Dáil Éireann debate -
Wednesday, 3 Jul 1985

Vol. 360 No. 2

Transport Bill, 1985: Second Stage.

Minister for Communications (Mr. J. Mitchell)

I move: "That the Bill be now read a Second Time."

As the House is aware, CIE have been under the microscope almost since I became Minister in late 1982. There was good reason for that as 1982 marked a 13th year of losses escalating by a multiple of the rate of inflation. When I came to office, I said that my first priority for CIE was to create a new environment for CIE to operate within. Within six months of coming to office a new five-year approach to CIE's finances had been decided on. The abandonment of the wishful thinking, the lack of control and the drift, which characterised Government's relationship with CIE for many years past, became a must.

The Government introduced as a first step in June 1983 a package of measures covering a five-year period aimed at reducing CIE cost to the Exchequer and improving the organisation's performance. This package included new arrangements for determining the CIE subvention which is now limited to the lesser of either half of the board's revenue or to one-third of their expenditure. They also provided for the first time ever for payment of the subvention "above the line" in recognition of the provision by CIE of certain unprofitable but socially desirable services. Most of 1984 was taken up with building on that foundation as conclusions on the longer term future of CIE, in the context of the McKinsey report and other reports on the transport sector, were overdue. A fresh start for CIE was mapped out in Building on Reality.

The Government subvention formula effectively provided that one-third of CIE's expenditure would be paid by the Government provided that expenditure is reduced in real terms by 2½ per cent per annum up to 1988. This was extended to 1989 in the context of the national plan. That these targets have been met so far, and without massive redundancies or cuts in service, is testimony to the wisdom of the approach.

Now CIE know well in advance what their allocation is and can plan to keep within it. Previously, a figure — often bearing no relation to reality — would be notified to CIE two or three weeks before the commencement of the relevant financial year. This lack of notice and lack of reality were constantly rewarded, not surprisingly, by being ignored. As a result CIE's finances had rocketed almost out of control.

The improvement now is perceptible and real. This is good news, not alone for the board, management and workforce of CIE, but also for the taxpayer who has to fund it. While there is no room for complacency, I think it right that these achievements should be recognised and I want again to congratulate all in CIE for their efforts.

The financial provisions have been accompanied by a major overhaul and strengthening of the board of CIE. The introduction of the Dublin Transport Authority Bill and the Road Transport Bill are further steps in the creation of the new environment which I have set out to establish.

The Bill to reorganise CIE into three operating subsidiaries under a parent board is in preparation. I had hoped to have it before the House at this stage. That was not realised but it will be enacted as soon as possible and, in any event, before the end of this year.

Until the reorganisation has been completed, it is understandable that some uncertainty and worry would abound in CIE. Indeed, I understand that among some sections in CIE it is leading to resistance. In the light of that situation, it is important that it should be known and understood that the whole purpose of the reorganisation is not to close CIE, as some people suspect, but to ensure their future by organising CIE in a way best suited to serve the customer, whose support is vital to any company's success. The completion of the reorganisation is in the best interests of the workforce and the travelling public alike.

I want to again appeal strongly to all in CIE to assist in the reorganisation so as to ensure that recent encouraging trends in the CIE performance are continued in the future. 1983 and 1984 have brought a 20 per cent reduction in real terms in the deficit. So far in 1985 the CIE performance is on target for a future reduction in the deficit in real terms. This represents a dramatic improvement after the trend of the previous 15 years. Inflation has been down to low single figures over the past few years and CIE are still beating it — a cause for much encouragement.

Deputies will realise from the decisions taken so far by the Government and the financial provisions made in relation to CIE, the work of creating a better environment for the organisation to operate within is evolving at a fairly satisfactory pace. We cannot at the same time be complacent. The measures which have been taken and are planned are in the longer term interest of CIE and its workforce.

The Bill before the House today is of significant importance for CIE's operations and capital programme and is another development in the creation of an improved operating environment for CIE. The purpose of the Bill are, first, to enable CIE to convert £30 million of the board's temporary borrowings into a loan repayable over a period of ten years with the Exchequer providing £3 million annually for repayment of the principal of the loan and, secondly, to increase the statutory limits on CIE's capital borrowing power from £230 million to £250 million and the corresponding guarantee powers of the Minister for Finance. Under section 4 of the Transport Act, 1983, CIE may incur, with my consent and that of the Minister for Finance, temporary borrowings of up to £40 million. This borrowing power would normally be used by CIE to respond to short term cash shortfalls, to meet unforeseen payments and for normal overdraft purposes.

Between 1979 and 1983 the borrowing facility has been used, with Government approval, mainly to finance the difference between total CIE subvention and deficit, where the total subvention made available was insufficient to meet the board's deficit on subventible activities. Since 1979 there was considerable expansion in the size of the shortfalls which led to the revision of the statutory limit from £5 million to £20 million in 1981 and to £40 million in 1983. At 31 December 1983 CIE had approval for temporary borrowings up to a limit of £36.245 million. There has been no change in CIE's temporary borrowing limit in the meantime.

The shortfalls which arose in the period 1979-83 resulted from an assortment of reasons, for example, under-estimation by CIE, increased costs, including labour and oil charges, industrial disputes and fall-off in traffic. Other significant factors were delays in sanctioning increases in fares and rates and subvention provisions, which were not realistically related to CIE estimates of the board's requirements. Decisions to bring the deficits closer to the subvention limit set were unacceptable because they would have involved extensive cuts in jobs and services. Inadequate levels of subvention meant that the CIE financial objectives were unattainable and led to Government approval for financing shortfalls by temporary borrowing.

When I became the Minister responsible for CIE the subvention for CIE for 1983 had been already fixed at £86 million. In the review which took place immediately after the Government came into office it was clear that there was no possibility of increasing the subvention beyond that level, even though it was recognised that the board's deficit would exceed the subvention. In the circumstances the only real alternative was to let CIE carry the shortfall of almost £16 million in 1983 by temporary borrowing. This was the cause of the increase in the statutory limit in the Transport Act, 1983.

Interest charges paid on the temporary borrowings, which fall to be met by the board out of their revenues, in the period 1979-1984 amounted to almost £13 million. In 1984 alone the interest charges amounted to about £4.5 million. It was clear to me from the beginning that the interest charges on the temporary borrowings were a considerable burden on CIE. I felt that the board should not have to bear the handicap of interest and repayment costs, arising in the main from the failure of Government either to provide in the past adequate levels of subvention over a number of years or to take decisions which would have enabled CIE to move significantly closer to the direction pointed by the subvention limits fixed.

Furthermore, the costs of temporary borrowings are high because of the levels of interest demanded for short term loans and the associated roll-over costs. Additionally, the hard core nature of the debt was becoming a source of concern. I came to the conclusion that a substantial reduction at an early date of the principal sum outstanding was essential and saw an urgent need to relieve CIE of the bulk of the burden as quickly as possible.

In planning for CIE's future the Government decided to reduce the board's temporary borrowing by £30 million by the rescheduling of £30 million into a ten year loan. The enactment of the relevant provisions of the Bill is necessary so that CIE can raise a loan of £30 million repayable over a 10 year period in equal annual instalments, financed by the Exchequer. The board will continue to be responsible for the interest charges on the loan as well as the balance, that is £6.245 million of the temporary borrowings, but the charges will decrease annually in line with the repayment of the principal. The board are also required to eliminate the balance of the temporary borrowings from their own resources. The existing statutory limit of £40 million for temporary borrowings is being retained.

The treatment of CIE temporary borrowings in this way will make a useful contribution to the regularisation of the finances of CIE by relieving the board over a period of years of substantial borrowings as well as easing the total CIE interest burden.

To complete the information on temporary borrowings, CIE will need to increase their temporary borrowings by £8 million later this year and by a further £8 million in 1986. This increase of £16 million was foreseen when the subvention allocations for 1985, 1986 and 1987 were being fixed. This will arise from the Government's acceptance of responsibility for the interest charges in respect of the capital investment in the electrification of the Howth-Bray line. These charges will amount to £16 million in each of the three years 1985/87. Because of the difficult financial situation it was possible to provide no more than £8 million in each of the years 1985 and 1986, but the shortfall in subvention of £16 million will be made good in 1987, when CIE will be paid £32 million in respect of the interest charges. These necessary additional temporary borrowings will be for a very limited period.

CIE's capital expenditure is financed from the board's internal resources, mainly depreciation provisions, borrowings, leasing arrangements and Exchequer capital advances. The borrowing arrangements require my approval and that of the Minister for Finance, who has power to guarantee them. CIE's total capital borrowings at 31 December 1984, amounted to £216.373 million. CIE need to borrow £15.416 million for capital purposes for 1985 so that by 31 December 1985 the board's capital borrowings are expected to amount to £231.789 million. As the statutory limit on capital borrowings is £230 million, it is necessary to increase that limit and I am now proposing an increase of £20 million to give a new limit of £250 million, which will be adequate to cater for the board's anticipated borrowings for the foreseeable future.

The board's original capital allocation for 1985 was fixed at £30 million and it had been expected that the existing statutory borrowing limit would have been adequate for the borrowing requirement involved in financing the CIE capital programme. However, in an effort to ensure continuity of employment at the GAC bus building plant at Shannon, the Government decided to reschedule the CIE capital allocation for bus building in the period covered by the national plan. As a result £10 million from the 1987 allocation for bus building is being brought forward to 1985. This brings the total CIE allocation for capital purposes for 1985 to £40 million. This change created the need for increasing the board's statutory borrowing limit for capital purposes at this stage.

The Government, in recognition of this decision, placing an additional financial burden on the board, decided that the extra financial charges arising on the authorised increased borrowing which are estimated at £0.5 million in 1985 will be recouped to CIE this year. Similar arrangements will apply in respect of 1986 borrowing.

The Government have made provision for substantial capital expenditure by CIE over the period of the national plan. The board's capital allocations for this period amount to £93 million. Provision has been made for expenditure in this period of £36 million on the CIE bus programme, including bus acquisition. Almost £43 million will be spent on mainline rail and mainline carriage acquisition and just over £14 million will be spent by the board on their signalling-communications and normal capital programmes, including £1.16 million which has been earmarked for work to be carried out at Rosslare Harbour in 1987.

The allocations for bus acquisition will facilitate continuance of the board's current bus replacement programme which commenced in 1980. In February of this year replacement of the board's city single deck fleet was completed. In addition 184 rural single deck buses have been programmed for construction and delivery in 1985.

