I move:—
That a sum not exceeding £2,431,670 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st March, 1961, for the Salaries and Expenses of the Office of the Minister for Transport and Power including certain Services administered by that Office and for payment of a Grant-in-Aid.
Provision was made for the services now administered by my Department in the 1959/60 Estimates for Votes Nos. 50, 51, 52 and 68. In the current year's Estimates these services have been brought within the ambit of one Vote No. 48—Transport and Power. For convenience of comparison with the 1959/60 Estimates a statement has been added at page 247 of the Book of Estimates showing the subheads for 1960/61 with the corresponding Votes and Subheads for 1959/60.
The Estimate of £3,646,670 for Transport and Power for the year 1960/61 compares with a total of £3,242,177 granted in 1959/60, including a Supplementary Estimate for £140,000—subhead 1.4. The provision for this year, therefore, shows a net increase of £404,493 compared with the provision for last year, 1959/60.
The principal increases in a gross increase of £1,026,565 are in the provisions for Salaries, Wages and Allowances, £106,896 (subhead A), constructional works at Dublin Airport, £255,000 (subhead H.3), Cork Airport, £275,000 (subhead H.4), Technical Assistance £36,500 (subhead M) and Rural Electrification £143,900 (subhead O). Other increases amount to £51,575 and bring the total to £868,871. To this must be added a decrease of £157,694 in receipts (subhead Q—appropriations in Aid) mainly on Landing Fees £90,000 (Q. 11) catering Sales Service £110,000 (Q. 18) offset by an increase in receipts from Grant Counterpart Funds £35,000 (Q.4) and Lettings of Offices etc. £8,200 (Q. 12). This decrease is equivalent to an increase in the net Estimate, making a total increase of £1,026,565.
The principal decreases are in the provisions for Redundancy Compensation—C.I.E. £149,000 (subhead F.2), Grants for Harbours, £99,352 (subhead G), Constructional Works at Shannon Airport £115,000 (subhead H.2), International Organisations, £35,140 (subhead L) and Fuel Subsidy £200,000 (no provision in 1960/61). Other decreases amount to £23,580 making a total decrease of £622,072 which when offset against the total increase of £1,026,565 gives a net increase of £404,493 in 1960/61 compared with 1959/60.
The increase of £106,896 in the provision for salaries, wages and allowances is mainly due to increases in remuneration, as from December, 1959, (£36,000) and to an increase of 65 posts in the Engineering, Architectural, Aeronautical and Air Traffic Control Services (£54,000). There is also a provision of £15,000 to cover the cost of additional staff, not yet recruited, for such services as Radio Communications etc.
These staff increases arise solely from increases in the various services provided by the Department and are not attributable to the creation of a separate Department for Transport and Power. The total number of posts provided is 936 an increase of 65 compared with 1959/60. The additional posts in Headquarters of Minister, Secretary and Deputy Assistant Secretary have been offset by the suppression of a post of Parliamentary Secretary and Deputy Secretary in the Department of Industry and Commerce.
The last occasion on which Deputies had an opportunity to consider in detail the affairs of Irish Shipping Limited in the House was in February, 1959, when the Irish Shipping Limited (Amendment) Bill, 1959, was being debated. This Act provided for an increase in the Company's authorised capital from £5,000,000 to £12,000,000 and an increase in borrowings guaranteed by the Minister for Finance from £2,000,000 to £5,000,000. On that occasion the House was informed of the success achieved by the Company and of the need for increased capital to keep the Company's fleet in first-class condition by timely replacements and to provide for additional tonnage. Deputies may recall that attention was also drawn to the very lean times through which the shipping industry all over the world was passing then.
Since that time the Company have taken delivery of another large tanker so that their fleet now consists of 18 vessels, 15 of them being dry cargo vessels totalling 101,300 tons deadweight and 3 being tankers comprising a coastal tanker of 3,350 tons and 2 deep sea tankers of 18,000 tons deadweight each. Over the same period 2 vessels totalling 17,600 tons deadweight, which were uneconomic and due for replacement, have been sold while an order for a vessel of 14,700 tons has been placed in Britain, where the necessary berth was booked in 1957. A contract for a similar vessel has been negotiated with Veroime Cork Dockyard Limited. In addition 2 vessels due for replacement have been converted to diesel propulsion in lieu of replacement and are back in service. All the Company's vessels are at present employed.
When the new vessels have been delivered the dry cargo tonnage of Irish Shipping Limited will amount to 130,700 tons deadweight, leaving a balance of 59,300 tons towards the target of 200,000, which is estimated to be the size of dry cargo fleet required to import national requirements in time of emergency. The cost of the fleet, including the two conversions but not the replacement vessels on order, was £13.6 million which was met as follows:—
|
Share capital contributed by the Minister for Finance |
£6.9 million |
|
Company's own resources |
£5.6 million |
|
Borrowing |
£1.1 million |
The Company's borrowing was arranged with their Bankers towards the purchase of the two deep-sea tankers and is being repaid by subscriptions of share capital in the Company by the Minister for Finance as provided for in the Capital Budget. The borrowing was reduced from £1.8 million to £1.1 million approximately by a payment of £687,000 from the Capital Budget for 1959/60.
The shipping slump continues with but little improvement. The tramp freight index of the British Chamber of Shipping was at its lowest of 62.7 in April, 1958. There is a seasonal tendency for freight to rise during the winter months and to drop again in the Spring. However, there has been a gain of some 13 points over the last two years from 62.7 at the 1st April, 1958, to 76.1 on the 1st April, 1960. It will be easily understood that since these figures relate to a base of 100 at 1952 and since costs have risen considerably since then, the rise has been relatively insignificant. Only the most efficient and economic ships can hope to trade profitably at current rates. The outlook is for a slow improvement in freight levels. Leading shipping authorities do not expect any spectacular rise and are so far unwilling to commit themselves to an estimate of the period which may be required to reach generally profitable levels once more.
Despite the difficult freight rate situation the Company expect to make a trading profit of £216,000 over the whole year 1959/60 before providing for depreciation. This is considerably better than what might have been expected and, I think, we can fairly claim that Irish Shipping Limited are riding out the storm reasonably well.
