I assume most Senators are already fully aware of the circumstances which necessitated the introduction of this Bill. The object of the Bill is to facilitate the amalgamation of the G.N.R. and C.I.E. undertakings. It is very largely a machinery Bill and many of its clauses are very technical in character. Senators will remember that the decision to acquire the G.N.R. undertaking from the old Great Northern Company jointly, as between the Government here and the Government in Belfast, followed upon the development of a situation in which the old company said they could not carry on the undertaking because of the heavy financial losses they were incurring.
After negotiations spread over some years, an agreement was made to acquire the undertaking jointly and to pay £4,500,000 for it. That agreement, which was concluded in 1953, provided for the setting up of a joint board and for the division of the losses on the undertaking and its capital expenditure equally between the two authorities. From the date on which that change took place, the date on which the joint board was set up, namely, the 30th September, until the end of September last year—that is, the last date for which the audited accounts of the concern are available—the total losses of the G.N.R., including interest payable to the two areas on capital liability and on payments which were made to meet losses and for capital expenditure, have been almost £4,000,000. Of that sum, our share was £1.4 million. In addition capital expenditure of £963,000 was incurred, of which we met £674,000.
In 1955, the Six County Minister of Commerce wrote to my predecessor here and pointed out that, in view of the heavy losses the undertaking was incurring, he was proposing to close certain of the cross-Border lines. The Government here resisted the proposed closure, and, in accordance with the terms of the 1953 agreement, that matter was referred to the chairmen of the two transport tribunals. There was a special inquiry, after which the two chairmen submitted divergent reports in September, 1956. When these reports had been received, the Minister of Commerce in Belfast indicated his intention to proceed with the closure of these cross-Border lines, notwithstanding the opposition expressed here. He also indicated at that time the probability that the Portadown and Derry line, which is almost entirely situated within the Six County area, would be closed. But later, following discussions which I had with him in Belfast last year, he agreed to defer that step for a period of two years at least. He indicated his intention then of giving notice, in accordance with the terms of the 1953 agreement, to terminate that agreement on the expiration of the five-year period mentioned in it. That period will expire in September next. The common services on these three cross-Border lines, which were the subject of the inquiry held by the chairmen of the transport tribunals, were in fact closed in September last.
I stated in the Dáil on a previous occasion that the Government here would have preferred to maintain an agreement for the joint operation of the G.N.R. system, even the remnants of the system left when these lines had been closed down, or indeed, even if the whole system was reduced to the single line from Dublin to Belfast. But our wishes in that regard could not prevail against the decision of the other party to the agreement. The termination of the 1953 agreement makes it impossible, as I am sure Senators will agree, to continue the G.N.R. as a separate undertaking.
The Bill provides for the amalgamation of the G.N.R. undertaking within the State, excluding Dundalk Works, with C.I.E. and for the definitive transfer of Dundalk Works to the recently formed company, Dundalk Engineering Works Limited. The Bill is concerned solely with the administrative arrangements required to facilitate that amalgamation and does not relate to the wider issues of transport policy which were recently discussed on the Transport Bill. Simultaneous legislation was promoted in Belfast providing for the amalgamation of the part of the G.N.R. undertaking in the Six Counties area with the U.T.A. Train services on the Dublin-Belfast line will continue and will be operated under an arrangement between the U.T.A. and C.I.E.
Lengthy negotiations have taken place between the Ministry of Commerce, Belfast, and my Department regarding the basis on which the assets and liabilities of the G.N.R. Board should be divided between the two areas. The outcome of these discussions is contained in the draft agreement which is scheduled to the Bill and which will be executed following enactment of this legislation. The agreement aims at broad equity in the division of the undertaking rather than laying down accounting details which can best be settled at operating level between C.I.E. and the U.T.A.
The terms of the agreement represent to a considerable extent an unscrambling of the 1953 agreement and of the agreed scheme drawn up under it for the apportionment of losses. The approach has been that the assets and liabilities should as far as possible be apportioned according to their location and that items in common use or of common interest should be divided equitably having regard to the needs of C.I.E. or U.T.A. in operating the parts of the undertaking falling to them. In this way lands, premises and chattels situated or normally used in one area will be allocated to that area. Railway rolling stock will in general be appointed equally, the particular units falling to either area being agreed by C.I.E. and U.T.A. The road passenger and road freight service operated by the G.N.R. will fall to us in its entirety.
Stores, materials and other assets and liabilities will be apportioned equally, the particular units falling to either area being agreed by C.I.E. and U.T.A. Staff, including former members of the staff on superannuation, will be divided on the basis of residence. The pension funds will be divided actuarially on the basis of residence of the members.
No permanent arrangement has been settled in relation to the County Donegal Railways Joint Committee which is jointly owned by the G.N.R. Board and the British Transport Commission. The position of this undertaking is extremely complex and it is possible that separate legislation here and in Britain may be necessary in regard to it. I am satisfied that the basis of division in the scheduled agreement is a fair and equitable one. It is the result of protracted bargaining conducted, however, in a businesslike but friendly spirit and I can recommend it to the House.
