Official Report: Minutes of Evidence

The Chairperson (Mrs Erskine): We are joined by Ronan O'Doherty, Translink's chief financial officer, and Ian Campbell, Translink's director of service operations. You are very welcome to the Committee. We appreciate your time.

Are members agreed that the evidence be recorded by Hansard?

The Chairperson (Mrs Erskine): Thank you for coming to the Committee. We have the written evidence that you have provided. I invite you to make a presentation of around five minutes, after which we will come to members' questions.

Mr Ronan O'Doherty (Translink): Thank you, Chair and Committee members. As you mentioned, we submitted a paper in advance, which we will take as read. However, I would like to cover some of its key points before we come to questions.

Public transport is key to the social, economic and environmental well-being of Northern Ireland. It is key to the Programme for Government (PFG) objectives, and its importance was referenced and emphasised in a recent declaration at the COP29 climate summit. In Northern Ireland, public transport has suffered from years of underinvestment compared with other regions of the UK and the Republic of Ireland. In the current financial year, 2024-25, Translink's resource funding is 9% lower than that which was received in the previous year, and capital funding is lower by 10%. The current resource funding figure for Translink of £153 million will see the company make a significant loss this year, and, without an adjustment to funding levels, cash reserves will be reduced to an unsustainable level going forward.

Translink believes that the budget for the upcoming 2025-26 financial year needs to be re-baselined to 2023-24 funding levels. We recorded a very small loss in that year. We also need to take into account the growing share of the funding that is being utilised for the concessionary fare scheme; the ongoing inflationary pressures that are faced throughout Northern Ireland; the impacts of the more frequent storm and flood damage and the climate resilience requirements that we have seen an increasing incidence of in recent years; and the employers' National Insurance legislative increase that will be introduced in April 2025. In addition to that, there is a clear need to grow our public transport network in order to achieve modal shift, as is required under the Climate Change Act (Northern Ireland) 2022.

Translink has continued to deliver efficiencies, introduce new technology and invest in capital projects to enhance our public transport network. Passenger numbers are growing. They are back to pre-COVID levels, with further growth targeted. The growth in numbers since the opening of Belfast Grand Central station stands at just over one million passengers year-on-year versus the equivalent period last year, and our target is to close out this year with just under 82 million passenger journeys, which, as I mentioned, is at pre-COVID levels.

Finally, public transport is an essential public service. It is cross-cutting across health, education, the economy and the environment. There is an urgent need to address the imbalance of funding to public transport in Northern Ireland, as that will ultimately determine the network that Translink is able to deliver now and into the future. Thank you.

The Chairperson (Mrs Erskine): Thank you very much, Ronan. You said that resource is 9% lower than previously and capital is 10% lower. What does that mean for Translink's priorities? What will not be delivered in the upcoming financial year?

Mr O'Doherty: In the current year, we are reducing our cash reserves to deliver our public services contract for the Department, so there is no immediate risk to services from that perspective. In a broader context, over the past few years, we have received, on average, about 90% of the funding that we required. There has been some volatility, as you would expect, due to the pressures on public-sector funding. Ultimately, for us, we are seeing a further reduction in our cash reserves. The issue going forward is that that is not sustainable in the long term.

The Chairperson (Mrs Erskine): For clarity, will you tell us what your cash reserves sit at?

Mr O'Doherty: Our cash reserves are at around £30 million. At the end of this financial year, which is imminent, we expect to be at around £23 million. Year-on-year, that is not a significant change. There are a couple of reasons for the current position. First, some of the funding that we received late in the previous year came on to our books only after year end. There was a timing element to it. Secondly — this is a good chance to pay tribute to the Department — this year, we worked collaboratively with the Department on freeing up cash in some historical capital grants. That brought in cash. They were some small amounts that were awaiting certain milestones, and we agreed with the Department that we could claim them. That has been helpful. We finish the year at £23 million.

It is also worth noting that, in recent years, we have established a Treasury management policy. One thing about that policy is that it addresses liquidity and recommendations around liquidity. We had an independently assessed metric for working capital day-to-day requirements, and the recommendation was that Translink's cash reserves should not dip below £30 million.

The Chairperson (Mrs Erskine): That was an independent assessment.

Mr O'Doherty: Yes.

The Chairperson (Mrs Erskine): What engagement have you had with the Department to flag that issue and your concerns about what it will mean for your services?

Mr O'Doherty: We provide a three-year corporate plan. In the current year, we submitted a three-year corporate plan that will have shown, on the basis of some funding assumptions, how our cash would degrade over that period. Obviously, the actual funding that we receive can vary. As you know, there is also the opportunity to get some in-year funding from monitoring rounds, which we experienced last year and was very helpful. At the moment, we are led to believe that it is unlikely that there will be any more in-year monitoring funds for this financial year. We share information with the Department regularly. We have assurance meetings; we share all our long-term financial projections; and the Department is aware of our funding requirements.

The Chairperson (Mrs Erskine): Will you detail the reasons why the cash reserves should not dip below £30 million? From a public perspective, £30 million seems like a lot of money, but, from the point of view of the delivery of services, it might not seem like a big pot. Why is it set at £30 million, and why can it not dip below £30 million?

