I move:
That a sum not exceeding £3,414,530 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st March, 1965, 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 net Estimate of £5,121,530 for 1964/65 compares with £5,219,890 for 1963/64. However, the 1963/64 provision included £1,175,000 for a grant to Córas Iompair Éireann and no provision other than a token sum of £10 appears for 1964/65. If the legislation which is at present before the Oireachtas is enacted it will be necessary to bring in a Supplementary Estimate for £2 million so that the total net Estimate for 1964/65 would be over £7 million, an increase of nearly £2 million as compared with last year. For the purpose of comparison I am assuming that the £2 million for CIE will be payable this year.
The principal increases are in the provision for CIE grant and redundancy compensation, £1,125,000, Tourism, £551,000, grants to Shannon Free Airport Development Company, £250,000. Increases in other subheads amount to £277,000 making the total increase £2,203,000. Decreases in expenditure on airports and catering service amount to £240,000, and on other subheads there is a decrease of £15,000. There is also an estimated increase of £47,000 in Appropriations in Aid. These amounts reduce the increases by £302,000, so that the net increase for 1964/65, assuming a £2 million grant for CIE, will be about £1.9 million.
I have circulated to Deputies notes on the activities of the State companies with which I am concerned and since only a few months have elapsed since the Estimates for my Department for 1963/64 were discussed in the House I propose to confine my remarks to policy matters and the more important features.
In view of the early recess of the Dáil, I have not been able to refer in detail to many aspects of Departmental administration. The general work of the Department, the planning directives and the very specific supervision over the companies for which I am responsible, together with the administrative practices in relation to the investigation of complaints are already set out in my speeches on last year's Estimates in Vol. 207, No. 4, Cols. 650-652 and Vol. 207, No. 11, Cols. 1496-1576. I would suggest that Deputies refer to these statements as it will enable a more constructive approach to the policy of the Department.
Although the total number of passengers handled at Shannon in the year ended 31st March, 1964, decreased by 9 per cent to 334,000 and the number of landings decreased by 19 per cent to 5,080, the number of terminal passengers—both embarked and disembarked—increased by 15 per cent to 188,000. It is probable that the increase in terminal traffic in 1964 will offset the drop in transit traffic, and that as from 1965, the total traffic at the airport should begin to rise again.
In fact, in the first five months, January to May inclusive, of this year while total freight of 6,750 tons is the same as last year's figure, total passenger traffic at 82,000 has shown an increase of 13 per cent over the 72,500 in the same period of 1963.
Deputies may wish to know that arrangements are in train for the celebration in September next of the Silver Jubilee of Shannon Airport operations.
Works in progress at Shannon include the erection of a new control building which will be more centrally situated in relation to the runways than the existing control tower. Accommodation will be provided in the new building for air traffic control and radio service staffs with a view to the efficient co-ordination of these services and the most economical utilisation of staff.
It is intended during the coming winter to commence the reconstruction of the concourse area which formed part of the original terminal building and is now in poor structural condition. This work will provide improved facilities for the handling of the increased number of terminal passengers who embark or disembark at Shannon. It is not possible to undertake this work during the peak traffic which occurs in the summer. In the meantime, however, work is proceeding on a preliminary part of the scheme. This includes alterations and improvements to the public catering accommodation and facilities involving the installation of a modern grill bar and cocktail bar to provide a faster meals service together with a first-class restaurant with a dance floor. The lounge area on which no major renovations have been carried out for several years is also being redecorated.
All sectors of traffic at Dublin Airport showed significant increase in the year ended 31st March, 1964. A comprehensive five year building plan continues and structures for cargo, administrative and catering and passenger reception continue to be planned and erected in due sequence.
It is expected that the flight victualling and catering service building will be started this year. The next step will be the construction of a new cargo terminal and a link building between the first and second piers already erected. The final step will be the erection of a new passenger terminal building which is becoming necessary owing to increases in passenger traffic.