The importance of Irish Shipping Limited in the economy continues to increase. The activities of Irish Shipping Limited in the last 12 months have ranged over the globe including Canada, the United States, India, Japan, Australia, South Africa, South America and the Near East. The Company commenced trading into the Great Lakes through the New Seaway and two of their ships—the "Pine" and the "Oak"—have been specially adapted for this trade. The total tonnage carried by the Company in 1958/59 was 1,194,000 as compared with 944,000 in 1957/58 and 835,000 in 1956/57. Over these three years an average of 76% of the total tonnage carried was carried foreign-to-foreign and this proportion tends to increase with the growth of the fleet. This, of course, represents foreign currency earnings and is a valuable contribution to our Balance of Payments. Employment given by the Company amounts to about 750 men ashore and afloat. The repair and overhaul of vessels is carried out in Irish Shipyards to the greatest extent practicable.
There have been suggestions from time to time that Irish Shipping Ltd. vessels should be used to a greater extent in the carriage of goods to and from Irish ports. From discussions I have had with the Company I am satisfied that they never miss an opportunity of profitable trade with home ports. The number of voyages to these ports is, however, very small, and is not likely to grow. Indeed I envisage that the proportion of the Company's business done between foreign ports will continue to increase. This follows from the fact that the Company are engaged in what is perhaps the world's most fiercely competitive industry and cannot afford to trade to any particular port except where remunerative cargoes are available to them, both on the inward and outward journeys. Official measures to channel trade to our own ships would run counter to our policy of allowing Irish Shipping Ltd. to pursue in peace time the aggressive commercial policy which is necessary if they are to compete successfully in the international shipping market; they would also involve a breach of the international principles to which we adhered when we joined the Intergovernmental Maritime Consultative Organisation.
The provision of £120,638 for grants for harbour improvement works is for improvement works in progress at some half-dozen ports, and includes a contingency sum for other works for which grants have been authorised or are under consideration. Major improvement schemes which have been financed with the aid of State grants are nearing completion at Waterford and Wicklow. The State is meeting half the cost of the new passenger liner tender for Cork Harbour Commissioners, for which an order was recently placed with Liffey Dockyard Ltd. and a grant to provide half the cost of a second tender has been approved, but the latter expenditure will not fall due to be met in 1960/61. Applications for grants for improvement schemes at Drogheda and New Ross are under examination; applications for further State assistance for additional works have also been received recently from a number of other provincial harbours.
The application of the Galway Harbour Commissioners for permission to invite tenders a third time for the carrying out of the Galway Harbour Improvement Scheme is still under consideration. I have recently discussed the whole question with the Harbour Commissioners and hope to be able to convey an early decision to the Commissioners.
The provision in 1959/60 was for a total expenditure on harbours of £220,010, but expenditure in the period reached only £76,276, because certain works did not commence as soon as expected, and a number of major schemes approached completion during the time.
I should say that, in addition to the grants for harbour improvement works which are made from the Vote for Transport and Power, there is also provision in the estimates for non-voted capital services comprising a total of £100,400, for works at Dublin, Cork and Limerick for which grants from the National Development Fund were approved.
It is evident from Parliamentary Questions and from correspondence in the Press that there is a widespread interest in the economics of the Irish airports. Some persons, however, appear to confuse capital expenditure with ordinary expenditure. It is scarcely necessary for me to point out that it is not correct to debit capital expenditure against the operations of the airports in the year or years in which the money is expended. In accordance with normal procedure, the proper debit in any year is the interest on the capital and the amount of depreciation. In order that Deputies may have a clear picture of the cost of the airports, I am giving details of expenditure under various heads. The total capital expenditure on Shannon and Dublin Airports has been £14,586,807 from the beginning up to 31st March, 1960. The total expenditure on salaries has been £5,377,810. Total revenue has been £6,948,067.
In the earlier stages, the operating losses were considerable but as the number of landings increased, the position became more satisfactory. In the last financial year, 1958/59, for which accounts are fully available, the following was the position:—
|
Dublin Airport. |
£ |
|
Total expenditure (excluding capital expenditure) |
268,755 |
|
Total receipts |
241,473 |
|
Operating deficit |
27,282 |
|
Depreciation and Interest |
173,523 |
|
Shannon Airport. |
£ |
|
Total expenditure (excluding capital expenditure) |
515,340 |
|
Total receipts |
801,930 |
|
Operating profit |
286,590 |
|
Depreciation and Interest |
294,119 |
The financial advantages accruing directly and indirectly to the State and the community under the headings of taxation, balance of payments, employment, tourism and insurance and many other forms of economic activity and national development are considerable. All facilities for air traffic are now available and this country can play a full part in an air-minded world. Apart from their value as facilities for transport, airports give direct and indirect employment and create business activity in their neighbourhood. An airport is a large employer and a large consumer. Over 2,000 persons are employed at Shannon Airport and the annual wage bill is estimated at over £1,000,000. These figures include only those persons actually employed at the airport. They do not include the considerable additional employment created by aviation activities outside the airport, such as ticket reservation offices, the employment created by activities providing products and services to air travellers and the employment created by construction of works.
I thoroughly dislike continuing transport subsidies of any kind whatever because there is an amplitude of transport facilities. Whereas I believe that all transport subsidies, indirect or direct, should be discontinued as soon as possible, I am not able to eliminate the deficits at the airports because an increase in our landing charges would materially affect the air fare structure which is subject to international agreement. I shall continue to insist on maximum efficiency in the hope that within the next few years it will be generally realised that in a fully developed transport system, the taxpayer in general should not pay for air travellers.
Moreover, it is possible that with the growth of air traffic the deficits will continue to decline and that landing charges and other revenue will cover depreciation costs. The figure for last year's operations at Shannon show practically a break-even figure.
From time to time studies have been conducted by my Department into the comparative costs of operating Irish and foreign airports. One such review was undertaken in recent months in which the operating costs at Dublin and Shannon Airports were compared with those of major European airports, and found to be generally lower per unit cost indicating that Dublin and Shannon Airports are operated at least as economically as their foreign counterparts.