Mr O'Doherty: I completely appreciate the point. It is a lot of money. We operate effectively below that level when we have to. I will use Grand Central station as an example of working capital. Our capital budget this year is £250 million, which is equivalent to around £20 million a month. If the invoices for capital projects total £20 million a month and, after collating information and submitting grant claims, you claim that amount a month later, there is a £20 million cash requirement until the money comes in. The reserve assists with working capital. Effectively, it gives you a buffer for ups and downs in cash. In addition, there is our overall cost base: £30 million is roughly just over one month's costs. As you can see from those metrics, it is an enormous sum, but it helps us to manage the ins and outs of the business, which are ongoing costs and the timing of grant claims.

The Chairperson (Mrs Erskine): One of the pressures comes from the increase in National Insurance contributions. Translink has forecast that as £5·5 million. What, if any, impact will that have on Translink's budget for public transport provision?

Mr O'Doherty: Chair, effectively, that is a new, emerging pressure. It is a new cost to us and, because it is UK legislation, to everybody. It is not only a cost to Translink of £5·5 million; undoubtedly, there will be cost pressures on some of our suppliers and contracts, which will be quantified and discussed in due course. Some contracts may make provision for legislative changes around cost bases, for example. We have put forward the funding that, we believe, we require to deliver public transport and the public services contract, and, within that, we have called out that emerging pressure. We need that amount on top of current funding because of the legislative change.

The Chairperson (Mrs Erskine): Do you constantly engage with the Department on that concern and the pressure that it will put on Translink? Does the Department have a sympathetic ear?

Mr O'Doherty: Absolutely. For example, the Department presented that last week as one of the pressures on Translink, and I am aware that the Assembly has been engaging with Westminster on the implications of that change. Our role is to make sure that the Department is fully informed of anything that changes or emerges in our business. The National Insurance change is a perfect example of something on which we liaise closely with it.

The Chairperson (Mrs Erskine): I have a final question before I move to members. There are two questions, but I will roll them into one. There is a business case for expanding the public transport network to support the night-time economy. How confident are you of getting the money to roll that out? Whilst it is good to see an expansion of the public transport network in Belfast, we also need to look at expanding public transport in rural areas, so my other question is this: is Translink looking at ring-fencing pots of money so that it can look at how rural transport can be increased as well as looking at the provision of public transport in the city centre to support the night-time economy?

Mr Ian Campbell (Translink): I will take that question, Chair, if I may. First, you are aware that we put forward a business case relating to the night-time economy. It requires an increase of £600,000 for one year, which is largely to cover bus services. We have already introduced later train services on Friday and Saturday nights, but we would like to expand them. We had a successful run-up to Christmas with the night services that we put on. Over those four weeks, we carried an extra 17,000 people, which shows that there is a demand. The feedback that we get from our customers and the business community is that, if we were to put that service on with a predictable run rate so that people knew that they could depend on late-night public transport services, the demand would only increase. We believe that, in the great scheme of things, that is a relatively modest amount considering what could be achieved for people's social lives and the hospitality industry. We await the outcome of that. That would be in addition to the funding that we are talking about today. There is a separate business case with the Department, and we have engaged with your colleagues in Economy as well.

Speaking more widely, we want to see more people using public transport. For that to happen, we have to provide solutions for the population of Northern Ireland. Some people regard public transport as mass transit, but the community in the Province is very rural in nature, so, to provide those solutions, we would like to increase the frequency of services on the Goldline network in particular. We are looking to and working with councils. That includes working with Fermanagh and Omagh District Council on its local development plan (LDP) and with Derry City and Strabane District Council on the north-west transport plan. We are also working with other stakeholders, and we are working on the eastern transport plan 2035. We are doing that in order to look at how we can enhance the public transport network across the Province.

It is all about the accessibility of public transport. By that, I mean that, for some, door-to-door public transport will not be an option. If, however, people have easy access to park their car in a park-and-ride beside the main arterial route, that provides a transport solution. We have plans for how we, working very closely with the Department, can provide a modern public transport network that is fit for purpose for Northern Ireland. That has to be done within the constraints of the current funding, and, if we are to avoid some of the congestion issues that we had prior to Christmas and entice more people out of their private cars, we will have to see public funding prioritised for public transport.

The Chairperson (Mrs Erskine): It would be great to see more 261 buses coming from Enniskillen.

Mr Stewart: Thank you for coming along today, gentlemen. We all appreciate the difficult position that you are in and how difficult it is to balance the budget. Like you, I want to see public transport being fully funded so that it can be delivered properly.

How much of the capital allocation is contractually obligated so far? How much of that budget do you have flexibility with?

Mr O'Doherty: I am happy to cover that, and I know that Ian will chip in as well. In the current financial year, quite a high percentage of the capital budget is contractually committed, given that this was the year of the delivery of Belfast Grand Central station. Entering this year, in excess of 50% of the budget was committed. Going forward, that percentage will fall. At the same time, however, we have significant and extensive plans to do what we are required to do. The contractually committed percentage may be lower, but, for example, around 40% of our capital budget for next year will be absolutely essential to ensure that we have a safe bus and rail network. We have a £5 billion rail asset, and, as you can imagine, the cost of ensuring that that meets all safety standards and regulations will naturally take up a lot of our capital spend.

I do not want to come across as having an issue with the word "committed" —

Mr Stewart: I appreciate that.

Mr O'Doherty: — but it is just that we know what moneys we will need to spend, and I think that at least 40% to 50% of that will be essential for continuing to run the service. Ian, I will let you talk more about things such as the fleets.

