The Bill which has been introduced has three main sections. I direct Deputies' attention in the first instance to the second sub-section of Section 1. It proposes that sub-section (5) of Section 11 of the Shannon Electricity Act, 1925, be amended by the deletion of the words "five millions, two hundred and ten thousand pounds" now contained therein and the insertion in lieu of the words so deleted of the words "five millions, eight hundred and thirty-five thousand pounds." That is the first purpose of the Bill, to increase the money from £5,210,000, the sum which had previously been granted under the Shannon Electricity Act, to £5,835,000. The money is to be increased by the difference between £5,210,000 and £5,835,000. A comparison lies as between these two figures but it is not the comparison that is shown merely by subtracting the one item from the other. I will go into that in detail more fully immediately. The first purpose of the Bill is to increase the money previously voted for the purpose of the construction of the Shannon Electricity Works, as defined in the Electricity (Supply) Act of 1927.
Electricity (Finance) Bill, 1929—Second Stage.
Does the Minister not mean the Shannon Electricity Act of 1925?
No. I am dealing with the definition in the Electricity (Supply) Act of 1927.
The second purpose of the Bill is set out in Section 2. Section 2 amends Section 12 of the Act of 1927 by deleting sub-section (2) of Section 12 of that Act, and reading for it what is down here. Again, I will go into this in more detail in a moment, but I want to get the purpose clear first. In Section 12 of the Electricity (Supply) Act of 1927 it is set out that certain sums of money are to be advanced to the Electricity Supply Board. While sub-section (3) of Section 12 of that Act, with which we are not dealing by way of amendment in this Bill, gave the amount of money which it was proposed and which it is still proposed to hand over to the Electricity Supply Board for the purpose of distribution throughout the Free State. Sub-section (2) dealt with a different matter, and it is sub-section (2) that I am proposing to deal with on this occasion. I only mention sub-section (3) to indicate that we are not changing the amount granted under that sub-section to the Electricity Supply Board for their purposes.
Sub-section (2) had this purpose: Under the old Act a sum of £5,210,000 was voted for the purpose of carrying out the Shannon construction works. A certain division had always been assumed in this sum. These were the moneys to be expended actually on construction. There was a further sum of money to meet interest on the capital expended on the construction works during the process of building, and during the two or three early years in which it was recognised by the experts that Shannon revenue would not amount to the Shannon expenditure. Extra capital was provided by way of making up for the deficit. We made, acting on the experts advice, a rough and ready calculation in this way: the actual construction money worked out at £4,600,000, and a sum of money to an amount of £600,000 was to be devoted to the payment of interest on the construction moneys during the period of years in which the Shannon scheme was not expected to be a self-supporting scheme, and for the maintenance and operation of the Shannon works when handed over to the Electricity Supply Board in the early years in which their revenue would not equal their actual charges. Sub-section (2) laid down that there was to be handed to the Electricity Supply Board, in addition to the sum of £2,500,000 mentioned in the next sub-section, whatever portion of the £5,210,000 I did not spend, or else a maximum of £600,000. The maximum of £600,000 was put in to meet objections to the effect that I was trying to get two sums of £600,000, the old sum of £600,000 mentioned as being interest on erection money, and the new £600,000 that it was presumed I was managing to hand over secretly to the Electricity Supply Board. It was stated that I was really giving them £3,100,000 instead of £2,500,000. To meet that objection it was laid down that the Minister shall hand over to the Electricity Supply Board such part of the £5,210,000 as he has not spent on construction, subject to the overriding maximum that that should not be a greater sum than £600,000.
It is clear why that distinction was made. If I happened to get the works completed very much earlier than was anticipated—a year or one and a half years earlier—I would not have had to spend any portion of the £600,000 myself. That was the point put to me, although I could not see the circumstances in which I would have spent only the construction moneys and would have £600,000 interest and arrears money to hand over to the Electricity Supply Board. View now the more natural course of events, and it would have been this: I would spend £4,600,000 on construction works and I would spend some of the £600,000 in meeting interest charges on the moneys put into building from time to time as the work was proceeding and I would have to hand to the Electricity Supply Board some indefinite sum, something that was a subtraction at the most of £4,600,000, my construction costs, from £5,210,000 voted, or some lesser sum according as my construction costs grew, my liability for interest grew, and the time period went against me. We propose now to delete that sub-section and instead to put in a definite sum of £156,000. That represents 3 per cent. of the capital costs, and is in accord with the Siemens project and the opinion of the experts. It is now clear that by the autumn I shall have spent all the money voted for construction and shall have met all interest charges thereon to date of the autumn.
All that has to be handed over to the Electricity Supply Board now is the three per cent. on the increased capital cost of construction, that being the sum which the experts said was the right sum to meet both interest on construction costs, and also the deficiencies during the early years when the revenue is not expected to be equal to the expenditure. That is somewhat involved. I do not know if I have explained it. We had £5,210,000. We had a division of that sum— £4,600,000 to be spent and actually put into building, and £600,000 to pay both the interest on the money put into building, and to provide the moneys which the Electricity Supply Board, or the Board operating the scheme, would have to obtain in order to be able to function and to preserve and maintain the essential works during the period in which their revenue would not be entirely adequate for their purpose. We know now that we will have spent a certain amount of money on construction work up to the late autumn of this year, and we will have met the interest on that with the principal sum of £5,800,000 which I am asking for. So we see we are able to determine accurately —it is not final, but it is fairly accurate—and we are in a position now to get away from the involved calculation of £5,200,000, minus whatever moneys have been spent on construction and meeting interest charges, up to a maximum of £600,000. We are in a position to determine it accurately, and to say that we are giving £156,000. That is the second purpose of the Bill. It is to determine the amount of money to be handed over to the Electricity Supply Board in addition to the two and a half millions for their own operating expenses, the building of new distribution network, and the taking over of other works, etc.
There are other clauses in the Bill, which amount simply to this, that the difficult question of navigation, which always complicated the Shannon construction works, and especially complicated the Shannon accounts, is dealt with here in a limited way. Previously the experts had reckoned that incidental to the construction of the building, the excavation of the canal and the building of the earthworks, there could be brought about an improvement of navigation on the river. They added up all the incidentals that they saw occurring, and they estimated the cost of these to be about £94,000. As the Shannon electrification was interfering with navigation by the old channel they considered it equitable to charge against the scheme the cost of providing a lock in the Weir at Parteen Villa. They felt that a sum of about £20,000 would supply that lock. In the old scheme we set out to charge the £20,000 against the Shannon, against the consumers of electricity eventually, and £74,000 against the navigation to be got out of tolls paid by the users of the navigation. The amount spent in the improvement of navigation has gone up. We must later decide how this is to be met. That is not determined in this Bill, but the one thing determined is that that sum of money is not to be paid back, as at present things go, by the consumers of electricity. There is an increase of navigation facilities. Navigation has been improved. It is costing more than was previously estimated, and we say that navigation is not to be charged against electricity consumers except to the extent of £20,000, which was the estimate for the provision of the lock and the weir.
We set aside that sum of £132,000. We say that how we shall repay that sum is not finally determined here. It will come up for settlement later on.
The fourth and last thing which the Bill sets out is that the Electricity Supply Board are not to be asked to pay interest on the £132,000, the amount now decided on as the figure that has been spent on the navigation of the Shannon. These are the purposes of the Bill:— First, the increase in the amount of money for the Shannon construction from £5,210,000 to £5,835,000. Secondly, the determination, as precisely as we can at this moment, of the amount of money to be handed over to the Electricity Supply Board in addition to the two-and-a-half millions of distribution money to enable them to meet interest on money to be spent on buildings hereafter to be handed over to them, and to meet the deficiency in their revenue in the earlier years. We reckon this sum to be £156,000. The other purpose of the Bill is to segregate the amount spent on navigation and to say that in this Bill that money shall not be charged on the Electricity Supply Board.
Do I gather from the Minister that the actual cost of navigation improvement has been £132,000 plus £20,000?
Yes.
And what you are doing is that you are leaving the electricity consumers to pay interest on the £20,000 but not on the £132,000?
To meet the charges on the £20,000.
May I ask whether the £5,835,000 includes the £156,000?
No, the £156,000 is additional to the £5,835,000.
I want to make a comparison between the £5,210,000 and the £5,835,000 plus the £156,000. Originally there was a Vote for generation, transmission and distribution of Shannon power to the consumers. There were, as between the 1925 and the 1927 Acts, two sums of money, £5,210,000 and £2,500,000. The second sum, the £2,500,000, is not being charged, so that we can banish it from the present calculation. There remains, therefore, this comparison —the sum of £5,210,000 previously voted for generating, transmitting, and supplying Shannon current and the bigger amount now sought, £5,835,000 plus £136,000.
The first contrast is between the £5,210,000 and the £5,835,000, increased by £156,000. As at present proposed, consumers of electricity are not going to meet certain navigation costs. Therefore, a deduction has to be made from some side of these accounts, possibly from both. The £5,210,000 did include a sum of £20,000 navigation money properly chargeable against consumers of electricity—the cost of providing a lock in the weir. The £5,210,000 included nothing else. It did not include the £74,000 which the navigation was known to cost additional to the £20,000. The £5,835,000 includes the £20,000 previously included in the £5,210,000 and in addition includes the £132,000. Let us wipe out the £20,000 that is common to both. The comparison therefore is between the £5,210,000, the old sum, and the £5,835,000 increased by £156,000 and decreased by the navigation costs of £132,000. I want to put it in that way because it shows the steps of the calculation.
I want to build up on the other side. £5,210,000 was the best estimate at the time when the Shannon Electricity Bill was going through the Dáil of the cost of the Siemens Schuckert project, but at the very time that legislation was going through the project which had been previously put up by Siemens Schuckert was being finally examined by four experts. These experts made suggestions as to improvements and modifications. Some of them were known to us, but it was undergoing a final examination when legislation was going through the House and I got what was referred to as an addendum to the Report when it was too late for me to have the sums voted increased. That addendum put on £100,000 to the scheme. The experts had modified the Siemens Schuckert Report at an increased cost of £100,000. In other words, if I had been coming to the Dáil two months later, the bill of costs would not have been any longer £5,210,000, but £5,310,000. There were modifications, mainly safeguarding modifications, introduced by them and they ran up the bill by £100,000. There is one other addition to be made to the £5,210,000. Under the old project, payment for pole-sites, poles which carried transmission lines, was calculated on an annual rental basis. We have gone on a different plan in carrying out the work. We do not pay annually any rental. We buy out the sites and the moneys for the purchase of the whole sites are included in the £5,835,000. As a balance to this the yearly rents will not have to be found by the Electricity Supply Board, but they will have to find the interest on the money now capitalised for the purchase of the pole sites. Supposing we take the money set aside under the old project as rents for pole sites, and capitalise that, it adds another £100,000.
Can the Minister give us the parallel figure, the actual cost of the pole sites?
I propose not to go into certain figures, and I ask the indulgence of the Dáil for not doing so.
As far as possible, the House would, I think, be anxious to do that, but where we are offered two alternative figures and when we are asked to put one figure against the other we should have the two figures. We do not want to press for figures which might embarrass, but if a figure is offered as an alternative, a parallel figure, we should have both.
I submit that as the Minister is dealing with moneys expended and is accounting for them, in a sense, it is no use giving figures unless we get what the capital value is.
I would be happy to state the amount of expenditure incurred, if it were fixed and certain, but the difficulty I am in is that I have bought only about one-quarter of the pole-sites, and if I revealed my figures I may be mulcted more heavily. As long as costs are in question I do not think that I should be asked about the moneys I paid so that owners of sites can put them in contrast with the money that I am allowed to pay. The comparison would not, in fact, always suit the people from whom I am buying sites or acquiring land.
I am not asking the Minister to state exactly how many sites he bought or what he has spent on those he has bought. I am asking him to give us an idea, irrespective of what he has bought, what he thinks the total cost will be.
I submit that the Minister ought to give the total cost.
