When I was speaking on the last occasion, I had almost completed an examination of the increases and decreases under the various subheads of the Estimate. A sum of £10,300 in respect of electrical power supply for the operation of radio equipment was transferred from the Vote for the Department of Posts and Telegraphs—Vote 46, Subhead C —to this Department's Vote—Subhead K.
The provisions for Constructional Works etc. at Shannon, Dublin and Cork Airports—Subheads G.2, G.3 and G.4—in the 1962-63 Estimates are incorporated under one Subhead G.2 in 1963-64. Maintenance Works, Supplies, etc., at Shannon and Cork Airports— Subheads H.1 and J.1 in 1962-63 Estimates—are provided for under one Subhead H.1 in the 1963-64 Estimates. Fuel, Water, Light and Cleaning at Shannon and Cork Airports—Subheads H.2 and J.2 in 1962-63 Estimates —are provided for under one Subhead H.2 in the 1963-64 Estimates.
Deputies will have noted the changes in passenger and freight movements at Shannon Airport in 1962; a relatively stable position in respect of passengers and a reduction of 12 per cent in total freight traffic. However, recent revision of the air freight break-bulk structure will tend to make the shipping by air of smaller cargo units more attractive than hitherto. The figures for the year 1963 show that terminal freight has increased by 16 per cent which includes an increase of 6 per cent for Industrial Estate freight. Though the number of transit passengers through the airport continued to fall considerably, terminal passengers again increased by 22,000 or 13 per cent over 1962.
Work is in progress on the erection of a new control tower accommodating air traffic control and radio service staffs which will be more centrally situated in relation to the jet runways than the existing control tower. New buildings and constructional work recently completed at the airport include a new turf-fired central boilerhouse, a store to meet the requirements of the expanding mail order business of the Sales and Catering Service and a new general purposes building, including accommodation for an automatic telephone exchange, an extension of the apron, the provision of blast fences and the extension of the water supply.
The turnover of the Sales and Catering Service amounted to about £1,340,000 for the year ended 31st January, 1964, an increase of about £60,000 over the previous year.
There has been no extensive development of navigational aids or communication facilities at our airports since the opening in October, 1962, of the new Precision Approach Radar Unit at Shannon. However, a number of major installations have been approved and are scheduled for installation over the next few years. The overall deficiency at Shannon Airport in 1962/63 was about £383,000, or about £98,000 more than that for 1961/62. Details have been provided in the notes.
The growth of traffic at Dublin Airport in 1962 showed a recession, the increase in the number of passengers being only 2 per cent compared with increases of anything between 10 per cent and 20 per cent during previous years. It is heartening, however, to report that a recovery has taken place in 1963 and that progress at the normal rate is being resumed. Passenger figures for 1963 were 12 per cent higher than for 1962, and for the first time over one million passengers— in fact 1,104,634—passed through the airport in that year.
Freight handled at the airport in 1962 increased by 13 per cent, and in 1963 by a further 25 per cent to a total of 20,298 metric tons. This figure does not include the weight of cars on the vehicle ferry service. There was no air car ferry service in 1962. Because of its importance to the development of tourism, I requested Aer Lingus to undertake a study of the matter and the result is that the company operated services this year to Britain and the Continent using two DC4 (ATL 98) Carvair aircraft. In all, 3,612 cars weighing 3,569 metric tons were handled at Dublin Airport during the six months May to October, 1963.
Between 1955 and 1962, passenger and freight traffic at Dublin Airport had more than doubled and indeed 1963 had almost trebled the 1958 totals. This upward trend is expected to continue and a scheme has been prepared to provide accommodation to meet developments in the foreseeable future. Portion of this scheme has been implemented by the erection of two pier buildings. I hope shortly to be able to publish sketch plans to indicate the form which this overall development might take.
Work will commence shortly on the construction of two additional taxiways and an extension of the apron at Dublin Airport, for speeding up landing and take-off. A new lighting system is being installed on the main runway.
There was an overall deficiency at Dublin Airport in 1962/63 of about £183,000 or about £85,000 less than for 1961-62. Full details have been supplied in the notes.
In 1962 Cork Airport had 77,650 passengers and 330 metric tons of freight. In 1963 the airport had 95,909 passengers and 372 metric tons of freight, being increases of 24 per cent and 11 per cent respectively. These figures are very encouraging. In 1963 Aer Lingus operated a vehicle ferry service from Cork to Bristol at a frequency of two services weekly during the peak period; 678 cars were ferried between Cork and Britain in the six months May to October, 1963. The freight figures mentioned do not include 651 metric tons, being the weight of cars on the air car-ferry service. The major constructional works at the airport have been completed. Airport field lighting, a car park, a cycle park and internal access roads have also been provided and navigational and other aids and facilities are in operation. The overall deficiency of revenue for Cork Airport in the period was about £187,000. Details can be found in the notes.
Net receipts from the passenger service charge, which was introduced at Irish airports in April, 1962, amounted to £165,000 within the last financial year. This was £15,000 more than the estimated figure. An examination of costs at European airports shows that productivity at Irish airports is reasonably satisfactory.