Mr Campbell: Ronan is quite right to highlight that 40% of our capital budget is about safety: maintaining a safe bus and rail network. Where assets become life-expired, we have to replace them — we have to.

On the make-up of the rest of the budget, about 10% of capital funding is for the completion of the Belfast transport hub. We have to replace our bus fleet and are targeting in particular some of the buses that operate in rural areas. We see bus usage as part of the regional balance in our strategy. We are also engaged with colleagues in Irish Rail on replacing the current Enterprise fleet, which also accounts for about 10% of the capital funding. That would be funded from three quarters: DFI capital funding; the Department of Transport (DOT) in Ireland; and Special EU Programmes Body (SEUPB) funding — we are drawing down money from the European Union. The remaining 20% of the budget is really for maintaining the performance of the rail network. Also included in that is the work to start phase 3 of the Coleraine to Derry line improvement work.

Mr Stewart: That is very useful, Ian. Thank you. When you came to the Committee a couple of weeks ago, I mentioned increasing capacity on existing routes. Does the funding have an allocation to increase some of the Carrick train services, for example, from three carriages to five? You said that some of the funding is for health and safety and like-for-like replacements, but are you increasing the fleet, particularly in the rail network?

Mr Campbell: We are looking at that, but the project is at a fairly early stage. We are looking at a feasibility study to increase the size of the train fleet, but that is a five-year process. We are maximising the use of the current train fleet, and it is only four years since we extended some of our class 4000 trains to increase capacity. However, the success of the railways has meant that the capacity has been used up.

With the bus fleet, it is about replacing the current aged assets with zero-emission vehicles. We have successfully rolled out some 200 zero-emission buses. We were delighted to roll those out in Derry/Londonderry recently, and the Foyle metro now makes the city one of the first in the UK and Ireland to have a completely zero-emission bus fleet. By the late spring, 50% of all bus services in Belfast will be operated by zero-emission vehicles. We recognise that the capacity should be increased on our popular services. We can do that by increasing the length of our trains or the frequency of the services, and we are keen to increase the frequency in the cities and across our rural networks. All of that comes back to the constraints on funding

The Chairperson (Mrs Erskine): Sorry to interrupt. We have interference on the mics at the moment. I remind members to move their phones away from the mics or put devices on to Wi-Fi rather than 3G, 4G or 5G, because the sound is being quite badly affected. Apologies.

Mr Stewart: No problem, Chair. That is useful, Ian. I will return to the point that the Chair made about the reserves so that I can get a feel for how concerned you are about the reduced amount. I appreciate that £30 million sounds like a lot, but it is, effectively, one month's running costs. From the point of view of being prudent, ideally, what would you like the reserve to be? At what point should we start to become incredibly concerned? You mentioned that it could reduce from £30 million to, I think, £26 million. We are starting to head into concerning territory, are we not?

Mr O'Doherty: In recent years, Translink's cash reserves have been reduced, and we understand that the reason for that was the pressures on the public purse, particularly a couple of years ago. We would like to see Translink getting a sustainable level of funding going forward. I am conscious that the 2025-26 Budget has not been agreed yet, and we are still in that process. Internally, we continue to draft our budget. That will be subject to internal executive scrutiny, and we will be held to account by our board. Ultimately, we want to see sustainable public transport funding. If that does not happen, cash will continue to degrade, and it will become more of an issue over time. Sorry to be the typical finance guy.

Mr Stewart: That is what you are here for.

Mr O'Doherty: As I mentioned at the start, the level of funding in Northern Ireland is significantly lower than in other parts of the regions. A few months ago, the Treasury reported the 2022 level of public transport investment per head: Northern Ireland was at £193, England at £465 and Scotland at £467. We are at a level of investment per head that is about 40% of that in other parts of the UK. We want to see the funding that we require to deliver what we deliver now, which has not been the case this year, and to have the funding to enhance and grow the public transport network. Ian has mentioned some of the initiatives that we would like to progress on that front.

Mr Stewart: I have a final question, Chair, if I may. We know that budgets are very tight and that every pound is a prisoner. What is your assessment of the current impact of fare evasion year-on-year? What is Translink doing to identify those committing that offence and to try to eradicate it or reduce it as much as possible?

Mr Campbell: Fare evasion, depending on the service, would typically be just over 2%, which, when we have benchmarked it, is quite low. That is based on the fact that we have systems in place to incentivise people to pay their fares. The vast majority have no difficulty with that. We carry out spot checks. We have inspectors in areas where we identify it as problem. Also, we have introduced contactless ticketing, and we are rolling out barrier lines on our rail network, which we have assessed as, in effect, offsetting any risk of fare evasion.

With the use of our current systems and new technology, we treat our revenue protection very seriously because, as you say, every pound is a prisoner. We recognise that we have a responsibility to collect fares, to be efficient and to reduce any impact that evasion has on the public purse.

Mr Stewart: I could ask about 10 more questions —

The Chairperson (Mrs Erskine): I know.

Mr Stewart: — but I will pass it on. Thank you very much, gentlemen.

The Chairperson (Mrs Erskine): What is that 2% in monetary terms?

Mr O'Doherty: I am trying to work it out. [Laughter.]

I should have brought my calculator. I think it would be probably no more than £1 million of our commercial revenues. As I say, the important thing for us is the benchmark.