The provision of almost £43 million for mainline rail, including carriage acquisition, will enable continuance of CIE's programme to construct 124 mainline carriages at Inchicore works by 1988. This programme which currently employs 61 persons was approved by the Government in 1982. The total cost of the project is estimated at £53 million in 1984 prices. The first of these carriages were put into service on the Dublin-Cork line in July of last year. A total of 34 are now in service on the Dublin-Cork, Dublin-Waterford and Dublin-Galway lines. The introduction of these new air conditioned carriages has reduced journey times and gives greater standards of passenger comfort than ever before. The balance of CIE's capital allocations over the period of the plan, i.e. some £14 million, will be spent on signalling and communications and on the board's normal capital programme. The signalling programme which began in 1980 is scheduled for completion in 1988 and is designed to update the signalling system on the mainline railway.

The board's long term capital borrowings are very considerable indeed. I am concerned about this level of borrowing which is a matter which will need to be given careful consideration at a future date.

I now wish to refer to rail safety about which I am very concerned. A few times this year rail safety, particularly in regard to the carriage of dangerous substances, made the news headlines. I know that the chairman of CIE shares my concern and is willing to take any necessary steps to make good any deficiencies which are brought to light. Rail is a very safe mode of travel but continuous vigilance and awareness of the risks and dangers of rail accidents is essential. There is a need for an on-going search for additional improvements in the interest of safety. I am satisfied that current arrangements relating to the transport of dangerous substances by rail embody all reasonable and practical elements. Nevertheless, having regard to recent events I have instituted another look at all aspects of the question of the transport of dangerous substances and involving other Government Departments and other interests immediately concerned.

The Government in charting the future for CIE have fully recognised the extent of the board's difficulties and in so far as possible special measures have been introduced to deal with the situation. The Government have also, of course, set very specific financial targets for the board but they have also made available financial incentives to help in their achievement. These targets will not be easily achieved but they are realistic and should be capable of being realised. It is now up to management and the workforce to ensure the future success of the organisation.

I commend the Bill to the House.

Mr. Wilson

We are becoming accustomed to listening to the Minister beating his drum about what he has done for CIE since he took office and the arrangements he has made for financing CIE. I know that the above the line subvention has now been adopted. If the Minister searches his file he will see that the decision was taken by his immediate predecessor. Consequently introducing it as something which was specifically introduced by him does not carry weight.

The reference to lack of reality is interesting in that the House has been asked to make provision for £30 million extra for CIE which will be paid by way of non-repayable grant for the next ten years. It is to be £3 million per year. In other words it is a subsidy to CIE. The Minister has explained in detail how the necessity for this arose. Temporary borrowings were made in order to cope with the deficit as between what the Government were prepared to make available to CIE and what the costs turned out to be each year. What we are being asked to do is vote £30 million to CIE in instalments of £3 million over three years. The conversion of the borrowings to a loan for a ten year period is part of what the Minister is doing but we must call a spade a spade. We are giving £30 million extra to CIE on top of what the Minister says they are being asked to do with for the period of the plan. This runs for seven years longer than the plan.

The Minister mentioned the introduction of the Dublin Transport Authority Bill and regards this as a major overhaul of what is going on in the transport world. We have already criticised that Bill. I sent the heads of a Bill to the parliamentary draftsman in December 1982 before leaving office and every piece of muscle in that Bill was taken out by the present Minister. Many of the Government back benchers agree with me that this Bill has not got the muscle it should have. The opportunity was missed to put a Bill on the Statute Book which would succeed in improving Dublin city transport to a degree which is not now possible due to the weakness of the Bill we have been asked to pass.

The Minister mentioned legislation to set up the three subsidiaries. Promises were made that this would come before the House in this session. We must criticise the Minister for not bringing it before the House. When I was Minister I thought the Dublin transport authority should be given priority and I recommended that the Dublin city bus service should be taken away from CIE. We could have seen how a combination of the Dublin transport authority, as conceived by me, and the new Dublin city services organisation would work before going on to deal with the rest of CIE, namely the national rail and bus services.

The Minister chose to break it into three parts. He has a weak Dublin transport authority and this will show over the years in that difficulties will be created for the Dublin city scene. I am not saying I disagree with what the Minister did with regard to the other two. I am saying I would have preferred if the Dublin Transport Authority Bill was passed, the authority set up and the Dublin city services sector set up which would then work in harmony with the Dublin transport authority. CIE were conceived of as agents of the Dublin transport authority within the heads of the Bill that we sent originally to the parlimentary draftsman.

Referring to uncertainty and anxiety in CIE regarding the reorganisation, the Minister said:

In the light of that situation, it is important that it should be known and understood that the whole purpose of the reorganisation is not to close CIE, as some pessimists fear, but to ensure its future by organising it in a way best suited to serve the customer, whose support is vital to any company's success.

I emphasise the words, "best suited to serve the customer". I am glad to hear the Minister sound an optimistic note about the company. I would be supportive of him in that regard because I presume his purpose is to take CIE out of a rut and put them into the field as a competitive commercial venture in all their three facets. Therefore, any criticism I offer will not impugn that position but we must not lose touch with the reality and some parts of the Minister's statement would indicate that he has lost touch with reality.

The Minister said also that he was appealing strongly to all in CIE to assist in the reorganisation so as to ensure that recent encouraging trends in the company's performance are continued. That sentence must be taken in the context of a Bill providing for the payment of £30 million to CIE apart from the arrangements the Minister has made in respect of his above the line subsidies to the company each year.

The Minister has referred to the importance of serving the customer but the customer does not seem to be anxious to be served as is indicated by some statistics outlined on page 354 of the Irish Statistical Bulletin. These statistics indicate that the customer is shying away from the improved service. In 1980, for example, passenger journeys in Dublin city totalled 175, 137. The Library here were not able to obtain statistics for me relating to 1984 but by 1983 the corresponding number of passenger journeys was 158,244. I agree with the Minister that the whole purpose is to serve the customer but obviously increasing numbers of customers are not satisfied with the service. In 1980, too, other city services accounted for 24,489 passenger journeys but this number fell to 20,967 by 1983. We can fiddle around as much as we wish, by audit or by accounts, with the moneys but at the end of the day the passenger will be paying and these in terms of transport are usually either bus or train passengers.

The number of long distance internal passenger journeys in 1980 was 45,893. The corresponding number in 1983 was 45,520. The overall figures as presented in the statistical bulletin were 245,519 in 1980 and 221,731 in 1983. Those figures would seem to indicate that much remains to be done by way of installing customer confidence in CIE.

If the Minister's purpose is to instil a commercial and competitive spirit and a passenger serving spirit into CIE, I am in total agreement with him but perhaps a more radical look will have to be taken at the service being provided with a view to ascertaining why the numbers of passengers are not increasing. We can become wrapped up in organisational problems and direct all our attention to those problems but at the end of the day the important factors are the numbers of passengers using the service and, linked closely with that, the type of service being provided, plus the potential of increasing those numbers during the coming years.

A few days ago we had a wrangle in the House about Dublin Port and Docks. That wrangle concerned management and unions but there was not a word from anyone about those who are paying both management and unions. They are the people who are using the port and whose requirements must be met. The parallel with the subject we are talking of is exactly the same because in this case the passengers will have to pay.

I gather from what the Minister said that the approval for temporary borrowings amounted to almost the limit of £36.245 million. I presume the Minister means that the company had borrowed that amount by way of temporary borrowing. He gives an analysis of why this happened and I have no quarrel with that analysis. He refers to the £86 million subvention that was allocated to CIE for 1983 which was the Minister's first year in office. I recall distinctly being responsible for that allocation. At that time we were putting together our policy on transport and on all the other areas of national Government. We must take into account that this Bill is an effort to cope with temporary borrowings, not merely for that year but for this year, for last year and for a number of years that involved the putting together of the £32 million.

That is what we are dealing with here. We gave Aer Lingus a subsidy for three years in respect of the North Atlantic service but we did not like to refer to those moneys as a subsidy. They were moneys transferred from the Exchequer to the funds of Aer Lingus just as we are talking here about money being transferred from the Exchequer to the funds of CIE. We are talking about a non-repayable grant of £3 million during a ten-year period. Admittedly, CIE will have to pay the interest on the money and will also have to pay the £6 million the Minister referred to, that is the sum that is left from the total aggregate of temporary borrowings sought.

I should like the Minister to clarify the matter of the £8 million CIE will need to increase their temporary borrowings later this year. The Minister tells us that a further £8 million will be required by the company in 1986. This is connected with the Howth/Bray rapid transport line, the DART. The Minister said:

These charges will amount to £16 million in each of the three years 1985-87.

I find this a useful bit of political footwork—

Because of the difficult financial situation it was possible to provide no more than £8 million in each of the years 1985 and 1986, but the shortfall in subvention of £16 million will be made good in 1987, when CIE will be paid £32 million in respect of the interest charges.

I do not know what particular virtue attaches to the year 1987 but that seems to me to be just a useful piece of political footwork. The Minister has decided that he will not be Minister in 1987, that some other Minister will have the responsibility. Therefore he will not pay this year but he will shove it on to the year 1987 and hang this considerable sum around the neck of the Minister who will be there in 1987.

I was a little disappointed at the Minister's treatment of the capital project. I must say I see very substantial arguments for the capital sector of this Bill. My disappointment lies in the fact that not enough information has been supplied about what is happening in the bus building plant. The Minister will know that I complained yesterday, in the august presence of the Ceann Comhairle, of having questions refused over a wide area in the transport field because the Minister has not got responsibility etc. I did try to get a question down about GAC, the financial arrangements they had made with CIE, about how much information the Minister himself had vis-à-vis this financial arrangement. After all, the complete plant in Shannon is owned by CIE. All the machinery and so on is owned by CIE and the Bombardier company was a tenant. They have gone and GAC have taken over. Under what conditions have they taken over?

As the Minister is talking about rationalising finances and so on, I would like some information on the cost of buses coming out of the GAC plant at present, how it compares with the cost of similar buses being put together elsewhere either in Europe or in North America. We took decisions on the rate of building of buses, both single and doubledecker, in the plant at Shannon when Bombardier were the tenants. We found we had to exert a certain amount of muscle to keep them to the programme we had outlined for them.

My complaint is that in this House we are responsible for the capital investment — what we are doing here is increasing the amount the Minister for Finance can guarantee — and, therefore, we are entitled to full knowledge of what is going on, even to access to reports of how satisfactory are the buses they are assembling or making. I undertook a minor survey of the actual bus drivers at a time when Bombardier was the subject of severe criticism both in this House and on the part of people — some with vested interests, I must say — outside it. One had to learn how to interpret an article which was in praise, say, of a certain bus, call it whatever you like — bus X. Of course one found that the article criticising Bombardier and praising this other bus was planted by the manufacturers of the bus coming out well in the comparison. This House should be in a position to have full information on costings, on the business arrangement for GAC and on the quality of the buses. I must say that the drivers I interviewed at that time were quite pleased with the bus they were getting as distinct from outside critics who said it was a bad bargain and a poor bus. From the point of view of availability and driving — apart from some teething problems — they claimed it was a good bus to drive. Here the point I want to make is that the Minister tells us about continuity of employment at the GAC bus plant in Shannon, when he said:

... the Government decided to reschedule the CIE capital allocation for bus building in the period covered by the national plan.