The Aer Lingus fleet was recently improved by the addition of two Carvair ATL 98 aircraft. I have already dealt with the utilisation of this aircraft. Because of rising demands, the company have been authorised to purchase a third Carvair at an estimated cost of £270,000. The amount will be subscribed by the Exchequer in the form of equity capital. The Carvairs will be used for the transport of cargo and horses as well as for car-ferry purposes.
The company have had to face substantial increases in capacity by British European Airways on the three main routes—Dublin/London, Dublin/Manchester and Dublin/ Birmingham.
In the year 1962/63, Aer Lingus earned a total revenue of £6.18 million compared with £5.68 million in 1961/ 62 but expenditure increased to £6.24 million from £5.63 million so that an operating loss of £63,000 was sustained compared with an operating profit of £56,000 in 1961/62 or a worsening of £119,000. The increase in traffic, particularly on the cross-Channel routes, was not in accordance with expectations and, apart from the resulting shortfall in revenue, expenditure was higher because the company's organisation was geared to a greater volume of traffic than that realised. The increasing competition from BEA on the company's cross-channel routes was a contributory factor in the disappointing traffic growth.
The company are experiencing difficulty in holding their position on the continental routes where almost all their competitors are operating jets. In order to enable the company to compete successfully on the Continent, therefore, the purchase of four short-haul jet aircraft has been authorised at a cost of £5 million, of which £2 million will be provided by the Exchequer in the form of equity capital, the balance of the cost to be met either from the company's own resources or by borrowing. The aircraft will be brought into operation in the summer of 1965. Aer Lingus will be stepping up promotion of travel from the continent to coincide with the faster services provided.
During 1962, for the second year in succession, Aerlínte had the highest load factor on the North Atlantic. They were in the forefront again for 1963. The total revenue earned by Aerlínte in 1962/63 was £5.26 million as against £4.17 million in 1961/62 and while expenditure also rose—to £4.80 million from £3.97 million — the operating profit at £466,000 showed a substantial increase over the profit of £203,000 earned in 1961/62. While the company's progress has been very satisfactory, the indications are that it is reaching the limit of its progress with its existing equipment. Accordingly, in order to ensure its continued progress the company is acquiring— without recourse to State borrowing—a fourth Boeing aircraft at an estimated cost of £3m., including supporting equipment and development expenses.
While the day to day operation of the air companies must be a matter solely for the companies themselves, projects for new capital expenditure by the companies on aircraft and equipment are closely scrutinised and regular meetings are held with the chairman and management of the companies with a view to maintaining the necessary liaison.
Aer Lingus and Aerlínte are being required to finance a substantial proportion of new capital expenditure from their own resources; out of £10 million for additional equipment and building the State is providing £2.27 million by way of equity capital. The failure to remunerate capital must be considered in the context of difficulties facing airlines generally. Preliminary figures for the International Civil Aviation Organisation for 1962 indicate that the world airlines made an estimated operating profit of only 0.9 per cent in 1962 while there was a 2 per cent loss in 1961. The permanent difficulty faced by Aer Lingus is the very short length of journeys, the average mileage being 233 which is one of the lowest averages operated by any air company.
Certain costs such as landing fees, etc. remain constant whether the stage performed by the aircraft is long or short. I am glad to say, however, that there has been a very considerable upsurge in the gross receipts of both Aer Lingus and Aerlinte in the first six months of this year compared with the corresponding period of last year. If no unforeseen adverse circumstances occur, Aerlínte at least should be able to make a considerable contribution over and above normal depreciation. It is difficult to compare the economics of different air companies, as factors such as length of route can significantly affect the results. In so far, however, as it has been possible to compare the operations of Aer Lingus with those of other international air companies of a similar character, I have satisfied myself that Aer Lingus has a relatively good efficiency of operation.
The Shannon Free Airport Development Company Limited continues its work of developing Shannon as a major international airport by encouraging all activities likely to contribute to the welfare of the airport and with particular emphasis on the stimulation of industrial and trading activity at the airport.
The grant-in-aid provision in the Vote for 1963/64 is £250,000 compared with £330,000 in 1962/63. This money is required to enable grants to be made to industrialists towards the cost of machinery and training of workers and also to meet the running expenses of the company. In addition to these voted moneys, £1¼ million has been provided in the Capital Budget to meet the share capital and repayable advances expenditures of the company on the Industrial and Housing Estates: this compares with £988,000 issued to the company in 1962/63.
The company continues to make excellent progress and the best evidence of this lies in the growth in employment on the Industrial Estate from 1,350 to 1,952 persons in the year ended 31st December, 1963. In my Second Reading speech on the recent Act increasing the limits on the company's finances, I gave a comprehensive review of the company's activities and, in approving of the measure, the House expressed its satisfaction with the achievements of the company to date and confidence in its continued progress. Proposals for promising new industries are under examination by the company and the volume of inquiries from warehousing interests is also encouraging.
Inasmuch as the company's finances are provided from State funds, the policy and projects of the company receive my close attention. Capital moneys and grants are provided only on the basis of foreseeable demand, the objective being not to impede natural growth and, at the same time, not to outstrip the public demand.
