I move:—
That a supplementary sum not exceeding £300,000 be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1957, for certain Transport Services; for Grants for Harbours; for the Salaries and Expenses of the Marine Service (Merchant Shipping Acts, 1894 to 1952, and the Foreshore Act, 1933 (No. 12 of 1933)); for certain Protective Equipment for Ships; for certain payments in respect of Compensation, including the cost of medical treatment (No. 19 of 1946); and for the Coast Life Saving Service.
I do not like to suggest to the Dáil that I have succeeded in disentangling in my own mind the financial position of C.I.E. I think it is clear that it is a very serious one and I do not want to do more than give the House the general picture in so far as I understand it at this stage.
On the revenue side, Deputies, I think, are aware that no provision has been made for the payment of grants to C.I.E. in respect of losses for some time past, and at the beginning of this financial year C.I.E. had a revenue debit of approximately £870,000. On the capital side C.I.E. were authorised in 1955 to issue stock to the extent of £4½ million, which they did, and that covered its expenditure on capital account to the end of March last. Authority to raise capital by further stock issues in 1956 was not given to them. It is quite obvious, therefore, that with a substantial revenue debit and no provision for new capital to meet its obligations on capital account, C.I.E. ran out of cash fairly early in this financial year. It carried on by means of temporary borrowings, by negotiating for the partial deferment of payments due to suppliers of diesel locomotives and other capital equipment, and by obtaining from the Exchequer by vote of the Dáil an advance described as a repayable advance of £1,000,000 to meet its capital obligations to the end of November last.
The £700,000 for which authority is now being sought is also to be classified as an advance on capital account. It is money required to meet the obligations of the board in respect of capital expenditure due for payment by it before the 31st March next. There is no provision being made to meet its operating losses. It is estimated that the losses of C.I.E. in the present financial year, 1956-57, are £1,825,000, of which very nearly £800,000 represents interest due upon its Stock which will fall to be paid from the Exchequer under the State guarantee.
These substantial losses arose notwithstanding the fact that a 10 per cent. increase in rail fares and in road and rail freight charges was brought into operation during the year. It is not yet clear to me, I must say, how the deficiency was financed, but presumably there are still amounts due by the board to creditors and there probably has been some running down of stocks.