asked the Minister for Finance if he will state the circumstances which warranted the sale of that section of railway between Letterkenny and Farland Point to the Lough Swilly Railway Company, Derry; and, further, why the proposed sale was not advertised in the public Press.
Ceisteanna—Questions. Oral Answers. - Sale of Railway Property.
asked the Minister for Finance if he will state if a section of the Lough Swilly Railway between Letterkenny and Farland Point, which was the property of the Office of Public Works, was sold privately to the railway company for £12,000; and, if so, (1) why the property was sold, (2) who valued the property, (3) who accepted the sum offered by the purchaser, (4) if the sum paid was below the market value of the property, (5) why a public auction was not held, (6) the date on which approval was given to the sale, and (7) the dates of conferences held between the Office of Public Works and the purchasers.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 30 and 31 together, and to make a full statement in regard to this matter.
The Letterkenny railway ran from Letterkenny to Farland Point, a distance of 16½ miles. It was built with the aid of two loans advanced by the Commissioners of Public Works to the Letterkenny Railway Company over 70 years ago and totalling £85,000. One of the loans amounting to £35,000 was the subject of a baronial guarantee, and was paid off in 1924; but repayments on foot of the other loan, one of £50,000, which was the subject of a first mortgage on the property, had by the year 1887 fallen into such arrear that the commissioners decided to take possession of the line as mortgagees.
I should, perhaps, explain that at Farland Point, where the Letterkenny line terminated, there was no station or siding; the rails of the Letterkennycompany and of the Lough Swilly railway, which ran on to Derry, simply joined each other to form a continuous line.
The Londonderry and Lough Swilly Railway Company worked the Letterkenny line from its opening in 1883 under an operating agreement between the two companies, and after the Commissioners of Public Works took possession of the Letterkenny line as mortgagees, they entered into an agreement in 1888 with the Londonderry and Lough Swilly Railway Company for the working of the line on terms which provided for the retention by the company of a percentage of the gross receipts on a sliding scale and for payment of the balance to the commissioners. This agreement was expressed to be for a period of 30 years from the 1st July, 1887, and thereafter from year to year.
Following the 1914-18 War the railways were brought under Government control from 1917 to 1921 and under the terms of the control agreement between the British Government and the Irish Railways the annual amount to be paid to the Commissioners of Public Works in respect of the Letterkenny line was stabilised at the actual amount paid in 1913. This arrangement was continued after decontrol by the Irish Railways (Settlement of Claims) Act, 1921. Under these provisions, the position was that the Londonderry and Lough Swilly Railway Company became liable for an annual payment of approximately £2,200 to the Commissioners of Public Works.
The Letterkenny railway has been worked at a considerable loss for many years past. The annual payment to the commissioners of £2,200 fell into arrears almost from the start; and by 1934 the arrears amounted to £28,000. These arrears, and all subsequent annual payments, had to be written off.
Let me come now to the circumstances which led up to the sale of the Letterkenny line to the Londonderry and Lough Swilly Railway Company. The company was still working the line (in conjunction with its own railways) under the old agreement with thecommissioners to which I have referred when, in February, 1951, they intimated to the Minister for Industry and Commerce that they desired to terminate the train services operated by them on their own railway lines, from Bridgend to Buncrana and from Tooban Junction to Farland Point, and also on the Letterkenny line. Deputies will be aware of the provisions of the Railways Act, 1933, regarding the termination of rail services and that it is therein provided amongst other things (1) that an Order under Section 9 of the Act terminating any such services shall not be made by the Minister for Industry and Commerce unless the railway company had authority to carry on a road transport service and gave public notice of the establishment of, or intention to establish adequate road transport services in substitution for the rail services to be terminated; (2) that the Minister's Order would not relieve the company of the liability for the maintenance of bridges, level crossings, fences, drains and other works, etc., and (3) that employees rendered redundant by the closing of the rail services would be compensated by the company on terms prescribed by the statutes. In so far as the company's own sections of the railway system were concerned, the provisions of the Railways Act, 1933, were applicable, but this was not so in respect to the Letterkenny line.
