Transport (Re-Organisation of Córas Iompair Éireann) Bill, 1986: Second Stage.

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

This Bill is a major milestone in the evolution of Córas Iompair Éireann and the public transport services operated by the board. Irish transport legislation generally has been and is undergoing an exciting period of change and development. There are at present, including this Bill, four transport Bills before the Oireachtas — the others being the Dublin Transport Authority, Road Transport and B&I Bills. A further three Bills in relation to harbours, sea pollution and Shannon pre-clearance are in the pipeline and will be introduced shortly. The Canals, Free Ports and Air Transport Acts — all important measures — have been enacted since 1986 began. All ten of these measures are geared to meet the needs of modern transport activities.

What I am proposing now in relation to CIE is an historical step equal in importance to the step taken in 1944 when legislation founding CIE was enacted. There are striking differences between the two events. The calendar alone demonstrates that the planning for the establishment of CIE was undertaken in a war time situation where all judgments were uncertain. Prophecies of what might happen in the years following the end of the war were completely speculative. The fact that CIE succeeded at all is a tribute to the planners of those far off days.

In their thinking, it is fair to say, financial considerations took great precedence. The conventional wisdom of the Twenties and Thirties in the failing public transport industry was that the strong could help the weak. Our planners believed then, and for the best part of 20 years thereafter, that an industry which through no fault of its own could no longer survive, mainly due to increasing costs and a threatened market, would be sustained and maintained by the cash contributions of strong members such as Dublin buses, and by a multiplicity of secondary elements such as line cross-subsidisation. There were further expected benefits based on concepts like economies of scale, or integration which, in the transport area, are not as relevant as many believe them to be and probably played only a limited part.

The money end worked reasonably well for nearly 20 years. It was in the early sixties that it was finally acknowledged by the then Minister, the late Erskine Childers, that CIE had to go the way of national transport systems in almost all countries and depend on a permanent rail subvention.

The management and market assumptions were less sound than the financial ones. It suffices to distinguish between those planning days 40 years ago, when there was virtually no private transport at all, and the market of today where private transport occupies an overwhelming position. It is extremely difficult to see how a unified management structure such as that which grew up between 1944 and more recent times coped at all with the increasing complexities of economic and social life and the pressures and changes internal to itself. The complaints so often heard about CIE have originated as much in the management and market sectors, including the work of serving the market, as in any other.

I see my role in relation to CIE in three aspects: (i) I have to get the subsidy right — it must never again revert to the excesses of growth that characterised the seventies. The correction process is well in hand but more has to be done; (ii) the overall direction of the undertaking has to be got right; (iii) service of the market has to be got right. The Bill deals with points (ii) and (iii).

The financial arguments based on cross-supports for holding CIE together were exposed to chill reality 20 years ago. In all respects every major activity started to head for losses. The management of CIE became increasingly pre-occupied with the financial struggle and their reputation in the market had to suffer.

With the ending of the financial argument for an amalgamated system there were questions that might be asked about the system itself but they seemed to escape notice. It did not really emerge that running a railway company was not the same task as running a provincial bus service and that the demands and needs of these two were different from the demands of a major urban transport system which in the case of Ireland and Dublin had always been a self-contained and distinctive activity until the creation of CIE. It amazes me that a relatively small central management team kept the whole unwieldy structure going at all or managed to deal on any rational basis with all the problems of infrastructure, rolling stock, supplies, staffing, industrial relations and services. The thought applies not alone to distinctive major activities on rail and road but out to the fringes of tour management, hotel operation, running Rosslare, keeping the canals passable and running ships to the Aran Islands.

The board and management of CIE were not invariably helped by Government. I do not wish to recite faults in Government of any party. I can say, however, that this vast, unwieldy and struggling agglomeration could have often been helped by clear delineation of what Government expected from it, by some better financial judgments and by less interference with the revenue earning plans of the undertaking.

I have no hesitation in complimenting CIE for the benefits it did produce during what I think should now be identified as years of struggle. And I am happy to put this positive aspect against the criticism which I have often found it necessary to make. I also give the highest praise to the whole hearted effort by CIE at all levels to implement and bring to fruition the changes I have already introduced. I know I can rely on a continuation of this effort to bring about this more or less final set of necessary improvements.

The Bill provides for retention of CIE as the parent of three new operating subsidiary companies registered under the Companies Acts. The new companies will have full responsibility under the board of CIE for the operations of the railways, Dublin city bus services and provincial bus services.

I think it would be useful to describe in a little more detail how CIE has developed over the years. The Transport Act, 1944, brought about the incorporation of Córas Iompair Éireann as a State-sponsored transport company and the country's principal transport operator with the transfer to CIE of the undertakings of the Great Southern Railways Company and the Dublin United Transport Company Limited. The Transport Act of 1950 established Córas Iompair Éireann as a statutory board to replace the State-sponsored company and the Grand Canal Company. In the Great Northern Railways Act, 1958, the Great Northern Railways undertaking within the State was amalgamated with CIE. At that time the board had responsibility for the railways (passenger and freight), bus services in Dublin and the provinces, road freight, coach and tour services and canals. Its mandate embraced Rosslare Harbour, a number of hotels and the Galway/Aran ferry service.

Later legislation made some small adjustments to the CIE role and its mandate but the statutory structure of the organisation remained intact.

Over the years, CIE has adapted its services to meet the needs of the times. The early fifties brought a major dieselisation programme. Since then rolling stock has been periodically updated and upgraded and extends to the current mainline carriage programme involving the construction of a fleet of air conditioned carriages at a total estimated cost of £53 million in 1984 prices in progress at the CIE Inchicore works and, as a native of Inchicore, I was delighted to be able to give the final go-ahead for that programme. These new carriages and the upgrading of track and signalling systems have reduced journey times and improved very considerably standards of passenger comfort. The Howth-Bray railway has been electrified at a cost of £113 million and this development has brought the railways right up to date in technological terms—the DART service is technically among the most advanced of its kind in the world.

There has been periodic updating and replacement of CIE's urban and rural bus fleets. Since 1980 CIE has undertaken a major programme of bus replacement and since then about 800 new buses have been purchased by the board at a cost of about £100 million. Fifty new tour coaches have just been acquired by the board for this year's tourist season and for the CIE cross-Channel Supabus services.

These are major capital investments but they had to be matched with stations and garage renewals and the acquisition of ancillary equipment to ensure that maintenance and support services were upgraded in line with needs. So it will be seen that CIE has had a lot of renewal in recent years.

Against its financial background it is not surprising that down through the years CIE has been the subject of a number of in-depth studies, the most recent being the McKinsey study "The Transport Challenge" published in February 1981.

When I was appointed Minister with responsibility for transport matters in late 1982 the serious situation in regard to the CIE finances and indeed in relation to the overall image and effectiveness of CIE was one of my immediate priorities. The deficit had spiralled and in the period between 1969-70 and 1982, during which the Consumer Price Index had increased by a factor of only 5.4, the deficit had increased from £3.234 million to £109.373 million, a factor of 33.8 — over six times more than inflation. I think that is a very relevant fact. I wonder if there should be an inquiry about it.

When I came to office I set to work immediately on the financial problems and simultaneously began to look at the CIE organisation in the context of the McKinsey recommendations. As a first step in tackling the financial problems, the Government approved in June 1983 a package of measures, which I proposed, aimed at not only reducing CIE's cost to the Exchequer over a five-year period but also paving the way for a new operating environment in CIE. These measures included a new basis for determining the CIE subvention which now limits it to the lesser of either one-half of the board's revenue or one-third of their expenditure. This was in CIE's interest as well as the Exchequer's.

The package also provided for the payment of the subvention "above the line" in recognition of CIE's social role in providing commercially unprofitable but socially desirable services. Expenditure restrictions were imposed on CIE as a means of introducing cash limits to contain costs. An obligation was placed on CIE to reduce the level of their expenditure in real terms by 2½ per cent per annum up to 1988 and the purpose of the formula was to obtain a reducing subvention in line with a reducing expenditure.

At this stage I would like to circulate with the Official Report a chart showing the reduction in the CIE net operating deficit since 1982 and projections for the future based on the subvention formula.



For 1983, 1984 and 1985 I am glad to say the targets have been met or bettered and this is a cause for congratulation to all in CIE and in my Department.

In addition to setting the financial targets for CIE, the Government also decided that it was necessary to supplement the board's mandate to ensure that the national economic situation and Government objectives were fully reflected in the formulation and development of board policies. A number of specific objectives were identified for CIE and included:

(i) to review in depth all aspects of CIE's operations in the interests of reducing the board's dependence on State subvention;

(ii) to review the effectiveness and organisation of CIE management and to undertake any restructuring found necessary;

(iii) to regard the improvement of staff morale and motivation throughout CIE as a major aim;

(iv) to extend and strengthen the role of the financial control function so as to improve the cost effectiveness of expenditure;

(v) to review board policy in relation to capital works and proposals for new developments;

(vi) to arrange at maximum advantage to the board's financial position the disposal of surplus assets or the development of those assets by third parties.

When the package of measures was in place it was then necessary to turn to fundamental issues. The consultants, McKinsey & Co. Inc., who were appointed in 1979 to undertake a study of CIE, came to a number of conclusions based on the decline in the Board's market share and projections.

