With this Vote, Motion No. 39 on the Order Paper in the names of Deputy Costello and other Fine Gael Deputies is being taken.
Committee on Finance. - Vote 45—Transport and Power.
I move:
That a supplementary sum not exceeding £10 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on 31st March, 1963, 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 sundry Grants-in-Aid.
The purpose of this token Estimate is to enable the Dáil to discuss the 1962-63 Estimate for the Department of Transport and Power. The Book of Estimates shows a net Estimate of £5,004,740 for 1962-63 compared with the sum of £4,841,810 granted in 1961-62—i.e. a net increase of £162,930. The 1961-62 figure was increased to £4,851,810 by way of a Supplementary Estimate for £10,000 which was taken too late for inclusion in the Book of Estimates thereby reducing the increase of £162,930 to £152,930.
The principal increases are in the provisions for Salaries, £105,000; Tourism, £359,000; Construction, Dublin Airport, £260,000; Working Capital for Catering Service—Shannon Airport, £110,000; Shannon Free Airport Development Co., £50,000 and Rural Electrification, £69,210. Increases on other Subheads amount to £84,130.
This gives a total Increase of £1,037,340 as shown in the Estimate. The "Late" Supplementary Estimate in 1961-62 increased the grant for the year by £10,000 and thereby Reduced the total of the Increase to £1,027,340.
The principal Decreases are in the provisions for Harbour Grants, £90,000; Construction—Shannon Airport, £75,000 and Cork Airport, £315,000. Decreases on other Subheads amount to £40,170. To these must be added an Increase of £354,240 in the Appropriations in Aid Subhead which is equivalent to a Decrease in the net Grant. This brings the total of the Decrease to £874,410.
The net increase in the Estimate for 1962-63 compared with 1961-62 is therefore, £152,930 as I have already stated. The increase in the provision for salaries is due to recruitment of staff to fill newly created posts, mostly at Cork Airport, and to general increases in salaries and wages and normal incremental progression.
The services of tourism for which £699,300 was provided in 1961-62 in the Vote for Industry and Commerce, £700,000 in Subheads H. 1, 2 and 3, less £700 receipts under Subhead S.3. Appropriations-in-Aid, and the aviation and meteorological radio services for which £178,000 was provided in Subhead F of the Vote for Posts and Telegraphs were taken over by the Department of Transport and Power and provision is made for these services in 1962-63 in the Vote for Transport and Power.
As the House knows, it is my general policy to bring about a position where the State Companies should ultimately be able to remunerate at least the new capital invested in them. It must be recognised, however, that there are special circumstances in the civil aviation industry. We all appreciate its unique contribution to our tourist industry and are aware of the extremely rapid rate of expansion which has been imposed upon it. In view of the international character of the service it is necessary to provide services capable of meeting the intense competition. The fares structure is the result of international bargaining by air companies, many of which enjoy various indirect advantages, such as long haul rates, concealed subsidies for social or military reasons; use of airports which are themselves subsidised. Despite these advantages the world's airlines showed a record operating loss estimated at £50m. for 1961 as compared with an operating profit of £25m. in 1960 and in some cases their Governments have been called upon to come to the rescue.
These losses have been attributed variously to excess capacity, the result of over-optimistic traffic predictions and fierce competition despite limitation of rates by international air agreements and the minimum fares prescribed by the IATA. In the context of world aviation Aer Lingus and Aerlinte as with some other airlines have made a reasonably good job financially of their operations last year. Aer Lingus showed a small operating surplus after allowing for depreciation but not for remuneration of capital, while Aerlinte in its fourth year of operation and in its first full year with its own jet aircraft earned a substantial operating surplus after allowing for depreciation at a time when other airlines long established on the North Atlantic were losing money.
Apart from the purely financial success, Aerlinte has made a notable contribution to the tourist drive and has well merited tributes for its publicity efforts in the US. It is a cause of regret to me that neither company has yet been able to contribute towards the remuneration of its capital but I am keeping in touch with the companies about their future financial requirements and I hope that it will be possible to make some more satisfactory arrangements for the future.
While the number of aircraft landing at Shannon Airport—7,406 in the year 1961-62—showed a decrease of 4 per cent. on the 1960-61 figure and the total number of passengers handled decreased by 5 per cent. to 376,000 the total number of terminal passengers — embarked and disembarked—increased by 17 per cent. to 149,000 and transatlantic terminal passengers increased by 17 per cent. to 92,000. The total number of passengers going through the Airport represents about one-fifth of all the air travellers on the North Atlantic.
At present, in addition to Aerlinte, the following eight foreign airlines are operating scheduled passenger services into Shannon Airport:— British Overseas Airways Corporation, Pan American Airways, Trans-Canada Airlines, K.L.M. (Royal Dutch Airlines), Swissair, Sabena (Belgian Airlines), Trans-World Airlines, Lufthansa, the German Airline.
The Airport's total freight traffic in 1961-62 at 24,680 metric tons increased by 37 per cent. over 1960-61, terminal freight increasing by 44 per cent. and transit freight by 36 per cent. Cargo scheduled services are operated through the airport by Pan American Airways, Seaboard World Airlines and Alitalia. Out of a total of 17 European airports Shannon is in seventh place as regards the level of cargo services. This indicates the very great importance of Shannon as a freight centre as all the ten countries concerned in these 17 airports operate thier own transatlantic cargo services. An important element in the increasing terminal freight traffic during the year 1961-62 is the continuing development of the Industrial Estate, the freight traffic generated showing an increase of 85 per cent. on 1960-61— 1,033 metric tons as against 559.
Traffic during the current financial year apart from embarkations and disembarkations will show an inevitable decline due to the reduction in transit traffic and this calls not only for maximum tourist promotion by all the airlines and Bord Fáilte but also for far more joint co-operative tourist promotion on the lines advocated by the former President of Limerick Chamber of Commerce. Shannon Airport is the centre for the scenic attractions of western Ireland and this is being highlighted in every way possible.
Work on the construction of a new freight terminal building necessitated by the increased freight traffic has been completed. A central turf-fired boiler house which will replace temporary and localised heating systems throughout the terminal area is expected to be completed by the end of this year. Work on the construction of a new control tower which is intended to accommodate the air traffic control and radio service staffs at the Airport with a view to securing the efficient co-ordination of these services and the more economic utilisation of staff has commenced and it is expected that this will be completed by mid-1963.
Contracts have been placed for the construction of a general purposes building which will include accommodation for an automatic telephone exchange and for a mail order stores which is required to meet the expanding mail order activities of the sales catering service.
Consequent on the use of the Airport by jet aircraft it has been necessary to carry out extensions to the aircraft parking area and provide jet engine blast screens, in order to provide sufficient parking space and to enable the aircraft to be parked close to the terminal building.
