Seanad Éireann debate -
Tuesday, 31 Jul 1962

Vol. 55 No. 13

State Guarantees (Transport) Bill, 1962 (Certified Money Bill) — Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Transport and Power (Mr. Childers)

The purpose of this Bill is to extend the existing statutory powers of guarantee vested in the Minister for Finance in respect of Córas Iompair Éireann. The House will be already aware that there is provision in existing legislation covering the borrowing of moneys for capital purposes by CIE and the guaranteeing of such borrowings by the Minister for Finance.

Under subsection (2) of Section 30 of the Transport Act, 1950, the Minister for Finance is empowered to guarantee the repayment as to principal and interest of moneys borrowed by CIE under the provisions of that Act. Guarantees under subsection (2) of Section 30 of the Act relate to guarantees of borrowing for long-term capital requirements. CIE may also borrow for short-term requirements and the Minister for Finance is empowered also under subsection (1) of Section 30 of the same Act to guarantee such borrowings. The maximum amounts which the Minister for Finance may guarantee have been amended by the Transport Act, 1955, and the GNR Act, 1958. Under those Acts, the upper limits of borrowing by CIE which might be guaranteed by the Minister for Finance were raised to £12 million for long-term and £1½ million for short-term borrowings.

The Bill is intended to serve a purpose rather different from the existing statutory provisions governing guarantees by the Minister for Finance. The existing provisions empower the Minister for Finance to give guarantees only in respect of borrowings. The Bill is designed to enable the Minister for Finance to guarantee, in addition to borrowings, the payment by CIE of moneys due by the Board on foot of contracts entered into.

CIE had received an attractive offer of extended payments at favourable terms for the purchase of new diesel locomotives. The terms of contract provided for payment in instalments over a period of five years, with interest at the rate of 5½ per cent. per annum on the balance outstanding subject to a Government guarantee. As the law stood, the statutory powers of the Minister for Finance did not enable him to give a guarantee in the terms required.

It is the view of the Government that acceptance of favourable credit terms such as were offered in this case should not be prejudiced by the absence of a statutory power enabling the Minister for Finance to give the required guarantee when the Minister for Finance is in fact already empowered to give a guarantee in respect of borrowings.

The existing statutory limit for borrowing for long-term purposes by CIE has been reached by the recent £2 million stock issue and it is not intended to propose a new upper limit for such capital borrowing by CIE until the position of the whole organisation comes to be reviewed towards the expiry of the five-year trial period provided for in the Transport Act, 1958. In any event, it was desired to accept the particularly favourable extended credit terms which were obtainable in the present case. A payment scheme of this kind amounts in fact to a pay-as-you-earn scheme which is a wholesome arrangement for an organisation faced, as CIE is with the obligation to pay its way.

The enactment of this Bill will enable the Minister for Finance to implement an undertaking given to CIE that power would be sought from the Oireachtas to permit of a guarantee being given for the payment by the Board of the instalments specified in the contract for the new diesel locomotives to which I have referred. To enable the construction of the locomotives to be put in hands at once with a view to early delivery, authority was given to CIE on 8th March, 1962, to purchase the locomotives from General Motors and later, on 18th April, 1962, CIE were given a formal undertaking on behalf of the Government subject to subsequent legislative confirmation, that payments under the contract would be met as due.

The Government decided that, as the authority of the Oireachtas was to some extent being anticipated, it would be appropriate, if only as a matter of courtesy, to include a reference to this particular contract in the Bill. It was claimed by certain Deputies in Dáil Éireann that the contract should, therefore, be scheduled to the Bill or tabled in the House. There is no precedent for publishing in this, or any other manner, a commercial contract entered into by a State-sponsored body in the exercise of its statutory functions and, as the inclusion of a reference to the contract was not necessary, I withdrew it by amendment in the Dáil.

Unfortunately the opportunity was taken by certain Deputies to suggest that my refusal to schedule or table this contract was an attempt to cover up irregularities by CIE and the suggestion was made that the contract had been secretly and irregularly entered into prior to the invitation of tenders from other suppliers. This imaginative invention was based on a newspaper report of last October, when representatives of General Motors were visiting Dublin, that they had obtained an order for 30 locomotives from CIE This report was publicly denied by CIE at the time. The representatives of General Motors had indeed visited CIE and were naturally seeking business. They were told that CIE would probably be in the market soon for about 30 locomotives and that they would probably be invited to tender. The Board did decide to acquire 37 diesel locomotives and, on 5th December, 1961, General Motors and seven other manufacturers were invited to tender. The General Motors tender was accepted on 28th February, 1962, subject to the provision of the necessary Government guarantee, and the contract was finalised on 4th May, 1962. How General Motors could be expected to accept an irregular and presumably unenforceable contract in October last when they would not accept a perfectly legitimate contract some months later without a Government guarantee of payment is beyond my comprehension.