Industrial development at Shannon is making a major contribution to the national economy. It is providing employment for significant numbers of our people at reasonable cost to the public purse in an environment where modern industrial skills and techniques are applied for the purpose of manufacturing goods for export with all the resulting benefits. I am sure the House will agree that the results achieved thoroughly justify the investment already made by the State in the Industrial and Housing Estate at Shannon and fully warrant the continued expenditure of State funds including the grants provided yearly from the Vote.
The depression in world shipping which commenced in 1957 following the boom caused by the Suez crisis reached a new low during 1962 when dry-cargo tramp shipping freights dropped to the lowest levels recorded since the last war. The monthly average of the British Chamber of Shipping freight index for that year was only 89.1 compared with 106.8 in 1961, and 100 in 1960. Since July, 1962, there has been a slow recovery, but with the present world-wide demand from the Far East, Russia and Europe for grain from the American Continent, there has recently been a considerable rise in freight rates and there is some reason to hope that the present revival will last through the winter and possibly later. The basic cause of the post-Suez depression has been an excessive supply of tonnage which has been aggravated by the advent of the large bulk carriers and large oil tankers, which can operate at rates which are grossly uneconomic for the older, smaller vessels.
The position facing shipowners is so serious that an international tonnage stabilisation scheme for tankers has come into force and efforts are being made for the introduction of a similar scheme for dry-cargo tonnage. Under these schemes compensation would be paid to participating shipowners in respect of laid-up tonnage and would thus encourage shipowners to lay up ships and to scrap older ships rather than operate them at uneconomic rates. The efficiency of these schemes will depend to the extent to which shipowners support them.
Inevitably Irish Shipping Ltd. was affected by the severe setback in freight rates in 1962 and had to lay up some of its vessels for some months. Total cargo carried during the year was 1,485,000 tons, a decrease of 7 per cent on the average monthly carrying for the 1961/62 period, which was due to a number of factors, including the lay-up of the ships. The net result is that, for the first year since 1949, the company did not cover operating expenses in 1962/63, and suffered a deficit of £36,700 on working account. Depreciation of the fleet for the year was £825,000 and the commercial loss, therefore, amounted to £838,000. The results for 1962/63 are disappointing but reflect the circumstances in the world shipping market. I am glad to say that the prospects for 1963/64 are somewhat brighter. Earnings during the first half of the year followed the pattern of recent years but, because of the current upward trend in freight rates, a significant improvement is expected during the latter half of the year. If the recent increases in freight and charter hire rates are maintained, it is estimated that the company's profits for the year—1963/64—will exceed any of the annual profits since 1956/57.
Irish Shipping Ltd. now have a dry-cargo fleet of 17 vessels totalling 146,400 tons deadweight. Four of these vessels are in the 15,000 ton deadweight range; two are conventional vessels and two are bulk carriers. These four vessels, all delivered within the past two years, are of modern design and will, it is hoped, prove a profitable investment even in the present highly competitive conditions in the world shipping industry.
As indicated in the Second Programme for Economic Expansion the target of 200,000 tons deadweight for the dry-cargo fleet of Irish Shipping Ltd. has been re-examined in the light of the increased speed and efficiency of modern vessels and of changes in the national requirements of essential commodities since the target was originally calculated. It has been decided that the current dry-cargo fleet is adequate to meet strategic requirements and that additions to the fleet will be considered when commercial considerations so justify. The possibility of negotiating remunerative long-term charters for additions to the tanker fleet are being actively explored and new tankers will be considered if such charters are assured.
The most important single development in recent years in relation to cross-Channel passenger services has been the decision of British Railways, announced in July last, to introduce a car-ferry vessel. This follows prolonged pressure by my Department and by Bord Fáilte. I am confident that this new facility will lead to a rapid expansion of the number of people bringing cars to this country. British Railways will be replacing the Princess Maud with the new ship, while the Commissioners of Public Works will provide the car terminal at Dún Laoghaire.
The number of cars brought to this country by all the shipping lines by sea during June, July and August last, was 14,096, compared with 11,299 in the same period in 1962, an increase of 24 per cent. A survey which has been carried out shows that even with all the existing and projected car carrying facilities, potential demand will still outstrip capacity.
Improvements in the accommodation for travellers using cross-Channel sea services continue to be made. Additional seating has been provided on British Railways vessels, the aim being to have the number of seats equal to the maximum passenger complement. On the British and Irish Steam Packet Company vessels, canvas and perspex deck shelters and extra seating have been installed, giving additional covered deck space.
The provision of £150,000 for grants for harbour improvement works covers works in progress or works expected to commence shortly. The principal current improvement schemes are those for Galway, Drogheda and Wicklow, for which grants totalling £340,000, £175,000 and £100,000, respectively, have been approved. Grants of £15,000 each have been approved for Ballina and Sligo. The Galway Harbour Improvement Scheme was officially inaugurated in September, 1963, and work is now in progress.
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 £79,940, 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.
For many years the trend of trade has been towards the larger ports particularly on the east coast and at the present time the trade of all the west coast ports accounts for no more than 5 per cent of the country's total seaborne trade. This trend is due to the growing average size of vessels and to the increasing importance attached to speed of delivery and frequency of service and may, therefore, be expected to continue. State assistance must be regarded as an exceptional measure and reserved for essential and productive schemes, the full cost of which cannot be met locally.