As Deputies will be aware from recent press reports and publicity and my reply to a Parliamentary Question on 12th April, 1962, a new US owned organisation has been granted a licence to operate at Shannon for the provision of full scale engineering facilities and to undertake a limited amount of traffic handling mainly for non-scheduled operations at the Airport. Conditions are attached to the licence to ensure that a satisfactory standard of engineering services is provided and to co-ordinate the traffic handling facilities of the new organisation with those already being provided by the national airline. The new organisation hopes to provide certain repair and maintenance services which have hitherto not been available at the airport and extending to major overhauls and repairs.
There have been extensive developments in the provision of navigational aids and communication facilities over the past twelve months or so. At Shannon Airport an instrument landing system, a precision approach radar installation of the very latest types and distance measuring equipment are either installed or projected.
Shannon is now the sole centre broadcasting meteorological information for the North Atlantic traffic on the European side of the Atlantic, and the quality of the broadcasts has been highly praised. In addition, broadcasts on very high frequency are being provided as part of a broadcast plan for the European Mediterranean Region and these broadcasts are also used extensively in the North Atlantic Region.
Despite a decrease in overall passenger traffic at the airport, there was an increase of over 7 per cent. in the turnover of the sales and catering services for the sales year to 31st January, 1962. This increase was achieved by an intensified sales effort on the part of the service and by the development of departments which do not depend directly on passenger volume for their income. Despite this effort there was, due to a further decline in transit traffic at the airport, a decrease in turnover since then. While only provisional figures are yet available the indications are that turnover, since 31st January, 1962, has fallen by between 8 per cent. and 10 per cent. Adverse factors affecting the services are the decrease in transit traffic and the reduction from $500 to $100 of the duty-free allowance of US tourists returning home. These factors, together with the concentration of jet traffic into shorter periods of the day, have led to substantial staff redundancy in the catering service involving almost one hundred persons. Every effort is being made by the Sales and Catering Service to ease the hardships which this redundancy will inevitably cause.
A provision by way of a grant-in-aid for £110,000 has been included in the Estimates this year to enable working capital to be provided for amounts and periods as required by the sales and catering service. Interest at the appropriate rate will be charged on the amounts outstanding from time to time. This does not represent a new expenditure by the State but is merely an accounting arrangement, the expenditure being balanced by increased Appropriations in Aid from the Catering Service.
The total capital expenditure on Shannon Airport up to 31st March, 1962, amounted to £4.9m. of which £4.6m. had been expended up to 31st March, 1961. Total revenue at the Airport in the financial year 1961-62 amounted to £845,000 as compared with £728,000 in 1960-61. The increased revenue was due largely to increased pilot training operations at the Airport during the year which yielded additional landing fees. Operating expenditure at the Airport in 1961-62 amounted to £644,000 as compared with £580,000 in 1960-61. Expenditure on air traffic control meteorological and radio services in 1961-62 amounted to £306,000. The operation of the Airport in 1961-62 showed, accordingly, a surplus of £201,000 but this figure makes no allowance for interest on capital expenditure, depreciation or pension liablity, which amounted to about £490,000. The overall deficit of the operation of the Airport in 1961-62 was, therefore, about £285,000, or about £22,000 less than the corresponding figure for 1960-61.
There have been substantial increases in traffic at Dublin Airport. During the year 1961-62, there were 16,700 aircraft landings, 963,600 passengers and 16,500 metric tons of freight representing increases of 8 per cent., 13 per cent. and 5 per cent. respectively over the 1960-61 figures.
The car ferry service which was introduced by a British independent airline on the Dublin-Liverpool route in April, 1960, carried 1,500 cars in 1960 and over 1,600 during the 1961 summer season. For financial reasons that company did not operate in 1962 but it was expected that a service would be introduced by another company. This service did not materialise.
In view of these abortive attempts to provide an air car ferry service and having regard to its importance in the development of tourism, I directed Aer Lingus to undertake a study of the matter, as I felt that they alone could provide a viable continuous air car ferry, in conjunction with their normal passenger and freight services. The company's proposals for entry into this field were approved. These proposals hold out the best promise of success because the future of an air car ferry service lies in its operation in conjunction with the normal passenger and freight services which Aer Lingus already provides. Two Carvair ATL 98 aircraft are being purchased at a cost of £700,000 to be provided by way of share capital. It is expected that the company will transport 4,000 cars between the two countries in the first year. The British terminals are likely to be Liverpool and Bristol but Birmingham is also being considered.
Passenger traffic at Dublin Airport doubled between 1955 and 1960 and it is estimated that an increase of a similar order will occur between 1960 and 1965. It was necessary, therefore, to prepare a long term scheme to provide additional accommodation to cope with anticipated traffic developments.
A pier building has been constructed for passenger movement ensuring flexibility of operation and permitting growth in traffic over a period. Other constructional works now in course of erection include a second pier building, permanent quarters for the technical administrative and staff catering services, a central turf-fired boiler house, and extensions to the fire station building. These works should be completed in the course of the next six months.
At Dublin Airport, to provide for expansion of traffic, arrangements are being made for the installation of surveillance radar equipment permitting co-ordination up to 120 miles from the Airport, and also for the provision of new precision approach radar equipment.
The total capital expenditure on Dublin Airport up to 31st March, 1962, amounted to £2.8m. of which £2.4m. had been expended up to 31st March, 1961. The total revenue at the Airport in the financial year 1961-62 amounted to £395,000 as compared with £337,000 in 1960-61. The increase was mainly due to increased receipts from landing fees. Operating expenditure at the Airport in 1961-62 amounted to £406,000 as compared with £340,000 in 1960-61. The operation of the air traffic control, meteorological and radio services accounted for about £117,000. The operation of the airport, therefore, in 1961-62 showed a deficit of about £11,000, a figure very much reduced from earlier years, to which must be added a sum of £257,000 in respect of interest on capital expenditure, depreciation and pension liability, making an overall deficit of about £268,000 on the operation of the airport in 1961-62. This compares with an overall deficit of £229,000 in 1960-61.
Perhaps the outstanding development in Irish Aviation during the year was the opening of Cork Airport on 16th October, 1961. In the five months up to 31st March, 1962 there were 500 aircraft landings involving the carriage of 20,500 passengers and 100 metric tons of freight and mail. In the 12 months up to 15th October, 1962, 76,335 passengers had passed through the Airport and 329 metric tons of freight were handled. The airport has made a very promising start and the traffic returns for the first year of operation have been encouraging. Direct services are operated to the Airport from Dublin and from the following ten points in Britain and Europe: Barcelona, Birmingham, Bristol, Cardiff, Exeter, Jersey, Liverpool, London, Lourdes and Paris. There are connecting Aer Lingus services to Lisbon, Rome and Zurich. In addition to Aer Lingus the following four British operators serve the Airport: Cambrian Airways Ltd., Airlines (Jersey) Ltd., Starways Ltd. and Derby Aviation Ltd.