They recommended:

—complete disestablishment of CIE into three separate organisations;

—the introduction of OPO in the Dublin city bus services; the closing of CIE road freight operations, and the elimination of the sundries rail service;

—centralising freight management to Dublin with operations limited to bulk traffic and the carriage of dangerous goods; and

—dismantling of the company's area management structure.

Having considered the future of CIE in the context of the McKinsey report, other related documents, observations furnished in response to the report and the views of the chairman of CIE, the Government were convinced that a major reform of the CIE organisation was essential. While many of the consultants' conclusions were found to be valid, the McKinsey recommendation for the disestablishment of CIE was rejected because of the value perceived in a single board continuing to have overall control of the organisation's operations. Another option considered was the re-organisation of CIE's responsibilities as an internal CIE matter without new legislation. It was rejected also because such a response was not considered sufficiently far reaching to give the results desired. The route chosen by the Government had a number of main objectives, first, to keep the deficit under control without major disruption of services or employment; second, to improve morale and the working environment generally in CIE; third, to improve the reliability and attractiveness of services at the lowest possible fares and fourth, to obtain greater transparency of the allocation of costs between the various CIE activities.

In the light of this the Government decided that the reform of CIE must be such as to transform CIE into smaller, more compact operating organisations, with clearly defined functions and hence the provisions of this Bill.

Re-organisation is not the whole story. For clarity it was also necessary to set financial objectives for such an enterprise. As a result the Government announced its intentions inBuilding on Reality in October 1984. Members of the House will recall some of the main elements of the Government decision, which covered such matters as:

1. The requirement to reduce expenditure in real terms on the railways was extended to include 1989 and the objective was revised to the reduction in real terms of railway costs by close to 20 per cent over a five year period, an average of 3.7 per cent per annum.

2. The halving of the 1983 deficit by 31 December 1989 in real terms was set as the objective for Dublin city bus services, which by the end of 1984, already had in real terms almost halved the all-time high 1982 deficit;

3. The formula for reducing costs by 2.5 per cent per annum was extended to 1989 for the provincial bus services and the services should become profitable by that time; and

4. CIE rail sundries and road freight services to be discontinued by 1 January 1986 unless they proved profitable in 1984 and 1985.

It is emphasised that the railway objective needs to be achieved without endangering rail safety.

There are significant advantages in retaining the board of CIE as the parent to the three subsidiary companies. These would be more manageable units having chief executives with clear objectives and targets to achieve. The board will vet the plans of the companies, monitor their performance and assess their competing demands for investments and funds. The board will also be an instrument for promoting an efficient, coherent overall approach to CIE transport services generally. At the same time the setting up of the companies will introduce greater flexibility into the CIE organisation with each of them having its own board of directors whose objectives will be influenced mainly by the more limited mandates of the individual companies and with management closer to its staff and operations.

That, in summary, is the background to the Bill before the House today. Already two aspects of re-organisation have been put in place, namely, the transfer of the hotels owned by CIE to CERT and the transfer of responsibility for the Grand and Royal Canals from CIE to the Commissioners of Public Works which will be completed in the coming weeks. These changes were designed to allow CIE to concentrate more completely on its transport activities and facilitated the re-organisation.

Now we must build on the financial improvements of the past few years and turn to the more fundamental re-organisation as soon as possible. This is reflected in the Bill which is not so complex as to delay its enactment but comprehensive enough to achieve the desired results. Under the Bill, CIE, I must emphasise, will not relinquish any of its statutory powers and duties or privileges but rather it will use the new subsidiaries as instruments for implementing CIE policy and as the board's agents in carrying out more effectively the functions entrusted to it by the Oireachtas.

The Bill requires the Board of CIE to establish three new operating subsidiaries responsible for railways, provincial bus services and Dublin city bus services and to register them under the Companies Acts. It deals with the delegation of functions and responsibilities to the subsidiary companies in respect of operational matters and for the provision of rights, duties and liabilities for the subsidiaries to allow them to carry out their functions. It sets out the principal objects of the companies and provides for the assignment of CIE staff to the new companies and the protection of conditions of employment of staff transferred.

The Bill also contains provisions dealing with certain financial matters arising from the proposed re-organisation. While I circulated an Explanatory Memorandum with the Bill, I would nonetheless like to outline the Bill in some detail to the House and to highlight some of the more important provisions, particularly those which involve fundamental changes for CIE.

Part I of the Bill, comprising sections 1 to 5, contains standard-type provisions of a general kind and for the repeal of certain sections of existing legislation. Section 14 of the Transport Act, 1950, which empowers the Minister to grant, by order, additional powers to the board, is being replaced by section 23 of the Bill which extends the scope of the existing provision to include specifically functions relating to the development of the assets of the board. This is in keeping with the revised mandate given to the board by the Government in 1983.

The repeal of section 35 (2) of the 1950 Act dispenses with the requirement on CIE to hold open public examinations for the recruitment of clerical staff and thus will allow greater flexibility to the board and its subsidiaries to determine recruitment policy and procedures in keeping with modern practice in major commercial and semi-State organisations. This change is something which both management and unions have been seeking for some time.

Part II of the Bill provides for the formation of the three operating subsidiary companies. It also contains provisions relating to certain financial matters, staff transfers and protection of conditions of service and other general provisions, which are features of Acts dealing with State-sponsored bodies.

Section 6 obliges the board to form and register the new limited liability companies conforming to the conditions laid down in the Bill and for the appointment, by order made by the Minister, of a vesting day, that is the day on which the reorganised CIE will commence operations. This order will be irrevocable except by an amending Act of the Oireachtas.

The proposed names of the new subsidiares are listed in section 7 although I must say I am not totally happy with them and I may give them further consideration. The section also specifies that the share capital of each of the subsidiaries shall be wholly owned by the parent Board and prohibits the transfer or disposal of any share in the companies. This clarifies beyond doubt that the purpose of the Bill is to reorganise and revitalise a State company which will continue to remain in State hands unless the Oireachtas decides otherwise on some future occasion.

The Government's intentions for continuing on a long term basis the national transport undertaking is also reflected by section 17 which enables the board to transfer assets to the subsidiary companies for the purposes of their operations but excludes from those assets land and buildings which will remain in the ownership of the parent board.

The principal objects of the companies and the general statutory basis for carrying out their functions subject to the directions of the parent board are set out in section 8. These provisions lead naturally into treating of the roles envisaged for the parent board and its subsidiary companies. Overall general objectives for the CIE organisation as a whole will continue to be set by the Government. The Board of CIE will settle, within overall sums provided by the Government and, well in advance, the financial targets and allocations for the subsidiaries and in setting these allocations the board will consult with the Minister where necessary.

It will be the responsibility of the board to agree with the boards of directors of the subsidiary companies their annual budgets, including capital investments, to monitor the activities of the subsidiaries, to ensure that the subsidiaries achieve any financial targets set for them and to provide an assessment of the performances of the operating companies in the board's annual report to the Minister. More generally the board will be expected to foster the development of a more commercial approach across the spectrum of the activities within the overall CIE remit. In addition to the responsibilities in relation to the subsidiaries, the board will be responsible for actively pursuing the development of CIE property and other assets, the operation of the board's International Tours Company and providing common services such as pension schemes and computer services, etc, for the subsidiaries. I want CIE to exploit its many human skills and property assets in other directions. I see potential for expansion here and this is something I have been encouraging the Chairman and Board of CIE to pursue. This could well be a vital contribution to the financial success of the organisation in the future and to providing the outlets for these relatively untapped, but rich, resources.

The boards of directors of the subsidiary companies will be responsible under the board for the operations and activities of their companies. This will include responsibility for finances, staff and industrial relations, marketing and customer and other services, business development, operating procedures, etc. They will be accountable to the board in regard to their performances.

Specific requirements as to the articles of association are contained in section 11 which sets out particulars of the size and structure of the boards of the operating subsidiaries. The directors will be appointed by the Chairman of CIE with the consent of the Minister, and it allows for the possibility of the chairman being appointed chairman or director of a subsidiary company or companies.

You will notice that I propose to limit the membership of each of the new boards to five members. I see these boards as executive in nature in the interest of efficiency and effectiveness and this arrangement introduces into the State sector here the two-tier type board system, which has been so successful in Germany. The members of the parent board elected by the CIE workforce will continue to make their contribution to the whole CIE organisation through the activities of the parent Board, which will continue to control overall policy and the operating companies generally. The value of worker directors in the State boards is now clearly established. In order, however, to avoid a situation which would cut across the electoral arrangements in CIE, I see a need to introduce an amendment to the Bill at Committee Stage to ensure that the new structures maintain intact the CIE constituency for electing worker directors to the board.

I might mention at this stage a further amendment which I will be introducing on Committee Stage. This relates to the provisions of section 13 which deals with membership of either House of the Oireachtas or Assembly of the European Community. This amendment will be designed to meet the wishes of Senators who have in recent times requested a provision whereby directors and staff of semi-State organisations will not be required to give up their directorship or stand seconded from their employment until actually entitled to take their seats in either House of the Oireachtas or the Assembly of the European Community.

I know that there has been some concern among certain staff in CIE about their future in the new organisation. Section 14 of the Bill provides for the transfer of staff of the board to the companies and for the protection of their existing pay and conditions. It empowers the board to designate existing employees for employment by a company and it obliges staff so designated to transfer to that company. It also allows flexibility for the transfer and promotion of staff between the companies within the group. This provision highlights yet again the continued coherence of CIE. This is highlighted by section 15, a very important provision, which enables the board of CIE to continue to organise and operate existing pension schemes for both the staff of the board and those of the companies. It provides for service with any of the companies to be treated as employment with the board for pension purposes. This should further facilitate intercompany transfers of staff in the future. Other important provisions in relation to staff are contained in section 11 (f) which requires the companies to set up negotiating machinery for the purpose of negotiations concerned with pay and conditions of service.

