Dáil Éireann debate -
Wednesday, 18 Jul 1934

Vol. 53 No. 13

Electricity Supply (Amendment) (No. 2) Bill, 1934—Second Stage.

Minister for Industry and Commerce (Mr. Lemass)

I move: "That the Bill be read a Second Time." This is a Bill to make provision for the execution of certain works by the Electricity Supply Board for the purpose of improving the storage of water in connection with the Shannon hydro-electric works and in certain other matters, to amend and extend the provisions of existing legislation. The works which it is proposed to undertake under the terms of this Bill are set out in the First Schedule thereto—the raising of the level of the water in Lough Derg from 110 to 112 feet O.D. and for that purpose to do certain things; the lowering of the level of Lough Ree to a minimum of 121 and making provision for controlling the level of the water in Lough Allen and for that purpose to do certain things; and the altering or removing and reconstructing divers quays, harbours, landing stages, boathouses, roads, bridges and other existing works. The first question that arises in relation to this measure is the necessity for providing this additional storage. At the present time, the Board are obliged to develop a considerable amount of energy at its fuel stations. Last year they developed approximately 82,000,000 units at such stations. That number of units represented about 1,600,000 cubic metres of water. That is the quantity of water that would have been utilised in the generation of a similar number of units at the hydro-electric works, and that water would have been utilised if it had been available.

The proposals for storage covered by the Bill before the Dáil will give, approximately, 260,000,000 cubic metres of water during the year and thereby reduce the amount of energy which it will be necessary to develop by steam. The present storage capacity of the Board's works is approximately 210,000,000 cubic metres. The execution of the additional works will increase that to 470,000,000 cubic metres and the experts contemplated storage up to 827,000,000 cubic metres at the full development of the scheme. It is proposed to enable the Board to carry out these works by making certain advances to it. The provisions of the Bill in that respect are, in the main, similar to the provisions of certain other Electricity Supply Acts that came before the Oireachtas. Some comment appears to have arisen from the fact that in this case the whole of the amount required by the Board is not taking the form of repayable advances, but some portion of it is being provided in the way of grants. Some misunderstanding appears to have been created on that account. The difference between the amount to be advanced to the Board and the total cost of the works, as estimated, is being provided for by way of grants, but the amount to be advanced represents the present economic value of these works to the Board. By the present economic value I mean the value of the additional storage to the Board, taking into account what it would cost annually to generate by steam the energy which could be produced at Ardnacrusha by additional water which will be made available in consequence of the execution of these works.

In arriving at that estimate of the present economic value of the works, however, the material item in the basis of calculation is that of interest. The Board have made their estimates upon the basis of the existing interest charge of 5½ per cent. At the present time discussions are proceeding between the representatives of the Board and representatives of the Department of Finance as to the rate of interest which will be charged upon future advances and it is, I think, to be anticipated that a lower rate than 5½ per cent. will operate. It is clear that, as the rate of interest reduces the present economic value of the works to the Board increases. It is not improbable that a rate of interest will be agreed upon which will in fact bring the actual cost and the present economic value of the works into relation, so that no grant will fall to be made. It is very desirable, however, that provision for advances should be made because it might be difficult for the Minister for Finance to give an undertaking over a period of years as to the rate of interest which would be charged. Deputies will note that the wording of the section provides for the making of grants to an amount not exceeding the £93,000 therein mentioned.

Mr. Dillon

Has the Minister mentioned what these extensions are going to cost?

Mr. Lemass

The estimated cost is the sum of the two figures mentioned in the Bill. I shall deal with them a little more fully now. The giving to the Electricity Supply Board power to construct these works and to the Minister for Finance power to make these advances and grants is, of course, the main purpose of the Bill. There are certain other matters with which the Bill deals that I shall explain; but these are the main purposes of it and the reason for its introduction at this stage. We are desirous that these works should be undertaken as early as possible, not merely because of the need for them but also because of the fact that they will involve a considerable amount of employment in the areas concerned. In fact, the justification for undertaking these works at present, and under circumstances which may make it necessary to supplement the economic value by grants, is the fact that the amount of employment which will be afforded in consequence of the expenditure of that money will be very considerable and bear a very satisfactory relationship to the total amount of the grant compared with other schemes that could be financed out of unemployment relief funds.

Sections 4 and 8 are the sections which authorise the Board to construct the works described in the first schedule and to acquire compulsorily or interfere with lands, premises and other rights mentioned in sub-section (1) of Section 5, subject in all cases to the payment of compensation for such acquisition or such interference. The provisions relating to compensation are similar to those in the Shannon Electricity Act, 1925, which authorised the Minister for Industry and Commerce to construct the Shannon works. It will be observed that Section 5 (1) (e) and Section 7 correspond with the addition to the Shannon Act of 1925 made respectively by the Amendment Act of 1933, and by Section 3 of the Amendment Act, 1930. It was not until the Act of 1933 was passed that compensation became payable for the mere flooding of lands. It will also be observed that Section 5 (3) enables the acquisition of lands in lieu of payment of compensation, which appears to be a useful addition to the Shannon Act. Under Section 6 (2) the amount of compensation will be determined by arbitrators selected in the usual way from the general panel appointed by the Reference Committee. That is a simpler procedure than that under the Shannon Act in which case the arbitrators had to be specially appointed for that Act by the Reference Committee. From certain discussions which have proceeded it appears that it may be necessary in some respects to provide for amendments of the Bill in Committee; but it is not necessary to detail these to the House now, as they are of no special importance in relation to its general principle.

The cost of the works which Deputy Dillon inquired about, is as follows:— For Lough Allen the total estimated cost is £150,000, of which £107,000 is regarded as the economic value, involving a grant of £43,000. For Lough Derg the total cost is £452,000 of which £402,000 is regarded as the economic value, involving a grant of £50,000. For Lough Ree the works proposed will cost £10,000 and £4,000 respectively, all of which is regarded as economic. It is desirable that the position in respect of the difference between the advances to be made to the board and the grants to be made to the board for the purposes of these works should be clearly understood, so that no question will arise that we are in any form subsidising the Electricity Supply Board at the present stage. It is considered desirable, on the ground of national policy, that the water storage on the Shannon should be developed so as to reduce the quantity of electricity to be generated by steam. The board is in a position to provide the energy by steam at the present time at a certain cost, and that gives a basis for calculating what we call the economic value of the works to be undertaken. Anything that the provision of water storage may involve over and above that cost is being made good by a grant, on the ground that the very large additional employment to be involved has for this country a value far in excess of the amount to be granted—a value in employment far greater than any other works which might possibly be financed from unemployment funds.

It is further to be noted that the difference between the cost of providing for that increased water storage and the economic value of the work to the board is entirely a matter of the rate of interest to be charged upon the advances and, assuming the reduction of the rate of interest to an extent which might reasonably be anticipated, no grant will arise to be made at all, as the full cost of the works will be economically justifiable.

Part III of the Bill introduces amendments to the 1927 Act in various respects. The object of Section 14 is to enable the Board to get earlier occupation of land or premises, in particular for transformer stations, than is possible at the moment. Under Section 45 of the 1927 Act the Board is enabled to go into occupation as soon as it has made the special order authorising the compulsory acquisition of the land or premises without waiting for the payment of the compensation, but in the meantime the Board shall pay to the occupier or owner interest on the amount of such price or compensation at the rate of 4 per cent. Under Section 13 of the Electricity (Amendment) Act of 1930 the Board is required to pay compensation to certain employees in generating stations who have ceased to be employed in consequence of the acquisition of the stations by the Board. Such compensation depends on the period of such employment. Paragraph 8 of the First Schedule of the 1927 Act enables such employees to reckon temporary absence on military service as part of the period of employment, and the object of Section 15 is to extend such service in the manner already provided in various other Acts.