It is a simple matter to calculate the number of sites required and, if the cost were given, by a process of simple division, to find the cost per pole. If people think that what I am doing at the moment is cloaking expenditure I make this offer to the House. I am prepared, after the whole thing has been completed, to introduce a token Vote of £10 in order to enable Deputies to see what the actual difference is between estimates and costs when completed. The whole thing will be revealed hereafter. It will not be very long from now, nine months at the latest, when the actual amounts can be given without any item of estimates in them. I must keep to the region of estimates just now and consequently hide certain things at the moment. So I get back to my comparison. I was comparing £5,210,000 with £5,835,000, increased by £156,000 and decreased by £132,000. I have spoken of two sums of £100,000 each. There is one of these sums of £100,000 that may be in dispute. The experts' report added on another £100,000 to the cost, which, it might be said, should not be taken in here as it was not before the Dáil. One item of £100,000 may be wiped out of the comparison by people who accept that argument. Where the justice of the case lies will have to be seen afterwards. I am asking the Dáil to allow this comparison to be made—£5,210,000 plus £100,000, the capitalised value of the pole sites, plus £100,000, the addendum made in the Experts' Report, the additions to the scheme, making a sum of £5,410,000 on one side to be compared with £5,860,000 on the other side. There is an increase of £450,000. Again, there are certain items that I cannot go into at the moment, but I can give the bigger items of increase. I would like to get one point firmly established at the moment, because establishing that point is a tribute not merely to the contracting firm who carried out the work, but to the Irish engineers who have watched and kept down the costs of building and kept the work within the limits of the moneys I have spoken of here. There is a sum of £450,000, or £350,000 in the case of people who accept the second £100,000, to be explained. £150,000 of that goes for administrative expenses during the period of construction. It is not all expended at the moment, but I have a calculation to cover all the administrative expenses I see ahead.
Administration in the Minister's Department?
In my own office and outside. It is the payment to engineers on the scheme of £150,000, for which no provision whatever had been made under the old scheme.
The idea at one time was there might be a free grant from the Government towards the suggested scheme. I am not accepting that as point because, when we come to a comparison of the estimates of consumption, we will see that there is no necessity to worry about that £150,000. Under the old accounts, there was no mention of contingencies. Of the £453,000, £53,000 is under that heading. I have included this time the sum of about £53,000 for contingencies. There was no item previously for contingencies. That was commented on at the time. I am giving a fairly liberal allowance, but I say I am not asking for more money than I think the item is going to cost. I want to present the Dáil with the best picture I can of final costs, and I have included £53,000 for contingencies. That leaves over £250,000 or £350,000 spent on the work more than had been contemplated. There are two big headings. I will have to deal with this in two sets of figures, one set being addressed to the people who do not accept the £100,000 of the addendum, and the other set for those who do. The civil works have gone up by £234,000. The electrical and mechanical works have gone up by £134,000. For the people who accept the take-off of the second £100,000, the civil works have gone up by the sum of £140,000. Electrical and mechanical works have gone up by a sum of £133,000. May I put that figure in another way? As far as these two items are concerned, the Experts' addendum put on £95,000, roughly, to the civil works, and something short of £1,000 to the electrical and mechanical works; so that on the work done on the digging of the canal, the excavation of earth, the digging out of rock and earth, the building of banks, the building of the power-house, the installation of the turbines and the transmission system through the country, there has been an increase on the estimate for the actual construction costs, on the one hand, of £140,000, and on the other of £133,000 or £134,000.
When one considers the rather lugubrious forecast made when this Bill was going first through the Dáil, when one considers all the hidden items there were, all the things that might go wrong and the fact that it was alleged that sufficient borings had not been made or sufficient trial pits dug, and that nobody knew what was the alternation between rock and earth to be excavated, no one knew what the canal bank would cost and no one knew what was going to be the cost of the power house and the intake buildings and all the vast and innumerable hidden items one's imagination could play about with in the early years, the increases I now show are amazingly low indeed. The canal is now dug to the point when we have almost come to the last item of expenditure on it. The mechanical and electrical works are so far through that we can see our final costs. In one case we find an increase of about £143,000 and in the other case an increase of £133,000. I think the presentation of these two figures constitutes in themselves a tribute to the power of estimation of the firm and the way they carried out the work and the engineers on the scheme who checked out every item on the work. I can go back on these figures to certain further points if it is required and they can be presented in other ways if Deputies view them from different angles. The costs of the scheme have therefore gone up. How much they have gone up is a matter people will debate for some little time, and these figures will only get properly established after they have been questioned and tossed about for a bit. There is something in the region of £500,000 or £600,000 extra to be spent on the scheme, and paid for by future consumers of electricity. In other words, I am contrasting the old sum of £5,200,000 and the new figure, which includes everything that must be charged against electricity consumers. I leave out of this new figure this £132,000 for navigation, but I include for navigation the £20,000 always thought to be a proper charge on electricity consumers.
The civil engineering works have gone up £140,000. The difference between £132,000 which is estimated for navigation as a surplus and the £74,000 which was previously estimated as a surplus over and above the £20,000 is £58,000. Do I take it that the civil engineering works have increased £140,000 plus £58,000, that is £198,000?
The civil engineering works have increased by £140,000 chargeable to electricity consumers and by £58,000 chargeable against navigation.
Is there included in the figures which the Minister has just given the cost of compensation paid to people for acquisition of land?
Yes.
All those costs are included.
In the £5,835,000, yes.
Also contingencies —sums to be paid where agreement has not been reached?
Mr. Gilligan
Yes—I include sums to cover the payment for all land acquired or to be acquired.
There is, therefore, revealed as the cost of the Shannon development the sum of £5,835,000 plus £156,000 minus £132,000. What does the increase of £650,000 mean to future consumers? To show this I can make many comparisons and use many calculations. One such comparison is provided on the tables on page 103 of the Experts' Report.
The experts there worked on the basis of two assumptions—a sale of 110,000,000 units and a scheme costing £5,210,000. On this they calculated what the revenue of the scheme ought to be to meet the interest and charges, to meet the maintenance and repairs, and a variety of things set out in the Siemens Schuckert Report—all the charges that would fall against the scheme. They calculated all the revenue that would have to be secured by those afterwards working the scheme in order to make the scheme pay its way—to meet all necessary expenses. On page 103 they gave their calculations. They showed what the price would have to be at the power-house bus bars— that is to say, what units would have to be sold there and at what price. There were other calculations of the cost of having the power delivered at the hundred kv. system and the 35 kv. transformer stations and a final cost for delivery of the power in bulk at the end of the ten kv. lines.
It is calculated if 110,000,000 units were to be sold finally to consumers the price for delivery at the power station would be .41 of a penny; at the end of the 100 kv. system it would be .52 of a penny; at the 35 kv. transformer stations it would be .74d.; at the 10 kv. transformer stations it would be .84d. The increased final costs now revealed mean that those figures have to be increased in this way: The .41 goes up to .46; the .52 goes up to .59; the .74 goes up to .81, and the last figure, and the figure, I think, I should fasten on for the purpose of comparison, the .84, goes up to .9. That is the difference in the scheme, looked at in this way. Instead of there being .84d. charge, there might have to be charged .9. So we are now in the position that as far as concerns one of the variables in the old Shannon project we can speak now with clarity and precision, and the figure I have quoted shows how much the increase has been. One of the variables was: How much were the works going to cost? We did not know that when the scheme was going through. There were all sorts of mournful prophecies of its eventually costing £11,000,000, £12,000,000, or £15,000,000. Of course, unit price per current would have to go according to the price of the constructional works and of the whole transmission system. That was one of the variants. The cost of the works might have been anything— one's imagination could multiply it many times. Actually, here is what we have: The other variable that has to be taken into calculation is—consider it constant for the purpose of calculation — the 110,000,000 units to be sold to consumers which, if sold at .9d. instead of .84d. at the 10 kv. transformer station will make the scheme pay. That is the net difference. If people gave me calculations and time to work them out we could get them worked out in a variety of ways. That is one good way of looking at it. That is the net difference: .84d. at the 10 kv. transformer stations now has become .9d.
I would like to show one further thing against myself in this. There are certain costs that are a sort of borderline costs between the Electricity Supply Board and myself. It is very hard to determine sometimes where distribution begins and transmission ends. At the moment, there are certain moneys that have to be met by the Electricity Supply Board out of the £2,500,000. I think they are properly met by that Board, but suppose these costs have to go against the Shannon scheme, and I think it is outrageous that they would have to, there would have to be a redistribution of the money, which would make a difference in the cost of the unit at the 10 kv. station. The highest it would go to in that unlikely event, would be .93d. which adds on another .03d.
Do I understand that there are some other figures which may have to be included and which are not now included in the .9?
Only on this basis, that there may have to be allocated against the supply in bulk charges which I think are distribution charges and should be met on the distribution side. It cannot possibly mean any enlargement of the moneys more than £5,835,000, plus £156,000, plus the £2,500,000. The cost that I have put to the £5,835,000 might come off the £2,500,000.
It might mean that the capital cost of the work would be increased by the amount taken from the £2,500,000.
Yes, in the very unlikely contingency I have referred to. I do not think it is a calculation that can ever be justified. I only mentioned it because there are borderline cases. We have had certain agreements with regard to charges made against each side, and I think there is a proper division there, but there may have to be a reallocation of the moneys. The distribution costs may come down and the transmission costs may go up, but I do not think it is probable.
It would mean a figure of about £300,000?
No. It would be lower. This is a figure that is completely in the air and that I am not going to get precise about. I say that the outside figure that the .9 might go to would be .93. I venture to say that in the debate that I have promised hereafter when we are able to see these things in the proper light, I do not believe there is anybody in the House who will want to have the figure increased from .9.
The Minister must have some figure in his mind.
I have, and it is staying there.
We can figure it out ourselves.
The Deputy has made an attempt to figure it out, but he is wrong. Let me get back to .9 of a penny. How many units are likely to be sold? 110,000,000 units is what we have to sell. Previously, when I spoke on this matter, I used to go on this type of calculation: First, how many units of electricity are actually being sold in the country? Look back over a period of years and see what was the normal increase in the electricity sold. Calculate one other point. Was there any suspicion that we had reached saturation point in certain areas, so that one would say an automatic increase is not likely to occur within the next four years? We used to calculate round about the time the works would be handed over that there would be an actual consumption in the country—this is without Shannon power being delivered to anybody—of about 70,000,000 units.
What was the date of that calculation?
Made in 1924 with reference to 1929. This was one of the figures that was quoted here when argument was proceeding on the old Act of 1925. We find that actually on the returns given by statutory, authorised and permitted undertakers that there is a consumption in the country at the moment of 73,000,000 units.
That includes such companies as the Tramways Company?
Everything— lighting, heating, cooking and power, including the tramways, public lighting and other purposes. When I said that the 110,000,000 units had to be sold at .9d. or .84d. under the old calculation I was slightly incorrect, because the 110,000,000 units were divided by the experts into 90,000,000 units for purposes other than heating, and 20,000,000 units for heating, and the 20,000,000 units for heating were to be sold at a very much less rate than the ordinary rate to be charged for lighting.
So that again to get a calculation I think we should go on this basis: that there is to be sold 90 million units for purposes other than heating and there will have to be sold about 20 million for heating, the latter at a fraction of the price asked for the former.
Under heating would come power?
No. By no means.
Heating for domestic use?
Mainly for domestic use. It might also, say, be for steam-raising in creameries. People might adjudge that to be a power use of it. I suppose you might call it power of one type, but certainly the twenty million units was not supposed to cover such things as the units used for the tramway system or anything like that. Take the total I have got from returns furnished by statutory authorities and permitted undertakers, not this year, but last year —1928. It then amounted to almost 67,000,000 units.
Can you segregate them?
I am going to. Of this 67,000,000, 17,000,000 were for lighting—I am giving round figures; 4¾ millions for heating and cooking, and 39½ millions for power; 3¾ millions for public lighting, and 1½ millions for other purposes, which mainly represent further power sales. The 39 millions there for power, I think, represents the power units in the three main cities using electricity, and the 1½ millions is for power sold elsewhere in the country.
Does that include power supplied after midnight?
It would include everything used in the Saorstát in the year 1928.
Might I ask whether the 1½ million units contain that class of power?
I have no figure on that.
At a later date, if the Minister would get us a clear definition of the 1½ million units we would be glad to have it.