I mention this matter only to express my dislike of the unfair and unworthy reflection on the Chairman and Board of CIE which it implies. The debate in the Dáil makes it essential for me to observe that even if Deputies and Senators disagree with the policy and actions of the Board, it is not too much to ask that they should abstain from using the privileges of the Oireachtas to make statements, without a shred of evidence, which can only reflect on the honesty and good faith of the directors and chairmen of State boards.

The question of diesel locomotives does not arise on the Bill as amended but to anticipate Senators' questions I may say that, while neither I nor my Department had anything to do with the tender or contract, the acquisition of the 37 diesel locomotives was approved by me as part of the capital programme of CIE. The locomotives are essential for the maintenance of an efficient railway system even if the system has to be on a smaller scale than at present. The locomotives will in addition enable CIE to achieve substantial economies in operation and thus help the Board to achieve its statutory obligation to pay its way.

I recommend this Bill for the approval of the House. It does not commit the Government or CIE to any expenditure that would not otherwise be undertaken. It merely provides an alternative to existing borrowing procedure which can be used where advantageous. Particularly favourable terms were offered in the case to which I have referred and may well be offered in the case of other transactions from time to time, because the transaction qualified for export credit financing arrangements and, under such arrangements, it is generally necessary to provide a Government or similar acceptable guarantee if the best terms are to be got.

Professor Hayes

This Bill should be accepted. It offers, particularly in the light of the amendment made by the Minister in the Dáil, a very good example of how little power the Oireachtas really has over State-sponsored bodies. In fact, the Minister in his Second Reading speech just now has made it quite clear that the Oireachtas has no power whatever over State-sponsored bodies. He had a section in the Bill which made a specific reference to a contract. There was some talk about the contract. What did the Minister do? He took out the subsection which dealt with the contract and now his position, without that subsection, is as good as it was when he put it in, and indeed probably better, from the point of view of order and debate. It is really a case of heads I win, tails you lose. The Minister has some power over these bodies. Parliament has none at all.

I suggest to the Minister that perhaps he would be better advised not to give advice at large to Deputies and Senators that they should refrain from abusing their privileges. I say in all mildness that the Minister and his Party got into office by the most flagrant abuse of their privileges in the Dáil. They abused everybody inside and outside both Houses of Parliament when they thought that would be of any advantage to them. In any event, so far as CIE are concerned, the Company should get an opportunity of making good and this Bill is merely for the purpose of allowing the Government to guarantee particular contracts rather than to guarantee loans made to CIE. I have no intention whatever of criticising any of the directors but the Minister's attitude would appear to amount to "Shut your eyes and open your mouth and see what Childers will send you." People are not prepared to accept that.

From the general point of view of State bodies, the first State body, the ESB, was set up in 1926. On that occasion, the question arose as to how the Dáil could exercise some control over it. I said from the Chair in the Dáil at the time that I did not know and that this would not be the last State body to be established. The position we are in at present is exactly the same. The Minister has power to advise CIE; he may have power even to coerce them. He may refuse to bring in certain measures into Dáil Éireann but there is no means by which the Dáil or Seanad, and the Dáil in particular, can influence them. I agree entirely that there would be no use showing me a contract made by CIE for the purchase of diesel engines as I admit my ignorance in these and other commercial matters. The situation then is that the more State control you have—and there are people committed to State control— the less Parliamentary control you have. It would be possible to argue the point—I do not propose to do it at this late hour of the day—that perhaps we exercise more control over private enterprise than we do over CIE or the ESB. However, I will not argue that point.

I agree with the Bill and there is nothing we can do about it in the position we are in with regard to these bodies. It may indeed be a good thing that we are not regarding them as being purely on a commercial basis. We regard electricity as a social service and I presume we regard the preservation of railways as something to be regarded not entirely on a commercial, dividend-paying basis. However, the Bill is one which I think merits a Second Reading from the House.