Section 16 makes provision to prohibit buildings in close proximity to the Board's transmission lines. It is considered undesirable that buildings should be erected close to the Board's transmission lines, and, therefore, power is taken by the Minister to enable him on the application of the Board to make an order prohibiting such buildings in any place specified in the order. It may be necessary to amend that section on the Committee Stage to provide for the giving of notice to the Board of the intention to erect buildings within a specified distance of the wires. As the section stands, the Board may not be aware that a building is about to be erected. An order made under the section shall not operate to prevent the completion of a building commenced before the date of the order.

Section 17 empowers the Board to pay the wages, etc., which the local authority might have paid under the Act of 1933 to certain employees entitled to payment under that Act. These local authorities declined to make this payment on the ground that where the employees were engaged on electrical undertakings afterwards acquired by the Board the assets represented by such undertakings should bear such payments. Certain persons were, therefore, debarred from receiving the payments to which the Act entitled them, and Section 17 is designed to rectify that position.

I do not know that there is any other matter upon which the Dáil might desire information at this stage, but, if so, I shall endeavour to supply it. The main purpose of the Bill is to authorise the construction of the works set out in the First Schedule and the financing of these works, and the other sections are really being brought forward because the introduction of this Bill afforded an opportunity of effecting a number of amendments in the other Acts which were noted from time to time and deemed to be desirable.

Mr. McGilligan

I understood the Minister to say in reply to Deputy Dillon that the sum to be expended or estimated as proper for expenditure was the addition of sums set out in two sections; that is, Section 9 (2) and Section 13 (2). The £530,000 plus £93,000 totals £623,000. The sums that have been given do not amount to that but they are very near it.

Mr. Lemass

The amount of the advance is £523,000, but £530,000 was put in the Bill as a round figure.

Mr. McGilligan

The position is this. The sum of £616,000 is going to bring up the units likely to be produced to a certain figure. Will the Minister give us that figure? Will he tell us what is the production at the moment and what is the expenditure? What has the Shannon scheme cost to date? What is its production? What is the future going to be if we add this sum to it?

Mr. Lemass

Does the Deputy want a reply now?

Mr. McGilligan

I thought the figures might be available.

Mr. Lemass

I will get the figures for the Deputy.

Mr. Dillon

There are a few points to which I would like to refer. The first matter in which the House will probably be interested has relation to beet sugar. Perhaps Deputies will cast their minds back to the Bill introduced here to authorise the Government to erect beet sugar factories. When that Bill came in the House bethought itself of the only reference the Minister for Finance had ever made to the financial records of Cumann na nGaedheal. He said that Cumann na nGaedheal had bequeathed to the existing Administration two white elephants.

Mr. McGilligan

Three.

Mr. Dillon

Were there three? I remember only two. One was the Carlow Beet Sugar Factory. The Minister then tied an apron around his middle, the forceps disappeared in the lying-in process and emerged, to the horror of everybody, with three offspring. Now, the second white elephant is being led out for a grooming. Having acted as midwife to the first, the Minister is going to act as coiffeur to the second and he provides the second with a new trunk and a pair of tusks at a cost of approximately £750,000. That is what it will come to before the job is done. This is something that Deputy Dowdall, who differentiates so carefully between promises and realities, should take a note of. So far as the Bill is concerned, I would like to ask the Minister, in connection with the grants that are going to be made, where is the money to come from? Are we going to have a supplementary estimate or is the money going to come out of the sum voted for the relief of unemployment?

Mr. Lemass

Wherever extension is required.

Mr. Dillon

I think that is a very sensible way in which to spend money for the relief of unemployment. I understand the scheme will be to discover how much in excess of what is called the economic figure these works are going to cost and to make a contribution of the difference. In fact the Unemployment Fund will be used to provide free labour in the extension of this scheme. I think that is a good plan. I think I made a suggestion here once that where there was a proposal to extend the Shannon Scheme and it was found uneconomic to do so, the Board of Works, who were administering the Unemployment Fund at the time, should make their offer. Possibly the seed I planted in the mind of Deputy Hugo Flinn on that occasion is flowering now under the benignant influence of the Minister for Industry and Commerce.

In Section 14 there is an amendment of Section 45 of the Principal Act, and now the Board can go into possession of the lands without waiting for the decision of the Arbitration Board as to value. Will the Minister say whether provision was made under the Principal Act for building value in land compulsorily acquired by the Electricity Supply Board? I believe, in fact, you could plead special building value and have that taken into consideration by the arbitrator. If that be so the objection to the immediate cession of title is largely removed.

Section 16 introduces a most astonishing provision, because under that section the Electricity Supply Board can prohibit the erection of buildings within a given distance of their transmission lines. The Minister, surely, has overlooked the fact that the line of the Electricity Supply Board is spread far over the country and passes over the land of many people whose only compensation was 10/- a pole. I think that the amount of compensation they were entitled to was 10/- a pole. In any case, we will say that it worked out in round figures at about that amount. Perhaps that was equitable, and perhaps it was not, but whatever it may have been for the space occupied by a pole, it is certainly nothing like adequate compensation if it is now to involve a prohibition of building in the vicinity of the line.

Once you have entered into a contract of compensation with the proprietor of property there seems to be no kind of equity in altering the terms upon which you acquired the land or upon which you acquired the right of way over the land, or the easement over the land, long after the easement has been granted. The Minister waxed eloquent to-day, on a Bill which we were discussing at an earlier stage, about the sacredness of contracts, and how he could not dream of breaking a contract with a monopolist without providing compensation; but under Section 16 he intends to break a contract with every farmer in the country. Of course, I do not expect a farmer to receive the same consideration at the hands of the Minister for Industry and Commerce as a monopolist would receive. There is something peculiarly sacred about a monopolist so far as the Minister is concerned, and the poor farmer, marching down the hill to bankruptcy, is not going to pull as much weight. Still, I think that he is entitled to some consideration—that he is entitled to bare justice. You took by statute the right to acquire an easement, for a given compensation, under the Principal Act. You are now proposing, under this amending Bill, to alter the terms of the easement which you originally took without providing any additional compensation. That is not justice. I submit to the Minister that wherever the Electricity Supply Board makes an order under Section 16 the question of compensation will arise and allowance must be made to the proprietor of the land for the injury done to its value by prohibiting the erection of buildings upon it.

Mr. Lemass

Does the Deputy mean by that that everybody in the country, over whose land the transmission wires pass at the present time, should get compensation in respect of the prospective building value of that land.

Mr. Dillon

No, but I say—yes, I do, because for a moment I thought—well, wait a moment! Let us get the meaning of the section first. Does it not mean that the board is allowed to prohibit the erection of any building, whatsoever, or any building of a specified class or classes under or within a specified distance of the transmission wires?

Mr. Lemass

It is empowered to apply to the Minister for orders.

