: I move:
That a Supplementary Estimate not exceeding £19,259,000 (nineteen million two hundred and fifty nine thousand pounds) be granted to defray the charge which will come in course of payment during the year ending 31 December 1980 for the salaries and expenses of the Office of the Minister for Transport, including certain services administered by that Office, and for the payment of certain grants-in-aid.
This Supplementary Estimate results from excesses of £17,652,000 on eight subheads and a deficiency of £2,700,000 on appropriations-in-aid offset to some degree by a total saving of £1,093,000 on other subheads.
The single item in the Supplementary Estimate is the provision of £14 million for additional subvention for CIE, which will bring the total subvention for this year to £70 million. This compares with a subvention of £56 million in 1979, which itself represented a very large increase on the provision of £37.7 million for 1978. The year 1979 had been a particularly bad year for CIE's finances because of the effects of industrial disputes, large increases in fuel costs and substantial increases in labour costs.
Regrettably the severe decline that occured in 1979 has not been halted and, while the overall rate of deterioration in the deficit has slowed somewhat, it is still very high.
The two major components in the increased subvention provision now being sought are (1) increases in labour costs of about £7 million over the provision for this purpose included in the original CIE budget and (2) a shortfall of nearly £6 million in anticipated revenue on subventible activities. Other factors include additional railway and bus maintenance costs, increased social insurance contributions and accident liabilities.
The additional labour costs of £7 million includes about £1.5 million in respect of the 1980 National Understanding for which sufficient provision had not been included in the CIE budget.
The balance is for other inescapable increases, including relativity increases, additional annual leave, increases in superannuation and pension costs and increased social insurance contributions.
As I have said, the second major component necessitating the increased subvention requirement is a shortfall of nearly £6 million in budgeted revenue. Among the factors which contributed to this decline are the slowdown in economic growth and the poor tourist season. The bulk of the shortfall has arisen on rail freight traffic on which estimated total revenue is £3.7 million less than had been anticipated at the beginning of this year. Of this amount about half is attributable to the cement, fertiliser and mineral ores traffics and the balance to other traffics, including over £1 million on sundries. The shortfall on sundries reflects a further serious deterioration in this business which has been showing very poor results in recent years, and this obviously is an area which must come under scrutiny in the review of CIE's activities which is at present being undertaken.
The road freight sector has also shown disappointing results in 1980 and a loss of £1 million on this activity is forecast this year. EEC Regulations would preclude the granting of a subvention to CIE to cover losses on road freight, nor would there be any justification for subventing this activity which, if it is to survive, must compete on equal terms with the private haulage industry. The Supplementary Estimate does not, of course, include a provision to cover this £1 million.
On the passenger side the shortfall in budgeted revenue is fairly evenly distributed over the three main businesses, amounting to an estimated £800,000 on Dublin city bus services, £600,000 on provincial bus services and £700,000 on rail passenger services.
Of the total estimated deficit of £7 million, about £48 million is attributable to the railway, £16.2 million to Dublin city bus services, £4.6 million to provincial bus services and the balance of £1.2 million to the maintenance of canals and the Galway/Aran ferry service.
While the railway still accounts for by far the largest portion of the subvention, the losses on bus services have grown alarmingly in recent years, having more than trebled since 1978. This is due to a combination of factors including increased labour costs, the continuing growth in private car ownership, traffic congestion in cities and a deterioration in the quality of the public transport service, arising in part from a less than satisfactory bus fleet. I am happy to say that CIE's programme for renewal of their bus fleet is now well under way and delivery of buses from the new bus-building plant at Shannon will commence next Monday. The initial production programme is for 50 single deck buses to be followed by double deck buses, the first of which is expected early in 1981. CIE plan to introduce about 200 new buses in Dublin city in 1981 and this should make a substantial contribution to the improvement of the bus service in the city.
Deputies will be aware of the measures which have been initiated to create a better operating environment for the city's bus services following the report of the Transport Consultative Commission on passenger transport in the Dublin area. A first requirement is to improve the enforcement of existing parking regulations, and for this purpose additional traffic wardens are at present being recruited and should begin to make an impact within the next few weeks.
Plans are proceeding for the introduction of bus lanes and similar measures which will give buses a degree of priority over other vehicles. In the course of next year such measures will be brought into operation on the main arterial routes between the city centre and the suburbs of Rathmines, Terenure, Blackrock, Whitehall and Artane. Bus priorities on other arterial routes will follow later.