Mr. McAuliffe

We in the Labour Party welcome this Bill because we welcome any move on the part of the Minister to ensure that CIE is run on an economic basis. We have subsidised CIE for too long and if there is any move to make CIE a paying proposition, it will be welcomed by this House and the people generally. As far as we are concerned, the chief point at issue is whether the contract for the purchase of the diesel engines between General Motors and CIE should be placed on the Table of the House for the benefit of the House. I understand in Dáil Éireann the Minister refused to give any information regarding the contract. He said it was not a matter for him; yet it is a matter for the people to put up a sum of money and to guarantee the money for the firm supplying these engines. We as representatives of the people are entitled to certain information which the Minister is not prepared to give us.

We would like to know who is the agent acting on behalf of CIE in connection with the purchase of these engines. We would like to know the conditions under which this agent is working and whether he is working on a commission basis or not and, if he is, what is the amount of the commission. We should also like to know how he came to be appointed to act in a huge contract of this nature. These are questions we would like to have answered by the Minister. I hope he will not continue to withhold the information we have been seeking. If the money is being provided by the State, we are entitled to know whether the lowest contract has been accepted or not, how many people have tendered, and how it was that a particular firm were selected to supply these engines. I hope the Minister has changed his mind about giving the information to the House. We in this Party will press for that information. We believe the people should know where the money is going.

Professor Quinlan

In this Bill, we are asked to guarantee money to CIE and consequently we should have a general look at the Company and at the soundness of the proposition because it is a very serious business to pledge the country's credit to the extent of £5 million.

The first thing which perhaps we might observe is that CIE appear to be making a very determined effort, and what outwardly appears to be a successful effort, to meet the grave challenge which confronts them. That challenge is part of the challenge which railroads everywhere are confronted with. In England, America and elsewhere, railroads are having great difficulty in maintaining themselves and especially is this true in the passenger line where they are faced with so much competition from other forms of transport. To that extent, our problem is not unique. We might congratulate CIE on what they have done.

There is one facet of their management which appeals very much to me, that is, that in their recent reorganisation, the technical men have come very much to the fore. They are apparently showing that on a foundation of good technical training and experience in practice, if to that is added the training and experience necessary for management, a technical man can rise to the challenge of management as well as and, in fact, better than, a nontechnical man. In that there is a great lesson for us in the way in which we plan to meet the challenge of the Common Market.

The main handicap CIE are fighting in the country is simply a lack of people. The Minister has at various times given statistics wherein he has shown that per thousand of the population, we have too many miles of railroad, more miles than anywhere else. I would much prefer to look at it the other way and say we have too few people per thousand miles of railroad.

An Cathaoirleach

May I draw the attention of the Senator to the fact that this Bill does not cover the whole gamut of transport? It is an enabling Bill relating to a specific item.

Professor Quinlan

It relates to the specific point as to whether we, as representatives here, shall pledge the credit of the nation to guarantee £5 million to CIE. I submit with all sincerity that we have to have a brief look at this Company and see in what way is it going to know is it wise to pledge the money asked for in this Bill. The point I want to make is that for the problems of the future, it does seem we will have to have a great increase in population over the next 20 or 30 years, whether that increase is provided by ourselves or greatly augmented by an influx from abroad under the Common Market. Consequently, we should never lose sight of that and, although facilities may be apparently uneconomic and be in excess at the moment, we have got to keep our eyes on the future and plan in that way. It would be very wrong that CIE should be compelled by lack of Government support to cut down the system to the point where we may regret it later. In that regard, we have a very positive statement that came from CIE in their report for the year ending 31st March, 1961. At the end of page 9, it is stated:

The Board announce that, except for some small stations, these were the final sections of the railway system that would be replaced by road services within the five-year period set out by the Transport Act, 1958.

That was a solemn statement made by CIE less than a year ago. It is on that basis we should deal with CIE and with their request for more money. We should view any departure from that as very grave indeed. Surely any general all-round increase, such as that being caused by the eighth round increase, cannot affect whether a particular section of the system is economic or not? We would expect the eighth round increase should apply to the road freight people just as well as railway freight. Consequently, it should not be a factor altering the balance between the two.

We come then to the question of whether we should vote this money or not. In voting this money, it behoves us, as ordinary, prudent representatives, to look at the balance sheet of this company to see what is the actual position and whether the money should be voted or not. The last balance sheet came to hand about last September and is for the year ending 31st March, 1961. This balance sheet was greeted in the national press with all forms of exaggerated hyperbole that such wonders had been achieved as, for instance, that the losses had been cut from £709,000 to £246,000 in the past year and that that was a continuation of what had happened in the previous year when the losses had been cut from £1,200,000 to £700,000. I submit that all that picture is totally false and that, although a good deal has been done, the worst enemy of CIE at present is the way in which their accounts are presented. These accounts bear no relationship whatever to reality. Any private businessman who would present his accounts in that form would not deserve to last very long.

