It has been an interesting debate. The first thing I want to note for the House is the fact that we have had only two really fierce critics of CIE, Deputy O.J. Flanagan, who did, however, praise the courtesy and kindness of the staff, and Deputy Murphy, who suggested there should be a complete investigation into the company, and that there might be gigantic waste of which the Dáil would not be apprised and so on. There was constructive criticism by other Deputies. That was inevitable because no company is perfect and CIE is not perfect. Proposals and suggestions were made, all of which, I think, the Minister for Transport and Power should examine to see if they should be put forward to CIE.
Much was said about statements made by the former Deputy Seán Lemass and myself in relation to subsidies for this railway enterprise. It is a fact that growing losses on railway operations have been a feature of all railway operations practically everywhere in the world, even in the USA, where railways were operated by private enterprise, although subject to some State and federal rules regarding their operation. I do not think any Minister for Transport could ever see sufficiently far ahead the effect of inflation, where it existed, on an enterprise whose labour costs are 65 per cent of total operating costs. When there is inflation, every State enterprise with a very high labour content is inevitably affected to a greater degree than enterprises with lower labour content, such as the ESB as compared with CIE.
I think it is a fact that most Ministers of Transport in various countries did not predict correctly the enormous impact of the private motor-car on railway passenger traffic and on certain types of freight traffic, arising from the construction of better roads. That is a fact; let us be honest about it. We were not worse than any neighbouring countries. I still hold to everything I said about subsidies. I do not like the idea of a subsidy for a State company if it can be avoided. I think any State subsidy must have some effect on the efficiency of the company but, having said that, I think that the kind of subsidy we have given CIE is one in which there is a considerable degree of discipline. If you tell a company they have to live on £10 million of subsidy over five years and they only overspend that by about £500,000 during a bout of very serious inflation, one can say that if you must have a subsidy, that is a good kind of subsidy. That cannot always be applied. Evidently, there are some State enterprises that require almost open-ended subsidies of some sort but, in this particular case, I think it worked fairly well.
I should mention in passing that the new subsidy happens to be the same percentage of total revenue of CIE in 1969 as the £2 million subsidy was in 1966. If you take the present subsidy of £2,650,000 at the 1964 value of money and allow for the fact that the subsidy would have to increase to cover the loss in the value of money, unless productivity and traffic had grown by a fantastic degree, then the subsidy in real terms is only up by some £10,000 on 1964. I am not saying that by itself is an indication of the efficiency of CIE but it is quite fair to look at the £2.65 million and apply to it the loss in the value of money since the previous subsidy was arranged in 1964.
During my time as Minister for Transport and Power, I had the advantage of being very closely associated with the European Conference of Ministers of Transport, whose permanent headquarters are in Paris, and it was possible for me to study at very close quarters the operation of other railway companies, many of which had different conditions from those applying to CIE. One can read a vast number of reports and inquiries into these railway enterprises and one can also watch the slow deterioration of profitability of railways in Europe which still remained profitable in the 1950s. As Minister for Transport, as long as I could see the Swedish railways, the Dutch and Swiss railways still making ends meet, I thought, perhaps, we might be able to make ends meet here. Many of the European railways have, of course, quite different operating conditions from ours. The fact is, however, that now there is not a single railway company in Europe which pays; the Swiss railways are the nearest. I do not think they require a subsidy because the deficit is so low.
I think it is true that when we studied this question we did not, perhaps, have sufficiently close connections with European railways. We always tended to look to Great Britain and say that we could not possibly compare Irish with British railways where the situation was so totally different. If we had closer connections with Europe at that time, we would have been able to study railway economics to a greater degree. Now, we are able to do this.
The main consideration in relation to Ireland is that even with the lines that have been closed it has one of the longest mileages per 1,000 of the population of any railway company in Europe. Equally it has no transit traffic because it is an island railway and, to that extent, is at a great disadvantage compared with the Swiss, Dutch or Belgian railways which have tremendous transit traffic passing through the countries. Unfortunately, in spite of the excellent development of all the traffic in the country, part of which is carried by CIE, we do not have the advantage of very heavy ore traffic which is an enormous help to the commercial viability of any railway company. Finally, if the arterial lines were 300 miles long instead of being roughly 130 to 150 miles long I think the railway portion of the operations of CIE would be more successful. It is impossible to make any commuter railway service in the world operate without a very heavy loss because of traffic peaks and their effect on operational expenses. It is almost impossible to make a railway service operate efficiently where its arterial distance is about 150 miles. If it were 300 there would be far more incentives offered to certain types of passenger and freight users. It is the short distance which makes it very difficult for a railway to pay.
