I welcome the Minister for Transport, Energy and Communications, Deputy Lowry, and his officials.
Estimates for the Public Services, 1995.
Vote 18 — Transport, Energy and Communications (Revised Estimate).
I welcome this opportunity to discuss with the Select Committee the 1995 Estimates for my Department. It is a useful procedure for providing information on all aspects of the work of the Department and to provide the opportunity for in depth debate on all sectors for which I have responsibility.
As in previous years it will be useful to give Deputies and outline of the nature and extent of my Department's responsibilities and functions which relate directly to how the Department's Estimates are framed. My responsibilities in the areas of transport, energy and communications are critical to many aspects of the country's economy and include responsibility for several commercial and non-commercial State bodies engaged in the provision of vital services. In addition, I am responsible for the Geological Survey of Ireland and the Meteorological Service, each of which provides an important public service.
The commercial State bodies under the aegis of my Department give employment to over 60,000 people and have a combined turnover of £3.7 billion. Their contribution to Ireland's economy is clearly extensive not only in the scale of their own operations but in their contributions to the general competitiveness of the Irish economy.
Deputies have already been given briefing notes on the subheads, the structure of which is mainly along the lines of the 1994 Estimates. The gross expenditure provision for my Department for 1995 is £163.319 million. Appropriations-in-aid for 1995 are estimated at £32.45 million, giving a net Estimate of £130.867 million. The net figure shows a decrease of some £48 million over the 1994 equivalent. This is due to the fact that a one-off increased allocation was made from the tax amnesty funds in 1994 for the pensions to An Post, Telecom Éireann and the Irish Aviation Authority.
The day to day running costs of my Department under the A subheads are covered by the terms of a three year administrative budget agreement which each Department has concluded with the Department of Finance. The financial allocations under the 1994-1996 administrative budget have been agreed with the Department of Finance and funds of £22.987 million are provided for in the current year 1995. This 1995 provision of £22.987 million compares with the 1994 outturn of £21.009 million.
Due to improved managerial efficiencies the Department succeeded in delivering a saving of £1.338 million in the administrative costs in 1994. These savings were carried forward to the 1995 Estimates thereby contributing to the increased figures for 1995. In addition, there were some once-off consultancies relating to the telecommunications, electricity and transport sectors.
I will update Deputies on some of the developments in each of the sectors covered by my Department. Let me first turn to the energy sector of my Department, to which the B subheads of the Vote relate. With regard to electricity, there has been a significant degree of public debate and media attention given to recent Government decisions taken on the modernisation of the electricity market. These decisions have been taken at a time when the ESB, the oldest of our semi-State bodies, is proceeding with the cost and competitiveness review for a new, more competitive environment.
The Government has decided that central co-ordinated planning and purchasing of electricity is essential in the small Irish market. Competition will be facilitated in the construction, ownership and operation of power generation plants and the ESB's monopoly on the retail supply of electricity will be ended with effect from 1 January 1998 for large users.
These changes in areas which have come to be regarded internationally as outside the definition of a natural monopoly will allow the cutting edge of competition to enhance efficiency in power production and the retailing of electricity services in Ireland. To ensure that power procurement is conducted on an impartial basis, the Government has determined that I will appoint board members to an ESB subsidiary which will plan for and purchase all electricity either produced in Ireland or imported. Furthermore, an independent regulatory authority will be established to ensure fair and open competition to protect the consumer interest. I am satisfied that these combined changes will reassure ESB and potential competitors of ESB that they will be treated equitably in the new Irish marketplace.
Other significant decisions taken by the Government relate to the need for ESB to reduce its costs in the interests of consumers so that it is prepared for competition and can grow both domestically and internationally. The Government lays particular stress on bringing the cost and competitiveness review to a successful early conclusion. For that reason the Government has agreed that a decision on an electricity price increase and the completion of the new Poolbeg power station must await a successful outcome of the CCR.
The Government has also acknowledged that electricity prices must adequately fund the ESB so that it can undertake necessary capital investment and finance rationalisation in its operations. The exact extent of any necessary price increase will not be known until the CCR has been concluded. One of the unfortunate side effects of the maintenance of competitive electricity prices in recent years has been the postponement of much needed investment in rural networks. The quality of supply in rural areas has to be improved. I have directed the ESB to upgrade electricity networks so that adequate supply is achieved, as far as possible, within five years. I am pleased to note that the ESB has now decided to move ahead on this programme.
In recent years Bord na Móna has undergone a major rationalisation process, the magnitude of which cannot be overemphasised. The board continues, however, to be in a serious financial situation because of its very high level of debt. At 31 March 1994, Bord na Móna's total net borrowings amounted to £172 million, all of it guaranteed by the State. Despite the major improvements in recent years in bringing its operations back to profit, the company still had a negative net worth of £72.4 million. On 30 May 1995, the Government gave its approval in principle, subject to certain conditions, to the injection by the State of equity into Bord na Móna in three tranches in 1995, 1996 and 1997 of a total of £120 million — in 1995 terms — and at the same time approved in principle a proposal to grant an average reduction of £6 per tonne in the price of milled peat supplied to the ESB by Bord na Móna. The proposal for this new 120 megawatt peat-fired station, to be located in the east midlands, has been included in the energy sub-programme of the Community Support Framework for Ireland 1994-1999. In April 1995, the Commission agreed to contribute £21 million in grant assistance towards the cost of the project and I now intend to bring proposals to Government to proceed with the project by way of an open competition on a build, own and operate basis.
To provide gas supplies as the Kinsale Head and Ballycotton fields are depleted and to provide an alternative supply in the event of any disruption of that source prior to depletion, Bord Gáis Éireann has built a gas interconnector between Ireland and the UK. The pipeline part of the interconnector project was mechanically completed and commissioned by BGÉ on December 1, 1993. The compressor station in Scotland is substantially complete except for certain modifications, the need for which came to light during initial commissioning. Those modifications will delay final commissioning until later in the year. However, since December, 1993, substantial volumes of gas have been transported through the pipeline for short periods during initial commissioning of the compressor station. In addition, the pipeline has provided security of supply facilities to protect BGÉ's core market of 230,000 customers should there be an interruption in supplies of gas from the Kinsale Head/Ballycotton gas fields. The estimated final cost of the project will be approximately £265 million, within the approved budget of £287 million, of which £91 million will be provided by the EU.
