I move that the Bill be now read a Second Time.
This Bill is the ninth of its kind since the transfer of services in 1922. Its purpose is, briefly, to authorise the Minister for Finance to advance further moneys up to a limit of £10 million for continued development of the telephone service. The money will be borrowed as required over a number of years.
As Deputies are no doubt aware, expenditure on the telephone service falls under two broad heads. The ordinary running expenses on day-to-day operation and maintenance of the system are met out of moneys voted annually by the Oireachtas under the Post Office Vote. On the other hand, expenditure on extension and development of the system—for example, on the erection of new exchanges, the provision of additional trunk lines and the installation of subscribers' telephones—is met out of funds provided by the Minister for Finance under the Telephone Capital Acts.
These Acts empower the Minister for Finance to issue out of the Central Fund sums not exceeding a stated amount for the development of the telephone service. The issues are subject to estimates of expenditure being submitted to and approved by the Minister for Finance. The Acts also authorise the Minister for Finance to borrow in order to meet or repay the issues from the Central Fund and for that purpose to create terminable annuities extending over a period not exceeding 25 years. The annuities are paid annually in six-monthly instalments out of moneys provided in SubHead M. of the Post Office Vote.
The total amount authorised to be raised under the previous Irish Telephone Capital Acts to finance works carried out since 1st April, 1922, is £22.75 million, of which £21.93 million approximately had been expended up to March 31st last. Of the latter amount some £15.9 million still remained to be repaid on that date.
The last Telephone Capital Act, that of 1956, was for £6 million. At that time expenditure on national development schemes had to be severely restricted because of shortage of capital. The Post Office, in common with other Departments, had to accept the situation that it could not obtain all the money required for its purposes including development of the telephone service, and the Minister for Posts and Telegraphs explained when presenting the 1956 Bill to the Oireachtas that the capital funds available would not be sufficient to meet all anticipated demands of the telephone service.
He went on to say that it would not therefore be possible to install all the subscribers' lines that could otherwise be provided, to undertake all the underground development schemes needed to meet and to anticipate demands for telephones in built up areas, or to do all the various other works such as new automatic exchange schemes and major trunk works that the Department would otherwise endeavour to undertake if there were no capital shortage; further, that new schemes involving substantial expenditure which could be postponed without materially affecting the standard of service to subscribers would be deferred. Notwithstanding that development on this restricted basis had to be continued over the greater part of the last 4 years, it has been possible to meet in very large part the steadily increasing demands for new telephones and to maintain a good standard of service for subscribers generally. In short, it can be fairly claimed that the moneys made available by the Oireachtas for telephone capital purposes have been used to the best advantage.
Of the funds previously authorised £0.42 million remained on 31st March, 1956, making a total of £6.42 million. Over the 4 years to 31st March, 1960, the money was spent under broad headings approximately as follows:
£ |
|
Subscribers Installations tions and local underground development schemes |
3.35 million |
Exchanges—new and extended — including buildings |
1.25 ,, |
Trunk and Junction circuits |
1.00 ,, |
5.6 million. |
The total expenditure on development works, including the value of stores used which were already in stock, was £6.7 million approximately.
Since 1st January, 1956, over 47,700 exchange lines and some 60,000 telephones have been provided and the number of telephones is now over 150,000; 46 new automatic exchanges have been provided including those at Limerick, Galway, Sligo, Mullingar and Naas; 582 exchanges have been extended; 261 telephone kiosks have been erected; and the trunk network has been increased by over 37,000 circuit miles. The total number of telephone calls handled increased from 105.7 million in 1956 to 132 million last year. Continuous service has been introduced at 101 exchanges where the service was formerly restricted and the hours of service at 151 other small exchanges have been extended.