With the commissioning of the third State Airport at Cork, I believe that the country is now adequately served with major airports, having regard to traffic potential and the rights available for economic service. The Exchequer commitment to the operation of airports is substantial and before any further capital investment in airports can be undertaken, the concentration must be on the problem of achieving economic operation of those already in existence.
The total capital expenditure on Cork Airport up to 31st August, 1962 amounted to £1.1m. The Airport commenced operations on 16th October, 1961 and in the period up to 31st March, 1962 total revenue amounted to about £3,000. Operating expenditure at the Airport in the period amounted to £38,000 of which the air traffic control, meteorological and radio services accounted for £15,000. The operation of the Airport showed, accordingly, a deficit of £35,000. This figure makes no allowance for interest on capital expenditure, depreciation and pension liability which amounted to £64,000 in the period. The overall deficit on the operation of the Airport in the period from 16th October, 1961 to 31st March, 1962 was, therefore, about £99,000.
The continuing loss on the operation of the three State Airports has been a source of grave concern to me. As I have indicated, the total deficit on the operation of the airports in 1961-62 was about £652,000. I have been examining ways and means of reducing this substantial deficit and, as a measure to reduce these losses, I arranged for the introduction as from 1st April, 1962, of a passenger service charge which is levied on air passengers travelling abroad. This charge is imposed generally at European Airports. It is estimated that this charge will yield about £150,000 in the current financial year and the receipts from this source will, of course, increase with the expected increase in air passenger traffic. Apart from the efforts which have been made to increase the revenue at the airports it is my policy to ensure that the airports are run as economically as possible, consistent with the provision of adequate and efficient services both to the travelling public and to the air companies.
I should mention that I am satisfied that the operations in comparable countries show that the cost of the Irish Airports is not unfavourable. It is difficult to make exact comparisons, as there are different systems of allocating costs. In some countries as in the United States and Britain for instance no charge, or a nominal charge only, is made against the Airports in respect of the cost of air traffic control, meteorological service or radio staff, whereas in Ireland these costs are debited in full in making up the cost of the Airports. The total loss on the operation of Shannon and Dublin Airports in 1961-62 amounted to £552,000. If the cost of the air traffic control radio and meteorological services were deducted, the result would have been a loss of only £70,000, which is not unsatisfactory.
The accounts of Aer Lingus for the year ended 31st March, 1962, show that the Company earned an operating surplus of £56,000 as against £277,000 in 1960-61. Total Revenue increased from £4,970,000 in 1960-61 to £5,684,000 in 1961-62, but this was more than offset by increased operating expenditure which amounted to £4,693,000 in 1960-61 as compared with £5,627,000 in 1961-62. The results of the company's operations in 1961-62 can be regarded as satisfactory in view of the increased competition encountered in the period both on the cross-Channel and Continental routes.
Aer Lingus at present operates an aircraft fleet consisting of eight 65-seater Viscounts, seven 40-seater F27 Friendship and five 32-seater DC3s. In the year ended 31st March, 1962, the company's passenger traffic increased by 9 per cent. to 779,000 over the year ended 31st March, 1961. Freight traffic increased by 17 per cent. to 13,100 metric tons but mail carried decreased by 2 per cent. to 1,657 metric tons.
In 1961-62 Aer Lingus continued to expand its European network by the inauguration of the new services from Cork to London, Bristol, Paris and Cardiff. Boeing jets operated on the Dublin-London route during the peak summer period of 1961 and on this route also a first class service has been introduced. Increased frequencies were provided on most of the cross-Channel routes during 1961-62 as well as on the Continental routes to Amsterdam, Cherbourg, Copenhagen, Lisbon and Paris. I have now received long term plans for the future expansion of Aer Lingus on all routes. In connection with this, I have directed them to carry out a joint research project with Bord Fáilte in regard to the potential tourist traffic originating from Northern Europe.
The accounts of Aerlinte for the year ended 31st March, 1962, show that the company earned an operating surplus of £200,000 as compared with an operating deficit of £94,000 in 1960-61. The total revenue earned by the Company in 1961-62 was about £4,167,000 as against £2,463,000 in 1960-61 and this very considerable increase reflects the extersive development achieved in the Company's traffic during the year.
In the year 1961-62, Aerlinte's three jet aircraft carried 55,000 revenue passengers, 525 metric tons of freight and 53 metric tons of mail representing increases of 57 per cent., 136 per cent. and 20 per cent. on the previous year, which is highly satisfactory.
On 1st March, 1962, very large reductions in transatlantic fares were introduced in respect of groups of at least 25 people. Aerlinte hope that the reduction will result in their securing business from groups in Ireland and the US who are at present chartering aircraft for transatlantic trips. This will help to utlise empty sectors of extra transatlantic flights in the peak periods.
The Air Navigation and Transport Act, 1961, which became law on 3rd August, 1961 increased the authorised share capital of Aer Rianta Teo. from £10m. to £13m. and provided for the issue by the Minister for Finance to the Company of repayable advances not exceeding £1m. The funds are required mainly for the repayment of bank loan, for working capital and for fleet and ground equipment. The Minister for Finance has agreed to subscribe a sum of £275,000 by way of share capital for investment by Aer Rianta in Irish and Inter-Continental Hotels Ltd. The total amount has already been advanced. The money is being used towards the construction of hotels in Dublin, Cork, and Limerick and these hotels will provide much needed additional first class tourist accommodation, the lack of which at present is undoubtedly retarding the air companies in their efforts to attract more tourists to this country.
Six Western European countries met in December, 1960, to consider the problem of jet aircraft in upper airspace and signed a Convention relating to Co-operation for the Safety of Air Navigation over their combined upper airspace. This Convention will shortly be ratified by these countries and a new organisation to be known as Eurocontrol will be established. The new organisation will co-ordinate upper air traffic control in the countries concerned. The Government have approved the making on behalf of Ireland of the necessary application to accede to the Convention and the text of the necessary enabling Bill will be circulated as soon as possible.
A development of very considerable significance to aviation in this country is the manufacture of aircraft at Baldonnel by the Potez group to whom Deputies will wish me to extend their very good wishes.
A new scheme for the initial training by the Air Corps of young men recruited by the national Air Companies for training as pilots is now being organised and will be effective in respect of the next intake of trainees. While it was necessary at the beginning of 1961 for the companies to send a number of young men outside the country for their preliminary flying training, such a course should no longer arise with the introduction of the new scheme.
At the request of the United States authorities, discussions were held in Dublin last December between representatives of both countries on the representations of the US Government that American planes be permitted to fly to Dublin and beyond. As Deputies will have noted from Press statements the Irish Government found itself unable to agree to this request and accordingly there has been no change in the pattern of USA-Ireland flights. The agreement which regulates air traffic between the two countries provides that a revision of the agreement may be requested on 60 days' notice by either side and the US Government have reserved the right to re-open the question in accordance with the agreement.
The Shannon Free Airport Development Co. Ltd. continues to develop to the fullest extent the great national asset which has been created in Shannon Airport. Its aim is to increase freight traffic, to encourage transit passenger traffic and to promote tourism.
