Dáil Éireann debate -
Wednesday, 9 Jul 1924

Vol. 8 No. 8

COMMITTEE ON FINANCE. - VOTE 53 (RESUMED).

Mr. JOHNSON

I was speaking on this Vote last night when we adjourned. It is described as an advance to the Londonderry and Lough Swilly Railway in respect of the working of the Letterkenny, Burtonport, Buncrana and Carndonagh Railway of £5,430, which appears to be part of a sum of about £7,000. I find there was a Vote in March this year of £510, which was additional to an anticipated saving on other sub-heads of £1,000, making a total of £1,510. The estimate was brought forward in March as something to be going on with and did not receive very much consideration, though the matter was raised by Deputy Wilson. In the absence of the Minister directly responsible the only explanation that was given was that there had been an agreement to pay a sum of money to meet certain losses. It was also pointed out during the discussion that we were on the eve of the introduction of the Railway Bill and it was assumed that all things would be made straight in regard to such concerns as this by the introduction of that Bill. But, lo and behold! when we got the Railway Bill we found that it had nothing at all to do with the Londonderry and Lough Swilly Railway Company. So that whatever was in the minds of Deputies to say in regard to the Lough Swilly Railway ought to have been said.

The expectation that the Railway Bill would remove the danger that might arise from such a loan as this has not been realised. I would like to know a little more definitely the conditions under which this sum has been agreed upon to be paid over by the Government on account of the losses on this line for this particular period. It is true to say that that part of the railway has been, in the main, profitable, certainly the most remunerative from the point of view of revenue. This loan was advanced because of a threat to close down. We want to be informed what conditions have been imposed upon the company for the use of this money. We ought also to be told whether in fact there has been any connection between the granting of this loan and the activities of the company in seeking powers from the British Parliament to increase their capital. I do not want to raise again the question of the right of the British Parliament to legislate in connection with this railway company. I believe it is outside the international agreement, and I believe that the Ministry have given away something substantial, or allowed something substantial to be taken away by the process of legislation in railway matters in the British Parliament.

Leaving that for the moment, perhaps leaving it altogether on this occasion, I want to point out that the company has its headquarters in Derry city. It has a mile or two of its line in Derry city. It is believed that it loses money in respect of portion of the line and generally recoups from that portion of the line which is, in fact, the property of the Government here. The Minister, I thought, rather suggested that there was not very much expectation in his mind of getting repayment of this loan. What then is to be the security? Are we getting anything from the company in respect of the other portions of the line? Have there been any commitments beyond the lending of this £7,000? I have a suspicion that the company has been one too many for the Ministry, that they have lent this money without much expectation of getting repaid. They could have perhaps got something substantial in exchange before they lent it. I hope there are some Deputies from Tirconnail who know something about this undertaking from personal knowledge and that they will probe the matter a little bit more deeply than I am able to do. I hope the twenty-four hours that the Minister has had since will have enabled him to find out all about this transaction. I am quite sure he has been delving and diving into accounts and books and documents, and that he will be able to enlighten the Committee on this transaction. Then I have no doubt that Deputies from that part of the country will be ready to take up the running.

Mr. WHITE

I can hardly say very much on this subject. The railway people may contend they are in a very bad way; that they are losing money heavily, and unable to keep the line running. Whether there is anything at the back of that or not, I do not know. We have to take the statement of the railway manager. I do not know anything about the auditing of the accounts, whether an auditor has been sent down from the Department that is associated with the control of the railways to check the figures. But I do know that if the railway closed down it would be a very serious matter for the districts concerned. They allege that it is impossible for them to keep running unless they get the subsidy, and a deputation approached the Department with reference to it. I listened to the statements of Deputy Johnson, Deputy Davin, and Deputy McGoldrick with the utmost interest, but I am in the position that I cannot throw very much light on the matter.