Mr. Dillon

So that my suggestion would not automatically apply to every field over which the line passed, but to every field where the Minister made an order on account of the proximity of the line. If the Minister will consider it, he will realise that he is bound to do it. Otherwise, it amounts to confiscation. Of course, if a man has a field in a remote part of the country and chooses to go to arbitration to get an assessment made of the building value, he will spend more in legal costs than he will get from the arbitrator, and it would be quite legitimate to give him a fixed time wherein to initiate proceedings—three months or months—and if proceedings were not initiated within that time, then his right to claim compensation would lapse. I think, however, that if the Minister considers that for a while, he will realise that there is an absolute obligation in justice to provide that.

Section 17, sub-section (2), paragraph (b) says:—

Every doubt, question, or dispute which shall arise in the carrying of this section into effect shall be determined by the Minister, whose determination thereof shall be final.

I strongly object to putting the courts of the country aside in that way. Here is a matter about which there is going to be no fuss or hurry. There is no question of any important enterprise being held up by prolonged litigation. It is only a question of fixing liability for certain payments on the local authority or the Board. It is a question which is pre-eminently suitable for submission to a court of law. It is the very kind of question for which the courts of law exist. It is a conflict between a local authority and an enterprise of the character of the Electricity Supply Board to fix liability, and I object very strongly to that function being withdrawn from the courts and put into the hands of the Minister.

I remember that, in a previous Bill, a similar clause was inserted and it has not worked out satisfactorily, for a variety of reasons. I am not going into that to-day, but it did not work altogether satisfactorily. This is going to put additional work on the Minister's shoulders, and no useful purpose is going to be served, because whatever verdict he presents is not going to satisfy people, whereas if the matter is allowed to go to the courts, and the courts decide the meaning of the statute which is in dispute between these two bodies, both sides will be quite content. It is a bad principle, and one which ought not to be adopted wherever it can be avoided. In my opinion, it can always be avoided if the Government wants to avoid it.

On the general question of developing the electricity supply of this country, there was a time when I took the view that the public money might have been spent to a greater advantage. Everything in this world is comparative and I remember that I used to think that to spend £7,000,000—the figure was somewhat less—on developing the Shannon scheme was a wild extravagance; but, by the Lord Harry, after I had seen a couple of Fianna Fáil Budgets, £7,000,000 is to Fianna Fáil what seven million farthings was to Cumann na nGaedheal. There is a saying in the country to the effect that it is like putting it into a child's hand. They have no more regard for £7,000,000 or £10,000,000, or £2,000,000 for the matter of that, than the veriest child has for a half-penny toy. At least there is this much about this expenditure, that we will have something for it, unlike a lot more that has been spent. If it is not spent on this, it will be spent up and down the country blandishing the voters of recalcitrant constituencies and we will have nothing to show for it. Here, at least, we will have so many more units of electricity available which will be sold by the Electricity Supply Board to the consumers of the country at a very stiff price. I think that, in that connection, the Minister might have given us some exposition to-day of the charges which the Electricity Supply Board are making for power and light throughout the country with a view to justifying the expenditure of £750,000 to increase the amount of electricity they have. My experience is that in the town where I lived we had a local undertaking which was under the control of the county council, the board of health and the local committee.

We were able to make £800,000 a year on the sale of electricity at 6d. a unit for light and 3d. a unit for power. The Electricity Supply Board has arrived now and they are going to charge 7½d. per unit. Incidentally they inform us that wiring of the houses of a good many of us is not suitable for the Shannon current. They are demanding that we should have the work redone for a very substantial figure.

Mr. Lemass

For a very reasonable figure.

Mr. Dillon

I am not saying that it is unreasonable. I am not going to be told that I am playing England's game or sabotaging Ireland's industries. I have just said that it is a substantial figure. I have no doubt the work will be well done. Everything they do is well done. I think the Minister should discourse to us on the relative charges of the Electricity Supply Board and such independent suppliers as are in the country. I do not pretend to be able to discuss the technicalities of the Bill. There is only one man who is competent to discuss the technicalities of the Bill—possibly there is in addition the Minister who may have learned in the course of the last few years something about the highly technical questions which arise with the Electricity Supply Board. It is one of the consequences of running undertakings of this kind—even partially—by the State. When the Minister comes to reply, I hope he will find time to deal with the questions I have raised and not least of all to tell us what he thinks of Mr. MacEntee in his new role of coiffeur, having shown himself so apt a midwife in a particular service.

Mr. Keyes

There is just one point on which I would like to get elucidation from the Minister in connection with this Bill. The Electricity Supply Board has been entrusted with large and wide powers to make it possible to get a development for the extension of electricity from water power at Ardnacrusha, and it should make compensation for all the interests that are disturbed. Judging from the previous Act—and this Bill appears to be a facsimile of that Act so far as the compensation clauses are concerned— there is just one interest which did not get compensation. The canal company had an amendment introduced into the Seanad in the previous Act that compensation should be paid in respect of their transport services on the Shannon. Through the development works of the Shannon hydraulic scheme a number of men were put out of employment on the Shannon and they got no compensation. I know some of those men. They had worked there for years and a number of them between Killaloe and Limerick were put out of employment, and during the two years they were out of employment while the works were under construction they never received a penny from anybody.

It is lop-sided justice to provide compensation for the canal company but to leave out the men who are part and parcel of the company. These men have been thrown out of their employment without any compensation whatsoever. I can see the possibility of increasing the water storage for the purpose of getting an increased supply of electricity. It is possible because of this to have interference with the navigation and it is possible that that interference may be productive of throwing a good number of people out of employment in that district. I want an assurance that in any compensation that may be given, the interests of the men will be included, that is the interests of the men who may lose their employment because of this development in the Shannon scheme.

I notice in Section 16 that there is an extension being made in this matter. It was a rather cruel irony that one of the men for whom I speak when applying for compensation for his loss through being disemployed was asked for his national record. He was simply an ordinary worker and he got no compensation whatever. I suggest that the men who are going to lose their employment because of the incidence of this development should be compensated. Of the total staff of 500 about 23 to 25 of the permanent staff will lose their employment. If compensation is to be given to any of the interests concerned it should not be impossible to determine that those men should be entitled to compensation.

I notice that the compensation is based on the Acquisition of Land (Compensation) Act, 1919. That does not seem capable of any thought being given to the point to which I am referring. I do not see how on the basis of the Acquisition of Land (Compensation) Act, 1919, these men can secure compensation. I would ask the Minister to give this matter his consideration and to give us an assurance that any of those employees who lose their employment will not be treated as they were treated under the previous Act, but that they will get the compensation to which they are entitled.

Mr. McGilligan

There are only about three points which arise for discussion at this stage of this measure. One of them is an involved matter. It can be made simple but that has not been done. We are told that there is about £616,000 to be spent under this Bill, that is, one big item for £450,000; another £150,000 on Lough Allen, and the third, £14,000, on Lough Ree. Of this £616,000 something like £530,000 represents what is called the economic value of the works. How that has been arrived at I have not been told. One phrase used by the Minister set me astray, I hope for a bit only, because there was some relation to what is called the present units generated in the fuel stations. I am assuming that there are so many units produced in the fuel stations that it is desirable to keep them in order. It does not arise from any comparison with the steam-generated units, but probably it arises in this way: that on the price which the Board are at present charging for units sold, or that they would get in so much money from so many units, that therefore they could spend so much money on generating those units. If there were £450,000 and £150,000, independent of present prices which the Board are charging, they could only recoup themselves of a certain amount of the expenditure of this money if they continued to charge the same prices. I assume that that is the way in which the calculation of the economic value has been arrived at. That leads us to the second point as to the interest rates. The interest rate has always been equitably associated with the interest rates which the State has to pay for the money it has borrowed. When loans were procurable at 5 per cent and 5½ per cent., when the E.S.B. got advances from those loans they got them at a very small additional expenditure, an expenditure which was a fraction relatively per cent. Sometimes it was 2/6 per £100, and that was suggested as an equitable charge.