During the year ended 31st March, 1964, Cork Airport had almost 98,000 passengers, an increase of 24 per cent. Freight traffic, which is as yet not very significant, showed a small drop of 3 per cent to 266 metric tons. In addition the Cork/Bristol car-ferry service carried 678 vehicles. This service will operate at an increased frequency this summer.
The increased participation by BEA on the Dublin/London, Dublin/Manchester and Dublin/Birmingham routes continues. Increased capacity will be offered by Aer Lingus on its cross-channel routes this year and frequencies will be increased on the Dublin/ Leeds, Dublin/Glasgow, Dublin/Liverpool and Dublin/Edinburgh routes as well as on the Cork/London and Cork/ Birmingham routes. The Aer Lingus vehicle-ferry services which were so successful last year will be continued this summer and increased frequencies will operate on the Dublin/Liverpool and Dublin/Cherbourg routes. The Aer Lingus services to the Continent are being maintained this year, and next year, with the introduction on these services of the BAC One-Eleven jet aircraft, it is expected that there will be a big increase in traffic on the routes.
The BEA shareholding of £95,199 in Aer Lingus has been acquired by Aer Rianta which now holds all the shares, except directors' qualifying shares, in the company. Accordingly Aer Lingus is now 100 per cent Irish-owned, the Government holding all the capital.
A new Boeing 707 aircraft has been added to the Aerlínte fleet this year, and it is expected to be in operation shortly. The aircraft, which can carry up to 178 passengers as well as a cargo load of 4 tons, represents a considerable advance over the present 720 aircraft which carry 130 passengers and 3 tons of cargo. A further Boeing 707 will be acquired in 1965. These purchases will enable Aerlínte gradually to replace its existing fleet. One of the existing Boeing planes which has lesser capacity will be sold at the end of the summer at its present book value. Another plane of the same type will be on charter to a foreign air line during the winter. These arrangements have enabled Aerlínte to utilise its fleet to the maximum extent during the summer when traffic is at its peak.
Aer Lingus as well as Aerlínte are conducting a vigorous campaign abroad to stimulate tourist traffic to Ireland. Their expenditure this year will be of the order of $1¾ million in North America and £120,000 in Britain. Aer Lingus is also expanding its student exchange plan, as there appears to be considerable traffic potential in this type of operation.
While the audit of the accounts of the air companies is still proceeding and certified accounts will not be available until mid-July it appears that the profit for the year, after providing for all charges including depreciation and interest on loan capital, will amount to approximately £350,000 for Aer Lingus — which compares with a loss for the preceding year of £120,904. In the case of Aerlínte the profit will amount to approximately £900,000 which compares with a profit of £466,000 in 1962/63.
The profit earned by Aer Lingus will have to absorb the adverse balance of £77,486 on the profit and loss account for 1962/63. The balance of approximately £272,000 together with Aerlínte's profit of £900,000 will be a useful contribution towards the companies' capital expenditure in the next few years of approximately £14 million, to which the Exchequer will contribute £2 million, the balance being found by the companies either from their own resources or by borrowing. Details of the proposed capital expenditure are given in the Notes.
Both Aer Lingus and Aerlínte have greatly increased their traffic during April and May of this year but in the case of Aerlínte the profit position may be affected by the substantial reduction in transatlantic fares. The average fare for April and May showed a reduction of 25 per cent on the corresponding months in 1963.
This year sees the coming into operation of two new Irish nonscheduled airlines: Shannon Air Limited and Aer Turas Teoranta. These will mainly operate freight charter flights. It is hoped that they will make a considerable contribution to the development of aviation in Ireland.
A sum of £410,000 is being provided for the Development Company by way of grant-in-aid in 1964/65, to meet the running expenses of the company and to provide financial assistance for the setting up of industrial, commercial and trading enterprises on an increasing scale.
A sum of £1,250,000 is being provided in the Capital Budget for 1964/ 65 to meet share capital and repayable advances, used mainly for factory building and community services, compared with £1,400,000 issued to the company in 1963/64.