The escalation of CIE's losses between 1969 and 1982 was all the more disastrous when it is considered that overall employment in the board fell by nearly 4,000 in that period and, and regrettably, reorganisation or not, a further reduction of 500 is envisaged. I am glad to be able to tell the House that I have been assured by the chairman of CIE that the bulk of these unavoidable reductions will be achieved through natural wastage or, where necessary, by using the existing arrangements agreed with CIE trade unions concerning redundancies. The reductions in staff contemplated have already been discussed with the unions.

The principal financial provisions of the Bill are contained in sections 19 and 20. Section 19 is based on the usual formula for the accounts and audits of State bodies. Section 20 outlines the borrowing powers and procedures to be followed in the case of the subsidiary companies. I envisage, as I hope is clear from the text of the Bill, a vital role for the parent board in regard to control of borrowings by the new companies. The powers to borrow for capital purposes are being retained by the parent board because of its overall responsibility for the CIE group. Subsection (3) of section 20 prohibits the giving of State guarantees for moneys borrowed directly by the companies. This will not hinder the subsidiaries in obtaining their capital needs as the board of CIE will be able to on-lend to its subsidiaries so that they will be able to carry out their capital investments in line with the capital programmes agreed by the parent board. The guaranteeing by the State of borrowing by the CIE board is not affected.

The existing statutory borrowing limits and controls will continue to apply to the new organisation as a group and all capital borrowings will continue to be subject to the approval and control of the Ministers for Communications and Finance, subject of course to the overriding statutory limits determined from time to time by the Oireachtas. The Bill empowers the companies to borrow temporarily, with the consent of the board, for day-to-day operating purposes subject to existing controls and within such statutory limits as may be determined from time to time.

Section 21 of the Bill was drafted before the decision to abolish the National Prices Commission was announced because experience had shown that the extent to which CIE could raise fares and rates was strongly influenced by what the market could bear and that was invariably less than what would be permissible under the national price control criteria. CIE fares and rates will, however, continue to be subject to approval by the Government. When the Dublin Transport Authority Bill, 1985, is enacted the new Dublin Transport Authority will have a role in the approval of CIE fare increases for Dublin bus and suburban rail.

Part III of the Bill contains a number of provisions relating to Córas Iompair Éireann and the subsidiaries. The statutory obligation imposed on the board by the 1950 Act to appoint a secretary and a general manager is being replaced by section 28 of the Bill which will allow the board greater flexibility in the appointment of officers and servants. This flexibility is desirable in the situation where the chairman holds office on a full-time basis and where the organisation is undergoing a period of major change and restructuring.

The provisions of section 29 of the Bill have been included on general policy grounds and require the board of CIE and the boards of each of the companies to have regard either to Government or nationally agreed guidelines in fixing the pay or the terms and conditions of staff and it also obliges each of them to comply with any directives in this regard which may be given by the Minister for Communications with the consent of the Minister for the Public Service. This type of provision is not new and is drafted along the lines of a relevant provision in the Gas Act of 1976 and several other Acts. Free collective bargaining between CIE and its employees will continue.

A large organisation such as CIE has need of continuous review so that it can adapt to face the various challenges as they appear. In transport, changes can arise from many influences, including changes in technology and equipment, barriers to travel and trade, the relative competitiveness of the various transport modes and the transport preferences of the customers.

The proposed reorganisation of CIE and the financial measures which I have outlined are designed to put the board's finances on a firmer footing and to secure the future of CIE, having due regard to what the Exchequer can afford, the interests of the taxpayer and the need to provide reliable services for the public. The Bill is designed to ensure and strengthen the future of the organisation. The reorganisation now proposed is, I am convinced, in the best interests of the travelling public, the CIE workforce and the Exchequer. The smaller units should be susceptible to more effective management in a manner which is not possible in the case of very large and diffuse organisations.

The implementation of the reorganisation provided for in this Bill is, of course, a matter for the board of CIE in the first instance. As I said in my opening remarks I am confident that I will have the full backing of CIE management and general workforce in carrying through the new arrangements which are so necessary for their future. The board and management are dependent on the support of all CIE employees in order to effect a smooth transition. The future success of the new CIE will rest squarely on the shoulders of the parent board, the subsidiary boards and the workforce. CIE and its employees have shown in recent years what it was possible to achieve in regard to CIE finances. This inspires confidence for achieving the objectives set for CIE by the Government in the years ahead. I say this in the knowledge that when the accounts for 1985 are published shortly they will show that CIE has had the best year for many years.

General public confidence in the transport services provided must be increased. This will be achieved mainly by improving the quality and reliability of the services. In that connection there is hardly need to emphasise the importance of a stable industrial relations climate. I have spoken on a number of occasions about industrial relations in CIE particularly in the Dublin city services. My more recent references where rightly devoted to improvements in that climate. Recent experiences are quite positive and augur well for the future notwithstanding yesterday's minor upset at Summerhill. The recent introduction of one-person-operated buses and DART feeder buses in Dublin, following agreement between the board of CIE and the unions, happily brought to a satisfactory conclusion that long drawn out saga. The new structures with less remote management should also contribute to good industrial relations throughout the organisation.

While I have set tough targets for CIE in the past three years and for the next three, I have also given a very substantial commitment to the board. For 1986 the estimated subvention, based on the subvention formula, comes to £104.5 million. But in addition, since I came to office, provision has been made for the Exchequer to take on board directly the interest payments on DART which is the correct approach for infrastructural projects of this kind. Moreover, the problem of CIE's short term borrowings has been addressed and £30 million is being remitted by the Exchequer over ten years, having commenced in 1985.

The capital provision for 1986 is £34.4 million mainly for new railway carriages, signalling and communications and the acquisition of buses for CIE Supabus and tour activities. Sixty-four million pounds will have been spent in the five years up to the end of 1987 on the replacement of railway carriages. On the present signalling communications programme £15 million was spent up to the end of 1984 and a further £14 million will be spent by 1987. This represents a very big investment, without which the CIE services would inevitably run down. When you consider this, the DART investment and the bus fleets, it will be readily clear that the renewal of CIE which this Bill seeks to bring about, has been accompanied by a very large investment to give it the modern tools to do the job.

The recently published Green Paper on transport policy and the publication of the National Plan raise a number of very important issues which have a bearing on the longer term future of the new CIE group. In so far as the railways are concerned, the new organisation and management structure together with the investments made in the railways give all concerned an opportunity to prove the worth of the railways and thereby guarantee their long-term future. The closing date for the receipt of observations on the Green Paper was 31 March and the many views furnished, for which I am grateful, are being assessed. The conclusions which we will draw from the contributions on the Green Paper will be taken account of in a White Paper to be published later this year.

The problems in relation to the structure of CIE which we are tackling here have been ventilated freely in the last few years. A certain negative approach which is based on so-called privatisation has been imported into the discussion. I do not wish to say anything about privatisation in connection with this Bill for the simple reason that privatisation has nothing to do with the Bill and is simply a red herring in the debate.

There are also, I believe, arguments based on what is seen as a threat within CIE — the threat of competition between rail and road services. This seems to mean that there must be no competition irrespective of cost to the taxpayer or service to the public as between CIE's rail and provincial road services. I utterly reject that approach. There must be some competition to ensure that each new operational company will be on its toes, that each worker in each company will identify with the public entity to which he is attached, work to further its aims and take pride in its new identity.

The board of CIE will still retain its powers and responsibilities. The board will guard against reckless or ruinous competition between the subsidiaries. Indeed, the proposed structure gets close to the optimum. It maintains the overall framework of the integrated approach which many see as essential to our transport system. It allows also for specifically identifiable sharing of services and supports where sharing is necessary — another argued benefit of integration.

National transport issues such as CIE and its services provide a basis for a very broad debate covering a very extensive field. I have endeavoured to give the House a comprehensive statement on the background to the changes proposed in the Bill, the motivation and the objectives. It goes without saying that there are many issues which Senators consider relevant which I have not touched on. Omissions are inevitable in a situation like this. I will, however, endeavour to reply to any such points in the course of my reply to the debate.

In conclusion, I wish to commend the Bill to the House.

I welcome the introduction of the Bill in the Seanad. It gives an opportunity for Senators to deal with a very comprehensive and important piece of legislation. The Minister has taken a rather broad view of the history and the problems of CIE and it is a view with which I can agree. In his address he compliments the planners of far-off days. I recollect coming home from the funeral of Mr. Tod Andrews and listening on the radio to his recorded comments on CIE. It is true that it was always a company about which there was speculation. Many problems were overcome in days gone by, through the War and other difficult periods of Irish history, right up to the time which the Minister rightly pinpoints as when the trouble seems to have begun, or perhaps a few years prior to it. The troubles really seem to have begun in 1969 in CIE. Prior to that it was a very respectable company, one which was appreciated and one which was very nationally orientated, servicing the Irish people in every way. I am amazed at the statistics the Minister has produced concerning the situation that pertained from 1969-70 to 1982. He said:

The deficit has spiralled and in the period between 1969-70 and 1982, during which the consumer price index had increased by a factor of only 5.4 per cent, the deficit had increased from £3.234 million to £109.373 million, a factor of 33.8 — over six times more than inflation.

