I move:—
That Dáil Éireann approves the following Order in draft:—
State Guarantees Act, 1954 (Amendment of Schedule) Order, 1957,
a copy of which Order in draft has been laid before the House.
Return to Writ—Dublin North (Central). - State Guarantees Act, 1954 (Amendment of Schedule) Order, 1957—Motion of Approval.
The purpose of the draft Order to which this motion refers is to provide the Dundalk Engineering Works with working capital by way of bank borrowing guaranteed by the Minister for Finance. Under the State Guarantees Act of 1954, the Minister for Finance may guarantee, both as to principal and interest, borrowing by a body scheduled under that Act within the limits specified under the Schedule. Section 9 of the State Guarantees Act empowers the Government, by Order, to add a body to the Schedule and to specify the limit by which borrowing by that body may be guaranteed.
A draft of the Order must be laid before each of the two Houses of the Oireachtas and an Order may not be made until a motion approving of the draft Order has been passed by each House. It is proposed in the draft Order to add the Dundalk Engineering Works to the Schedule of the State Guarantees Act and to insert a sum of £500,000 as the maximum amount which may be guaranteed by the Minister for Finance.
The likelihood of problems arising which would have a prejudicial effect upon the maintenance of employment in the Dundalk railway workshops became clear for the first time in 1955 when the Minister of Commerce in Belfast informed my predecessor of his intention to cease paying subsidies in respect of three of the cross-Border lines of the G.N.R. system.
It became still more obvious when, at a somewhat later date, he communicated his intention to close down also the Six County internal line between Portadown and Derry. The implementation of these two decisions involved the disappearance of almost two-thirds of the total mileage of line in the G.N.R. system and obviously that was likely to involve corresponding curtailment of the amount of the railway work available for the Dundalk workshops. Shortly after I resumed office as Minister for Industry and Commerce this problem was brought to my notice, and after some preliminary communications, I went to Belfast for the purpose of discussing it with the Minister of Commerce there.
I found that the position was even more urgent than I had at first assumed because, though Lord Glentoran agreed during the course of our discussions to keep open for at least two years the line from Portadown to Derry, he informed me of his intention to exercise his right under the agreement about the G.N.R. to terminate the whole agreement at the end of the preliminary five-year period for which it was expressed to run. The agreement was so framed that both parties to it were bound by it for a minimum period of five years, but either could give notice to terminate it after that five-year period.
The Minister of Commerce in Belfast informed me that he intended to give notice to terminate the agreement when the five-year period had expired, on October 30th, 1958. It was clear that the termination of the agreement would bring the prospects of maintaining activity and employment in the Dundalk railway workshops back to the position they were in in 1953, before the agreement was made. Deputies will remember that, in 1953, it was proposed by the Belfast authorities to divide the G.N.R. into two parts, one part to be administered by the Ulster Transport Authority in Belfast and the other part to be left to whatever arrangement we thought fit to apply to it here. By reason of the agreement made in 1953, that prospect was removed for the time being. In the course of those negotiations, the position of the Dundalk workshops was very much on the centre of the table, and indeed I made it clear that apart from any more general consideration, the immediate practical interest we had in preserving the integrity of the G.N.R. system was the fact that these workshops, which constituted the main workshops of the system, were located in Dundalk.
The position which appeared likely to emerge as a result of the notice of intention to terminate that agreement was similar to that which we faced before the agreement was made. Because of the implications of that announcement, I gave the matter of the Dundalk workshops the most urgent consideration. These workshops are in a somewhat different position from that of other properties entrusted to the management of the G.N.R. Board. The agreement of 1953 provided that the physical assets of the G.N.R. in the Twenty-Six Counties would be vested in the Minister for Industry and Commerce here and the physical assets in the Six Counties vested in the Ulster Transport Authority; but the Dundalk workshops were put into a special category.
These workshops are the property of the G.N.R. Board. There is special provision regarding them in the agreement and indeed it was inserted in the agreement at our insistence, because it was intended to provide thereby for the retention by the joint board of the Dundalk workshops as the main workshops of the whole system. In order to give them the protection which it was desired to give them they were put into that special category as the property of the joint board.