The figure that was seized on—it is given on page 5 of the report—states that for the year ending 31st March, 1961, there was a net deficit of £246,000 compared with a net deficit of £709,000 in the preceding year. That is a very positive statement. It is one that has been seized on to show that CIE, by their own efforts, by the reorganisation and by what is usually referred to as superior management——

An Cathaoirleach

Would the Senator now relate these matters to the amending Bill?

Professor Quinlan

I am relating it to the fact that we are being asked under the Bill to approve that the Minister may guarantee a sum which, according to Section 2, shall not exceed an amount equivalent to £5 million. I take it that in discharging our duty to discuss that, we have a right and a duty to look at the financial position of the company involved?

I am making the point quite categorically that while I give full credit for what has been done—I can say that as great an effort has been made as was made by any other railroad company and everything that could be done has been done—the fact is that the picture is not as presented here. In point of fact, CIE, by their own efforts, just about held the line last year. Holding that line was quite a substantial achievement. Take the figures that really matter: passengers carried. There is a slight reduction in this, some three per cent. as shown in this report. Perhaps that was due to a strike that operated for some period. Anyway, there was no increase there. The only section that showed a worthwhile increase was railroad freight, in which there was an increase of seven per cent. over last year. Road freight increased some 20 per cent. over last year. There was a total increase in freight carried of 14 per cent. These appear to be very substantial increases.

An Cathaoirleach

I wish again to draw the attention of the Senator to the fact that the whole problem of transport is not under review on this Bill.

Professor Quinlan

With all due deference, I am not discussing the whole problem of transport. I am merely discussing——

An Cathaoirleach

I am ruling that the Senator is going out of order and he must come back now to the terms of the Bill.

Professor Quinlan

I do not see how we can discuss the Bill if we are not permitted to discuss the question as to whether or not the picture in relation to CIE is as presented in its balance sheet. I think we would be failing very much in our duty——

An Cathaoirleach

The Senator is entitled to refer to the balance sheet, but the whole balance sheet is not under review on this Bill.

Professor Hayes

Surely it must follow that, if we are asked to guarantee a particular body, we are entitled to ask—I do not propose to do this—whether the body is worthy of being guaranteed? If we cannot do that, then our power is even lower than I put it when I was speaking myself.

An Cathaoirleach

In reply to the last matter, the Chair will not rule on a theoretical point. Senator Quinlan, to continue.

Professor Hayes

There is nothing theoretical about it. If a Senator is going into the question of the credit-worthiness—that is the word, I understand, the bankers use—of CIE, is he not entitled to do what the Senator is now doing?

An Cathaoirleach

If it is related to this Bill, but a general review of transport is not in order on this amending Bill. Senator Quinlan, to continue.

Professor Quinlan

With all due deference, I am not in any way undertaking a general review of transport.

An Cathaoirleach

The Chair will judge on that. Senator Quinlan, to continue.

Professor Quinlan

All I am doing is examining the profit and loss account to show that the picture presented of the account and the picture that has been painted from that account by the national Press is not the real picture. The claim that the position had improved last year from a deficit of £709,000 to a deficit of £246,000—an improvement of £463,000 —is not real because the figures that make up that £463,000 are, first, interest received for CIE investments; and the interest received was due to the fact that the State has been giving a grant of £1,125,000 each year for five years, and CIE have been setting a good deal of that aside as not required for present purposes, and have been getting a good interest on the money provided by the State.

The increase in amounts received under that heading was £80,000—from £109,000 in 1960 to £190,000 in 1961. That is an increase, as I said, of £80,000. There was a statutory contribution to the County Donegal Railroad Joint Committee, which was relieved by an Act of Parliament, giving a net reduction of £14,000. The modernisation programme shows that, for the first time, and this is very important, in the accounts for 1961 CIE brought over some of the surplus that was made by selling railroad tracks, and other goods that had been written off, and, as it puts it here, used it on modernisation and reconstruction of rolling stock, stations and buildings, and office equipment. That is at the bottom of page 23 of the Report. It used £128,000 out of £173,000 that had been obtained from the sale of surplus stock. I take it that if that surplus stock had not been available, if the railroad tracks had not been taken up, the modernisation programme would still have gone ahead and would have been paid for out of moneys made available in that year.