It is a fascinating figure. I recollect that in this House at that time I tabled motions concerning CIE's road freight situation where archaic systems were leading us into the seventies with huge costs and tremendous losses. It happened slightly before 1969, but the figures seem to have come together from that specific period, but I would allow it probably two or three years before the rot set in.

With regard to the Bill itself, it is not a Bill based on the McKinsey report, although parts of it may be extracted from it. The new system of setting up of the companies is the one on which I would like to comment. There are a few things I would like to ask the Minister and perhaps he would be courteous enough in his reply to respond. He said it is the German type situation now, that he has set up the companies under a holding company with three subsidiaries. We never heard of that in a public debate here as of yet, at least I have not heard of it. I want to make the following comments about it.

First, the holding company is a fine idea, but the holding company is the controlling company. That is obvious from the remarks the Minister has made throughout his speech. It is the controlling company and obviously the finger point as regards what the subsidiaries do. I cannot understand, first of all, the naming of the subsidiary companies as Irish Rail, Irish Bus and Dublin Bus. There was not a lot of mind-boggling in the Department or on the part of the Minister when they were simply branded in this way. This it typical of how we have been in this country over the years. If our friends across the water make a decision and it looks appropriate for us, we will make the same decision. We are just a bunch of copy cats and this Government particularly are a bunch of copy cats. I thought the Minister had a broader mind than that and more ability. I would like to see those three names changed. They do not show much imagination. If you had asked a child in second class at school to give names to these three companies, I am sure they could have done it. I would welcome any amendment the Minister would bring in on this. On this occasion if he changes the Bill in the other House he does not have to come back to the Seanad. He will be robbed of the excuse we usually get in this House: that if we change the Bill we have to go to the Dáil to have it amended. I hope the Minister will give some thought to the changing of the names. Surely, with all the brains and expertise available to the Minister in the Department of Transport, we could have a little touch of flamboyance in the naming of the companies.

The other question I want to raise is the question of the holding company. I speak about CIE from the knowledge I have of it and I speak of this period from 1965 onwards. The bureaucracy of CIE began to develop in those years. All I am afraid of is that the Minister, who slipped through this by saying that he has provided for a holding company and three subsidiary companies, is making room for more bureaucracy. If one stands at any of the stations in the city, and particularly the major stations, there appears to be a lot of bureaucracy. All I hope is that this holding company is not to be just a home for all those bureaucrats instead of telling them that there is no room for them in this sector. That is all I am afraid of and that is enough to be afraid of because CIE has been choked in recent years by a tight knot.

The other fear I have concerning the three subsidiaries and this holding company is that they will be totally under the control of the Minister. The Minister has the record in this House of taking the fast option of liquidation. We have seen it in Irish Shipping. His record is not very good as regards exploring all the avenues open to him and I would be afraid that tool could be used if any of those companies was not shaping up, and perhaps without giving it the proper and dedicated attention it should get. I would have a slight fear there, knowing the Minister's history.

I would also say that, as I said in regard to the names of the different companies, we are a bit British-orientated. This Government have a great admiration, if not a little more, for Thatcherism or that type of philosophy today. We have seen it in many companies. I will deal with some more of them which worked for CIE later on. Little mercy has been shown and I do not think that is the way those things should be. While one would like to see every place making a profit —"profit" is a sacred word — but a limit on profit can also be taken on board.

The other option, which again would be the Thatcher inclination, would be that if one company were doing very well and the Government could do with a few shillings they could actually sell it off. This system could allow that to happen.

If Bus Éireann or Bus Átha Cliath were showing a huge profit next year, it would be very easy for the Government to call in the board and make such a decision. It can be done.

It is not in the Bill.

It is not in the Bill that it can be done, but I always find it is far more important to have in the Bill what cannot be done. We have seen these things done before. I would like to see a phrase confirming that point of view. From what we see of opinion polls the Minister may not be much longer in the position. However, I would like to see a protection in the Bill. While it may not be in the phraseology of it, Ministers and Departments are well able to adjust words and rephrase statements at a later stage. We have often seen in the past on other matters, not perhaps as serious as this, their ability to find an escape route. I would like to see it confirmed here that they cannot and will not sell these companies. I am not critical of the general run of the Bill. I am critical of parts of the Bill.

It is true, despite what the Minister might say, that bureaucracy still exists in CIE. Their performance over the years in the motivation of their work force has been proof. In the last 15 or 18 years motivation of the work force has been the weakest point in CIE. That can be seen from all the trauma and all the discomforts that were created. The Minister, in a reference to the founding fathers of CIE, stated:

In their thinking, it is fair to say, financial considerations took great precedence. The conventional wisdom of the twenties and thirties in the failing public transport industry was that the strong could help the weak.

I like the phrase, because if we take it to the period of 1965 onwards that certainly did not apply. There are many people in this city and throughout this country who on a Monday morning discovered that rather rudely when they stood at the bus stop to get a bus and they found that there was no bus available. That has to be said. It is fair to say that did probably develop from 1965 onwards.

There were other things as well. The rural bus services had their traumatic periods. The rail service had its traumas. They were all quite sudden and quite sharp. It was not that the strong were helping the weak, but rather that the strong were strengthening themselves. That happened because the bureaucracy over those years lacked the ability to motivate its workforce. If they were motivated properly the things that had happened over those years as regards strikes etc. would not have happened. We had one not too long ago and we had a threatened situation yesterday, as the Minister rightly pointed out. It is not over yet. I cannot see the holding company, if it is to be the home of the bureaucracy that has existed in CIE, changing that a lot. That would be sad. It would be a very poor performance. Now is the time for the Minister and this House and the other House to act so that that situation can never be allowed to happen again in a public service which is a necessary public service. That is a very important point.

Has the Minister considered the situation that may arise as regards feeder bus services from railway stations, particularly rural Ireland. What proposal has he to ensure that those services are continued? I want to give this as an example. When in days gone by we were closing all those smaller lines certain guarantees were given by CIE. There was, in my own county, a guarantee given, when the Loughrea station was closed down, that a bus service would pick passengers up at Athymon junction and take them to Loughrea. Loughrea is the third largest town in our county. Today no such service operates despite the guarantee given at that time. It is a sad reflection on the bureaucracy that that happened. I give that as an example because I can foresee that with the two separate companies making two separate decisions, both I assume based on financial considerations, the bus service may well say: "That does not pay us". So the service is cut. Where is the guarantee for people who use the mainline service? Is there a guarantee that Irish Bus will take those people to meet Irish Rail?

There is another point that one would have to make. It is seldom one hears praise of CIE. However, there is one aspect of CIE I would like to praise and that is the educational programmes and the apprenticeship programmes which were always carried out by CIE. They have produced many fine people in their particular fields. I would like to know from the Minister whether all these three companies are going to take on board any apprenticeship course? Will this new holding company be responsible for it or will it be each of the three individual companies dealing in their own individual field? It is very important that the knowledge and training that has gone on in the past will be continued, because, particularly from a rail point of view, safety is a major factor and if we do not train the personnel correctly for that particular service we cannot expect to get it. That is a statement of fact. I would like to know where this training and apprenticeship fits into this new structure. Who is responsible? Despite the odd accident that happened the safety of CIE, particularly on rail, has to be commended. I would like to be reassured that the programme that has kept it that way in the past will keep it that way in the future as well. If that is not spelled out clearly then it will cause concern.

Regarding the bus company, anything that could be done about Dublin buses would be an improvement. If Dublin Bus is to be the machine to move city bus services into line I welcome it, apart from its silly name. I have watched Dublin buses over the years as an observing motorist and I cannot tolerate the situation that has appertained. I pass by Conyngham Road practically twice a week at all hours of the day and night. I fail to understand how, whether it is peak time or weak time, that yard is always full of idle buses. I do not understand how, at the peak periods, with so many people to be transported, we can afford this luxury. There is a traffic light across the road from it and I take such offence at what I see that I normally count the buses in the yard. I have not yet seen fewer than 36. This is something that has annoyed me over the years. That has to be bad organisation. I do not know if anybody can speak about the other bus stations but that is what I can tell you about it.

If anybody is coming in here tomorrow at 1 o'clock, which I expect is a peak time in the city, at 5 o'clock tomorrow evening would they look at some other bus station and count how many idle buses are standing there? It is little wonder that Dublin city buses began to lose money over recent years. That sort of nonsense cannot be tolerated and somebody has to be responsible for it. As the Minister pointed out in his speech here today, £110 million was paid out for buses in recent years and we have added on to the fleet recently on the tourist side. This sum was paid out for public transport and yet in the main city of this country they can afford in one station to have not less than 36 buses, double deckers and single deckers, standing idle. I wish the Minister would try to explain it to me. I am sure it would annoy him as much as it annoys me or any other public representative.

Who will be responsible for leadership in an adjustment, for example, concerning the rural bus services? You have this great social service where you can afford to send a 55 or a 58 seater bus jogging up and down the road at the wrong hours of the day to carry people who do not want to go anywhere except to get to the local shop or maybe to the local village or maybe just to go for a spin for the sake of a spin and come back again. I wonder what the Minister proposes to do about sharpening up the rural services, thinking about people who want to go to work early in the morning, thinking about people coming home from work in the evening at the different hours they finish their work. I think the social service bus, the one on which old age pensioners travel could be much smaller. In the rural outposts like the ones in my constituency a bus half the size would suffice, a larger type mini-bus would do. There would be less rattling and shaking and the people would be far more comfortable and would not be thrown all over the bus on the roads for which we are now renowned. I feel sorry for old people because the bigger the machine the bigger the bumps. I was in Leenane recently and I saw old people coming out of the bus at 1.15 p.m. and they were pale from all the shaking and rattling they received going along the roads of Connemara.