From late 1996 it is expected that BGÉ will commence importing some of its gas requirements through the new pipeline as the Kinsale Head/ Ballycotton supplies will be decreasing from that date. According as the Kinsale Head/Ballycotton fields decline, there will be increasing gas flows through the new pipeline each year from 1996. The interconnector is designed to enable the provision of a spur line to Northern Ireland from the onshore pipeline action in Scotland. A South/North gas interconnector would complete the loop as it were and would be a valuable means of ensuring security of supply in the event of a disruption of supplies in either of the two pipelines from Scotland. A joint South/North prefeasibility study of such a proposal is being carried out at present. A draft EU directive concerning common rules for the internal market in natural gas proposes a number of liberalisation measures. The Council has not yet considered the details of the draft directive. Meanwhile, I am studying the implications of the EU initiative for the Irish natural gas sector.
As Deputies may be aware, EU member states are required to hold 90 days supply of oil as a precaution against oil supply disruption. As an island nation dependent on imported oil for nearly 50 per cent of our energy needs, security of supply continues to play a vital role in Irish energy policy. This obligation has been shared by oil companies and large consumers in association with the State up until recently. Following a recent review of the position in my Department, including consultation with the industry, new regulations have been introduced. Under these measures, a stock holding agency — the National Oil Reserves Agency (NORA) — has been established and has statutory responsibility to ensure that oil stocks are at all times sufficient to meet minimum international obligations. This measure will improve the manner in which our strategic stocks are held. The National Oil Reserves Agency will operate on a break-even basis, thus minimising the cost to the consumer. I am pleased to advise Deputies that both IBEC and the Irish Petroleum Industry Association have welcomed the introduction of this new stocks policy.
The response to the recommendations of the Culliton and Moriarty reports, the Government decided that the mandatory off-take of petroleum products from Whitegate refinery at cost recovery prices must be terminated by the end of 1996 at the latest. In order to enable the refinery to compete with market prices after 1996, the board of the Irish National Petroleum Corporation developed a three year plan which was approved in December, 1993, for commercialisation of refinery operations. The plan, which is currently on target and at its midway point of implementation, incorporates investments costing about £26 million, and marketing initiatives. These investments are being funded by the Irish National Petroleum Corporation by means of funds raised through the mandatory off-take system.
I have recently instructed the Irish National Petroleum Corporation to restore the oil terminal at Whiddy Island, County Cork, to operational status by installing one single point mooring buoy for the discharge and loading of crude oil. It is hoped that substantive work on the project will commence next month and will be completed during 1995. The new facility will provide ready access to oil stocks already stored at the terminal in the event of a stock disruption and will enable the stocks there to be augmented. It will also facilitate possible additional storage and oil trading activities at Whiddy by third parties on a commercial basis. INPC, at my request, are pursuing this matter.
Energy is the life blood of industrial, agricultural and commercial activity and of our modern lifestyle. It is costly and for most of our energy sources its supply is finite. Energy conservation and efficiency therefore matter to all of us. I am happy to announce that my Department's Estimates for 1995 allow for a concerted well-resourced assault on factors underlying energy inefficiency and waste. They allow for the establishment of a new Irish energy centre to heighten the profile of energy conservation. They allow for the delivery by the centre of targeted grant schemes and they provide for selected actions in various sectors. The aim is to achieve energy savings of £50 million per annum by 1999. I will be monitoring progress carefully on the achievements of the energy conservation programme.
The Government is fully committed to supporting all exploration activities in the offshore as it is our belief that Ireland has substantial potential for further significant commercial discoveries of oil and gas. Two petroleum exploration licensing rounds were recently held in the Slyne and Erris Trough and the Porcupine Basin off the west coast. In 1994 five frontier licences were awarded in the Slyne and Erris and this year eight licences were awarded in the Porcupine Basin. The response by the oil industry to both rounds has been very encouraging.
Last year, the petroleum affairs division of my Department, in co-operation with the Irish Offshore Operators Group and the Irish branch of the Institute of Petroleum, held a very successful conference on the geology of Ireland's offshore basin. The conference was the first of its kind to be held in Ireland and was one of the most significant promotion efforts made to date. This conference provided an ideal forum to promote exploration in the Irish offshore. The renewed interest by a number of major exploration companies in the Irish offshore is most heartening and should lead to a significant increase in exploration activities in the future. If this exploration effort is sustained and developed, we can look forward to substantial social and economic benefits arising from the production of hydrocarbons in the Irish offshore.
The Estimates provide for expenditure on delineation of the Continental Shelf off the west coast. This is to provide for the acquisition and processing of seismic data as the first input to Ireland's case to define the boundary of the Continental Shelf which will be lodged with the UN Commission on the limits of the Continental Shelf, thereby confirming Ireland's rights to any oil or gas deposits found within the boundary. This procedure has to be followed as a result of the UN Law of the Sea Convention which came into force in November 1994, the purpose of which is to bring legal order and a greater degree of international fairness to bear on activities affecting the sea and the seabeds.
Provision is also made in the Estimates for grant-in-aid for the RPII — Radiological Protection Institute — and for the radiological emergency protection plan. The risks from the British nuclear industry, particularly Sellafield/ THORP, have been identified by the Radiological Protection Institute through the results of its radiation monitoring programme. The institute monitors the levels of contamination of the Irish Sea and has published the results of a series of reports since 1982. It has found that radioactive contamination decreases with increasing distance from the point of discharge at Sellafield. It has also found that there have been substantial reductions in the levels of contamination in recent years, reflecting reductions in discharges from Sellafield. The institute has consistently stated that the radiation exposures arising from Sellafield discharges into the Irish Sea do not give rise to a significant health hazard to the Irish public. It has found that the annual exposure of a heavy consumer of seafood is only a fraction of 1 per cent of the average annual exposure received by a member of the public from all sources of radiation.
However, Sellafield has caused and, with THORP's commissioning, will continue to cause long lasting radioactive contamination of the Irish Sea. I consider that such radioactive pollution of the Irish Sea is not acceptable and should be forestalled and eliminated. This is specifically recognised in the Government's policy agreement, A Government of Renewal. I have drawn up a blueprint for action to implement the commitments on Sellafield and the Irish Sea in the policy agreement. This is currently being considered by an inter-departmental committee of Ministers and officials, chaired by the Minister for the Environment, Deputy Howlin.
Drafting of an Energy (Miscellaneous Provisions) Bill, 1995, is at an advanced stage. The Bill will deal with a variety of matters in relation to the production, supply, sale, transmission, distribution and use of certain forms of energy and matters incidental to these activities. It is hoped to publish the Bill within the next month.