The company's main sources of finance are provided under the authority of the Shannon Free Airport Development Co., Ltd., Acts, 1959 and 1961. These Acts authorise:— (i) the Minister for Finance to take up shares in the Company up to an aggregate limit of £3,000,000; (ii) the issue by the Minister for Finance of repayable advances to the company to meet one-half of the expenditure by the company on the provision of dwellings for workers employed on the Industrial Estate at the Airport. The aggregate amount of advances shall not exceed £400,000; and (iii) the provision, by way of grant-in-aid, of sums which in the aggregate shall not exceed £1,250,000. The total amount of repayable advances to the company to 31st March, 1962 was £310,000.
The grant-in-aid moneys are voted annually by the Oireachtas and a sum of £330,000 is being provided for the company in the current financial year, the money to be used for grants to industrialists and to meet the running expenses of the company. Up to 31st March, 1962, £614,500 had been paid to the company by way of grant-in-aid. The total amount advanced by way of non-voted share capital to that date was £1,578,000. This money is used by the company to acquire revenue-earning assets such as factory buildings and dwelling houses, the income from which will go to supplement the company's grant finances. Up to 31st March, 1962, the total State investment in industrial development at Shannon was, therefore, about £2,500,000. This expenditure includes an investment of over £600,000 in the provision of housing and in community development.
It was to be expected that a concept so revolutionary as an Industrial Estate on the fringe of an international airport would take some time to come to full fruition, but already the results recorded are heartening. Over 1,300 persons are now employed in the Industrial Estate compared with 700 a year ago and the annual value of their salaries and wages is of the order of £500,000. Eight manufacturing and five trading concerns now operate in the Estate and 22 factory bays have been constructed. The contribution to air freight is notable and up to the end of September, 1962, a total volume of some 2,000 metric tons of air freight had been generated by industrial operations at Shannon. An encouraging feature of the industrial development programme is that five of the existing firms have taken steps to extend their operations. By March, 1964, it is expected that total employment in the industrial estate will amount to 2,000.
To date ten houses and 137 flats have been provided for employees. A contract has been placed for and work is well advanced on an additional 100 houses. The normal community amenities are being provided. The extent to which additional houses should be provided at the airport is at present under consideration. It will be appreciated that the availability of a stable labour force is of the greatest importance to the continued success and development of the industrial enterprise.
While the development of an industrial estate has been the most spectacular feature of the company's work, other developments have not been neglected. The company is co-operating with Bord Fáilte and other interests with a view to maintaining the flow of transit traffic and of increasing terminal traffic at the Airport and it has itself undertaken a vigorous Press and public relations campaign, both at home and overseas.
Members who visited the Industrial Estate in April will have seen for themselves the developments which I have outlined and I think I am correct in concluding that they will have been very impressed with what they saw and will have satisfied themselves that the moneys being provided by the State including the grants, which are yearly provided in these Estimates, are being put to very worthwhile use.
The world wide recession in tramp shipping freight rates which has lasted for over five years still continues and there is little sign of any sustained recovery in the immediate future. In 1961 it looked for a time as if the shipping industry was at last emerging from the slump, freight rates rallied and there was a continued decline in laid-up tonnage.
In December, 1961, however, a decline set in and since then freight rates have fallen catastrophically to levels which are the lowest recorded since the last war. The British Chamber of Shipping freight index figures for August and September, 1962, were 79.4 and 81.0 respectively as against 100 for the base year 1960 and 106.8 the average for 1961. When account is taken of the very heavy increases in wages and operating costs since the war it is clear that shipowners are facing a severe crisis. The volume of laid-up dry-cargo tonnage has risen sharply, the figure at the end of September, 1962, being 2.37 million tons gross compared with 500,000 tons at the end of October, 1961. The low freight rates generally and the decline since December, 1961, are attributable to the continuing surplus of world tonnage, the earlier invasion of the grain trade by tankers, greater carryings by bulk carriers and a recession in certain sectors of world trade. The overriding factor is the excess of tonnage over demand and as a large volume of new shipping is still under construction it will probably be some years before a state of equilibrium between supply and demand can be reached.
I am glad to say that Irish Shipping Limited benefited from the temporary improvement in freight rates in 1961. For the 11 month period ended on 31st March, 1962—the company having altered its accounting year, which previously ended on 30th April—the company showed an operating surplus of £279,000 compared with £238,000 for the 12 months ended 30th April, 1961. The depreciation of the fleet for the 11 months amounted to £691,000 and the commercial loss for the period was thus £409,000, compared with a figure of £515,000 for the previous 12 months. Total cargo carried during the period amounted to 1,466,000 tons, which is a rate of increase of about 4½ per cent. over the average monthly carrying for the previous year.
Because of the recession in freight rates the company were forced to lay up temporarily two of their deep-sea dry-cargo vessels, one of which, however, is now back in service. While the company hope that the lay-up of further ships can be avoided this possibility cannot be excluded if freight rates continue at the present low levels.
The company's fleet consists at present of 17 dry-cargo vessels totalling 138,500 tons deadweight and three tankers totalling 39,400 tons deadweight. The dry-cargo fleet includes two recent deliveries of 15,000 tons deadweight each, the Irish Rowan which is a sistership to the Irish Sycamore delivered last year, and the Irish Cedar, the first of two sistership bulk carriers. The second bulk carrier is due for delivery in March, 1963. These bulk carriers will enable the company to participate in the growing development of specialised bulk carriage. The operating costs of these four vessels relative to their carrying capacity are substantially less than those of smaller vessels in the fleet and the company believe that they will prove a worthwhile investment. With the delivery of the second bulk-carrier, the company's dry-cargo fleet will total 153,500 tons deadweight so that only a further additional 47,000 will be required to meet the target of 200,000 tons which has been set. Replacement of a number of the existing older vessels will in the normal course also be necessary before 1970.
The company's earnings represent a significant contribution to our balance of payments, the net contribution on current account for 1961 being £1,235,000. The company gives direct employment to about 850 persons, and provides valuable training facilities for young men interested in a seafaring career. Indirect employment is given in the repair, overhaul, bunkering and provisioning of the company's vessels which is carried out as far as practicable in the State. With the establishment of the Verolme Cork Dockyard, the building at home of deep-sea vessels for the company is now also possible. The Irish Rowan, which is the first ship to have been built at the new dockyard, reflects great credit on the management and workers and marks, I hope, the beginning of a long and mutually beneficial relationship between the two companies.
I am glad to say that the container dispute at Dublin Port has at last been settled and that container services are now operating freely through the port. The container service between Greenore and Preston has continued to expand and constitutes a very valuable contribution to the development of efficient and economic transport for our exporters and importers between this country and Great Britain. I was also pleased to note the inauguration during the year of a container service from Drogheda to Preston. Another very welcome development is the provision of a refrigerated container service between Dublin and the Continent. Shipping and port costs must necessarily play an important part in the ability of our exporters to compete with producers and manufacturers of other countries and, particularly in the era of increased competitiveness forced upon us by the Common Market, it is essential that these costs are not inflated by restrictive practices or the retention of outmoded methods.