It is the Minister's duty when he is replying to give us an indication of what he wants as regards the services. At the same time he should remember that there is a saving in all this and there is profitability in it. The social aspect is very important but it can be cut down to size and not have this ridiculous situation that has been allowed to continue for far too long. That has not been the responsibility of the Minister but the responsibility of the bureaucracy that has operated within CIE. There must be scope in the outback areas for Irish Bus to co-operate with the postman. It is a novel idea that the postman could take individuals to collect their pensions in different areas rather than have this 54 seater drive all over the highways and byways of the country. These are all money savers and things that have got to be taken on board. They are important to the people of the community rather than having this monstrosity continuing to hog the roads of the outward places of the west of Ireland in particular.

The other question is the question of redundancies. I would like the Minister to outline to us what the situation is with regard to the proposal that was mentioned of 500 redundancies in CIE. Has any progress been made to date? What has happened to that golden figure of 500? Is it there now and if it is not there now what is the figure that is there now? I do not know what has happened.

I noticed that many of the senior members of the workforce of CIE seem to be on retirement now. Could the Minister tell us how many are left to be brought into this scheme? Could he tell us, when he is replying, how many people he now feels are left to be declared redundant and what method is to be used to achieve the figures he so eagerly said in the past he would achieve? That has to be told to us. I should like to know how many have gone and how many have to go and what is the process? I think that is important.

The Minister in his speech said:

I do not wish to say anything about privatisation in connection with this Bill for the simple reason that privatisation has nothing to do with the Bill and is simply a red herring in the debate.

It could be a red herring in the debate, but it is not a red herring out in the street. I will tell you why. The private bus people who have invested enormous amounts of money to give a service — a very fine and cheap service — to the rural parts of this country, to and from this city in particular, have to be taken on board. They have to be respected for their achievements. No matter what we say about CIE their ineptness in the past allowed them to come in. They allowed individuals to come in and many of them are fine young people who are doing a fine job. They allowed the private bus situation to develop because they failed themselves to give the service that those people give.

I think the ordinary transport consumer in this instance has got to know now and quickly what is their position in regards to this very fine service in general which is in operation. When CIE were demanding from Galway city to Dublin £21 return on their rail carriage, there were operators in Galway who were offering for £5.50 a return on their bus. Included in that service, let me say, was a cup of coffee in a glass cup, plus a video machine so they could pass the time watching a programme on that bus. For four times that money and more they were put into a carriage. They got a cup of coffee in a paper cup. It was probably half spilled by the time they got back to their place and they paid at least 50p for it. They paid an astronomical figure altogether if they had a light meal.

I should like to say, on behalf of the people who do not use CIE because CIE did not and do not give the service, that the Minister has got to introduce a Bill in this House to allow a private company to operate a service to compete with CIE. I no longer want to hear the old stories that have been fired around that they are not paying their drivers, that their insurance is not up to date, that some of them are probably collecting the dole while they are driving the coaches to the city. I know the reputable companies involved and that is the furthest thing from the truth. That old nonsense is not going to get us anywhere anymore. They do not want to be accused of working outside the law, because I think that is the worst accusation of all that could be made. They are all taxpayers. They are all big investors in those coaches and they are all giving the services. I could pinpoint the services they rendered on numerous occasions which CIE refused — taking workers to Galway city in the mornings and home again in the evenings and the teachers in Galway city teaching in Tuam town who got a service from them down in the morning and a service back in the evening. CIE totally refused to have anything whatsoever to do with that route and those people were licensed by the Department, and rightly so, to give the service. Now it is a fine service and one which is used.

Those are the matters which have to be looked at. It is not good enough for us to have here the formation of Irish Rail, Irish Bus and Dublin Bus. These are all good. I acknowledge that. The other aspect of the private bus operators is that legislation to enable them to operate within a set down law has to be brought before this House. I speak not alone for myself on that matter but on behalf of many members of my party and, I am sure, other parties who would like to see this matter formally legalised. In no way by saying that am I saying that they are operating outside the law now. I should like to see legislation for them so that their operations could run concurrently with the services provided under the legislation at present before the House. That can be done.

We have viable services from areas where there is no other public service at all. The Minister himself knows of an area in the constituency adjoining me where there is a very fine service to Dublin daily and back. There is no other public service for them except that one. I cannot see any reason why, for example, that service could not be licensed under the law the same as Irish Bus will be licensed under the law. If there was some competition for Irish Bus, it might be the best thing of all to wake them up a little. I think competition is the life blood of trade. That was an old proverb around the west of Ireland in my time and I do not see anything wrong with it. When the private buses in Galway began to operate a daily service from Galway City to Dublin CIE began to make special offers. How is it they could do it then? The first 50 people into a CIE train in the morning could get going for £5. It made you rush in in the mornings. Why did they not think of that ten years ago and not allow the situation to develop? There was never any thinking there. I sincerely hope that we will now have a good competitive company which can give service for the money they extract from the travelling public. I should like to think that it is not a red herring, as the Minister said. It is not a red herring in regard to the situation in the street. I hope the Minister will outline in his reply the specific date he proposes to bring in legislation to allow private bus companies to operate and to allow the fine services which they give to many people throughout the length and breadth of this country to be continued. That is very important. I want to make that point in passing because it is a public demand nowadays that that should be done.

With regard to the three companies and the fear I had in relation to liquidation, while there are other Senators here to speak on this matter who know it in a more detailed manner than I do, I wanted to talk about the situation concerning the company which built the buses, Bombardier. I do not know the exact details. I am sure the Leas-Chathaoirleach does. I am sure she will be able to deal with the matter in more depth than I. I think they are a marker for what I have said concerning liquidation. I believe there are 200 jobs gone in the main factory. I believe that there are 250 further jobs gone in the smaller subsidiary companies. I think that that expertise is a loss to this country. It was a quick act of liquidation. That is why I should like to see the Minister put into this Bill that none of those three companies be liquidated. I am sure the parent company could not be liquidated. Perhaps it could, too, if the other three were gone. What would it be doing then except looking after the chief executives — inherited from CIE I am sure. They would have to put themselves into that position too. This Bill should contain guarantees that the soft option of liquidation is not the one we seek.

I give Bombardier as the example where the soft option was liquidation and the consequences were tremendous. The great tragedy of this country today is the number of liquidations in every sphere of life where no assistance or help seems to be available to help any company. When a nation is faced with a Government like that which we have now, who do not seem to care about the workforce, it is our responsibility in this House to ensure that protection for such developments as this have got to be spelled out clearly and not by just a passing phrase as if it were not important.

Having said that, it will not be Fianna Fáil's intention to oppose this Bill. As I said at the beginning, I do like many parts of it. I have noted a few in which we certainly have reservations. I speak basically on my own behalf but also on behalf of many Members of the Fianna Fáil group here in the Seanad to whom I spoke today on this matter.

I look forward to the amendments the Minister will bring in concerning the naming of those three companies and I do hope that he will exercise a bit of imagination to try to give us something better than a basic British name and which is a copycat performance to which I take exception.

What is British about Bus Átha Cliath?

The tragedy about it is that in the Bill it is not Bus Átha Cliath. Bus Átha Cliath is Dublin Bus.

The dual name is Bus Átha Cliath — Dublin Bus.

Is it Dublin Bus or Bus Átha Cliath? What does the Minister think the national media are going to call it? They are going to call it Dublin Bus. I guarantee that on the 6 o'clock news or whatever this evening Bus Átha Cliath will not even be mentioned. The announcement will be Irish Rail, Irish Bus and Dublin Bus. That is it. It will be like British Rail etc. Would the Minister put his brain to work? I am sure the Minister has a broader concept than that.


It is the truth. The Minister more or less said it himself.

Can I have a few suggestions?

It is nonsensical. Is there no imagination in it at all? Are we just gone simply numb? Does the Minister want Fianna Fáil to make some suggestions?

What about the airport?

We might be naming the buses, too. It looks like it.

We might. There is nothing wrong with it at all Minister. I see he is very jealous because he did not get down there. Knock Airport——

Never mind Knock Airport.


It is the pride and joy of the west of Ireland and no apologies to any man. I would speak on behalf of the Cathaoirleach on that issue, if I too, were allowed to do it. There are only a few from the Pale who hate and begrudge. It is a sad reflection on the nation today. I am amazed at the Minister, Deputy Mitchell. Surely at this stage one cannot continue the old nonsense that went on among the high ups in Fine Gael who were paid so lucratively to put out the message on behalf of the party, the national handlers who were dropped in recent times. They are the people who are responsible for the irresponsible statements made about Knock Airport and Fine Gael men hired them, including the Taoiseach and the Minister himself. It does not behove the Minister to even comment on Knock Airport anymore. Rather take it and allow it to happen because it is going to happen anyhow. In spite of the Pale, it will happen. Let there be no fears about that? The Minister might as well join in now and enjoy it rather than going around with a huge sawmill instead of a chip on his shoulder in the begrudging way this Government have treated the west of Ireland over the years.