The Chairperson (Mrs Erskine): Yes. OK. Stephen?

Mr Dunne: Thank you for coming in again, gentlemen. I will just pick up on the fare evasion point. I appreciate the work that you are doing with the contactless system. The progress is very positive. What are the percentages or ratios of successful prosecutions for fare evasion? I understand that there is a fine of up to £1,000 in place. How has that worked?

Mr Campbell: I do not have those figures available, but we would be happy to supply them off line.

Mr Dunne: That would be helpful. A constituent raised that issue with me this morning, so it is quite timely that it is being talked about. You talked about different patterns. Are there any no-go areas for inspectors on any of the routes, whether for Gliders or across the regional balance?

Mr Campbell: No. We adopt varying approaches, depending on the nature of the service, but there are no no-go areas.

Mr Dunne: What about hotspots? What is the spread like? Are there areas where fare evasion is a bigger issue, a bigger challenge for you to tackle?

Mr Campbell: There are areas where you have higher rates, or higher risk, should I say, of fare evasion. That is where we allocate more resource.

Mr Dunne: Staying with the fare theme, one of the often-flagged issues, which people use as an excuse not to take public transport, is the cost. They say that it is prohibitive in places. I would like to tease out more from you about how we compare with the rest of the British Isles on costs. I appreciate the yLink scheme. You place a great emphasis on it. That is positive. Also, tying in with the recent changes in the concessionary fare scheme, what impact has the £20 application fee for 60- to 64-year-olds had on passenger numbers and uptake of the scheme?

Mr Campbell: I will take the first part of your question. Ronan will pick up on concessionary fares. We benchmark ourselves across other operators in the UK and Ireland. We regard the fares that we have as still very competitive, particularly in the UK context. Our regional and commuter services still match competitively with those, bearing in mind that, quite often people look at the headline single fare, but we have better-value-ticket products, which offer excellent value for money. With the contactless system, we ultimately want to end up with account-based ticketing, where people are guaranteed the best value fare and it is easy to use.

The other area to highlight is that, in Ireland, the policy is a further 20% reduction. In benchmarking, we see an additional subvention on rail services south of the border, for example, where some fares are cheaper. That is deliberate and a policy of the Irish Government.

Mr O'Doherty: I will add a final point. Albeit that we are conscious that a lot of the period was during the COVID pandemic, there have been no fare increases in three of the past five years, which is worth noting. We still see really strong growth in take-up of the concessionary fare scheme. Year on year, there is growth of about 10% in the funding required to deliver that. Helpfully, the Commissioner for Older People for Northern Ireland published this statistic: by 2046, the number of people aged 65-plus will have grown by 49%. It is anticipated that one in four of the population by then will be over 65. The concessionary fare scheme sees really strong take-up and continues to grow. This year, the cost of delivering it will be about £5 million extra for Translink, we anticipate that the cost will remain at that level.

Mr Dunne: Thank you. Finally and briefly, on improving rail connectivity, I have raised with previous Ministers and some of your colleagues improvement of rail passenger access to George Best Belfast City Airport. I know that a report is due in the spring. What input have you had to that? Is there a realistic chance of safety improvements being made for road users and train users at that location?

Mr Campbell: Work is being done specifically on the feasibility of improving the rail link and access to George Best Belfast City Airport. There are a number of options. As an example of how we seek to draw down additional funding from other sources, the funding for that work comes from the UK connectivity fund — from the UK Government, in effect. As part of the work on feasibility, options are being developed. We work closely with the team at Belfast City Airport and with DFI colleagues on that project.

Mr Dunne: OK. Thank you.

Mr K Buchanan: Thanks, gentlemen. I will finish off the point on fares. You talked about an average of 2% across NI as a figure for fare evasion. There are hotspots, as we referred to them, where that is higher. Where are they?

Mr Campbell: They tend to be in urban areas of high population — the cities, basically — and Belfast in particular has such areas. As I said, we deploy our staff where we see that the risk is highest.

Mr K Buchanan: OK. I want to talk about efficiencies. In your paper, you refer to a £3 million fuel efficiency benefit in the past two years, which is, obviously, £1·5 million per year. What do you benchmark that £1·5 million saving against? How far back do you look, and do you compare that with the cost of buying the fuel from week to week? How does that system work?

Mr O'Doherty: I can cover that one, Ian.

We have had a fuel-hedging policy for a number of years. That means that we look forward and pre-purchase fuel at agreed prices: hedging, effectively, the price that we pay for fuel. There are two reasons for that. First, it helps us to avoid volatility, and, secondly, it gives us certainty going into the Budget. For example, in the past week, we have done what is probably our last hedge for the upcoming financial year, meaning that we have locked in the price of about 90% of our diesel requirement.

To answer your questions about the ups and downs, we monitor against that the market price that we would have paid if we had not hedged. It can be negative or positive, but we do everything possible to bring benefit out of that. A good example of that, going back in time, is from the advent of the Ukraine war, when diesel prices absolutely skyrocketed. At that time, we had hedges and confirmed prices in place for most of our fuel requirements for the next 12 months, so, over that period, we were able to utilise the fuel that had been pre-purchased. We made a conscious decision not to enter into future hedges at extremely high prices. We were able to wait out that spike in diesel prices and come out the other end. In the 2022-23 year, we saved £13 million against the market prices that we would have paid if we had bought on the day. That was an enormous saving. It will be a lot more modest going forward.