The Minister now says that it is difficult for a Minister for Finance to estimate over a period of years what is the interest to be charged. Where is the difficulty? If this £500,000, or whatever portion of this £616,000 has to come out of borrowed moneys, has been borrowed at a particular rate, surely it is quite easy to estimate as far as that amount of the money is concerned what is the proper rate to charge the Electricity Supply Board, because the repayment date and the interest and the sinking fund all correspond to the repayment date, the interest and the sinking fund of the moneys that have been borrowed from the people. It may be difficult to estimate a sum over the whole borrowing or the whole of the money lent to the board, because some of that will have been borrowed at one rate and will be subject to certain charges, while some more of it will be subject to something different, but, as far as this sum of between £500,000 and £750,000 is concerned, it is surely one of the easiest matters in the world to say: "That cost so much. It has to be repaid in such and such a time. Interest is being charged at such and such a rate, and sinking fund is being paid on such an amount. We will charge that to the board, plus whatever is the agreed—or it would seem to be the disagreed—sum for the proper promotion expenses." It is surely simple enough to get that amount. It is not a matter of extreme difficulty to get it. After it is got, as money is cheaper to-day, it means that that £500,000 can be lent to the board at a cheaper rate than any of the previous moneys. Consequently, this ought to be a very easily perfected job. That is one side of it—the amount to be charged to the board, which has to bear some relationship to the amount which the State has to pay to the people who lent the money.

The other side of it is the prices charged. Deputy Dillon has referred to that. It was very often referred to before. The Minister was strangely silent about that side of the matter to-day. Has there not to be some consideration given—it was always promised—to the question of re-adjusting electricity charges to the new conditions? The old scheme was put up on a most conservative basis. The charges were supposed to be sufficient to bring in a certain revenue. That revenue was estimated as being the correct amount to meet certain expenses—to meet certain commitments viewed as reasonable ones. What did they include? They included this, that if we take, say, 35, 40 or 50 years as the period during which the Shannon scheme has its life, at the end of that 30, 40 or 50 years the Shannon scheme would have been completely freed from debt, and there would have been a reserve fund piled up equal to the building of a new Shannon scheme. In other words, the original scheme contemplated doing what no other business ever contemplated doing— meeting replacements and running repairs, and piling up a reserve equal to the original cost of paying off the entire debt. I was often asked to remit some of the charges, because it was thought possible by some people— probable and certain by others—that some of those charges, which were being put upon the board, and through them upon the people, were not fair to the people of this generation. Why should the people of this generation pay in their electricity charges the debts which their credit had allowed the board to accumulate, and at the same time give them a reserve fund of relatively a very big amount indeed. I found myself justified on previous charges in holding fast to the old scheme, because in those days it could not easily be foreseen what emergency charges might suddenly arise.

Right at the end of my period I was faced with a demand of a most excessive type from the contractors of the scheme—over £1,000,000, being moneys which they said they had lost in the building of the scheme. Just before I left I got that claim settled for £150,000. The Minister has no charges of that kind to meet. There are none of those sudden emergencies that might arise against him. In those circumstances, when we are now considering what is the economic value of certain works, is this not the proper time to have full consideration given to the whole scheme? After all, it was always stated that it was a bad thing to begin to readjust the Shannon finances until the revenue side of their account had assumed something like normal figures, and until we got into an ordinary year, until a period where certain things that arose in the early promotion years had been met and discharged. One development scheme has now been completed. In fact, there has been an encroachment upon a second development scheme. This is getting very near to the second of the three stages that were at one time thought of, and it is probable that, being the second of those three stages, it is the last stage of the Shannon development proper. That being so—if it is so—is not this the time at which there should be consideration given to whether or not it is fair to present-day consumers of electricity to ask them to pay such sums in their two monthly accounts as will pay off the debt in whatever is the time for repayment, and will at the same time allow a big reserve fund to be piled up? I may be told, in answer to that, that this is not the situation yet. I am not saying that it is the situation actually arrived at, but is it not a situation that can quite easily be foreseen, and towards which we are likely to make progress even within 12 months; in other words, the first repayment by way of sinking fund will have been made? At any rate the charges have now become known to the people. It is known what the number of consumers per annum is over five or six years past, and it is easy to calculate what is the increase each year over the previous year. It could easily enough be calculated as to whether, considering the areas that have still to be developed, there is any likelihood at all of having reached the saturation point in the development of electricity, through the attraction of new consumers to the use of this medium of heat and light.

If there was any such view taken of the scheme at the moment, and if there was any such decision arrived at, as I think is at any rate possible— it would require detailed knowledge of how revenue is running at the moment to say whether it is probable —the nearer one approaches that examination or that problem the more will those works become economic, because if this £500,000 worth of works is thrown in against the whole of the Shannon works built to-day, and the whole of the moneys to be recouped, it is a very small portion indeed of the amount the consumers are paying; the moneys which in the end will go to provide not merely interest but sinking fund. The question as to what is the economic value of those works, on which the Minister's whole speech and this Bill seem to turn, is somewhat vague at the moment; it is badly defined. I should imagine that it is not merely probable but an absolute certainty that no part of this money which is described as granted money will, in fact, ever be made as such; in other words, if and when the interest rates for this £500,000 or £750,000 are struck at what is the appropriate figure, bearing in mind the rate at which money can be borrowed to-day, the whole of this £500,000 job will become economic. If, then, there is a better consideration given to the other matter it is quite probable that not merely would that be regarded as economic but that the charges for electricity arriving at the expenditure of this amount of money as well as the charges now being met out of the expenditure of the previous sums could all be lowered, and lowered advantageously. The other side of this point is that if there is any proposal to charge the Electricity Supply Board, and through them the consumers throughout the country, anything more than what it costs the State to borrow at the moment, the State are, in fact, making a profit out of lending borrowed moneys to the Electricity Supply Board. I am presuming that the figure, whenever it is fixed finally, will bear a relationship to the price at which they have been able to borrow, plus some sum, whatever it may be, for the expenditure necessary to collect that loan and the administration of the loans as between the State and the Electricity Supply Board.

The second point that arises is the development itself. The Minister said that the board's final scheme of the Shannon in its last development looked forward to the harnessing of 800,000,000 cubic metres of water and I think he said that when this storage is effected it will put the board in possession of about half that, or 400,000,000 cubic metres.

Mr. Lemass

Somewhat more than half.

Mr. McGilligan

At any rate, it is certainly somewhat more than half way progress to the final stage of the Shannon. Again, I am assuming that that 800,000,000 cubic metres refers to what was in Siemens Schukerts' first proposal, their second stage, and what was in the experts' report as their third stage. I think that most of the engineering opinion brought to bear upon that scheme since it was first inaugurated has tended against the final development of the Shannon and that, in fact, there are many more suitable ways of developing even water power in the country than by going on to the final stage of the Shannon. There is, for instance, the development of the Liffey scheme and even of schemes nearer the Northern boundary, more profitable, both from the point of view of the time at which the water runs and can be stored and from the point of view of necessary expenditure, than the final stage of the Shannon, so that this, in fact, does mean something approaching the final stage of the Shannon development as orginally passed by the experts because they drew attention to what they thought was likely to be the uneconomic nature of what they described as the third stage of development as they viewed it.