If the joint board was terminated on the termination of the agreement presumably some arrangement would have to be made regarding its assets and the workshops, as the property of the board, would presumably be regarded as part of its assets to be disposed of, the proceeds if any to be divided between the two parties to the agreement. I felt that situation would be unsatisfactory in the extreme. While one could contemplate acquiring the workshops on the termination of the G.N.R. Board, it was certain that there would be a period of difficulty before any alternative arrangements in regard to the utilisation of these workshops could be completed. The uncertainty that would prevail amongst the employees in the workshops would be bound to have a serious effect on their morale and efficiency and the time that would be available fur their reorganisation or re-equipment, to enable new forms of activity to be developed for them, would be inadequate.
Already I felt that the time available to me to make alternative arrangements, and to get supplementary activities undertaken in the shops was insufficient, but, such as it was, I was anxious to make full use of it so that the minimum difficulty would emerge when the G.N.R. ceased to exist, with the least possible dislocation of employment. Accordingly, I opened negotiations with the Minister of Commerce in Belfast, with a view to securing his concurrence in an arrangement which would enable the reorganisation and realignment of the shops to begin at once. In the course of the negotiations, some legal and other problems emerged, but finally agreement was reached in principle for the leasing of the shops to a new company, on a basis which would involve no loss to the G.N.R. Board, which would ensure that all the work which the shops would ordinarily do for the G.N.R. Board would continue to be done there, so long as the G.N.R. Board remained in existence, and at the same time, give the necessary freedom of action to develop the workshops to undertake ordinary commercial engineering business.
In the meantime, and in anticipation of the satisfactory outcome of the negotiations with the authorities in Belfast, we bad taken steps to set up a new company which we called the Dundalk Engineering Works. Indeed, before any final agreement was recorded, negotiations had been opened between the new company and the G.N.R. Board for the taking over of the workshops, for the allocation, valuation and disposal of the stocks of material in the works, for arranging the continuation of the normal work done in the shops for the G.N.R., and also for the transfer to the new company of the staff employed in, and in connection with, the works.
These negotiations were very involved and intricate and indeed while they are almost completed now, they have not been quite finalised. The actual lease has not yet been completed. The transfer of the shops to the new company has not yet taken place, but I hope it will be settled soon. I had in mind an earlier date for the completion of these arrangements, but the multitude of details which arose for settlement made that impossible.
When the new company was set up and, while all these other discussions and negotiations were going on, it was directed, on the assumption that the arrangements for the leasing of the shops to the company would be satisfactorily concluded, to consider and investigate all possibilities for the development of commercial engineering activities there on a scale which would hold out a fair prospect of maintaining employment in the shops.
Deputies will appreciate that in order to develop at Dundalk commercial engineering activities on that scale, considerable working capital will be required. For the time being, the new company will have these shops on lease only and, consequently, will not possess assets which could be made available as security for borrowing in the ordinary way. That is why it is necessary to support its borrowing by a State guarantee, to put the State credit behind the undertaking.
The company has already tendered for large contracts abroad. Naturally, we hope it will be successful in securing some or all of the contracts which it is seeking. On the assumption that it may be successful in securing these contracts or some other contracts of equivalent dimensions and that certain other plans which it has under consideration can proceed, it is estimated that a working capital of approximately £500,000 may be required.
It is, of course, important that the company should be in a position to tackle vigorously and without any financial impediment the task of developing new activities. I want to be most careful in not creating any impression that the arrangements made to date put beyond doubt the future of the Dundalk shops. The board of the new company have been given an immense and very difficult task indeed. Neither they nor I can guarantee success. Success will, in the main, depend upon the competence with which the undertaking is directed. It will depend upon the opportunities for the development of new forms of engineering activity in Dundalk which may arise and it will depend particularly upon the energy and enthusiasm with which the workers in the shops face the job of building up the efficiency of the works in a way which will enhance the prospects of developing new commercial activities and particularly of obtaining export business for the products.