These are returns furnished in statutory form, and I doubt if it would be possible to break up the 1½ millions in any better way, but I will see what can be done.
Does the 39 millions include trams?
Yes.
Mr. Murphy
Can the Minister say how much is for trams?
I cannot, at present. Sixty-seven million units is returned as being consumed in the year 1928. If I take the calculation back over the years from 1924, and take the automatic increase year by year, that 67 million units becomes, in 1929, 73½ million units; becomes 81 million units the year after; 89 million units the year after, and 98 million units in 1932, the date at which the experts thought the scheme should be able to pay its way.
Has the Minister an estimate of the actual total consumption for the intervening years to 1929?
Certainly. 1924, 48,662,000; 1925, 51,667,000; 1926, 55,726,000; 1927, 60,447,000. I have given the rest. There is the calculation based upon the automatic growth of electricity in the country at the price that ruled before the Shannon power came to be delivered, and without any effort made by the Shannon Supply Board to push electricity into new districts, and without making any impression on the electricity consumers of the State, by reason of the fact that Shannon power was to be delivered by the Electricity Supply Board set up to push the sales. We are taking the calculation merely on the different rates that at present operate through the country in the towns and small places. If there was no incentive given to people to consume electricity at any greater rate than previously, if the old price held, if the increase of electricity simply advanced, as it did in the years since 1924, in 1932 we should reach a consumption of 98,000,000 units.
Mr. Bourke (Limerick):
Has the Minister made any provision for redundant workers and employees?
That will arise later. I want to take another calculation—the calculation which the Electricity Supply Board has made as a result of investigations in the country and what they think is the likely result—at any rate, the result that they hope for, and their hopes are based upon a pretty firm foundation, in 1932. They divide the experts' figure of 110,000,000 units into three different sections. They take the 20,000,000 units for heating that I spoke of before, but they divide the other 90,000,000 units into lighting and household purposes, 43½ million units, and power, including tramways, 46½ million units. The actual consumption for 1928 for lighting and household purposes was 25¾ million units, and the Board calculate that on a very conservative estimate in 1932 we would have reached the 43½ million units which the experts thought likely. They point out that that would represent an increase of fourteen or fifteen per cent. per annum over the years intervening, and the actual consumption taken over a period of years back shows that that has been the increase for household and lighting purposes. Taking into consideration the fact that the Shannon will be able to deliver current in bulk at less than one penny per unit through the transformer stations everywhere, and the fact that they are pushing into new districts and opening up new areas, they say that it is a conservative calculation that the experts' 43½ million units will undoubtedly be reached in 1932.
When the experts were estimating the power units at 46½ millions——
I am going on to power immediately. Light and household purposes, 43½ million units. In 1928 the consumption was 25¾ million, and the Electricity Supply Board's calculation is that it is a very conservative estimate to hold that we will have reached the experts' figure of 43½ millions in 1932. The experts' division then allocated 46½ millions to power. In 1928 there was being sold 41 million units for power in the country.
Was that segregated as between the trams and industrial purposes?
No, but I can get it.
A very large element of group power in the consumption, which includes consumption by trams, is not expansible—that is the point.
The only detail they give is that in 1928 power showed a consumption of 41,000,000 units. The three larger cities— Greater Dublin, Cork and Limerick —accounted for 39 million units and the rest of the Saorstát for two million units.
Can the Minister give us a rough estimate of the amount used by the Tramways?
I have not got anything as to the amount of the tram consumption at the moment. Deputy Murphy might supply that. I shall get it supplied later if necessary.
Can the Minister get the consumption by the trams, because the whole figure of consumption of power is vitiated in ordinary calculation unless we have the tram power consumption.
I am not quite sure that anything is vitiated, because we have people banking their reputations to a certain extent on the statements they give to me with regard to prospects. They are the people who have made the investigation and have had agents through the country for one-and-a-half years and they say, as a result of careful calculations, that they are satisfied there is an immediate market in the Saorstát, taking in the three large cities, for 30,000,000 more power units, and in the rest of the country that that two millions should be increased to seventeen million by 1932. In other words, instead of the expert figures of 46½ millions being reached for heating by 1932 they hope to have a consumption of 81 million units. Let me present the picture fully and then I shall answer any questions. They hold that the 20,000,000 units set down under the heading of heating will be reached in 1932 mainly through the use of electricity in steam-raising and industrial furnaces. And they calculate that in 1932 one can look forward to the consumption not of 110,000,000 units but to the consumption of 144,000,000 units. Making all the deductions necessary from that figure and remembering that what has to be reached is a sale of 90,000,000 units at ordinary prices for household convenience purposes and 20,000,000 units at a very low rate for heating, in the end we find there is a fairly secure calculation that by 1932 we will be selling so many units at .9d. that the Shannon scheme will be paying its way. That is the point to which the Deputies will have to address themselves now. The scheme is there and the cost of the supply in bulk can be shown. We are not dealing with the other side, the distribution side, at all. There is the calculation, and we get back to the experts' figures that I quoted in the old debates, and I prefer in a conservative way to found more upon this calculation of the returns showing the number of units sold under the various heads I have described, showing the total last year of nearly 67,000,000 units and this year an estimated total of 73,000,000, and showing an increase by 1932 up to 98,000,000 units. That is the picture that I want to present of the Shannon scheme at the moment. Costs have gone up and are reflected in the change from .84d. to .9d. The previous estimate made in 1925 as to what would be the power market for electricity automatically arising in the Free State, in 1929, has been more than borne out if we take the 73½ million units reached this year.
The whole thing to me is very encouraging. There was a big element of risk about the whole scheme when starting. It had to be dealt with in a most careful way. A very big firm of contractors came in and presented this project in particular circumstances. They had their scheme tried and judgment passed upon it by four experts of international repute, and they said there was a big prospect of the Shannon paying its way by 1932. They made certain calculations as to price and final costs, and they allowed a margin for error, and they made a calculation as to units of consumption, and we see the difference as far as cost is concerned —the .84d. increased now to the .9d., and the other calculations in regard to units to be sold.
Do I understand this, that his estimate for 1932 is based on a consumption of 140,000,000 units?
What estimate?
The Minister said it was estimated that there would be 144,000,000 units used in 1932.
That was what the Electricity Supply Board on certain particulars calculated. I am not founding upon that.
The Minister is not founding the statement that it will pay in 1932 upon that?
If we get a demand for 144,000,000 units we would not have them to sell in 1932. from the Shannon, but the scheme will pay its way on whatever we have to sell. Remember we have a few power stations which we will have taken over to supply deficiencies.
Would the Minister tell us what was the figure that we compared in 1925 with this figure, .84, say, for Dublin? I think the figure was .125 of a penny.
Does the Deputy mean the actual charge in Dublin?
At present from the principal source of supply in Dublin we compared .84 with, I think, the figure .125.
The Deputy wants to know what is the figure— the actual charges in Dublin.
Yes, at that time.
I have not got that figure, but I shall get it later. If I understand Deputy O'Hanlon properly, I should say to him there is a calculation made that we will be selling more than the Shannon is guaranteed to supply in 1932.
The Minister's statement that at .9d. it would be a paying proposition in 1932 was not based on a consumption of 144,000,000 units?
No, on a basis of 110,000,000 units sold to consumers. Remember not even 110,000,000 units sold at .9d. but 20,000,000 units sold at something less than .9d. and the rest at .9d. That is the calculation that people have before them. I would like to give another opportunity of having this further discussed, simply in retrospect when the scheme will have been definitely completed. We are at the point where, as far as the canal works are concerned, we are at the end, or almost at the end, of the construction works. There are certain things that will lag on for a bit, certain works which will not delay the filling of the canal and the delivery of power. Other work is proceeding, such as the erection of transmission lines through the country. That is a part I am not dealing with at the moment because the figures do not arise for consideration and it is more connected with the work of the Electricity Supply Board.
From the point of view of expenditure the whole thing has gone much better than I think most of the prophets hoped that it would go. We have been within the limit, as can be seen, of the margin allowed for and spoken of in the experts' report. The conditions that have been met do not make such a variation in the whole scheme as to necessitate such an extra charge for units of electricity as would make one doubt whether there will be a demand for electricity at that price. The one thing that is still variable is this question of likely consumption. There we are more or less in the region of calculation; I am afraid some people might be inclined to call it guess-work. At the same time I think that the calculation that has been made is a fairly accurate one. It is founded on the results of past years and we are simply carrying that forward. The only argument that could be put forward would possibly be the argument as to whether the saturation point is reached. If and Deputy is inclined to query that and to argue that we would be still short of sales, I would like him to remember that we still have in the background an invention, not Professor Drumm's invention, but Deputy Moore's invention. That invention is that by reducing the price of electrically-propelled vehicles in this country we can, on the calculation of Deputy MacEntee immediately get a market for 14,000,000 units.
I want to get a a little clearer about a possible fluctuation of the £150,000 for administrative purposes. Let me put the matter this way: There is an increase of from £400,000 to £550,000 now being asked for in this Bill and an increase of from .84 to .9 occurs on the basis of £150,000 going to administrative costs. Supposing that figure were to be so increased as to be doubled, would it be fair to say that the increase would be one-third of the .06 increase incurred?
If the £150,000 increased to £300,000, it might go to .91.
Quite so.
There I am more or less in the region of certainty. I know my charges for administration and the moneys I have had to expend to date. I can see the end of the Shannon office in sight. The engineers will be discharged progressively from this onwards. There is not much chance of the £150,000 going up.
That is satisfactory.
Has the Minister taken into account, in calculating the potential demand for power, a possible change over from the present system of rail trams to trackless electrical trams, and has he considered whether that would make any substantial difference? No doubt the Minister is aware that such changes are taking place very rapidly in most cities in other countries.
I would like to mention one matter to the Minister. I wish to ask him if he has figures relating to, or, if he has not the figures, would he ascertain for us, what proportion of tramway power is included in the total of 39,500,000 units? If the Minister has the figures, I would be glad if he would give them to the House.
I will have to look into the matter.
It would be important to have them, because a good deal of the arguments will turn on the expansibility of certain demands. The proportion of that 39,500,000 units, in so far as it is represented by tramway power, may have a hard core which is not, as far as we know, expansible. We want to know the size of the hard core in relation to the total in order to be able to treat it as an elastic figure. If the Minister has not the figures, will he ascertain them, and, if he will not give them to the House, will he tell us why he will not give them? He may have a perfectly good reason.
That question could be addressed to me when I have refused to give information. The Deputy had better ask it then.
The Minister mentions that in order to make the scheme pay they will have to supply electricity at some points at .9. Is that exclusive of distribution charges? Is it at the Shannon?
It is a bulk charge.
At the Shannon?
No; at the 10 kilo-volt transformer station.
What has to be added to that to cover the distribution charges and to make the whole scheme pay?
The scheme has nothing to do with distribution.
I would like to ask the Minister whether, in calculating the increase in the use of electricity, private electricity plants have been taken into account?
No. If a person has a plant of his own he is not included.
Can the Minister say whether there has been any notable increase in private plants within recent years?
I cannot say that, because before the 1927 Act was passed there was no way of getting returns from such people except what they liked to supply us with. One could not obtain returns compulsorily, although there is certain power given to the Electricity Supply Board under which they can see whether a plant is really a private plant and is not selling electricity or supplying electricity for sale purposes. I do not think they have gone to the trouble of getting particulars about private plants. At any rate, they should be left out of consideration, because they are not people who could be compelled to take Shannon power; they are free agents.
If there was a great increase in private plants it is quite possible that that would interfere very much with the Shannon scheme.
A man usually sets up a plant for himself in a district where there is no public supply, where there is no company supplying that would be prepared to meet his demands.
Will the Minister state when the power will be available in Cork City and County? There are a number of traders rather interested.
I cannot answer that.
That is a different question. It is really a matter for the Electricity Supply Board.
Will the Minister facilitate us with the figures that Deputy Flinn has asked for and which I have referred to in connection with the units of electricity consumed by the Tramway Company? We want it for the purpose of the next day's debate, and not for this particular discussion.
Perhaps the Deputy would give me 15 minutes' indulgence. If people would stop asking questions the information would be more readily at their disposal.