I spoke last year about the prevalence of restrictive and out-moded practices in cargo handling at Irish ports. It cannot be too much emphasised that continued improvement in working conditions at the ports, as indeed in all industry, is dependent on increasing productivity and the use of modern methods. I am glad to note that over the past twelve months improved methods of working have been introduced in a number of instances with the agreement of the interests concerned.
There is an increasing use at our ports of containers, unit loads, cranes, grabs, fork-lift trucks and other such facilities, leading to higher efficiency. Concurrently with this movement, the possibilities of introducing decasualisation and avoiding redundancy among port workers are receiving close attention. Following the settlement of the container dispute at Dublin, the method of employment and payment of cross-Channel dockers at the port has been improved. I understand that the possibility of achieving similar conditions for the deep-sea dockers at Dublin is currently being investigated. The port authorities of Cork, Waterford and Drogheda have introduced simplified charges designed to facilitate the growth of container traffic.
I may note as a recent indication of progress in productivity the setting up of permanent machinery at Dublin, arising out of the recent work stoppage at the docks, designed to resolve in an amicable fashion any future causes of complaint. Another landmark is the agreement recently concluded at Waterford between British Railways and the ATGWU, under which dockers will load and discharge ships under work study and bonus incentive conditions. As a result the company will realise economies, but no workers will be displaced, all will take home more pay, will secure improved holiday conditions and will qualify for free travel facilities. This is stated to be the first occasion on which work study techniques have been applied to dock work in Ireland.
Turning now to tourism, I am proposing that the provision under Subhead F.I for Bord Fáilte's main Grant-in-Aid for this year should be £954,000. This provision shows an increase of nearly £200,000 over the amount voted last year and it reflects a general increase in the Board's activities.
Under Subhead F.2 the Board are being allocated £200,000 towards the development of major tourist resorts. This provision is more than double the amount spent last year. This money is applied in grants for basic development works and necessary amenity facilities at selected centres subject to a minimum 20 per cent local contribution. The River Shannon has been added to the list of selected areas and Bord Fáilte plan to spend approximately £100,000 on grants for the development of the river and its lakes for recreational purposes over a five-year period.
The third Subhead relating to tourism is Subhead F.3 under which funds are provided for the various grant schemes for accommodation development. The provision under this Subhead for the current year is £315,000, an increase of £52,000 over last year. Bord Fáilte grants cover only 20 per cent of approved works and every £1 spent by the Board represents at least £4 spent by the hotel industry itself.
The total estimate under these three Subheads amounts to £1,469,000 and though the provision is moderate, it is the largest sum ever provided by the Government for the promotion of tourism. According to the Organisation for European Cooperation and Development, tourist receipts represent 12 to 14 per cent of total current receipts in Switzerland, Italy and Greece, 16 per cent in Ireland and 31 per cent in Spain. I am confident that the Dáil will endorse the proposal to provide these increased and productively directed funds for Bord Fáilte. A detailed statement of our tourist earnings and of the progress that has been made in recent years is contained in the notes which I have had circulated in connection with the Estimates for my Department.
Bord Fáilte have estimated that in the first nine months of the year there was an increase of 4½ per cent in total passenger arrivals. There were also substantial increases in car traffic. Some 3,500,000 car crossings were made southwards across the Border in the first nine months, an increase of over 800,000 or 30 per cent on the same period in 1962. The percentage increase in direct car shipments to Ireland, by sea and air, during the first nine months was over 30 per cent while the increase in August alone was 35 per cent. The indifferent summer weather militated against good business at many resorts but Bord Fáilte have provisionally estimated that the total income from tourism including foreign receipts of Irish air companies amounted to £55 million. Should this estimate be confirmed, it will represent an increase of £2½ million over 1962.
I would like to refer briefly to an important development during the year in the organisation of the tourist industry which I asked Bord Fáilte to initiate, that is, the formation of tourist regions. Since taking over responsibility for tourism, I have been concerned with the question of how best to organise and utilise the knowledge, experience and general tourist activities of local interests throughout the country. I could not help feeling that we were not getting full value for this local effort and application, and I felt that more could be achieved if local authorities were enabled to contribute more directly towards the promotion of tourism in their own area and also if the efforts of the various groups were co-ordinated both with other groups in their regions and with the overall national effort of Bord Fáilte. Each of the new regions will have its own tourist organisation representative of local authorities, local development groups and the business and commercial life. The organisation will receive financial support from the local authorities, from Bord Fáilte and will need considerable sums relative to the tourist turnover in the area to enable it to employ a full-time executive officer and, under Bord Fáilte guidance and co-ordination, to engage in publicity, in the servicing of visitors, the provision of entertainments and amenities in co-operation with other local bodies and the development of local resources. I am confident that these measures provide a solid foundation for the future expansion of the tourist industry.