To provide for the full economic use of the Aer Lingus Viscount 808 aircraft and to permit of the limited jet operations which Aer Lingus will carry out between Shannon and Dublin, it is necessary to extend the main runway at Dublin Airport from its present length of 5,288 to 7,000 feet and to extend a subsidiary runway (4,800 feet) to 6,000 feet. The apron accommodation is also being extended.
A new hangar for jet aircraft, which is being constructed by the Irish Air Companies, is due for completion by the end of the year, when the first Boeing jets are expected by Aerlinte.
The picture at Dublin Airport is one of intense activity. During the year 1959 almost 12,300 aircraft landed at the airport, an increase of 6% on the corresponding figure for 1958. The number of passengers handled in 1959 was over 647,000, representing an increase of almost 15% on the 1958 figure. The amount of freight handled at the airport was 10,000 tons, representing an increase of over 20% on the 1958 figure. In addition to Aer Lingus, one Dutch and four British airlines operated scheduled services to and from Dublin Airport in 1959.
A number of airlines other than Aer Lingus operate air services to and from Dublin Airport under bilateral agreements. British European Airways operates services from Birmingham, London and Manchester to Dublin in pool with Aer Lingus. A number of British independent Companies also operate services: Silver City Airways Ltd. from Blackpool in pool with Aer Lingus, B.K.S. Air Transport Ltd. from Leeds in pool with Aer Lingus and singly from Newcastle, and Derby Aviation Ltd. a recently-introduced service from Luton and Derby. K.L.M. Royal Dutch Airlines operates in pool with Aer Lingus on the route Dublin/Manchester/Amsterdam.
Dublin Airport is managed by Aer Rianta on my behalf. The year just closed was a busy one and the surplus on operation—before allowing for depreciation and interest on capital— is expected to be satisfactory. Further expansion will take place this year in line with the growth in air line operation.
A careful study is being made of the major replanning and development that will be needed if the airport is to cope with the traffic through it. It is expected that in the next 5-10 years traffic at the airport will grow at a rate at least as fast as has been experienced during the last decade.
The completion date for the new jet runway at Shannon Airport was for early August. As, however, I felt it essential that the runway should be completed earlier so that advantage could be taken of the summer season, I have made special arrangements by which the runway will be ready for daylight operation early in July. Although there will be very much increased overflying of Shannon by Transatlantic jet aircraft, I am satisfied that a considerable number of jet planes will continue to use Shannon Airport and the earlier completion of the runway will, I hope, assist in attracting a number of planes which would otherwise by-pass Shannon. We are beginning to reconstruct the existing apron so that jet planes can be brought close to the terminal building and to provide covered approaches to the building for passengers alighting and embarking.
Work is in progress on a scheme of extensions and improvements to the terminal building for early completion. The improved accommodation for passengers and public will, it is expected, be adequate for any demands which may be made on the building in the foreseeable future. A new maintenance hangar has been completed and this has been leased to Seaboard and Western Airlines who propose to transfer their European maintenance activities to Shannon.
In 1959, while over 9,000 aircraft landed at Shannon Airport, there was a decrease of 20% on the 1958 figure and 12% on 1957 while the number of passengers handled at the airport in 1959, though exceeding 400,000 represented a decrease of 18% on the 1958 figure and 8% on 1957.
The number of terminal passengers (50,730 embarked, 44,001 disembarked) was down by 2% compared with 1958 and up by 9% compared with 1957. On the other hand, freight traffic handled at the airport in 1959 showed a very encouraging upward trend. There was an increase of 21% over the 1958 figure and 46% over the 1957 figure.
In the first three months of 1960, while there was a reduction of 7% in freight handled, compared with the first three months of 1959, there was an increase of 25% compared with the first quarter of 1958. Freight in transit increased by 22% over the first quarter of 1959. It is hoped that industries coming to Shannon will use this airport as a warehousing centre. Modern freight facilities are being provided and it is expected to place a contract shortly for the construction of a new freight building and to complete the project early next year.
The reduced passenger activity at the airport in 1959 as compared with the 1958 figure is attributable to the introduction of jet aircraft on the North Atlantic route. As I have already mentioned, I am confident that the turn over to jet transport will not have the very adverse effects which were first anticipated. Traffic in recent months has shown an encouraging upward trend in passenger movements as well as a continuing increase in overall freight traffic.
The completion of the new jet runway and the development of industrial activity at the airport will be accompanied by an increasing promotion campaign to ensure that Shannon will preserve its status as a major international airport.
As a result of the reduction in passenger traffic at the airport in 1959, there was a reduction in revenue and profits in the sales and catering service. Turnover in the half-year to 31st January, 1960, the latest period for which accounts are available, amounted to £694,144, which represented a decrease of about 12% on the turnover in the corresponding period of the previous year. Viewed in the light of a 15% drop in passenger traffic, the reduction in revenue of 12% was, however, less than might have been expected and revenue in recent months has continued buoyant. The initiation of a mail-order business from the Shannon Sales Centre has proved successful—the orders for the 12 months ended 31st January, 1960, totalling £93,000.
The Shannon Free Airport Development Authority was established in the second half of 1957. The Authority was to take such steps as were necessary to encourage the use of Shannon Airport to the maximum extent and to provide additional employment at the airport, apart from employment related directly to the servicing of aircraft. The Authority was an administrative body with no separate legal existence and financed from funds made available from the Catering Account.
The Authority was superseded by the Shannon Free Airport Development Company Limited in January, 1959. The Shannon Free Airport Development Company Limited Act, 1959 authorises:
(i) the Minister for Finance to subscribe for shares in the Company up to an aggregate limit of £1,500,000, and
(ii) the provision by way of grant-in-aid voted annually of sums which in the aggregate shall not exceed £500,000 over the whole period of the Company's activities.
The grant-in-aid is intended to meet the running expenses of the Company as well as the cost of financial incentives given to new industries to establish in the free airport area. Up to 31st March, 1960, payments by way of grants-in-aid amounted to £190,000 and capital issues to the Company amounted to £393,000.