Ultimately, we are not speculating, but we keep a very close eye on market prices and sentiment. For example, we postponed our most recent hedge on the basis of some comments that were made by Donald Trump to the effect that a lot of drilling would be going on, shall we say. That brought prices down in the short term. We felt that that was an appropriate period in which to hedge. Since then, prices have gone back up. We try to keep an eye on what is happening in the market.

Mr K Buchanan: You have saved £1·5 million a year on average over the past couple of years. What is your total yearly bill for fuel, roughly?

Mr O'Doherty: The total bill is just over £30 million.

Mr K Buchanan: Can you work with anybody else, such as the health sector, to purchase fuel? Is there any way of working with anybody else? If you were spending £60 million, would you have more clout?

Mr O'Doherty: Undoubtedly. We run more than 40 million miles a year of services, so we are an enormous purchaser of fuel. I am not going to take credit for this, but we have made introductions to our process and shared it with other bodies. It is quite difficult administratively to have an overarching policy because the price that we pay is, ultimately, linked to where fuel is delivered in depots. There may need to be a centralisation of that, which is probably a project in itself.

Mr K Buchanan: My final question is about zero-emission buses. We talked about diesel. What is the diesel usage compared to the total fleet? What percentage of the fleet is zero emission?

Mr O'Doherty: Currently, it is about — Ian will correct me — 20% and growing.

Mr K Buchanan: Is that zero emissions?

Mr O'Doherty: Yes. We have 1,100 diesel buses. By the end of this year, we will have over 200 battery electric vehicles. We have a small number of hydrogen buses as well.

Mr Boylan: Welcome back. A number of feasibility studies are ongoing. Are they going to be impacted on in any way? What stage are they at?

My second question is about annual budgets and engagement with stakeholders, such as the Inclusive Mobility and Transport Advisory Committee (IMTAC). When will you start that process? Have you had any conversations in that regard at all?

My final question is about retaining staff and encouraging them right across the network. Will you give us a wee update on that?

Mr Campbell: Our capital funding can impact on feasibility studies. Feasibility is the initial stage of any project. Where there is uncertainty of funding, we have to manage within our means. We want to get projects to the point at which they are, in effect, shovel-ready. That is very much part of our approach. Although, at this stage, the feasibility studies that we are running are not directly impacted on, there is always the risk that the one-year capital funding budget could be lower than our requirement. Those projects also need sustainable funding over many years. That is something that we have to consider.

When you look at overall industry benchmarks, you see that our staff retention figures are very high. We work closely with our staff. It is, ultimately, our staff who are delivering the pre-COVID levels of passenger numbers. We are seeing encouraging growth. For example, as Ronan has identified, since the opening of Belfast Grand Central station, there have been one million extra passengers. That represents about a 10% increase in the number of people using buses and trains. That is delivered by our front-line staff. We work closely with our staff and our trade unions to ensure that we retain our staff, because, ultimately, they deliver the service.

Mr Boylan: What about engagement with the likes of IMTAC? Obviously, annual budgets are very challenging.

Mr Campbell: We regard the work that IMTAC and other representative bodies in the same field do as absolutely invaluable in the early stage of project development. IMTAC was very heavily involved in, and added a lot of value to, the design of Belfast Grand Central station. IMTAC helped us to design the new buses that were rolled out in Derry and Belfast, to ensure fair accessibility for all customers. We regard IMTAC's role as being very important, and we are continuing to engage with it.

Mr Boylan: Across all stakeholders as you roll out your budgetary —?

Mr Campbell: Absolutely. We treat external stakeholders as a vital part of the development of these projects.

Mr McMurray: You said that the big issue was getting more people onto public transport. That is important and is key to reducing congestion and combating climate change. You said, Mr Campbell, that while this is about the 2025-26 budget, there is a longer trend, if that makes sense. How will this and future budgets impact on Translink's ability to invest when it comes to supporting the green economy, addressing climate change and making the modal shift that we talk about?

Mr Campbell: You highlight one of our significant challenges. We enter into commercial contracts with our supply chain. In order to do that, we need foreseeability of funding, so it is not just a matter of meeting budgets on a year-by-year basis. A number of the capital projects that we are delivering can take six or seven years or more. That is quite a commitment, so the foreseeability of funding is very important to us. There is also the foreseeability of the resource funding required to deliver services. What our customers want is predictability, reliability and punctuality. To achieve those, we need not only one-year budgets but sustainable funding so that we can build the market.

Mr McMurray: You mentioned the supply chain and six- to seven-year plans. Currently, 20% of your vehicles are electric. I was talking to some of your colleagues at a local level about the Goldliner buses. We need forward planning. I cannot imagine that you buy a renewable Goldliner off the shelf. How will future budgets impact on your ability to future-proof to cope with capacity increases and decarbonisation? Also, some of those buses are going to require additional infrastructure in the stations. How are you going to cope with the grand objective and long-term budgets?

Mr Campbell: We have capital plans that extend way beyond four years. We assess what demand is going to look like in maintaining steady state — that is, the service levels that we are delivering today — and the potential expansion of services, and that applies to our infrastructure, and to our bus and rail fleets, which are the three main areas where you see the large investment, plus ticketing of course. We look ahead to see how we would do that.