An Cathaoirleach

Will the Senator now come back to the Bill before the House?

Professor Quinlan

I am on the Bill. I am on the profit and loss account of CIE in their account ending 31st March, 1961. I have accounted for £80,000, £14,000 and £128,000 of that. The closing of the canal contributed another £28,000. That was an act of merely shutting down. With regard to fuel, due to the heavy investment that the State has made in the dieselisation programme, and the development of that programme, which is, in itself, a very good thing, fuel bills have decreased to considerably. They have decreased to the tune of £105,000. Other goods which were written off account for £36,000. In short, there is not a point of actual difference due to the actual operation of the lines. That may be a very substantial achievement, holding the position in that way—I think it is —but it is not in the interests of CIE that their profit and loss account should be framed in this way; and it is not in our interests here that, in voting this money, we should be fooled by such an account, that we should take it that the position has shown considerable improvement whereas, in fact, what has been done is merely to hold the line.

If anybody is interested in seeing an analysis of the accounts for the preceding year, then these accounts, which showed a spectacular reduction of £1,200,000, are available. The reductions were, in effect, of exactly the same kind so that, again, there was nothing substantial in it. In fact, the only figure that appears substantial in the profit and loss account is the improvement in the freight department. That improvement, as shown here, accounted for an increase of 14 per cent. That is a very good increase. But it must be remembered that last year our exports increased by 18 per cent. and our imports of 16 per cent and CIE got its proportionate share of the increases available. Again, full marks to them for doing that, but let us not be misled into believing that the present management is so much superior to past management.

All management in CIE have tried to do their job well and efficiently. Certainly the previous manager, Mr. T. C. Courtney, was one of the most hardworking and able officials that this country has ever had the good fortune to be served by and, consequently, I should not like any ballyhoo to be used to suggest in any way that the present administration has worked miracles where all other administrations failed. In point of fact, nothing will succeed with CIE except hard work on the part of all its employees, plus more goods, more transport, and so on.

I should like to make one other comment on the present position of these accounts. These have been contrasted very unfavourably with the previous accounts in this little green book. Actually there is more real information in the little green book than in the balance sheets and reports of the past two years. The report last year even cut down on the information that was given in the preceding year.

I make the appeal then that if we are to go ahead, as I suggest we should go ahead, approve of this guarantee, and allow CIE to go ahead with the dieselisation programme, then we should do that on the understanding that the system of accounts shows clearly the actual position of CIE, that such things as interest received from Government grants, or moneys received from the sale of stocks, which have already been paid for by the taxpayer, should be shown quite distinctly in the accounts and should not in any way lead to the type of confusion that prevailed last September in regard to the accounts.

In going ahead with this guarantee we are taking CIE at their word in their announcement here that, having closed the Waterford-Tramore, the West Clare and the West Cork lines, that was the end of the closing down of railways. I suggest that in granting this guarantee, we should base it on the actual factual statements made by CIE in that report.

Finally, I should like to support Senator Hayes very strongly in his statements with regard to the great uneasiness we feel in the Seanad in dealing with semi-State bodies. Apparently, we have no function but to hand out the taxpayers' money. It is high time that some positive approach was made to deal with such companies. I suggest that there should be committees of the House which would go into issues such as contracts—the contract in this case should have been attached to the Bill —and other important items. The examination would then be under the secrecy of the committee and the affairs of CIE would not perhaps— this is what the Minister quite rightly objects to at the moment—be dragged into public debate in the House. Surely there is a happy medium—a happy medium which works in all progressive countries where there are Select Committees of the House? They report to the House that they are satisfied that everything is in order. If we had that, there would be far fewer grounds for criticism in regard to the relationship between the Oireachtas and the semi-State bodies. That would be for the good of all.

Mr. Cole

I want to deal with only one small point in the Bill. Does the Minister consider this a better way of dealing with the matter? We are guaranteeing a hire-purchase agreement. There must be a considerable amount of interest involved in this case —a matter of five years. Over a number of years a considerable amount of interest and capital will be paid out of the country. What difference would there be in the State paying this direct and letting CIE pay it back to the State if and when they are able?