The National Minerals Policy Review Group, set up in April 1994, presented its final report to me in April this year. I welcome this report as an important and very useful input into the further development of national minerals policy. I am committed to the successful development of our nation's mineral resources. While I understand the concerns expressed by various environmental and other groups, I can see no reason why, with proper safeguards and environmental management, these resources cannot be brought into production in harmony with the needs of the environment to the benefit of both the developers, who bear considerable risk in these ventures, and of the State as a whole through the contribution of mining to the national economy. The recommendations of the review group have been given wide circulation and, following careful consideration of both the recommendations and the comments received thereon, I will take whatever steps are necessary to give effect to the broad thrust of the review group's report, namely, that responsible development of the nation's resources should be more actively encouraged.
On 3 February 1995 I granted a State mining licence to Arcon Mines Limited to develop the zinc/lead ore deposit at Galmoy, County Kilkenny. Construction work on this major project commenced at the end of May and the company expects to be in production by autumn 1996. About 350 jobs will be created during the construction phase of the project and there will be about 200 direct jobs plus about 150 indirect jobs during mining operations. The licence which I have granted to Arcon provides for the payment of annual royalties of 3 per cent of revenues from the project with reduced concessionary rates applicable for the first four years of production. These royalties will, of course, be in addition to standard corporation tax.
The zinc/lead deposit at Lisheen, County Tipperary, is about three times larger than that at Galmoy and the developers hope to submit their planning application and accompanying environmental impact statement for this project shortly. I would expect my Department to receive an application for a State mining facility at around the same time. All going well, it could be expected that construction work on this project will begin in early 1997 and the mine should be in production by early 1999.
I appreciate the assistance of Dáil Éireann in having the Minerals Development Bill, 1995, passed on 24 May. The Bill now awaits Committee and remaining Stages in the Seanad. The Bill is an important one which cannot await the outcome of the fundamental review of policy and legislation which is in progress. The Bill provides the necessary statutory basis for the renewal of minerals prospecting licences, both for the past and for the future, and for application fees for State mining leases and licences. It also updates a variety of penalties, originally set in 1940, so as to deter illegal mining and other offences against the proper development of the nation's mineral resources.
I would now like to refer to developments in the area of public transport. Public transport matters are dealt with under the C subheads. State financial support for the provision of socially necessary but financially unviable public transport services has been very substantial over the years. In the past ten years a total of over £1 billion has been provided by way of annual Exchequer subvention to the CIE group. In 1995 a sum of £99.5 million is being provided by way of Exchequer subvention to CIE. The high levels of State financial support for the provision of public transport services reflects the commitment of successive Governments to the best possible provision of public transport services nationwide.
Approximately 90 per cent of the annual subvention goes to support the rail network. The level of support for the railway, together with the major mainline rail investment programme totalling £275 million planned in the period up to 1999, again indicates the importance attached by the Government to the upgrading and development of the railway. The balance of the subvention is deployed in support of the extensive range of socially necessary urban and rural bus services provided by Bus Átha Cliath and Bus Éireann.
The levels of subvention paid to CIE in each year is determined by the Government by reference to a range of factors, including the financial situation of CIE and, more generally, the need to balance the many urgent and competing demands on the Exchequer. Successive Governments have pursued a policy of containing and, where possible, reducing CIE's requirements for State financial support. This policy has proved extremely successful in that the Exchequer subvention has declined by over 30 per cent in real terms since 1980, without giving rise to any reduction in the overall network or the levels of service provided by the group.
Over the next five years the CIE group will be a £1 billion plus company, involving State subvention payments for the provision of essential public transport services and implementation of the major programme of public transport investment involving expenditure of £600 million of EU and public funds which will be undertaken by the group. Maximisation of the social, economic and commercial return to the State on these investments is essential, and this can only be delivered by top quality management. In the context of managing policies for necessary change in public transport I decided that a combination of new and existing management skills was required in the group in order to secure the best possible implementation of the extensive programme of change and renewal facing the group as a result of the Government's investment programmes.
The Government has recently taken the necessary steps to secure a revitalised management structure in CIE and appointed a new full-time executive chairman of the group. A group chief executive has already been appointed by the CIE board. The executive chairman, together with the board and the group chief executive, will now build a new management team for the CIE group, drawing on the resources already available within CIE and recruiting whatever skills and expertise they feel are required from outside. The CIE group has recently advertised appointments at top management level. The posts to be filled are head of human resources, head of programme and project management, chief financial officer and head of marketing and sales.
Under the National Development Plan, covering the period 1994 to 1999, total investment in the mainline rail network will, as I indicated earlier, amount to approximately £275 million. This investment is comprised of an European Union assisted investment programme of £185 million and a further £90 million of uncofinanced investment for CIE's own resources. The investment, which will be effected under the Operational Programme for Transport, will be focused on track renewal, £123 million, modern signalling systems, £27 million, and rolling stock, £125 million. All major lines on the interurban mainline railway network are included in the proposed investment programme. Projects approved for investment under the programme will be undertaken within the period 1994 to 1999. It is too early to give details of precise levels of investment on particular lines or the mix of European Union and CIE resources that will be devoted to particular lines. This will depend on the outcome of detailed consultations with the European Union Commission in the coming months.
Before turning to public transport in Dublin, I should welcome the publication yesterday of the report of the Oireachtas Joint Committee on Commercial State-sponsored Bodies dealing with Iarnród Éireann. While I have only had a brief opportunity for an initial read of the report, it raises a series of important issues including the need for strengthening of the management team and the introduction of new commercial skills in the area of marketing and cost control. These proposals are entirely in line with my own policy in relation to the need for the provision of public transport services on a cost efficient and customer focused basis. The management changes in CIE to which I referred will help to address these issues.
I would now like to turn to the development of public transport in Dublin and to the comprehensive strategic framework for the development of such services which has been established by the Dublin Transportation Initiative. Since coming into office I have been placing strong emphasis on the new generation of public transport projects and I have taken immediate steps to activate them. My recent decision to approve the extension of DART from Bray to Greystones is the first of these projects. It arose from a commitment which I gave to a cross-party delegation when I met them last March.
I have also repeatedly emphasised my personal commitment to the delivery of quality, reliable public transport services at the lowest possible cost to the consumer. This is the correct approach for us to adopt both in the case of Dublin and the other networks throughout the country. It is one of my priorities as Minister to ensure that in both capital investment and operational terms the travelling public throughout Dublin and its commuter belts can rely on public transport services which are on a par with the best standards of efficiency and service enjoyed by other European cities.