Mr. McGILLIGAN

This particular sub-head of the Estimate to which reference has been made, sub-head (d), is as described, an advance to a particular railway company, the Londonderry and Lough Swilly Company, in order to meet the loss on three other lines—the Letterkenny and Burtonport line, and the Carndonagh and Buncrana extensions. The story about these lines is one that must be familiar to Deputies who attended the various stages of the Railway Bill. This is a question of an old working agreement which, under present conditions, is inequitable, and an advance had to be made to the Londonderry and Lough Swilly line to get them to continue working these three lines, which were being worked at a loss. The basis on which the worked lines were paid was somewhat different in the three cases. In the Letterkenny line the arrangement was a percentage of the profits, and in the other two it was on a basis of £3 10s. per mile per week. Previously, when Deputy McBride raised a question with regard to a Mayo line, I pointed out that there was a working arrangement to work that line at £4 a week per mile, and I argued that it was quite inequitable under the circumstances. I say now that £3 10s. is unjustifiable as a working arrangement. With regard to the percentage of the receipts upon the line on which this was the arrangement, its expenditure has in recent years exceeded all receipts. The position the Government was faced with was that unless some other arrangement could be made, the three lines would cease to operate. These are Saorstát lines, but they are worked under an Act which says that they shall be worked under the Londonderry and Lough Swilly Railway Company. There had to be an interim solution, and that solution was by way of an interim advance.

There is, I think, a suspicion that all Government Departments are foolish and apt to be guilty of tremendous folly, and there is a suspicion here, I think, that the railway company was one too many for the Department which allowed the advance to be made without investigation. That is not the case. The accounts were examined. Someone was sent north to examine the accounts of the three lines, and they were brought down here and again scrutinised, and, as a result of that scrutiny, an agreement was made to advance the amount in four instalments equal to half the loss in 1923. The benefit of that was this: that none of that money went in compensation to the shareholders, but the directors, with this money, were enabled to go to the bank and negotiate a further advance. On one occasion they had to get an overdraft to meet the wages bill for one week. The advance has been made, and it is simply an advance. There is no further commitment in the payment of this money, and there is this safeguard, that the accounts are kept separate and are subject to examination, and they will be examined and, if it is clear that the advance, or any portion of the advance, is not reasonable, the advance can be withheld or arrangements made for its repayment. The entire position is safeguarded. There is no relation between this advance and the Bill which is now being promoted in the British House of Commons, and which has to do with the raising of further capital expenditure on the working line for the Londonderry and Lough Swilly Railway. The advance which we made has only to do with the three worked lines and has nothing to do with the working line. With regard to that Bill in the British House of Commons, the Saorstát position is definitely safeguarded. Special provision is made for that portion of the expenditure on the line within the 26 counties. Nothing has been given away under the terms of that Bill. The main argument to have this advance made was, as I said last night, that without it Donegal would have been left entirely without railways, because not merely would the three worked lines have gone out of operation, but even the working line, the Londonderry and Lough Swilly undertaking, would also have ceased to operate. That line did pay a good dividend, about 7 per cent., before the war, but at that time its wages bill was one of the lowest in Ireland, and the employees were badly paid. That is not the case now, and after the period of control the sum which the railway got under the Settlement of Claims Act was received and paid out, and there was actually no money in the coffers of the Londonderry and Lough Swilly line. We are not in the position of having paid money to replenish empty coffers. The causes of the loss in working which have brought these railways to this position may be briefly stated. Two of them are peculiar to Donegal. One, which I hope will not unduly excite Deputy White, is the failure of the fishing industry in Donegal, and the second is the cessation of the travels of migratory labourers to Scotland. The third cause is due to trade depression. These three factors put the lines in this position. I hope the House is satisfied with the explanation.

Mr. WILSON

This advance, I take it, is equal to half the loss of these worked lines. Has the Minister estimated what is the loss in connection with the capital expenditure? These lines have, I presume, been built out of national monies and are the property of the State. This item of £5,430 of subsidy makes no account of the amount of money which would be received on the capital expenditure. Am I right in assuming that?

Mr. McGILLIGAN

The three lines are not all on the same basis. The Letterkenny Railway was built out of an advance and the Board of Works are the mortgagees. The Burtonport Extension and the Cardonagh Extension were built out of public funds under one of the Balfour Acts.

Motion put, and agreed to.