I move: "That the Bill be now read a Second Time."
The main purpose of the Bill is to provide for the dissolution of the County Donegal Railways Joint Committee and the Strabane and Letterkenny Railway Company and for the transfer of the assets and liabilities of the undertakings to CIE. An important feature of the Bill and one which I will deal with in more detail later is the provision for payment of compensation by the Exchequer to holders of baronial guaranteed shares in the Strabane Company in consequence of the proposed dissolution of the company.
The Bill also contains a number of provisions dealing with measures to improve safety on the railways, the transfer of responsibility for maintenance of road surfaces on overline bridges to local authorities, toll charges at Fiddown Bridge, County Kilkenny, the handling of claims for redundancy compensation under the Transport Acts and with other miscellaneous matters.
The County Donegal Railways Joint Committee operates road passenger and freight services in the southern part of County Donegal. Prior to 1st January, 1960, when the lines were closed, the joint committee operated rail services on its own lines and on the railway line between Strabane and Letterkenny which was owned by the Strabane Company, in which the joint committee holds a majority interest.
The joint committee is owned in equal shares by the Great Northern Railway Board and the British Railways Board. Since 1964, however, the GNR Board's interest in the undertaking has, for all practical purposes, been represented by CIE. British Railways have for many years been anxious to sever their connection with the joint committee and the Government decided in 1961 that CIE should take over the road transport business of the joint committee and should enter into negotiations with British Railways with a view to arriving at a basis for a financial settlement. These negotiations, which were protracted, culminated in CIE signing an agreement with British Railways on 31st May, 1967, the text of which is scheduled to this Bill, whereby, subject to the enactment of the necessary legislation confirming the agreement and payment of the sum of £57,742 by CIE to British Railways, the rights and obligations of British Railways in the joint committee and in the Strabane Company would be transferred to CIE. Pending enactment of the necessary legislation CIE have taken over British Railways' interest in the joint committee and in the Strabane Company. The board had, in fact, taken over management of the undertaking since 1st January, 1966.
To give full effect to the Government decision that CIE should take over the road transport business of the joint committee, CIE also entered into an agreement with the Northern Ireland Transport Holding Company— successors to the Ulster Transport Authority—under which, subject to payment by CIE of a net sum of £3,449, the assets and liabilities of the GNR Board in respect of the joint committee and the Strabane Company would be transferred to CIE. This agreement, which was made in pursuance of the provisions of the agreement scheduled to the Great Northern Railway Act, 1958, was formally approved by the Northern Ireland Ministry of Development on 21st March, 1969, and by my predecessor on 3rd April, 1969.
The terms of the financial settlements with British Railways and the Northern Ireland Transport Holding Company were based on a valuation of the assets of the joint committee and took account of anticipated continuing annual losses on the operation of the Joint Committee's road transport services. No payment was made in respect of goodwill. Things have turned out better than expected, however, and I am glad to be able to say that the Joint Committee's undertaking is now operating at a profit.
The Bill confirms the financial settlement between CIE and British Railways and provides for the transfer to CIE, with effect from a date which I shall fix by order, of the assets and liabilities of the joint committee and of the Strabane Company, excluding any liabilities of the latter company in respect of its baronial guaranteed shares. CIE will continue to provide the road transport services, both passenger and freight, which are being provided at present by the joint committee.
All staff employed by the joint committee immediately before the transfer date will become CIE staff. There are in all about 100 staff involved, of whom 81 are permanent staff. The Strabane company have no employees. I am taking this opportunity to assure the House that no member of the joint committee's staff will be disemployed as a result of the transfer of the CDR undertaking to CIE. It may be found necessary, however, to transfer some clerical staff to CIE locations outside County Donegal, but transfers of other staff are not at present envisaged; the necessity for such transfers at some future date cannot, however, be ruled out. Transfers of CDR staff will be covered by the same arrangements applicable to CIE staff and there will be full consultation between CIE and the trade unions in advance of any such transfers.
Provision is made in the Bill for the preservation of the pension rights of existing and former salaried employees of the joint committee who are members of the British Railway clearing system superannuation fund. These particular staff are being seconded to CIE pending completion of arrangements which are at present being made by CIE to set up a separate fund, with an appropriate share of the assets of the British fund, to which members of the fund in this part of the country, including CDR staff, will be transferred. This will require legislation both here and in Britain in due course. Until these arrangements have been completed it will be necessary to keep the joint committee nominally in existence.
On being transferred to CIE, members of the CDR regular wages grade staff aged between 21 and 50 years will automatically become members of the CIE wages grade pension scheme. The position of employees who are ineligible for membership of this scheme because they are over age will have to be examined by CIE in consultation with the trade unions.
As I have already mentioned, the Bill provides for the dissolution of the Strabane company, in which the joint committee holds all the debenture stock and 87 per cent of the share capital. The remaining shares, which are privately held, include baronial guaranteed shares with a face value of £17,510 and 148 ordinary shares which are not guaranteed. Payment of dividend at the rate of 4 per cent per annum on the baronial guaranteed shares was guaranteed, under statute, by Donegal County Council and by Letterkenny Urban District Council. These guarantees involved the county council and the urban district council in annual payments of £640 and £60 respectively, but following the termination of the joint committee's rail services on 1st January, 1960, the two local authorities discontinued their payments on the grounds that they had been advised that they ceased to be liable for these payments when the railway ceased to operate. The Strabane company, on the other hand, was advised that the liability of the local authorities continued. Apart from 1960, when the Strabane company paid the dividend in anticipation of a settlement of the dispute, no dividend has since been paid to the holders of the baronial guaranteed shares.