I should like when dealing with the Bill to deal with it rapidly and get it over and done with. Something should be done about the names. I say that honestly. Apart from that, as I was saying until I was so rudely interrupted by the Minister, there are many parts of the statement which he has made here today with which I thoroughly agree. I must say that. The Bill itself we generally give our blessing to, except for the reservations I have made. I am sure many more Senators have their own reservations and I look forward to the comments of the Minister.

I welcome the Bill. If anything, a Bill such as this is overdue in this House in order to look at the necessary organisation of CIE. If it has been approached through a very serious examination of that company, not just by McKinsey but also by the Department and the Minister. The present period of re-organisation in CIE, of course, is not simply the parameters of this Bill, because to any outside observer these times within CIE must be very challenging times. This Bill is clearly the most major piece of legislation in relation to the provision of public transport by CIE since the Transport Act of 1950, when the present statutory body was set up. Currently we also have the Dublin Transport Authority Bill about to be debated in this House and we have had in recent times quite a close examination of the performance of CIE and the steps taken by the present Minister in particular to put some order on the Finances of that company.

The financial problems in CIE, as the Minister outlined earlier, of course date back the best part of 20 years. More recently the financial problems were resolved in a package laid before Government and provided for by Government in June 1983. It is very encouraging to hear from the Minister on Second Stage that the controls that have been set up to allow for the continuing operation and development of CIE have not just been successful by way of the subvention given to the company. It appears that 1985 was the best year yet in relation to that company and the way in which the company, led by their chairman, have managed to cope with the financial subvention in the interest of getting much greater improvement in CIE's position.

As a layman looking at this Bill, not somebody who has had a great knowledge or close experience of the operations of CIE, we are dealing with an area of quite considerable complexity. On the other hand, it seems to me that the essential thrust of the Bill towards establishing the holding company and three subsidiaries operating on a smaller but more compact operating arrangement would seem, in the long run, to be a model which has been very successful in Germany and which could well succeed here. I am sure it will lead to improved performance, more effective management and a much greater understanding of the workforce of CIE, of the company they belong to and a much greater bond of interest in their organisation to the extent that the company will clearly be much more intertwined with the individuals who are taking part in it. It is clear to me in dealing with this Bill that many of the issues which face CIE in the course of the period following enactment have been carefully thought out and should lead to a very successful period of operation for the company.

There are some areas which concern me and, perhaps, the Minister could deal with them. One is the actual decision taken to divide up the Dublin buses and the two companies in rural Ireland dealing with rail and the provincial bus services. What I wonder here is whether it is entirely feasible for the rail service and the provincial bus services, which to a large extent operate out of the same premises and up to today use the same staff, will be divided up in a manner which will increase the efficiency of the two companies, or will there not be a great deal of complex difficulties faced by those who are involved in rural Ireland?

It is clear that the establishment of a separate bus service for Dublin will be successful. It was successful in the past. I do not see why it cannot, outside the present arrangement, operate well again as an entity. I wonder about the success of the provincial bus and rail services operating in very close tandem at present, whether it will be possible to divide them up sufficiently and not to have difficulties between the two services in the area of staff and premises. That kind of difficulty has been faced by CIE before. We had the difficulties of the bus districts here in the city operating even from the same street. We had problems of breakdowns and difficulties of availability of buses for another district when those breakdowns occurred. Will increased costs and more complex problems for those trying to deal with the new companies arise when the rail and provincial bus services operate out of the same premises and service the same public? It is clear that many people travelling as customers to provincial towns use the bus service to their final destination. I raise that as an issue which may be something the Minister could outline in more detail when he gets to his reply at a later point.

The other issue I should like to seek some general clarification on is the establishment in this Bill of the holding company and the three subsidiary companies. Presumably the holding company will act as the source of clearing up difficulties between the operating companies for the city bus, provincial bus and the train services. It needs to be sorted out between one service and another as to the best way of developing the overall needs of the community in the form of public transport. I presume that the holding company will iron out these difficulties and will be constantly in the business of dealing with matters that need to be resolved between the companies. For example, the position which might be considered by the provincial bus service that instead of operating as much of its services between the major cities, Dublin, Cork, Limerick, Galway and so on they concentrated their bus fleet to a large extent on servicing the needs of people between the different towns and accelerate the provision of rail between the major cities. That form of rationalisation of services would need to be considered not just by the subsidiary companies but by the main board of CIE. I take it that in the establishment of the holding company the needs of rationalisation between the different subsidiary companies will be borne in mind as being important in the furuture.

There are a number of questions I should like to pose at a later stage when we reach Committee Stage.

My contribution will be brief because this is an area in which I am not very knowledgeable. Nonetheless, I am very concerned with the matter under discussion. Senator Killilea referred to other Members who would follow and who would be more knowledgeable than he. Although he looked in my direction I tried to avoid his glare to make sure he was not accusing me in that regard.

Like Senator Killilea I welcome the fact that the Bill was introduced in this House. Since becoming a Member of this House I have seen many important Bills initiated and there are many other which I would like to see in the not too distant future. I am not sure if I would refer to this Bill as being a very important one but nevertheless in so far as it will help in the area of transport I welcome it. CIE have come in for criticism over a very long period, some of it sustained, some of it unfair and some of it fair. There is also the other side to the coin. In dealing with CIE we all have come in contact with officials and workers who were kind and generous such as conductors who helped out the elderly, those who were feeble and those who had problems.

A few months ago I spoke to a friend who had travelled by train on a Sunday afternoon excursion to a football match in the south of Ireland. He sent his 12 year old son to the canteen to buy cigarettes where the official refused to sell them to him saying he was too young and if his father needed cigarettes he should come for them himself. I would like to commend that worker. The father of that child was rather proud of the CIE worker who in a busy situation took what might be regarded as an unpopular option. Nevertheless he was concerned enough to refuse to supply this young boy with cigarettes.

There are many areas with regard to CIE where the same would apply. In making representations to CIE over the years, in meeting their officials and on the occasions they have come to meet us on the urban district council, they have been civil and helpful. I would have no complaint in that regard. I would like to refer to the aspect that does not get publicity, the one which is very important. I realise that it is much easier to be generous when looking in from the outside. It is not easy for those involved in long queues and long waits to be as generous. At a time when people are looking for comfort and are not prepared to wait or be inconvenienced, people with cars who want to drive up to the shop door and park illegally. In such situations when you are very much involved, it is not possible, perhaps, to be objective. Nevertheless, I did have to avail of public transport for a very long period in my life and I want to emphasise that particular aspect.

I have not been fortunate enough to have been able to travel abroad on many occasions. When I was in London, for example, I noticed that traffic moved much smoother due obviously to the restrictions on private cars and good planning along with many other reasons. At traffic lights delays were for much shorter periods. I see no reason why the same could not apply equally well in Dublin. We have the practical experience of other countries to fall back on. The congestion and delays which occur in this city at different times can be attributed to many reasons which I will briefly refer to later. These are some of things I noticed and they are particularly noticeable to an individual who has not been outside the bounds of this country very often.

With regard to the Bill the McKinsey report recommended three companies. Here we have four, the holding company and the three subsidiaries. Instead of eliminating bureaucracy this is going to exaggerate it. I would have very little grouse against the officials I have dealt with directly in the local authorities and other bodies. In most cases they were tied down by the rules and regulations. These put a damper on the situation. Dividing up CIE in this way may very well be justified from the point of view of planning and may result in improvement. There is the danger which has been referred to earlier that it could result in bureaucracy. Every effort should be made to avoid this.

Senator Killilea also referred to the possibility of liquidation of these subsidiaries. While there is very little likelihood of that happening, the possibility is there. The possibility is also there to sell these companies. Senator Killilea has gone into that in some detail and I am not going to dwell on it.

CIE have been regarded as a very poor company in motivating workers. I am not knowledgeable enough to go into this in detail but it is fair to make that comment. I am wondering will this Bill do anything in that regard. I note the attempt for greater worker representation. In the past, trials have been carried out without consulting the workers. The workers were not even aware that the tests and trials were in progress. This is unfortunate. For any company to succeed there must be motivation of the workers so that they have this urge to succeed and enjoy what they are doing. If this Bill succeeds even to a small degree in this regard, it is to be welcomed.

Reference was made to the closing down of a company which manufactured buses and this was unfortunate. It is over and done with and there is no point in going into it in any detail. It was unfortunate that we lost this facility and it would take a long time to build it up again.

Reference was also made to the further closing down of rail services. I gather that this is unlikely to happen. I am glad to note that, because the closing of the railways was unfortunate in many regards. Possibly, it would have been difficult to justify retention of the railways from the point of view of finance alone, but the closures meant that small towns suffered. I am thinking of towns like Oldcastle and Kells which suffered in a way that they cannot easily recover from. They also suffered in many other ways through the closing down of small schools, the police barracks and small Protestant churches. These have all contributed to denuding the country. Indeed, at the time some of the railway lines were closed there was talk of converting some of them into roads. Unfortunately, this did not happen. In the years since then houses have been built and other buildings have been constructed across these lines. It would be impossible at this stage to reopen them. I am glad that there is no rush to close any more of these railways.