Up to 31st March, 1964 the total State investment in industrial and housing development at Shannon amounted to £5.4 million. At that date there were 12 manufacturing and 8 trading concerns in operation at Shannon employing 2,109 persons.
The company's tourism promotional activities are designed to promote tourism generally and, particularly, to spread the benefits of increased tourism earnings throughout the west of Ireland where tourism forms an important part of the regional economy. The company's mediaeval tour is proving highly successful and is encouraging an increasing number of Americans travelling to and from Europe to include a stop off at Shannon in their itinerary. Work on the folk park project as an extension to the Bunratty Castle development is also proceeding satisfactorily. Both these projects were initiated in my Department.
The progress of the company in the past year, as reflected in the expansion of industry and the increase in employment to which I have referred, is very gratifying. The company is at present negotiating with several firms interested in setting up at Shannon and, with the expected development of new industries and the continued expansion of existing ones, the future of the Shannon Industrial Estate appears to be bright. It is intended that the provision of housing and community development will keep pace with the requirements of the expanding estate.
Irish Shipping Ltd. now have a dry-cargo fleet of 17 vessels totalling 146,400 tons deadweight and three tankers totalling 39,380 tons deadweight. Having regard to the privately owned tonnage available 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 accounts of Irish Shipping Ltd. for 1963-64 have recently been presented to the House and, although the position is still far from satisfactory, the results were considerably better than in the previous year. The company had an operating surplus of £445,322 on working account for the year and after providing an amount of £1,023,845 for depreciation of the fleet and allowing for investment income, bank interest, directors' fees and auditors' fees, the net commercial loss amounted to £556,721. The improvement was due to the temporary increase in freight rates which took place at the end of 1963, although about 70 per cent of the revenue for the year was attributable to rates obtaining before the increases became effective.
The provision of £190,000 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. The growing importance of the ports is reflected in the country's export trade which increased from £174 million in 1962 to £196 million in 1963.
In relation to harbours, the Government's Second Programme for Economic Expansion assumes that normally all harbours should be operated as commercial undertakings and that maintenance charges and improvements required by expanding trade should be financed on a commercial basis.
Efficient cargo handling is a matter of vital interest, not only to the individual harbour authorities, whose trade will expand or decline according as shippers and consignees find the port an economic one to use or otherwise, but, it may be said, to virtually the entire industrial and commercial community. It is pleasant to be able to record that advances continue to be made in this field.
The procedure governing the documentary clearance of goods through ports is also a matter calling for inquiry and I have set up a working group to investigate the possibility of securing a freer flow of goods.
The new car ferry vessel, to operate on the Holyhead-Dún Laoghaire route, is now under construction and I am informed by British Railways that they hope to have it ready to put into service by June, 1965.
Very substantial improvements in second class accommodation will be effected on the British Railways passenger vessels this autumn. This, together with increases in the number of sailings, the additional platform at Holyhead and other improvements make a most welcome modernisation programme initiated in 1961 and continued since that year under the two able Midland Board chairmen of the British Transport Commission and ably assisted by the British Railways Irish Sea Traffic Manager.
CIE and British Railways are, through the medium of the Fishguard and Rosslare Railways and Harbours Company, jointly carrying out a comprehensive examination of the improvements necessary on the Fishguard-Rosslare services to cater for the traffic through that port and for the very substantial growth in tourist traffic— especially cars—which is foreseen. The proposed improvements include the improvement of Rosslare Harbour and the provision of road access between the mainland and Rosslare Pier which can at present be reached only by rail.
I come next to energy. The energy we used in 1963 was supplied roughly as follows: oil, 36 per cent; turf, 30 per cent; coal, 26 per cent; hydroelectric 8 per cent.
The final results of the working of the ESB in 1963/64 are not yet available in full, but I understand that they will show a surplus which will be somewhat less than the surplus —£636,000—for 1962/63. Hydro conditions during the year were a little below average and the mild weather in the last quarter of the year resulted in a slight slowing down in the growth of demand for current.