I should like to know exactly how many buses are being produced per week — the Minister might give a list of buses here — the costings, the arrangement as far as the business side of GAC is concerned. The Minister might be able to give me some of that information when replying. I shall be particularly interested in the cost per bus whether single or double-decker.

We took a decision about the main line carriages at Inchicore. I am glad that the Minister has continued — I know his heart would lie in that general direction — the Inchicore effort.

The Minister said further:

The introduction of these new air conditioned carriages has reduced journey times and gives greater standards of passenger comfort than ever before.

Yesterday I had a question down about the unfortunate death of a passenger on the Cork-Dublin line. One of the statements — I do not think it was an irresponsible statement because it was made by a very responsible journalist — was that the temperature in the carriage was over 80 degrees and that there was no way it could be lowered. If that is so, that is air-conditioning gone haywire. Those of us who have to endure parts of this House will know that when that occurs it is impossible to work and difficult to survive. The communication problem which the Minister admitted in his reply had not been attended to since the Cherryville disaster, should be attended to as a matter of life and death. This particular incident was unfortunate and I do not want to make a meal out of it in that the person was going for treatment for a heart disease.

The Minister might be able to tell us when the three Bills for the setting up of the Dublin city bus services company will be introduced. Also he might like to give some reflections on their relationship to the new Dublin Transport Authority, how he conceives the Dublin Transport Authority CIE "interface" might be a good word. I do not want to get into clichés already, but I have indicated to the House that my thinking was that CIE should be the agent of the Authority. Consequently, the Authority would be in a position to put their plan into operation, a plan being basic to the Bill for which I had ambitions. I know the plan was thrown out totally by the Minister. That is my major criticism of the Bill, probably the most important criticism.

Some time ago the Minister said that CIE was in a markedly better financial position than they were a few years ago when the Government came to power. He said this in one of his press releases. In the light of the statistics I have read into the record of the House, I cannot see that. As far as commercial criteria are concerned, money cannot come from anybody other than from the passengers; and, if the number of passengers is going down, then one has to either charge outrageous fares to keep the accounts going or get into a worse financial position. The Minister has not denied a report on 23 March 1985 in the Irish Independent which said that the deficit in 1984 would be £114 million but that the estimated deficit for 1985 was £123 million. Judging by what we say will be the rate of inflation, some of the claims the Minister is making seem to be out of kilter with that.

Mr. J. Mitchell

Those figures are inaccurate.

Mr. Wilson

It is under 5 per cent, then, on the total of last year. I will listen to the figures with interest. The figures I had admittedly came earlier on in the year and there may have been an improvement. But up until the start of this debate I could not get up to date statistics for 1985. There is not a noticeable improvement in the finances.

In connection with that, the numbers that DART is now taking would give some heart to those who study the statistics. The Minister has said in this respect that the figures would want to double before it would be a paying proposition or before it would break even. I do not know what factors have been taken into consideration when coming to that conclusion. Is the Minister talking about taking the servicing of all the loans into account when he gives that figure? The really pertinent question to ask is: what is the position about feeder services with regard to DART? We cannot get the maximum potential out of DART until arrangements have been made with regard to the feeder services. I know there are trade union difficulties that have been going on for some time. Optimistic statements were made about having all those problems ironed out and the wider problem of the one-man buses ironed out by the end of 1985. Will the Minister make some comment on that in his reply?

If available, I would like the Minister to give the House the estimated revenue for 1985 and the actual revenue for 1984 as a percentage of costs. The estimated subvention for Dublin city bus services that I have here for 1985 is £17.6 million. Perhaps it is a pipedream I was entitled to when I envisaged a strong Dublin Transport Authority and a Dublin city bus service working together harmoniously, and where harmony could not be arrived at the powers given to the Dublin Transport Authority would provide a method of inducing harmony. I had this pipedream that Dublin, a vast city and conurbation, should be in a position to make a profitable bus service available and a transport authority that would be in a position to take certain strong measures to achieve that. I know there is a vast question of pedestrianisation and of access to the perimeter of a pedestrianised area for buses. There are various problems to be dealt with. It may be naive but I do not see how certain private transport companies can keep going, making a profit with limited customer availability, and not CIE in a Dúblin city bus services structure backed by a strong Dublin Transport Authority. They would have a huge number of customers available and should be able to provide a profitable service, one that would be in aid of the transport finances in general.

Some time ago I gave statistics for various European cities of roughly the same size as Dublin and Dublin did not come out of that comparison too badly. If the Minister's optimism extends to that ambition of a Dublin city bus service which would provide a good service at a reasonable cost and make a profit, I support him. A statistic which was scattered about earlier in the year was that it took £100,000 to keep one CIE bus on the road for one year. I know that CIE used that statistic when they were attempting to rebut arguments put by a suburban deputation which wanted a service to their suburb. It is a very substantial cost figure. I presume a heavy percentage of that would be taken up with wages. The figure would work out at £187 million to keep the Dublin city fleet on the road for one year.

The statistic I gave of falling passenger satisfaction is difficult to understand when one looks at the statistics for private cars as between 1980 and 1984. Between those years there was a drop from 736,000 to 711,000 private cars available for use. That should provide an extra opportunity for a bus service. The House will know, if it studies the figures, that the major subvention each year for CIE is absorbed by the railways. What is the Minister's view with regard to further expansion of the suburban rail services? The Minister has generally indicated that he is not in favour of a similar type of operation to the Howth-Bray operation for the Tallaght area. The Minister has also gone on record as saying that, if he were Minister, he would have been very reluctant to embark on the Howth-Bray project. It will take time, but in time this project will be justified. For the standard of service and comfort, it is already justified; but I am talking also about the hard-nosed realm of commercial viability. The potential is there. I would aid the Minister in his efforts to try to have the feeder services provided as early as possible. When the Bill setting up the three separate companies comes before the House we will have an opportunity to assess the provincial bus services operation — I read some statistics into the Official Report of the House from that as well — and also an overall picture of the railway system.

To conclude, I am in support of and not opposing this Bill. I want the truth to be seen to be told with regard to what this £30 million is. It is temporary borrowings, all right, being converted into a loan and then this mechanism is being used to pay an extra £3 million a year for ten years to CIE. I am not quarrelling with it, but that is what it is. We should not lose sight of that. With regard to the increase of the amount up to £250 million which the Minister for Finance can guarantee in moneys to be used for capital purposes, of the two major areas for this mentioned by the Minister, the GAC plant in Shannon is a venture that should be supported. I am making a plea for more information for this House and for the Members of this House with regard to the workings of that operation, the costings, etc. The other major one the Minister mentioned was the Inchicore venture, whose product, I gather is worthy. There will be some difficulties to be ironed out with regard to the operation of air conditioning and communication from the new carriages, and this should be attended to as quickly as possible. With regard to the signalling, of course we know from the inquiries that were conducted and so on that it is absolutely essential to have a first-class system and this is a very worthy place to deploy some of the capital investment.

Mr. Carey

I welcome this Bill and in particular the note of optimism which the Minister brings to the House in relation to CIE, our national transport company. I suppose the Minister should feel relieved that the spokesman for the Opposition agreed, even though reluctantly, that he was entitled to some optimism about the future of CIE.

This Bill is an effort to make financial targets feasible, and the Minister is taking the right steps, in relation to the capital spending and the interest subsidy which he is proposing in this Bill. The three areas directly concerned, GAC in Shannon, in my constituency, the mainline rail and the DART system, are all new life to this ailing company. The capital spending in GAC at Shannon has been justified. This company were set up after a series of prolonged industrial disputes in the city of Dublin when it was found impossible to manufacture schools buses, rural buses and city buses. People in Shannon with no native skill have taken together to themselves this new company and have proved nationally that they have the determination and ability to succeed. Most of the employees in GAC were made redundant from different companies on the industrial estate. They had not the basic engineering skills, yet they have proved themselves adaptable. I commend the Minister on the fine work he has done in reorganising the finances which were set out in the national plan to accommodate the production which GAC now find they can achieve. This line of buses which they have sold has been successful in the country and in the cities and I am sure that the school buses will be successful also. These vehicles are manufactured to the standards which CIE look for. While we have in Shannon an adaptable workforce and a quality product, it is not easy, as Deputy Wilson required, to make a fair comparison because different items will be involved. If Deputy Wilson had changed his request to the Minister to mean some kind of cost benefit analysis of the buses I would understand it, but competitors in this industry have come in here previously and offered buses which have not proved to be the most reliable. The GAC product has proved itself despite early hiccups when various problems arose and Minister went from this House down to Shannon. When the management of Bombardier, now GAC, began to rely totally on the local workforce there was a great response and people in our area are happy that this company, who rely a great deal on local services for small products, have without doubt made a mark in the Shannon region and have helped us nationally. The Van Hool project in Inchicore left a bad taste and GAC, Bombardier and their workers deserve the thanks of this House.

However, I am not happy about one aspect of the GAC operation. When that company were set up they intended to export a considerable amount of their product. Unfortunately, to date their success in foreign markets has been negligible. They have sold some buses to the US and at present they have a bus in the Middle East. However, they do not seem to be making great strides in this area, and I ask the Minister to impress on the company the necessity to have alternative products by the time the period of this capital allocation runs out. In fairness to CIE and to the Government, there is a limit to what the country can purchase in the way of buses. The GAC have a duty to the employees in Shannon and to the myriad of small companies there in the mid-west region and throughout the country who are supplying them with goods and services and who should get continued support.

The capital spending has been successful also in the mainline rail coaches and in DART. Teething problems arose in the commissioning of coaches in mainline rail and there were numerous instances where doors did not open or did not close, long delays and so on, but the public generally are very satisfied with the quality coaches which are on the mainline rail from Dublin to Galway, Cork and Waterford. Travel from Limerick to Dublin in the train now is really superb, and the CIE engineers and operational staff deserve the praise of this House for the manner in which they conduct themselves. The only regrettable feature of that CIE operation on mainline rail is when they introduce some of the old coaches as a supplement when demand is heavy. Some of these coaches can be a disaster in winter. One can travel from Dublin to Limerick in freezing' cold with no heat whatever, in rare contrast to what Deputy Wilson talked about, the poor man who died the other day. Sometimes CIE can reach a very low level in that regard. However, this Bill is helping them to continue with their capitalisation programme and it is helpful in the national interest. DART is a very good service and the Minister is doing the right financial thing in subsidising the interest payments at present. This will help to set an attainable target for CIE. I understand that DART will become operationally viable by 1987 and if the public respond fully I am sure they will find CIE willing to look after them. I commend the Bill.

Mr. M. Ahern

It must be made clear that the Bill is making provision for an extra £30 million as a subsidy for CIE. This is due to the deficits which were run up by CIE over the years by temporary borrowing above their subvention from the Government. By this method the Government are setting up a loan and giving CIE £3 million each year for a period of ten years. We must call it what it is — a subsidy.