As regards the Bill itself, its terms in relation to the amalgamation of the G.N.R. undertaking within the State with C.I.E. follow the same lines as the 1950 Act which provided for the amalgamation of C.I.E. and the Grand Canal Company. Unlike C.I.E. there has been no comprehensive modernisation of the G.N.R. undertaking and much of the G.N.R. rail rolling stock and equipment is antiquated. In the circumstances it is proposed that the amalgamation should be carried out without any increase in the capital liability of C.I.E. This is tantamount to writing off the capital liability of the G.N.R. Board of £2,250,000 representing our half share of the acquisition price of the undertaking in 1953 together with our share of moneys advanced since 1953 to finance capital expenditure which by September next should amount to about £770,000. In addition our share of the accumulated losses of the G.N.R. Board since 1953, which by September next should amount to about £1,867,000, is likewise being written off.
All staff resident in the Twenty-Six Counties and employed by the G.N.R. Board immediately before the transfer date will become C.I.E. staff. Compensation provisions identical with those in the Transport Bill, 1958, will apply to transferred G.N.R. staff. In addition, provision is made for the compensation on the same terms of employees suffering loss of employment or worsening of conditions as a consequence of the amalgamation of the two undertakings. Provision is also made for the preservation of the existing pension rights of G.N.R. staff transferring to C.I.E. In the case of wages staff, a due share of the pension funds will be transferred to C.I.E. C.I.E. have decided to become a subscriber to the British Railway Clearing System Superannuation Fund in respect of G.N.R. salaried staff who are members of that fund. This will require special British legislation.
The Railway Clearing System Superannuation Corporation who control the fund have indicated their willingness to co-operate and it is hoped that it will be possible to secure enactment of the necessary British legislation next year. Meanwhile provision is made in the Bill preserving the status quo whereby G.N.R. staff who are members of the fund will be transferred to C.I.E. on secondment only. When the necessary British legislation has been enacted and the G.N.R. Board dissolved the existing obligations of the G.N.R. Board under the fund will be binding on C.I.E.
I think the Seanad is already aware of the efforts which are being made to maintain the level of employment at Dundalk Works. One of the most serious consequences of the division of the undertaking which was feared was its effect upon the level of the employment there. We decided to try to save valuable time in dealing with that situation by anticipating the termination of the 1953 Agreement in September next; with the consent of the Six County Authorities, the works at Dundalk were leased to the new company set up for the purpose—the Dundalk Engineering Works, Limited—in January last. This Bill makes provision for the definitive transfer of the works to that company.
The salaried staff at the works at Dundalk are at present seconded by the G.N.R. Board to the company. The majority of that staff have general railway gradings and common seniority rights with corresponding grades elsewhere in the system. They will retain their G.N.R. employment and transfer to C.I.E. on the amalgamation. If they are not required by C.I.E., it is to be assumed their services will formally be dispensed with, which will entitle them to compensation. However, it is anticipated that they will continue in their employment with the Dundalk Engineering Works, in which case their compensation will be abated for as long as they are so employed by that company or by any State-sponsored body or local authority, in the same way as any other C.I.E. staff who become redundant.
The wage grade staff at Dundalk have already been transferred definitively to the new company. These staffs were recruited and employed solely at the works. Their future lies with the new industrial developments planned at Dundalk. I am sure Senators are aware of the efforts made by the Board of the Dundalk Engineering Works, Limited, to provide continued employment for all the wage grade staff who have been transferred to them. The Bill provides for the preservation of the pension rights of former G.N.R. wages staff employed by the new company and an appropriate share of the G.N.R. pension fund will be transferred to that company.
The Bill as passed by Dáil Éireann includes provision for the compensation of staff of the Irish Railway Clearing House who may suffer loss of employment or worsening of conditions as a result of the disappearance of the G.N.R. as a separate undertaking. As Senators are aware the Clearing House is a statutory body whose main function is the settlement on behalf of Irish and British transport and shipping companies of the accounts of through traffic. The provision in the Bill has been inserted at the request of the Clearing House which will bear the cost of the compensation.
I should not like to conclude this statement, explaining the provisions of the Bill, without paying a tribute to the joint board who have carried on the undertaking since 1953. They had not by any means an easy task. Indeed, they took over the running of the G.N.R. at a period which, I think, could fairly be described as one of the most critical in the history of railways in this country. I am sure all Senators will regret the disappearance of the G.N.R. as a separate undertaking after almost a century of existence. I bring this Bill to the House with very considerable reluctance but, as I have already pointed out, we have no option in the matter. I hope Senators will recognise the Bill as a genuine effort to meet in a fair and reasonable way the many interests which were affected by a very difficult but inevitable situation. It is in the expectation that they will do so that I recommend the Bill to the House.