Major public transport developments which are planned for Dublin under the Operational Programme for Transport include the development of the light rail system, further upgrading of DART and other rail based commuter services and quality bus services. The basic light rail network recommended by the Dublin Transportation Initiative is for lines to Tallaght, Cabinteely — via the Harcourt Street line — and Ballymun, However, the basic network cannot be constructed within the European Union and other resources totalling £200 million at 1993 prices set out in the National Development Plan. Moreover, a longer time frame than that of the national plan and the Operational Programme for Transport, which covers the period from 1994 to 1999, will be needed to complete the basic network.
The objective is to have two priority phases of the light rail network constructed in the period up to 1999. In this context my Department, in conjunction with a high level project team in CIE, have for some time been engaged in detailed planning preparatory work to advise on the optimum combination of light rail links recommended by DTI to be constructed by 1999 on the basis of a number of criteria, including financial performance, congestion alleviation, environmental impact and ease of construction. All of the bodies involved in the planning and provision of transportation in the Dublin area are co-operating in this work which embraces all aspects of the light rail network. The provisional finding arising from this work, which is subject to detailed examination in a number of respects including detailed route alignment, is that links to Tallaght and Dundrum are the priority. I am committed to the construction of these two links to Tallaght and Dundrum during the period of the operational programme. The decision in relation to the two priority phases to be constructed by 1999 does not imply any abandonment of the remaining phases of the basic network.
Aviation matters are covered by subhead D. The cornerstone of our aviation policy is the belief that a strong competitive and efficient network of airlinks is vitally important for developing our trade and tourism sectors, particularly having regard to our island status and peripheral location. I believe that despite the recent turbulent times, not alone in Irish aviation but also in aviation worldwide, we are making steady progress in this area. The Department pursues its policy of addressing the requirements of the market not alone in relation to its regulatory role but also in relation to its shareholder role in the three aviation State bodies — Aer Rianta, Aer Lingus and the Irish Aviation Authority. It is my view that in following this philosophy of serving their customers satisfactorily, each State body will secure their future role in Irish aviation and will contribute to national economic prosperity.
The Department's responsibility for regulation of the aviation sector is now increasingly governed by European Union Single Market rules which provide greater freedom and opportunities for Community airlines in relation to air fares, access to routes and right of establishment. In recent years, with the opening up of aviation markets within the European Union and worldwide, increased emphasis has been placed on ensuring real but fair competition between airlines in the marketplace. This has meant regulators having to address areas of airline operations not previously regulated — for example, airline computer reservation systems, booking procedures and the allocation of time slots at airports. The regulatory role of the Department is essentially to ensure that the European Union Single Market rules are implemented in Ireland and, secondly, that in devising Single Market rules in Brussels, the interests of Ireland's airlines and aviation sector are adequately represented.
In Europe the opportunities arising from the completion of the Single Market in air transport in 1993 have continued to stimulate increased competition among Community airlines. For Ireland this has resulted in cheaper air fares and a wider choice of airlines and routes to the benefit of the consumer and the tourism and business sectors. This trend continued during 1994, when two new licensed carriers commenced operations in Ireland. They were Cityjet, operating scheduled services on the Dublin to London City airport route, and Airlink Airways Limited, which provides an executive air charter from its base at Galway airport. At the end of 1994 there were a total of 15 commercial air carriers licensed in Ireland, ranging from Aer Lingus to small carriers providing helicopter hire and air taxi services.
Several new air services were introduced such, as the Virgin Cityjet service to London City airport, new Ryanair services to Birmingham, Manchester and Glasgow and Crossair services on the Dublin to Zurich route. Traffic grew on all routes. For example, passengers on the critical Dublin/London route, the second largest international route in Europe, grew by 12 per cent and passengers between Dublin and Birmingham, Manchester and Glasgow grew by 83 per cent, 45 per cent and 96 per cent respectively. Transatlantic traffic also grew by 17 per cent in 1994. I am very pleased to state that the growth on UK, European and indeed transatlantic routes is continuing in 1995.
I should also say that further evidence of the increasingly competitive market is Cityjet's decision to commence air services on Dublin/Brussels route from 19 June. I also understand that Aer Lingus are today announcing a new fares initiative for business traffic on all European routes which should lead to reduced travel costs for business generally.
In talking of growth and competition on all air routes, it is appropriate while congratulating all carriers to single out Ryanair for special praise as they were undoubtedly the significant force behind growth on UK routes with their "low fares no frills" policy.
In relation to developments at European Union level, the Single Market in air transport was enlarged in July 1994 and now includes Iceland and Norway in addition to the 15 member states. Negotiations with Switzerland are ongoing. The Community is now concentrating its efforts on improving the competitiveness of the aviation industry, technical harmonisation issues, and developing policy on relations with third countries. In this regard one of the critical issues to be addressed in the coming years will be the question of future relations with the USA. We will be taking an active part in that debate to ensure that Irish aviation interests are protected.
I would now like to refer to developments relating to Shannon Airport. I am committed to facilitating the development of Shannon Airport to achieve its maximum possible potential. The Ireland/USA agreement, as it now stands, not only ensures the continuation of transatlantic services to Shannon but also, I believe, provides opportunities for growth. The agreement provides opportunities for airlines and the travel and tourism industries by allowing flexibility and choice in relation to Irish holiday destinations. So far this year, according to Aer Rianta figures, there has been an increase of 10 per cent in transatlantic terminal traffic at Shannon over the same period last year. I am confident this growth pattern will continue for the rest of the year. It should be remembered that it is terminal traffic rather than transit traffic which underpins tourism employment in the region, and overall this is up 6 per cent in the first five months of this year over the same period last year.
As expected, there has been a fall in transit traffic at Shannon, due to Aeroflot achieving the capacity to overfly Shannon on some transatlantic services and also due to the changes in the Ireland/USA services. I believe that the decision to grant Aeroflot "wayport" rights for CIS traffic at Shannon last year will help to offset the reduction in transit traffic and lay the foundation for major traffic promotion through Shannon in the medium term. This new operation, which commenced in May, will facilitate the transfer of passengers from other CIS airlines to Aeroflot RIA transatlantic flights at Shannon and will give Shannon a unique advantage in attracting services from these states. Shannon is now set to become the largest single hub operation for Aeroflot RIA outside the Russian Federation.
In addition to the hub issue, there have been further efforts to develop opportunities in our relationship with Aeroflot and the Russian Federation. An Aviation Co-operation Agreement with the Russian Federation, which was signed last December, provides significant further opportunities for Irish aviation bodies to do business with their Russian counterparts. It is proposed to review the operation of this agreement during 1995 and my Department has already approached its Russian counterparts in this regard.