When capital budgets are submitted, there is an element of foreseeability that they will have a long-term commitment, and they go in first, in effect. That is why, before you sign a contract and make an investment decision, it is important to have a long-term view of funding.

The capital funding is vital. You mentioned Goldliners, but we have to replace about 100 vehicles in our bus fleet every year because they are coming to the end of their useful life, and they then become a lot more expensive to maintain. We mentioned efficiency. Whilst the electric vehicles that we buy are more expensive from a capital point of view, they are significantly cheaper to operate than diesel vehicles. We see it as part of the green economy, and those vehicles are currently built in Northern Ireland. Not only do we see a role in decarbonising transport but it builds an efficiency into what we do and supports the local green economy.

Mr McMurray: I was unaware of that. That does show the circular economy quite clearly.

Finally, you mentioned that our investment in public transport is 40% of what it is across the water. You mentioned how much the Republic of Ireland spends on public transport. You want a better service, and a better service means that more people are likely to use it. Ergo, maybe costs will come down. In those places, what is the best exemplar of best practice and best service? As a user of Translink, and as good as it is, I am wondering how it could be better, given the investment across the way.

Mr O'Doherty: I will kick off on that. The benchmarks are hard to come by in the sense that every jurisdiction is different, for example, in its mix of rail and bus. I will use the Republic as an example, where the Budget has recently been announced. Based on some of the climate change demands and a need for a modal shift on to public transport, the Republic has announced that it is increasing public transport funding by 10% this year. That is an example of where investment is being made to do what needs to be done in the coming years to do the things that you have referenced, which are to grow the number of people using public transport and to allow the investment in zero-emission vehicles, which are, as Ian mentioned, cheaper to run. Those are the types of things that we want to achieve.

On the benchmark, we do believe that we are underfunded, and we want to grow usage going forward. This year, we will grow our passenger numbers by around 5%, which is a really strong statistic. There was commentary in the past that public transport use will never return to pre-COVID levels. We have now achieved that. There are other parts of UK that we have looked at in recent years that have been consistently behind us in recovery from pre-COVID numbers. We have seen good uptake, and we are pleased with that.

Mr Campbell: The wider issue is the question of where the best practice is. We do have some, based on the number of people who come and engage with us on Belfast Rapid Transit (BRT) and the Glider service in Belfast. The fact that that has delivered over 40% growth and nearly 10% modal shift on the routes that that serves shows that there are good examples of best practice in public transport in Northern Ireland, but we need a lot more of that.

The last time that we were in front of the Committee, we talked in particular about congestion. Looking across the jurisdiction, where public transport, particularly bus transport, works is where you have park-and-rides around urban centres so that people do not have to take their private car into the city. Urban centres also have bus priority from those park-and-rides to the city centre and the other parts of the city that people want to go to. Those park-and-rides go across rural areas so that you are providing accessibility for the whole region to get people to where they want to go. As I said at the beginning, public transport is not a solution for everybody, but we have to make it accessible so that it becomes a solution for everybody.

Miss Brogan: Thank you for your presentation. There are a few points that I want to pick up on from the conversation. The discussion about decarbonisation of public transport, including the fact that 20% of the fleet is already made up of zero-emission vehicles, is really interesting. I agree with you that, when you are planning ahead, you need multi-year budgets. You will know that Finance Ministers have been pushing for multi-year Budgets, and, hopefully, we will see that in the future. You need that, and all organisations need to be able to plan for years in advance.

The concessionary fare scheme was mentioned. I am glad to see that that has been picked up and the usage has increased. Members of my family use it, and I can see the social value that it has.

What kind of engagement do you have with your counterparts in the South about the scheme that they have for people of pension age?

Mr Campbell: Just to clarify, you are asking what engagement we have with colleagues —.

Miss Brogan: In the South of Ireland. There is a scheme there, and I believe that residents here can get free access to public transport in the South. How does the scheme work for you, and what engagement do you have with them?

Mr Campbell: Those are agreements between the two Departments. We simply operate the scheme and accept those tickets. We recognise the success of the scheme in Northern Ireland and are seeing huge growth. In fact, some of the capacity challenges are because we have seen a larger uptake. As the operator, we administer the scheme, but those are agreements between Departments in both jurisdictions.

Miss Brogan: Fair enough. You might not have this information to hand, but, if you could get it to me at some stage, it would be useful to know what the uptake is like in rural areas compared with urban areas. I would be interested in that.

Mr Campbell: We will be happy to give you a breakdown of those figures.

Miss Brogan: Thank you. That leads me to my next question. I am from West Tyrone and represent a largely rural area. As you have already mentioned, there are issues with promoting public transport in rural areas, because it is not always easily accessible. You mentioned park-and-ride expansion to make it a bit easier. What else are you doing to promote public transport use in rural areas?

Mr Campbell: First, it is about enhancing the network. People will use the service if it is attractive and meets their needs. To achieve that, we need to see more focus on and a greater priority given to public transport. Whilst, compared with other parts of the UK, Northern Ireland has a high level of public transport accessibility — I think that it is in excess of 83% — we recognise that more can be done. However, that can only be done if public transport funding is prioritised and resources are put into delivering it. For us, it is about developing the network, increasing the key arterial routes and making those accessible to people. It is about having higher frequency on those routes and later evening services so that, in effect, the market is served.

Miss Brogan: It is about having dependable services as well, so that people know that it will be there.