Over 1,000 workers are involved. The establishment of a new enterprise in this country employing 1,000 skilled, adult male workers would be a big achievement at any time, but the preservation of employment on that scale at Dundalk is as big an undertaking to face and nobody has any illusions about its dimensions. However, it is, I suppose, possible to decide that this problem would have arisen at some time. Later in the month, we will be discussing future transport policy here and I should imagine that Deputies will have views to express as to the part the railways will play in the future transport system of the country, but whatever views we may have about that, I suppose there are not many who would confidently predict that railways will certainly be in operation here ten, 15 or 25 years from now — certainly not on the scale on which they are now operating.
At some stage during that period, the country would have had to face up to a surplus of railway workshop capacity and it would have to consider what measures could be taken to utilise that surplus capacity in some other direction which would benefit the country and preserve the employment involved. If I am right in my belief that this situation would have arisen some time, we may as well face it now as any other time. Indeed, if the outcome of this effort which is being made to transform the Dundalk railway workshops into a general engineering undertaking of substantial size is successful, then this situation may prove to be all for the best.
There are quite a number of subsidiary problems arising out of the transfer of those workshops to a new company, not all of which have been resolved, although, I think, that all have been considered and discussed with the people concerned. If I express an element of doubt as to whether or not we have covered all in our discussions to date, it is because quite a number of new problems are emerging from the complicated structure of the arrangements affecting staffs which operated under the G.N.R. Board and, indeed, I suppose operates in any railway undertaking of that kind. These negotiations and discussions covered such matters as the pension fund applying to the workers in the Dundalk shops, the very substantial deficit in that fund, the compensation rights of salaried staff which, naturally, the people concerned would be anxious to preserve until they could be secured and a number of similar matters of that kind, some considerably intricate, some more simple I had discussions with the representatives of the trade unions concerned in connection with these matters. Indeed, I heard, during the course of these discussions, a few new problems that I did not even know existed but which will now be dealt with. There have been discussions between these unions and the management of the new company and there have been almost continuous discussions between the board of the new company and the existing G.N.R. Board.
It is obvious that the solution of a number of those problems will involve legislation and it will be presented to the Dáil in due course. In the meantime, however, I am satisfied that suitable and acceptable working conditions can be completed.
I recommend this motion to the Dáil. I am certain that members of the Dáil will have no difficulty in concurring. The enterprise with which this new company is being entrusted in Dundalk is a major enterprise. It certainly could not be expected to carry it through without finance and the purpose of this motion is to enable them to get that finance through negotiation with bankers supported by the State guarantee which will be given as soon as this motion is passed.
Would the Minister answer a few specific questions? Is this a private or public company? Is it a company the share capital of which has been subscribed by private individuals or a company the share capital of which has been provided by the Minister for Finance? The Minister might save trouble if——
At the moment it is a company with £100 capital all of which is held by the Minister for Finance. I should not like to suggest, however, that that may be the permanent position. It certainly will be the position for some time but I would contemplate the possibility, assuming this company succeeds in developing commercial engineering activities in Dundalk on a scale which would justify it, the formation of a different type of company and possibly a public issue of shares in that company.
The Minister mentioned that the works were at present leased to the company. He also mentioned the question of purchase at a later date. Did I understand that the term of the lease is until such time as the G.N.R. position is cleared up or the undertaking closed down? I think it is a desirable thing that the facts should be put on the records of the House before the guarantee is given. We are all in favour of the guarantee.
My original idea was that in so far as the termination of the Great Northern Company agreement would involve the transfer of the workshops to a new undertaking at some time, we should take time by the forelock and do it now. Transfer on that basis proved difficult for legal reasons and, therefore, this lease arrangement was made instead. The workshops are leased to the new company on a basis which, I think, does not involve any substantial payment by the company to the G.N.R. Obviously, there will be a new situation on the 30th October, 1958, assuming the termination of the agreement is then effected. At that time I would contemplate that this company would then come into the ownership of the property.