The Board's programme of generating plant construction provides for a long term increase in demand of about 9 per cent per annum. Between now and 1970, 530 megawatts, of which 420 megawatts will be oil-fired and 110 megawatts will be milled peat fired, will be added to generating capacity.
The Board is pushing ahead rapidly with the re-canvassing of rural areas in connection with the post-development rural electrification scheme.
By the time the new canvass has been completed in all areas, that is to say, within the next three years, practically 100,000 unconnected houses will have had an opportunity to benefit from the increased subsidy, at standard charges or slightly above standard charges. If all these should accept there would then be connected about 96 per cent of all rural premises.
The task of canvassing these 100,000 houses is a considerable one which must be organised and carried out on a planned basis so as to ensure its completion within the specified period and in the most economical manner. The canvassers are followed by the construction crews who have been specially organised for maximum output under the particular conditions. These are self-contained units supplied with the necessary transport and equipment. The keymen move from place to place with the crews but the unskilled workers are generally recruited locally. It is essential in the interests of cost and efficiency that these crews operate according to a carefully planned programme. Of course no matter what system was adopted it would be impossible to reach some areas before 1967, but every unconnected householder can be assured that he will be offered connection in his turn within the next three years.
The issue of £10½ million 6 per cent stock in March last brings the Board's total stock issues to £37½ million.
The probable financial result of Bord na Móna's operations for the year will be a small surplus after all charges have been met.
A fourth briquette factory to be based on the Shannonbridge-Athlone group of bogs is planned to come into operation in 1968.
Moss peat is a very successful product of Bord na Móna. Sales in 1963/64 were worth almost £300,000. A new moss peat factory is expected to come into production in County Laois about the middle of next year. Its capacity will be about 300,000 bales and it will employ about 250 workers bringing total employment in moss peat production to over 550. The cost of bog development and the erection of the factory will amount to about £450,000. About 80 per cent of moss peat production is exported.
Bord na Móna had a successful issue of £2,000,000 stock last month— their first appeal to the public. The eager response reflects the confidence of the public in the organisation. This issue exhausts the Board's borrowing powers and amending legislation will be necessary to authorise them to obtain additional capital.
Coal consumption in this country amounts to about 1.6 million tons annually. In 1963 coal represented about 26 per cent of the country's total supply of energy. For coal supplies the country is almost entirely dependent on imports which come mainly from Great Britain, the United States and Poland.
The investigation into the prospect of using the reserves of high ash content coal in the Arigna coalfield in an extension to the Arigna Station is still proceeding.
Oil, of which about 1.5 million tons is now used annually in this country, accounts for about one-third of the country's entire requirements of primary energy. Consumption has been increasing rapidly over the last five years and the indications are that by 1970 it will supply nearly one-half of requirements.
It has recently been decided that my Department should assume overall responsibility for co-ordinating matters concerning nuclear energy. Other Departments having special interest in particular aspects of nuclear energy will, of course, continue to be responsible for these aspects of the subject.
As I have mentioned previously, my Department is sponsoring a promotional drive with the object of interesting industrial firms in the very considerable savings which can be achieved by the efficient use of fuel.
43 firms were visited during 1963 and the potential savings in fuel costs which could be achieved by these firms were estimated at £138,000 annually or 20 per cent of an annual fuel bill of approximately £690,000.
I do not propose to deal with CIE in the course of this speech as I recently dealt with it very comprehensively in my Second Stage speech on the Transport Bill, 1964. Should Deputies wish to raise any particular questions concerning road or rail transport during the debate on the Estimates for my Department, I shall endeavour to deal with them when replying to the debate.