Apart from the provision of new automatic exchanges at various centres, significant advances have been made in the field of automatic working of telephone calls. Direct dialling was formerly limited to local calls but the facility has been extended far beyond the local range. Dublin subscribers can now dial directly to all automatic exchanges within a radius of 20 miles and similar facilities exist in the reverse direction. Subscribers at Cork and Athlone can dial directly to Dublin and to other larger automatic exchanges. These are really pilot schemes which have worked very satisfactorily and they have encouraged us to go ahead with extension of trunk dialling by subscribers throughout the country.
During the past four years, the great bulk of trunk calls have been connected with little or no delay. On many routes it was found possible to defer very heavy expenditure on permanent schemes by less expensive short term solutions but we have now reached the stage where heavy expenditure to meet both immediate and long term needs must be incurred. The need to increase the capacity of the trunk system generally was shown by the difficulty in handling the sharp rise in traffic at certain peak periods recently. Actually certain relief measures were already in hand and more are proposed but the capacity of the trunk system will need to be expanded very greatly within the next few years. Particular attention will be given to improvement on the shorter distance routes.
Last year the basis of charging for trunk calls was radically altered. Under the new system exchanges are arranged in groups for charging purposes and a simplified scale of charges is now in operation. Local call areas have been considerably extended and subscribers have the benefit of local charges for calls to all exchanges within their own groups. Simultaneously with the introduction of group-charging, the radius within which standard rentals apply was increased from two to three miles and the provision of telephones at residence rental rate was conceded to certain farmers.
The introduction of group charging, the primary object of which was to prepare the way for the extension of subscriber dialling of trunk calls, and the other concessions have resulted in a marked increase in the demand for telephones. Applications received in the 12 months ended 30th June last exceeded the average for the preceding three years by 57 per cent. The increase in demand outside Dublin has been particularly high; it exceeded the average for the previous three years by 83 per cent. Although the rate of installation of telephones is now higher than ever, there is still a waiting list of about 4,570 applications but more than half of these are with the engineers for early attention.
Financially, the telephone service is in a healthy condition. The charges are reasonable by comparison with those of other services or on any other standard and the service has been operated at a profit after providing for interest charges, depreciation and superannuation. In 1958/59 the surplus was £413,000 and for 1959/60 it is expected to be of the order of £350,000, notwithstanding the concessions in rentals and call charges a year ago. While these profits may appear to be large, they are modest in relation to the capital employed.
The present Bill is intended to provide for the needs of the next 5 years approximately. The amount for which authority is sought is £10 million which will allow of an average yearly expenditure of about £2 million. The programme proposed provides for the installation of 65,000 additional subscribers' lines and 80,000 extra telephones the net effect of which will be to increase the number of existing telephones by about one-third. It also provides for a considerable improvement in the trunk network including the permanent circuiting by means of cable and radio links of numerous main and intermediate distance routes as well as an extensive scheme of improvements on shorter routes. The maximum progress achievable will be made in the conversion of exchanges to automatic working and the subscriber trunk dialling will be extended on a wide scale. Contracts have already been placed for equipment to provide trunk dialling facilities for subscribers at Dublin and the principal provincial automatic exchanges and for the conversion of some 50 exchanges to automatic working.
The estimated break up of the proposed expenditure is: Subscribers installations and local underground schemes, £6.42 million; Exchanges— new and extended, £2.24 million; Trunk and junction circuits, £2.13 million; Buildings, £0.53 million, making a total of £11.32 million. Allowing for a carry over of a balance of approximately £0.82 million on hand on 31st March last, and some possible overestimation, the sum required is, in round figures, £10 million.
It is hardly necessary for me to expand upon the value of the telephone system in the commercial and social life of the country. It is, I think, generally agreed that apart from telephone capital expenditure being self-liquidating, extension and improvement of the service contributes to greater efficiency in production and distribution. The service also provides a very desirable social amenity. In addition, it gives worthwhile employment to thousands of our people. We have still considerable arrears of development work to make up and we must be prepared to cater for continued and steady demand for telephones. It is for these purposes that the grant of the extra funds is proposed under this Bill which I confidently recommend to the House for approval.