I move that the Bill be now read a Second Time. The House is already familiar with the circumstances which have led up to the introduction of this Bill. Nevertheless in order to put the matter in proper perspective, I feel I should recount in very brief outline the recent history of the G.N.R.
In 1950, the then G.N.R. Company reported to the Government here and to the Government in Belfast that it would be unable to continue in operation because of its financial losses. Following protracted negotiations with the Six-County Ministry of Commerce, it was agreed in 1953 that the two Governments should acquire the railway and operate it as a joint enterprise. The undertaking of the G.N.R. Company was acquired for £4,500,000 of which we paid half. Under that 1953 agreement, the concern was to be operated by a joint board and losses and capital expenditure were to be shared equitably in accordance with the agreed scheme.
From the establishment of the joint board in 1953 up to 30th September last, which is the last date for which audited accounts are available, the total losses of the G.N.R., including interest payable to the two areas on the capital liability and on payments to meet losses and capital expenditure, have been almost £4,000,000, of which our share was £1.4 million. Additional capital expenditure undertaken during that period was £963,000 incurred up to 30th September last, of which we met £674,000.
In 1955, the Six-County Minister of Commerce, in view of these heavy losses, proposed the closure of the three cross-Border secondary lines. The G.N.R. Board were opposed to the closure of the lines on the grounds that they should not be closed until they had an opportunity of proving themselves with modern equipment and rolling stock. The attitude of the G.N.R. Board in that instance was in accord with our thinking here in regard to railway operation as was disclosed in the recent discussions on the Transport Bill.
The Government here gave formal notice of opposition to the proposed closures and in accordance with the terms of the Great Northern Railway Acts, 1953, the matter was referred to the chairmen of the transport tribunals in the two areas and, following public inquiries, the chairmen submitted divergent reports in September, 1956. Following the receipt of these reports from the chairmen of the two transport tribunals, the Minister of Commerce in Belfast indicated his intention to proceed with the closure of the lines within the Six-County area, notwithstanding our opposition. He also indicated the likelihood of the Portadown-Derry line, which is almost entirely within the Six-County area, being closed, but later, following discussions which were held in Belfast, he agreed to defer that step for a period of two years at least. He indicated his intention of giving notice to terminate the 1953 Agreement after the expiration of the period of five years mentioned in the agreement, which period will expire in September next.
The 1953 Agreement contained provisions under which we could have assumed full financial responsibility for the operaton of the lines in the Six-County area which are now closed. However, even if the Government here were prepared to meet the heavy cost of subsidising rail transport within the Six-County area, the termination of the agreement made that course impossible. The lines could not be continued in operation after the termination of the agreement. Any programme of capital expenditure directed towards modernisation of the lines would, for the same reason, be impracticable. Moreover, the decontrol of road transport which has been mooted in the Six Counties would further increase the already heavy losses on those lines.
In these circumstances, the Government had no alternative but to accept that the lines would be closed. The common services on the three lines in question were in fact terminated in September of last year. The closing of the cross-Border services left no prospect of economic passenger services on the stump lines within the State and these were subsequently terminated. The merchandise services on the stump lines have been continued, however, on an experimental basis.
While I have stated previously that we would have preferred to maintain an agreement for the joint operation of the remnants of the G.N.R. system, even with cross-Border services reduced to the Belfast-Dublin line, our wishes cannot prevail against the decision of the other party to the agreement. The termination of the 1953 Agreement makes it impossible, however, to continue the G.N.R. as a single separate undertaking.
This Bill provides for the amalgamation of the G.N.R. undertaking within the State, excluding Dundalk Works, with C.I.E. and for the definitive transfer of Dundalk Works to Dundalk Engineering Works, Ltd. The Bill is concerned solely with the administrative arrangements required to facilitate that amalgamation and does not relate to the wider issues of transport policy which we discussed on the recent Transport Bill.
Simultaneous legislation is being promoted in Belfast providing for the amalgamation of the part of the G.N.R. undertaking in the Six Counties with the Ulster Transport Authority. Train services on the Dublin-Belfast line will continue and will be provided by arrangement between the U.T.A. and C.I.E.
Lengthy negotiations have taken place between the Ministry of Commerce, Belfast, and my Department regarding the basis on which the assets and liabilities of the G.N.R. Board should be divided between the two areas. The outcome of these discussions is contained in the draft agreement which is scheduled to the Bill and which will be executed following enactments of the legislation here and the corresponding legislation in Belfast. The agreement aims at broad equity in the division of the undertaking rather than laying down accounting details which can best be settled at operating level between C.I.E. and U.T.A. The terms of the agreement represent to a considerable extent an unscrambling of the 1953 Agreement and the agreed scheme drawn up under it for the apportionment of losses.
The approach has been that the assets and liabilities should as far as possible be apportioned according to their location and that items in common use or of common interest should be divided equitably having regard to the needs of C.I.E. or U.T.A. in operating the parts of the undertaking falling to them. In this way lands, premises and chattels situated or normally used in one area have been allocated to that area. Railway rolling stock will in general be apportioned equitably, the particular units falling to either area being agreed by C.I.E. and U.T.A. The road undertaking will fall to us in its entirety. Stores materials and other assets and liabilities will be apportioned equitably, the particular units falling to either area being agreed by C.I.E. and U.T.A. Staff, including former staff on superannuation, will be divided on the basis of residence. The pension funds will be divided actuarily on the basis of residence of the members.