The emergence of the regional organisations will mean that in future the members and Directors of the Irish Tourist Association will apply their experience and know-how at the regional rather than the national level. I should, at this point, like to pay a tribute to the Association, which has since its inception in 1925, made a most vital contribution to our tourist industry. The establishment of the Association was, indeed, the first attempt on a national basis to develop the tourist industry in this country. I am glad—though not surprised in view of the Association's past record—to find the Association giving their co-operation in the measures at present being taken to organise the industry on a regional basis. Their valuable experience will be of considerable help in this sphere and the new regional structure will provide a framework within which the ITA members and directors will continue to serve the community.
May I repeat that the over-all publicity from local sources whether by hotels individually or in groups, or by other local interests has increased in the past few years, the best examples being the more successful fishing development associations. Nevertheless, the grand total of regional tourist expenditure is far too modest compared with that of Bord Fáilte and, as a percentage of the tourist turnover in any area, it does not yet compare with regional expenditure in Europe.
One well-known region in Ireland spent considerable sums on a direct general tourist drive through newspaper advertising followed by brochure distribution. The cost per reply worked out at approximately 5/-, a worthwhile investment. The existing very active development associations have proved to me that the single most important new influence in increasing tourist traffic will be regional initiative and drive. Killarney is competing as much with, say, Lucerne as with Switzerland in general. That is the lesson to be learned.
One of the biggest problems which we, and indeed most European countries are encountering is the question of extending the holiday season and the associated problem of relieving the congestion in travel facilities and holiday accommodation which takes place in July and August each year. Approximately half the total annual bednights are recorded in the three-month period 1st July to 30th September. The conditions created by this high demand and the difficulty frequently experienced in obtaining suitable accommodation tend to deter visitors and to reduce our potential tourist income.
The timing of the August Monday holiday has, I believe, a considerable influence on our holiday patterns as many people tend to take their annual vacation around this holiday. One of the ways in which we could lengthen our holiday season would possibly be a re-timing of both the Whit and August Bank Holidays. I have, accordingly, with the approval of the Government, established a Commission of Inquiry to look into the timing of our public and bank holidays generally with a view particularly to easing the problems I have mentioned. I trust that all interests connected with the tourist industry or otherwise affected by the question will make known their views to the Commission.
Apart from this, attention is also being given to other measures to extend the season. The Bord Fáilte June Holiday Plan has met with some success in developing holiday traffic outside the peak period. Festivals and conference business are also, of course, valuable sources of off season tourist revenue.
Angling of all kinds—sea, game and coarse—has now developed into a major tourist attraction mainly due to the five year Fishing Development Plan which was undertaken in the period 1957 to 1962 by Bord Fáilte and the Inland Fisheries Trust. A new five-year angling plan is now under way under which Bord Fáilte will be responsible for the provision of accommodation and other fishing amenities as well as overseas promotion work while the Trust will undertake fisheries development work. A Special Committee of the Board and the Trust will ensure co-ordination between the various elements of the programme.
I would like, at this point, to refer to another potential major attraction for visitors, that is, our wealth of monuments and historic buildings. A certain amount has already been done towards the preservation and presentation of these monuments as a tourist attraction and the Parliamentary Secretary to the Minister for Finance is at present examining the whole question of future policy in this field.
The target set by the Government for the tourist industry under the new Programme for Economic Expansion is a doubling of 1960 earnings by 1970. The achievement of this target will require the maximum effort on the part of everyone connected with tourism.
Early this year I asked Bord Fáilte to make a fresh and vigorous approach to the complex job of evaluating the potential traffic available from the middle income classes in Great Britain with particular reference to the fact that of the 3 million English people who go abroad for holidays—some 320,000 came here—nearly 50 per cent prefer to take a package holiday.
At the same time, in connection with the small farm areas, examination is taking place of what particular steps can be taken to induce more tourist activities in these areas. Linked with these questions is that of providing far more entertainment for visitors, increasing the amenities for young people and stepping up interest in special tours and presenting our ancient monuments to tourists in a more attractive manner.
I have given special consideration to the question of accommodation to suit the needs of middle and lower income groups. Well run guest houses offer a good "second string" of accommodation to complement hotels and are favoured by many people because of their informal homely atmosphere and their moderate prices. Until now, financial assistance for guest house development has consisted of guaranteed loans with grants to meet interest charges but I feel that there is now a case for extending to guest houses more direct incentives in the form of cash grants for extension and improvement works. Full details of these new grants have not yet been worked out but they are likely to follow closely the existing 20 per cent grants for hotels. It will probably be necessary to confine these grants to premises providing at least ten guest bedrooms but the exact details of these new grants and of other extensions of the financial incentives for holiday accommodation development will be announced in due course by Bord Fáilte.
All this is in the context of the 1960-1970 Economic Programme. Some proposals are already under examination, others will shortly emerge but I can say that a fundamental reappraisal of the whole tourist potential and measures required to stimulate growth has been under way for some time.