The question of additional services between Shannon and the UK or continental points is one that has been raised by many interested in the continued development of Shannon. I should point out that with the completion of the Single Market in air transport within the EU, including Norway and Ireland, it is essentially a matter for air carriers themselves to decide what routes they wish to serve according to their own commercial judgment. Having said that, I am sure that there is no real need for me to add that any carriers wishing to seve such routes to and from Shannon will be more than welcome.
This brings me to the special promotion measures for Shannon Airport, which have been increased from £469,000 to £1.8 million. Shannon Airport Marketing was established on 1 October 1994 with a budget of £2 million for 1995, £200,000 of which will come from the tourism operation programme. Shannon Airport Marketing was established following the recommendation of the Shannon Airport Traffic Development Task Force that, in order to overcome the then existing overlapping and duplication of traffic promotion functions between Aer Rianta and Shannon Development, a new traffic promotion body should be established. Shannon Airport Marketing now has sole responsibility for the marketing of Shannon Airport.
Its mandate is to increase traffic at Shannon Airport through the stimulation of new traffic from North America, securing a second Shannon-London scheduled service, a new scheduled service to continental Europe and new services to UK provincial cities. In addition, Shannon Airport Marketing will pursued opportunities for developing transit traffic and increasing the volume of air freight through Shannon. I am aware that some local interests in the Shannon region are not entirely confident that the Shannon Airport Marketing structure is the most appropriate mechanism to attract new business opportunities for the airport. I will be keeping a close watch on the activities of the body to ensure that it continues to be the best mechanism for the job.
I would now like to deal with a new provision in the Estimates on an essential air services programme for regional airports. I have provided £1.5 million for the introduction of an Irish essential air services programme, which is aimed at guaranteeing a minimum level of service to the regional airports. The decision to establish this new subvention programme was taken against a backdrop of a sharp fall-off in traffic at the regional airports — a decrease of 51 per cent in 1993 over 1990 — and recognition of the fact that the regional airports contribute significantly to maintaining and attracting industries and tourists to peripheral regions of Ireland. The programme compensates selected airlines for losses incurred on uneconomic domestic routes.
Tenders for the operation of services to the six regional airports under the essential air services programme were advertised in the Official Journal of the European Communities on 25 June 1994. It was subsequently considered by the European Commission that the existing surface links serving Waterford and the number of existing carriers servicing Connacht were adequate and so routes covering these airports were removed from the programme. Contracts were awarded to Aer Lingus for two routes — Dublin-Kerry and Dublin-Galway. Services on these routes commenced on 9 January 1995. In accordance with the EU regulation, each contract is for a maximum of three years subject to annual review of performance.
The tenders received from the Dublin-Donegal and Dublin-Sligo routes under the first call for tenders were not satisfactory and the EU Commission was asked to readvertise these routes. Thas was done in January 1995. The new tenders received for these routes have been forwarded to the EU Commission as required by the regulation. A decision on the award of contracts to operate the routes will be taken as soon as the detailed examination of tenders has been completed.
Before I conclude on aviation, I would like to briefly refer to the performance of the three State-sponsored bodies. In 1993, the Government, with the consent of the European Commission, approved the Aer Lingus restructuring programme. The programme is designed to restore the organisation to self-sustaining financial viability. It calls for the company to focus on the core airline activity while disposing of the non-core subsidiaries to reduce debt. Cost-cutting measures are also a feature of the programme, with annual cost reduction targets set at £50 million.
The Government decided to invest £175 million equity in Aer Lingus over three years. A sum of £75 million was paid in 1993 and another £50 million in 1994. The remaining £50 million is due to be paid in 1995. Before this, it will be necessary to report to the European Commission on progress on the implementation of the restructuring programme.
Since the implementation of the plan the trading performance of the airline has improved, despite increased competition. Reduced labour costs, rationalisation and pay restraint, together with increased traffic carryings, have contributed to this improvement. Air transportation showed a profit of £41 million in the 21 month period ended 31 December 1994, compared to a loss of £37 million in the previous accounting period. I have requested Aer Lingus to proceed with implementation of TEAM'S five year business plan which is targeted towards the achievement of commercial viability by the company.
Aer Rianta has again had a very successful year, with net profit after tax increasing from £20.6 million in 1993 to £27.7 million in 1994 and turnover increasing by 11.6 per cent during the year. Passenger traffic at the three airports reached another milestone in 1994, with total traffic reaching 9.3 million passengers, an increase of over 11 per cent on 1993. Traffic at Dublin was particularly buoyant at 6.9 million, an increase of 17 per cent.
As regards Shannon, the type of traffic which underpins tourism employment and development in the mid-west is, of course, terminal traffic as opposed to transit traffic. I am, therefore, pleased to note that terminal traffic has increased by 4 per cent in 1994.
Cork, with its state of the art new terminal, also achieved record levels of passengers, with a growth of 11 per cent. I hope that its current marketing strategies towards reaching the "magic million" passenger throughput figure will be successful. I am glad to note also the upward trend in freight traffic at the three airports, with a growth figure of 11 per cent achieved in 1994.
As a result of the substantial growth in traffic at the three State airports, Aer Rianta is proposing an investment programme of over £200 million over the six years 1994-99. I have a commitment from the EU of Structural Funds aid of £19 million towards this programme. The balance will have to be funded by Aer Rianta from its own resources and borrowing. Because of the magnitude of the programme, I have engaged an independent consultant to assess the assumptions underlying the company's traffic demand forecasts, the adequacy of the existing terminal and airside facilities, the need for and cost of the airport developments proposed and the feasibility of funding those developments. I expect to receive the consultant's report shortly.
I recently gave approval to Aer Rianta to make a bid, in conjunction with a leading London Financial institution, for a shareholding in Birmingham Airport. This proposal would build on Aer Rianta's expertise in its core business of airport management. As I have stated publicly on several occasions, it is my policy that the State-sponsored bodies for which I am responsible should source external startegic partners where appropriate to allow the full potential of their business activities to be realised.
the Irish Aviation Authority, which operates under the aegis of my Department, is now well into the second year of its operation as a commercial State-sponsored body. As the House will be aware, the functions of the Authority, which essentially involve the provision of air traffic control services and regulating the safety standards of Irish civil aviation, were exercised by the former Air Navigation Services Office of my Department prior to 1 January 1994.
1994 was, therefore, a period of significant change for the authority in its transition from a Civil Service entity to a State-sponsored body. I am pleased to say that the authority has successfully laid the foundations, including the putting in place of a new management structure and the appropriate financial and other control procedures, to ensure that it operates to the highest international standards and in line with Government policy.