No permanent arrangement has been settled in relation to the County Donegal Railways Joint Committee which is jointly owned by the G.N.R. Board and the British Transport Commission. The position of that undertaking is extremely complex and it is possible that separate legislation here and in Britain may be necessary in regard to it. I am satisfied that the basis of division in the scheduled draft agreement is a fair and equitable one. It is the result of long and hard bargaining conducted, however, in a businesslike but friendly spirit and I can recommend it to the House.
As regards the Bill itself, its terms in relation to the amalgamation of the G.N.R. undertaking in the State with C.I.E. follow the same lines as the 1950 Act which provided for the amalgamation of C.I.E. and the Grand Canal Company. Unlike C.I.E., there has been no comprehensive modernisation of the G.N.R. undertaking and much of the G.N.R. rail rolling stock and equipment is antiquated. In the circumstances it is proposed that the amalgamation should be carried out without any increase in the capital liability of C.I.E. This is tantamount to writing off the capital liability of the G.N.R. Board of £2,250,000 representing our half share of the acquisition price of the undertaking in 1953 together with our share of the moneys advanced since 1953 to finance capital expenditure which by September next should amount to about £770,000. In addition our share of the accumulated losses of the G.N.R. Board since 1953, which by September next should amount to about £1,867,000, is likewise written off.
All staff resident in the State and employed by the G.N.R. Board immediately before the transfer date will become C.I.E. staff. The compensation provisions of the Transport Bill, 1958, when enacted, will apply to transferred G.N.R. staff in the same way as they apply to C.I.E. staff. In addition provision is made in the G.N.R. Bill for the compensation on the same terms of employees suffering loss of employment or worsening of conditions as a consequence of the amalgamation of the two undertakings.
Provision is also made for the preservation of the existing pension rights of G.N.R. staff transferring to C.I.E. In the case of wages staff, a due share of the pension funds will be transferred to C.I.E. The position of salaried staff who are members of the British Railway Clearing System Superannuation Fund gives rise to some difficulty. C.I.E. cannot become a subscriber to this fund in respect of the transferred staff without special British legislation which would take probably a couple of years to secure. Similarly the transfer of the appropriate funds from that fund to a C.I.E. fund, as was done in 1947 in respect of C.I.E. staff, also required British legislation. The Railway Clearing System Superannuation Corporation, who control the fund, have indicated their willingness to co-operate in solving that difficulty. The position is being carefully looked into and pending a satisfactory solution, provision is made in the Bill preserving the status quo whereby G.N.R. staff who are members of the fund will be transferred to C.I.E. on secondment only. The G.N.R. undertaking will be kept nominally in existence for the time being to facilitate that arrangement.
The House is already aware of the efforts being made to maintain the level of employment at Dundalk Works. We were fortunate to be able to save valuable time by anticipating the termination of the 1953 Agreement. With the consent of the Six County authorities, the works were leased to Dundalk Engineering Works Limited last January. Provision is now being made for the definitive transfer of the works to the company. The salaried staff at the works are at present seconded by the G.N.R. Board to Dundalk Engineering Works Limited.
The majority of the salaried staff at Dundalk have general railway gradings and common seniority rights with corresponding grades elsewhere in the G.N.R. undertaking. They will retain their G.N.R. employment and transfer to C.I.E. on the amalgamation. If they are not required by C.I.E., and their services are dispensed with, they will be entitled to compensation, but, of course, their compensation will be abated for as long as they are employed by Dundalk Engineering Works Limited, or any other State sponsored body or local authority, in the same way as any other C.I.E. staff who become redundant.
The wage grade staff at Dundalk works have already been transferred to the new company. These staffs were recruited for, and employed solely at, the works and their future lies with the new industrial developments planned at Dundalk. I think the House is aware of the energetic efforts which are being made by the Board of Dundalk Engineering Works, Limited, to provide continued employment in that way for all the wage grade staff transferred to the company. While their present plans appear to provide for employment for an equivalent number of workers at Dundalk, it cannot be ruled out, however, that there may be a residue of men who are not found to be adaptable to the new skills or who, for one reason or another, cannot be fitted into the new organisation, and I have been considering that problem. Should this problem emerge, and of course, it may not emerge, then it would be my intention to put the Dundalk Engineering Works in a position to do something by way of lump sum payments, on an ex gratia basis, for workers who have been employed at the works for some minimum period and for whom non-adaptability, or other problem, raised difficulty in regard to the obtaining of employment at Dundalk.
Any such payments would be of a non-statutory, ex gratia nature related to length of service at Dundalk Works and would cover only workers whose services cannot be utilised. These payments would, as I said, be intended only for workers for whom employment could not be provided when the arrangements contemplated for Dundalk had been completed. Any worker to whom employment was offered would not be included. Problems of that character, if they arise at all, would arise quickly so that it would be clearly necessary to arrange that the lump sum payments—which would be more in the nature of severance pay —would be in operation for only a year or two.