Again, I relate all this back to the question of price and having a fairly clear view of what the Shannon development as such is going to cost, what the moneys to be collected in order to meet the expenditure are and, therefore, what the price ought to be. We are very near the end of the Shannon development as such, so far as the harnessing of water power and the storage in these three lakes are concerned. There are two things, then, that emerge on the works side. The level of Lough Derg is to be raised from 110 to 112 feet O.D.—two feet of an increase. When the scheme was first spoken of, 110 feet O.D. was the point at which the waters of Lough Derg stood for about three or four months in the year and the first scheme necessitated the holding of these waters at that level, not merely through these three or four months in which they ordinarily ran to that point, but for three extra months in each year. In so far as the natural level of that lake and the natural run of the waters down from the catchment area brought it to the 110 feet point for some months in the year, there was flooding and that flooding was increased by the holding of the waters at that level for the two or three extra months, and that was understood to be one of the most expensive parts of the original scheme.

It is to be noted that of the moneys to be spent here, £450,000 is to be on Lough Derg. I am again assuming that that means that there is a definite recognition that by raising the level of the lake by two feet, and, probably, holding it there throughout the year, there is going to be considerable damage done to the callow lands around the lake and these will, in the main, be bought out rather than that compensation will be paid for disturbance and submerging. If compensation is paid at the old rate, the people who have those lands will not have much cause to complain if they are bought out, but it certainly was unsatisfactory to have these claims for temporary damage arising year after year simply because the allegations were things that could never really be disproved or very accurately fixed—they varied from year to year—as to what was the extra damage done to lands ordinarily wet or flooded or submerged for two or three months when that flooding or submerging was continued for double the period. I am assuming, when I see that heavy item, that it means that these lands will, in fact, be purchased and will be regarded no longer as land of the country but as something underneath the waters of the lake and, of course, there will be compensation.

The other point is that referred to by Deputy Keyes. If on the upper lakes, Allen and Ree, the level of Lough Allen is controlled between the limits of 168 and 154 feet and the level of Lough Ree is to be lowered to a minimum of 121 feet O.D., it is to be noticed that, in the Schedule, the lowering of the level of Lough Ree to this level drags with it, as a consequence, the execution of divers works, whereas the controlling of the level of Lough Allen between 168 and 154 feet O.D. involves the dredging of new channels and the deepening of existing channels, removing and reconstructing the weir at the outlet of the lough, reconstructing certain bridges and divers other works. Again, I am assuming that this, to all intents and purposes, means that navigation above Carrick-on-Shannon will not merely be very seriously interfered with but will probably have to disappear. Inland navigation, in so far as it goes near these lakes, will, to all intents and purposes, disappear.

Mr. Lemass

Oh, no.

Mr. McGilligan

Will to a great extent disappear.

Mr. Lemass

The only portion that might interfere with navigation is the lowering of Lough Ree and that is only lowered to 121 feet so as not to interfere with navigation.

Mr. McGilligan

I was wondering why the sum of only £14,000 is the amount of money appropriated by way of expenditure to Lough Ree works. I was going to ask if that included compensation. I am told that there is going to be no compensation payable. That will be satisfactory if it is possible, but there may be doubts on the point.

Mr. Lemass

When I say there is compensation payable, I should say that there may be some items of compensation for water supply and that sort of thing.

Mr. McGilligan

With £14,000, there could not be much. Might I put my point in another way? Lough Derg has related with it in the Schedule for works to be carried out the other two lakes, which include £14,000 in respect of Lough Ree. I am assuming that the amount includes not merely expenses, say, to workmen for digging certain trenches and removing certain earth embankments, etc., but certain compensation money.

Mr. Lemass

Yes.

Mr. McGilligan

Very good. I was wondering what was going to happen to navigation because I thought that if the level of the water was going to be lowered to the lower of the two limits set out in the Schedule there would be very serious interference with navigation. The word "control" is put in and it may be possible to use the waters in the different seasons of the year in such a way as to allow navigation to go on unhindered but it will not be so argued, naturally. There will be, however, two views on that, too.

The other point that the Minister spoke of is the third point to which I want to draw attention. The Minister said that last year the Board had generated a certain number of units— I think it was about 80,000,000 units— through the Pigeon House, and that it was desirable to amend that situation. The amendment is to have that substituted by electricity produced by water power. It was not so much the absence of this storage last year as the fact that there was not a lot of water to be stored that rendered such an amount as 80,000,000 necessary of generation in steam stations and probably the same thing is at the moment occurring. The Minister might say, by way of testing this, if the works now set out in the schedule had been perfected two years ago, and we had the two dry periods we have had this year and last year, how many of those 80,000,000 units would still have had to be generated from fuel stations?

Mr. Lemass

A substantial part.

Mr. McGilligan

More than half?

Mr. Lemass

Yes.

Mr. McGilligan

That gets us back again to the point that, even with this storage, if there were a succession of dry seasons like the last two we had, we would still have to have a very substantial stand-by in the way of a steam station. I think that ought to be faced up to frankly, because it is going to raise a considerable amount of the usual confusion and inconsiderate talk in relation to the Shannon scheme.

The Shannon scheme, as estimated, never provided for two seasons such as have passed. They were drier than the driest season for the last sixty years, I understand. The estimate was for a catchment area, and the water running down that area to the sea in dry periods taken over a period of sixty years. Until we get better meteorological advice and a better impression of the weather in this country as having changed for the better permanently, I still deem the engineering calculations to be that it would not be worth while to spend money in so enlarging the storage capacity in those lakes as to try and avoid the consequences of two seasons such as we have had. It would have to be done at an extraordinarily heavy charge, and, even if you had all the storage capacity in the world, it is doubtful if you could get sufficient from the catchment area of the Shannon to pass enough water through the turbines to generate all the electricity required in seasons such as we have had. I mention that because I want the Minister's assent to that. It might as well be known immediately that this, even when accomplished, will not prevent a very considerable lien on the Pigeon House, or some such station, in dry seasons of the type we have just experienced.

I am sorry the Minister was not able to give the expenditure to date on the whole Shannon works. It is somewhat hard to calculate, because there will be money contracted for and not yet spent, but it should be possible to say that, generating so many units of electricity, the works for that purpose cost so much, and the cost of the works for that purpose can be divided in certain proportions between water power works and fuel plants. Even a third calculation might be given as between the generating items proper, divided into fuel and water, and, secondly, everything else; that is to say, long distance transmission and distribution, so that we can see what are the various stages, with the appropriate expenditure to each stage on generation and the other two things, taking these two together. There is a purpose to be served even by giving the figure for distribution because, after all, it is through the increase in the local distribution mains that one gets the best idea of the new areas that are being opened up and of the new consumers. I welcome this as a very definite extension of the original scheme, because it is shown now that it was very well thought out and has been completed very much according to the original plans, everything still being on a very conservative estimate and a good basis.

Mr. T. Kelly

On the last occasion on which the Minister introduced a Bill in connection with the Shannon Scheme I adopted the role of the candid friend. I shall have to resume that role again this evening. One newspaper referred to me as the lone Deputy on that occasion, as I was the only one who voted against the Bill. I presume I shall be the lone Deputy again this evening. I tried to explain on that occasion my authority for interfering at all. I am not an expert in any sense of the word, but I had a very long education in connection with the Dublin electrical supply, as I was in it from the beginning. Through the various committees which dealt with that scheme from start to finish I got a fair layman's experience. Therefore, I speak in the sense that I know something about what I am going to say.