This is a Bill the purpose of which is to give the Minister power to pledge the credit of the State to get funds for the purpose of additional expenditure on the Shannon scheme. I think that a very large portion of the Minister's remarks was directed towards obscuring that fact. If one who is not an expert in electricity or one who is not an expert in finance can approach the consideration of this Bill without fear it is very largely due to the fact that those whom we always looked upon as infallible in the past have erred in its interpretation. I notice that the most infallible person in the country, the writer of the leading article in the "Irish Independent," has been absolutely at sea in his interpretation of the Bill and if a person of that kind can go wrong I will not worry very much if I go wrong also.
This is a Bill to enable increased expenditure on the Shannon scheme to be undertaken. I say that whatever we may think of the circumstances that led up to the introduction of this Bill, this Dáil has practically no choice but to authorise the increased expenditure. As I said already, I am approaching the consideration of the whole question from the point of view of the man in the street and not from the point of view of the expert either in electricity or in finance. When the question of the Shannon scheme was originally before the Dáil I was not in the Dáil and I looked upon the debates that took place here in relation to it as an outsider. I still have to consider the matter largely as an outsider would and it is as an outsider that I intend to speak in reference to it, because certain remarks made by the Minister are at variance with the general public conception of what was undertaken when the Shannon scheme and the various commitments that were made at that time were embarked upon. The best course probably to take would be to follow the line that the Minister himself has taken. Under the old arrangement, a sum of £5,200,000 was mentioned and it was to represent the total all-in costs of the Shannon scheme. The Minister has endeavoured to confuse that particular fact here this evening. He mentioned it as an estimate that could be secured for the Siemens-Schuckert project. But there was no ambiguity whatever about the various statements made by the Minister and other members of the Executive Council when the Shannon Electricity Act of 1925 was under discussion here. It was definitely stated that £5,200,000 would represent the maximum cost of the scheme and that under no circumstances was it likely that that figure would be exceeded. It is true of course, as some Deputies pointed out at that time, that it did not matter very much what figure was in the Bill.
The Deputy has quotations, I presume, as to that.
I have any amount of quotations if necessary. On the 3rd April, 1925, the Minister for Industry and Commerce said: "The prices are absolutely fixed and binding. They are maximum prices from Siemens-Schuckert's point of view. They are not the minimum from our point of view. We have checks and controls by which if we find a reputable firm in any other part of the world that would do any part of this work at less than Messrs. Siemens-Schuckert, then we can beat them down to that or give the contracts on those parts to other firms." Before that he had said: "The only scheme that is under consideration at the moment is the scheme entailing a cost of £5,200,000. Nobody can question that is the amount which we are considering, because for that we have binding estimates, if we care to accept tenders here and now."
I am not approaching this question from the point of view of the expert at all. I am approaching it from the point of view of the citizen. I was a citizen at the time when the scheme was introduced. I read in the papers the report that appeared there and the debates that took place here and I, like the vast majority of the citizens who took an interest in the matter, was left definitely with the impression that the total all-in cost of the scheme was not to exceed and could not exceed £5,200,000. As I said, the actual figure that appeared in the Bill was a matter of small moment because once the Dáil decided on embarking on that scheme they gave the Minister a blank cheque. Some Deputy at the time pointed out that fact because as he stated if, when the scheme was three-fourths completed we found that the total amount mentioned had been exceeded, it would not be possible to leave it there in the air. The balance would have to be provided and the scheme completed.
We have paid I think £4,600,000 which was mentioned originally as the total cost of the construction. At least that is the figure that appeared in the press a few days ago in relation to the Finance Account of the State up to the 30th June. I think it was something like that figure. I did not think also that there was any question of addenda to the scheme when it was originally brought before this House. The Minister very generously informs us that we might, if we liked, consider the £100,000 which has been set down additional to the scheme as extra expenditure or as part of the original project. There is no doubt that this item is for exceptional or for extra expenditure in so far as various items covered by it were not mentioned in connection with the original scheme on which this House decided. These items may have been present in the mind of the Minister. I do not know, but they were not conveyed to the Deputies or to the general public who have had an interest in this scheme.
The additional cost involved in purchasing outright the sites for the poles instead of paying an annual rental charge is probably an economy and there is very little to be said in that connection. The total net increase of moneys, the Minister informed us, was £100,000 for addenda, and his £100,000 represents the capital value of the rentals for the pole sites. Then there is £450,000, of which £150,000 is for administrative expenses. Now, I want to be quite clear as to what is the meaning of this item "administrative expenses." What are administrative expenses? Is that £150,000 intended to be a payment in respect of the services rendered by the officials of the Minister's Department for which provision was made in the various estimates of that Department submitted to this House from year to year? If not, what does it represent? To whom has this money been paid? I understand that portion of it has been paid already. If so, I want to know to whom? The Minister states it represents the expenses of his Department. I think he could give us some more information in the matter, because it seems an extraordinary method of getting funds for that purpose and paying the administration costs of a Government Department.
Who said it was a Government Department?
The Minister informed me that it was the expense incurred by his Department.
So it is, but it is not a Government Department. The engineers on the works are obviously not civil servants.
Then there is a sum of £53,000 provided for contingencies. I think that we should get more information on that item also, because that is an exceptional figure in view of the fact that the scheme is now nearly completed, and the possibility of contingencies arising must be very largely foreseeable. Does the Minister anticipate that that sum will be required, and if so, upon what basis was it calculated? I want to know on what basis was the actual figure of £53,000 arrived at? Taking away from the total additional cost of the scheme, the items for administrative expenses and for contingencies, we find that the actual additional cost for the civil side is £234,000, and the cost of the electrical and mechanical works is £134,000. The fact that that additional cost has to be incurred, as the Minister indicated, involves a rise in the price of the current to be sold if the scheme is to meet out of revenue the charges for interest and sinking fund upon the moneys invested in it. When the Minister had completed dealing with the actual figures relating to the additional cost he proceeded to boost the scheme in the style that he alone can do. He is, of course, excellent as a booster. He made one short statement here in the Dáil a few days ago, and he boosted the selling value of the Great Southern Railways shares up by £5,000,000. As a booster he takes first place in the country.
The golden voiced Minister.
He has been very largely boosting here to-day, and I think that Deputies should examine the various figures which he mentioned very closely. It would not be possible to work out any calculations on them at the present time, but it seems to me that estimating that there will be a demand in 1932 for 144,000,000 units of electricity, is stretching the string too tight for credulity. I mean that we have only succeeded in finding sale for 73,000,000 units in this year, and even taking into account the effects of the propaganda campaign now in progress, and the fact that electricity from the Shannon scheme perhaps will be available, I do not think that we can look forward with any degree of confidence, no matter what the Minister might say to the contrary, that we will be able to consume all the electricity produced in this country during the next three or four years. However, the Minister says that it is not necessary that we should have a market for the 144,000,000 units in that year. He said that the 144,000,000 units would be more than the Shannon scheme would supply. I want to know does he wish us to take it that the total capacity of the scheme to produce electricity will not reach 144,000,000 units and will be something less than that in a normal year. The rate of consumption of electricity in the Free State is likely to increase as a result of the activities of the Shannon Board, but I think that we should reckon, or take into our calculations, the fact that it will put us to the pin of our collar, to use a common expression, to secure that by the 31st December, 1932, we will be selling the 110,000,000 units which it will be necessary to sell to ensure that there will be no necessity to increase the charge for the current or to put an extra burden on the taxpayers, to make up the deficiencies in the Shannon Board revenue.
I think that while optimism on the part of the Minister is undoubtedly desirable, undue optimism is likely to be dangerous. We have had experience of undue optimism from the same Minister in the past, and have had experience of seeing that optimism fade and being dispelled in such matters as the Trade Loans Facilities Act and other legislation. As I said, he is an excellent booster. Whenever he comes with a proposition to the House he can undoubtedly boost it in a very excellent manner, but we have to try to forget the fact that he is a booster and to get down to the hard facts of the situation. The hard facts of the situation do not justify an unbounded degree of confidence in the success of the Shannon scheme such as he has expressed this evening. I believe myself that the Shannon scheme will be a success, but it will be only made a success as the result of intensive effort. We certainly wish that it should be a success, and anything that can be done by the section of the community which we represent to ensure its success will be gladly performed, because results of the success of a scheme of this kind would be inestimable. In any case we cannot afford to risk failure at the present time. I hope the Minister will deal with the various points I have put to him when concluding and give us the various items in relation to the Bill which the Dáil is now asked to pass.
Frankly, I was hoping to receive from the Minister a statement covering much more ground than he has covered in relation to the various matters contained in the Bill before us, particularly as there are so many interests affected not only by the establishment of the Shannon scheme proper, but also by the establishment of the Electricity Supply Board and its operations.
I would like to be clear as to whether on this Bill any matters in relation to the administration of the Electricity Supply Board are relevant.
I do not think they are. A question was asked by Deputy Bourke which was not relevant. The Minister is not responsible in any way for the administration of the Shannon Electricity Board. Anyhow, if he were, it does not arise under this particular Bill.
Of course, so far, I have only made a general statement. I have made no detailed reference to the Shannon Electricity Board. Possibly the Minister anticipates that I may do so, and wants to rule me out immediately. There are various sections of the Electricity Supply Act to which I want to refer in this matter. If a Bill is before the Dáil to amend certain sections of the Act, are we not entitled to refer to other sections of the Act, as the section of the Act to be amended may have an indirect relation to another section of the Act?
I am not clear as to what the Deputy means by that. The Deputy at this stage is confined to the amendment of the Electricity Supply Act of 1927, which is contained in the Bill, and anything which is relevant to that amendment is relevant to the debate. That is what I understand he wants to know.
Would you, A Chinn Comhairle, rule that sections which are being amended in the Act are not administrative sections relating to the Shannon Board?
I will have to hear what the Deputy says before I could give him a general ruling. The whole Act of 1927 does not arise here. There is only a particular amendment of the Act to be considered at this particular stage. I cannot know whether what the Deputy wants to say about the Act of 1927 is relevant until I hear it.
The position I find myself in is that I want to make certain references to certain sections of the Act. I think that the section of the Act which it is sought to amend is an administrative section.
The Deputy must not deal with the administration of the Electricity Supply Board. It is not affected by the Bill at all. In any event there is nobody responsible here for the administration of the Electricity Supply Board. The Act under which the Board is set up gives it a particular power, and the Oireachtas has come to a particular decision on that point.
I am prepared to speak on the matter subject to your ruling. It is a matter which I consider is of the greatest importance to the whole community. The Electricity Supply Act of 1925 was introduced for a specific purpose. That was to supply electricity generally and to bring about, if possible, a very big increase in the use of electricity by the community at large. It was never contemplated, as far as I know, that while the State was going to monopolise the generation of electricity, it was going to monopolise the whole life and soul, as it were, of the electricity business in the Free State. Subsequent to the introduction of the Act, it was clearly indicated and distinctly understood that the main purpose behind this particular undertaking was to supply in bulk at a cheap cost. There was no suggestion of interference with the communal life of the citizens or the individual life of private individuals.
This Bill has no relation to that whatever.
No, but operations arising out of this Bill have. This is an amending Bill.
I would like to hear the Deputy conclude on that point as I wish to see what he is aiming at.
I have asked question after question with the object of getting certain information as to the operations arising out of the particular Act and the functions of the Board. I contend that we are custodians of the Board at present.
That is, the operations of the Electricity Supply Board?
The Electricity Board and the Shannon undertaking.
They are two completely different things.
They are both embodied in the same Bill.
If the Deputy wants information it must be either about the Shannon scheme in regard to the generation of electricity or about the Electricity Supply Board.
I do not want information at present, but I want to make a reference to a particular item.
About which scheme—generation or distribution?
It is neither generation nor distribution. It is installation.
That is clearly outside everything in this Bill.
It is governed by a section of the Act.
The Deputy must not refer to the operations of the Electricity Supply Board on this Bill. The fact that the Act has been passed, and that there are certain repercussions is there. There is no remedy for it.
In other words, has the State no relation whatever to what is going on in the administration of the Act? What I wish to make out is that the State has got certain funds at its disposal. It is using these funds for certain purposes. The responsibility for the payment of the funds is on the shoulders of the citizens of the country, and where the citizens are being adversely affected I contend that there is some relation between the spending of that money by the Minister or this body and our responsibility to the citizens.