Much has been said about line closures. I thought we had ended that discussion but, apparently, people still regret the passing of certain branches. I shall not go into this in detail except to say that the net financial betterment to CIE from the closure of 620 miles of line between 1958 and 1964 and 126 miles of line between 1964 and 1968 is close to £1 million per annum. I do not know if Deputy Murphy would like to come forward with a resolution for a supplementary sum of £1 million a year in order to keep the railway going.
The closing of railway lines has been universal. It is going on all over Europe. It has been going on under railway managements that have been reorganised and where new directors have been appointed. Closures of lines are unavoidable in the case of any railway where the position is reached that it is literally nothing but a bus service forced to run along a railway line and stop infrequently in a sparsely populated area. That is a simple way of putting it. There is no point in running a railway such as the West Cork Railway where, from what I can remember, the average number of passengers per train load was 30—that compares with a bus load—and where the average number of tons of freight carried on the train was 45 tons. When the Farranfore-Cahirciveen branch line was closed, I think it was replaced by one lorry and one bus.
The branch lines that were closed were, for example, in the very lowest category of the Beeching Report in Great Britain. As listed in the British Railways report on line closings they were in the category where automatically the line would be closed. I think it was perfectly right at that time to close those lines. The railway system that has been left still does not pay. Some sections of it are more profitable than others. Some sections may be profitable for both passengers and freight; some for freight only, but as I have said, there was a lack of proper economic prediction of the operation of railways everywhere and we suffered from it here. I and my predecessor were responsible for not having this capacity for prediction. I think this was largely because the science of railway economics was only developing at a time when the railways were beginning to lose money. If it had been developed, say, about 20 years ago, I think we would have been able to make our predictions more accurately.
I might also say as a matter of interest to the House that when Pacemaker was published in 1963— that very brilliant report published by CIE which is a great credit to the directors and management of CIE and to all those engaged in its preparation —at that time in the whole of Europe and even in America there were very few closely analysed documents in regard to railway economics. I am not sure if Pacemaker was the first but it was certainly one of the first well-conceived economic analyses of a railway company. That is a good illustration of the fact that railway economics have been recently developed and that CIE, in producing Pacemaker, were in the forefront. I think I have said enough on this general subject that railways no longer pay.
Deputy Desmond referred to the overall planning of transport in this country. As Deputy Desmond knows, the Minister for Local Government and Foras Forbartha have been working on the question of road structures and road definitions. I think CIE can be said to be fitting into this planning. There has also been a survey of freight traffic throughout the country which led to certain decisions by the Government—for example, the liberalisation of cattle traffic. The question of further measures to liberalise road freight transport is under examination. There have been at least two reports by Professor Schaechtele for the Dublin Corporation. A committee consisting of members of Dublin Corporation, of the Department of Local Government, of the Garda and of CIE are examining the question of Dublin City traffic. I think two reports have been published already including the one proposing, if I remember rightl, an inner ring road in Dublin. Other reports are awaited.
Of course, let us be frank about it: if you read the greatest report that has ever been published on traffic congestion—the Colin Buchanan Report —the proposals he makes for eliminating road congestion are financially impracticable, even for Great Britain. The question of solving traffic congestion is a very difficult one indeed. I cannot go into that except to point out that CIE have been playing a very active part. They have pointed out that some 51 per cent of people in Dublin go to work by public transport and that, if more are to go, there must be some way of guaranteeing the movement of the buses. There has been no final decision about this. It has been pointed out in other countries, too. In any road traffic arrangements, if people are to have cheap and effective transport, the public bus carrying a large number of passengers must be given some kind of right of way through the city. That is one of the problems. As I have said, there is a great deal of planning going on in relation to transport—perhaps not quite what Deputy Desmond wanted, which was a huge overall transportation plan. Nevertheless, I would say that roads are being planned with the knowledge of the CIE railway system in mind and that there has been a good deal of work in relation to Dublin street planning.
