asked the Minister for Communications if he will give details of Exchequer subventions to CIE in the last three years; and the proportion this figure represented of the total operating cost.
Ceisteanna—Questions. Oral Answers. - CIE Financing.
10.
Exchequer subventions to CIE in the three years 1981 to 1983 were £85 million, £96 million and £86 million respectively. The subvention represented 35.4 per cent in 1981, 34.4 per cent in 1982 and 28.7 per cent in 1983 of total operating costs. CIE introduced a change in accounting practice for the 1983 accounts as a result of which certain receipt and expenditure figures are shown in gross terms, whereas those for 1981 and 1982 were in net terms. The percentage of subvention to operating costs for 1983 on the basis of net figures would be 30.3 per cent.
Last year the Minister laid down guidelines for the funding of CIE and he laid down certain percentages, particularly in regard to operating costs. Will he tell the House if he is satisfied that those guidelines have been adhered to by CIE?
The figures I have given for the three years were figures that were settled under the old system and in all cases they under-represented actual CIE losses. In effect, there was an under-provision. In mid-1983 I introduced a new system where CIE would get one-third of their expenditure as a subvention——
Or half the revenue.
Yes, but effectively that is one-third of expenditure, provided that expenditure was reduced in real terms by 2.5 per cent per annum. Deputies will be aware that in 1983 the losses for CIE fell from £109 million to £102 million. That was the first reduction achieved in recent years. If we had taken the path on which CIE deficits had been going for 15 years, the expected loss for 1983 would have been of the order of £130 million and the outturn of £102 million was a dramatic improvement. Because so many bad things are said about CIE, I want to take this opportunity again to commend everyone in CIE for that performance. We have not yet the results for 1984, although informal figures will be available shortly. I understand that CIE losses in real terms will reduce again in 1984 and will probably turn out to be of the order of £104 million or £105 million. They are tentative figures. There has been a great improvement in the whole situation for which the Government and I are very grateful.
11.
asked the Minister for Communications if he will give details of (a) the size of interest bearing and (b) non-interest bearing capital liabilities on CIE for each of the last three years; and if he will indicate whether, in his view, CIE will be in a position to service such liabilities from its own activities.
CIE's interest bearing capital liabilities were £133.655 million in 1982; £182,070 million in 1983 and £208.634 million in 1984. The only non-interest bearing capital liabilities related to Ostlanna Iompair Éireann and these were £1.4 million in 1982; £7.4 million in 1983 and £11.253 million in 1984. CIE are required to service their borrowing liabilities from their resources including the State subvention.
I join with the Minister in wishing CIE every success in improving their situation. According to the Minister's answer, the amount increased from £133 million in 1982 to £208 million in 1984. Can he tell us the reason for this?
The reason is that the capital allocation for CIE is almost always entirely non-Exchequer capital— in other words, they have to borrow for long-term borrowing purposes. In the past year or two their capital programme has been of the order of £50 million or £60 million. This has to do with the replacement of the bus fleet and the replacement of rolling stock on the railways.
Is the Minister saying that there has been between £50 million and £60 million additional capital investment by CIE in the past two or three years——
Per year.
Is this mainly in respect of the replacement of buses?
Yes, and last year on rolling stock also.
Is the Minister satisfied that is good value for money?
It was very necessary to commence the programme of replacing rolling stock and my predecessors deserve credit for that. It means considerable expenditure and this adds to the CIE deficit which has to be met by the taxpayer. However, not to have undertaken the replacement of the bus fleet and the rail rolling stock would have meant less efficient services and more costly maintenance. It was a wise decision even though it is very costly.
Would the Minister like to repeat the OIE element in the figures he has given? How does he see the future in that regard?
I said that the only non-interest bearing capital liabilities related to Ostlanna Iompair Éireann and they were £1.4 million in 1982, £7.4 million in 1983 and £11.253 million in 1984. As the Deputy will know, responsibility for OIE has been transferred to the Minister for Labour and I have to suggest that the Deputy tables a question to that Minister.
That is a neat shuffle. When the Minister said non-interest bearing, does he mean that was an Exchequer loan given without interest?
That is right.