The peculiar advantages to industrialists who establish industries at Shannon are—firstly, a location in the immediate vicinity of a large international airport with the ease and convenience of air transport for passengers and freight; secondly, the special facilities of a customs free zone; thirdly, tax remission for a period if 25 years; fourthly, the availability of modern factory buildings at reasonable rents, and fifthly, the availability of grants towards the cost of buildings, machinery and equipment and training of workers.
From the expenditure point of view the most important item is the outlay on the construction of the industrial estate. In the case of eight industrial projects for location in the estate, production has already commenced, or arrangements to commence production have reached an advanced stage. Negotiations are in progress with seventeen other promoters for the leasing of factory premises. At a recent date there were six British, five American, one French, one German and one Dutch firms negotiating for factory bays. Only three Irish firms have, so far, shown interest and this I find regrettable.
If the estimates of the promoters prove realistic—and there is no reason to believe that they are not—it is not unreasonable to expect that within a short period, employment for between 1,000 and 2,000 industrial workers should be afforded in the estate. The construction of factory buildings, costing nearly £1 million, in a period of eighteen months from a standing start is an almost unique record of Irish building activity.
The provision of adequate housing, both for executives and workers either in or near the estate, is a particularly important problem and is receiving the urgent attention of the Company.
The activities of the Company go beyond the creation of an industrial estate and include the promotion of all types of business activities at the airport. To increase traffic at the airport the Company maintains close contacts with the leading airlines, travel agencies and Bord Fáilte Éireann, and sponsors or operates advertising campaigns, tour-sales programmes, window displays, etc., in the United States. The Company is also actively engaged in association with other bodies and organisations in promoting the sale of package tours and specialised tours of this country —such as golf and fishing tours.
The new housing at Shannon is being planned after the most exhaustive research by our own and foreign experts into how the employees in the factories are likely to choose their dwelling places, and after making allowances for the number likely to come from the neighbouring area and to go to reside in the towns and villages nearby.
I am determined that the new community centre should be distinctive and attractive. I hope that the employers and workers at Shannon will from the first, wish to join together in establishing a relationship which embodies the most modern concepts. For this purpose the Shannon Development Company have been consulting our own Productivity Committee and through it have secured the advice of international experts attached to the European Productivity Agency.
May I stress again the advantages of the Shannon industrial area purely from the standpoint of freight convenience? We know that firms in New York fly materials as much as 3,000 miles for partial assembly and fly back the semi-finished product. Examples of the products which we believe will be particularly suitable for manufacture at Shannon are scientific instruments, office machinery, jewellery, plastic goods, toys, musical instruments, light engineering equipment, and in a very appropriate sense aircraft parts.
Construction of the new airport at Ballygarvan near the city of Cork, commenced some months ago. Preliminary drainage and fencing work has already been completed and work is at present in progress on construction of runways, taxiways and apron. Work on erection of the buildings will commence this summer. The airport will be fully equipped with up-to-date lighting, landing and navigational aids, including an instrument landing system on the main runway.
The airport, costing a million pounds, is scheduled for completion in July, 1961, which will be in time for the main summer season travel. I am doing everything possible to see that this target is achieved. Every contractor has been made aware that every day saved adds to the value of the first year's aircraft movements, but inclement weather is an unpredictable factor.
Aer Lingus will operate scheduled services at Cork. A number of British companies are also interested in operating scheduled services at the airport. I believe that the new airport will generate substantial new air traffic and that it will be a notable tourist attraction, drawing in visitors direct to fish and see the incomparable beauty spots in the province of Munster.
In the year ended 31st March, 1959, Aer Lingus had a balance to credit of £48,943 after discharging private loan obligations and superannuation costs, the gross operating surplus was £204,000. In the six months ended 30th September, 1959, the operating surplus was £420,000. This operating surplus is exactly the same as the surplus for the corresponding half of 1958/59. When the final accounts for the year ended 31st March, 1960, are available, however, it may be found that the surplus on the operating account for the full year will be lower than that made in 1958/59 due to a number of factors including wage increases and increased costs and the effect of the two industrial disputes which reduced the Company's operation during the year.
In the financial year 1958/59, Aer Lingus planes flew five million miles and carried a half-million passengers. The number of passenger miles flown was 121,000,000. The average distance per passenger flight was 234 miles and the average fare paid was £6.09. In 1959/60 Aer Lingus carried over 550,000 passengers, 7,800,000 kilos of cargo and 1,570,000 kilos of mail. These represent significant increases over the figures for the preceding year particularly in view of the effect of the industrial disputes to which I have referred. Tremendous efforts will be required to develop what must be mainly a short-haul service even although continental travel increases.
Three new routes have been opened this year viz. Dublin/Leeds, Dublin/ Cherbourg, and Shannon/London. Fares have been reduced and frequencies increased on certain existing routes. The greater carrying capacity, combined with an intensive sales drive by the Company, is expected to increase business this year. In this connection it is of interest to note that from April to October, a total of approximately 550,000 seats will be available on scheduled Aer Lingus services. This represents a 12.5% increase on the figure for the same period last year. It is most satisfactory to note in relation to the question of capacity that Aer Lingus achieved last year a load factor, or in simple terms the average amount of seat capacity sold, of 67.2%—the highest in Europe. I think we should congratulate the Company on this fine achievement.
The present operating aircraft flect consists of 7 Viscount 808 aircraft, 7 Friendship F.27 aircraft and 5 D.C.3 aircraft.
I should at this point make two important comments on the future of Aer Lingus. I believe that all transport companies should pay their way. Aer Lingus has shown increasing financial stability since 1950 but has not yet begun to pay the taxpayer for the investment of his capital in this growing enterprise. With the growth of the fleet and the use of the more economically operated aircraft, I hope that in the near future the Company will, without restricting its services, begin to remunerate the State capital invested in the enterprise so that the enterprise will be independent of State assistance. Further, to become a reality, the costs must be kept down and the present high standards of efficiency improved. Secondly, I must make a brief comment on the circumstances attending the recent strike.
I hope that relations within the Company between the staff and management will be friendly. I wish, however, to make it clear beyond all doubt that since I have responsibility for the general well-being of the Company, I have informed the directors that I am aware that a very exacting standard of discipline is maintained by the Company, for which I wish to give full credit to the air pilots and staff of the Company. I have, however, urged on the directors the need for the maintenance, and, if possible, the improvement of this high standard and I uphold the decision of the directors and management that the standards should be more exacting even than those of other air lines.