What is the Deputy getting after?
If the Minister will bear with me——
The Ceann Comhairle does not want to prevent the Deputy from raising any particular matter which may be in order. I might have the most complete sympathy myself with Deputy Briscoe in the matter which he wishes to raise, but my personal sympathies are altogether beside the point in question. The Deputy must not initiate a debate on a matter which is outside the scope of the Bill. It is not a question of sympathy at all but of facts. I could not allow, on this Bill, any question to be raised on the administration of the Electricity Supply Board, and there is no use in trying to debate it. It is quite clear that the cost of the Shannon scheme, however, would arise.
The Minister made the point that the cost of the electricity generated was estimated at a particular figure on the k.v. lines. The Minister now states that it will be higher if he has to charge to the scheme certain moneys expended by the Board.
I had not taken them into consideration.
The Minister has referred to it. In that way he has given me a loophole to connect the Board with the Shannon scheme proper. He has made a certain calculation that the price will be so and so. I submit he has established a relationship between the scheme proper and the operations of the Electricity Supply Board at the present time.
The Minister could not do it.
He has done it.
Nothing the Minister says could affect the ruling of the Chair. There is no use in saying that the Minister said something, and that his statement must be followed up by a statement from somebody else. It simply is not so. It could not be done.
Very well. I will come on to some other point. I am sorry we have not here the figure— possibly Deputy Flinn will deal with it later—in regard to the current consumption of the tramways companies. Fifteen minutes have elapsed since we were promised it.
Does the Deputy realise that the procuring of that information is outside my Department and that it is one of the things handed over to the Electricity Supply Board? I will give it the moment I get it. Why this cavilling about giving information when I said repeatedly that I have not got it?
The Minister made certain points in connection with the cost of the Shannon scheme, the increase and so forth. I wonder if in calculating the final cost of the scheme he has taken into consideration the viewpoint held by many people that confiscated undertakings have had, and have at the present time, some capital value. I wonder has he set that side by side with the other basis of calculation?
There is no money being asked for at this moment for the purpose of taking over any undertaking. It does not arise on this Bill.
No, because they have been confiscated. The Minister talked about extra money being added to the cost of the scheme for the purchase of sites of poles in lieu of an annual expenditure for the rental of the sites. We have no idea of what the cost is going to be. Why does he not suggest rather than increasing the cost of the scheme in capital outlay that the scheme is going to cost so much, and in addition to that we are going to spend a certain sum separately for the purchase of pole sites in lieu of rental, which would have brought about certain overhead charges? Could the Board not have made certain arrangements whereby the cost of the poles or the sites of the poles would be recouped to the State? I think that would be a better arrangement, particularly when the Minister does not give the exact figure to be paid for the sites.
How is it better?
It was agreed in the original undertaking that the rental of the sites would be part and parcel of the general overhead expenses.
Yes.
If it was part of the overhead expenses it would have to be met out of revenue or profit. The point is that the capital cost is being increased by estimating an amount equivalent to the capitalised value of the rental. I contend if you are going to add that figure to the capital cost you should know and you should say that the figure is so much. If you do not know the figure or if you choose, for any purpose which may be correct, not to make it public, you should let it be judged on its own merits. I think it would be just as well to leave it outside.
Why would it be better if you do not know?
I do not say that the figure is any worse or any better, but for the purpose of trying to arrive by some mathematical calculation at the cost of what is a business transaction, a hypothetical case is not something on which you can transact business. That is why I say that it would be better if it were treated on a separate basis altogether.
Now the Minister also discovers at this stage that it would not be right—we certainly agree to that—to charge the cost of the improvement in connection with navigation to the Shannon scheme proper or to the Electricity Supply Board. I perfectly agree with that. When the Minister sets aside this sum of money which is to be the cost of the work in connection with the Shannon Navigation proper, is he making any arrangement whereby the State will be recouped for that outlay? How is he going to deal with it? Is he going to bring in an estimate to the Dáil for the cost the Minister outlined of the work which is being done in the Shannon but which is purely a navigation matter and not chargeable to the establishment of this scheme of the Board afterwards? What I want to say is, I think the Minister should have stated to us how he is going to deal with that particular figure. When the State is going to make an improvement in the shape of the reconstruction of some destroyed areas they bring into this House an Estimate for that purpose. They tell us what is the estimated cost. How is the State going to recoup, if they are going to recoup at all, the certain sum voted for the Shannon scheme? That money was found insufficient. It is quite possible that it was not reasonable to expect it would be sufficient, but in the readjustment the Minister finds a certain figure for a particular class of work which he decides should not be chargeable to the Shannon scheme or harnessed to the power there. He says this should be a different matter. I say this figure should not appear in the Shannon scheme, and that the Minister should introduce an estimate for the portion of the money which was spent on the Shannon scheme itself. If that is not the case, will he say how he is going to deal with it? Is it going to be given as a present or is the Minister going to take from the Board of Works certain functions which are prescribed by the Act? Is he going to debit that money of what is now Board of Works property and will subsequently become Shannon Board property? The Minister may have a simple explanation which will clear the matter up.
The Minister gave us a lot of figures with regard to the consumption of electricity in this country for various periods. We are not disputing these figures but it is very interesting to know whether the figure we have before us is the figure which may vary at a certain point. It is not the cost of current to the consumer so that we have no idea of the attraction there is going to be for the continued development of the use of electricity. We know that certain figures have been published for certain areas by way of charges on routes and also by certain supply sources being left as they are but can the Minister state where the relation is between the price charged at present or the price to be charged and the cost of generation? What I want to be satisfied on is this. Roughly we had at the time the Shannon scheme was entered into a total consumption of something like 60 million units in electricity. It is admitted that between Dublin and Cork and the surrounding districts of Dublin at least three-quarters of that amount was produced and consumed. In that connection a certain portion is current used by undertakings such as the Tramway Company. What I wish to be made more clear on is the ultimate position that the Shannon scheme is going to occupy, what is hoped to be accomplished in the shape of current consumed by the public for domestic use and consumed by the industries in this country rather than by the Tramway Company. I contend it would not be worth while making this expenditure of roughly £6,000,000 to get current for a small portion of people already a consuming population, the only difference being that instead of existing generating stations which will be taken over, in their place the Shannon power is used.
If the Minister's argument is going to be based on the saving to the State of the coal consumption let us have some figures. The Minister should be able to give us some figures on that by now. He is strangely lacking in information. As I said at the outset I was rather surprised that the statement he made was confined to the explaining of the Bill. We should be given some information which would give us a better idea as to the prospects and as to the general situation which arose. On March 6th, 1929, I addressed to the Minister a question and asked him if he could state the total amount paid to date to the contractors on the Shannon Power Development Scheme and further if he would state the amount which would accrue for payment on the completion of the work. The answer I got was "The total amount paid to the contractors up to February 1st, 1929, was: Civil constructional works, £2,140,557 11s. 0d.; electrical and mechanical works, £1,428,904 18s. 11d.; total £3,569,462 9s. 11d. The amount which will accrue for payment on the completion of the works can at present only be estimated. The sums will be approximately: Civil constructional works, £2,897,000; electrical and mechanical works, £1,906,000; total, £4,803,000."
That was last March. Since last March we find that that estimate has been increased to a further figure of roughly £73,000, which suggests that all the figures the Minister has given us to-day are to be taken as nearly final.
I said so.
You said that on this we can start calculating the position as it is.
I said "Not regard it as absolutely final, but very nearly that."
Would the Minister say how far out they would be? In March last year the Minister was out £73,000 on the excess.
I do not think so.
I got a figure, in answer to a question that I addressed to the Minister in connection with the damage which had been caused by the sinking of a bank on the Shannon scheme. Now we are £73,000 beyond that. If the figure is not final to-day, I want to know what is the next figure going to be.
There is one other point I would like to develop. I addressed a question to the Minister in connection with the damage caused by the sinking of the bank in the Shannon scheme, and the answer I got to that was: "The estimated cost of the additional work necessitated by the subsidence of part of an embankment at Parteen village will not exceed £6,000. The subsidence is about 150 metres in length. Should any question arise as to the liability for the cost of this additional work, it will be determined in accordance with the relevant provisions of the contract. I do not, therefore, consider it desirable that I should express an opinion here on the matter." What I want to try to get from the Minister is: Is this contract between the State and the contractor a contract to do a certain job at a certain price, with certain allowances for contingencies, or is it a time and material job? I have my own view and I would like a statement here with regard to the cost involved in the sinking of this embankment. We know that it was the contractors themselves who drew up the specifications and offered them to the State, subject to expert opinion on them. It was not the State that drew up the specifications and tendered them to the contractors to quote on. I contend that where contractors themselves draw up specifications to do a certain job, and where, subsequently, something is found wrong, the responsibility should be on the shoulders of the contractors. They should be liable for the repairs. If it is a time and material job it would be different. The Minister might clear up that point by telling us whether it was a time and material job or a contract.
I cannot understand why there should be so much secrecy about this thing. Time and again, the Minister was asked for closer details with regard to the relation between the contractor and the State. Various excuses were given at various times. The excuse was given early that the contract could not be exposed; that it would make it difficult for the contractors when purchasing raw materials if the suppliers knew they had to get them for this particular job. The time for that is now past. The contractors have supplied themselves with all the requirements for the contract. I would like to know if the Minister is going to facilitate the House some time in the near future in going over all the points in connection with the contract. We hear all kinds of rumours abroad some of which are not well-founded, and others of which should be taken account of. If the Minister would say, even now, whether that particular contract is a time and material one or whether it was a contract at a certain price, with certain allowances for contingencies and alterations, we would understand where we are. As far as I am personally concerned, I see no reason why the Minister should hesitate in putting the liability of the sinking of the bank on the shoulders of the contractors that supplied the specifications. If an architect proposed to build a house and prepared his specification he is responsible if the house sinks. If I employ an architect to prepare specifications and hand these specifications to a contractor, I am responsible if anything goes wrong.
The point I wanted particularly to stress has been ruled out by the Ceann Comhairle. I am not going to attempt, in his absence, to get it in in another way, but I would like to ask the Minister is he prepared to try to negotiate some understanding between the Board and people who are adversely affected by the operations of the Board. If he is prepared to meet them and see if he can solve some of the difficulties they are up against I will be satisfied. If he is not prepared to do that, will he suggest some way? I do not believe that the Minister realises some of the things that have happened. A number of these people are hard hit and if their difficulties could be solved in some way there would be a little better harmony as regards this scheme. As the success of the scheme will depend on the co-operation of all sections affected, I would ask the Minister if he is prepared to meet these people without any other people intervening and see what their complaints are.
There are certain figures that I said I was prepared to give. The figures are: Dublin Tramways, 18,500,000 units, and the Cork Tramways, 1,250,000 units. These are the 1928 figures.
Could the Minister give us the figures for previous years?
In the three years previously it was about 16,000,000. There was about a 2 per cent. increase. That is a calculation of my own.
You cannot tie anybody down to two figures.
I find myself placed in the same difficulty as Deputy Briscoe. I wanted to raise certain matters here which it must be admitted apply to the administration policy of the Electricity Supply Board, with particular reference to the electrical workers on the Shannon scheme. I understand that that is outside the scope of this Bill and is not permissible in debate. I will content myself by reminding the Minister that this Electricity Supply Board is his own child. It was brought forth through the instrumentality of the Shannon scheme. Like Deputy Briscoe, I do not think it is fair that the people who have to pay for this should be refused, through their elected representatives, an opportunity of having a say in its administrative policy. I have evidence here to the effect that the Electricity Supply Board has set out on a deliberate campaign——
I understood the Deputy to say at the opening of his speech that he understood what he is now saying is out of order.
I want to ask the Minister will he not interfere in an effort to remedy what may create a serious crisis later on if it is not handled in a proper way.
It is quite out of order.
The Minister cannot do it on this Bill.
The electrical workers were in communication with the Minister's Department——
I have told the Deputy that he is not in order.
These men say——
The Deputy has been told that he is not in order.
We are asked to vote money on this Bill——
The point is that unfortunately the Deputy is not dealing with that matter. The Deputy will have to find some other means of dealing with the matter he wants to raise.