The Minister spoke about the Dublin Transport Authority Bill which was to be a major measure. Deputy Wilson set out what he and the Fianna Fáil Party had intended to do, making CIE an agent of the Dublin Transport Authority. The Minister has failed to grasp that nettle and consequently this is a very weak Bill.

The Minister referred to a Bill to reorganise CIE into three operating subsidiaries, but he has not yet brought forward this Bill. I fear he is putting it on the long finger. When the Bill is finally put before the House we may find that it is weak and ineffective. The end result could be to make the situation worse than at present.

The Minister spoke about serving the customer. Unless people are provided with a proper service they will not utilise it. Deputy Wilson has shown that the number of people using CIE services has fallen dramatically in recent years. One reason is that CIE are not providing the bus services at times required by people in the country. Under Deputy Wilson's Bill, CIE would have to compete in the market in the Dublin area. We see plenty of private bus owners making profits and CIE should be able to do likewise in an area where there are sufficient customers.

An important feature is that borrowing by the board for capital purposes has been increased. It is good to see a change in the Government attitude towards creating employment.

The NET factory is near to my home and numerous trains pass by carrying dangerous substances. On a number of occasions during the past year there have been leakages. I am glad to note that CIE and the Minister's Department are checking and testing to make sure that every safeguard is provided against an accident involving these dangerous substances.

People tell me that the new coaches being used on the inter-city trains are a marked improvement on the old type and that the speed between Cork and Dublin is fantastic.

Mr. J. Mitchell

The Deputy should try them himself sometime.

Mr. M. Ahern

I will.

Mr. J. Mitchell

We will arrange a pass.

Mr. M. Ahern

Thank you. Many people are now travelling by train who for many years did not do so because of the old rolling stock. I am glad the Minister intends to keep up standards and provide more modern stock for the railways.

While we have no objection to the provisions in this Bill, it must be made clear that its purpose is to convert temporary borrowings and give a grant of £3 million a year to CIE. I hope their financial position will be strengthened in years to come so that there will be no need for a Bill of this type in the future.

Tomás Mac Giolla

I am not opposing the Bill but I wish to make some comments on aspects of CIE and their expenditure. It is understandable that Deputy Carey should defend the GAC factory in Shannon since it is in his constituency and they fought hard to have this factory there. However, it is time that the Minister considered this matter. Deputy Wilson's comments were nearer the mark in regard to the viability of that factory for CIE. It is probably quite viable for the company but is it viable for CIE? My understanding is that CIE own both the factory and the equipment and that the GAC company build the buses and then sell them to CIE. As well as buying a very expensive bus, CIE must then pay VAT and excise duty of about £20,000 on each bus. There is also a mark-up for the company of 33 per cent. The whole operation seems to be absolutely crazy from CIE's point of view. They are buying the dearest buses in the world and the company are unable to sell these buses to anybody else. All except two or three of their buses have been sold to CIE.

I believe CIE are unhappy with this situation, but the Minister would know more about that. I do not know if they have expressed their dissatisfaction to the Minister, but from the point of view of money saving and viability CIE would be far better off running the factory as the workers in Inchicore wanted them to do in the first place. They have a highly skilled workforce who would be far more efficient if they were paid higher wages. The fact that people in other parts of the country might have been prepared to take less wages or to accept worse conditions does not necessarily mean that they will make a cheaper bus and certainly it does not look as if GAC are building the cheapest bus on the market for CIE.

CIE are spending a lot of money in subsidising a factory. We should look at the question of State companies subsidising other companies. In that connection — and the Minister can correct me if I am wrong — a private bus company. The Londonderry and Lough Swilly Bus Company was sold. I suppose if it was still in existence it would be known as The Derry and Lough Swilly Bus Company. When it was put up for sale I understand that CIE offered to buy the company but were prevented from doing so and that the bus company and all assets were sold to a Mr. Doherty, a private individual. His first action on purchasing the company was to sell off the depots and whatever assets the company had to property developers and I understand that there is a supermarket on one of the depot sites. However, Mr. Doherty held on to the bus services. When the company made a loss on the bus services they applied to the Department of Transport for a grant to keep them in business and they have been getting a grant — something in the region of £80,000 per year — for the last three years to keep them in business.

The worst feature of this is that apparently the grant is paid to this private bus company by CIE, presumably on the Minister's instructions. If this is true, the Minister should explain why a State company is paying a grant to a private bus company who are in opposition to CIE and whom at one stage they wished to buy. I understand that this year the bus company are looking for an increase in the grant to £100,000. The Minister should indicate whether he thinks this is the proper way to spend taxpayers' money and he should also ask the Minister for Finance if the company are up to date in their payments of PRSI and PAYE as CIE must always be up to date in their payments.

I am not worried at the Minister's delay in bringing in a Bill to split the company into three because of the highly dangerous implications for provincial bus services, the railways and, to a lesser extent, the Dublin city bus services. CIE have closed down an enormous number of railway lines over the years and have been seeking to close others like the Limerick to Rosslare, Waterford to New Ross and Nenagh to Limerick lines. However, as a result of public outcry and political pressure they were prevented from doing so, and I am in agreement with that. The rail lines we have left should be kept open because they are a great asset to the country. Does cost benefit analysis ever take into account the enormous amount of traffic which they keep off the roads and the further expense that would be on the taxpayer on the upkeep of roads? Yet CIE have never considered that a subsidy is necessary for the upkeep of railways. They pay for all the permanent way. Laying of rails, renewal and upkeep of rails, building bridges and so on come into CIE operating costs. Roads do not come into the operating costs of any other transport company — they are paid for by the taxpayer.

The House and the Minister in any discussion on railways should immediately take into account the enormous benefit to the country of the work and money which CIE are putting into railways. We should ensure that more goods are carried on railway lines, thus reducing the cost of road building and the upkeep of roads, bridges, etc. These involve enormous expense and are never looked on as a subsidy to private transport. The payment of subsidies to the railways should be looked at in the light of their benefit to the community generally, to the country, to the whole area of pollution and also to social benefits. CIE are told that they must work within their budget; but, when they say that in order to do so they must close down certain railway lines, they are told that that would be politically dangerous and that they cannot do so.

The same applies in the case of the Irish Sugar Company. They are told they cannot continue to make losses, but when they wanted to close a loss making factory in Tuam there was a wild outcry. I agree that the factory in Tuam should be kept open, not as an economically viable part of the company but for social and job reasons. Therefore, we must be prepared to subsidise the company which does that for society. Similarly, CIE must be subsidised for keeping loss making railways open for the benefit of the community.

It is strange that when Dublin city bus services are ended there is not a word and the public do not seem to know. Even when small railway lines are closed there is a national outcry, but the same does not apply to the buses. CIE have cut back one No. 16 bus, two No. 19 buses, five No. 7 buses, five No. 8 buses — mostly due to DART — one No. 55, one No. 86, one No. 34, one No. 24, one No. 31, five No. 12 and one No. 45. This was done without the slightest outcry from anybody. There was no publicity — they just stopped them. This is a reduced service to the community. We are told that they are doing this in order to save money because they must be viable.

I was surprised to hear Deputy Wilson say that the city should be able to provide a profitable bus service without any subsidy. Later he pointed out that the city does better than any other city in Europe. No city in Europe is providing a profitable bus service and the subsidy to the Dublin city bus service at 20 per cent is a lot less than the subsidy given to bus services in other cities. For example, in Rome the subsidy is between 50 and 60 per cent. City bus services throughout Europe are more heavily subsidised than CIE. The Dublin bus service is doing very well but the company is being forced all the time to cut back more, give a lesser service to the people of Dublin because they are not getting more money.

More money is spent on keeping railway lines outside Dublin open, and I agree with that. The railways outside Dublin have receipts of £53.9 million and receive grants of £72.4 million as against grants to the Dublin city bus service of £17 million. The savings the company could make by closing some of those lines would more than make up for the grant to the Dublin city bus service, but those lines must be kept open for political and social reasons. In spite of all social and political reasons the Dublin city service is cut back because the money must go to other sections of CIE's operations.

There should be a decision on what is the mandate to CIE. If we want the railway lines open — and I would press for that — then we give CIE a mandate to keep them open and to do everything possible to have increased goods and passenger traffic on those lines. There is little hope of getting increased passenger traffic on some of those lines. I understand that an average of 29 people use one of the lines. However, there are opportunities to increase goods traffic on them. If we give CIE such a mandate in regard to railway lines we must give them sufficient funds to operate on them. We must have a policy of giving a service to people rather than one of cutting back when money is tight.

I understand that the Minister will be introducing a new policy in regard to CIE with the division of the company into three units. I am glad he is taking his time in doing that and is not, as Deputies have asked him, rushing in the change. I hope when he announces the changes he will give a clear indication of what the Government require of CIE in regard to rail services, provincial bus services and the bus service in the city of Dublin. It will be a disaster if he says that he will give the city of Dublin a mandate to make money in two years' time or else further grants will not be allocated. That cannot be done in any city and a city cannot provide an adequate service under such a requirement.

Mr. J. Mitchell

It is already set out.

Tomás Mac Giolla

I am anxious that the Minister takes as much time as needed thinking over the position of the Dublin city bus service. I appeal to him to have another look at the GAC operation in Shannon.

Mr. R. Bruton

I am somewhat concerned at the shareholder control, that is, what taxpayers are doing in regard to the operation of the various commercial semi-State companies. Last year alone the commercial semi-State companies lost an aggregate more than £200 million. Yet the House tends to vote through "on the nod" things like increased borrowing possibilities for those companies, all of which are guaranteed by the taxpayer. In the same way we vote through injections of equity into those companies. Subventions to companies are scarcely scrutinised in the sort of detail we need. I am worried because I do not think the House knows what is being paid for in a lot of those cases. The country was rocked by the discovery in the case of Irish Shipping of liabilities that nobody knew about and were out of control. In the same way many of the other commercial semi-State companies have been less than frank in presenting information to the House so as to help us assess the value we are getting for taxpayers' money. It is commonplace for annual accounts to be presented late; but, more important and in the case of CIE, we do not know what is happening to the massive subvention that is going to the company.

We have an aggregation between the major categories of rail, bus and provincial bus, but we do not have any proper information on how, for example, in the Dublin city service that subvention is being allocated between routes. In short, we do not know whether what we are paying for is really worthwhile. I know that in the past CIE operated at a significant loss items that could not possibly be construed as having social value, such as sundry freight. That has been operating at a loss and I find it hard to see why the taxpayer should be chipping in money to subvent that type of operation. In the same way in the Dublin city bus service we do not know which routes are losing money. That is a jealously guarded secret in CIE. My suspicion is that the routes that are losing money are those that go to areas that are in the main more affluent. In a sense we are losing on the double. We have reasonably profitable routes where affluence is relatively low and the taxpayer is getting money back, but in other areas where the population is generally affluent the taxpayer is chipping in money. It is difficult to see the justification for that.