Mr Campbell: Exactly. Predictability and dependability are what make a good public transport system.

Miss Brogan: Thank you.

Mr Durkan: Thanks to the gents for coming along today. Ronan, I think that you said that there is a £5 million shortfall for running the concessionary transport scheme. How do you propose to fill that gap? Will it be done through fare increases, and, if so, how much in fare increases will we be looking at this year? The previous Finance Minister, in her Budget sustainability plan — I cannot remember its exact title — identified an increase in public transport fares as a means of generating more income. Therefore, while, in other jurisdictions, there are increased allocations for public transport, here, we are kind of shifting it to the passenger to foot the bill, which is counterintuitive and could make public transport less attractive.

Mr O'Doherty: The concessionary fare scheme is a policy decision. We implement it. The costs, as you said, Mr Durkan, are approximately £5 million extra per annum. That, effectively, creates a funding pressure for us. Historically, fare increases have served two purposes: one is that they help us offset the cost inflation that we see within the business, like any business; the other is to ease the public funding pressure. Ultimately, any fare increase in the upcoming year will be a regulated matter for the Minister to decide on. However, those decisions obviously have knock-on implications in the funding required for public transport. I agree that operation of the concessionary fare scheme is creating an additional £5 million per year funding pressure for our business.

Mr Durkan: And it is not the only funding pressure —

Mr O'Doherty: Yes.

Mr Durkan: — so you will have to fill a gap that is bigger than £5 million. Can you hazard an estimation as to how big that gap will be in total?

Mr O'Doherty: We are in the middle of 2025-26 budget pressures. At this stage, our role is to continue to give information on the pressures and funding that we require, and we liaise with the Department about that. At the start, I outlined the fact that, in order to stand still over the past couple of years, we needed an extra £10 million for concessionary fares. We will have the National Insurance legislation: that will be £5·5 million. We have ongoing cost inflation in our cost base, and climate resilience costs us money. There have been recent storms. I dread the naming of the next storm. We have had storm Bert and storm Éowyn. They have all caused —.

Mr Durkan: The next one will begin with an "F". [Laughter.]

Mr O'Doherty: No comment.

The Chairperson (Mrs Erskine): We will not pre-empt the naming of it here.

Mr O'Doherty: Storms create additional cost pressures. I absolutely agree, Mr Durkan, that the pressures on the business continue to grow.

Mr Durkan: OK. I am particularly glad to hear that we have money for the Derry-Coleraine line. That has been long-awaited. What money is there for this year? What work will that do? Can you give a timeline for those works, or is that for the other side of the house?

Mr Campbell: It is preparatory work for what is, in effect, a track upgrade for a large section of the line between Coleraine and Derry. Ultimately, it will improve the performance and resilience of the line, which is much needed. For us, it is also the foundation for future development of the railway network to the north-west. Funds are identified in the capital plan. On the roll-out, doing that work will require the closure of the railway line. We are working through that from a project planning point of view. Operationally, we want to keep that to a minimum. We are working through that timeline.

Mr Durkan: You answered an earlier question about ongoing feasibility studies. What are the implications of the budget pressures on feasibility studies and other work around implementation of the all-island rail plan. It is well established that delay is the biggest driver of cost, and it is an extremely ambitious project. Will much go into that, and will there be much going on?

Mr Campbell: To be clear, whilst the projects that we have in the capital plan are compliant with the all-island strategic rail review, there is nothing specific in what we plan to do next year. It will be future-proofed for that. The all-island strategic rail review is really a strategic framework for decision-making in the future. Around £300 million per year for 25 years is the scale of the funding that would be required to deliver it. However, it is a really solid place from which to start, because it identifies the strategic framework for future decision-making.

The work that we are doing on phase 3 of the Coleraine to Derry line and on cross-border rail, including with colleagues in Irish Rail, the Department, the Irish Government and SEUPB on putting in a new Enterprise fleet, which will be future-proofed for higher line speed and reduced journey times, will complement the strategy that was outlined in the all-island strategic rail review.

Mr Durkan: Finally, there was an earlier question on the cost of fare evasion to Translink and everyone as a consequence. Do you have figures on the cost of vandalism to Translink per year? Are those readily available?

Mr Campbell: We do. I can provide those figures to you offline, if that is OK. I do not have them to hand. Vandalism is another area of cost, and we treat it very seriously. We have received excellent support from the safe transport team in the PSNI to help us target known areas of vandalism, and we have had some success in that. People have been brought before the courts as a direct result. It is an ongoing issue. It is a wider societal issue —

Mr Durkan: Absolutely.

Mr Campbell: — but it is one that we recognise creates an additional cost burden that we have to carry.

Mr Durkan: It is about much more than the cost of physical repair of vehicles. You also have to consider the injury and stress caused to drivers, as well as the impact on services.

Mr Campbell: Absolutely, and on the communities that they serve.

The Chairperson (Mrs Erskine): Cathal, you indicated that you want to come in on a wee point. Be brief, if you can.

Mr Boylan: It is just a quick question, Chair. Ian, I appreciate what you said about park-and-ride and all those people, like me, who travel down the motorway — the 40,000 vehicles. However, we have a major issue with short journeys within the greater Belfast area. The public transport network is there, and we should be encouraging more and more people to use it. I know what happened over the Christmas period, and we are getting better at it because of the new station and everything else, but we need to identify a plan. I know that it is difficult to plan with yearly Budgets, but we need to attract the majority of people. We need to get the balance right.

