Specific tasks are;

 Representing the Department on national emergency planning groups such as the Government Task Force, National Steering Group and Interdepartmental Working Group on Emergency Planning.

 Co-ordinating the Department’s responses to the Office of Emergency Planning in relation to their monitoring requirements.

 Co-ordinating the Department’s activities where this Department is the “Lead” Department in an emergency in the transport sector.

 Support to the Departments Emergency Planning Committee.

 Participation in the development of emergency planning processes resulting from reviews of events across the Departments sectors.

 Briefings for Management Board members

Irish Language This involves the promotion and facilitation of the provision of services through Irish in the Department in accordance with the requirements of the Official Languages Act 2003. Specific tasks are:

 Ensuring that Divisions are aware of their responsibilities regarding the use of Irish on stationery, signage and advertisements the provision of replies in Irish to correspondence received in Irish ,and the publication of all corporate/general information publications bilingually at the same time.

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 Development and implementation of the Department’s Language Scheme

Preparation of new Language Scheme. A new language scheme under the 2003 Act took (Scheme 2) has been drafted and submitted to An Roinn Ealaíon, Oidhreachta agus Gaeltachta. When this is approved, we will move on with implementation. This is expected in the latter half of 2014.

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Comprehensive Review of Expenditure 2015 – 2017 / Capital Review 2015-2019

Strictly Confidential

Pages 1-112 Redacted

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