This unvarying tradition will contribute to the fine record held by the Company for many years, albeit granted that Providence equally plays a part in the affairs of man and planes. I feel quite sure that this high standard will attract to the corps of air pilots the kind of men who have up to now shown such zeal in the performance of their duties.
Aerlinte continued its transatlantic service from Shannon to New York and Boston throughout the year. In the eight months of operation in 1958, the Company carried something over 13,000 transatlantic passengers. In 1959 the Company carried 23,000 transatlantic passengers, over 37 per cent. of these terminating or commencing their journeys in this country. This conforms with the estimate made in 1957 of 22,680 revenue passengers. The Company will continue to operate the service with piston-engined aircraft leased from Seaboard and Western. Airlines until next December when it will introduce into service the latest Boeing jet aircraft to replace the super Constellations at present in service. During the coming Summer all except a few operators on the North Atlantic route will operate jet aircraft. This presents Aerlinte with a major challenge during the current year. The introduction of jet services has produced everywhere the inevitable unanticipated cost increases some of which are no doubt temporary. I have no doubt that Aerlinte will find the going somewhat rough in the early stages. To meet this challenge the Company using new sales offices in America have launched an intensive selling campaign which it expects will lead to increased traffic in both passengers and cargo.
I am glad to say that the prospects for Aerlinte look better this year than last year. The number of passengers carried for the first four months of this year shows an increase of 33? per cent. over the number for the corresponding period of 1959. The past few months have shown a substantial increase of 45 per cent. in bookings over the same period last year. The present position is buoyant both in numbers of forward bookings and in revenue taken for these forward bookings. Until the Company obtains its jet aircraft it will be at some disadvantage with lines which operate jets. However, as an offset to the speed of the jets there is a reduction in fares for piston engine aircraft and this reduction compensates in some measure for the attraction of the more speedy aircraft. Meanwhile, Aer Lingus continues to expand its European operations and the combined network of Aer Lingus and Aerlínte covers a total mileage of 11,000 miles, extending from Copenhagen and Rome to Boston and New York.
In the year ended 31st March, 1959, the excess of expenditure over revenue was approximately £790,000. Certified figures for the year ended 31st March, 1960, are not yet available, but the loss on that year's operations is estimated at £525,000. The estimate of losses originally made for the two years fell short of these combined figures by 10 per cent., not an excessive figure. The first of the three Boeing 720 jet aircraft on order will be delivered in November, 1960. Preparations are well advanced for its introduction into commercial service on 15th December, 1960. The remaining two will be delivered in February and March, 1961. The Company is confident that the introduction into service of these, the most up-to-date now being produced and the fastest across the Atlantic, will put them in the strongest possible position and they are optimistic in regard to future prospects on this route. As my predecessor indicated last year, however, everything depends on the general growth of tourist traffic from the U.S.A. and this in turn is to a great extent dependent upon the number of additional bedrooms with baths provided by the hotel industry.
Last year, when the Vote for Civil Aviation and Meteorological Services was being introduced, it was explained that in order to meet the future financial requirements of the Air Companies, the Government had decided to introduce legislation to increase substantially the authorised share capital of Aer Rianta. In August, 1959, the Air Navigation and Transport (No. 2) Act was passed authorising an increase of capital of the Company to £10,000,000 and increasing the limit of the borrowing power of the Company to £5,000,000.
The additional capital for which provision was made in the Act was required by Aer Rianta to finance the purchase by Aerlinte of jet aircraft at an estimated cost of £6,000,000 and to provide for repayments of £655,500 to British European Airways and £798,500 to Aerlinte as well as providing additional share capital for Aer Lingus.
Under Capital Services, Subhead E of the Vote includes a provision of £15,000 for the purchase of Facsimile Transmitting Equipment for the Meteorological Service. It is intended to establish a Central Analysis and Forecasting Office in Dublin city. It is also hoped that the establishment of an independent unit primarily concerned with general forecasting and its location in the major population centre will result in a better and more accessible service to the man in the street while making some savings possible.
The provision for C.I.E. in this year's Estimates consists of the statutory grant-in-aid of £1,175,000 and a sum of £175,000 in respect of the recoupment to C.I.E. of the cost of redundancy compensation payable by them in the current financial year.
The year ended 31st March, 1960, was the first year of the five year reorganisation period by the end of which C.I.E. are required by the Transport Act, 1958, to be self-supporting. The task confronting the Board of C.I.E. is a formidable one but the enthusiasm and vigour with which they are applying themselves to it is most heartening.
C.I.E. are pursuing an aggressive sales campaign in their drive to secure more business. The removal, under the Transport Act, 1958, of the outmoded restrictions on the commercial adaptability of C.I.E. has enabled the Board to enter into package deals with various firms to carry their traffic on an annual contract basis. The amount of the additional freight business already obtained by C.I.E. through package deals amounts to over £250,000 per annum.
The economy measures adopted by C.I.E. are designed to ensure that the Board's operations are carried out with a maximum efficiency without impairing the quality of services provided for the public. With regard to the closing of branch railway lines, C.I.E. are empowered by the Transport Act, 1958, to terminate any particular train service where they are satisfied that its operation is uneconomic and that there is no prospect of its continued operation being economic within a reasonable period. Before a decision is taken by C.I.E. to close a branch line all relevant factors are carefully considered. A decision to terminate a train service is taken only when the Board are fully satisfied that there is no prospect of the particular railway line being economic within a reasonable period. This means in practice that so large a proportion of travellers find that the railway stations do not convenience them as to make a bus service more modern, more up to date and acceptable. Where train services have been terminated C.I.E. have provided satisfactory substitute passenger and goods services. The closing of branch railway lines which have been found to be uneconomic is in no way peculiar to this country. Many branch lines are being closed in various other countries for example Britain and the Netherlands where the volume and density of rail traffic are far greater than in this country. In the Netherlands 67 per cent. of the passenger stations have been closed. There are certain almost irrevocable trends in the pattern of transport.
First, in a matter of years the majority of people in the advanced economies will have motor cars or motor bicycles with which the railway will have to compete.