Mr Campbell: We are focused on that, Cathal. You touched on the congestion. We are working closely with DFI, Belfast City Council and others on plans for how we can mitigate that congestion. It is what I said earlier: in terms of best practice, we need park-and-ride facilities around the city, and we need to make Belfast more accessible to public transport, such as through bus priority. On cost pressures and resource pressures, if our services are caught in traffic, we have to provide more buses and more drivers simply to maintain the timetable, and that is evident in some of the cost increases that we have seen. Clearly, urban areas are where you will see the greatest growth, but that has to be nuanced in recognition that we also have rural networks and that we are looking at regional balance. There are a lot of spinning plates. In order for us to meet everybody's requirements, we need far more sustainable levels of funding for public transport.

The Chairperson (Mrs Erskine): We are bang on an hour from when we started the evidence session, but I want to pick up on a few points. We had a discussion about the zero-emission fleet. When you replace vehicles, that is a capital cost to Translink, and you referenced 100 vehicles per year needing to be replaced. What effect does having a zero-emission fleet have on fuel costs, including diesel, which is a resource cost? How much are you saving as a result of that?

Mr O'Doherty: All those statistics are correct. We have an overall fleet, including Gliders, of around 1,500 vehicles. As I mentioned, we will have about 200 battery electric vehicles by the end of the year. They run at about half the fuel cost per mile, so there is a slight benefit in that. I would need to come back on the exact number, because the mix is constantly changing. I am happy to do a calculation on that. However, on cost per mile, it is around 80p for diesel and around 40p for battery electric. Prices can change, but, as Ian mentioned earlier, we are seeing a benefit in tackling climate change and a reduction in fuel costs in the longer term. We still have a long way to go on that, obviously.

Mr Campbell: There is clear evidence, Chair, that we have been able to offset some inflationary pressures with the efficiencies that we have seen. We talked earlier about hedging diesel fuel. We are now also hedging electricity, because that is the fuel of the future. It is green tariff electricity as well. Ultimately, it comes from renewable sources.

The Chairperson (Mrs Erskine): You can come back to me on the figures for what that switch of resource means savings-wise. It would be great to have that information.

I want to pick up on the storm bids. I noted that, in January monitoring, there was a bid of £2 million for concessionary fares. I noticed that the bid for the storm was £2 million. Why was it £2 million? What discussions are you having with the Department on that £2 million for concessionary fares for what was a period of a few days?

Mr O'Doherty: The bid for concessionary fares was not related to the storm. Sorry, Chair: there was a separate bid for the storm. We were asked at short notice to turn around estimations for storm damage. Concessionary fares are a separate issue. For the storm, we put in a bid of around £1·9 million, which was pulled together at short notice and was, effectively, a costing for the damage that we felt was caused in that period. In the days subsequent to the storm, and even up to the present, our estate teams and property teams have continued to report damage. The initial assessment within a day was that over 150 trees had fallen around our tracks and network. We had 10 damaged barrier arms that needed urgent repairs. We had damage to signals and telecoms. The costing was based on that. The bid was a best estimate of what it would cost to repair those things. That is just to give some context.

The Chairperson (Mrs Erskine): The Finance statement that came out last week shows a bid of £2 million for concessionary fares. Did Translink put that to the Department?

Mr O'Doherty: Sorry: I thought that your question interlinked the bids for concessionary fares and the storm. The concessionary fares were an additional pressure over the year based on uptake of the concessionary fares scheme.

The Chairperson (Mrs Erskine): OK. During your evidence, you talked about the upgrade of the Enterprise rail fleet. You said that it is 10% of your capital budget, and that it will be funded from three quarters: DFI, the Irish Government and PEACE PLUS-type funding. Can you give a breakdown of the monetary value of the funding from DFI, the Irish Government and PEACE PLUS for that rail fleet upgrade?

Mr Campbell: Sure. SEUPB and the PEACE PLUS programme have identified €165 million of capital funding to support that project. The remainder will get picked up by DFI and the Department of Transport in Ireland.

The Chairperson (Mrs Erskine): OK. What will DFI contribute in monetary terms?

Mr Campbell: We are out for procurement. I could not comment on what the total value of that project is likely to be until we complete the procurement process.

The Chairperson (Mrs Erskine): OK. Can you keep us up to date on that?

Mr Campbell: Sure. We would be happy to.

The Chairperson (Mrs Erskine): That would be good.

Some members asked questions on prosecutions for fare evasion. We would be grateful if you could provide those figures to the Committee. Nicola asked for information on the uptake of concessionary fares in rural areas versus urban areas. Mark asked for vandalism figures as well.

Thank you very much for coming to the Committee. We are always most grateful for your time and the evidence that you provide to the Committee.

Over the weekend, there was an incident involving one of your staff at a train station. Attacks on your staff are wrong. We want to pay tribute to your staff for the work that they do. They are public facing. I know that, in the past, the Committee has looked at safety on our transport network. I want to put on record that we wish the staff member well. I see Graeme Smyth sitting in the gallery. I also want to put on record our thanks to all the staff for their engagement with us on local issues. We appreciate it. Thank you.

Mr Campbell: Thank you. We will pass that on. We appreciate it. Thanks, members.