I was disappointed to discover that the Dublin Transport Authority have not got to grips with the issue of what it is we pay for. I am seriously worried about the way in which the losses were incurred by CIE over the years. What we have seen in the case of the Dublin city bus service is a continuing loss, year on year, of passengers. In the last ten years or so we have lost 25 per cent of passengers on city buses and yet we have sustained the size of the fleet and the operation and suffered increased costs on them.

I am willing to subsidise a public transport system. I see great virtue in a public transport system that takes people out of their cars in a rush-hour, provides a better amenity and takes freight off the roads. But there is no justification for the State chipping in money to prop up a service that requires a subsidy, not because it is winning new trade that may not be 100 per cent profitable but because it is losing the trade it has. That serious problem needs to be confronted. I am not satisfied that the approach by the Minister in introducing this 33 per cent subsidy across the board to CIE is the correct one.

I should like to congratulate the Minister on his success in getting some control over the finances in CIE but I do not think his approach is the correct one in deciding how much of taxpayers' money should go to services. How can we stand over what we are paying for if it is to be on the basis of 33 per cent of everything regardless of whether it is a service that should be paid for 100 per cent by the commercial interests who are availing of it? We need to confront in greater detail what it is we are paying for within the various elements of CIE and other semi-State companies.

What we are getting down to is the hard core of giving the commercial semi-State companies a mandate in which they can operate. This Bill is yet another ad hoc measure rather than getting down to the much more serious task of confronting what it is we expect the commercial semi-State bodies to be achieving and making that clear to all.

The Minister described how temporary borrowing crops up. There are points here which, to my mind, do not represent acceptable reasons why we should end up subsidising the paying off of these temporary borrowings — things like underestimation of costs, fall-off in traffic, which was presumably unexpected, and so on. These items essentially represent failings because management fail to live within a budget they agreed at the beginning of the year. We cannot, as this Bill appears to do, come along after the event and say that these temporary borrowings are insupportable for CIE and that the taxpayer will have to pay off, as subventions, those items even though originally the taxpayers held out strongly in a last ditch attempt saying they would not pay these moneys. This makes a nonsense of setting a CIE subvention if after a couple of years have elapsed we give them the money by way of a capital sum to wipe out temporary borrowings. We need to address the problem more seriously than is done in this Bill. I am not singling out this Minister but these Bills come before the House with increasing frequency to extend borrowing rights and we have not got down to confronting how we will set a more coherent mandate for the semi-State sector.

The National Planning Board, which reported to the Government in 1984, went a long way down the road towards indicating how we can set about doing that. They said indicators of management performance should be set in a public and visible fashion so that we would know CIE were successful in, say, the quality of service they were providing, manning levels, the extent to which they won new passengers and so on. All these points should be quantified for the Dáil so that when we vote the money each year we can say that CIE did very well in a certain year and in this way we could stand over the money we were paying them.

The planning board said the State subventions for so-called social services should be based on what the Government feel we should pay for these services and on a least cost tender basis, and not necessarily just subsidising inefficiency in providing a certain service. We should say we realise a service will be loss-making, but that as it is socially worthwhile we will pay a certain sum. At the end of the year CIE should be able to come back to us saying they were able to live within that sum and provided a certain service. Until we get this type of information regularly we will be floundering and failing in our responsibility to the taxpayers.

The planning board also went into the very thorny issue of the under-capitalisation of the commercial semi-State bodies. That is a very important point because too often we hear semi-State bodies whingeing about the need for capital injection in equity, as if equity was something which did not have to earn any return. Equity for the taxpayer is just as hard earned as any other money and should earn a dividend. Without going into the planning board's suggestion, I think it makes a lot of sense. Basically what they are saying is that where there is a viable service and there is an over hanging of liabilities, we should wipe them out and from there on put them on a footing that there will be no more free capital injections and they will be on a much more strict leash. That, combined with the explicit subsidy for the loss-making social services would give CIE a system in which to operate. Not only would they know what they are going to get from year to year but we, as the Oireachtas, would know what value we were getting for money.

The Minister has acted commendably in letting CIE know what they are going to get but he has not completely resolved the problem because we, the Oireachtas, do not know what we are getting for the taxpayers' money. Before introducing the new Bill breaking CIE into three subsidiaries with an overall board, the Minister should address these problems and get for the Oireachtas a handle by which we will know what we are getting from CIE.

I congratulate the Minister on his many achievements. My criticisms of this Bill are of a general nature which I address to many semi-State bodies who come to the Oireachtas looking for increases of subventions but do not provide the kind of information we need to justify giving them this money.

Mr. M. Brennan

I would like to speak briefly about the uncertainty of the train service to Sligo. A threat has been hanging over the people of the north-west for a long time. There have been rumours that their line between Dublin and Sligo will close. I hope the Minister will tell the people that that line will not close. As far as I am concerned, CIE are giving an excellent service to the north-west. The line between Dublin and Sligo is the only link between Dublin and the north-west because there is no train service to Donegal.

I am disappointed with the recent decision to almost completely close the CIE garage in Sligo which services all the buses and the school buses in the area. They are also talking about closing the offices in Sligo although they have excellent office accommodation there. These offices deal with the services for all the school transport needed in the Sligo-Leitrim area. It is proposed to transfer the staff to Ballina and to build new offices there, although, as I said, they have excellent offices in Sligo. If these rumours are true, it is time CIE were put on a right footing, so that a decision like this would not be reached in Dublin or Heuston station on matters which affect the north-west.

CIE are offering an excellent service to Sligo. It is a social service. Before the recent opening of the kidney unit in Sligo, a number of people travelled by CIE on different days from Sligo to Dublin to go on a kidney unit there. For many years we have been looking for a supertrain to Sligo and better CIE service to the north-west. I see from the Minister's speech that there are new air-conditioned carriages on trains between Cork and Dublin, Waterford and Dublin and Dublin to Galway, but some of the carriages now in use on the Dublin to Sligo line should not be used on any line. Why have we not a better train service with better air-conditioned coaches from Dublin to Sligo as are on the Galway to Sligo line?

Mr. J. Mitchell

They are coming.

Mr. M. Brennan

The people of Sligo and the north-west are very concerned about the rumours that the line between Dublin and Sligo will close. I hope that this Minister or any other will never make that decision.

Mr. J. Mitchell

I do not think Minister Nealon would want that decision, either.

Mr. M. Brennan

I am not worried about Minister Nealon, but I hope that no Minister of any party would make such a decision. The Dublin to Sligo line offers a great service, indeed, to Sligo. When is it hoped to get the better coaches that we were many times promised? With regard to the recent design for the new road between Collooney and Sligo the people involved have been asked by the Department of the Environment to plan that road by the side of the railway line. That is taken as a further indication that CIE may close this line.

Many years ago CIE decided to close the Claremorris to Sligo line and the only link to Limerick was the Sligo to Limerick train. They then put on a CIE bus which ran daily between Sligo and Claremorris and eventually to Galway. There are rumours that it has been decided this month or early next month to take off that bus service. The Minister mentioned Minister Nealon a couple of moments ago. Would he give the information to Minister Nealon about the position of the bus route between Sligo and Claremorris? If that bus service is discontinued, there will be no CIE link between Sligo and Claremorris.

I hope that the Minister will seriously reconsider the closure of the CIE garage in Sligo. This is taking much needed jobs from Sligo town and transferring them to Ballina and Longford. I hope the rumours that CIE are closing the office in Sligo and building new offices in Ballina, where there is already excellent office accommodation, are not true. I am asking the Minister to state that the Dublin to Sligo line will always be there as long as he is Minister and during the term of office of whichever Minister comes after him.

Mr. G. Mitchell

I wish to make a few comments on this Bill. First, I represent a constituency in which a number of people work for CIE. I worked for that company myself and grew up beside the CIE works in Inchicore, as did the Minister. I do not want to be hard on or critical of CIE but there is a problem. I do not think they inspire confidence in their own workers. That says something of the company itself. There is something essentially wrong in the outlook of policy of the company and this has gone on over a very long period. It lacks modern outlook and imagination in its present management and in the approaches which have developed over a very considerable time.

If the morale of the employees and inspiration in the company could be improved, there would be no end to the possibilities for such a company. The CIE works in Inchicore are a very exceptional engineering works in these islands. They surely are capable of building almost anything and there is nothing in the Republic to compare with them. One would have to go to Harland and Woolffs in the North to find a comparable engineering work. Yet the Inchicore works are totally under-utilised and have been for a long number of years. That is one of the problems with regard to CIE. Their own workers do not feel confident about the future of the company or its performance.

There is also a feeling within the company that it is top heavy in management, that it is a pyramid in reverse, with small numbers of employees supporting a large number of managers. That feeling is probably somewhat justified. The lack of dynamism in the CIE make-up must be changed. They need a boost of the type which An Post have been getting. That organisation were very good even as the Department of Posts and Telegraphs and they have received a great boost in the last two years. CIE need similar treatment, but it will be more difficult in their case.

I cannot understand why CIE are not making coaches instead of assembling them. In many cases they are bringing in fully assembled coaches which only require the plastic to be taken off and a few screws put in here and there. They have an engineering works capable of doing quite a lot of work in the assembly and manufacture of coaches for trains and buses.

I do not see why Aer Lingus need to import small aircraft from Northern Ireland. Surely there is a possibility for CIE in this area of development and diversification? Unless we get CIE thinking in terms of diversification and dynamism and inspiring confidence in their employees, no increase in capital or any other injection will slove the underlying problems which that company have faced, are facing and will continue to face.

Would it be too much to consider the opening the Harcourt street line as a toll road, if it is not possible on the basis of a rail line? We tend to think these things simply cannot be done until somebody in private enterprise does them. They can be done if they are investigated and we must get that sort of thinking into the CIE boardroom. That would help not only to improve the financial standing of CIE but to give a boost to their employees who are a very capable and very qualified work force who, unfortunately, feel that their skills are not being put to the best use because they are not producing manufactured goods which they are capable of producing.

Deputy Mac Giolla spoke about buses being taken off certain routes. He left out one bus, namely, the 81 bus. I can understand CIE having to take buses off routes particularly where a population has become settled, where there are many cars and where the use of public transport has dropped, when at the same time there is pressure for transport in areas such as Tallaght. What happens is that the management get together with the trade unions and they come to an arrangement acceptable to them, but they do not consult the consumer. I will give an example of what I mean. The 81 bus passed by a block of flats occupied by old folk and it took them about one mile down the road to the old folks' centre. Now that the 81 bus has been taken off, no other bus will pass on that route. A very small detour by one of the buses in the area would solve the problem, but it is very difficult to get any response from CIE. There is no consumer consultation or input.