Does the Minister contemplate that will be the time when the legislation he has indicated would come before the House?
No. I think it may be necessary to have legislation before that.
We would be quite satisfied with it not later than that date.
It may be necessary to make earlier arrangements in respect of pension rights and compensation rights so as to preserve those rights during that transition period but I should not like to say so definitely. I certainly think that the people concerned would like to see these rights put upon a statutory basis as soon as possible and I should like to meet them in that respect.
From what I gather, the present situation is that this Order enables the Minister for Finance to guarantee the company of which he is the sole shareholder. Is not that the present situation?
That is right.
I do not think that there will be any objection to the Minister giving the guarantee which is sought in the motion but I think it would be unwise if we were to imagine that giving this guarantee is going to provide a solution for all the problems which spin around the Dundalk workshops. There is no doubt in the world of the intention of the Northern Government to close down railways entirely in the Six Counties. They have closed a number of their short internal lines. They have indicated they propose to close cross-Border lines or to accept no more financial responsibility for them. At present I think they have got three lines and perhaps a small line to Bangor. They have the Belfast to the Border line; the Belfast to Derry line via Portadown; the Belfast to Derry line via Portrush and, I think, a line from Belfast to Bangor.
They have indicated already that they intend to close one of the lines to Derry and the line that is going to be closed is the one that will hit Tyrone and Fermanagh very badly. It is the line between Portadown and Derry which is a cross-Border line for about ten or 15 miles where it runs into our territory at Donegal. It is only a matter of a short time until that line goes and then the Six Counties will have left the Belfast to the Border line, the small line from Bangor to Belfast and the line from Belfast to Derry. I think they will follow pretty soon because the Northern Government have declared that they regard the Six Counties as too small an area to maintain an internal railway system and they have fully convinced themselves, the cost of providing substitute transport notwithstanding, that it is much better for their economy to provide lorries and buses than it is to maintain the railway system in the Six Counties.
The Dundalk workshops have had a rather difficult economic career notwithstanding the existence of a fully developed transport system in the Six Counties. We must visualise the workshops against a new background, the background that a number of lines in the Six Counties have gone, that others are on the way out and others have had preliminary notice of closing certain of the lines served upon them. The Dundalk workshops are, therefore, left in the position that, being faced with the certainty that they will lose a substantial amount of trade from their former customer, the G.N.R., they must consider whether it will be possible for them to find alternative work in the commercial market which will enable them to maintain their current volume of employment.
At all events, the economics of the Dundalk workshops must be considered against the background that in the course of time — and I do not think it will be very long—if the Northern Government maintains its present attitude, they will get very little, if indeed any, railway work from the Six Counties. It must be remembered also that the G.N.R. have workshops in Belfast and I imagine the Belfast workshops will get a fair amount of work, particularly when the Dundalk workshops are owned by or on behalf of this Government. I suspect, therefore, that some of the possible work will be transferred to the Belfast workshops and that the Northern Government will see that as much of the work as possible will be done there, especially when they are clear of the financial responsibilities for maintaining the Dundalk workshops.
Any examination of the prospects before the Dundalk workshops must take cognisance of that rather wintry background which, I fear, does not spell out an optimistic future for them. It may, of course, be possible that the Dundalk workshops will get work in the commercial market. I doubt very much about the possibilities of getting substantial work in continental markets because continental engineering firms are not only highly developed but highly equipped for engineering work, and the cost of importing steel and iron here is greater than the price at which these raw materials are available in continental countries. Anybody who operates with steel or pig iron here knows perfectly well that he operates at once at a competitive disadvantage against anybody who uses these raw materials either in Britain or the Six Counties. That is one of the disadvantages which the Dundalk workshops will have in competing in markets where the raw material is cheaper than that raw material can be purchased for importation at Dundalk.