That is what I wanted to know, if the Minister would take steps to look into this matter.
I am deaf to any appeals that are out of order.
If evidence is submitted to the Minister that money is being expended unwisely in the employment of incompetent men on this scheme——
The Deputy is out of order.
I am rather sorry that the whole discussion should be left to this side of the House. I understood there was active opposition to everything Shannon on a previous occasion. It evidently is not operative now, to that extent at any rate. I think if the Minister had been simply frank and said "we have under-estimated the cost of this scheme within a margin which is reasonable," and came and asked the House on those terms he would have met the matter very much better. I once heard the Minister speaking on the subject of the Shannon scheme in a place which certainly affects his method of speaking. That is the City of Cork. He told us that the Dáil, having once committed itself to the 1925 Act in relation to this scheme, had taken up these certain responsibilities and that it would have to implement those responsibilities whatever might be the consequences. Frankly, I see no particular difficulty in admitting that particular aspect. You cannot do things and then turn your back upon the consequences of those things. When the first sod of the Shannon was cut certain continuing responsibilities were taken. If this is one of the continuing responsibilities which cannot be avoided in fact, then it cannot be avoided in an Act either. If they have found in making their calculations that certain unforeseen things have turned up, or that certain miscalculations have been made, and that more money is required to make what money has already been spent operative, whether it is £500,000 or £700,000, that money, in my opinion, has now to be granted.
The actual visible cost of the scheme has increased by between £500,000 and £600,000, and no amount of special pleading will get away from that. We may blame the method of estimation. We may blame the degree of disclosure or lack of disclosure of the terms of the contract, but we are faced by that fact, and no amount of complaining in future as to what has occurred will affect the fact that this money has now to be paid, if the money which was originally granted is to have any chance of being made operative. What is shown in this Bill is an increase in the visible cost. There is no attempt whatever to deal with the fact that the actual cost to the State of doing the thing which the 1925 Act set out to do is to-day very much greater than either the £5,200,000 or the £5,991,000, which it is now frankly admitted it is going to cost. In order to know what the actual cost is, the Minister would have to tell us, and he alone can tell us. I have made an attempt to ascertain from his Department, and through other Departments to which I have been sent by his Department, the figures which would enable that extra invisible cost to be ascertained, and have not received that information. We would have to know the total value of pre-existing electrical supplies in the country. We would have to know the total profits of pre-existing electrical supplies and the total rates paid by them to local authorities in relief of rates from ordinary ratepayers. We would have to know the total amount of income tax paid by these undertakings to the State. When we have those figures, in so far as the Shannon scheme is going to be made solvent by the non-payment of those things, we should have to add to the nominal cost, now exposed, of £5,991,000, the capitalised value of those pre-existing assets which have been sunk in the scheme. These are figures which I think ought to have been made evident. The Minister tells us that the cost at the last transformer is going to be .9d. On that basis of charge, the Electricity Board that is going to get that .9d. has to carry out the obligations under the Act of 1927, as amended by this Bill. It has to provide the interest and the sinking fund, no more and no less on the total amount of money issued to it. But it has to do it within the whole of the powers that are given to it. One of the powers given to it, which influences intimately this question of .9d., is whether they are going to sell at a profit or at a loss, the retail articles and accessories used in electrical supply. That .9d., assuming that that is the calculation, is made on the basis of the Electricity Board carrying out its responsibilities and using the whole of these powers, and I take it that is what the Minister has calculated upon. It is based upon that, adding into that the whole of the profits, or facing up to the whole of the loss, of an installation department run by that Electricity Board in conflict or in co-operation, or competition, if you like, with the existing suppliers. If in so doing they substitute themselves merely for the whole of the installation trade of the country, then that cost and that capital value, from the point simply of a total charge internal to the State, will have to be added to the invisible cost of this particular scheme. Take, for instance, a particular case. The City of Dublin contributed, roughly speaking, when selling a certain amount of current to its consumers at a certain price, £20,000 per year to the central revenue of the country in the form of income tax. Selling the same amount of current at the same price —and we have the direct authority of the Electricity Board for saying that they cannot sell it at a less price——
Is the question of the Electricity Supply Board's operations in order?
I think anything in connection with the operations of the Electricity Supply Board would not be in order.
made an observation which was not heard.
Do I understand you to rule that anything connected with the Electricity Supply Board is not in order?
I said anything in connection with the operations of the Board.
I was dealing with a matter which came within the scope of their operations and I was ruled out of order.
The Deputy misunderstood me. I said anything in connection with the operations of the Electricity Supply Board would not be in order.
Take that £20,000. That was a pre-existing State asset. Its capitalised value as a pre-existing State asset and to the extent to which the Shannon Board in performing precisely the same functions——
Is the question of the Shannon Board in order?
No. The Deputy has been told that.
Frankly, I misunderstood you in the first case to say that I was in order. That is why I said we would have to see the records.
Perhaps the Deputy would sit down for a moment. He has no necessity whatever to look up the records. I said quite distinctly, and I am sure the Deputy heard me quite distinctly and understood perfectly what I did say.
You are perfectly wrong, A Leas-Chinn Comhairle, in suggesting that I am making any statement to this House which is not absolutely true. The statement was confirmed by the Deputy behind me. I was amazed to get the statement from the Leas-Cheann Comhairle. I did not, as you notice, appear to expect it. We are dealing now with the question as to what is the actual cost of the scheme. The Minister went into it in great detail. I suggest to the House that the nominal cost of the scheme, as set out, of £5,991,000 is not the actual cost to the community, and that the work which was contemplated to be done for £5,200,000, and is now contemplated to be done for £5,991,000, is not being done for that amount, but for that amount plus the capitalised value of the whole of the existing income tax, the whole of the existing rates, the whole of the existing profits of all electrical supply undertakings existing in the country plus a proportion of the total value which, personally, I do not think is very high, of the retail distribution of electrical accessories and the installation of electricity in houses. I think these facts have to be met.
The Minister has given us figures —and it is the first time we have had them and I personally am very grateful for getting them—showing the increase in the demand for electricity. I have a graph here as far as I could do it roughly which is a hollow curve and it shows every sign of increasing to something more than a straight line. I may say I am absolutely prejudiced in favour of believing and hoping that the most optimistic estimate that has been made in this consumption will come true, I hope it will and that it will be altogether better. It is our business and the business of every one of us to do everything possible to make it altogether better than the Minister has estimated because I believe it will have to be altogether better to cover not merely the visible but the invisible cost now sunk in the Shannon scheme. But what the Minister does not take into account in this quantity gradient is the price gradient as well. The price gradient between the introduction of the Shannon Bill here and the present day has been from eightpence to fourpence in lighting current in Dublin. It has been reduced, I believe sixty per cent. in some of the suburbs. It has been reduced all over the world as far as I know by fifty, sixty and seventy per cent. during that particular period; because in the one case you are dealing with war rates of wages, with war rates of cost, with war rates for coal and transport. Now we are dealing with coal at a price when it is practically as cheap as pre-war and in which coal freights are cheaper than pre-war. Under that stimulation you have had this price grading.
I hope that that quantity gradient will increase, but I cannot see any prospect in the Shannon scheme of continuing that price grading. You cannot reduce the price of current in Dublin from four pence to nothing because you have reduced it from eight pence to four pence. And the Minister and those responsible for making this estimate will have to take into account the statement of the head of their own Electricity Board that the cost of electricity for lighting in the city of Dublin has been reduced lower than they could reduce it, lower even than they would have put up if they had the choice. The Minister will have to look into these figures with a certain amount of caution. Another very interesting figure the Minister has given, and which again is available for the first time is the figure which shows that out of 67 million units used in the Free State in 1928 no less than 41 millions were used for power. I do not think any one of us would have calculated that. It is a very curious figure, and it is founded on the fact that the two cities of the Free State are largely responsible for the consumption of electricity in the Free State. Of that 41 million units for power over half is hard shell— tramway current. In Cork the tramways are kept on for no other reason but that they are compelled to keep them on. There is a certain franchise in relation to the right to sell electricity in the city of Cork, which is dependent absolutely upon their continuing to run the tramway, even though they run it at a loss. The trams would be shut down to-morrow in Cork so far as I know—it is purely a commercial proposition—if there was not that obligation. There is another question which I do not want to touch on more than is necessary—how the Shannon scheme supply is going to solve the riddle of getting into Cork and putting its current economically into use and at the same time, keep that 1¼ millions of tramway current available is going to tax all their ingenuity.
We come to Dublin where you have 18½ million units. Does anyone think that that figure is going to expand along this gradient indicated here? Does anyone think that it is going to go up at that rate? Every prospect, I am afraid, is against that view. From every point of view I can see no reason whatever to believe that tramway current in Dublin is going to be an expanding factor. In addition to that, who says they are going to get the tramway current? Who says that the Shannon scheme at the present moment can generate current and put it on the tramway bus bars as cheaply as the Tramway Company can now put it upon their bus bars? That would be rather a nice problem. Dublin is apparently fitting in with the scheme of costs, has put down modern plant to carry it over an unexpected winter load. That is a very efficient plant.
What reason is there to believe at the present moment that the Shannon scheme can supply current any cheaper than the steam station can develop it? I hope they can, but I think the calculations which were made should certainly be calculations entirely independent of those who are anxious, and rightly anxious, so to believe. There you have in relation to your increase of quantity two vitiations; first, that the price gradient which creates the quantity gradient cannot continue to exist; and secondly, that in the power element of that calculation 50 per cent. is represented by a factor which is not, as far as I could see, subject to normal expansion.
All these calculations will have to be very carefully taken into account, and I believe subconsciously they have been taken into account in the changed atmosphere in relation to the Bill and in the changed atmosphere in relation to the finance of the Bill, which was represented by the 1927 Act as distinct from the 1925 Act, and which will be represented by the 1930 Act as distinct from the 1929 Act. The calculations which were given of over-estimation or under-estimation on the electrical and the mechanical and civil work represents £134,000 and £140,000 plus £58,000 respectively. I am rather surprised to find the figure of £134,000 on the electrical and mechanical side. I do think that that requires a considerable amount of explanation. This £95,000 here was, I gather from the Minister, due to the change imposed by the experts. I think that was so.
On the electrical side less than £1,000.
That really will make the position more difficult. Now £134,000 is a very big discrepancy on the electrical and mechanical side. If £95,000 of that had been imposed by the experts through the definite changes which they require it would have brought £40,000 of the discrepancy within a limit which might be more easily justified. I certainly think that that portion of the over-estimation will require a considerable amount of justification. There is £140,000 on the civil engineering side. Having regard to the size of the scheme and to the nature of the scheme, that figure, in my opinion, is lower than we could have expected. Personally, I never had any doubt whatever that when a firm of the standing of SiemensSchuckert took over this undertaking, that from an engineering point of view everything that could be foreseen would be reasonably dealt with and that a sound engineering job would come out of it in the end. I have no apology whatever to make for that. I believe that any sound engineering firm in the world, when up against a big job of this kind, would value their own reputation too highly to make mistakes within their professional competence. I have always felt quite confident that, so far as they could foresee things, that a sound scheme from the engineering point of view would be turned out in the end. If we had run up against a very much bigger difficulty than is represented by £140,000 of a change in the civil engineering side of the work, I think that we might not feel that we had very much reason to complain.
As to the actual accident which did occur up there, and I had an opportunity of seeing it, all I can do is to congratulate the House, the Minister and the country that it did happen. It was the best thing that could possibly have occurred. It occurred at the right time. It would have been a disaster if that latent defect had not revealed itself at the time. If we had flooded that place with water, having regard to the whole conformation behind and below it, and had the defect then developed, a very serious disaster would have occurred. If that is the worst that is to occur on the civil engineering side, we may congratulate ourselves, and Siemens-Schuckert may congratulate themselves on the soundness of that side of their work. I say that while I cannot see the justification for the under-estimation of £134,000 on the electrical and mechanical side, I am certainly not surprised to find £140,000 of an increase on the civil engineering side, when £95,000 of that was caused, apparently, by the structural alterations imposed by the experts' additional report.