We were told in the beginning that the Shannon scheme would cost in its first stage £5,000,000. As a matter of fact, it has cost nearly double that. The balance sheet discloses a capital expenditure of nearly £9,500,000 for the first stage. I tried to find out some information about it, but it is very difficult to get. It is a matter of light, but I am very much in the dark. I tried hard to get information from various people in connection with the working of the Shannon scheme, and I failed. I discovered, however, a pamphlet issued by Dr. MacLaughlin—"The Shannon Scheme Considered in its National Economic Aspect." It was issued at 6d. and published by the Sackville Press. I had never heard of it until recently, when it came into my hands. I presume everybody will give Dr. MacLaughlin credit for knowing what he is writing about. In his introduction he says:-

"The Shannon scheme as prepared by Messrs. Siemens-Schuckert and modified by the experts appointed by the Government is visualised as taking place in three stages: (1) the partial development; (2) the further development; and (3) the final development. These three stages differed on both the hydraulic and electrical sides. On the hydraulic side, in storage, in the first stage only Lough Derg is to be used, in the second Lough Ree in addition, and in the third Lough Allen is to be added. On the electrical side the three stages correspond to stages of increased electrical supply and consumption. The development, which at the moment comes in question, is what is termed the "partial development." When the "further development" will occur will depend on the growth of consumption, the experts reckon in, roughly, ten years' time. In this article it is proposed only to deal with what now arises, viz., the "partial development."

He then goes on to explain that the scheme provides for the diversion of part of the Shannon and says that in a very dry year, such as 1905, these turbines will generate 153,000,000 units. He says that partial development, apart from providing for what is described, incidentally includes an improvement in the drainage and navigation of the Shannon. Its total cost is estimated at £5,200,000.

These are portions of his introduction to the pamphlet. The pamphlet goes on to explain how Ireland will benefit by this great scheme and how, particularly, the farming industry will benefit by it—that the farmers cannot possibly get along now without using electricity, and that the only means whereby electricity could be supplied to them was through the Shannon scheme. He compares the development of electricity in other countries and speaks of the great saving in coal. Here is an extract from what he says on coal:

"The Coal Conservation Committee reported some years back that in Great Britain on an average 5 lbs. of coal were required to produce one horse-power hour of energy. We may take this as a fair average for Irish conditions to-day. The Shannon, under the partial development, will produce 288,000,000 units in a year of average rainfall. On the above basis this is equivalent in energy to 860,000 tons of coal. Reckoning coal at an average of 30/- a ton throughout the Free State, this is equivalent in money value to £1,290,000. In this first stage of the Shannon scheme, therefore, we have the possibility of producing at home the equivalent of £1,290,000 worth of present-day imports. If we capitalise this sum at 5 per cent. we arrive at £25,800,000. The Shannon scheme, in its partial development, will cost £5,200,000. Surely it is good business to invest a capital of £5,000,000 to get the equivalent of a capital investment of £26,000,000!"

He goes on to describe the consumption of electricity in the Irish Free State. He tells us:

"In the Irish Free State there exists to-day 91 electric power stations for public supply purposes. Of these, 15 use water power to some extent, but in every case combined with a steam or oil plant. The rest are steam, suction gas, or oil driven. Of these 91 only four are alternating current stations. The others are direct current and their possible area of economic supply is thus necessarily limited to about one and a half miles from the power station. Such power stations can only supply those living in the towns or villages and their immediate neighbourhood. They can never supply farmers living in the country."

At the time this pamphlet was written there were 91 electric power stations throughout the country, and we may take it they were giving satisfaction to all concerned. From all I have knowledge of, the city electric power station was giving great satisfaction to the citizens of Dublin. He proceeds to speak of what will happen when the Shannon scheme has been developed:

"The ordinary man, rightly or wrongly, has the idea that the cost of installation is so great that he would not think of installing it without a good deal of persuasion. In the Dublin supply, for instance, of whose merits we hear so much and whose demerits, as pointed out by the European experts, were so carefully suppressed by the Dublin newspapers, there is no separate commercial management. A technical engineer is in charge, but where is the commercial man?"

He meant where was the commercial traveller to persuade men to take in electricity and tell them that the cost of installation would be small and that the price of electricity would also be small. Their commercial man has not been a success. We have the balance sheet only up to the 31st March, 1933. How the Electricity Supply Board stood on the 31st March this year we will not know until next January or February.

Here is an extract from the annual report and accounts of the Electricity Supply Board relating to installations and merchandise sales:-

"The credit taken for contracts completed and invoiced for installation work amounted to £49,794 12s. 10d., on which the rate of gross profit was 26.4 per cent. Having debited to the installation trading account a proper proportion of general overhead expenses, there is a net profit of £652 14s. 7d.

"The sales of appliances and apparatus for which credit has been taken amounted to £35,603 16s. 8d., on which the rate of gross profit was 18.6 per cent. Having charged a proper proportion of general overhead expenses, the merchandise trading account shows a net profit of £484 15s. 11d."

On their own showing the figures relating to installation work and sales indicate scarcely £1,000 profit on a capital of over £9,000,000. I have an example of their charges. A man told me that he asked them for a price for installing an electric water heater in a flat. They quoted him the price of £17 10s. He agreed to it, and had the heater installed. Afterwards he was fortunate enough to get a house, and he asked for an estimate to remove the heater from the flat to the house. The estimate was £6 10s. He demurred and said it was too high, and he refused to pay it. He got an ordinary electrical contractor to remove it for 35/-. He can produce the invoices, the estimates, etc. The actual number of units generated up to 31st March, 1933, was 166,076,000. Dr. MacLaughlin, in his introduction to the pamphlet, said the total cost for generating 153,000,000 units would be £5,200,000, so that for the additional 16,000,000 the price is raised to £9,600,000.

Mr. McGilligan

What about the distribution?

Mr. Kelly

I have the greatest possible sympathy with the Minister in this matter. I suppose of all the members of the Executive Council the greatest responsibility rests on his shoulders. He has taken charge of the arduous work of helping on industrial development in this country. Anybody with a head on his shoulders knows that electricity can be made a very potential asset in a Minister's hands, but it is in the Minister's hands it ought to be. Here we have a body with almost omnipotent powers. They can do what they like. In fact I do not think the Dáil has any control over them. I am almost sure the last time the Minister was introducing a Bill to give money for this enterprise he stated that he did not know anything about it and he was simply acting, so to speak, as the mouthpiece of the Board. I presume that it is the same position now.