Éamon Ó Ciosáin

I have just a few remarks to make on this Bill. We should not have a full dress debate on the policy of Córas Iompair Éireann on a Bill of this kind when we are not, as some Senators seem to think, voting money for Córas Iompair Éireann. We are guaranteeing money on behalf of the State to Córas Iompair Éireann to carry on their good work.

There has been a suggestion here that there is uneasiness in the people's minds as to the operations of the semi-State bodies. This is the first time, I must say, that I have heard any suggestion of the kind that there is uneasiness anywhere about the working of these semi-State bodies. If I were to pass any remark on their operations, I would say that, instead of any uneasiness existing in the people's minds as to the way they are carrying out their respective policies, the people look upon them as good examples of efficiency. There is no doubt about that. These semi-State bodies have done wonderful work. I doubt very much if they would have been as successful in the carrying out of their work as they have been if, as has been advocated here, they were compelled to put their day-to-day administration before the Houses of the Oireachtas.

Mr. McAuliffe

Five million pounds is a big sum.

Éamon Ó Ciosáin

It was never intended, when these bodies were set up, that they would have to account to the Oireachtas for their day-to-day administration. They were set up, as has been described, as semi-State organisations and, as such, they have carried on their work very well. They have given good employment and if Córas Iompair Éireann have not been entirely able to meet their commitments there are many contributory causes of that.

Córas Iompair Éireann are a huge State organisation and all we are being asked in this Bill is to guarantee to the extent of not more than £5 million. That is a very small item when we take into account the great amount of employment they are giving all over the country and the good services they provide for the people when all is said and done. Senator Quinlan seemed to make little of the improvement that has been brought about by the present Chairman.

Professor Quinlan

On a point of fact, I did not. I praised the improvement very fully.

Éamon Ó Ciosáin

It was very queer kind of praise I must admit. When we praise the present Chairman, we are not by any means detracting from what has been done before by other chairmen. They were all up against a very difficult and complicated problem. Everyone knows that but I shall not go further into it. I should not like to embark upon a full debate on the policy and administration of Córas Iompair Éireann. I do say, however, that they have made a good job of the transport system of this country. They have been called upon to perform a difficult task within a certain limited time and they are going a good way towards doing it.

Senator Quinlan mentioned certain things. He said their investments should not be taken into account. Why should they not? If any business concern makes wise investments and derives advantage from them, are they not entitled to claim credit for them and are they not entitled to put that into their accounts?

An Leas-Chathaoirleach

The Senator is now going outside the scope of the Bill.

Éamon Ó Ciosáin

CIE have had to meet many difficulties and have recently had to meet increases in wages which put an extra burden on their shoulders. That should be taken into account and instead of having unfounded criticism levelled at them as to the way in which they are carrying out their policy, CIE deserve our commendation.

Professor Jessop

I was very interested in Senator Quinlan's analysis of the economic position of CIE. For my own part, I formed the opinion that I would support this Bill when I read recently the very lucid statement made by the Chairman, Dr. Andrews, entitled, I think, The Future of CIE. I read that with great interest and I thought it gave a very forward-looking, constructive picture of the whole enterprise. It gave a sense of leadership, a sense of confidence which I had not seen in any statements about this concern before. It encouraged me greatly and I felt that having read that statement I should do anything I could to give further encouragement in this situation.

It was an honest statement because the Chairman referred to the difficulty, which has just been mentioned, of wage increases. The biggest burden of that has not been revealed in the report which Senator Quinlan has analysed. That has to come in the present year and the situation which seemed so rosy just recently will not be so rosy at the end of this year, as we understand from this statement. Therefore, on account of the terrific effort that has been made in this company and on account of the impression I have received for the first time that they are really tackling this almost impossible situation, I should like to support this Bill.

Mr. Childers

I do not think this is the right moment to engage in a full-scale analysis of the position of CIE, which I could well do, and to give a detailed account of all the tremendous and fundamental changes that have taken place in the operative organisation of the company concerning which I have had full particulars from the Chairman. Neither do I think this is a suitable occasion on which to outline again in detail how these changes will eventually affect favourably the financial fortunes of the company. Therefore, in order to keep the debate within the confines of the Bill, I shall have to confine myself to a few points that were made by various Senators on this matter.