Inchicore has great potential in the work that is being done. The skills which are there are not being exploited and could very well be exploited outside CIE. It could be done in such a way that it would not interfere with the private sector. CIE have been opposed to private encroachment. This is understandable, but those availing of private services would not agree. Private services have played their part. It would be wrong that private companies in competition with CIE would get the cream. They should have to compete fairly. Nevertheless, there is a part to be played by the private companies, particularly in rural areas. Part routes could possibly be covered by private companies. I am sure there must be some way that the private companies can play their part as at present they seem to be doing considerable business, whether unfairly or otherwise I am not in a position to say. I would like to see this aspect developed to some considerable extent because it is very important to set down parameters both for CIE and the private companies. I am sure that this can and will be done.

I am glad that the dispute in relation to one-man buses has been resolved. One individual in charge of a bus has a very difficult and onerous task, particularly when we read about attacks in urban areas and the dangers in recent times. Any man in charge of a bus has a difficult job and it is one which I would not like to have.

CIE have played an important part with regard to tourism. Tourism is very important. I have made representations at different times to CIE with regard to extending the Boyne Valley tours and with regard to other matters in relation to tourism. I want to say that I have never been disappointed; I have been listened to. Obviously, the company would not be in a position to accede to all the requests made; but with regard to reasonable requests the officials have gone out of their way to be helpful, particularly in extending the Boyne Valley tour to Kells. I am glad that it has been a success. I am sure there are other places within that general area which could also be taken in by that tour.

I note that we will have an amendment in regard to Irish names. I feel that the Irish name will be sufficient. I do not see any point or reason for the English equivalent in this country. If we are ever to get back to the use of the Irish language, Irish names should be used. In many areas we are losing out. Instead of using Irish names, housing schemes are called after places mentioned in "Dallas" and "Dynasty". The names of our townlands and place names should be used in Irish only. I cannot see any problem about it. There is no difficulty.

In relation to the motion coming up soon regarding the Committee for the Irish language, I should like to put it on the record that this is an area where we have lost out very much over the years.

With regard to place names, it was unfortunate that the decision taken in the early years of the 19th century regarding the Ordnance Survey was to use a mixture of names rather than the authentic Irish name. Here we are with a Bill in 1986 giving the names in both languages. I see no reason to use the English language in this regard. I would recommend that we get a suitable name in the Irish language only and use that.

The Minister referred in his speech to the Green Paper on Transport Policy which was published in November last year. I agree that this is a very important document. It is one which covers all of this area in very great detail and in a much wider sense than we are dealing with under this Bill. This Bill is restricted. It is in three parts. Sections 1 to 5 contain provisions of a general kind which we get in all Bills passing through the House. Section 6 to 22 deal with the formation of the three operating subsidiary companies, certain financial matters and other provisions, many of which are standard features of Acts dealing with State-sponsored companies. Section 23 onwards deal with some additional matter.

I would like to refer very briefly to a few of the points raised in that document on transport policy, particularly under urban transport. It is appropriate and very much in order to refer to them when dealing with this Bill. The section under urban transport referred to commuting from the suburbs and stated that it tends to be increasingly based on cars, partly from choice and partly because the public transport system fails or is unable to provide a sufficiently attractive alternative. These public transport problems arise from both internal and external factors. Increasing car use and proper services resulting from increased traffic congestion adversely affect the numbers using public transport. As more people opt to use their cars congestion increases and this reduces the effectiveness of public transport even further. The failure of the public transport system to provide a flexible, reliable and attractive service can adversely affect patronage levels. We are in a situation where we have a reaction between one and the other, a type of vicious circle.

I want to say that in all of this it is the people who matter. I have made the case many times for development in rural areas for those who want to live there. I realise it is not easy to make that case. It must be borne in mind at all times that we are dealing with people. I spent some years living in the city where in the summer time if people decided to go to the seaside they would queue up for a bus that would never come. They would queue at the end of a line that would never be taken up in a bus. It is a problem which you would not have in rural areas.

The Green Paper stated that there is no easy solution to urban traffic problems. It was rather unnecessary and rhetorical to say this, but nevertheless it was important to say it. Of course, it is a very difficult and complex problem. The aim of traffic management is to achieve optimum use of the road network through improved signalisation, one-way systems, parking controls etc., with the best possible balance between the private and public transport. It is necessary to get that balance.

People have asked in the past whether private cars should be allowed into the centre of Dublin and the question has not been satisfactorily answered. It is most important that it should be. I am well aware that people want to drive right up to the shop door and, if public transport could be provided in such a way as to suit these people, I am sure they would avail of it. That is the important aspect. When I speak about the rural areas I realise there is a problem with regard to profitability. In other ancillary areas you could make the point that, where people decide to build in remote rural areas, a car or a second car is needed. In those situations, apart from providing satisfactory roads and infrastructure, there is the extra cost of this second car which leads to wage claims and many other problems. I understand that; but at the same time there should be provision for those who want to live outside the urban areas and there should be satisfactory infrastructure including public transport.

The document on transport policy also referred to the desired move from private to public transport. For this to be achieved it refers to the measures which would be necessary such as the placing of restraints on the use of private transport, specifically, parking controls generally. I am not too sure if that could be accepted without question. It also referred to adjusting the prices for long-stay parking. There is far more involved in this respect than just deciding on parking fines. At present, with so many people out of work, if that is all that is needed or if that is a considerable part of what is needed, it would simply mean getting more traffic wardens to police the streets to get offenders to pay more. That is one aspect that I would question. We will have a greater opportunity to do so when we are dealing with the Dublin Transport Authority Bill. It is one of the areas that will come directly within the ambit of that Bill.

The Minister referred in his speech to the deficit over the years in the Dublin city service. It is noticeable in the graph supplied that that devicit rose considerably between 1975 and 1981. It has decreased and stabilised over the last two years. I accept the Minister's statement that it is expected that this will decrease further, particularly over the next four years. The graph also gives us a picture of the millions of people carried by the Dublin city services. Unfortunately, this has gone down considerably between 1975 and 1981 and it has more or less levelled out over that period. This is difficult to understand in a situation where we have a growing city. It is difficult to understand that we even have a growing city. By and large, the growth of the cities has been due to the increase in employment. People moved towards the city centres and the urban centres for employment. At present, employment is not there. From that point of view also there should be some discouragement of centralisation and some greater incentives given towards decentralisation in this regard. It is difficult to understand why the numbers have not increased and this is something which is of considerable importance as regards this Bill.

Finally, before any road transport can function satisfactorily we must have a proper network. In many areas we do not have that at present. Whether we are talking about rural or urban transport, the actual road work is of the utmost importance. I have mentioned before on a number of occasions that the roads from north Donegal to Kells and right through Cavan are grade one. The Kells-Navan road and the Navan-Dublin road is quite satisfactory until one reaches Clonee. From Clonee into Dublin we have a bottleneck. I understand that this road will be improved in the coming year. That is the intention and I hope it materialises. Sometimes, and indeed more often that not, there is a delay for one reason or another. We seldom see things achieved before their time. In this regard the sensible thing to do in the early days would be to provide a proper infrastructure and roadwork around the city.

Here we have a situation where people coming to work in the morning find themselves behind a JCB or some slow moving traffic and because of the narrow road there is a bottleneck. For the most part there is a path only on one side. This causes a hold up of traffic. No matter what Bills are brought into this House and no matter what improvements are made with regard to CIE if we do not have roads wide enough, properly aligned, with a proper surface and without potholes, they will not be of any use. I am glad this road is being repaired. I am not bringing it up because I am involved. I bring it up in the general sense that it is the worst road into the city. No matter what Bill is brought into the House, with that kind of set up I am sure we would have still further crisis in CIE.

What can a bus driver do if he gets into a situation where he cannot make time and where people are waiting in queues for much longer periods? It is necessary to start at the beginning. CIE should be given the proper opportunity to make a success of public transport. They should be given the facilities and above all the finances to make this viable before we start to be critical of them and to make them the scape-goat for problems for which they should not be responsible. If all these things are taken into consideration in so far as this Bill is concerned, I welcome it. Planning is necessary in relation to the nitty gritty of public transport. When we are dealing with the Dublin Transport Authority we will be able to go into it in much greater depth than at present. It contains aspects of far greater detail which we do not have in this Bill.

I am concerned with the urban aspect. I want to make it clear that I am also equally concerned with the rural areas. While the city people may have to wait-for very long periods, in most cases the bus arrives at some stage. In the more rural areas there are people who are unable to use public transport because it is not there. In this regard some attempt should be made to provide mini-buses for areas where the roads are too narrow or where the numbers involved are too few. If this is done and if some genuine attempt is made to deal with all the problems that we have in this area, success will come and we will have more people availing of public transport. In so far as this Bill succeeds in an improvement in transport, I welcome it.

I want to welcome this Transport (Re-organisation of Córas Iompair Éireann) Bill. I want to compliment the Minister and the Government or bringing it through. I do not like to wish things a speedy passage through the House but it should be passed expeditiously after a good and thorough examination.

CIE is one of the large semi-State companies that comes in for much flak. I suppose they earn most of it but that is too simplistic because it is a powerful organisation. It employs tremendous people, people with great heart and great expertise, craftsmen and other people, who give a really good service. In parts of the organisation where the personnel are very exposed to the travelling public. I suppose there are points which grate on some people's nerves. We cannot have an altogether perfect service in any sphere. That is why I am very happy that the Minister is tackling the problem.