Secondly, in every country the roads will be widened and improved over several decades to cope with this increased traffic regardless of the railways' future.
Thirdly, in a country of scattered homesteads lacking huge mineral resources and with a low density of population which could rise by 50 per cent. without affecting the general analysis of the position, the substitution of bus and lorry traffic where the railway is uneconomic in operation will not materially increase the cost of the road system. Assistance can be provided where required by once and for all supplementary improvement grants.
The taxpayer should not be asked to subsidise the running costs of any form of public transport because there is great amplitude of transport facilities.
The Transport Act, 1958, was approved unanimously by all the major Parties. Only one section was challenged seriously, that making it possible for C.I.E. to close lines without providing substitute services. In fact C.I.E. are not likely to take advantage of this privilege. This unanimity has made the work of C.I.E. much easier in that there is a general agreement that C.I.E. must pay and pay its way it must.
I have asked the Board to complete the main examination of uneconomic lines without delay so that the particular stretches of railroad whose retention is likely may be delineated and so that the total mileage of track whose future is questionable, may be reduced as much as possible, within the earliest practicable period.
The financial results of C.I.E. operations for the year ended 31st March, 1960 which was the first year of the 5 year reorganisation programme, are encouraging. C.I.E. have reduced by over £1 million to £700,000 the annual loss of the Company compared with the previous year; the most important improvement was on the railways where the Company reduced the loss from £1.2 million to £500,000 by a combination of increased revenue and decreased expenditure, a most remarkable result and with possibly no parallel in railway history.
About 80% of C.I.E. train services are now operated with diesel traction and conversion of the remainder of the system—principally the part of the G.N.R. taken over by C.I.E.—will be completed within the next few years. Considerable economies in operating costs have been achieved by the change over to diesel traction.
I have confidence that the policy which the Board of C.I.E. are pursuing will lead to realisation of the objective of the Transport Act, 1958—a self-supporting public transport system free from the demoralising effects of subsidisation by the State. The burden on the Exchequer will only be partly eliminated by the ending of the subsidy. The present annual cost is about £3½ million. Losses and capital adjustments totalled £23 million approximately in 10 years, and will take years to be finally amortised. The fact that the reorganisation measures foreshadowed for the British Transport Commission are similar in many respects to those adopted here for C.I.E. tends to confirm the wisdom of the policy for the reorganisation of C.I.E.
The sole factor in determining the future pattern of public transport is that of providing the most modern, economic and convenient form of transport.
If ever we needed an example of how desperately this country requires modern, searching, unsentimental, 20th-century dynamic thinking and action through the application of modern, fast moving techniques, C.I.E. can be that supreme example.
The provision in the Estimate of £175,000 for redundancy compensation is in accordance with the Transport Act, 1958, which provides for the payment of grants to C.I.E. out of voted money in respect of redundancy compensation payable under that Act and the Great Northern Railway Act, 1958. The fact that the State provides for compensation on a generous scale for redundant C.I.E. workers enables C.I.E. reorganisation measures to be carried through smoothly without causing hardship to workers dismissed as a consequence.
Included in the provision of £38,000 for Technical Assistance in the Estimates is a provision for a grant of £35,000 towards the cost of establishing a development and research unit by C.I.E. This grant will be recouped from the Grant Counterpart Reserve Fund. The C.I.E. research unit will concentrate on special technical problems, in particular the use of containers, flats and pallets in connection with the co-ordination of road and rail services.
The electrifying process of examining costs, reducing waste, stepping up output, so well demonstrated by C.I.E., is required in almost every part of our national economy. C.I.E. is deserving of this Counterpart Fund contribution.
With the withdrawal shortly of the remaining C.I.E. barges from the Grand Canal the use of this canal for commercial purposes will come to an end. This raises the question of the future of that canal. Under the existing statutory provisions C.I.E. are precluded from closing the canal to navigation unless it has not been used for public navigation for at least three years. It has been represented by certain interests that the preservation of the Grand Canal as a waterway is essential for the maintenance of a link between the east coast and the Shannon. On the other hand, it has been represented from other quarters that the preservation of the canal solely for pleasure boating could not be justified on economic grounds; that boats can be conveyed more quickly and more conveniently by road from Dublin to the Shannon and that the canal itself has no particular attraction as a waterway for pleasure boating.
I am reasonably certain that the answer lies in the development of boat hire services on the Shannon and other waterways for which much preparation will be required. I do not expect any worthwhile growth in the use of canals for pleasure boating. Parts of the canal system will have to be maintained for water conservation purposes thus satisfying in part the ambition of local angling development associations for most of whom, in any event, there is a huge choice of lakes and rivers.
During the passage of the Road Transport Act, 1959, through the Oireachtas, I undertook to consider specially any genuine cases in which the statutory increase of 7 cwts. would appear to be inadequate. All cases of this kind which came up for consideration have now been dealt with and Deputies will be glad to know that none of the hauliers affected has had his position worsened. The hauliers concerned have been warned, however, that the additional weight allowed for attachments can be used for that purpose only and that it may not be used to acquire larger lorries with greater basic carrying capacity.
The educational tours for school children and the all-in holiday rail tickets are evidence of initiative and imagination in C.I.E.'s drive for increased passenger business. In the case of the educational tours, bookings to date for this year exceed 80,000.
The popularity of C.I.E. coach tours continues to grow. The numbers carried have increased from 5,721 in 1957 to 6,623 in 1958, and 7,801 in 1959. The total of 7,801 passengers carried in 1959 came from 43 different countries: no less than 2,979 came from the United States.
In 1958 extern tours were admitted on an experimental basis. In that year 10 extern operators operated 10 tours and brought in some 3,000 passengers. For the 1960 season, 19 tours have been licensed and it is expected that the number of passengers will show an increase on the 6,000 figure for 1959.
It is estimated that in 1959 the extern tours provided additional revenue of the order of £100,000 from tourists and benefited 28 hotels.