There is another problem to which some consideration should be given. As far as my recollection serves me, there was an examination of the efficiency of the Dundalk workshops with a view to placing the establishment on a more efficient and more competitive basis and if the Minister has not read that report he ought to do so, though I hope he has read it in his consideration of this matter. It does not disclose any high target of efficiency in the organisation of the place. I pass no derogatory comment whatever on the skill of the people employed there. Some of the finest craftsmen in the country are employed in the Dundalk workshops, but even a fine craftsman needs competent direction on that job. It will be found that the deficiencies in the Dundalk workshops are weaknesses at the top level and that a scheme of organisation exists there which does not give the works an opportunity of doing the work as efficiently as it could be done if the top stratum responsible for the running of the works were to plan the works in a manner that would give a much better return. The new directors will have a pretty plateful to get the works organised in such a way that the skill of the operatives there, which is well known, can be utilised in an economically rewarding way under the new régime there.
I should like to ask the Minister what is the position in respect of workers who are now employed by the G.N.R. and who may be transferred to the Dundalk Engineering Works. Many of these workers either have pension rights or at least have a moral claim or perhaps a legal claim to compensation in the event of their being rendered redundant or in the event of their being dismissed as a result of the closing of all or portion of the lines. It would be obviously unfair to transfer them to the Dundalk Engineering Works without making some provision for whatever pension rights have accrued to them. While you could transfer them to employment at present in the Dundalk works, the future of the works might be such that they could not retain their employment there. Therefore, unless something is done for them by legislation they run the risk of falling between two stools. I hope the Minister, by what he has said, concedes that some provision should be made whereby a G.N.R. employee who is transferred to the new Dundalk works will have held for him whatever pension rights he has at present and that he will be able to draw on those rights and have them fully recognised if he loses his employment in the new engineering works.
I think the position of those people should be safeguarded by legislation and that the liability of some organisation to pay them compensation should be clearly established by statute, so that their rights will not be surrounded by any doubts in the event of their subsequently losing their employment or when the time comes for them to retire in the ordinary way.
I should like also to ask the Minister if it is possible for him to disclose what the lease terms are—in other words, what sum of money the new company is paying to the G.N.R. for the lease of the premises, the lease of the works and the use of the equipment there; whether there are any maintenance conditions imposed in the lease; and, generally speaking, what the terms are under which the works will be leased.
I should like in addition to get some further information as to what the position will be when the G.N.R., as now constituted as a unified company, will cease to exist next year. Both Governments have an interest in the Dundalk works. I suppose one could physically dispose of the works and parcel out the proceeds between the two Governments; but I take it that what we are doing to-day in approving this Order is an indication that at some date in the future the Dundalk works and their equipment will be valued and that we, who apparently desire to run the works as a going concern under the name of Dundalk Engineering Works, will pay to the Six County Government whatever is assumed to be their rights in the works. In other words, it is not contemplated closing down the works and selling it and then trying to restart by putting the fragments together again. I take it the intention is that, having ascertained the value of the works, we would pay over—by a lump sum or by instalments or by some other arrangements—the interest which the Six Counties have in the works. Perhaps the Minister will be able to tell us at this stage whether that is the course on which the company proposes to embark.
I should like to ascertain whether any consideration was given to the question of the Dundalk works operating as a joint concern by the Six-County Government and the Twenty-Six County Government. Was any suggestion made that the two Governments would find the necessary capital or the necessary guarantees to operate the works, or was that proposition ever put to the Six-County Government; and, if so, perhaps the Minister could indicate what the reaction was?
As I said at the outset, I think the House generally will approve this Order. An extremely difficult situation has been thrown up by the transport developments in the Six Counties, possibly aggravated by the transport developments here in the course of time. I think it is only right that every possibility should be examined of maintaining the Dundalk Engineering Works and I hope that the works will be able to operate satisfactorily and profitably as a commercial concern. At this stage, however, we should recognise that it is in the nature of an experiment and that there is less than a calculated risk involved in what we are doing. The company will have considerable difficulties and every governmental help and commercial ingenuity will have to be used by the Government and by the directors of the company in order to maintain the present very substantial volume of employment which is provided at the Dundalk works. I agree that every possible effort should be made, through the provision of the necessary guarantees, to save the very large number of skilled workers and their families from the certainty of emigration if nothing were done to maintain the potential output of the engineering works at Dundalk.