The Londonderry and Lough Swilly Railway Company served notice on the Commissioners of Public Works terminating the working agreement of 1888; and the position then was that the company would cease to have any responsibility for the Letterkenny railway, while the Commissioners of Public Works would likewise have no responsibility, being merely mortgagees in possession, which they took of the property in 1887 in an endeavour to recover as much as possible of the debt due to them. This debt, which amounted to £108,000 (including interest) at 30th June, 1953, had long since been regarded as irrecoverable. An order terminating the rail services on the Bridgend to Buncrana and the Tooban Junction to Farland Point sections would effectively close the railservices on the Letterkenny line; but whereas the statutory obligations of maintenance and to redundant employees, and of providing substitute road services, to which I have referred, would remain with the Londonderry and Lough Swilly Railway Company, in so far as their own railways were concerned, no such obligations would attach to that company, or to any other body, in respect of the Letterkenny line. It was in these circumstances that it was decided, in consultation between the commissioners and the Department of Industry and Commerce, to negotiate with the Londonderry and Lough Swilly Railway Company with a view to the sale to them of the Letterkenny railway property.
The negotiations were opened on the 14th November, 1951, between representatives of the Department of Industry and Commerce, the Commissioners of Public Works and the railway company and were resumed on the 18th November, 1952, after the Transport Tribunal, to whom the matter of the closing of the lines had been referred by the Minister for Industry and Commerce for advice, had reported in favour of the company's proposal to close their own sections of the railway system and also in favour of the closing of the Letterkenny line. The negotiations concluded on the 14th May, 1953 when it was agreed, subject to the sanction of the Minister for Finance, to convey the property to the Londonderry and Lough Swilly Railway Company for a consideration of £12,500. That amount was agreed upon following (1) independent valuations by competent persons, made on behalf of the company, and the commissioners respectively, of the buildings and land, and (2) competitive quotations for rails, sleepers, poles and scrap metal, etc. The figure agreed upon for these assets was £26,475; and the offsetting liabilities which the company, on purchase, would assume in respect of the obligations of maintenance and compensation to redundant employees to which I have referred were assessed at £13,975 on the basis of estimates of cost made, following inspection, of the maintenance of bridges, level crossings,drains, culverts, etc., and of quotations obtained from insurance companies for the provision of annuities to cover the compensation to redundant employees. The sale to the company on the terms indicated was sanctioned by the Minister for Finance on the 2nd June, 1953 and was finally completed on the 30th June, 1953.
It is considered that this afforded the only practical and satisfactory solution of the problems and difficulties arising. The offering of the property by public advertisement for sale in lots, apart from the grave doubt as to whether it was within the competence of the commissioners to take that course having regard to the provisions of the Railways Acts, would have left the problems of maintenance, compensation to redundant employees, etc., in the air.
Might I ask the Parliamentary Secretary to repeat that answer?
Arising out of the Parliamentary Secretary's reply——
The answer to this question has been so comprehensive that I will allow only one supplementary question.
Does the Parliamentary Secretary not consider that the procedure of selling public property privately does not make for the complete satisfaction of the general public and does he not further consider, in view of the distasteful odour from this transaction, that the wisest and best course would have been to have the property sold publicly?
Shades of Tramore!
I am going to intervene in this matter——
I respectfully suggest that, as the question was addressed to the Minister for Finance——
The Department of the Minister for Industry and Commerce has been mentioned in thereply and the Minister is quite entitled to intervene.
The action taken regarding this line was taken on my decision. If this section of the railway line running from nowhere to nowhere which had come into the possession of the Board of Works as mortgagees in possession had been sold to the Lough Swilly Railway Company, no compensation would have been paid to the employees on the termination of the service nor provision made for the maintenance of the bridges and permanent way. May I add that if anybody else wants to buy any old sections of railway line throughout the country, publicly or privately, I shall be glad to see him in my office?
The Minister is the man who stopped the public auction.