asked the Minister for Communications the financial subvention which will be allocated to CIE for 1987; if it is expected that the subvention will be sufficient to avoid the need for increases in fares in 1987; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - CIE Subvention.
9.
The financial subvention for CIE in 1987 will be in line with the subvention formula which the Minister introduced in 1983. This will be calculated shortly. It is hoped that there will be no need for any fare increase in the foreseeable future.
Can the Minister indicate whether the full subvention will be paid in 1987? Will the balance of the subvention for 1986 be paid? I understand it amounts to about £9 million, deferred to 1987. Will it include the £16 million interest charges on DART which were also deferred to 1987?
Deputy De Rossa has mentioned a sum of £9.2 million payable under the formula which was deferred and due to be paid in January next and I should like to tell him that it will be paid.
Over and above?
Out of the £115 million of 1986?
Out of the £104.451 million.
What about the £16 million?
I do not have the details of the DART interest charges but I will get that information for the Deputy.
Is the Minister aware that CIE have to engage in short term borrowing to cover the £16 million? Does the Minister appreciate the importance in ensuring that money is paid to the company? I understand CIE estimate that there will be a shortfall of £107 million in their trading for 1987. Will the Minister indicate if the subvention will be of that order? If bus fares and other charges are not to be increased a subvention of that order will be required.
I would not go along with that. The calculations have not yet been made but they will be completed shortly. I hope there will be no need for bus fare increases.
We must move on to the next question. We are not making much progress on this matter. This is more like a debate on an Estimate and the House will remember that the Estimate for this Department was debated last week.
That is true but I am anxious to ask a question about the mechanics of the procedure mentioned by the Minister. As the Estimate that depends on the revenue for 1987 has to be made now I should like to know the formula for deciding it.
The Government's decision on new arrangements for financing CIE was announced in 1983 by the Minister. In accordance with those new arrangements CIE's subvention is now settled on the basis of a formula under which the subvention is determined as 50 per cent of CIE revenue or 33? per cent of expenditure, whichever is the lesser. Subvention moneys paid by CIE are treated as revenue and are shown above the line in CIE accounts in recognition of the board's social role. The new arrangements include a requirement for CIE to achieve a reduction of 12 per cent in expenditure in real terms over five years from 1985.
That does not answer my question. The revenue will accrue in 1987 but, as the Minister said in his reply, the formula has to be applied in the month of January. How will that formula work? Will it not be guesswork?
I do not have details of the mechanics of that operation and I am not familiar with it.
This follows from broadening the scope of the question into an Estimate debate.
It is impossible to get the information. My question is relevant in that the accounts seem to me to be far too neat. We have £99 million for 1986. It would take the financial wizard to end all financial wizards to decide in January 1986 what 50 per cent of the revenue will be by 31 December 1986.
I should like to tell the Deputy that that contribution is not relevant to Question Time.