No doubt the Minister's anxiety is to give employment. This would undoubtedly be helpful in that respect, but where is the use in throwing millions every year into an enterprise such as this unless we have some belief that is is going to be a success? Is it going to be a success? On a former occasion I was told that the scheme was only in its infancy. Apparently it is still very much a weakling. It has to get a lot of cod liver oil rubbed into it in the shape of millions of money. How long is it going to be a weakling? We must remember there were large numbers of electrical enterprises all over the country working and giving satisfaction and this board took possession of the whole of them. In Dublin they took possession of a really valuable plant. Here is the official statement of the Dublin Corporation undertaking on the 31st March, 1929. The valuation of the assets then was £1,826,000. In addition there were revenue assets amounting to £142,263, good debts due. There was net cash in bank of £57,980. The liabilities against those only amounted to £68,000. So there was a net balance of £1,959,000, less a loan debt of £514,000 still due, which meant a net capital handed over to the Electricity Supply Board of £1,445,670. That was what they received from the Dublin Corporation. Naturally, a man like me, who was associated with the municipal undertaking and the municipal body for so long, must take an interest and a keen interest in the working of this body that took possession of such a successful enterprise. But what do we find now? They closed down the Pigeon House at the time. As a matter of fact, they were going to scrap it. For some years, as I was told by a man who lived down there close to it, there was only a caretaker—one man. They found, however, that the Shannon scheme was not doing as well as it was thought it would do and they had to turn to the Pigeon House again and use it as an extra source of supply, and the coal is again coming into the harbour to-day as it did before. I suppose that the same kind of coal is being used there now as was used before. Unfortunately, also, in this dry season, as the members learned to their cost quite recently, 500,000 gallons of water a day are being used down there. I think that is the figure. I am almost sure that that was the figure that the city borough surveyor announced a few weeks ago. So that, really, only for the Pigeon House the Shannon Electricity Supply Board would not be worth a £5 note. That may seem a hard thing to say but that is my belief.

I think it is full time now for the Minister to say that he is going to take charge of this Shannon scheme; that he is going to work it as a national concern; that it is going to be looked after in the proper way; and that people are not going to be charged outrageous prices for installations. How are people going to get installations otherwise? If they employ an outside contractor to put these installations into their houses, they are still at the mercy of the board because the board may not pass them. I think that at least this board should be compelled to give up its commercial activities. Let them be suppliers of electricity in bulk and not be competing with men in the trade in Dublin and other cities and places throughout the Free State. Let them be satisfied to do what the corporation did—generate the electricity and then supply it in bulk. There is a great deal of dissatisfaction in connection with the Shannon scheme. I have heard it from all classes of citizens but I could hear from none that could give me any definite information concerning it.

I do not want to go into other matters that I might go into to-day. I am dealing here with the statements made by Dr. MacLaughlin. They are there in that pamphlet and they have not been borne out. More than £500,000 is being put into the enterprise now through this Bill. I must protest, although I am sure I am going to be the only protestant here, against any further money being spent until, at least, the Government have established a commission of inquiry to go into the whole question with regard to future development. I should be glad, and very glad, to hear of the scheme being a success, because I admit, as every man of commonsense must admit, that it would afford a great opportunity to our young people here to find employment directly through it or, indirectly, through the various enterprises and manufactures that would be fed by the current from the scheme. Emigration has ceased, and everybody is faced with the serious responsibility of what is going to become of our young people in this country in the future. As I say, I should be very glad if the scheme were a success, and I should be very glad to be able to announce to-day that I thought it was going to be a success. On the facts and figures that I have given, however, how can a man say that it will be a success? If the Minister would take my advice, he would establish a commission of inquiry, or better still, he would get his Executive Council to say that they are going to take control of this electricity supply in the future and just simply dispense with the board and appoint men of their own. In my view, it would be more suitable to do so from the point of view of conducting this enterprise in the future.

Mr. P. Hogan (Clare):

The Minister, in introducing this measure, told us that advantage was taken of the introduction of this amending Bill to redress certain impedimenta in the Principal Act, and I am very sorry to see that he did not take advantage of this Bill to redress certain grievances that still exist, notwithstanding all the several Bills that have been introduced since the original Bill was passed. First, I should like to ask what is the argument that can be put forward or the case that can be made for subsection (3) of Section 7? When Deputy McGilligan was Minister for Industry and Commerce he exempted the buildings, grounds, and such things in connection with the Shannon scheme from poor law assessment or valuation. He certainly did not make a case that could convince me, and, at the time, it did not convince my colleagues from Clare, as to the justice of taking from the county what they should receive in rates from those constructions in the county. I do not know what the case is. I cannot see that any case can be made.

If anybody takes the trouble to look up the Book of Estimates that is presented here every year since the Dáil was established, he will find that for every Government office or any national undertaking of this kind, there is a sum paid in rates. Yet we find, in the county that is getting no special advantage whatever from the establishment on its grounds of the buildings of the Shannon electricity scheme, that it is exempt from assessment from rates, and the Minister here again endeavours to continue that and intends to continue it. He says that the Minister for Local Government may declare that any particular works shall be exempt, either permanently or for a limited time. I do not know what case there is for that. I see that most of the works are going to be around Lough Derg. Most of that work will be in the County Clare. I should like to know what case the Minister can make for that. No case was made on the previous occasion and the Minister did not make a case in introducing the Bill. I hope that he will make a case now. The county did suffer a good deal of loss during the construction of the scheme, in the matter of public health service and in the matter of roads and such things. Now it is not getting one unit one farthing cheaper than any other place in the State, and yet if any other national institution was erected anywhere else, that institution would be subject to assessments for rates in the county in which is was situated or else an equivalent amount of money would be paid in. We cannot but say straight that we did not get much in Clare from the Shannon scheme, not much at all. We got in Killaloe the unemployment of 20 or 30 men and there is not one word in this scheme about it.

I want to say one word about compensation for them. They were employed constantly during the season, that is to say each season consecutively. But the Shannon hydraulic scheme has destroyed the source of their employment. That is one of the things they got because of the Shannon scheme. They got the closing down of a grinding mill because there was no water power. The power they hitherto used became a purely placid lake with no power to drive a mill. Now on top of that we get the fact that the Minister proposes to continue that. The Minister will have power to relieve from rates where the holding has been damaged. Instead of doing that the Minister might have repealed the section in the Act which previously did make buildings responsible for rate assessments.

I will have something to say on the Fisheries Bill regarding the compensation to people who were disemployed because of the operation of the Shannon scheme. I want to get it in here too because this is the origin of the disemployment for the last five years. On the top of that we have it that the local authority is deprived of that to which they are entitled in the matter of assessment for poor rates.

Mr. Lemass

The matters that were raised on this debate are somewhat varied. I will try to deal with them in order and as briefly as possible. It should be made clear that the construction of these additional works for the purpose of providing storage is not in any way in consequence of the comparative drought which was experienced this year, last year, and the previous year. The years 1932 and 1933 were dry years. The year 1933 was a very dry year, and up to date 1934 has been an exceptionally dry year. But the decision to proceed with these works has no connection whatever with that abnormal feature. These works would be required and would be economically justifiable if the ordinary normal rainfall had occurred during this dry period. Even if we had the works constructed and if last year there had been a normal rainfall there would still have been the necessity to have generated at the Pigeon House and at other stations a fairly large percentage of the units which were in fact developed by steam in that year.

These works for water storage are required to provide for the normal increase in the growth of the demand for electric current. The question of the economic cost is one which, I think, is easily understood. Last year 82,000,000 units were generated at the Pigeon House. The question arose was there any other way in which these units could have been obtained? When the question of obtaining these units by the erection of new works on the Shannon for increased storage arose, the calculation as to what the economical cost of these works would be had relation to the actual cost of generation through steam at the fuel stations. A certain figure was arrived at which represented the cost of generation from steam. An estimate was made which was checked by certain experts. Having regard to that figure and the amount of the capital sum which the board could afford to expend upon increased storage, the figure which was arrived at was roughly £520,000. The next step to be taken was to find what the actual works would cost. Certain contracting firms were asked to submit tenders for the execution of these works. These tenders were received and on them, plus the assumption that interest would be payable upon the advances by the Department of Finance at 5½ per cent., the actual cost was determined and shown to be a figure £93,000 above that of the present economic value of the works.