The position in relation to cargo handling at a number of our ports is far from satisfactory. It is clear that some dock workers persist in maintaining restrictive and outmoded practices and resist the introduction of modern methods. This results in higher discharging costs and also in higher freight rates to compensate for delays in the turn-round of ships. Such restrictive practices must in the long run operate to the detriment of the business of the port and ultimately to the detriment of the livelihood of those responsible for maintaining these practices. It seems clear to me that port workers cling to outmoded practices because they fear redundancy or loss of earnings. The aim of the port users should be to try to secure a general acceptance by all parties of the vital necessity for higher productivity. If the right mood could be created, it might be possible to achieve greater efficiency at ports and more rewarding conditions for all concerned.
Whilst some progress has been made at the Port of Dublin I feel that the time has come when a serious attempt to improve matters at other ports must be undertaken. While the initiative may lie with the employers of port labour the co-operation of the trade unions is also absolutely essential. Port authorities are, of course, concerned at existing conditions, but they are not directly involved in the stevedoring business, and their unaided efforts cannot be expected to bring about improvement. The Harbour Authorities Association offers opportunity for consultations on port workers' productivity. Labour relations fall of course within the sphere of my colleague, the Minister for Industry and Commerce. I am sure that his Department and the Labour Court would be only too willing to render any assistance possible in order to resolve the problem.
An international conference at which this country was represented was held in London earlier this year to consider amendments to the International Convention on Prevention of Pollution of the Sea by Oil, 1954, to which effect has been given here by the Oil Pollution of the Sea Act, 1956. We have a considerable interest in this matter as our beaches are from time to time badly affected by oily residues washed up from the sea and anything that would help to minimise the discharge of oil from ships would be greatly to our advantage. The Conference was unable to agree on a date for the complete avoidance of the discharge of persistent oils into the sea but adopted some important amendments to the 1954 Convention, including considerable extensions of the sea zones in which the discharge of oil from ships is prohibited and a complete ban on the discharge of oil from new ships of 20,000 tons gross and over, except in special circumstances. The steps necessary to implement the amendments to the Convention in so far as this country is concerned are under examination.
My Department and Bord Fáilte have been constantly pressing for improvements in the cross-Channel services. It will be recalled that for the summer period of 1961 the number of sailings on the Dún Laoghaire-Holyhead route was increased. A further increase of seventeen sailings was provided for the summer period of 1962 and there were also eight extra sailings on the Rosslare route. The additional platform at Holyhead, quicker customs examination, a reduction in the number of passengers per vessel and better catering facilities, all contributed to a better service. The appointment of a Chief Shipping and Irish Traffic Manager by the British Transport Commission should lead to further improvements in the future.
While the number of sailings on the Dublin-Liverpool route remained unaltered, this service in common with the others offered cheap mid-week fares on more attractive terms in a further effort to encourage more even utilisation of the services so as to relieve pressure on those dozen or so peak days when the services operate under the pressure of acute demand. If the difficulties which arise on these peak days could be alleviated the basic problems in connection with the cross-Channel passenger services would be well on the way to solution. It is, unfortunately, the experience of the operators that the mid-week fare concessions are not sufficiently availed of by the travelling public. For that matter, the day sailings from Dún Laoghaire are also insufficiently utilised and in an endeavour to encourage better utilisation of these sailings the requirement of sailing tickets for day sailings at Dún Laoghaire was cut to the minimum this year.
The point that the heavy concentration of demand on a relatively small number of days creates substantial difficulty on the cross-Channel services is strikingly illustrated by the fact that the passenger capacity for the 1962 summer season on the Dún Laoghaire service was almost exactly double the number actually carried on the route in the summer of 1961.
The commencement two weeks in advance of certain industrial holidays in the British Midlands helped appreciably this year to ease the very high traffic demand which normally builds up around the August Bank Holiday week-end. This change should make for greater passenger comfort on peak days and also help significantly to spread the load. The re-timing of the industrial holiday period in the Birmingham area is of special interest in view of the efforts which, in conjunction with Bord Fáilte, I am making to extend the holiday season in Ireland. I will refer to this matter in more detail when, at a later stage, I deal with tourism.
I am informed that passengers using the Dún Laoghaire-Holyhead route could be further facilitated if they would travel by those sailings for which they hold sailing tickets. While there are arguments for and against sailing tickets, they should in the normal way provide a reliable indication of the demand for service on peak days and also help appreciably to distribute the traffic. Unfortunately each year's experience has shown that demands for transportation which could not possibly have been predicted occasionally arise during the peak period. One substantial reason for this is the high wastage of sailing tickets, which in 1961 was over 20 per cent., and reached 40 per cent. for some sailings. The position in this respect, regrettably, did not show any marked improvement during the 1962 summer season.
Improvements at the Mailboat Pier at Dún Laoghaire are continuing. Covered queuing space and improved toilet facilities have been provided, and two cranes which will facilitate the handling of cars have been delivered and are in course of erection. Improvements at Rosslare Harbour include the provision of increased space for customs examination and the marshalling of passengers. New toilets have been provided and the refreshment rooms have been extensively improved.
I have already mentioned the proposals for the introduction by Aer Lingus of an air ferry for cars next year. I am glad to be able to say that the shipping service for cars is also improving. The special car cargo-vessel which has been operating on the Dublin-Liverpool route was replaced this year by one with a capacity approximately 50 per cent. greater and taking account of an increase on the Rosslare service also the overall increase in sea capacity was of the order of 10 per cent. Improvement in this traffic is demonstrated by the fact that the number of cars carried by sea for the first 9 months of 1962, 16,465, represents an increase of approximately 23 per cent. over the corresponding figure of 13,422 for 1961.
It is hoped to achieve a more flexible and fuller utilisation of car-carrying capacity on the Dún-Laoghaire-Holyhead route when the cranes at present being installed at Dún Laoghaire Pier are in operation. My Department and Bord Fáilte are pressing continuously for the introduction of a proper car-ferry vessel on the Dún Laoghaire-Holyhead route and I am hopeful that our efforts will eventually succeed.
The provision of £150,000 for grants for harbour improvement works covers works in progress, or expected to commence shortly. The principal improvement schemes included are those for Drogheda and Galway, for which grants totalling £175,000 and £340,000 respectively have been authorised. Tenders for the works at Galway have been received and are being examined. This head also covers provision for the second of two new passenger liner tenders completed earlier this year by Liffey Dockyard Limited for the Cork Harbour Commissioners, of which the State is meeting half the cost.
The provision in 1961-62 was for a total expenditure on harbours of £240,000, but expenditure in the period reached only £151,930 because certain works, contrary to expectations, did not commence within the year or did not proceed at the expected rate.