There should be some kind of consumer body to advise the management, particularly in the case of Dublin city services, regarding the views of consumers and in particular when they are considering changing bus routes. That would not be difficult to organise. Under the proposed legislation on local government reform, I understand from speeches made on Second Stage, that there is a proposal to give consultative status to community development councils vis-a-vis local authorities. Could those bodies not also have the right to be consulted by CIE when changes affecting commuters are proposed? It would be easier to implement changes and it would solve many of the problems that arise as a result. In addition, it would be a useful and democratic exercise. Our job is to see that CIE serve the commuters, not just the management and workers.

In the most diplomatic way possible I should like to make the following point. In discussing the finances of CIE we should consider the question of penalties for commuters who conspire not to pay their fares. When this happens — and one hears of such stories — it affects the income for certain bus routes. In turn, that reflects on the figures for the number of people using those routes. Buses may be taken off certain routes in Dublin on the basis of information that is not entirely accurate. In times gone by people have been abusing the system on a weekly basis. We will have to give serious attention to providing for penalties for commuters who conspire not to pay their fares. I do not want to say anything that would reflect on bus conductors or on CIE staff. In every large group of people there are always a few who are not honest. I am fearful that, unless we ensure that there are sufficient penalties, commuters may be deprived of services on certain routes. In parts of the Continent it is a very serious offence for a person to conspire not to pay a fare. I ask the Minister to consider this matter because it could affect the availability of routes in certain cases.

I welcome the changes announced regarding CIE pensions. This will improve morale in the workforce. I hope the Minister will ensure that those changes are implemented without further delay. The situation that has existed up to now is quite outrageous.

Mr. Sheehan

I come from an area where a train service is not available to the inhabitants within a radius of 100 miles.

Mr. Wilson

That makes two of us.

Mr. Sheehan

It is thanks to Fianna Fáil because they took away the service in the fifties.

Mr. Wilson

They did me, too.

Mr. Sheehan

I know that the taxpayers in the area to which I refer are highly critical of CIE and the demands they are making for supplementary estimates. It is the right of every citizen to be cherished equally. Citizens in the south-west Cork constituency were deprived by a Fianna Fáil Government in the past of a train service. We had an excellent train service from Cork to Bantry but the tracks were pulled up in 1954 and sold to the blacks in Africa. We were told then that there would be a comprehensive bus service for the area, that the service would be unique.

Mr. Wilson

They told us that, too.

Mr. Sheehan

We were also told that our roads would be improved. However, we did not get one mile of national primary road in the south-west Cork constituency. It is hard to blame the taxpayers in my area if they are highly critical of a semi-State body like CIE making the demands they now put forward on an over-taxed community.

I am highly critical of the high-handed dictation of personnel at the top in CIE who can change the weekly service to the Kilcrohane-Durrus peninsula in my constituency. It operated to the satisfaction of the inhabitants of the area, even though it was only a weekly service. However, the people in west Cork are very tolerant. If citizens in Dublin city had only a weekly service from CIE they would be parading outside this House. We would not be able to come in here with the hordes outside Leinster House with placards on their backs. That service in south-west Cork was changed from a Friday to a Saturday to suit CIE.

I wonder if CIE stands for "Coming in Empty"? When that service to the Kilcrohane-Durrus peninsula was running on a Friday morning at 10.30 or 11 o'clock to bring people into Bantry, which is the nearest town to that peninsula, the bus was packed to capacity. The post office, the banks, the Government offices were open on a Friday and everything was catered for with that one day a week service. For some unknown reason some fellow sitting at his desk in CIE thought it would be much handier to run it on a Saturday — a weekly service on a Saturday when there is no post office, no bank and nothing at all to attract the people to the town. What is the result? The result is that the bus is coming in empty and going out empty. It is disgraceful to think that the inhabitants, the taxpayers of that peninsula, are asked by the Minister here today to subscribe further millions towards a State-sponsored body which does not seem to give two hoots about the inhabitants of rural Ireland.

I listened to Deputy Mac Giolla criticising the fact that there was only £17 million being spent by CIE in the Dublin area. There are children in south-west Cork walking three miles to a CIE bus to be collected in the morning and walking three miles back to a CIE bus. What area of Dublin is not within 30 yards of a bus service? Does Deputy Mac Giolla realise what the citizens of west Cork are enduring in comparison with the citizens of Dublin? It is high time the Minister took this into consideration. I am asking him when this debate is finished to contact CIE immediately and get that Friday bus service to the Kilcrohane peninsula back immediately. I want that back because I think citizens of that area deserve a little bit of consideration even though it is only a once a week service.

There was another weekly service from Skibbereen to Baltimore, a distance of ten miles. Baltimore is the port of call for Oileán Cléire. CIE withdrew that once a week service. After repeated representations they made a decision to restore it for the months of July and August. Big deal, leaving Baltimore, Cape Clear Island and Sherkin Island without a bus service for ten months of the year. Who is codding whom? Surely the person living in Cape Clear, in Sherkin Island and in the Kilcrohane peninsula deserves the same consideration as the person living in Finglas, Foxrock or Dundrum? The sooner the Minister realises that and makes sure CIE give that service the better.

The taxpayers cannot be expected to carry the can whenever a State-sponsored body falls into difficulties. Every country must have a railroad service. It is most important. The most backward countries in Africa have one. But at least there should be a time limit put on CIE to make sure that they balance their books and make their service pay. With the volume of people living in Dublin I can see no reason why CIE have not got surplus revenue from their Dublin services that would correct any imbalance in the provision of services in rural parts of the country. It is of vital importance that CIE be built up. The Minister should make sure that they are able to stand on their own feet in the not too distant future, that they give a service to the people and not allow the high ranking officers of CIE to dictate to the ordinary citizens of this country. There is an old saying that the customer is always right. The customer must be provided for. Seeing that the Minister has been so generous to CIE this evening, I hope he will ensure that they meet the demands I have made on the floor of this House. What is sauce for the goose is sauce for the gander. The taxpayers in south-west Cork and rural Ireland generally are highly critical of giving one penny extra from the national purse to a State-sponsored body that will not give them a service in their area.

Mr. Taylor

I would like to welcome this Bill in so far as it takes some relatively small steps towards the funding and capitalisation of CIE into some kind of acceptable order. I do not think it goes far enough in that respect. CIE and transport should be a service provided to the members of the public. It is not something that should be expected in any way to break even and still less to make a profit. I believe that with a different pricing policy, an improved service and a more regular service, particularly to densely populated areas, it would considerably improve its cash flow. I find it remarkable that the major expenditure that has taken place in CIE in the last decade — by the provision of the excellent DART service — was provided to serve relatively low populated areas along the north south access along the coast. The planners surely knew that the main concentrations of population would be located in west Dublin in the new towns which during the period of the construction of the DART project have built up to very high populations indeed that have been left there with a completely unsatisfactory transport system.

I believe that the development of the rail system of transport is crucial. I prefer it in many respects to the road method. It is cleaner, it is better for the environment, it is cheaper to run. It avoids the clutter and the traffic jams that we experience in and around our major towns. I believe that people take to their cars not because they particularly want to but because the public transport system provided for them is utterly inadequate in terms of reliability and in terms of cost. I believe that if a good, regular, cheap rail service was provided in and out of the city of Dublin to the satellite towns it would be used to a very large extent. It would benefit the country, it would save us much valuable foreign exchange in imports of oil from abroad, it would improve the environment to a considerable extent and avoid the appalling intrusion of lead fumes to the frightening degree we have at present.

Why has there been this constant bias over the years, both with this Government and with previous Government towards the road programme? It is always the road programme that is favoured and all the Government documents over many decades show that. We talk about accelerated State investment in roads but we talk about a package of retrenchment measures so far as the rail links are concerned.

It is a very bad decision and will hit back at us in many ways. It should be reversed very quickly. In the new town of Tallaght, which has been described as the fastest developing area no this country but in the whole of western Europe, the planners in the county council and corporation fully expected that a rail link would be provided. They planned for that in advance with great trouble and foresight. They reserved the land which would enable a rail link to be provided and a rail station to be built. They realised it could take in the population centres of Tallaght, Clondalkin and Ballyfermot, the Minister's own constituency, and would make sound business and investment sense so far as the transport programme is concerned.

I am appealing, as I have done before on so many occasions and will continue to do so, that funds be allocated as an investment. We are not talking about expenditure but about an investment which would pay for itself many times over. A rail link would provide tremendous benefits for the massive population which has been settled in Tallaght, Ballyfermot and Clondalkin and would also provide benefits for the State in many different ways.

I welcome expenditure on the roads. We must have a road network as well but the emphasis is wrong. The Government should look again at the large sums of money being provided in the plan. A substantial proportion of those funds would be far better invested in improving our rail links to densely populated areas. CIE are anxious to do that. Skilled technicians and others were employed on the construction of DART and they would be ready, willing and able to undertake this task. The position is clear for all to see. We have a densely populated town, land reserved for a rail link, a connection point on the Cork line, skilled men with ability, many of whom no doubt are currently on the dole, to carry out the construction work and funds have been allocated in the national plan for transport purposes. Does it not make sound economic and business sense that those strands should be knitted together to provide this facility for the population of 90,000 in Tallaght and the large populations in Ballyfermot and Clondalkin? It would be of great benefit to them and the country as a whole.

Mr. Prendergast

I welcome the Minister's attempt to introduce an element of sanity into the area of transport. The Minister referred to the fears of some people working in CIE as to what exactly would happen. There have been welcome elements in the review of the Government's position vis-à-vis CIE in that at least now those in CIE know exactly what is open to them by way of financial allocation and so on. However, that could smack of “the patient died but the operation was a great success”. I ask the Minister to take into account the legitimate fears of sections of the workforce of CIE.

Anyone travelling by CIE, whether by rail or bus, will appreciate that we have one of the most efficient services in Europe given the type of money that it is expected to operate under and a most courteous staff. The unions are fearful about what the Minister and the Government have in mind. I urge the Minister to have the fullest possible discussions and ask the unions for their ideas. Very often whizz kids come in full of good ideas. They have the answer to everything but the solution to nothing. They bypass the advice of those working on the ground within the company who know the set up. In some semi-State bodies we have seen engineers coming in with professional qualifications and the porter or the ordinary "two by four" in many cases advising them as to the best way to carry out a certain task.

My party have had many discussions with the CIE groups of unions and the transport union is very much involved. The fear is that CIE have become top heavy with engineers who apply a clinical type of approach and miss out on the basic service aspect of the operation. As I understand it there is no rail system in Europe which pays its way with the exception of Switzerland. I am open to correction on that. Switzerland rely on electricity and have a powerful hydroelectric scheme. It is crazy to expect CIE on the one hand to provide a social service and at the same time emasculate it financially.