I welcome this Order very sincerely—representing as I do that part of the County Louth. I, too, should like the Minister to give some more specific details of the working arrangements which he has made with this new company. I should like him to say whether this money, which will be provided on loan to the new company, will be used for the renewal of existing plant, the renovation of workshops, or, in part at least, to pay compensation and pensions to the men who will become redundant on the change over. Again, will it be used as a prop to wages until such time as orders come rolling in to the new company?
Deputy Norton hit on the most important aspect of this matter when he referred to the compensation item. I am informed that the men have obtained legal opinion to the effect that they are entitled to compensation and, as the Minister knows, he saw them recently and discussed that issue with them. He also told them that he could not pronounce on that matter with any sense of finality, that he would need to have at his side the Minister for Finance.
Oh, no; on the legal aspect of that I could not have been more definite.
I should like also to deal with the work which is being done at the present time in the workshops in Dundalk. If I construe the agreement aright, I understand that next October the existing repair work which is done in Dundalk will be transferred to Northern Ireland and C.I.E. respectively, that C.I.E. will take over the repairs of all the buses and all the road vehicles and they will be responsible. As the Minister has said, they have been instructed, as he calls it, to take over such repair work. I would like him to define what he means by "instructed to take over." Will it be the case that C.I.E. will do the work in C.I.E. workshops, or will it be the case that the work will be done for C.I.E. in Dundalk as a sort of sub-contract?
I should like to join with the Minister and other speakers who have expressed the hope and the wish that the new company will be a success. In this competitive age, their task will be very difficult and in my opinion that task will be made all the more easy if the men co-operate in a spirit of goodwill and honest endeavour. It will be up to them, too, and not only up to the directors and those at the top. It will be up to the men whose interests are at stake to co-operate in whatever plans are being prepared for this company.
I should like to stress the compensation aspect. A lot of men fear that while no men will be dismissed when this new company takes over, after a few months they will be dismissed and they will be without any compensation rights or any pension rights. The Minister said that the pension fund had a deficit and that it was being subsidised by the Government. I hope that, if possible, that position will continue at least until such time as the new company is on a solid footing.
It is quite true, of course, as Deputy Norton said, that this situation at Dundalk arises from a change of policy regarding public transport services in the Six-County area. The agreement of 1953 would hardly have been possible at all—nor, indeed, would we have been very much interested in it—were it not for the fact that there was at that time uniformity in the main aspects of transport policy as applied in each area. We here and they in Belfast were seeking to preserve the operation of railways and to that end were limiting the competition to which they were subjected in respect of freight business from road hauliers. If there had been in 1953 the intention in Belfast to close down railway lines and to have a free-for-all in respect of road freight business, the prospect of the G.N.R. Board making a profit, or breaking even, would have been so remote that we would not, I think, have been interested in the proposition that we should buy out the owners of what was then the privately-owned G.N.R. Company.
If I have any feeling in this matter, it is one of disappointment. The proposition which I put to the Dáil in 1953, which involved the payment by us of half the purchase price of the undertaking, to the extent of £2,250,000, was based upon the expectation that policy generally in respect of transport in both areas would continue to develop upon the lines then laid down and that no great divergence in policy would develop at any future time. There has been obviously an almost complete change of policy in the Six-County area. The decision now is to strip down the railway system to the minimum mileage and to make it almost impossible for that system, in my view, ever to make a profit, by allowing a complete free-for-all in road freight operation.
However, whatever the "might-have-beens" are, the fact is that we have been informed that this agreement is going to terminate. That will create a situation in which the only part of the Great Northern system which will be our concern will be the railway line from Dublin to the Border and the road passenger and freight services which it operates in the Twenty-Six County area. I think most people will agree that it would be foolish to keep a separate organisation in existence to operate that small mileage of line, that we would not require two superstructures of management to look after two divided transport undertakings and that the only sensible course, when that happens, will be to amalgamate all our internal transport services in one undertaking. Therefore, it is to be assumed that the G.N.R., as a separate entity, will cease to exist, although there will certainly be some working arrangement between the two transport authorities for the operation of railway services upon the Dublin-Belfast line which will continue to be open.