International travel for holiday and recreation, for cultural reasons, as well as for business purposes, is extremely sensitive to factors over which we have no control—the degree of prosperity in various countries, the international political situation, weather conditions and changes in holiday fashions. In addition we must bear in mind that every year more of our own people are in a position to take holidays overseas and while this is a happy sign of rising standards at home it does affect the net value of the return from travel and tourism. Moreover, we cannot expect that travel from Britain to Ireland by emigrants and their families will continue indefinitely at its present level. Many countries have climatic and other advantages over Ireland in the tourist sphere, yet are continually spending very large sums on the promotion of tourist traffic. It will be clear, therefore, that sustained effort is needed to attract increased numbers of visitors to Ireland and to raise our net tourist income. This entails a continuing programme for the improvement of amenities at home and better facilities and services for visitors as well as intensive advertising and publicity in overseas markets.
Turf now holds second place among our sources of energy, first place being held by oil. The results achieved by Bord na Móna in the year ended 31st March, 1963, are summarised in the Notes which have been circulated to Deputies. 1962 was a good turf year and production reached nine hundred thousand tons of sod peat and one million nine hundred thousand tons of milled peat. The ESB absorbed nearly 600,000 tons of sod peat and nearly a million tons of milled peat; and they produced 40 per cent of their output from these fuels.
The remainder of the Board's sales found their way either as sod peat or as turf briquettes to industry and domestic consumers. The hard winter helped the sales of briquettes which reached a record of 262,000 tons, including 22,000 tons exported.
To meet the growing demand for briquettes, which is now well in excess of the output of the existing factories, Bord na Móna propose to erect a new briquette factory, with a rated output of 100,000 tons per annum, in the Shannonbridge-Athlone area which will commence production about 1968. Production of milled peat for electricity generation by 1970 will be in the region of two and a quarter million tons per annum and over a million tons will be produced for briquettes manufacture. Production of sod turf will remain at about nine hundred thousand tons per annum. By 1970 the Board's total production will be approximately the equivalent of two and a quarter million tons of coal.
Turf production is sensitive to weather conditions and Bord na Móna have been faced with a difficult problem in organising production and supplies so that the electricity stations which depend on turf will not run short of supplies following a bad turf season. The Board have had recourse to stockpiling and the use of polythene sheets to protect the stockpile from wind and rain. I am glad to say that their efforts in this direction have met with a considerable measure of success and continuity of electricity supplies from turf can now be planned with greater assurance.
Seed and potting compost sold under the trade name "UCEE" is produced at the Board's peat moss works at Kilberry, Kildare and studies of its application are continuing. "Móna Peat Moss" production is continually rising and is expected to reach 350,000 bales this year. This product is much sought after abroad and 80 per cent of production is exported.
Coal ranks third in size as a supplier of energy, consumption in 1962 amounting to about 1,600,000 tons. Coal, as well as turf, has a special place in the domestic hearth. The domestic consumer is now the biggest market for coal. It is possible to combine much of the advantage of the open fire with a greatly enhanced measure of fuel economy by using modern grates and stoves. I urge more promotion for this development. Recently freight rates for coal from Hampton Roads to Western Europe reached 40/- a ton compared with a figure of 19s. 6d. a ton a year ago— and this increase is reflected in the landed price of coal.
Native coal production in 1962 amounted to about 69,000 tons from the Arigna mines most of which was consumed by the ESB power station at Arigna and 130,000 tons of anthracite coal of which 12,000 tons were exported. The Arigna coal is of high ash content and it will not bear the cost of transport. Any expansion of output would have to be consumed at source in the same way as the present output is mainly consumed in the power station. Before this becomes possible it will be necessary to reduce the cost of extracting the coal and devise economical methods of burning the higher-ash coal generally known as "crow" coal. My Department has sponsored an investigation of these matters. This investigation has necessarily been protracted but I hope that it will be concluded fairly soon.
The summarised results of the working of the Electricity Supply Board for the year 1962/63 are also to be found in the notes circulated to Deputies. In the year, production increased by more than 10 per cent to a total of 2,700 million units. Of this, hydro provided 25 per cent, peat, 40 per cent and coal/oil, 35 per cent of which 3.7 per cent was provided by native coal. It will be noted that generation from native sources amounted to approximately 69 per cent of the output. This proportion will decline with the years as demand grows and the limits of expansion of turf production are reached. The rate of growth in demand for electricity is now of the order of 9 per cent per annum. A continuance of this rate of growth will call for doubling of existing generating capacity in less than ten years' time, at a cost of £50 million.
Rural electrification is now progressing to completion at an accelerated pace. On the basis of the present subsidy it is possible for the ESB to connect at reasonable charges about 96 per cent of all the houses in the country. The sale of electrically powered farm and domestic appliances grows steadily. Increases in the number of the more commonly used appliances vary from 20 per cent to 80 per cent since 1959. The more power rural consumers use the less will be the deficit incurred for rural electrification.
My Department administers a scheme of grants for the promotion of fuel efficiency in industry. The scheme was started in 1957 as part of a technical assistance scheme for industry following the disclosure in a report by a firm of consultants that there was considerable scope for economy in the use of fuel by industrial concerns. Under this scheme, grants of up to one-third of the cost were paid to industrial firms who had surveys of their heating and power plants carried out by expert consultants with a view to determining the scope for reduction in their fuel costs. The response from industrialists was, however, very disappointing and in view of the lack of interest shown in the scheme, it was decided in 1962 to have a promotional drive carried out. The drive was carried out by the National Industrial Fuel Efficiency Service—an organisation specialising in the field of fuel efficiency. The drive involved a visit by National Industrial Fuel Efficiency Service engineers to a number of industrial firms who were given an appraisal of the scope for reducing fuel costs in their boiler plants.