Reference was made to the heightened losses within the Dublin city service. Many years ago I asked in the Limerick Council of Trade Unions — and subsequently wrote to the then Minister for Transport — why it was that to travel from Shannon to Limerick, a distance of 16 miles, cost in the region of 20p, whereas to travel the same distance in Dublin cost 6p. It was three and a half times as much to travel that distance in the country as compared to the city. The reply we got back was that the Dublin city area was paying its way whereas the Limerick-Shannon area was not. Within the overall Dublin city services there are jealously guarded secret areas which are losing money but which are not disclosed.

CIE's philosophy has probably been wrong in that they are entering into an area of diminishing returns. By increasing rail fares out of all proportion they are forcing people to use their cars and not the rail system. The fairly simplistic approach adopted in many European cities is to apply a flat fare regardless of where one wishes to travel within a city. This would tempt people to leave their cars on the perimeter of a city and use the buses. The disparate approach that we adopt to the whole question of transport policy is a disgrace. There is one policy for the airports, another for shipping which unfortunately is in tatters, and a kind of makeshift ad hoc policy in regard to the CIE problem. This Government and all previous Governments stand indicted because we have failed to draw up what must surely be a requirement of every economy, that is, an overall and integrated transport policy. I talk about a system where the Arabs must be smiling all the way to the bank, where because of the unplanned road system in every one of our cities, millions of pounds are being exported to pay for fuel and where there are huge logjams of buses and cars. Apart from the convenience to motorists and pedestrians we would save millions if we elected an overall transport committee to consider in detail the whole question of an integrated transport policy. If a country were to spring up suddenly in the Atlantic off the west coast of Ireland, the first task in such a virgin economy would be the production of a transport system for the transport of goods, services and people. That would be the priority even in any banana republic in South America.

Certain trains run every day, whether from Limerick to Dublin, from Cork to Dublin or from Sligo to Galway. These trains will be on time anyway. The State provides millions of pounds per year by way of subvention to CIE. Surely it is time that CIE decided on a fare which would attract people to use their sevices? Let us go broke on this one if necessary and make some imaginative attempt to woo people back to public transport. One thinks of what that imaginative young woman from the Civil Service was able to accomplish by way of hiring a train and offering a realistic fare of £10 return at weekends from Dublin to Limerick. She was able to pack the train but CIE could not do that on their own. This is not an indictment of the management of CIE. They do their best within limited resources but would it not be well worth the Minister's while to proceed as I have outlined? I was very pleased to read in today's papers that the liquidators appointed to Irish Shipping have absolved the management of all fraud. That is what we all expected. It is easy to be wise in hindsight. It is said in politics that while victory has many fathers, defeat is an orphan. No one wants to know any person or group when they fail.

The Irish Productivity Centre are a State funded body who are experts on all aspects of industrial relations, mobility, transport and so on. What would be wrong with the State making the services of the IPC available not only to CIE but to other semi-State bodies? I am the chairman of the committee on semi-State bodies. Labour would say that we do not do away with jobs but that we wipe out inefficiency. Nobody can defend the indefensible. When we think of some of the feather bedding going on in some of the semi-State bodies and some of the items that will be examined, it behoves us as trade union officials to speak out. The public will not believe their ears in regard to some of what they will hear. We lose all credibility if we seek to defend the indefensible but that applies equally to management. Unfortunately, some semi-State bodies are top heavy with the wrong kind of management.

It would be very imaginative of the Government if they were to send an efficiency team, such as the IPC, into CIE. Before moving into any organisation the IPC could guarantee, as the ICTU guarantee, that there will be no loss of jobs, that they are going in for the purpose of undertaking a feasibility study, whether in respect of staffing or the restructuring of policy or anything else, and that their purpose is to introduce worthwhile methods and new systems of efficiency. These are the resources that are at our disposal but there must be the imagination and the political will to use them as I have suggested. There would be no need for the IPC to move in in any terrorising or draconian manner. They could move in on a positive commitment to talk with the people who operate the organisation on a day-to-day basis and draw from them in a co-operative way their best ideas. There is a residue of goodwill but it must be drawn on properly. Sometimes we adopt the big stick approach and frighten people off. CIE would have nothing to lose by that approach.

The company should consider the introduction of a standard rail and bus fare so that people could use the buses or the trains to go from point A to point B, to alight and later travel between other points on the basis of one ticket. The buses will be going to these places anyway and it would be better to have a bus full of passengers paying 20p each rather than having it half empty with passengers paying 50p each. That is elementary.

Mr. J. Mitchell

It is bad arithmetic.

Mr. Prendergast

I am talking about the principle.

Mr. J. Mitchell

It illustrates the problem very well. A bus half full of passengers paying a 50p fare would yield more than a bus full of passengers paying a 20p fare.

Mr. Prendergast

I am mentioning these figures off the top of my head. It is the principle I am concerned with. In Limerick for example there is a whole new development at a place called Moyross where there are 1,200 houses and about 3,000 people. The area is bigger than any town in County Limerick and is about a ten minute walk from the railway station. The rail service could be extended to service Moyross. I note that on the excellent DART service, intermediary lines are used to facilitate more frequent stops. That is an excellent idea.

I suggest to the Minister and the people in CIE that the same thing could be done, for example, at Moyross — and remember that of the population there approximately 54 per cent are unemployed and are expected to take costly taxis out from the city in a rush hour. That is very unfair. It should be remembered also that it is the poorer working class areas that support the buses and trains if we make them available. I use the example of Moyross because there is a difference of opinion between the authorities and the people down the line who drive the buses. Some of that area is not facilitated and people have to walk long distances before catching a bus to go into town. It would not cost a whole lot to site a small station there with somebody to man it. The train passes through there anyway but never stops to drop off the people from Moyross. I would urge the Minister to take up that suggestion with the people concerned. That is one simple example where they could make money, ease congestion on the roads and help the people in a huge, local housing estate that has at present no such facility. For example, the buses are not satisfactory for people in the Glenagross Park area which has over 300 houses, more than many small towns and villages. It is an example of what could be done with a little imagination.

I could go on extensively about CIE. It is my honest opinion that the black-guarding that CIE has received from successive Governments would be tolerated by no other semi-State body. They have not been given the wherewithal to supply the type of service they are expected to supply. I welcome the Minister's assurance that what the Government are endeavouring to do is to preserve CIE. It is worse than lunacy to attempt to carry out an operation of the size proposed unless one has the deepest and most meaningful discussions with the people who really know the business — not parachutists, like some of the professionals and academics who drop in from beyond the system and who have the answer to everything but the solution to nothing. Rather those who should be consulted are those who grew up with the system, whose parents and families were involved, who know the system and who can make positive recommendations if only they are listened to.

For example, it might not be before its time to have an ideas programme in each region where local workers could be asked for their suggestions about how the system could be run more effectively. It could be done on a trial and error basis which would not cost much more money than what is being spent at present. There must be many imaginative ideas, and such a scheme would have the tremendously positive effect of stimulating people into a sense of co-operation. There is a malaise throughout the system, a sense of demoralisation, a feeling that they are nobody's child. Anybody wanting to have a go at CIE tends to talk about their multiplicity of unions. It should be remembered that there is a multiplicity of unions in every semi-State body, and I say that as a trade union official. They are all the same trade unions but yet there are no problems there. We like to blame somebody and we all latch on to CIE. They are doing a fantastic job, £ for £, given the lack of support to them over the years. The return they have given is out of all proportion to the money they have been allocated. The Minister might throw out some of these ideas, speak to the people who made and know that system and see what will emerge.

Minister for Communications (Mr. J. Mitchell)

First, I should like to express my thanks to the Deputies who participated in this discussion. I should like to acknowledge the co-operation of the Opposition in facilitating the passage of the Bill, which has been taken at rather short notice.

The importance of CIE to the community, the economy and their dependence on the Exchequer from the basis of their high profile. I welcome views, even those with which I do not agree, of Members of the House whose contributions reflect their personal experiences and, in some cases, those of their constituents. Criticism of policy must be taken into consideration in legislating for CIE. Those criticisms of its operations are of value to the board and management in ensuring a response to experiences which generate such criticism. I am glad that Deputies have been able to comment on the positive aspects of CIE and their operations. While the job of CIE organisation is difficult and the environment in which their employees operate is not always the most congenial, nevertheless overall their services are good and deserve many more supporters. As their dependability grows, the public will allow CIE do the driving to a greater extent. The financial performance of the board has improved markedly and the general public is becoming less grudging in recognising CIE's strong points.

The enactment of this Bill will help CIE to improve their overall services and financial performance. The next development in the policy field to be brought before the House will be the Bill to restructure CIE. As I explained in my opening statement, that Bill is in preparation with a view to enactment in the next session.

Before dealing with specific points raised by Deputies I should like to make some general comments on matters that occurred to me in the course of the debate. I was somewhat depressed with the notion which seemed to run throughout almost all contributions that I, the Minister, should decide what services should go where, at what level, etc. Politicians have meddled too much over the years in deciding what services should go here or be retained there, no matter what changes have taken place in population and transport patterns, that has contributed to the problems of CIE over the years. When I became Minister I made a conscious decision that that was not my job, that I would not receive deputations on operational matters, that that was the job of the board and management whom we appoint and pay to do that job. Therefore I shall not answer questions in this House, as I have refused to do since becoming Minister, on operational matters raised by some Deputies. That is not my function.

In that respect I was particularly depressed by Deputy R. Bruton's contribution. Deputy Burton praised me — he did not praise the company but they deserve praise also — for getting the finances of CIE under control. Effectively, he went on to argue that I should be deciding on the subsidy for each service, that I should be deciding the social content of each service. Can one imagine any worse political scenario than that? Imagine what would happen to bus and train services as every local or by-election arose. Apart from the obvious political dangers of such an approach, can one imagine the commitment of manpower and the cost if I and my Department were to decide whether there should be, say, a Westport-Newport bus service, or whether there should be a Cloughjordan-Nenagh bus service. Deputy R. Bruton's proposition was absurd. I feel I should reject it very strongly. Deputy R. Bruton is a respected Member of this House and a person for whom I have a great deal of regard. But the notion that we politicians, Governments or Departments should decide where bus services should go, the level of social subsidy and so on is something that would carry extreme danger and, the House can be assured, that it would have little to do with the real transport needs of an area.

One of the general features of this debate is the relative absence of criticism of CIE although the House has not been lavish in its praise of what has been achieved. This is a new development in debates on CIE. It shows some recognition of what has been achieved, perhaps a grudging recognition that things have turned around. I do not say that to seek credit for myself, although I would not mind some of it, but it is important that the board, management and workforce of CIE understand that their achievements have been recognised. For too long our criticisms of CIE have added to the demoralisation of the workforce. I am glad to be in a position now to praise the achievements of the company. Their achievements are all the greater because they have been achieved without massive redundancies or cuts in services. Deputy Mac Giolla mentioned a number of cuts in bus services but did not mention the new bus services which reflect a change in the population patterns in an expanding city. The populations of the old suburbs have declined and also the demand for services and new bus services are needed in the new suburbs. Deputy Mac Giolla seemed to suggest that we should not make these changes. That is absurd. Deputy Mac Giolla did not mention all the new services set up to service the new suburbs. We cannot guarantee that services there today will be there for ever. It depends on need and demand.