The provision for tourism this year is £2,020,000 compared with £1,469,000 last year, an increase of £551,000. This takes account of requirements under the Second Programme for Economic Expansion. The provision takes the form of three grants-in-aid to Bord Fáilte Éireann—Subhead F.I. under which £1,350,000 is provided for the discharge of the Board's general functions including overseas publicity and advertising and a wide range of activities at home and abroad; Subhead F.2 which provides for a sum of £250,000 for resort development grants; and Subhead F.3 under which £420,000 is being provided for grants to assist the development of holiday accommodation.
The Second Programme for Economic Expansion aims at a doubling of tourist income over the decade 1960 to 1970 and this calls for an average annual increase of 7.2 per cent as compared with an annual 6.8 per cent during the First Programme.
In December, 1962, I asked Bord Fáilte to consider a very detailed memorandum relating to the requirements of the tourist promotional drive based on the objective of encouraging medium-priced grade traffic to this country and setting out at length the factors involved, from the provision of accommodation to the improvement of local facilities in resort areas. This enabled advanced planning to be undertaken before the very high second programme tourist growth target was set in the middle of 1963.
The programme, as devised by Bord Fáilte, was discussed and examined at great length with them. The target will be difficult to achieve because the increase in direct tourist expenditure by genuine tourists from countries other than those where expenditure is likely to expand only moderately must be very large indeed to provide a net 100 per cent increase.
The Bord Fáilte organisation has been strengthened, particularly on the marketing side, and the very best marketing methods are now being employed. Increased emphasis is being placed on particular facilities and amenities in Ireland which are likely to be attractive to special categories of visitors — angling, pleasure boating, student travel, conference business and so on—and some of these are already proving quite successful. More personal contact is being promoted through the visits of travel agents and travel writers.
The scheme for developing major resorts has gathered momentum and the grants paid by Bord Fáilte last year amounted to £180,000, or more than double the previous year. Increased assistance can now be given in respect of new accommodation—hotels, holiday camps or holiday villages— especially in the more remote tourist areas of the West not adequately supplied with accommodation for visitors. The grant schemes for the extension and improvement of existing premises are being continued with increased maxima to take account of money depreciation and with other modifications made in the light of experience.
A significant new feature is that grants are now available for guest houses which provide not less than ten guest bedrooms either before or after completion of improvement works. In view of the need for more entertainment facilities for visitors, particularly outside the urban areas, grants for this purpose have been extended in scope. Assistance is also being made available towards the provision of additional youth hostels, especially in the West, and for the improvement of existing hostels. In addition, residential schools and colleges, which can accommodate groups of visitors during the summer season, will be assisted where necessary to improve their facilities. There will be continued emphasis on the need to provide medium-priced accommodation for lower and middle-income visitors. This question is, of course, affected considerably by the capital investment required for new building and the difficulty of remunerating this capital on the basis of a short holiday season. The campaign for extending the tourist season continues and a commission is now sitting to examine how far changes in public and bank holidays can ease the position.
With the formation of the eight new regional tourism organisations, we now have the framework for a co-ordinated tourist campaign using the resources of all sections of the community. Many local authorities have shown their appreciation of this new development by increasing very substantially their contributions to tourism and I am sure that the fruits of this investment will be evident in the expansion of the tourist trade in their areas. I hope that members of this House on all sides will lend their support to the new tourism organisations and will encourage all interests in their constituencies to work together in this new co-operative endeavour. In 1965 the boards of directors will be elected on a proportional and democratic basis.
The Transport Act, 1950 (Additional Powers) Order, 1964, is being taken with the Estimate. Therefore, I should give some explanation of it. The purpose quite simply is to enable CIE to establish a subsidiary company for the handling of air freight. This is a very highly-specialised business and CIE consider it important that it should be operated by a separate company. At the present time, the volume of air freight between this country and other countries is not more than a small fraction of the volume of freight moving by land but, in terms of value, air freight is not inconsiderable. Between this country and Great Britain, for example, air freight represents about seven per cent of the value of total import and export trade.