The need for increased investment at home in productive enterprises has been repeatedly stressed. In this connection it is not out of place for me to refer to the position as regards investment in vehicles required for the transport of merchandise. C.I.E. have adequate facilities for the transport of goods by rail and road and have complete freedom to negotiate package deals with individual firms for the handling of their transport requirements. The fact that such package deals have already been successfully negotiated with a large number of firms proves that C.I.E. are in a position to quote competitive rates. Expenditure by business and other concerns on the acquisition of vehicles for the carriage of their own merchandise tends to increase still further the country's surplus transport capacity.
I am, therefore, appealing strongly to those contemplating the purchase of vehicles for the transport of their goods to examine critically the costings and not to embark on any such expenditure unless they are satisfied that C.I.E. and the other licensed carriers could not do the work more cheaply and as efficiently.
Two aspects of the cross-Channel trade which have been engaging my particular attention are improvements in the facilities for the importation of passenger-accompanied motor cars and an improvement generally in travelling conditions particularly at Dún Laoghaire Pier.
On the Holyhead-Dún Laoghaire route a pilot scheme which was introduced on 1st July, 1959, for the carriage of a limited number of cars on the mail boats proved successful. Some 900 cars were carried between July-October, 1959, and capacity has been increased this year. Plans have now been drawn up for the installation in 1961 of cranes which will speed-up operations and will allow a much larger number of cars to be carried.
To improve passenger facilities at Dún Laoghaire further works were carried out for the 1959 tourist season consisting of a high-level enclosure on the west side of the Pier connected by a foot-bridge to the existing high-level enclosure on the east side. The benefits of this additional accommodation were manifest during the peak traffic period when it enabled both sides of the Pier to be used for departures; furthermore, it enables advantage to be taken of the large-scale facilities available on the east side when, on occasions of adverse weather conditions, the ships had to sail from the west side; and by enabling disembarkation to take place at two levels simultaneously it speeded up the handling of ships arriving at the west or normal arrivals side of the Pier. Passenger handling was, therefore, much smoother during the season despite a tendency towards sharper traffic peaks in the July/ August period. For instance, an all time record of 16,000 passengers were dealt with on Dún Laoghaire Pier in one day in August, 1959, without any untoward incidents.
For the coming season, the high-level enclosure on the west side of the Pier will be extended and certain other improvement works estimated to cost £73,000 are planned.
Since July, 1959, I have met personally, as have the officers of my Department, the Chairman of the British Transport Commission and the executive heads of the Commission responsible for rail and steamship travel to Ireland. I also discussed the general importance of this traffic with the British Minister of Transport.
Every effort has been and will be made to secure an improvement of the amenities on the various routes but particularly the Irish Mail route. Very great improvement has taken place; more is needed. The improvement, however, is subject to the limitation imposed by the nature of the traffic, i.e., the relatively high peaks, for only about 10 weeks in the year, with a few peaks of only 48 to 72 hours in the number travelling. To provide facilities beyond a certain limit to cater adequately for such peak periods could be costly and wasteful since the facilities would not be used during the rest of the year.
With this limitation in mind I hope that the new Chairman of the Midland Area Board of the British Transport Commission will be conferring with us here.
Apart from the improvements in the transport of cars between Dún Laoghaire and Holyhead, an air car ferry service is now in operation between Dublin and Liverpool. The service will provide one flight each way per day at the beginning, rising to 4 flights each way per day during the height of the season. It is expected that this service will carry 3,000 cars in the season, rising to 10,000 if the demand increases. There has been a compelling need in recent times for the provision of air car ferry services. In order to develop our tourist trade, it is essential to ensure that visitors from Great Britain and elsewhere who wish to bring their cars to this country by air can do so with the minimum difficulty. I trust that the new venture will be successful and that in a comparatively short time it will be possible to provide additional services from other points in Great Britain.
I feel that there are great possibilities about the car ferry business. Statistics on other ferry routes indicate that once the service is established, an ever-increasing volume of traffic is generated. There has been a phenomenal increase in the number of motor vehicles in Britain in recent years. Statistics indicate that there is at present one car in Great Britain for every 34 yards of roadway. Comparable statistics for this country indicate that there is one car for approximately every 170 yards of roadway. Clearly there is a vast tourist potential for motoring holidays in this country, and the establishment of car ferry services should play an important part in this development.
The generation of electricity has risen from 314 million units in 1938 to 1,898 million units in 1959—a sixfold increase. Our total consumption of electricity per head of the population is still, however, only about half the average for Europe. Consumption per head for domestic purposes is indeed somewhat over the European average but consumption for industrial uses is much lower. In 1958/59 consumption of electricity for industrial power amounted to only 475 million units as compared with 670 million units for domestic purposes. Consumption for industrial purposes has, however, been increasing at about the European average, thus reflecting the expansion of industry here. The further development of industry under the impact of the Government's economic programme should lead to a continued substantial increase in the industrial use of current and help bring our overall consumption closer to the level prevailing in Western Europe generally.
As I announced a few months ago I have conveyed to the Electricity Supply Board general approval of the Board's proposals for expansion of generating capacity in the years 1964/ 65 to 1968/69 based on a projected annual increase of 7 per cent. in demand. Planning for the programme must commence at this early date because it takes up to 5 years to bring a new power plant from drawing board to full operation. This programme will, however, remain subject to change in the light of developments and further expansion may be necessary if the demand should require it. There has already been an encouraging sign in that the demand in the year to 31st March, 1960, has shown an increase of about 10 per cent.
Before the first plants in the new programme come into operation in 1964/65, the Electricity Supply Board will have brought into commission at Rhode, Co. Offaly, and Bellacorick, Co. Mayo, 120 megawatts of new plant all of which will use milled peat. This will increase the total generating capacity of the Board's plant to 808 megawatts. The new programme envisages the addition of a further 340 megawatts of which 160 megawatts will be fired by milled peat and 180 megawatts by oil, and provides for the absorption by 1968/1969 of the annual output of all the bogs which are at present considered economically usable for the generation of electricity.
Oid-fired stations will be sandwiched between peat-fired stations so as to ensure maintenance of electricity supplies in a year in which weather conditions were very adverse for either turf or water generation of electricity or both. To ensure continuity of bog development and employment by Bord na Móna the oil stations will be used only to the extent that water and peat generation is insufficient to meet demand. For the development and exploitation of the bogs in connection with this programme it is expected that Bord na Móna will provide additional employment for up to about 1,000 men each summer falling to about half that number in winter.