Senator Hayes suggested that we indulged in violent criticism at the time of the general election and asked, therefore, if we attack another Party during a general election, why should there not be an attack on the Chairman and Board of CIE? I do not see how the two things could be the same. I have no objection to the cut and thrust of politics. I am prepared to experience that at all times but as I have complete responsibility for the general conduct of CIE in respect of legislation enacted in this House, as I review constantly the effect of all legislation in relation to State companies and as I meet the chairmen of the boards of these State companies at frequent intervals in order to discuss with them their operations in relation to general Government policy, their intentions to borrow, the increase in efficiency they can bring about and their part in the growth of the economy, I should like attacks made by Deputies or Senators on the general working of any State company to be directed against me and not against the chairmen or directors of State companies who themselves are unable to answer in either House of the Oireachtas.

As I said in the Dáil and as I should like to repeat here, there has been a very good tradition in regard to that over the years, with some few unfortunate exceptions. Let us forget the exceptions and keep to the tradition. A Minister can always be challenged in the Dáil or the Seanad to consider the general efficiency of a State company and to consider his part in the direction of that State company, and that seems to me the best way to do it.

I am glad to hear the members of this House, either directly or by implication, praise the work of the present Chairman of the Board of CIE. Virtually everybody who spoke here today reversed the most unfortunate situation which arose in the Dáil where, by implication, these men were not doing well and not trying to help the country in their efforts. I am glad therefore to hear this praise being given, although it was given with reservations in certain cases. Nevertheless, we have here a much better atmosphere in regard to this whole matter.

I do not know how I can deal with the powers of the Oireachtas in relation to State companies except very briefly to refer Senator Hayes to the statement made by the Taoiseach to the Institute of Public Administration on the relation of State companies to the Government, to Ministers and to the Oireachtas. What he said there is to be recommended as the answer to the question as to whether the Oireachtas should have more power. This is a matter which has been discussed in many countries and by people of both the socialist and capitalist hue of politics. People have very widely divergent views on the subject but my own feeling is purely pragmatic in character. On the whole, our State companies have done very well and I cannot see the necessity at the moment for any drastic change in the procedure.

I was delighted myself when the Taoiseach suggested that if Deputies wished to discuss the affairs of a particular State company in considerable detail, an occasion could be made available by a resolution asking to discuss the annual report of the company being moved by any Deputy. That has already been done in the case of CIE and there was a very prolonged discussion in which I gave a great deal of detailed information on the general position of CIE, quite enough for the purposes of the debate. If, on the occasion of any debate of that kind, allegations of a really serious character, with factual evidence, were made, or if statements made responsibly by Opposition Deputies or Deputies of any Party reflected on the general efficiency of the Board or the character of its policy, any Government in office would be almost compelled to institute some kind of inquiry.

I feel, therefore, this agreement by the Taoiseach to accept resolutions of that kind offers a very good solution for the problem of enabling the Oireachtas to discuss in more detail the operations of a particular company. Of course, in the ultimate, the Oireachtas have set up commissions of inquiry into the working of boards and State companies and the whole of the present legislation is based on one of the finest reports ever presented to the Oireachtas—the report of the Committee on Internal Transport which led to the 1958 Act.

I want to say a few words here about the contract between CIE and General Motors. I naturally consulted the Minister for Finance in respect to this contract and it would be setting a most undesirable precedent if I gave any kind of a disclosure of the character of this contract and entered into the question of the agent and his commission. The agent of General Motors is very well known to everybody in this country. As I said, it would be setting a precedent by which every contract between any State company and their suppliers could be questioned by Deputies and Senators and it would tend to set up large-scale political interference which would be wholly undesirable. It is perfectly obvious that if I were to schedule this particular contract, members of either House could in future raise all sorts of questions about contracts, whether the lowest tenders were accepted by the ESB and by Comhlucht Siúicre Éireann, and you would get the growth of pressure lobbies introduced into the debates on the affairs of these companies.

We are all human beings in respect to those sort of things and there has been a tradition since the inception of Parliament that the proper thing to do is to appoint a first-class board, to provide legislation of the right kind, to insist on the presentation of full annual reports by these companies, to regard the efficiency of the board as the index by which a company is judged and to leave the carrying out of the day-to-day operations to the board without any political interference. I feel quite sure that any Government which might succeed ours will never take steps to publish individual contracts of State companies. If I felt there was a necessity to do that, what I should do would be to ask for the resignation of the chairman of the board or to undertake the institution of a committee of inquiry into the workings of the board.

Senator Quinlan touched briefly on the policy of CIE, which in fact is based on the 1958 Act, in relation to the social and economic patterns of this country. I do not want to delay the proceedings by going far beyond the ambit of the Bill now before the House except to assure Senator Quinlan that we have made a very detailed study of the Beddy Committee Report and its consequential effects in relation to the CIE decision to close branch lines.