I should explain that the guarantees on the baronial guaranteed shares were given to the Strabane company, not to the shareholders, and as such these guarantees would become unenforceable on dissolution of the company. Further, the financial position of the Strabane company is such that there would be no assets available, on a winding up, to make any payments to unsecured shareholders, whether guaranteed as to dividend or not. All the available assets of the company would be claimed by the joint committee, which have priority rights as holder of the company's debenture stock.
In considering this aspect of the matter, the Government were conscious of the fact that in the reorganisation and writing down of the capital of railway companies guaranteed shareholders have generally been treated with some consideration.
In all the circumstances, the Government decided that the holders of the baronial guarantee shares should receive compensation from the Exchequer on the dissolution of the Strabane company. The amount of money involved was relatively small— the total cost to the Exchequer is about £14,500—and the baronial guaranteed shareholders were, after all, the innocent victims of changing circumstances. Section 13 of the Bill provides that CIE shall, within two months of the transfer date, pay to each guaranteed shareholder such amount which, if invested in Government securities, would produce the same amount in interest as he would receive if dividends were being paid on the baronial guaranteed shares. Section 13 also provides for payment of the arrears of dividend on these shares with effect from 1st January, 1961.
The amalgamation of the joint committee's undertaking with CIE is a logical development. The Bill puts a statutory seal on the practical arrangements already made for the transfer of the CDR undertaking to CIE and provides for continuity of the road transport services already operated by the joint committee. It is very satisfactory to be able to record that CIE are taking over an efficient and profitable unit and I hope that this will continue to be the position.
The opportunity is being taken in this Bill to carry out some desirable amendments of transport legislation to improve safety on the railways and to deal with some other miscellaneous matters.
Section 22 of the Bill provides for the substitution of automatic controls for gates at level crossings at which CIE have no statutory obligation to provide attendance, although in some cases attendance is provided. These are level crossings on roads which were not public roads at the time the railway was built but have since been taken in charge by the road authorities concerned. CIE's statutory responsibility is confined to maintaining gates on either side of the railway and it is the responsibility of users to open and close the gates.
There are over 70 such public crossings and some of them carry a considerable volume of traffic. Where no attendance is provided by CIE, the gates are more often than not left open by users of the crossings, thus creating a serious hazard for both road and rail traffic. There has been a number of fatal accidents at these crossings and the question of improving safety arrangements has been under consideration by a working group, comprising representatives of my Department, the Department of Local Government and CIE.
The working group have recommended the installation of automatically controlled flashing lights and bells, without barriers, at seven of the more dangerous crossings, without prejudice to the addition at a later stage of any further protective measures, e.g. barriers, which in the light of experience may be considered necessary. It is expected that the group will recommend similar installations at other crossing as their examination of individual crossings proceeds and that the continuing development of road traffic will create a need for further similar installations in the future.
As the need for these additional safety measures arose out of the growth of road traffic which compelled road authorities to make the roads part of the public road system, section 23 of the Bill provides for the sharing of the cost of providing and maintaining these automatic installations between CIE and the appropriate road authority in each case.
It is proposed in section 25 of the Bill to increase from £2 to £25 the penalty for failure to close gates at unattended level crossings.
Again in the interests of safety, it is proposed in section 29 of the Bill that engine drivers and persons whom CIE wish to train as engine drivers shall be subject to compulsory periodic medical examination, including eyesight tests, in accordance with regulations to be made by me on the application of the board and after consultation with the trade unions representative of the drivers and trainee drivers. CIE have made periodic medical examination a condition of employment since 1968 for new entrants to the grade of locomotive driver and the board are most anxious that such examination should be compulsory for all engine drivers with a view to ensuring the detection at the earliest possible stage of drivers who might be suffering from diseases which would constitute a disability for driving and a public hazard. I am in agreement with the board that this additional safety measure is necessary. It will be a matter for negotiation between CIE and the trade unions as to how men who are found unfit will be dealt with.
Section 36 deals with another railway problem—the misuse of the communication cord on passenger trains. This has been a growing problem in recent years and is particularly prevalent on trains which are being run for sporting occasions. In some cases the cord has been pulled repeatedly with consequent lengthy delays to trains. In the hope that an increased penalty will act as a deterrent in such cases, section 36 of the Bill provides for an increase in the penalty from £5 to £25.
The other provisions of the Bill deal with a variety of matters including the application to level crossings on railway lines in this country owned by the Fishguard and Rosslare Railways and Harbours Company of section 9 of the Transport Act, 1958, which provides for the substitution of automatic controls for gates at level crossings on roads which were public roads at the time the railway was built; the transfer, subject to payment of compensation, of responsibility for maintenance of road surfaces on overline bridges from CIE to road authorities; the transfer from CIE to Westmeath County Council of liability to maintain Float Bridge on the River Inny—this would also be subject to payment of compensation; the reference in future of all disputes in redundancy compensation cases to the circuit court; the fixing of toll charges at Fiddown Bridge, County Kilkenny; and certain provisions relating to two of CIE's subsidiary companies, Aerlód Teoranta and CIE Tours International Incorporated.
The miscellaneous provisions of the Bill can best be dealt with at Committee Stage. I commend the Bill to the House.