In addition to the grants for harbour improvement works from the Vote for Transport and Power, there is also a provision under non-voted capital services, comprising a total of £106,000, for works at Dublin and Limerick, for which grants from the National Development Fund were approved. These commitments were incurred before the winding up of the Fund on 31st March, 1957.
The responsibility for maintaining and improving harbours rests by statute on the harbour authorities constituted under the Harbours Act, 1946. I should make it quite clear that the grant of State assistance for a harbour is now a very exceptional measure. If proposed improvement works are of a productive nature, which they certainly should be, it should be possible for the harbour authorities to raise the necessary funds by borrowing, with the assistance of the local authorities or other local interests who stand to benefit from the improvements. State assistance can be considered at all only for essential and productive schemes, the full cost of which, because of entirely exceptional circumstances, cannot be met locally. Improvement works aimed at catering for existing trade, which is already being handled satisfactorily at another harbour, and which are not calculated to generate genuine additional trade, cannot be regarded as justifying State assistance. It would be foolish and wasteful to subsidise one harbour against another in this way.
The present trend in international trading indicates clearly that more and more commerce is entering and leaving the larger harbours, creating a problem for coastal shipping and for the continued existence of the smaller harbours. During the past year, I have thought it desirable to impress on port authorities that the old attitude towards harbour administration must now change. Harbour facilities have to be sold just as air traffic and railway traffic are sold and the smaller harbours cannot be expected to survive unless there is active selling in every single case.
I am proposing that the grant-in-aid provision under subhead F1 for Bord Fáilte for this year should be £725,000 which represents an increase of £153,500 on the amount allocated last year. This increase is due to a general increase in the Board's activities as was contemplated under the Tourist Traffic Act, 1961, but one of the bigger items of increase — approximately £65,000—arises from the increased rate of investment in hotel development works which has involved Bord Fáilte in greater commitments in respect of interest grants on loans raised by hoteliers and guest-house proprietors for improvement and development works.
Apart from this grant for general activities, Bord Fáilte also administer a special fund of £1,000,000 for the development of major tourist resorts which was established under Section 2 of the Tourist Traffic Act, 1959. The amount being provided under subhead F2 of the Vote for this purpose this year is £174,000, which is nearly three times the amount actually expended in 1961-62. Bord Fáilte are entirely responsible for the administration of this scheme which is now passing from the initial planning and consultative stage to a stage where the Board expect actual execution of development work to be speeded up. This accounts for the fact that this year's provision is almost three times the amount actually spent in 1961-62.
The holiday accommodation fund of £500,000 which was also established under the Tourist Traffic Act, 1959, and which is administered by Bord Fáilte is used to finance the schemes of cash grants in respect of additional bedrooms and general improvement works at hotels. This year's provision under this subhead F3 is £160,000, an increase of approximately £40,000 over last year. This increase also reflects the increased investment by the hotel industry in hotel development works.
I have authorised Bord Fáilte to extend the grant schemes to cover the provision or improvement of bedrooms, diningrooms and rest-rooms for hotel staffs and, in the case of hotels outside the main urban centres, facilities for the entertainment and recreation of hotel guests. Because of the calls on the existing bedroom and improvement grant schemes and the need to provide for the two new schemes, it will be necessary to increase the £500,000 fund established under the 1959 Act and I shall in due course be bringing legislative proposals before the Oireachtas for that purpose.
A total of 2,850 rooms have been built since the Bord Fáilte grant scheme commenced of which 1,900 are of A class and 950 of B and C classes. Registered guest-house rooms have increased by about 20 per cent. and Bord Fáilte has prepared a list of almost 9,000 rooms in unregistered premises. Bord Fáilte's targets for top grade accommodation are now in sight of achievement but there is still a deficiency in the number of grade B and C rooms available, particularly in some parts of the country. I have directed Bord Fáilte to concentrate on the expansion and improvement of middle-grade accommodation and, with a view to giving extra encouragement to the small hotelier, the Board have reduced the lower limit on the cost of improvement works eligible for grant assistance from £2,000 to £500.
I am convinced that there is a market for medium-priced accommodation in many centres which at present lack suitable accommodation for family and middle-class holiday-makers and I hope it will be possible for the hotel trade to eliminate this deficiency. I regard this as the most important problem now confronting the tourist industry, and, as I feel the problem may be too great for private enterprise alone, I have asked Ostlanna Iompair Éireann to go into the possibility of building new grade B hotels in suitable places where there is and is likely to be a continuing inadequacy of such accommodation and where block booking for package tours is required by travel agents.
Related to this and also of great importance is the provision of a better standard of amenity at holiday resorts, particularly those frequented by families staying in caravans and guesthouses. I believe that it is possible, without spoiling the natural attractions of a resort, to provide entertainment of various kinds, including facilities for young people and entertainment during rainy periods. This is a problem requiring the attention and effort not only of hotel and guest-house proprietors but of all the business and commercial interests in a resort.
The total provision for tourism this year is £1,059,000. While this is the largest sum ever voted for tourist development it is, I believe, a moderate provision when one takes account of the value of the tourist industry to the economy. The 1961 income of £46.9 million from tourism and travel proved a most important factor in closing the gap in our balance of payments and comparisons recently made by OECD showed this country's net earnings from tourism as greater than those of Denmark and higher than the combined net tourist earnings of Greece, Portugal and Norway. Of this over £25 million can be attributed to tourists as distinct from Irish people returning home for holidays.
Reports about the 1962 season are conflicting, not only from different parts of our own country but from all over Europe and figures are not yet available to show the final picture of the year's tourist trade. Recently, I gave the following provisional statistics in respect of the eight months period January to August: Total inward passenger movements by sea and air down slightly from 919,572 to 914,015—a drop of 0.4 per cent.; Arrivals at Dublin, Shannon and Cork Airports up by 5 per cent. but sea traffic from Britain down by 5 per cent.; Disembarkations eastbound at Shannon up 18 per cent.; Total transatlantic traffic by sea and air up 16 per cent.; Cross-Border car traffic up 8 per cent.
During the 12 months since I assumed ministerial responsibility for tourist development policies, I have given very close attention to the problems of the tourist industry and have given directions to Bord Fáilte regarding the lines on which future effort should be directed. This has covered such matters as the need for greater publicity and promotional activities by regional hotel groups and other tourist interests, and the stimulation of increased tourist effort by local authorities and local development bodies. I asked them to improve the standard of their main publicity material and to commence the highlighting of scenic roads by the preparation of a scenic road map and later by more imaginative signposting. Apart from the new grant schemes for hotel staff accommodation and guest entertainment facilities, Bord Fáilte have also, at my direction, undertaken a special study of the potential tourist traffic for this country in Europe. Aer Lingus is co-operating in regard to this study. I directed them to announce extensions to the Tidy Towns Competition designed to stimulate greater interest in the improvement of the appearance of seaside resorts and the provision of better amenities and they propose to organise a special competition for the coarse angling centres. The study of the needs of the tourist development programme continues to have my constant attention as I consider that the industry has not yet reached its potential in this country.