Deputy Norton is somewhat doubtful about the prospect of getting commercial engineering activities into the Dundalk workshops on a scale which will preserve the present volume of employment there. Naturally, we are all doubtful about that. I stressed in my opening remarks the magnitude of the task which we have given to this new company. However, I have some reason to think that they may succeed. At present they are endeavouring to obtain export business of the kind for which the works are at present equipped, as a first-move. If they succeed in that, it will case the problem of transition very considerably. In the meantime, of course, various other possibilities are being investigated.
Deputy Coburn asked what this £500,000 is for. It is for working capital for the undertaking. It is not for the payment of compensation, it is not for supporting wages, it is not for any purpose whatever except to enable this company, if they get an order for any type of equipment, to buy the materials, to pay the wages, and do all the work involved in delivering the goods such as any commercial enterprise would have to do. It is working capital in that sense of the term. If the company ultimately produce a proposition for some major change in the character of the works at Dundalk, a change which will involve the purchase of new equipment, then they will probably have to come seeking additional capital for the purpose. I say "probably" because one is now guessing as to what such arrangements may involve in money and as to what other sources of capital may be open to the company. What we are thinking of in this sum is merely working capital so that as soon as they take over the works they can carry it on, doing all the commercial operations which will be involved in carrying it on.
There was an investigation of the efficiency of the works carried out by one of these firms of consulting experts and I think some difficulty may have arisen in the works by reason of that investigation, but whatever information that investigation disclosed regarding the suitability of existing equipment from the viewpoint of a railway workshop will be available to the new management and will, of course, be taken into account by them. However, that is less important now than it was previously.
The representatives of the new company have met the trade unions and have discussed with them the changes of methods that will necessarily be involved in transferring a railway workshop into a commercial engineering undertaking, changes which may even involve some alteration in methods of remuneration, certainly some alteration in the tempo of operations, and generally they found the unions completely co-operative and most anxious to facilitate the bringing about of those changes in a manner which will contribute to the success of the whole enterprise.
The position regarding pensions for workers in the shops is this: Some of them have meagre pension rights based upon a fund. Some others have what might be called rights based upon traditional practice. The fund, such as it is, is in deficit but the payment of the pensions is guaranteed by the Great Northern Board even though the fund is in deficit and what I told the unions was that I would put as guarantor of the payment of the pensions some other authority instead of the G.N.R. Company whose guarantee would be at least as effective, probably a great deal more effective.
So far as compensation is concerned, the workers in the shops have no statutory compensation rights. Indeed, the G.N.R. Act was very tightly drawn so far as compensation rights for workers made redundant by the closing of services were concerned. It is different in many respects from the Acts that apply to C.I.E. In the case of C.I.E. a worker becomes entitled to compensation if he loses employment by reason of the closing down of a railway service. In the case of the G.N.R. Company a worker is entitled to compensation only if he was directly employed upon the operation of the service that was closed. That will involve some problems which we will have to resolve but it clearly indicates that the workers employed in the shops have not got the right to compensation and, indeed, one would perhaps doubt the value of compensation rights if they existed against the G.N.R. Board when the board goes into liquidation.
There are, however, problems and anxieties in that regard and while I should like to avoid undertaking statutory obligations I think that it will be the general aim of all concerned to get rid of those problems and anxieties in a way which will leave no permanent discontent behind.
Deputy Coburn spoke about the possibility of workers being disemployed in some months' time. While I hope, and the management of the new company hope, that they will be able to develop a programme of works which will prevent that, it should be clear that we just cannot guarantee that the particular workers now employed at Dundalk workshops will always be employed there in future. Most of them, I think, will. Indeed, the great asset of these shops is not the machinery or the buildings that are there; it is the skill of the workers and it is that asset that has to be turned into revenue to maintain the shops.