The study has been based on various assumptions regarding the social and economic state of this country and I can assure the Senator that, having made a comparison between this country and others in relation to congestion, or absence of congestion, of population, in respect to the movement of goods, the availability of roads, the lack of congestion on roads outside the immediate city areas, even if there were a very starting increase in population—say 50 per cent.—in the areas where the lines have been closed and a starting increase which I hope will take place in economic activity, I have no fear that the closing of branch lines closed up to now would seriously affect the economy of the country or create serious problems which would be better solved by allowing trains to run virtually empty over the years until the population increased. The Netherlands have 11.5 million people and 2,030 miles of line. In this country, there are 1,564 miles of line and we have 2.8 million of a population which shows there are very wide disparities.

Mr. L'Estrange

What about the canals?

Mr. Childers

I am not talking about the canals. They do not arise on this Bill.

Mr. L'Estrange

They are a method of transport.

Mr. Childers

Senator Quinlan also made some observations on the character of the CIE report. I cannot understand the Senator on this. He said information was lacking in the report and then proceeded to give the information. I can only tell the House that the accounts were properly audited, that the public in general do understand them and do know that there has been an improvement in the position.

Professor Quinlan

My statement was that there was much more information in the older accounts than in the present ones.

Mr. Childers

The Senator went far beyond that. He suggested that the reduction in the loss had been somehow caused by chance happenings in the life of CIE. I can assure the House that as a result of dieselisation and a growth in the volume of road freight by 50 per cent. since 1957-58, plus a slight increase in the volume of rail freight since that time, and as a result of increasing the output of various sections of the services, of introducing work study and effecting increases in output in the maintenance of diesel engines and wagons, there has been a genuine improvement. I can say further that if the 1958 Act had not been passed and if there had not been dieselisation and a full programme of reorganisation, the loss in the year just expired would have been well over £3 million and we would have a much more serious problem.

Senator Cole asked about the financial advantage of this method of financing the purchase of the diesel locomotives. I would say there are two advantages. First, the rate of interest is somewhat less than would have to be provided if CIE had to secure the money by way of public issue and if the public issue were not fully subscribed partly due to the unfair criticisms of people who should know better; and secondly, the Government encourages foreign investment here for production purposes because of the very heavy capital programme in general that has to be undertaken and the still heavier capital investment that will be required to help us to meet our commitments in the foreign market. This type of transaction of entering into a hire-purchase arrangement with a foreign bank we regard as very favourable to a country still in the process of economic development as we are.

I think I have answered the major points without engaging in far more widespread controversy than would be justified in the case of this Bill. I should say, in conclusion, that CIE reckon that diesel engines cost to run, including all items, about one-third of what steam engines cost and that the financing of this purchase is a real help towards the economic position of CIE.

Mr. McAuliffe

The Minister stated that the agent was well known. I asked today who the agent was and the Minister says he is well known. I have not yet met anybody who has told me.

An Cathaoirleach

The Senator may ask a question, not make a statement.

Mr. McAuliffe

If I repeat the question as to who the agent is, I think I should be entitled to an answer.

I should like to ask the Minister if he is aware that there is a Select Committee in the British House of Commons to consider British railway matters and that the business done by British railways is put before the House?

Professor Quinlan

The Minister stated that Holland has 2,030 miles of line compared with our present mileage of 1,564——

An Cathaoirleach

The Senator is making a speech.

Professor Quinlan

The question is: on an area basis to have the same distance of railway per square mile, we would need 5,000 miles of line compared with our present 1,564——

An Cathaoirleach

I may remind the Senator that is a calculation.

Professor Quinlan

Does the Minister agree with that?

Mr. Childers

The Senator has got his analysis wrong. I do not want to delay the House by going into this in detail. In reply to the question about the agent, everybody in Dublin knows who the agents are. The name was published in the Irish Times the other day. The Senator can find it.

Mr. McAuliffe

The Minister might let us into the secret.

Mr. Childers

I think I could at this stage. It has been published but again I think it is trying to create a lot of hot air about an absolutely respectable contract carried out in the usual way by the Board of CIE after very detailed examination. I do not see why I should name the agent but, as I have been asked, the name is T. McCairns, agent for General Motors. This is not, of course, of the slightest help to the members of the House in discussing this Bill.

Question put and agreed to.

Agreed to take remaining Stages today.