Bord Fáilte have also given special attention to the question of the staffing of hotels. Following a study of the question by a representative working party, the Board formulated proposals for the establishment of a Council for Education, Recruitment and Training in the Hotel and Catering Trade. The Council will be representative of employers and employees as well as the Department of Education and Bord Fáilte and will have as its main objective the establishment of a system of recruitment and sufficient schemes of training to ensure an adequate supply of qualified workers to meet the needs of the industry.
One of the major problems to which I am giving particular attention is the very short holiday season. The majority of our people take their holidays within the late July and early August period and this period also coincides with the time when many of our visitors arrive. During this short period our hotels, guest houses and holiday resorts are overcrowded and our transport undertakings over-taxed. In the case of the hotel industry, particularly, there is the associated problem of the short employment season and the difficulty of meeting the overheads involved in maintaining or improving the working conditions of staff. This annual bottleneck, in fact, creates difficulties for all those catering for holidaymakers and is a limiting factor in the full use of holiday facilities. Outside this peak period accommodation is generally going abegging. As an illustration, in 1961 out of 4,174,000 bednights taken up in registered accommodation, 2,027,000 were recorded in the July-September quarter. This figure represents over 48 per cent. of the year's total and was almost double the number of bednights recorded in the April-June quarter. It is essential for the economic operation of our holiday services that the peak, to which I have referred, should be levelled off to give a greater spread of the demand and to promote a higher utilisation rate.
Bord Fáilte have, for some time past, been engaged in various activities to extend the holiday season, e.g., the development of special attractions during the early and late periods and the June Holiday Plan. This Plan met with encouraging success when it was first introduced last year, and this year the overall increase in business in the nine resorts which participated in the June Plan is estimated to have been at least 31 per cent.—from 59,000 bednights in June, 1961, to 77,000 in June, 1962. June holidays give good value for money. Apart from the discounts being offered by hoteliers, car-hire operators and others, records show that the month of June has longer hours of sunshine, lower rainfall and longer daylight hours than either July or August.
On the average, duration of bright sunshine in June is at least 20 per cent. greater than in either July or August. The average rainfall in June is lower than in either July or in August, being at least 20 per cent. lower than in July and at least 25 per cent. lower than in August.
Additional efforts are necessary, however, if we are to overcome this problem of the short holiday season. One of the factors which tend to concentrate the bulk of holiday-making in Ireland into a very short period in July and August is the timing of the August bank holiday both here and in Britain. One way of easing the situation would be the introduction of a fixed holiday on the last Monday in June in lieu of Whit Monday and the postponement of the August bank holiday until the last Monday in August. If these changes were possible, the re-timed June bank holiday might, in time, become the main focus of Irish holiday-making and the late August bank holiday would secure the double purpose of attracting some traffic from the beginning of that month and providing a late-season break for people who had taken their main holiday in June or early July.
An easement of the July-August peak on these lines would have the effect of giving the tourist industry, the industries which serve it and those businesses which derive essential income from the spending of tourists a more even flow of business throughout the holiday season and would also give us more room for holiday-makers. The harassments of crowding would be eased and both Irish people and people from abroad would benefit.
What I have in mind is a tourist season based on five fairly evenly spaced bank holiday breaks—the British Whit Monday bank holiday, a late June bank holiday here, the July bank holiday of the Six County area, the British bank holiday at the beginning of August and our own late August bank holiday. There would be, throughout the season, a structure of demand based on bank holidays, which would enable our holiday services to be more economically maintained and, for both the Irish and foreign holiday-maker, the succession of bank holidays would maintain that sense of liveliness at the different resorts which makes holidays so much more enjoyable.
There may be difficulties in bringing about these changes but from preliminary discussions which I have had with representatives of employers' and trade union organisations in the matter I have found that, generally, they are favourably disposed to the proposals in principle.
The changing of the public holidays would constitute only one part of the overall programme for the extension of the season. Another aspect is the problem of primary school holidays. At present, primary schools do not close until July and thus families with young school-going children are unable to take holidays in June. In order to extend to such families the opportunity of taking June holidays, should they so desire, the Department of Education, at my request, undertook consultations with the interests concerned about the possibility of advancing the summer closing date in urban schools so as to take in at least one week in June. The proposal has not won favour with a number of the organisations interested, notably the Irish National Teachers Organisation.
One of the reasons given by the INTO for their opposition is that very few large or moderately large families can afford holidays anyway and that those who take holidays do not occupy hotel accommodation. They suggest that the numbers who would take early holidays because of a change in the school closing date would be insignificant. I would suggest, however, that a broader view should be taken of the question. The numbers of our own people who take holidays away from home is increasing every year and this is a trend which every reasonable person will be anxious to help and encourage. It is true that financial problems limit the holiday opportunities of many families; so also do the problems of travel and accommodation during periods of peak demand. The June holiday plan is an effort to relieve these problems. Reductions of 15 per cent. are offered in the resorts participating in the Plan. These reductions cover hotels, guest houses and many unregistered boarding houses offering low-price accommodation and it must be remembered that these reductions apply to rates which are in most cases already below the July and August tariffs. Persons travelling by CIE can get a 10 per cent. reduction of their bus and rail fares also and car hire firms offer similar reductions. That there is a demand for this type of special offer is shown by the 31 per cent. increase in the number of bednights in the nine resorts which participated in the 1962 Plan.
I think it is a great pity that so many families are denied the opportunity of benefiting from this scheme. There are large numbers of fathers who have a choice as to when they take their annual leave but because of the existing school holiday arrangements they are confined in practice to the months of July and August. The teachers appear to be concerned that an earlier opening of the schools will mean a return to school during the holiday fortnight which follows the present August bank holiday. This, however, would not be the case. A school availing of the eight week vacation period and allowing one week in June would not re-open until after the end of the present August bank holiday fortnight. This would mean that those parents who have a choice of holiday periods could get in at least one full week at the special June rates while those who are tied to the first fortnight in August would still have their families with them during their annual holiday.
I have heard it suggested that the change would not be beneficial to the health of the children. I think it must be remembered in this connection that an earlier closing of schools would, in conjunction with the June plan, bring holidays financially within the reach of many families which cannot take holidays away from home at present; this must undoubtedly redound to the benefit of the children, and nobody will deny the benefits to children of the longer days and the drier weather of mid-summer.
I do not want to go into any further detail on this matter but I hope I have said enough to illustrate that the changes which I am proposing would be beneficial to our own people. There is no question whatsoever of Irish families being forced to take holidays at times not suitable to them in order to leave more room for overseas visitors. All I am seeking to do is to extend to Irish families a wider choice of holiday period than they have at present. No doubt, many would still choose to take holidays in July or August but I am convinced that considerable numbers would be delighted to have the opportunity of the better weather and lower tariffs of June. I hope very sincerely that the teachers will have another look at this question in the light of what I have said and agree to the change at least for an initial period of two or three years.