Therefore, so far as these workers are concerned there will be every desire to retain their services and to utilise them for the benefit of the new enterprise but, of course, it will be appreciated that the Dundalk Engineering Works will be in much the same position as the Cement Company, the Sugar Company or any of these large-scale enterprises that the State here has fostered and there may be from time to time some fluctuations in employment. The usual procedure is to deal with these matters on the basis of agreements made between the trade unions representing the workers and the management concerned and, as I said, the trade unions and the management in this case have already got together and have discussed these problems and I think can be said to be working in concert to make good the whole idea which is involved here.
May I put this question? I take it the Minister would examine sympathetically the question of making provision for a worker who may be transferred to the Dundalk Engineering Works so as to ensure that whatever claims he had against the G.N.R. from a superannuation point of view he will carry with him?
That is why I mentioned the possible need for legislation because I think the actual terms of the pension scheme would require the repayment to the worker of his contributions to the fund when he ceases to be employed by the G.N.R. Obviously, it would be preferable to carry over that fund to the new undertaking and to preserve the worker's pension rights through the fund rather than to try to deal with them on an individual basis of giving back the worker's contribution and having to collect them from him again. I think that will be agreed.
The pensions provided in the G.N.R. pension scheme are, as I said, very meagre and I should hope that in time this company will be able to develop revenues which will enable them to supplement them.
The Deputy asked for the terms of the lease. I cannot give details but I think it roughly means that the amount which will be paid by the new company to the G.N.R. Board will be equivalent to the amount of local rates that the G.N.R. Board will pay on the works. The actual net amount of money passing will not be considerable.
As to the future, I would hesitate to discuss that. It is obviously a matter which will have to be subject to negotiation with the people in Belfast. We have at the moment an indication of their intention to give notice to terminate this agreement on 30th October, 1958. The actual formal notice has not been communicated and before that, presumably, there must be quite detailed negotiations regarding the process by which the agreement may be wound up, including the division of the assets of the undertaking.
Having regard to all the circumstances involved, I think we should certainly be able to get the transfer of the physical assets of the Dundalk workshop to the new company without capital liability. I should like to think that the joint ownership of these works as general engineering works would be feasible and it is certainly a possibility that will be explored if there is the slightest prospect of it being worth while doing so, but I think we must realistically face up to the probability that these works are now, and will remain, our sole responsibility and that it depends on our own efforts whether we can carry out this great enterprise and, by doing so, preserve employment there.
There is perhaps one other point to which I should refer. Deputy Coburn talked about the repair and maintenance of buses now operated by the G.N.R. on their system being transferred to C.I.E. There may be some misunderstanding there. It is certainly intended that the obligation to provide road passenger and freight services in the G.N.R. area shall become the obligation of C.I.E. when the G.N.R. ceases to exist. By that time, of course, Dundalk workshops will be a separate commercial enterprise and the arrangements that may be made between the management of that workshop and C.I.E. for the repair and maintenance of road vehicles is a matter for negotiation between them.
I had to discourage the idea that the problem of Dundalk would be solved by any transfer of work from Inchicore or any other of the C.I.E. shops, but there will be on everybody's part the intention of keeping the Dundalk workshops going over this initial and difficult period in the expectation that at the end of that period there will be available for them commercial work in sufficient quantity to ensure that there will be no contraction of employment there. If we are lucky and if the Dundalk Engineering Works succeed in getting some contracts on a substantial scale for rail or other equipment which will keep the shops fully occupied then there will be no problem at all, but if that does not happen and if there is surplus capacity unutilised by these contracts at Dundalk then it will be a matter of securing by consultation agreement to avail of it to the fullest extent possible.
While it is not possible for me to commit any of the State undertakings to give business to the Dundalk workshops I think it can be fairly assumed that will be desired, and particularly in respect of work that might otherwise go abroad there will be a general effort to divert that type of activity to Dundalk.
This is a very big enterprise and we must not attempt to minimise the magnitude of the task given to those responsible for directing it but sufficient has come from the exploratory and investigatory work that has been done to give us some grounds for hope that it will succeed.
Question put and agreed to.