Last evening I opened my remarks on this Estimate by objecting, first of all, to this Department having been set up at all. There was no necessity for it. It must be a rather humiliating experience, I think, for the Minister to be put in charge of a series of companies which, according to today's paper, are described as either solvent or tending towards solvency. The limited information we have got shows that they are all in a very definite position of not paying their way. We were supplied with over 60 pages of typescript as between the two documents circulated to us in connection with this Department. Yesterday we had 38 or 39 pages of typescript which the Minister read; the rest is taken up with notes he supplied over the week-end, with a warning that this might be the last time these notes would be supplied.
In all the 60 pages there is not the information that would be required from, say, the chairman of a group of companies addressing a shareholders' meeting and trying to get them to understand how the companies under his control were doing. In the first page of the notes supplied the Minister speaks of the groups for which he has responsibility. He states:
"A great part of the work of the Department is concerned with the State-sponsored bodies for which the Minister for Transport and Power has overall responsibility. These are—
He names them.
"——the Electricity Supply Board, Bord na Móna, Córas Iompair Éireann, Irish Shipping Limited"
and the three air companies, as well as the Shannon Free Airport Development Company.
The next sentence swerves away from the overall responsibility which the Minister states he has for these State-sponsored bodies.
"Under the relevant statutes these bodies enjoy a very wide degree of autonomy in their day-to-day administration".
There is then a zig-zag back again:
"They are, however, subject to certain statutory controls, particularly in relation to finance and are also responsible to the Minister in matters of general policy."
It has been the experience of this House over the past couple of years, since this Ministry was founded, that we more often hear about the autonomy of these companies than we hear of the Minister's responsibility for them. There is scarcely a question that has been addressed to the Minister that has not met with the evasive reply that the matter is one of day-to-day administration for which he has no responsibility. Even when questions on matters which I would assume would have been accepted as policy have been put to the Minister, he has disclaimed responsibility. Nevertheless, he has made many journeys abroad and up and down the country, exploiting himself as the person who is responsible for these State-sponsored bodies while, at the same time, in this House he fails to give the information that should be supplied so that people could understand how his Department is progressing with the bodies that are under it.
Let us start with the principle that he does control a great number of the State-sponsored bodies. I notice in this morning's paper the word "solvency" is used with regard to C.I.E.; it is approaching solvency. I suppose the Minister would agree with me that these various bodies mentioned in the first page of his notes are bodies no longer in the promotional stage; possibly an exception might be made with regard to Aerlinte, thought it is now in its third year. The rest are outside the promotional stage. It is a well-known practice with regard to these State-sponsored bodies that they are provided with State capital and credit from the community and they are given a certain time to get their financial feet under them before they are asked to remunerate that capital. But they are asked in the main, and they should be asked, first of all, to service any capital while it is outstanding and to ensure by sinking fund devices, and otherwise, that repayment will be made within a reasonable time having regard to the assets the particular State-sponsored body controls.
With the possible exception of Aerlinte—and I do not make that a real exception—all these other bodies are in the position that they should be meeting their accounts in the way in which an ordinary commercial body would be meeting its accounts. There is a delusion current amongst certain people in this country, and even amongst certain Deputies in this House, that what is called the public sector of our economy is progressing and that it is virile, active and successful, when, all the time the contrast that is so often made with what private enterprise does in this country is opposed to that illusionary situation.
I am putting it that these bodies are all now in the position, again with the possible exception of Aerlinte, in which they should be on the same footing as any ordinary commercial concern. That is to say that they should, in the course of their operations, draw in as much revenue as will meet ordinary operational expenditure and that they will have enough money to replace their plant and machinery if it goes out of order and to keep their premises in good condition. It also means that if they have to borrow money from a bank or from private subscribers they will be in a position to pay off some of the capital and, while any of that capital is outstanding, to pay the interest on it.
That sort of comparison should be made with this group of State companies. It is not an unfair comparison that at this stage of their lives these bodies should meet that standard and that they should successfully compete in private enterprise conditions. State sponsored bodies are better off than private companies. Private companies have to meet their running expenses and make sufficient profit to enable the people associated with them to live and to keep up an ordinary standard of living. The State sponsored body has no profits to make. All it has to do it to pay the interest on the capital advanced to it and to repay that capital.