All the more important rivers have already been harnessed for electricity generation. Stations on the remaining rivers would be uneconomic in present circumstances having regard particularly to the high initial capital costs and current high interest rates. The Electricity Supply Board, however, are continuing to collect data and investigate other rivers with a view to possible later development for hydro generation. The Board have in operation a 15 megawatt generating station at Arigna using approximately 45,000 tons a year of native coal. Small quantities of native coal are also used at Ringsend Station.
Looking to the future, this country has a special interest in nuclear energy. As national income rises, so will the demand for electric energy. Our known natural resources of energy are strictly limited and we must be prepared, in good time, for the day when the nation will be forced to rely on nuclear energy to supplement, if not replace, other available sources of electric energy. The E.S.B. is keeping in touch with development in this field.
Generation from water, peat and native coal in the year ended 31st March, 1960, was over 73% of the total. In addition Irish refined oil was the fuel used for about 4½% of generation in that year.
The programme of rural electrification, which was initiated shortly after the war, is now nearing completion. At the 31st March, 1960, some 688 areas had been completed out of a total of 792, and at the present rate of progress it is expected that the balance of the programme will be completed in about two years from now. The completion of 688 areas has involved: the erection of over ¾ million poles; the stringing of over 40,000 miles of line; the connection of ¼ million new customers and the expenditure of £26¾ million.
These statistics, impressive as they may be, are but the reflection of the virtual revolution which the advent of rural electrification has brought about in the economic and social life of rural Ireland. In fact this revolution is only beginning and there are many evidences that the scheme will, in time, have even deeper and wider effects.
This achievement, bringing our rural electricity development to a stage which is creditable by West European standards is one of which the Electricity Supply Board is justly proud, particularly as the scheme was designed and carried out entirely by the Board's staff and based to a substantial degree on the use of Irish materials. The very success of the scheme has, however, tended to obscure the cost of it, and it is just as well to realise that the programme has involved a heavy burden on both the electricity consumer and the taxpayer. The justification for the burden is that the scheme has brought amenities and services to rural areas which they might have had to do without for years, or even decades, if the extension of electricity to rural areas were to be decided on purely economic grounds.
The total cost of the rural electrification scheme when completed will amount to some £30 million, of which some £5 million will have been met by the State subsidy and the balance by the Electricity Supply Board. Despite the element of State subsidy, the supply of current under the scheme is showing a growing loss which for the year ended 31st March, 1959 amounted to over £650,000. The most uneconomic areas for development have been left to the last and a further increase in losses can be expected. These losses have to be borne by the Electricity Supply Board revenue as a whole and therefore fall on the urban consumer.
I should emphasise that under no circumstances will there be any ultimate element of subsidy on current operations. Consumption in newly developed areas tends to be low at first, although it does increase somewhat as the years pass and this will help to reduce losses. A wider use of electricity by the farmer would undoubtedly increase his returns. In the farmyard, there are many and varied applications of electric power. A mere one h.p. electric motor will drive many machines in regular use even on a small farm. One of the most valuable of the amenities which electricity can supply for the farmer is a supply of water piped to any point in the farmyard where he needs it and, of course, to his dwellinghouse. I am glad to say that there is a growing demand for group water schemes from house-holders who use a common well and pump. The Electricity Supply Board is co-operating fully in this manner with local authorities and with the Departments of Local Government and of Agriculture.
During the year 1959 our coal imports came mainly from Britain 891,000 tons, but substantial quantities were also imported from the U.S. 462,000 tons, Poland 117,000 tons and Germany 113,000 tons. The magnitude of pit-head stocks in Europe suggests that the present overall situation of ample supplies is likely to continue.
During most of 1959 Irish anthracite producers, generally, were able to dispose of their output although some difficulties are currently being experienced. The possibility of solving these difficulties is being examined and I am in touch with the collieries and the coal trade with a view to easing the position. The output of anthracite was lower than in the previous year, being 138,000 tons against 151,000 tons in 1958. Opencast production was commenced by a few anthracite mining companies but production so far has been small. The Arigna mines, which produce semi-bituminous coal, found the competition from cheap imported coal very severe and the mines generally had to cut back production somewhat. The steady demand provided by the electricity generating station at Arigna has proved of great assistance in maintaining output and employment in the area.
The Electricity Supply Board is also helping by accepting the maximum possible quantity of Arigna coal at its Ringsend station having regard to the fact that it is less economic than imported coal and is technically unsuitable for the boilers at Ringsend, which were designed for fuels of quite different characteristics.
I have suggested to the Arigna mine owners possibilities of formulating jointly a technical assistance scheme for the improvement of the quality and utilisation of Arigna coal.
Because of the good season, Bord na Móna had an exceptionally high output last year. For the previous year which, of course, was a year of disastrous weather for the Board the output was 675,000 tons of sod and milled peat. The corresponding figure for the year ended 31st March, 1960, was 2,550,000 tons and revenue from sales exceeded £3 million for the first time. With normal weather, output this year is planned to reach 2,290,000 tons. Output of peat moss for 1958/59 and 1959/60 respectively was 111,000 bales and 160,000 bales. The target for the current year is 200,000 bales, most of which is for the export market.
During the year industrialists have shown a growing interest in turf as a fuel, and the Board also exported 22,000 tons of milled peat to a London gas-works where it is used to improve the quality of the coke. As this latter development becomes more widely known, the Board is hopeful that the demand for milled peat will increase. The new briquette factory at Derrinlough has commenced production and the second factory at Croghan, will, it is hoped, be in production by the end of this year. Production of briquettes will then be increased to 250,000 tons per annum as against 45,000 tons in the year ended 31st March, 1960.
Recently a number of prominent businesses have installed peat fired heating systems because of the absolute net economy effected after calculating all possible costs. I hope that consulting engineers will be more open-minded in regard to the use of peat and electricity as a source of heating power.
It is Government policy that all Government Departments, State bodies and local authorities should use native fuel to the utmost practicable extent and should when planning new buildings or heating installations give special consideration to the use of peat and electricity.
