asked the Minister for Communications the profits on CIE sundries, traffic and freight services to January 1986 in the context of paragraph 3.43 of Building on Realtiy, 1985-87.
Ceisteanna — Questions. Oral Answers. - CIE Profits on Services.
4.
CIE's road freight services in 1984 showed a profit of £41,000. While the audited accounts for 1985 are not yet available I expect a considerable improvement in the financial performance of this service in 1985 compared to 1984.
Separate working accounts for rail sundries traffic are not contained in the CIE Annual Report and Accounts. My Department are assessing the financial performance of this service in 1984 and 1985 in consultation with CIE in the context of Building on Reality.
The Minister stated that separate accounts are not available. How then can the management of CIE decide if the service is profitable or not? According to paragraph 3.43 of Building on Reality, CIE rail sundries traffic and road freight services will be discontinued from January 1986 unless they are shown to be profitable in 1984-85. If the accounts are not shown separately, how will anybody, management or Minister, know if the service is profitable or not?
Work in this area is being done in my Department and in CIE and preliminary indications are clear that there has been a very substantial improvement in the road freight performance and the future is secure.
Would the Minister like to comment on representations I received from private licensed hauliers indicating that CIE freight service are using their subsidised position to compete unfairly for ordinary business?
These types of assertions are frequently made but it must be remembered that the people making them are not always objective, impartial commentators. There is a difficulty in trying to judge what is fair competition. There are a large number of people on the road passenger and freight sides who want the profitable business, but very few want to take on the unprofitable business. There is a statutory responsibility on CIE to provide certain basic services. If they are expected to provide these unprofitable services, they have to be allowed a substantial part of the profitable service to offset those costs. We hear a lot of talk about private operators in this or that area and the unfair advantage CIE have, but nobody talks about the disadvantages CIE face. I am in favour of encouraging increased competition, but it must be fair competition and none of the relevant factors must be ignored.
Would the Minister accept that the people who wrote to me are fully licensed, legitimate traders, taxpayers, VAT payers and so on? Could he say how much, if any, of the subsidy CIE receive from this House is applied to that area of CIE's activities? This is the nub of the question.
Under EC rules we are not permitted to subsidise road freight services. As a former Minister for Transport, Deputy Wilson will understand that there are grey areas where rail freight interlinks with road freight and there are shared overheads. As I said, in relation to road freight there is no subsidy and the question of whether there are undue overheads on the rail side is being examined. I want to make it clear that what I said earlier was not meant to reflect on members of the Irish professional and legal road haulage industry because in my experience they are very fine and reputable people. The point I was making is that because a case is made by them it should not be taken as being absolutely objective.
Is the Minister saying that a decision has been taken to continue with that service? In other words, in accordance with paragraph 3.43 of Building on Reality has a decision been taken to continue with that service on the basis that it is profit making?
No decision has been taken but I am optimistic that the requirements of Building on Reality will be met in relation to freight services provided by CIE. I want to take this opportunity to record my appreciation for what has been achieved by CIE in the past three years. CIE's deficit declined in 1983 and 1984 and when the accounts for 1985 are published we will see a further substantial decline in the deficit.
They will be getting diesel for nothing shortly.
That is not the only reason. They are doing extremely well and deserve the encouragement of Members from all sides of this House.