In connection with this matter of capital I asked questions yesterday to find out what was the overall situation of the State in regard to the moneys lent out to these various enterprises. I was told that the gross return for the year ended 31st March, 1961, was about £10 million. Of that the interest was £3.5 million. That is the interest paid to the State by these bodies out of which £2.9 million came from the E.S.B. The overall return was 3.2 per cent. and the return from the E.S.B. was 4½ per cent. If the overall return is only 3.2 per cent. and if the return from the E.S.B., with nearly £100,000,000 invested, is 4½ per cent. then the other bodies cannot be paying three per cent. between them. The calculations cannot be made exactly because one would want to know the amount invested in each body but it is quite clear that if the overall return is 3.2 per cent. and if the E.S.B. supplies 4½ per cent., the return from the others must be under three per cent.
I asked then what we were paying for money we got in by way of National Loan and otherwise. I was told that the average rate of interest on long term debt was 4.3 per cent. If State-sponsored bodies other than the E.S.B. are only paying interest at less than three per cent., they are not paying what the State ought to get on the money which it borrows and passes over to them. These State-sponsored bodies are not merely getting money at low interest rates but they are even depriving the State of the interest they ought to pay. They are getting money under exceptional conditions such as the easy provision of credit and they are not able to pay the interest that they should pay.
On first reading of the Minister's speech it emerges that C.I.E. are losing and that their losses will be cut down this year to £250,000. Shipping is running at a loss this year of £460,000, Shannon airport is running at a loss of £307,000, Dublin airport at a loss of í232,000 and the Aerlínte operational losses are expected to be in the region of £80,000 this year. The full total of those is £1,330,000. That is not anything like the true picture but, taking it at first glance, all the companies about which the Minister boasted are costing the community £1,330,000 if the losses do not run any worse than is estimated. That is nothing like the true picture and I want to go through the various companies and see what the true picture is.
To get the true picture we must know what capital is invested in any of these concerns, what interest they pay on the capital put into them, what sinking fund arrangements are imposed on them. We would also want to know whether the revenue they are receiving is better or worse than the expense they have to incur in providing the service. We would also have to inquire into the treatment of the employees, how their wage rates compare with outside employment and what are their superannuation arrangements. After all that, one would want to inquire what service these concerns are providing, whether it is efficient and whether it is one that the public are looking for and are entitled to expect.
I shall take C.I.E. first. The Minister has told us in his notes that capital has been written off to the extent of £24? millions. In addition to that there is a later £10,000,000 which was put into the various companies that form C.I.E. and that has been written off also. I do not believe that is anything like the total of the money originally put into these concerns but let us start with that. In addition to it there is a sum of £6.6 million, the payment of which has been waived. Those three items total nearly £41,000,000. It is quite clear that in ordinary business capital commitments sometimes have to be written off. The business gets into the position that it cannot meet its capital commitments, it goes bankrupt, pays so much on each share and then starts all over again. In that way it gets rid of the dead weight of debt.
This is a significant sum of nearly £41,000,000 which has been wiped off the capital originally put into the services that are now tied up with C.I.E. An article was published on 24th June of this year in a journal which is described as the official organ of the Road Transport Organisation. After a good deal of criticism, and they are entitled to criticise, of the whole railway system, because they are definitely being put out of the running in competition against the rail system they wind up in reference to road services in Britain, which, they say, make a profit of from £35 millions to £40 millions a year, by summarising the C.I.E. position rather well, I suggest, in the next two or three lines. They say that surely the State-sponsored transport undertaking, Córas Iompair Éireann, with over £20 million losses written off to the tax-payers, with Government responsibility for pensions and gratuities to redundant staffs, with an annual State grant averaging £1 million, plus many lucrative monopolies both overt and hidden, at the very worst should be able to break even or to show a paper profit.
I have searched through the Minister's speech to find out some of these things. It is quite clear that the redundant employees are now a burden on the State, at least to a certain extent, £250,000, and that is going to go on for a long, long time. In addition to that, the State has taken on itself the burden of paying the interest which was waived in favour of C.I.E. and that the Minister's speech put at £632,000. If I add these two together it means that the State at this stage, when C.I.E. is described as almost becoming solvent, is bearing £880,000 a year. Whether the £1 million that we are supposed to give to C.I.E. by subsidy is in addition to that or covers that, I do not know. It should emerge from the speech but it does not.