We are faced by the fact that this scheme is going to cost more than was previously estimated. We ought to have been consciously in possession of the knowledge that it has cost a great deal more than the actual visible increase declared by the Minister. We are faced also by this fact, that that money has now got to be spent. It has got now to be met and this scheme has now got to be made a profitable one for this State. Whether it was wise or unwise is another matter. As one who for twenty or thirty years has been advocating the electrification of the Shannon I say that there can be two opinions as to whether this was the particular moment to start it. It might be questioned whether, considering capital charges in relation to materials which were used on the scheme, and considering the advance or non-advance of the country in the use of electricity, that that was the right time to do it. But the fact remains that it was done. I think the obligation is upon everyone, in so far as they can to the limit of their powers, to co-operate with this, and now they are responsible for seeing that for the benefit of the whole country the whole scheme, whatever it has cost us, shall be made profitable and prosperous.
I want to make a few remarks, principally because I would like, first of all, to state the impressions which I gathered from the Minister's speech in order that these impressions may be corrected if they are incorrect; and, secondly, because, with the exception of an occasional remark of the last speaker, it seemed to me the real significance of the Minister's statement was very little appreciated by previous speakers. The Bill asks for more money, but nobody ever expected that more money would not be required. The whole point turned upon how much more money was going to be required. It is quite true, as Deputy Lemass said, that a contract was entered into for a certain sum; but in the extract which Deputy Lemass read, it was pointed out that power was reserved in relation to extra work which might be necessary so that it could be carried out by the contractors at the closest price that could be obtained elsewhere, or else have it done at their lowest price by other contractors. No engineer ever expected that a contract of that magnitude could be carried through without extra charges becoming necessary. The whole point is what would be the amount of the extra charge.
I divided the Minister's statement into two parts. In the first he explained why the extra charge was required and the causes to which the extra charge might be attributed. In the second part he was occupied with comparing the forecast made four years ago and our or rather his present knowledge. Then he went on to forecast for 1932, being four years nearer 1932 than in 1925. Taking the first part, the reason for the extra cost, putting aside the capitalisation of what had been regarded as the annual cost of the working of the scheme, and putting aside what had not been allowed for at all, these administrative costs in connection with the scheme so far, it seems to me the upshot of what the Minister said was that the contractors present us now with a bill of either £300,000 to £350,000 or £200,000 to £250,000, according as you take account of the £100,000 for improvements immediately undertaken in consequence of the report of the experts.
That is the contractor's bill.
The contractor's bill of costs is either £200,000 or £300,000 in accordance with the way in which you regard the £100,000 consequent on the experts' report. I wonder would any engineer ever expect that work of that magnitude, involving a contractor's bill for £4,600,000, would be carried through with extras amounting to £200,000 or £300,000. It is something like 5 per cent. of the total. If it is the case that that is to be the actual bill for extras which we shall have to meet, and if it is not going to be added to at a later stage, I must say that I congratulate the Minister upon getting off with such a small bill for extras. It seems to me to be something upon which we may all congratulate ourselves very strongly indeed. I wish the Minister gave us some details as to how the bill for extras is made up. It may be that it was made up of a large number of things of small account, or it may be largely accounted for by some big things. I think the Minister might have given us fuller information on that point. I think it would also be likely to ease public anxiety, though it is not a very big thing, if he told us whether that amount of extras had been increased by extra charges arising from the giving way of the embankment that occurred a short time ago. He said that involved only a small expenditure—about £6,000 or £7,000.
In connection with another and a vital matter, so far as this State is concerned, arising out of the working of that scheme, I think the Minister is to be congratulated. I refer to the forecast that he gave four years ago as to the probable usage of electricity units that would be experienced in 1929 and the comparison between that forecast and the actual conditions that exist. I think I, and almost everybody, thought that he was too optimistic in saying that we might expect there would be 70,000,000 units in actual use by this, and that we would be offering for sale electrical units so soon as 1929. The figure he gives us is 73,000,000 units. I think this is a matter on which he is to be congratulated and it augurs well for the working of the scheme. Again, I want to go slowly, and I am not prepared to follow the Minister in his augury for 1932 as compared with our knowledge in 1929. It may turn out to be correct. We can only hope that it will be correct. I do not think that we have enough evidence yet to show us that we can hope so soon as 1932 that the total amount of electricity that will be available from the scheme will be in demand throughout the State.
That is not the important point. The important thing is what result has the knowledge that we have gained up to the present produced upon the figure at which the originators of the scheme hoped to be able to sell the current? The Minister has told us, in what he regards as final figures, that the effect has been to add .06 per unit to the cost that they held out as the estimated price at which they would be able to sell the current. He told us these are final figures. That is to say, that they have only got to increase their estimate, the estimate at which they hoped to be able to supply electricity, by .06 per unit as the result of the experience they have gained and payments that have been made. I think it is too early yet for us to be attempting to estimate what price that will mean in particular districts. I am not in a position at the moment to be able to say to what extent that compares with what other people hoped they would be able to sell electricity at at this time, but I think it is very satisfactory, so far as it goes, that after four years the promoters who are carrying out the scheme are able to show that experience has justified their estimate to the extent of .06 per unit.
There have been various points of detail raised on the Second Reading with which I would like to deal very briefly. Deputy Lemass spoke of administrative expenses. Administrative expenses in the sum of £150,000 includes moneys paid to date, or estimated as being likely to fall to be paid before the scheme is completed and before the temporary engineers who have been recruited for the work have been dismissed. It further includes payments made and shown every year in the Estimates for certain officials of mine who have been allocated to the Shannon Office. To that extent it means that, instead of asking the taxpayer to pay for the cost of civil servants who are doing other work, the consumers of electricity will eventually pay for it.
Does it appear as an appropriation-in-aid for the Minister's Department?
The way it is shown in the Estimates is that there are certain people with asterisks before their names, and it stated that they have been allocated to the Shannon Office and paid for the time being, although they have to be kept separately as civil servants with their pension rights, increments, and so forth maintained. Their pay for Shannon work is definitely allocated against consumers in the future.
How will that money eventually come back? It is money that has been charged up to the general estimate.
By repayment to the Shannon Fund it will eventually come back to the Exchequer.
It will come back as extra-Exchequer receipts, but extra-Exchequer receipts are used as income, and these are capital charges.
That is a point that can be raised in another way at another time. Officials of mine have been allocated to Shannon work and consumers in the future are going to pay the cost of their services. The matter of their payment will be raised and dealt with in another way. As regards the contingencies amount, I regard that as a reasonable provision, and is, if anything, on the safe side. I do not want to stress that belief of mine in any vehement way, as afterwards it might be found that the sum of £53,000, or whatever it is, is not sufficient. We are approaching the end of the scheme and we should be able to look forward with some degree of accuracy to the amounts to be put under the heading of "Sundries." There is still an amount of electrical equipment to be ordered. We found out, on the electrical side, that owing to the advance made in regard to switch gear apparatus and other things, it is put up to us to spend a little more money in order to have, at the end of the job, the best equipment to be found anywhere, and we are paying for it in the belief that we are going to save on the maintenance costs of the scheme.
Deputy Briscoe felt that it would have been better if I had done two things in another way. One was the matter of pole sites. He would have preferred that to have been done in another way, although obviously not knowing the two amounts that have to be set in comparison, the Deputy could make no calculation as to whether it would be better dealt with in this way or the other way. I can put it to him in this way. A certain sum of money is set up as the payment to be made year by year for the rents of poles, and if by spending an amount of money at the moment I could reduce the yearly payment by half, obviously that was a better way to do it. I can be judged now by the fact that I am doing it in this way. As regards the Shannon navigation scheme figures, I have to deal with certain moneys which have to be paid to the contractors. I cannot at the moment divide the money, bring it in and show how the money which we are setting aside for navigation is going to be met. That will be done afterwards. All I am saying is that no interest is going to be paid by the Electricity Supply Board on money definitely due to navigation.
Certain moneys are being expended on the improvement of navigation which is presumably going to be handed over to the Electricity Supply Board.
That is not decided.
That is the implication in the section, that these works will be handed over to the Electricity Supply Board. Is it intended that the Board will have functions in regard to the navigation of the Shannon?
Possibly they may have. The Act of 1927 gives that power, but there has as yet been no order transferring the functions to the Board. That question will arise on the order. It is comforting to have Deputy Briscoe's assurance that he thinks that when the contractors drew up their specifications they should pay for the subsidence that occurred. The whole thing will obviously be ruled by the terms of the contract, and the Deputy knows nothing about them. I intend to keep him in ignorance as long as possible. It will arise eventually as to whether the terms of the contract, or any part of it, should be made public. It should be remembered that a firm's reputation may be at stake, especially as to prices and other matters intimately connected with the firm, and the question will arise as to how far it is right that we should issue such information. It may, of course, be possible to bulk certain things and to show certain estimates and the actual cost of carrying them out. I am not sure that anyone in this House would press for a document if it was shown that it was going to be detrimental to a firm, and if it were also shown that that firm carried out a very big job in a very creditable manner. At the moment it is absolutely necessary that the contract should be kept secret.
I understood the Minister to say that within nine months he would be in a position to give us a definite figure—the estimate and the actual figure.
Estimates are one thing but contract conditions are quite different. It was of contract conditions that Deputy Briscoe spoke. The Deputy also seems to believe that there are only two types of engineering jobs, namely, the time and material job or the one where a certain amount is allotted to certain specific jobs. There may be all sorts of conditions in between. As regards the subsidence of the bank, it is the most insignificant thing, so far as cost is concerned, that has happened on the scheme, and I have no doubt as to who is going to pay for it. On the broader aspect of the matter, Deputy O'Hanlon put a question to me, and on my answer, given in a certain way, Deputy Lemass has, I think, come to certain conclusions which are wrong. He asked me, at any rate, whether it is beyond the capacity of the Shannon to supply 142 million units. My answer to Deputy O'Hanlon's question obviously referred to the present development and to the experts' estimate of the number of units to be sold to the consumers under the conditions which they found in the driest period in sixty years in this country. In a normal year there would be more than 110 million units. In the present year there would be considerably more. In the full development of the Shannon there would be considerably more even in a dry year. In a wet year in the second stage there will be still more. One hundred and forty-two million units is not beyond the capacity of the present development in normal times. When we took the estimates previously, we were going on the basis of the driest year found over a period of sixty years and what was the volume of water we would get under peak load circumstances. We take that very conservative estimate right through.
That is all you could contract for.
Even with the provision of certain stand-by stations which will have to be kept there could be more than 142 million units. As one gets back along the line that increases. Deputy Flinn spoke at one time about blaming the method of estimating or to whether one had to blame that method. I put up against that the remark of Deputy Thrift that there was no engineer alive at the date of the contract who would have gambled on such a small percentage increase on the whole work. There was not one such to be found amongst the Irish engineers, as almost to a man there was a belief that the whole thing was underestimated. Their most conservative estimates would have ranged far beyond the figure now shown to be pretty accurate. As to the question of consumption in the future, Deputy Flinn has introduced two or three points which he thinks breaks up that estimate. One point is the question of the tramways, the units consumed by the tramways, which he previously referred to as being hard core and which did not allow for great expansion. To my mind that makes my case all the stronger. I say that there is a percentage increase shown from year to year, taking in the hard core which only shows an expansion of two per cent. If I can remove that, and can say that it will be steady, it means that there is a much bigger percentage increase for ordinary matters, and if I take that for ordinary matters I am making up for anything that may be lost.
That hard core may disappear.