The overall potential savings by the firms visited in 1962 was £87,000 or approximately 20 per cent of a total bill of £478,000. In the 18 months following the start of the promotional drive, 29 applications for grants were approved compared with 24 applications in the whole of the previous five years. The promotional drive was continued in 1963. The grants for surveys have been increased from one-third to one-half of the cost, and have been extended to surveys of heating plants in hotels.
I do not propose to speak about Córas Iompair Éireann on this occasion since Deputies will have ample opportunity to discuss CIE during the debate on the new transport legislation which will be introduced shortly. I might mention, however, that the notes which I recently circulated to Deputies contain statistics of the Board's operations which, taken in conjunction with the statement already received by Deputies from CIE of their activities during the five year period 1958-1963, give a reasonable amount of information concerning the progress made by the Board since 1958.
As Deputies are aware there has again been some Press publicity recently concerning the possibility of portion of the Grand Canal in Dublin being acquired by Dublin Corporation for the purpose of using it for the laying of a sewerage or drainage system from Inchicore to Ringsend. As I have already indicated in this House, however, there has been no consultation by Dublin Corporation with my Department about the use of the canal for such a purpose. Under existing legislation CIE may not close the canal to navigation until the expiration of three years from the date on which it was last used for public navigation.
There has been an increase each year since 1959 in the number of pleasure boats using the canal. In 1959-60, 54 Irish pleasure boats used the canal and by 1962-63 the number had increased to 77 Irish boats and six foreign boats. There was a further increase in numbers this year and up to 31st October, last, 103 Irish boats and three foreign boats had passed through the canal.
I am glad to be able to inform the House that to facilitate sportsmen and tourists CIE propose to delete from the Grand Canal Bye-Laws the archaic prohibition on the carriage of sporting guns and fishing tackle on vessels using the canal. CIE are also prepared to allow row boats and canoes to use the canal but not the canal locks having regard to the danger of their being swamped when the locks are being filled.
The future of the Grand Canal is still under consideration and I have not yet completed my examination of all the factors involved. In the meantime CIE are required by law to maintain the canal in navigable condition so nothing is lost to the canal enthusiasts by any delay in coming to a final conclusion.
The Transport Act, 1963, has given power to CIE to raise, by stock issue, capital funds not exceeding £3 million to enable the Board to meet the cost of its capital programme for the current financial year and for part of next year. The programme includes such essential items as payment of instalments on the new diesel locomotives, the construction of new railway coaches of an advanced design, the continuation of the railway wagon construction project, the cost of new and more up-to-date buses for the Board's touring services and the provision of additional road freight vehicles.
The Act also authorises CIE to borrow temporarily from the Minister for Finance up to the statutory limit for temporary borrowings, which is £2 million. In fact, CIE have already had to borrow from the Minister for Finance owing to the loss sustained through the bus strike in April and May last. The strike resulted in a loss of revenue of £724,000 and cost the Board about £370,000. I have already warned this House that to the extent that borrowing by CIE to meet the deficit on operating account in the current year cannot be repaid from the Board's revenues the gap will have to be made good by the Exchequer.
I think it is wise to make some observations on the relationship between my Department and the State-sponsored companies for the surveillance of whose general conduct I am responsible. These companies have a combined capital of some £157 million and their annual turnover of business approximates to £63 million. They are concerned with air, surface and deep sea transport, tourism, the Shannon Industrial Estate, electricity and peat.
So far as the Oireachtas is concerned, there are opportunities for debate on Estimates, on the discussion of Bills relating to the Companies, Parliamentary Questions which cover the general questions affecting State Company operation, and the opportunity to seek a debate on the affairs of a company when the annual report is laid on the table of the House.
I believe that the constant interest shown in these companies by the Dáil, the strict accounting required of them and the many occasions for debate which arise provide an incentive both to them and to the Minister in charge. It is the Minister's responsibility to stimulate rewarding Dáil discussion. It is his duty and privilege to give full information to members of the Oireachtas regarding matters of general policy on which questions have been raised during the course of the debates. In this way understanding of the special problems arising in the State-sponsored bodies should be promoted and confidence generated in their ability to overcome these problems.
When the exercise of supervision by the Minister and the Department is examined, it is obvious that there can be no fixed set of rules as to exactly where ministerial control, inquiry and general supervision begin and end once the matters that are not specifically those for ministerial direction are considered. In order to give Deputies some idea of the Department's functions in respect of these companies, I will set out the specific and definite controls and then comment on matters which are of an ad hoc character and largely determined by the Minister in charge and by Departmental tradition.
The principal controls over State companies include—
(a) the appointment, removal and remuneration and Conditions of Service of Board members;
(b) sanction of long and short term financing and capital investment programme;
(c) examination of audited accounts and annual reports and their submission to Dáil Éireann;
(d) sanction of staff superannuation schemes.