It is a good idea to try to unscramble the egg that was nicely scrambled in the 1932 Act and in subsequent Acts. Back 30 or 40 years ago big was beautiful and I suppose it still is. The independent rail companies, the canal companies, the bus companies and the tram companies were all eventually amalgamated into a monopoly. I do not know if there was competition within the various sectors of CIE. If there had been greater competition between the various in-house services it might have been much better. I remember back in the forties, in the lean times, when we used to draw beet to the railway station in Abbeyleix, when the Waterford train would pass down, the old porters, if the train was a few minutes late or early, would accuse their watches of being slow. They believed that the train had to be on time. It always was on time and they would change their watches accordingly. If the train was at 5.30 p.m. and their watch was 5.31 p.m. they would change the watch because they would not accept that the train could possibly be late. Over the years CIE, and I suppose many other companies, lost that greatesprit de corps that sets it out. I do not think the transport service will make a great profit or give a fantastic service until that esprit de corps returns to the country and to the service.

I would like very briefly to make one or two comments on the service. I do not want to be critical of CIE. I recognise the great work that they do and the difficulties that they have. Here in Dublin the CIE bus service would need, somewhere near O'Connell Bridge, a square like the Piazza Silvestro in Rome where one can, by walking 40 or 50 metres in any direction, have 30 or 40 different bus services without having to traipse the full length of the quays or half the length of O'Connell Street to try to find which bus one needs.

Transport which accounts for 25 or 27 per cent of GNP, is a completely underrated industry. When the powers that be in successive Governments handed over the monopoly situation to what could be described by some as an indifferent outfit, CIE lost a lot of their imagination. At one stage they just closed down rail lines, cut off branch lines or closed down services. It would be a good idea now if CIE would identify their loss making services and offer those loss making routes to the private sector and see what they would do. I suppose it is not as simple as that. If we take a small private operator with a 45-seater coach and two or three mini-buses, his overheads cannot be compared with the overheads that a big semi-State organisation like CIE would have to spread over any particular route. At this stage CIE should identify the loss-makers and allocate them out.

No matter what CIE do they are not able to give a comprehensive service. There is an excellent express bus service going across the country, but they only stop in the towns and the large villages. That means that the people who live in between or who do not live near the approved bus stops have to rely on the private bus operator who offers the same journey, whether it is from the provincial towns to Dublin or wherever, for about half the price or less. The one criticism I have — and I can only look at the services as far as my own constituency is concerned — is that the middle management, the people who make the decisions, do not see what the travelling public want. They should be pandering to the public. they should not be just trying to see what the public require and what the public are going to use, they should be tailor-making a service to meet the local demand. If the demand is not there they should create it. They have been spoiled by successive Governments who footed the bill and made up for deficiencies. Personnel in CIE are as good as you will find in any other part of the public sector. They should be given greater flexibility and greater autonomy to try to utilise the facilities they have and to provide the public with a service.

I hope that the present situation, where there is a link between the road services and the rail services, will continue. Perhaps on some of the routes that CIE now find less profitable they might be able to improve that situation by introducing smaller or less expensive coaches. There should not be a duplication of services. They should endeavour to create the infrastructure that would meet the needs and the facilities of the towns and the areas they are servicing.

There must be a lot of ambiguity about the subsidy that the Department of Social Welfare pay to CIE in respect of free travel. I do not know what that amounts to and I do not know how it is calculated, but it should be clearly indentified. I accept that there are people in this country, especially retired pensioners, who should be encouraged to travel and get around and keep an interest in life. I accept that they should not be asked to pay the economic rate of travelling. I do not subscribe to the idea that a monopoly organisation should get a subsidy irrespective of whether they are giving a service to the people at whose behest they are supposed to be providing a service. There are hundreds of thousands of pensioners here who do not have any occasion to use the free travel service. The passengers should be subsidised and not the company. I do not know how that can be done but I am sure there must be some means of devising it.

The rail services have been updated to a great extent. In the main the inter-city service is very good. There is also a lot of old rolling stock. The last time I was in Paris I was getting on the Metro and there was a brass plate on the door step with the date 1914. It was still going strong. Just by virtue of the fact that the coaches are old there is no reason to believe that they cannot be comfortable. There is certainly no excuse for them not being clean. With the continuous railroads, where there is not a bang every 50 or 60 feet, the older coaches could clang on for ever. I hope the new company that will have responsibility for the rail services will endeavour to expand the present mileage of railroad rather than curtail it.

CIE should seriously look at the possibility of having a DART link brought to Heuston station. One can travel to Dublin very fast on the mainline train services and then, depending on the time of day, can spend a long time getting across the city. I do not see why that link between Heuston and Connolly stations cannot be made by the DART service so that people wanting to go to Dún Laoghaire or to the north side of the city would be able to get there or to a station quite near it. That would be a service that would be used. The only problem with Dublin at present is that one cannot get through it. I understand there is a link between those two important stations which should be used. If CIE would use the infrastructures they have and put them at the disposal of the public, the public would be happy to pay for them. I hope that the new companies will exploit every possible avenue to ensure that every bit of infrastructure that is there will be maintained and put to good use.

From a policy point of view, because transport is such an important factor in the lives of all our people it should certainly be upgraded. I hope the Minister will be able to impress on his colleagues in Government the necessity for setting up these three new companies on a very sound financial footing. I do not think that the cost of setting them up or establishing the necessary modern infrastructures should be cut back in any way. We are giving a new lease of life to transportation not only in the city but in the country as a whole. The people who take on the responsibility to do this should look at the whole problem to find the best possible way of endowing future generations with a workable system and a system that serves the people.

In a press release which I received from the Irish Congress of Trade Unions they give a rather guarded welcome to this proposed legislation. They conclude by saying:

The Unions think the proposed legislation should be amended in consultation with all parties. Suitably amended, this legislation would help in improving the services provided by the National Transport Company.

While they finish their press release very well, they have not been very complimentary to the idea of the Bill earlier on. The message in this press statement of 14 March 1986 underlines the attitude of the CIE group of unions to their work in CIE. The point they miss is that the whole idea of having a semi-State transport organisation is that the organisation must be there to service the travel interests of the people.

I do not believe that everything the Government proposes, such as CIE, should be looked at from the point of view of creating jobs. I knew jobs are very important, but we must be realistic. We want a transport system which will transport people to their place of work or elsewhere. It should not be a social service for employing people. I respect the people who do an excellent job in CIE and in every walk of life. However, I do not agree that the very fact of a person having a job must be secondary to the purpose of the service being provided.

I hope that the input the Irish Congress of Trade Unions will make to the successful launching and establishment of these three new transportation companies will be positive. I hope that they will put their best people on the board as worker-directors to ensure the easy, smooth and efficient running of the company. The people are entitled to this. I wish the Minister success with the Bill. There are many points in it that we can address ourselves to on Committee Stage.

In conclusion, I hope that there can be a greater utilisation of the private sector in the reorganisation of the company. The semi-State interests will still have almost a monopoly. They will certainly be the biggest contributors to the entire service. I hope that it will be Government policy to encourage the private sector to move in. There should be a new system of licensing introduced in the transportation service, not as a means of raising taxation but as a way of ensuring that there will be a service on particular routes for the people. The Government and the Minister responsible will be in a position to retain an input, a control and a guiding influence on it so that we will have an effective and successful service in this regard.

One of our big problems as an exporting nation is our remoteness from the lucrative markets in Central Europe. I hope that the Minister in his policy on transportation will press at European level to expedite the establishment of a European transport policy that will recognise our remoteness on the western periphery of the European Community. The export of our goods to European markets should reflect some kind of transportation subsidy, not just to featherbed the people who are in the industry, but to make our exporters more competitive.

I want to sound a cautious warning note at this stage of the debate. Senator McDonald prompted me into making this comment when he said that he hoped for a speedy passage of this legislation. I refer to the Minister's opening speech in which he stated that the Bill was an historical one. It is historical legislation and the whole concept of it is of major consequence. It will need the fullest discussion by this House, by the Minister and by various interests, and not alone the interests of the workers involved in CIE. If we are to have a successful set of companies, whether we settle for two or three, it is important that the people who will be involved in the running of them in the future will have every opportunity by way of discussions with us in the formulation of proper legislation which will reflect their interests, expertise and views on the subject.

The Labour Party in particular have had the longest possible link with the transport system and with those who are engaged in it, whether it is the bus service or the rail service. It is because of this extremely long link with the workers in the transport authority that our party have taken it upon themselves from the publication of the planBuilding on Reality which addressed itself to the problems in CIE, to set up a specialised committee with a lot of expertise, much of which might be already available to the Minister and his officials. It is available to us as a political party.

Because of this and the submission they have made and the reservations that have been expressed about this legislation, it will need a lot of debate and discussion. It will need a lot of reassurances from the Minister in his reply to the Second Stage debate and indeed every section on Committee Stage. I am suggesting, in fairness to the legislation and to the Minister who is bringing it forward, that it will be a long debate. I hope that at the end of the day, when we have completed our deliberations, the end result by way of legislation will be something that can be workable and that can address the worries and concerns of those who are working in CIE at present.

When we have a strike in CIE, whether it is official or unofficial, everybody screams about how difficult it is to work with that company and the problems that are created by it. All of us forget the magnificent service that this organisation has given to us down through the years from the time of the division of the railways into the regions until it became the responsibility of Córas Iompair Éireann. There is no better public transport authority in any part of the world, given the financial restrictions that were always on them. The kind of service that they have given has been second to none. At times we are quick to criticise and we are very slow to give credit where credit is due.

Debate adjourned.
Sitting suspended at 5.30 p.m. and resumed at 6.30 p.m.