It is only spoken of as disappearing in Cork. The Electricity Supply Board have been given certain powers. They have been investigating and have been dealing with certain people in regard to acquisition. It will come to their turn one of these days to say how far the money given to them is sufficient. I do not say that that money should not be regarded as sufficient, as I have no knowledge on that matter. They have furnished me with their opinion on the estimate. They believe that by 1932 there will be a big increase beyond the estimate's best hope in the consumption of units in the country. They know the Cork situation and are aware of all the developments of which Deputy Moore spoke. Nevertheless, they told me that that is frankly an estimate, but it is an estimate based on investigations. It is not the type of hope that I was expressing three years ago when the scheme was first introduced. In that case we had experts' figures and certain calculations were made. People tried to point out that such calculations were vitiated by the fact that those who made them did not know the country. Here are people, however, who have gone into the whole matter. They know the country and know the dangers they will be up against better than anyone else. They have to consider whether hereafter they will be able to sell to the tramway systems or sell under the present Dublin rate to secure consumers in Dublin and the tramways. I do not found too much on that letter, but they, having got certain information, have given certain figures. Deputy Thrift asked whether we might give some details as to increased expenditure. I do not want to go into details to any great extent. The increase on the electrical side has been queried. That increase might really be described as an increase on the transmission system side. Quite a large amount of it comes from a big increase necessitated in the building of transformer stations all over the country. It is a figure which I might hereafter publish as being a useful commentary on the cost of building in this country. That matter was rather accurately dealt with in the estimates previously. The building costs of certain types of transformer stations in Germany were taken and related by two experts, one to Swedish costs and the other to Swiss costs. They got the Irish employees wage figures, and got so far as they could the cost of material in this country. There was a miscalculation on the first estimate. The comparison with the cost of building in this country over Germany, which is not the cheapest country, is between 60 and 100 per cent. over.
That is taking the relative costs of material and wages?
Yes. One interesting figure that I could give is in relation to a transforming station which was regarded by the experts as being a skin-fit and which might not bear comparison with others. It was thought at the time that it might simply have been thrown in by Siemen Schuckert. The estimated cost of that transformer station was £5,000, but was found ultimately to cost £30,000. We will examine that when the detailed figures are shown.
It is not easy to come to conclusions when you have not the exact figures.
One conclusion I came to is in regard to the costs of building.
What does the Minister mean by the cost of building? Is it the cost of labour or the cost of material?
Both.
Will the Minister inform us in regard to the cost of labour and material whether the Germans got certain figures from his Department?
They got certain figures in regard to certain items, but they did not get other figures.
They were 500 per cent. out in the estimate.
There was a big miscalculation. After three people had investigated that matter that big error was shown. It is the most abnormal thing that happened in the whole contract. There never was anything like it. There was no percentage equal to that. On the whole, the transformer station building shows a very big increase over the estimates. The contract on the electrical side was not entered into until a year after the other contract and the price of material had gone up in the meantime. There was an increase in wages and the price of material in Germany. We were, for instance, buying copper nearly always in a rising market. In addition, there were innumerable extras on the electrical side. We could, of course, have cut them out, but we had to calculate whether these would give us a better scheme from the point of view of efficiency to start with and reduce the maintenance costs hereafter.
On the other side there were very big losses here and there, and very big savings here and there. The scheme was not three months old when the decision was taken that in order to have better security with regard to the intake buildings to move the inlet works about a mile up stream. The point at which they were first projected gave sufficient security, as far as building was concerned, but did not give absolute security that was to be got from building on an absolute rock foundation, and the weir was shifted a mile up stream. That meant two miles of banks, one on each side, and meant a loss of £180,000, which was saved afterwards on certain things. There were pluses accruing and minuses coming against us.
That was one big item. There was a big item of expense at the Power House building itself, and the expenditure was incurred in the interest of the security and stability of the works. There was a third item that increased the cost on the civil side. We did really more work in the tail race with a view to future development than was at first projected. So that the partial scheme which was at first contemplated bore a considerable amount of the cost of the second development. In fact it bore a greater amount of the cost of the second development than was originally intended, when the Power House would have to be in continuous operation. We decided to incur expense at this point. However, hereafter better details can be given in these matters.
With regard to Deputy Flinn's statement to what he describes as an accident in Parteen Valley, and congratulated the House that it happened at this time, and that if it had not happened now a great disaster might have come on the whole scheme, I doubt very much if it is a proper thing to describe the subsidence, even in the language which the Deputy used, that he envisaged it as a likely disaster. It might have been an inconvenience, and held up the operations for a bit, but the term "disaster" I do not think should be used. It never would have remained over, because if the accident had not happened, we would have dug out the bank. The method deliberately taken of dealing with the sub-stratum of peat was to put this bank on top in order to squeeze this peat matter out. Actually the accident did not happen according to plan. The bank was built in particular circumstances, hoping that the pressure as it came, daily increasing, would squeeze out this matter. Instead of this particular soft matter coming out by degrees, it suddenly came out. If there had not been the accident, I doubt if there would have been any chance of water being let into that bank as long as we knew that it was built on that particular type of foundation. We wanted to squeeze out the peat, but it did not emerge. That is not going to occur at another portion of the work, because where boring has shown peat foundations elsewhere other methods have been adopted. That is the only peat foundation attempted to be dealt with in that manner.
I want again to say to Deputy Thrift that I have not put up these figures as absolutely final. I do not think the Deputy misunderstood me, but I want to make the point quite clear. Deputy Thrift and other Deputies will recollect that I always refrained from saying that £5,210,000 was the absolutely final cost of the scheme. I refused to be dragged into any statements of the type. I can get interruptions of mine scattered through all the debates where I refused to do it, even in cases where it would, to a certain extent, have eased the progress of the Bill through the House to let the debate go on the assumption that it was final. Time and again I contradicted and said I was not making that contention. There is the 10 per cent. variation that the experts referred to in their report. I always referred to that and founded on it. I never made any statement such as Deputy Lemass pretended to quote me as saying. I want to be clear. I do not put these forward as absolutely final figures to a nearer degree than can be judged by the nearness of our approach to the end of the works. That is the most I will say on it. I was very glad to find from Deputy Thrift an appreciation of what had been revealed to the House this evening. Deputy Lemass says I am a booster. It is a good thing to be the kind of a booster whose statements can be challenged afterwards. That particular epithet might be recalled when what is described as boosting is proved by after events to be so near the facts as my own boosting statements are now found to be.
What about the £5,600,000.
I am taking that. I am saying take the old estimate. Take the conditions under which it was put up. Take the fact that I refused to put myself beyond this, that it was within the 10 per cent. variation the experts stated it should be regarded as. I take that and put it in opposition to all the pessimism there was about this scheme, and I come now to present actualities and to contrast £5,200,000 with the present £5,800,000 or so. I claim that the application of the word boosting to what I said with regard to the Shannon scheme is not merely an ungenerous term, but a very unjust term. If the things that the Deputy has committed himself to with regard to other schemes in this country are found by trial to be as nearly accurate as I proved these figures to be it will be a good thing for the country. It is an amazing thing that Deputy Flinn should stand up and say that he regretted something should be left to his Party. What was left to that Party was left a little bit vague, but the phrase preceding it was that there had been active opposition to this scheme. I want to recall that there was never a division challenged on this scheme in all the time it went through this House. There was never such an ungenerous statement made about it when it was merely a project as has been made about it by two or three speakers on that side to-night, when it is revealed, to my mind, as an amazing success. There was accurate, severe questioning, there was a lot of people who asked had the experts looked into this, that and the other thing. There was an enormous amount of cross-examination, but on the scheme itself, on the motion which was put down asking that the Government should proceed to carry out this scheme, on the various stages of the Electricity Act, there was never a division challenged.
I know that.
There was no active opposition. The most active opposition to this scheme arose from one member of the Oireachtas, not in this House. As far as this House was concerned there was never a division, and I challenge anybody to read the reports on the different stages of the Shannon scheme and find if they can see words equal in the point of being ungenerous, to some of the things said here to-day. Now when the development is definitely proved, as far as one side is concerned, and the costs of the scheme prove to be much nearer the estimate than the big majority of those who oppose the scheme after hearing it debated here for many days believed it was going to be, Deputy Flinn complains that I have not come along to make a frank announcement. I wonder could there have been anything more open, clear and frank than what I said to-day. I suppose the Deputy would prefer that I should come in and say we underestimated this to the extent of £700,000 or £800,000 and let that figure go. Is that a proper way to represent this to the country? No matter what the Fianna Fáil Party may think, there is a very big section of the community whose fortunes are bound up with this scheme. You might say that the whole of one profession in Ireland is definitely packed in the hold of the Shannon Scheme, and it is very ungenerous to have made about these people comments of the type that were made here this evening with regard to wrong estimation and with regard to querying details as to why expenditure went up on this, that and the other thing. The active, youthful and enthusiastic members of one profession in the country have been engaged on this scheme and the result is a marvellous tribute to them. The members of that profession, having nothing like the experience of the men they were up against, fought out the contractors' men with such ability that they saved this country an amount of money that carelessness or inefficiency on their part would have lost. We have a big scheme and a big development. People might query units of consumption in the future and estimates on them. Would anybody listening to the debate here to-day come to the conclusion that we had made a very big step forward as far as this scheme is concerned; that we have got out of the woods and are now in the open with regard to one thing, the cost of the scheme and the final cost of the bulk supply to the customer? I use the word "final" again with the reservation I put on it to Professor Thrift. Would anybody listening to the debate realise that in relation to a scheme so severely criticised and subjected to so much pessimism in the early stages, the difference between the estimation and the fact is reflected in the difference between .84d. and .9d.? That is what I am presenting to you. I am presenting it to you as the work of a very big number of Irishmen engaged in opposition to a very big number of experienced foreigners.
I say that the greatest credit is due to these people for the way everywhere—in the office, on the job and through the country—the scheme has been handled. There ought to be a most enthusiastic welcome given to this statement. Instead of that I find myself criticised for not being frank. Would it be fair to these people if I had come in and said "I want to admit an increase of £100,000 on this scheme?" Would it be fair to take one item only and let it pass without mention of the fact that it included a certain sum of money in the way of capital costs—the acquisition of pole sites—that was not previously included in the £5,200,000? Would it be fair to pass over the £100,000 of the addendum? Personally I would prefer to have the case based on the increase on the original estimate on the electrical and civil side, not on the figures as increased by the addendum. I think I was bound, in justice to the people on the works, to say what I did say here to-day. I did not try to make any false case. I was as frank, I think, as anybody could be expected to be, in the presentation of a mass of figures, some of which were not previously included in the £5,200,000. I would like Deputies to think over it and let them put to me on the Third Reading any points that they want to have made clear. Let us try to see what is the final cost of the Shannon Scheme in so far as we can recognise it. Let people try to get away, in this case, from trying to down a Minister. Let them think that there is one profession engaged in this job through the country and that it is those young men's reputations that are at stake. They are Irish people, and let us register an appreciation of the character of the work that they have done.
Is the Minister not big enough to stand up for himself instead of hiding behind a profession?
I do not want to hide behind that profession.
Honestly, that is not fair.
I could defend myself if this was a question of officials under my administration. When people are going to query £234,000 on the one hand and £138,000 on the other, they are definitely getting after the engineers. In so far as it is a question of officials acting under my administration, and for whom I take responsibility, let us have all that criticism. I want one phrase remembered definitely against Deputy Flinn. It is that a statement of mine was not frank. I will stand over the statement I made. I will ask anybody to consider, and give his verdict as between the Deputy and myself as to whether it was not as full and frank a statement as anybody in my position could make.
I would like to ask the Minister a question as regards the increase in the cost of the navigation side. Is it represented by a change in the method of dealing with the navigation side or a change in the cost of doing the work in relation to navigation?
It is mainly increased cost.
Would the Minister be prepared to consider the point I put to him with regard to those people affected by the scheme?
I do not know anything about it.
Would the Minister be prepared to consider it?
I do not know who they are. This is, of course, irrelevant. But if I am asked to interfere with the authority of the Electricity Supply Board, an authority given to them by this House, I will not do it.
The position is, that people have got no consideration from the Board. They have written to them and got no reply. What I am asking is that the Minister would listen to their case and see if he could recommend to the Electricity Supply Board that they give them a hearing on the matter.
Obviously, the Deputy is asking me to interfere with the Electricity Supply Board. I am not prepared to say that I will do it.
If the Electricity Supply Board is utilising its powers in a manner in which it was obviously never intended it should utilise them, is there no remedy for the traders and business men whose businesses are being destroyed?
That is so hypothetical that I cannot answer it.
It is not hypothetical; it is happening.
The same thing is happening with regard to the electrical workers.
What I am asking is that the Minister will accept particulars that I can give him. It will be for himself to consider whether he will consult with the Electricity Supply Board or not. If there is nothing in the points put by these people, then there is no case. The Minister himself will decide that.