I would now like to refer to some issues in relation to the telecommunications sector at this particularly important time in the area of telecommunications in Ireland. The importance to the development of the nation of a telecommunications sector offering state of the art services at competitive prices cannot be over stressed. The services sector, which is the sector providing the greatest rate of growth in developed economies, is totally dependent upon good telecommunications services being available at reasonable prices. It is also a sector which is highly mobile. It can move, with minimal cost and disruption, to wherever it gets the services it requires at the cheapest possible cost. Ireland has had some success in attracting telemarketing and back office jobs. The challenge is not only to keep those jobs but to create more of them. For this we need to be in the top quartile of telecommunications services in the OECD, not only in terms of quality but also in terms of price.
This coincides with ever increasing competition and challenges arising from liberalisation policies and technological advances which bring an ever greater convergence of telecommunications and information technology. Big international customers and major companies increasingly want to be able to get all of their advanced telecommunications services on a consistent basis from a single supplier. This trend is driving a lot of activity, leading towards major joint ventures and other alliances between telecommunications operators and between them and related sectors, notably information technology.
We here in Ireland are not immune from this pressure and it is in the vital interests of the future of employment creation and retention that we do not lag behind but that we capitalise on the opportunities afforded by this. Telecom Éireann, despite the great advances made in the last ten years or so, is ill prepared for competition. It has a debt equity ratio and a productivity level which are untenable in a liberalised environment.
The company's network requires investment to provide the advanced services that will be demanded. In addition, it is also widely recognised that the company must become increasingly customer focused. In short, it must give the customer, particularly the business customer, what he or she wants. It is no longer acceptable to give the customer what Telecom Éireann has available. It is for those reasons that Telecom Éireann needs a strong partner to help it face the challenges that lie ahead.
Telecom Éireann has reported to me on the results of preliminary discussions with a number of potential partners. I will soon be in a position to give Telecom Éireann a mandate to enter into detailed negotiations with those prospective partners and I hope to have the matter finalised before the end of the year. I might refer here to some media reports which suggest that there are "favourite sons" who just need to go through the process before being awarded the winner's rosette. Nothing could be further from the truth. Negotiations will take place between Telecom Éireann and the various companies which have expressed an interest. The board of Telecom Éireann will report to me as shareholder. At the end of the day the chosen partner will be the one which in the Government's view is the one most suited to assisting Telecom Éireann develop into a strong modern, customer focused company capable of providing the country with the telecommunications services needed to underpin our economic development.
One of the key issues which must be addressed is the liberalisation of the telecommunications sector. We already have competition in terminal equipment and a number of value added service licences have been issued. Arrangements are now being considered for the transposition into Irish law of the Directive on satellite services. A licence to operate the second mobile telephony service will issue before the end of the year. This will open the mobile sector to full competition. An independent regulatory regime will be required to oversee a liberalised market and work on the necessary elements of the regime is in hand.
Full liberalisation of voice telephony and infrastructure will be achieved by the EU generally on 1 January 1998. Although Ireland has an option to seek a derogation of up to five years from the European liberalisation timetable, I want to make it clear that advances in technology are changing the decision making environment rapidly. We must be prepared and organised to move with the mainstream. As a nation and as an economy we cannot afford to be left behind.
On the postal side, I announced last week that I have requested the chairman of An Post to undertake a fundamental review of the postal services so as to be in a position to meet increasing competition which will arise from the EU Commission's emerging policy on postal liberalisation.
As the EU Commission will shortly be bringing forward its proposals for the liberalisation of the postal services within Europe, I want to position An Post to be able to meet that competition and to satisfy all reasonable demands for postal and other services which the company should be able to offer to its customers. The primary responsibility of An Post is to provide an efficient and reliable national postal service to meet its customer needs while keeping charges to a minimum. At the same time An Post should make full use of its large infrastructure in order to provide for all future needs of its industrial, commercial, social and household customers. The review will make recommendations on the role and methods of operation of An Post and will deal with issues which I have previously outlined.
In conclusion, I wish to reiterate what I have already stated in the House, that the generation and maintenance of a substantial increase in permanent, sustainable employment is at the heart of this Government's economic policy. The programme for this Government, A Government of Renewal, undertakes to revitalise public enterprise to meet this aim. We recognise that dramatic change will occur in some State companies, that policy will change from a reactive to a more proactive approach and that the twin drivers of technological change and EU competition rules will affect what were once regarded as “natural monopolies” in the State sector.
This situation gives rise to a wide range of difficult and complex problems to be tackled right across the commercial State sector which will require decisive action. It is my intention to ensure that all necessary measures are taken so that we will have a strong, vibrant and competitive commercial State sector which can meet and manage the growing challenge of competition at national and international level.
My contribution was longer than I had originally envisaged but, as you will appreciate, Sir, it is a very broad Department.
It was longer than I anticipated, so I propose, in fairness to the Opposition spokespersons, to give them the same flexibility.
I join with you, Sir, in thanking the Minister for coming here today and for his extremely comprehensive and lengthy statement. I have a high personal respect for the Minister and his officials. Any criticisms which I will make are criticisms of policy which are directed at the Minister, as the Minister, and at the Department, as the Department, and in no way reflect on the Minister personally. It is important to say that because these are very complex, serious issues and my party intends to offer trenchant opposition in a few areas, which must be seen as opposition to policy.
There is little difference between this Government's economic strategy and its strategy for the semi-State bodies. There is no coherence in either and there is no economic philosophy behind the Minister's approach to the State companies. Our semi-State sector deserves better treatment than it is getting from the Government. In recent months the Government has subjected the sector to ridicule. The Minister has stirred up media scares about the way contracts were awarded, but he was forced to back off because his claims had no substance. The Government is managing the semi-State sector by late night press releases and is substituting public relations for definite ministerial action.
In my view the Government is seriously undermining our semi-State companies. This is a pity because these companies have contributed in a major way to the development of the State and the creation of employment. There are many examples. There has been much talk recently about plans for Telecom Éireann. However, there is still no Government decision on a mandate for the company to begin strategic alliance talks, as the Minister calls them, although we know it is a straight sale of Telecom Éireann shares. The Minister said on 4 May that he was putting the finishing touches to a negotiating mandate. He said there was a need to act quickly and promised action within two weeks. However, six weeks later there is still no sign of a mandate for Telecom Éireann to begin negotiations.
It now appears the Government will sell up to 40 per cent of Telecom Éireann and use part of the money to shore up its own financial situation. This will be in direct contravention of Democratic Left and Labour Party policies and the Programme for Government. Any such money should be used to reduce Telecom Éireann's debt. Why is the Government adopting such a defensive strategy on the future of Telecom Éireann, rather than charting an offensive strategy, such as that proposed by Mr. Michael Smurfit in a recent television interview? He said Telecom Éireann should be looking outwards to see what markets it can conquer throughout the world rather than defensively looking for a partner to come in and do what the current management and Minister themselves should do in the company.
