I do not think we should allow this Bill to pass from the House without having a last look at its provisions and at the changes which it proposes to make in the transport situation in this country. These changes are not of very great significance but they represent the sum total of the proposals which the Government has to make for dealing with that transport situation. There is a change in the ownership of Córas Iompair Éireann. The great majority of those who have stock in that concern are having their State guaranteed 3 per cent. debentures transformed into State guaranteed 3 per cent. transport stock. So far as they are concerned the change is purely verbal. The rest of the shareholders, the owners of the common stock of Córas Iompair Éireann, are also getting in replacement of that common stock State guaranteed transport stock, and they alone are securing an advantage because whereas in the past they were entitled to receive a dividend upon their stockholding only when the company made a profit sufficient to permit of dividend payments they are now being guaranteed by the taxpayers an annual return of 2½ per cent. on their holding, whether the company makes a profit or a loss.
At the cost of £90,000 per year to the undertaking, underwritten by the taxpayer, we have changed the method of electing directors to the concern. Heretofore these directors, other than the chairman, were elected by the common stockholders. Now all of them, including the chairman, will be nominated by the Government. One must admit the possibility that a better board of directors will be chosen by the Government than was elected by the shareholders but it is difficult to convince oneself that that change in the personnel of the board, following upon the change in the method of selecting the board, will in itself solve any transport problem.
Other changes in the transport situation which the Bill effects are also of no very great significance in relation to the situation. Córas Iompair Éireann is being released from all statutory control over the charges it may make for transport services. It has been released from all statutory control over the adequacy of the services it provides except to this extent, that it may not cease a service of trains over any branch lines upon which services are now run or abandon permanently a branch line on which services are not now run without the consent of a transport tribunal to be established.
A sum of £7,000,000 may be advanced to the undertaking or raised upon Government guaranteed stock to meet its future estimated capital needs. I doubt if there is any Deputy in this House who sat in during all the debate on the Bill who believes that it contains a solution of our transport problem. Despite the changes in the policy of the Government which were announced since the Bill was first circulated, it is difficult to feel convinced that the Government have given serious consideration to the transport problem. Córas Iompair Éireann's difficulties are, in the main, due to its railway services. Its road freight services, omnibus services and other supplementary services, such as its hotels, all earn profits, but its railway undertaking produces a substantial loss. The kernel of its railway problem is that the cost of operating the railway services far exceeds what, in our conditions, these railways are capable of earning in revenue. If there is to be any solution to the Córas Iompair Éireann problem, other than asking the taxpayers to subsidise it, it must be applied in relation to its railway undertaking. It must be a solution which will ensure either that its railway undertaking will be able to increase its revenue or reduce its cost. The prospects of increasing revenue are doubtful. Everybody who has examined the transport position here has recognised the difficulty of expanding the business available to railway undertakings sufficiently to enable them to operate without loss.
Various suggestions for forcing traffic back on to the railway have been adopted or recommended from time to time. The expert, whose report prompted the Government into action, Sir James Milne, also considered that difficulty and made his recommendation for the limitation of private lorry transport, a recommendation which apparently has not been adopted. Despite the optimism with which he, in his report, considered the future, he was not able to hold out the prospect of the Córas Iompair Éireann railway undertaking avoiding losses in the future, even on the various assumptions which he made as to future costs and other factors, assumptions which time has already proven to have been unjustified. If, therefore, there is to be any solution in the foreseeable future of the problem confronting the new Córas Iompair Éireann Board, it has to be found in re-equipment and reorganisation of the railway undertaking in such a way as to secure a reduction in operating costs and thereby permit of a reduction in freight charges which will attract a larger volume of traffic. I feel certain, however, that neither Sir James Milne. any officer of Córas Iompair Éireann nor any railway expert, whose mind is brought to bear on the problem, will assert that it is possible to effect the re-equipment and reorganisation necessary in the Córas Iompair Éireann railway undertaking within a limit of £7,000,000 additional capital expenditure. Even for the reconstruction of the permanent way so as to permit of higher speeds being run, without considering at all the reopening of closed branches, we know that half the total capital sum provided by this measure will be required.
The standardisation of rolling stock, the modernisation of carriages and wagons, the reconstruction of goods stations and the multitude of other changes which are recognised to be necessary will clearly involve over a period of time—five, ten or 15 years—a substantial capital outlay. The Minister, however, indicated in the opening words of his opening speech on this Bill that capital outlay on an adequate scale was the one solution which the Government was not prepared to try. He informed the House that the former chairman of Córas Iompair Éireann had outlined to him a programme for capital expenditure on the undertaking, mainly on the railways, but also upon other branches of the undertaking, amounting to some £17,500,000, and so enormous did the Minister consider that figure to be that he described it as madly extravagant.
If there is to be no fundamental reconstruction of our transport system, no getting down to the real cause of losses on railway operation, then we have to recognise that this Bill gives us at best a patched-up system which is bound to lose money, which is bound to involve as an offset of these losses a heavy annual subsidy from the Exchequer. That the Government have in mind a patched-up system has been evident, I think, during the whole of this discussion. It was evident in their attitude to the Store Street bus terminus and to other projects for the expansion of the railway organisation and productive capacity which were in train and which they killed. I do not think that even with the complete re-equipment of the railway and the introduction of improved organisation and methods of working, the railway can entirely earn by itself sufficient to cover operating costs, but I think the gap between revenue and cost can be brought well within the limit of the profit that can be earned on the other branches of the Córas Iompair Éireann system. If that is not so, if that does not prove to be so, then the solution must be found by permitting Córas Iompair Éireann to undertake other activities, even activities of a non-transport character, which would expand its total capacity to earn profits.
I do not know why there should be any hesitation to recognise the substantial capital needs of the Córas Iompair Éireann system in view of the many references which have been made by members of the Government from time to time about the desirability of repatriating external assets, the utilisation for investment here of funds held in this country but invested abroad. There is surely no field for investment as large as the transport organisation, or capable of yielding as substantial a return in the efficiency of national production and the lowering of trade costs, whether internal trade or export trade.
It was, in my view, no condemnation of the former chairman and board of Córas Iompair Éireann that they had intended to propose this substantial capital outlay. The decision as to whether that capital outlay was to be facilitated by legislation did not rest with them. They recognised the need for it and stated the need for it. They stated it to the present Minister and he decided against their recommendation. He has produced here a Bill which apparently involves only the minimum of capital expenditure necessary to keep the undertaking functioning, expenditure which is sub-divided under heads set out in the Milne Report to which the £7,000,000 figure in the Bill must be related.
If all this talk about the repatriation of external assets is anything more than a weak excuse for the continuance of a deficit on our external trade, then those who are speaking of them should turn their attention to the possibilities offered by Córas Iompair Éireann's needs and Córas Iompair Éireann's opportunities. We can, through capital investment in Córas Iompair Éireann's not merely increase the efficiency of our transport undertaking, not merely reduce the cost of public transport services to those who use them, not merely avoid a heavy annual drain upon the Exchequer through subsidy to Córas Iompair Éireann, but we can also build up important manufacturing activities which are not practicable in this country because of our limited market and size unless Córas Iompair Éireann is in some way associated with them.
The Bill, it is true, does give Córas Iompair Éireann the right to engage in manufacturing activities, but the action of the Government in closing down the various projects which were in train for the production here of motor chassis, steel wagons and other equipment required by Córas Iompair Éireann is an indication that the terms of the Bill which give it powers are not intended to be implemented and, if they are to be implemented, then clearly the capital provisions of the Bill are entirely inadequate.