The short holiday season here and the difficulties which arise during the peak period constitute one of the major problems now confronting the tourist industry. I am confident that, with the support of the various interests concerned, the problem can be solved and I would appeal to Deputies to lend their active support in the matter.
The results of the Electricity Supply Board for the year ended 31st March, 1962, showed a surplus of £572,322 in the Board's net revenue account, which is about the same as the surplus for the previous year. The continued improvement in the Board's financial position is due mainly to increased revenue, and the fact that, as no new generating plant was commissioned during the year, increased production was achieved without any increase in the capital charges appropriate to generation.
Electricity generated in the year ended 31st March, 1962, amounted to 2,450 million units or about 8.4 per cent. greater than 1960-61. Of the 2,005 million units sold, industrial consumption was 684 million units, an increase of 6.6 per cent., while domestic consumption was 822 million units or an increase of 6.8 per cent. Other classes of consumption, comprising mainly general lighting and heating and also night storage heating, showed increases varying from 7.7 per cent. to 13.3 per cent. on the previous year. During the year the total number of consumers increased by 14,512 to 642,753. In the first five months of the year 1962-63 consumption showed an increase of 11.5 per cent. over the corresponding period of the previous year.
Last year, on this occasion, I pointed out that continued increase in demand for electricity tended to make more urgent the necessity for commissioning new generating plant. During the year ended 31st March, 1961, new generating plant placed in commission comprised two 20 megawatt units at Rhode Station, Offaly, bringing the total installed generating capacity to 723.5 megawatts. No additions were made to the Board's generating plant during the year ended 31st March, 1962, but steady progress is being made in the plans to add a total of 506 megawatts of new capacity by 1968-69. The first of two 20 megawatts generating sets at Bellacorick, Mayo, was commissioned in October.
The increased demand for electricity will also make it necessary for the Board to undertake substantial capital expenditure on the extension and strengthening of the transmission system within the next few years. Before the summer recess, I dealt at length in the course of the debates on the Electricity (Supply) (Amendment) Bill, 1962, with rural electrification and the new directives to the Board for its further extension as well as the capital requirements of the Electricity Supply Board and I am sure that Deputies will not wish me to cover that ground again.
Since the 31st March, 1962, when 754 rural areas out of a total of 792 had been developed, a further 12 areas have been completed. There appears to be an increase in the numbers now taking supply in the developed areas as a result of the increase in the subsidy to 75 per cent., but in view of the short period since the increased subsidy was introduced no reliable indication of the trend is available.
I trust that there will be propaganda by local organisations encouraging those people in the developed areas who are still unconnected to seek new estimates for the installation of electricity. The number of unconnected houses which could be connected at the standard rates is now about 77,000 and a further 23,000 could have electricity if they pay special service charges which would not be more than half their standard charges.
I am now seeking financial provision in respect of the £10 grants for bottled gas which are being given to those who can obtain connection to the electricity supply only if they are prepared to pay high special service charges. No provision for these grants could have been made when the Estimate for my Department was prepared. The extra sum now sought is the nominal figure of £10 as it is now clear that there will be savings on other subheads of the Vote which will be adequate to cover the probable expenditure in the current year. It has not so far been possible to reach a firm estimate of what this expenditure may be but it is not likely to exceed £50,000.
The Electricity Supply Board, on behalf of the Government, have been keeping in touch with work being done in various parts of the world in the application of nuclear energy to the production of electric power. It is clear that, so far, conventional fuels are cheaper than nuclear power for electricity generation.
The year ended 31st March, 1962, was another unfavourable year for Bord na Móna. The harvesting season was affected by bad weather so that the production targets were not attained, although production did show an increase on the previous year. Output of sod and milled peat exceeded two million tons as compared with some 1½ million tons the previous year but was almost 15 per cent. short of the target aimed at. Production, however, was sufficient to meet the demand for electricity production. Included in the production target for 1961-62 was a figure of half-million tons of milled peat to be held in reserve to augment production in a year of unfavourable weather. It was not possible to build up this stock pile during the year. After paying interest and allowing for depreciation the Board showed a loss for the year of about £95,000. It should be pointed out that in relation to total sales of £4,316,000 this is not a serious deficiency.
During the 1962 harvesting season, overall production showed a further increase but the bad weather in the latter part of August and in September will prevent the attainment of targets. Bord na Móna estimate that they will have produced roughly 900,000 tons of sod peat and 1,800,000 tons of milled peat. Of this production about 560,000 tons of sod peat and 1,000,000 tons of milled peat will be used for the production of electricity. The Board expect to go some distance towards building the stockpile of milled peat against a year of low production.
During July and the earlier part of August this year, there were representations, both in this House and direct to my Office, in regard to the fact that Bord na Móna were using machines where formerly manual labour was employed. People who had been expecting a prolonged spell of employment on the Board's machine turf bogs found that they were not required because additional machines were being used for the work they used to do.
I explained in reply to these representations that the recruitment and employment of workers on their bogs is a matter solely for Bord na Móna and that the Board, which must sell machine turf in competition with other fuels, must take all possible steps to remain competitive in a highly competitive market. Only by mechanising production as far as possible can the Board keep the price of machine turf at such a level that it will sell against coal. To illustrate, machine turf in the Dublin area is offered at £6 or £6 2s. a ton. In general, in terms of calorific value, one ton of coal is equivalent to two tons of machine turf. The prices for coal in the Dublin area vary from about £8 12s, per ton for Polish to about £12 per ton for British. American coal is available at a little over £9 a ton. While close to the bogs Bord na Móna have an advantage, the main centres of fuel consumption over the country in general show the same pattern as Dublin. To sell at all, therefore, the Board must keep their price at a minimum and must take all possible steps to reduce costs.
The Turf Development Act, 1961, raised the amount which Bord na Móna may borrow for the performance of its functions from £19m. to £24m. The capital will be invested in the development of bogs for the production of fuel for electricity, based on directives given to Bord na Móna and the ESB.
Sales of machine-won turf in 1961-62 were approximately 845,000 tons as against 860,000 tons the previous year, while milled peat sales increased from 800,000 tons in 1960-61 to roughly 1¼ million tons in 1961-62.
The demand for briquettes continues to increase and is now five times higher than what it was three years ago. Sales of briquettes in 1961-62 amounted to 180,000 tons compared with 120,000 tons in the previous year. Exports of briquettes to the Six Counties increased from 6,000 tons in 1960-61 to 11,000 tons in 1961-62. The new briquette factory at Croghan. Offaly came into operation in April 1961. The rated output of the Board's three factories is 250,000 tons per annum but they are capable of producing up to 280,000 tons. The Board are pursuing a vigorous sales campaign, including the use of television advertising, on the home and export market.
Progress reported: Committee to sit again.