I refer the Minister to the Financial Times of Monday last, which stated that Ireland, Peru, Sri Lanka and Venezuela are now considering privatising their State owned telecom operations within the next 18 months. It is important to note this newspaper seems to know something that Dáil Éireann has not been told. I recommend to the Minister an offensive, positive outward-looking strategy for Telecom Éireann rather than one which suggests somebody must come in and rescue the operation. That is a defensive strategy and it is a pity such a fine company must have such a strategy thrust upon it.
The Minister has refused to publish a report on Telecom Éireann's future or allow a debate on telecommunication policies. Newspapers appear to have more information than Dáil Éireann at present. I have asked the Minister on many occasions to consider publishing the report on the strategic future of Telecom Éireann. Why is it that the public, Dáil and committees cannot discuss the future of the company on the basis of this report, which is being kept secret despite the Government's commitment to openness? Even the unions and staff have been kept in the dark as regards this strategic report, which needs to be discussed publicly. I again ask the Minister to consider making the report, which is from the board of Telecom Éireann to the Minister and lays out the strategic objectives, available to the public.
Nobody wishes to discuss the details of the companies involved, which is the Minister's prerogative. However, we want and are entitled to consider the options put forward by the board of the company to the Minister. We are not being allowed to do so. I do not suggest the Minister intends this, but it would be a pity if it turned out that the entire process was conducted by the Department behind closed doors without the process and guidelines being laid down in advance and published before the strategic alliance or sale is completed. If commercially sensitive information is contained in the report, it could be deleted before it is published. This happened with the Competition Authority's report on the newspaper industry, so there is a precedent. I am aware the Minister is concerned about commercially sensitive information, but it could be deleted before the report is published.
The Government has also adopted a faulty policy with regard to the second mobile telephone licence. It is set to grab cash rather than considering what is in the best interests of consumers. I understand the calls to tender are going out at the end of June and the licence will be awarded in October. However, it makes no sense to put in a minimum of £10 million on the tender documents, which are unpublished, as I understand the Minister is doing. It does not ring true to put in a figure of £10 million and upwards and then say that it is not a crude auction.
It is a crude auction for the second licence and it should not be so. The contract should be awarded to the mobile telephone company or conglomerate which offers the public the best rates. If it is done in the way proposed by the Minister — effectively to offer it to the highest cash bidder, although ther are other considerations — there will be a continuation of the situation where Ireland has the highest mobile telephone rates almost anywhere in the world. The Minister is aware of the recent Sunday Times survey on this matter which indicated that Ireland is far and away the most expensive part of the world for mobile telephones. These are no longer luxuries but an essential part of business.
I ask the Minister to publish the tender documents and to make it clear that he wants a set figure for the licence — for example, between £10 million and £50 million. It will be a short term gain for the Exchequer if it becomes a Dutch auction, because the company which wins the licence by paying £40 million to £60 million will simply pass on the cost of buying it to the consumer. This method of dealing with the mobile telephone licence will ensure a continuation of high charges rather than a direct competitive situation between Telecom Éireann and the new firm. They will not be able to compete if they must recoup between £40 million and £60 million.
In that regard, why only the provision of a second mobile telephone licence? There is nothing particularly difficult about the technology these days and if there is an open market in telecommunications and mobile telephones, why not provide three or four licences? There is no reason and it makes no sense why the mobile telephone market should turn from a monopoly into a duopoly, particularly when it involves a cash grab by the Exchequer rather than a consumer led policy.
A full explanation is also required as to why £400 million will be spent in order to shed 2,900 jobs in the ESB, given that the Minister recently spoke about importing electricity. Does it make any sense in the long term to talk about spending £400 million to take out almost 3,000 people and at the same time discuss importing electricity? If electricity is to be used, should we not generate it ourselves rather than consider importing it? There may be a price element, but I am sure that could be discussed.
The Government has derailed the ESB talks on three occasions in three months and was forced to change its mind on one or two occasions on cost savings. I ask the Minister to let us know the up-to-date position on these talks. Where are they going with regard to the 2,900 jobs? Could the Minister explain in particular the overall strategy of discussing the importation of electricity while at the same time 2,900 people will be taken out at a cost of £400 million? It may make sense, but I wish to hear the rationalisation and to see the circle squared.
The Government has made no effort to ensure that no strings were attached by the European Union to the final £50 million investment in Aer Lingus,. The reality is that the airline still has not received the money. Government procedures have been breached in relation to the extension of the DART to Greystones. The board of CIE has not sanctioned this proposal, even though the move was announced by the Minister. Perhaps the Minister will tell me on what date the board of CIE sanctioned the DART extension to Greystones so that the public may be reassured that proper procedures were followed, given that he is concerned about State companies adopting proper procedures.
We will see that before the Harcourt Street line opens again anyway.
I do not understand the Minister's actions in relation to An Post. I watched an extended RTE snippet of the Minister tidying up An Post and sorting it all out. Then I asked myself: what was the instruction? The Minister has said again today that he has contacted the chairman of An Post and told him to get on with reviewing the company's activities. I thought chairmen of State companies were to do that job in any case. It is wrong to present that as a fundamental and thorough review of An Post when it is the chairman's job anyway. The Minister is right in saying that it must be done. However, the Minister should have asked independent consultants — the ESRI, the OECD or some outside body — to look at An Post. He should not have telephoned the chairman and asked him to review the company the chairman was appointed to look after in any case and then announce it as a high profile review of An Post. That is a mistake.
I wish to mention one or two other matters which arose in the Minister's speech. The Minister said that the estimated cost of the gas pipeline project is £265 million. Is the Minister telling the committee that the gas pipeline is not yet in operation and that it is to be used mainly as a safety net? It is an expensive safety net if it costs that price. Is it planned to start importing gas through the new gas pipeline as the Kinsale Head/Ballycotton supply is depleted? That is fair enough if it is part of energy policy. I understood that our gas exploration programme was such that we might look forward to exporting gas through that pipeline at some stage. If it is a means of importing gas, where does that fit in with the ESB redundancy programme?
The Minister also spoke about the establishment of a new agency, the National Oil Reserves Agency. Is this another State agency to hold the reserves of the State? I thought that was the job of the INPC. I raised the Greystones issue earlier so I will not repeat what I said. The Minister spoke at length about public transport and about the requirement for investment in rail transport. I welcome the Minister's assurance of investment in rail transport. About 50 per cent of the track predates 1916, so it desperately requires investment. I support such investment.