But if the rate of interest which the Department of Finance will require in respect of these advances is reduced from 5½ per cent., which the board has heretofore been paying, to a lower figure, then the gap between the actual cost and the economic value narrows and if the rate of interest comes as low as 4¾ per cent., the gap is closed completely, and the works to be carried out under this Bill will be an economic undertaking for the Electricity Supply Board without any grant.

Even when these works are constructed it will be necessary to generate a very substantial number of units at the Pigeon House and at other stations and to consider various other means by which additional energy can be secured by the utilisation of water power. The next stage in that connection will obviously be consideration of the possibility of the utilisation of the Liffey for that purpose. I do not know that any purpose is to be served by discussing the points raised by Deputy McGilligan as to whether it is fair and reasonable to ask the electricity consumers of this generation to provide in the price they pay for their current not merely for the repayment of the advances already made and to be made to the board but also to provide a Reserve Fund capable of securing the replacement of the existing works when the question arises. That is, of course, at the present time largely an academic question. The electricity consumers are not doing that, as Deputy McGilligan pointed out. They are not as yet doing more than paying the working cost of the scheme and of the working expenses of the board.

The question of the repayment of the advances is one under consideration now. It was at one stage hoped that the first repayment would be made in the present year. That is not possible and the question of the fixation of the date upon which payment commences is under consideration. But it will not be for some time to come. It is of much more importance that we should get the finances of the board upon a sound basis than that we should have an undue regard to academic points. I for one would be satisfied if I saw the Electricity Supply Board paying its working costs, and included in the working costs there are the depreciation charges and the interest upon the advances made and the repayment of the advances. I would not ask in addition to repaying the advances to accumulate a Reserve Fund, although certain reserve funds are required in order to provide against fresh advances having to be made to replace assets which were damaged by various accidents of one kind or another. There was a storm of last year which did a certain amount of damage. The repair of that damage, the replacements of the assets which were destroyed, and which had themselves been provided out of advances not yet repaid, should have been financed out of a Reserve Fund and not out of fresh advances. Certain reserves to meet contingencies of that kind are necessary. Subject to the accumulation of these reserves; to the payment of working costs, including depreciation; the payment of interest and the repayment of the advances, I think we can be very satisfied with the position of the Electricity Supply Board without looking for more. One point which I made during my opening remarks caused some misunderstanding, I think, because of the form of words I used. I spoke of the Minister for Finance being unable to guarantee for a number of years that funds would be available at a certain rate of interest. The advances which are to be made under this Bill will not actually fall to be made for some time to come, and it would be difficult to say now that two years ahead the State would be able to provide funds for the Electricity Supply Board at any particular rate of interest substantially below the rate which has been charged heretofore.

Deputy T. Kelly raised a number of points, all of which have been the subject of discussion here from time to time. The position, as I have explained before, is that there is in existence the Shannon works, on which £5,500,000, or a substantially larger sum now, have been invested. There is the position created in which the Electricity Supply Board has got effective control over the business of generating and distributing electric current here. It is not going to get us anywhere to debate now whether in 1924 or 1925 a different policy from that adopted should have been adopted, or whether things would have been better for the electricity consumer if nothing had been done, but the development of the electricity industry had been left to private enterprise. I think most people, who have given consideration to the matter, will agree that it is much better that we should have a national electricity scheme than that we should have a very large number of privately owned generating stations and distributing systems, with the consequent inability to adapt the supply to industrial requirements in any area, or to secure uniformity of rates or services in different parts of the country. In other countries where the electricity industry developed in that haphazard way through private enterprise, they have found it necessary to take more and more powers of regulation and control, with the ultimate result of getting a position in which they would have a nationally regulated system as we have here. The main consideration for us, therefore, is what we must do in order to make the best of the present situation. Whatever objection Deputy Kelly might have had to provision of the funds asked for the Electricity Supply Board at the beginning of this year presumably he would have no real objection to the funds being asked for in this Bill, which are designed to secure that more of the current which is at present being consumed, and which will be required by our people, will be generated by the use of water than by the use of coal. It is a particular source of satisfaction that, in carrying out the works which will enable that to be done, a very large number of people are going to get employment for a period.

It is not anticipated that the execution of those works will in any way interfere with navigation. There is a canal with connects Lough Allen with the river further down, but which has not been used for some time and which, I think, the Canals Commission estimated could not be put into working order by an expenditure of less than £50,000 or £55,000. I gave consideration to the question of navigation above Carrick-on-Shannon, because, as Deputies are aware, we are at present carrying out in that area certain investigations into mineral resources. If it should happen that those investigations will reveal the existence of mineral resources capable of commercial development, it might be necessary to have means of transportation by water. It appeared however, from the investigation which I caused to have made that the additional expenses which would be involved in constructing navigation works at a later date, over and above the expense which would be involved in constructing them now, was so small that it was obviously quite practicable to postpone a decision on the matter until the result of the investigations into the mineral resources was known. If it should appear that the execution of the works to permit transportation by water is desirable, that could be done at a cost very little, if at all, in excess of what would have to be expended on the existing canal in order to get it into a condition in which it could be navigated.

Reference was made to charges for electric current. I have no function in relation to that matter. The Act of 1927 puts on the Electricity Supply Board the responsibility of fixing charges which will yield it a revenue capable of meeting all its expenses, without making a profit. Deputy Kelly made some reference to the fact that the board made no profit. The board is, in fact, deterred by law from making a profit. It is required to fix its scales of charges so as to produce sufficient to meet its expenses, including in its expenses the necessity for making those provisions for reserves and other similar purposes.

Deputy Hogan asked why Clare did not get the benefit of the existence of the Shannon works in the County Clare in the form of a contribution in lieu of rates, such as is made in respect of certain other State property. One does not like to answer a question of that kind by asking another question, but the question: "Why should it?" is an obvious one, and appears to require an answer. Those works were undertaken as a national scheme. They were located in a certain part of the country. It was purely by chance that the County Clare was chosen; at least it was not due to anything associated with the local government of that county that such a site was chosen. Why the benefit of rates which would have to be paid by electricity consumers all over the country should be granted to the Clare County Council, because of the accidental fact that the works were situated there, is a point which is not easy to follow. I think, in fact, it is a good principle that where national works of that kind are established the country as a whole should benefit evenly by them rather than one particular county.

Mr. McGilligan

Has that principle been accepted?

Mr. Lemass

I think there is a lot to be said for the principle.

Mr. McGilligan

Deputy Hogan's remark was about his colleagues from Clare who did not accept that principle before. Have they now accepted it?

Mr. Lemass

That is leading me further afield than I intended to go. County Clare may have lost a little in the form of the unemployment of certain part-time fishermen and the closing down of certain mills which would probably have closed down in any case, but it certainly gained considerably also by the fact that there was a considerable influx of workers into the county, during the period of the construction of the scheme, which must have meant a large expenditure amongst the traders there of the money earned by them. I do not know if there was any other point raised that requires to be dealt with at this stage. I will endeavour to get, before the conclusion of the discussion on the Bill, the various figures and information that Deputy McGilligan asked for.

Mr. McGilligan

Could the Minister get the information in the form I asked for?

Mr. Lemass

I will endeavour to get it in that form and supply it to the Deputy.

Question put and agreed to.

Committee Stage ordered for this day week.