Up to 1983 the subvention limit for CIE was set by the Government some time during December. The subvention for the following year starting on 1 January was communicated to CIE some time around mid-December. To deal with the situation in 1982 Deputy Wilson who was Minister, and his Government settled on a figure of £86 million as a subvention limit for 1983. This merely repeated what had gone on for years. The outturn for 1982 was £109 million. CIE were to reduce their needs by £23 million despite the fact that inflation was running at 20 per cent. If the £109 million had gone up with the rate of inflation by the end of 1983 there would have been a loss of about £132 million. CIE were to reduce that to £86 million. This was totally unrealistic. Even if CIE were to sack half their workforce, it could not be done because the redundancy payments would have greatly exceeded £46 million. That illustrates the lack of reality in Governments' handling of CIE for years. They were given unrealistic figures plucked out of the air, to fit in with the Estimates two or three weeks before the financial year. The figures were ridiculous and were ignored. For the 15 years 1968-69 to 1982 the deficit in CIE went up by a multiple of the rate of inflation so that in 1982 there was a loss of £109 million. The National Prices Commission eloquently pointed out that had the deficit gone up merely by the rate of inflation from 1969 to 1982, it would have been only about £12.5 million in 1982 and not £109 million. That indicates how CIE got out of control. This is not something that could be blamed on CIE management and workers, although clearly some blame could go to them. The Government played a huge part in bringing about that disgraceful trend because they failed to face the issues. That is what we sought to change after December 1982 and that is what we have changed.

In January 1983 I said that we had to create a new climate, a new environment in CIE and get away from year to year budgeting. By mid-June 1983 CIE had a five year profile. It is working. In 1983 the losses declined to £102 million, a drop of £7 million. Inflation that year was close to 18 per cent, so we are really talking about a reduction in real terms of about 15 per cent — a dramatic improvement without massive cuts in services and without redundancies. The 1984 figures are not yet published but it will probably be somewhere between £104 million and £105 million, leaving aside the new subsidy for interest charges for DART which we have taken on board. Inflation in that year was at 7 or 8 per cent. That means another 5 per cent reduction in real terms in the deficit. We are now half way through this year and the projected outturn is that losses will be £104 million, allowing for 5 per cent inflation which gives a further reduction in real terms probably of the order of 3 or 4 per cent. The board, management and workforce of CIE should be given credit for that achievement.

Mr. Wilson

Are they getting any more passengers?

Mr. J. Mitchell

It is important for them to know that their achievement has been recognised, that it is worthwhile, and that the future of CIE is now more assured than it has been for many years. There is, however, no room for complacency. Deputy Wilson and Deputy Prendergast alluded to this question and Deputy Wilson in his interjection a moment ago raised the question of passengers. Passenger numbers are falling, and I want to deal with that subject. Many Deputies have talked about a social service and I think it was Deputy Prendergast who used the phrase that we should go broke on this. Deputy Taylor and others advocated a spend, spend, spend policy on railways. Deputy Taylor criticised the emphasis given in the national plan to the road programme. The railways cater for only 4 per cent of all passenger miles in this country, a very small percentage. They cannot be argued to be a massive social service. I believe that the railways should be used more and I would encourage everybody to use them. They are safe and an increasingly comfortable and fast way to travel, and I hope that more and more people will seek to use them.

It is true that passenger numbers have been declining and I hope that we can arrest that. In the city bus services at least we had a little halt in 1982-83 and again a slight return to declining numbers. As I remember it, the decline is less rapid than previously. I have said, and it is no harm to repeat, that CIE have now a new urban bus fleet. They are in the process of getting a new provincial bus fleet and they have DART. They have the first quarter of their new mainline coaches. That is all part of the new environment we are seeking to create, but what we need now in the urban bus services in particular is dependability of service. That is the next ingredient. We have new buses, busways, faster and more comfortable journeys, and we need dependable, reliable services, and that is where the question of industrial relations and absenteeism in Dublin city services is very important.

Mr. Wilson

Marketing.

Mr. J. Mitchell

If we can get over those problems I believe that we will see growth in the Dublin city services, and I am glad that this year so far the industrial relations position in the Dublin city services is quite good. I hope that continues.

Mr. Wilson

It is danger time.

Mr. J. Mitchell

In a sense when Deputy Prendergast was speaking on this question of passengers he highlighted one of the old gems that are often raised in relation to transport, that is: "Reduce your prices and get more passengers". This has been tried previously. We had the great train robbery sales promotion a few years ago. Yes, it is true that the great train robbery promotion scheme attracted more people to the railway, but it lost a great deal of money to CIE because the extra numbers multiplied by the smaller price amounted to much less than the previous numbers multiplied by the higher price. Unwittingly Deputy Prendergast highlighted this problem. A half busload at 50p is better than a full busload at 20p. He was making the opposite point but he was wrong. It highlights how wrong the old argument in relation to transport is. By just reducing the fares you are not necessarily helping the transport situation.

The £30 million which has been referred to in this Bill and by several Deputies — in fact £36 million — in short term borrowings has accumulated because of wishful thinking in the past by the Government and possibly by CIE, but more so by the Government. That was setting £86 million and wishing it into existence. The year before that they wished £96 million into existence and the outturn was £109 million, and so these short term borrowings increased. Now we are saying that we recognise that this matter was not faced up to in the past. We are taking it on board as a Government; we have not got £30 million to pay it off but we are going to pay it off over ten years. It is only right that we should do that.

Deputy Gay Mitchell spoke about CIE pensions. I am very glad, very happy to have been able to do something about CIE pensions. Coming as I do from Inchicore, which is the principal point of employment for CIE, I have known since a child many men who retired on very small pensions. Negotiations have been going on for some years between management and unions on a new pension scheme but, a new pension scheme having been drawn up, the cost of it to the workforce was found to be too high and it was dropped. An interim arrangement improving the present scheme has come before me and I am delighted to have approved it. It means that the maximum pensions for wages grade workers in CIE have been increased from £16 to £34 subject to there being no objections. It is required that these increases in pensions in CIE be advertised in the newspapers and observations sought. I understand that the newspaper advertisements will be placed in the next few days and 28 days must elapse before the scheme is implemented. I hope there will be no insuperable objections to it, although apparently there may be from one of the unions. I will be only too delighted to approve finally immediately it comes to my desk — the increasing of the maximum pension from £16 to £34. The idea is that this supplements the normal social welfare benefits so that all wages grade employees leaving CIE will have two-thirds of their retiring wage to live on.

Mr. Wilson

Is there no lump sum?

Mr. J. Mitchell

I am not sure of the details. I would like to deal quickly with some points raised by Deputies. Deputy Wilson raised the question and speculated on some rumours which I have not heard of a loss for last year of £114 million and next year of £123 million. I am glad to say that this is not the case. The losses for 1984 will be of the order of less than £105 million, around £104 million, which is very much on target. That does not include the interest payments on DART, as we treated them separately and the Government are paying them. For 1985 again the figure of £104 million is on target with six months gone.

Deputy Wilson, Deputy Mac Giolla and in particular Deputy Carey raised the question of GAC at Shannon. I have made a general comment about Deputies wishing Ministers to run State organisations and interfere all the time and do this, that and the other. One of the things that has caused many of the problems in State companies is not leaving them to the boards to run them. I have had to repel a great deal of harassment from Deputies, particularly Deputy Carey, about GAC. I am glad that, having harassed me for so long, he was able to recognise what we were able to do to keep the jobs going in the GAC plant at Shannon. I suppose Deputy Carey by his harassment ought to take much of the credit for that, but it was the right decision for this country. It is true that the buses are somewhat dearer than we would pay if we were importing them, but at least we are saving money on the balance of trade and maintaining employment in Ireland. I am grateful to Deputy Carey for acknowledging what has been done there.

I am rather puzzled at Deputy Mac Giolla's attitude. It is the first time ever that I have heard a person purporting to represent a workers' party arguing that workers' jobs should be done away with and that we should import cheaper buses. That seemed to be what he was arguing. He was actually criticising the production of buses in this country. I do not know what motivated Deputy Mac Giolla. It certainly could not have been a pro-worker bias. I am somewhat confounded by his stance.

The GAC operation at Shannon might be criticised on some grounds. I cannot pretend to be totally happy with every aspect of it, but I believe we were right overall in bringing forward expenditure from 1987 to 1985 in order to keep that plant going. Provision had been made in the national plan for a certain amount of money to be spent by CIE in 1985, 1986 and 1987 in replenishing their bus fleet. If we spent only the amount envisaged for this year it would not be enough to keep GAC going until the end of the year and they would have to close down, forcing us to import buses in future years. Rather than do that, the Government decided to rearrange the allocations and bring forward an amount from 1987 to 1985 and the remainder to 1986. That is enough to keep the plant going in 1985 and 1986 and we will get all the buses we need without importing them.

The future after 1986 is something about which I am sure GAC are worried. We cannot go on buying buses. Most of our bus requirement will be met by 1986 because of the upgraded bus programme. They must find export markets. We are paying now for buses we need, although we do not need them quite as fast as we are taking them. We are doing that to keep jobs in this country. Beyond 1986 the situation is very worrying and GAC will have to redouble their efforts to export. I hope that Deputy Carey, who has been so articulate on behalf of the workforce there, will be articulate in bringing that message back. GAC will have to find orders abroad if they are to survive in the long term. The Government have done everything possible in extremely difficult financial circumstances to keep them going for the next two years.

Mr. Wilson

Hear, hear.

Mr. J. Mitchell

I hope Deputy Carey will not have to harass me again for some time.

Mr. Wilson

I thought they would be exporting in 1983, judging by the way they were talking, but one becomes cynical as time goes on.

Mr. J. Mitchell

Deputy Brennan questioned the quality of rolling stock, particularly on the Dublin-Sligo line. As more and more coaches come on stream from the Inchicore works, new carriages will be put on various lines. At present new carriages have been put on the Dublin-Cork, Dublin-Limerick and Dublin-Galway lines. Some of the better old stock has been moved from those lines to lines like Dublin-Sligo. Deputy Brennan can be assured that there will be greatly improved rolling stock on the Dublin-Sligo line before too long.

I thank Deputy Wilson, who is always extremely helpful in bringing important items through this House. I thank him for his contribution and I appreciate what he said about encouraging the workforce in CIE to go for even greater success than has been achieved in the past two and a half years. I believe they will achieve it and that the travelling public will benefit.

Question put and agreed to.