The purpose of this Bill is, briefly, to authorise the Minister for Finance to advance moneys, up to a limit of £50 million, for continued development of the telephone service.
Expenditure on the telephone service falls under two main heads. The cost of operation and maintenance is borne out of moneys provided annually by the Oireachtas under the Vote for the Department of Posts and Telegraphs, but extension and development of the system are covered by funds provided under Telephone Capital Acts.
These Acts empower the Minister for Finance to issue out of the Central Fund sums for development of the telephone service and empower him also to borrow in order to meet or repay the issues from the Central Fund. The Acts do not of themselves authorise expenditure, but merely ensure the continued availability of capital. Expenditure is authorised and issues from the Central Fund are made on foot of annual estimates approved by the Minister for Finance.
The moneys required for repayment of the sums borrowed are provided annually under sub-head G of the Post Office Vote.
The Telephone Capital Act, 1963, passed in December 1963 authorised the Minister for Finance to issue a total of £30 million for telephone development in the following 5 years. There had been on hands at 1st April, 1963, a balance of £2,555,000 from previous legislation. Expenditure during the five years ended 31st March, 1968, amounted to £28,897,000 leaving a balance of £3,658,000 which is now exhausted.
During this period 76,000 new subscribers' lines were connected to the system, 209,000 miles of new trunk circuits were added and 479 kiosks were erected. Over 190 important trunk schemes—underground or overhead cables or radio links—were completed. 220 manual telephone exchanges were converted to automatic working and the capacity of existing automatic exchanges was increased by 54,000 terminations.
When my predecessor was introducing the last Telephone Capital Bill in 1963 he emphasised that the main effort would be concentrated on improving the quality of the service to existing users at the expense of delaying connection of new telephones and running up the waiting list. This policy was followed, but from 1965-66 on when the trunk capacity of the system had been greatly enlarged it was possible to devote more engineering effort to providing service for new applicants and the waiting list was substantially reduced.
The £50 million capital expenditure provided for under this Bill represents the estimate of the cost of the works programme which it is hoped to carry out in a 5 year period. A net increase of about 115,000 subscribers' lines is provided for, representing a growth rate of 9.4 per cent in the 1963-1968 period. Some 500 new kiosks will be erected.
Four new automatic exchanges will be opened in the Dublin area and one in Limerick. New trunk exchanges will be brought into service in Dublin and Cork. A new international exchange will also be provided in Dublin to cater for our foreign traffic which, except for that with the United States, has hitherto been handled by the London International Exchange. It is hoped to convert some 300 exchanges to automatic working in the next 5 year period, including the larger exchanges at Wexford, Killarney, Clonmel, Castlebar, Ballina and Monaghan. In addition the spare capacity of all existing automatic exchanges will be raised to a level adequate to provide for further expansion.
Work is in progress at present on several major trunk circuiting schemes and many more are planned for the next few years in order to keep ahead of the growth of traffic which is estimated to rise at 15 per cent per annum. As the list is rather lengthy I shall mention only the principal schemes. Radio links, each with a capacity of 960 telephone circuits, are expected to be brought into service this year between Dublin and Great Britain and between Dublin and Portlaoise. Similar links will be completed next year between Dublin and Cork and between Portlaoise and Athlone. An underground co-axial trunk cable from Athlone through Roscommon, Castlerea, Claremorris and Castlebar to Ballina will be finished by the end of the year. Work will start in the near future on cables between Athlone and Galway, between Galway and Clifden and between Ballina and Belmullet.
Substantial amounts of additional equipment will also be provided at various centres to switch dialled calls throughout the network.
It is planned to introduce subscriber trunk dialling to London and Belfast in about 12 months time and to extend this facility later to other places in Britain and in Continental Europe.
A new type of coinbox telephone from which trunk calls as well as local calls can be dialled by the users will be introduced in 1971 when the changeover to decimal currency occurs.
The expenditure is estimated to be as follows: £22½ million on subscribers' exchange lines and apparatus, £14 million on trunk circuits, £11 million on equipment of new exchanges and extension of existing exchanges and £2½ million on buildings.
Over the past five years the work force of skilled and semi-skilled technicians required for large scale expansion has been built up and more are in training. Moreover, industrial consultants have been employed for a period of 18 months from whose recommendations it is hoped to secure a substantial increase in productivity by use of more mechanical aids and better organisation. Professional engineers have not become available in as large numbers as would be desired but there are grounds for hoping that this difficulty may be surmounted.
Despite the valuable progress already made, the telephone service in Ireland is as yet in an early stage of development. A first-class telephone service is today essential to industrial and commercial progress. Socially also its value is high. I am convinced that with rising living standards and the growth of industry and business there are boundless opportunities for rapid expansion of the telephone service to the benefit of the whole community.
Apart from direct contribution the service makes to economic and social progress it is a sound commercial proposition. The return on capital in recent years has averaged 7 per cent. If the service were allowed to re-invest its surplus and depreciation provision it would be able to finance about 40 per cent of its capital requirements from its own resources. In effect, therefore, the Exchequer will be called upon to provide only about £5.5 million net, per annum, and interest will, of course, be paid on all sums invested by the Exchequer in the service.
The moneys to be provided under this Bill will enable the service to be continuously improved, to make a modest profit for the taxpayer and to give employment to some hundreds of extra skilled and semi-skilled men as well as to many engineering graduates.