Deputy Desmond referred to the cut back in CIE's capital payment. The actual position is that, in common with other State-sponsored bodies, CIE's capital allocation has to be determined in the light of the priorities in the Public Capital Programme. That applies to every Department in which there is a tremendous competition for capital. Deputy Desmond knows the total amount of capital that has been raised by the Government or by State companies for public services has enormously increased in the last three years. But capital has to be got either by borrowing from abroad or from the savings of the people. There is an absolute limit to what can be made available to any one particular enterprise.
Some Deputies suggested the transfer of the Dublin bus services to Dublin Corporation. It is very difficult to see what advantage could be gained by that. A good many overheads would also have to be transferred to the Dublin Corporation relating to the general operation of the entire national transport system. There is the question of the linkage between the Dublin railway system and the bus system. I doubt whether there would be much advantage to such a policy. It would be very difficult for me to pronounce on it at the moment. I certainly would not like to predict what the Minister for Transport and Power would say. I do not think he regards this as likely to provide a better or more efficient Dublin bus service.
Suggestions have been made that we have given a great deal more liberty to the road freight licensed hauliers. In fact, the number remains the same. They have been given more flexibility. We do not believe that CIE will suffer as a result.
In fact, the position is that we have far too much transport in this country that is probably uneconomically carried by owners of private vehicles. We gave this flexibility partly as a concession in return for the whole of the carriage of cattle becoming free from restriction, and partly because I think the present number of licensed hauliers and CIE together ought to play a greater part, particularly in long distance transport, in containerised transport, in groupage transport, than they do at present. I hope that my successor will give particular attention to this question.
Deputy O'Donnell mentioned the reference to non-commercial costs of CIE and sought clarification on this point. Non-commercial costs refer to the social services which have been provided by CIE during the past five years at the request of the Government: school bus services, free transport for old age pensioners and Old IRA men, the cost of which has been quantified and is paid for by the appropriate Departments.
It also relates, to some extent, to the normalisation of accounts. Deputy O'Donnell said it would be a good thing if CIE had this system. One could say that CIE's accounts have been partially normalised but the definition of normalisation is not universally accepted. If you had a railway service that remained open, for example, entirely at the request of the Minister for Defence, the loss on that service should under normalisation of accounts be recouped to the railway company. The question of normalisation of accounts is something about which one could have very considerable discussion.
The railways, the canals and the vessels can be described, to some degree, as social services and the losses on these services are being met by the annual grant from the Exchequer, plus the profits on the board's other services. The service from Galway to the Aran Islands, for example, makes a considerable loss; but this is regarded as an essential social service.
Many Deputies suggested that they did not know what was happening in CIE. I hope they read the accounts of CIE which give quite clearly the profitability of the various sectors of CIE operations, and indicate quite clearly the losses where they exist in the case of the railways, canals and vessels. I do not think there is any lack of detail in the accounts. Occasionally we give figures in the Dáil about the proportions of the services that lose in various sectors. For example, Pacemaker revealed that 35 out of 79 Dublin city bus services lose money; the rest either break even or are remunerative. Further information could be given in relation to the provincial bus services —some of them highly profitable and others, which are essential in the interests of local communities, uneconomic. In the past year, as the House knows, there was a surplus both on the provincial bus services and the Dublin bus services.
A number of Deputies suggested some kind of detailed inquiry into the whole operation of CIE. They felt that if there were some kind of parliamentary committee the result would possibly be the revelation of excessive lushness, inefficiency and excessive costings. I am afraid the House will have to accept my word and that, I am sure, of my successor. We do not believe that such an investigation would prove any gross inefficiency or gross excessive costings on the part of CIE. We believe that the Pacemaker Report is still valid. If you apply the changes in the pattern of traffic, the changes in the volume of traffic such as have occurred, the securing of additional traffic by CIE in competition, in many cases, with other services and then, at the same time, apply the increase in costings both for the purchase of materials and for salaries and wages, there is no reason to believe that a request for an additional £650,000 for the next five years is the result of inefficiency of operations.
When I was Minister I made comparisons as far as I could between the subsidy paid to CIE and those paid to other European railway enterprises. Although there was not a single railway with which you could really make an exact comparison, if you just looked at the various features of each railway, you could only come to the conclusion that the subsidy actually paid to CIE by the taxpayers is by any definition a reasonable one and cannot be regarded as an indication of extravagance on the part of the company.