CIE are well placed to provide a specialised transport network throughout the country for air freight. However, the main reason why they wish to establish this subsidiary is in order to qualify for recognition by the International Air Transport Association as an air freight forwarding business. To participate effectively in the air freight forwarding business, it is desirable for CIE to dissociate air freight business from general carrying business. For this reason, CIE find it necessary to establish a subsidiary company to deal with the air freight forwarding business.
There are other technical reasons. There is a difference in the character of operation. There has to be very special flexibility and very high speed air-freight transport. For that reason, I recommend that the Dáil agree to the formation of this subsidiary company.
I should add that the powers of the company will not be wider than the powers already exercised by CIE. It will be subject to official control. The memorandum and articles of association will be subject to the approval of myself and the Minister for Finance. Alterations cannot be made in this memorandum without my prior approval and the same applies to the company's borrowing powers. The procedure, in fact, is in line with that adopted when CIE formed a separate company for hotels, Ostlanna Iompair Éireann, Teoranta.
The directors will be the same as the directors of CIE, including the chairman, who will also act as chairman of the subsidiary company. Neither he nor the ordinary directors will be paid any remuneration for their services to the company. I think that gives the particulars of the reasons for establishing the subsidiary company.
The motion on the Order Paper in relation to the State Guarantees Act, 1954 (Amendment of Schedule) (No. 2) Order, 1964 a copy of which in draft has been laid before the House, is also being taken. The purpose of the Order is to add Aer Lingus, Teoranta, to the Schedule to the State Guarantees Act, 1954, to enable the Minister for Finance to guarantee borrowings by the company up to a limit of £5 million. The existing legislation in regard to the guaranteeing of borrowing by the Air Companies is contained in section 75 of the Air Navigation and Transport Act, 1936, as amended by section 3 of the Air Navigation and Transport (No. 2) Act, 1959, and provides that the Minister for Finance may guarantee debentures issued by Aer Rianta up to a limit of £5 million. There is no provision for the direct guarantee by the Minister for Finance of borrowings by Aer Lingus.
It is considered that Aer Lingus should be in a position to borrow direct from commercial sources, under the guarantee of the Minister for Finance, moneys required for its own purposes and it is proposed to provide for this and other matters in legislation which I hope to introduce later in the year in relation to the air companies. As an interim measure, it is proposed to avail of the machinery of the State Guarantees Act, 1954, to provide the Minister for Finance with the necessary powers of guarantee. I would propose on the enactment of the new legislation to have Aer Lingus Teoranta deleted from the Schedule to the State Guarantees Act.
Aer Lingus has ordered four short-haul jet aircraft, for use mainly on the company's continental services, and these aircraft are due for delivery next spring. Of the total cost of about £5 million, £2 million will be provided from the Exchequer by way of equity capital. It will be necessary for Aer Lingus in the near future to borrow moneys from commercial sources towards the financing of the purchase of the short-haul jet aircraft and for other capital purposes. Borrowing from commercial sources—provided the terms are reasonable—is to be encouraged as it reduces the demands for loans from the Exchequer. The addition of the company to the Schedule to the State Guarantees Act will facilitate the proposed borrowing as it will enable the borrowings to be guaranteed by the Minister for Finance. The Minister for Finance would, of course, be prepared to give a guarantee only where he is satisfied with the terms of borrowing.
Section 7 of the State Guarantees Act, 1954, requires the Minister for Finance to lay an annual statement before each House of the Oireachtas giving details of each guarantee given by him under the Act and borrowings by Aer Lingus guaranteed by the Minister will be included in the annual statement.
The immediate capital commitments of the air companies involve an expenditure of the order of £14 million, of which the State contribution will be £2 million towards the purchase of the four BAC One-Eleven aircraft. It is expected that the companies' own resources will provide about £4 million of the total cost. The source of provision of the balance of upwards of £8 million has not yet been determined but it is expected that substantial borrowing will be required from commercial sources. It is the policy to encourage the companies to secure as high a proportion as possible of their future capital needs from outside sources and so increase the capital resources available for the State's capital programme, including the companies' own development.