Above all, however, the responsible Minister must concern himself with the extent to which the policy and operations of the companies are consonant with Government policy and contribute to economic expansion, or provide a service which keeps pace with the requirements of planned economic expansion. He must be ready to consider new policies, issue new policy directives and, as required, promote new legislation where this seems warranted. These matters involve continuous contacts between the companies and the Department. They involve discussions on the adequacy and efficiency of the services provided as related to the national economy. There are discussions about progress of the companies in relation to the country's needs, the ability to compete effectively where there are competitive services and such matters as utilisation of modern machinery and methods, work study, productivity, research, etc. These contacts range from discussions on specific matters at Departmental level with representatives of the companies to ministerial discussions with chairmen and boards to review progress and policy generally. In addition, I make it my business to have periodical meetings with the chairmen of all the companies together on matters of common concern to State companies.
In relation to the raising of capital, there must be a detailed examination of the productive nature of the investment, the method by which the money should be raised, provisions for remuneration and repayments.
In relation to Government policy, there will be long-range discussions on new techniques, expansion into new fields which private enterprise is unable or unwilling to enter, the calculated risks required to be taken to assist in the drive for economic expansion and so forth.
The question of the strategic moment to expand in certain operations, the risks to be taken in face of some adverse, if temporary, recession in the fields of activity covered are of equal importance.
Of very great importance is the function of bringing pressure to bear to achieve the ultimate objective that transport and power companies should pay their way and discharge their capital interest payments. It is the policy of the Government that all transport and power companies should pay their way and that State capital be remunerated, except in those cases where it is agreed that any surplus should be ploughed back into further expansion.
I now come to the far more difficult problem of supervision, where the Minister is treading the No Man's Land of actual inquiry into matters of day-to-day administration. The most significant type of intervention relates to the way in which complaints by the public are handled. These complaints relate first to the cost of services. With few exceptions, individual complaints of this kind are not matters for ministerial intervention. The Minister's function in this context relates to the overall examination of the annual accounts and the directives given by Acts of the Oireachtas, some of which, such as those relating to the ESB and CIE, definitely provide that the companies should pay their way. When charges rise, the basis for the increase should conform with general policy principles. The Minister must have an understanding with each company as to the interpretation of "paying its way".
Other complaints may relate to inefficiency of one kind or another and may include proposals for changes in or extension of services. First, may I say that the number of these complaints and proposals for innovations is extremely small? Secondly, I must describe how they are handled.
Routine complaints are referred to the company concerned for reply direct to the person concerned, but where a number of such complaints about some particular matter might suggest grounds for the existence of serious public dissatisfaction inquiries would be made with the State bodies concerned.
Complaints of a serious character suggesting departures from Government policy or established practice are discussed with the companies. In these cases I have the matter examined and in the light of the examination I decide whether any further action is necessary.
Finally, the functions of my Department are not merely regulatory. It is one of my important functions as Minister to be a fount of new ideas, and I give every encouragement to the officers of my Department to submit new ideas also. Ideas which, on preliminary examination seem to warrant further consideration, are referred to the State companies concerned for practical evaluation and action where appropriate.
From what I have said Deputies will understand that my Department is extremely active and yet the general independence of action by State companies is preserved, there being very broad definite controls and policy directives of a general character.
Success depends on the character of the boards and the chairmen; on the standards of character and ability of the staffs, in which we are fortunate, and in the ultimate, on the attitude of the individual Minister. The officers of the Department play a vital part in maintaining the right kind of relationship with the companies concerned. This can result in much useful exchange of information and the elaboration of policies at executive level without either interference of an undesirable kind or, on the other hand, disregard of their responsibilities.
As Deputies are aware, questions on the day to day administration of the State companies are ruled out of order on the basis of the statutory provisions. In regard to all questions allowed by the Ceann Comhairle, any impartially minded person will agree that I go as far as possible in supplying information.
As I am sure the majority of Deputies will agree, it is necessary to maintain the commercial independence of the companies and I could not contemplate interference with their discretion in management matters. I am glad to say we have the good fortune that the boards of the companies are dedicated and efficient and their systems of administration are admired by many experts from other countries.
I do not agree with suggestions that the companies should be asked for detailed information on purely regional activities or for sectionalised accounts, the object of which would be to obtain a specific advantage for a particular area or pressure group or possibly for a section of the staff. I regard it as my duty to see that in the overall plan of a company a reasonable balance of interests is maintained. To take just one example—once I am satisfied that CIE have adopted a fair and reasonable basis for costing the operation of branch lines, I should expect the House to accept my general assurance.
In the informatory notes I have endeavoured to give very full information on the operation of the companies. Much of this information is not new. It is contained in published accounts and reports already available to Deputies but I felt that information in a summarised form might help to highlight important aspects and would facilitate Deputies wishing to take part in the debate, who would otherwise have to consult a number of reports.
I note that Deputies rarely refer to the public relations work carried out by the companies themselves—to the patient work of CIE for example, in their market research investigations into the travel needs of people in various areas. It is, indeed, a fact that the State companies serving the general public are in close and continuous contact with public opinion.