These measures will create greatly improved conditions for the operation of the public transport services and it will provide an opportunity for CIE to demonstrate that they are equal to the challenge of responding to these measures by providing a punctual, reliable and satisfactory service.
All of the measures being taken in Dublin will not necessarily be appropriate to other cities but the experience with the Dublin approach should help in considering how best to deal with the problems of traffic congestion elsewhere.
Reverting to the general question of CIE's overall financial position, I think that Deputies will agree that the continuing serious deterioration in the board's finances emphasises the need for the review of CIE's activities which was put in hands last year with the assistance of the management consultants, McKinsey and Company. The consultants have been studying CIE's four main businesses, that is, the railway, Dublin city bus services, provincial bus services and road freight. They are now in the final stages of their work and their report is expected to be completed this month. This report, together with other recent reports on transport matters, will form the basis for an informed review by the Government of policy in relation to CIE and public transport generally.
Premature publicity about the McKinsey Report focused on the possibility of an attenuation of the railway system, but, as I have already made clear, this is but one of a range of options examined by the consultants. The Government recognise that many of the public transport services which the community requires cannot be judged solely on commercial criteria. In their consideration of the future role of the railway the Government will, of course, take account not only of the high financial costs involved but also of the overall contribution which the railway can make to the achievement of social and economic objectives. The Government will, however, have to be satisfied that services supported by the taxpayer are operated as efficiently and economically as possible and that the community is getting value for money.
I will shortly be introducing a Bill to provide additional capital borrowing powers for CIE and Deputies will have an opportunity for a debate on CIE on that occasion.
The additional £2.7 million which is required in 1980 under subhead E of my Department's Vote relates to work under the Cork Harbour Development Scheme and represents additional moneys allocated by the Government during the year to enable Cork Harbour Commissioners to proceed with major dredging, reclamation and marine works required for the purpose of the proposed roll-on-roll-off facilities at Ringaskiddy.
The excess expenditure of £193,000 for construction works at airports arises mainly in connection with a number of projects completed during the year, including an extension of the apron at Dublin Airport, additional fuel facilities at Shannon, and the provision of a helicopter pad at Cork.
An additional £340,000 is required on this subhead to meet an unforeseen increase in the cost of overtime which was due mainly to improved overtime rates which were negotiated under the civil service conciliation and arbitration scheme. In keeping with Government pay policy my Department endeavour to keep overtime working to an absolute minimum. However, a considerable amount of overtime working is inevitable in areas where the operational requirements of the aviation and meteorological services specify a 24-hour day, seven days a week coverage.
The additional sum of £250,000 is required to meet the increased costs of consultancy services in the transport area, including the review of CIE finances which I have already mentioned and also work related to the establishment of the Dublin Transportation Authority.
The additional £40,000 sought under subhead B.I. is due principally to increases in travelling and subsistence rates and for expenditure on cleaning and related services at the new headquarters building for the Meteorological Service which was opened during the year.
The additional £61,000 sought under subhead C is required to meet increases in the costs of consumable stores which were greater than anticipated mainly because of unfavourable exchange rates in respect of purchases necessarily made abroad.
The additional £68,000 under subhead M is required to meet the costs of the Whiddy inquiry and for the Transport Consultative Commission.
Appropriations-in-aid are now expected to yield some £7 million as compared with the original Estimate provision of £9.7 million. The shortfall of £2.7 million arises from the fact that Aer Rianta, who manage and operate the State airports on my behalf, now expect to be in a position to surrender a sum of £1.6 million this year as compared to an original estimate of £4.3 million. This downturn is attributable to a number of factors.
The effects of the world recession, coupled with a significant switch from charter to scheduled services has had a dramatic impact on traffic through Shannon. Transit traffic through the airport is down 38 per cent while terminal traffic is down 10 per cent. The consequential net loss for 1980, taking into account both landing charges and lost revenues from duty free sales, catering and so on, is estimated at £1.3 million. Traffic through Dublin and Cork Airports is also down about 6 per cent and 13 per cent respectively. Apart from being hit by the general downturn in travel, the Aer Lingus strike, which lasted for five weeks in the peak July-August period, added its own problems and affected both the revenue and cost sides of Aer Rianta's operations. The ALT strike accounted for £1 million in lost revenue while the repercussions of the strike in terms of ALT payroll costs will amount to a further £0.75 million.
The total amount of the increased expenditure is £20,352,000—including a shortfall of £2,700,000 in appropriations-in-aid—but there is an offset of £1,093,000 in savings on other subheads. Accordingly the net amount required is £19,259,000.
I recommend the Supplementary Estimate to the House.