Could the Minister confirm his intentions regarding Dublin Bus? In an article that appeared in Business and Finance a few weeks ago the Minister said that the Government is carrying out a complete overview of the transport system and is drawing up legislation to open it to competition. There is no reference to such legislation in the Minister’s speech today. I take it that the omission is an oversight. Could the Minister confirm that competition in the Dublin Bus area is part of Government policy? If it is not, perhaps the Minister could confirm that he was misquoted by the magazine and that he does not intend to have such competition. I would like a straight answer.
There is plenty of competition from cars and bicycles.
There is still a loss of £3.9 million.
There are horse drawn carriages. There is plenty of competition.
The Deputy knows what I mean.
The Deputy is not being very clear.
I will make it clear because Deputy Dukes appears to be making a silly point. I mean other private bus companies.
I am picking up on the Deputy's point.
The Deputy did not think I meant cars.
Name the monster.
I have named it — other private bus companies. The Minister said he wants to open that area to competition. He did not mean open it up to competition from cars and Deputy Dukes knows that. He should behave himself——
How very perceptive of the Deputy.
——until I finish. I would like the Minister to clear up that point.
The Minister said that he will unveil a blueprint for action on Sellafield. I understood that this Government opposed the THORP facility, had told the British Government as much time and time again, had consistently raised it in the Council of Ministers of the EU and would continue to do so and, finally, would take legal action in the courts, as was stated in the Programme for Government. Will the blueprint for action indicate a different policy or will it wrap up and re-present the old policy with the assistance of public relations officers? If it is the latter I will understand, because I have done the same myself many times.
It is all the Deputy ever did.
If not, I would like to know if new action is planned. Would Deputy Dukes stay quiet and let me finish?
The Deputy is provoking me.
I know. I am obviously getting close to the bone.
Deputy Dukes will have an opportunity to speak at a later stage.
On a point of order, I appreciate that the Chairman should give the Opposition a little more time because the Minister spoke at length. It was very interesting and one would wish that the Opposition would use the time a little more productively and not indulge in the type of nonsensical rhetoric we hear now. Will there be extra time for backbench Members of the committee? There is a number of questions one would like to raise which will expose the fallacy of much of what Deputy Brennan is saying.
I will not take it as a point of order. However, all Members of the committee will be given the same scope given to the Minister. I suggested a timetable that was approved by the committee. Unfortunately, the Minister exceeded that substantially and I feel obliged to let everybody else do the same. I am here until 8.30 p.m. or 12 midnight if necessary.
I will be finished in two minutes if Deputy Dukes will allow me. I am getting up his nose because these matters are getting close to the bone.
The Deputy would not reach that far.
That comment shows the Deputy's attitude.
That is called leading with your chin.
We will not conclude our business unless spokespersons are allowed to continue with their contributions.
I support a number of the Minister's policy directions. I oppose the ones to which I have specifically referred. He would not expect me to speak at length about the policies I support. It is my job to indicate the ones I oppose.
There is a great deal of confusion about policy in the semi-State sector. The Minister is allowing Bord na Móna to get involved in electricity and the ESB to get involved in the telephone business. However, he is telling Aer Lingus to stick to its last. There appears to be a contradiction in the strategy he is pursuing with regard to State companies. He is telling some of them to expand while he tells others to pull back. He has told Aer Lingus to sell its ancillary companies and stick with its core business.
I did not tell it to do that. The Deputy told the company that.
That is fair enough. That is what it should do.
The company was going down the tubes until somebody told it to do something when the Deputy was Minister.
The Minister is a great man. I see from a parliamentary question which I set——
Could we get on with our business? I ask Deputy Brennan to bring his contribution to a close.
There is a contradiction in semi-State strategy. Bord na Móna is getting involved in electricity and the ESB is bidding for the telephone licence while we are telling Aer Lingus that it cannot expand. We must have one outlook on these companies and not different outlooks depending on which company is involved.
I am substituting for Deputy Molloy, who, unfortunately, is ill this week and could not attend. He sends his apologies. I have not had much time to prepare for this because it was not long ago that I was asked to substitute for him.
I thank the Minister for a comprehensive speech. It was very long, but this Department covers many activities and topics and it is right that he should seek to cover them reasonably fully, which he did. There are various points arising from what he said on which I would like more information. Sometimes information is hard to come by and there are points on which I would take issue.
I am very encouraged by the early months of the Minister's tenure of office. For the first time in a long period I saw somebody who was prepared to take on some of the semi-State bodies which, I know from my own experience, need to be taken on. This applies in particular to commercial monopolies. I am less encouraged by a certain amount of what I perceive to be backsliding in recent weeks and months on the Minister's part. The attitude taken to semi-State bodies, particularly to commercial monopolies, has been mistaken in the past in that it was thought that the welfare of these institutions was virtually paramount rather than the tasks they were set up to solve. I thought this attitude changed with the present Minister, but I am now somewhat doubtful. He said:
I wish to reiterate what I have already stated in the House. That the generation and maintenance of a substantial increase in permanent sustainable employment is at the heart of this Government's economic policy. The programme for this Government, A Government of Renewal, undertakes to revitalise public enteprise to meet this aim.
In practice what this seems to mean is that these bodies would be used for the generation and maintenance of employment within themselves. If this is the Government's intention, it is, in my view, ill-founded. The best way to generate and maintain employment is to make the provision of these services competitive with what is available in other countries. Trying to keep an unnecessary 2,000, 3,000 or 4,000 people in one of these State bodies for the sake of it is wrong. This is the case at present in several of them, including the ESB, Telecom Éireann and Aer Lingus. There are far more people employed than are needed. We are driving up the costs of industry, commerce and tourism and are destroying more jobs in the economy as a whole than are being artificially maintained in these bodies. If the Government wants to follow the path which has been enunciated here, this is wrong.
Is this the Minister's personal view? I hope it is not. He is Minister of a Department which fought against change with extraordinary tenacity. I recall well the battles I fought in 1984 and 1985 when I suggested competition in air transport was the solution to certain of our problems, that it was inevitably going to come and the sooner we adopted it the better. The response of the Government and the Department at the time was to introduce legislation which made it a criminal offence, punishable by two years imprisonment and/or a fine of £100,000, for anybody to discount a fare below the rate approved by the Minister and the Department, which at the time was £208 return on the Dublin/London route.
I said at the time this was a crazy policy and that it would not be accepted by the EC. It has been shown to be crazy. I pointed out that if it was changed and we had competition, we would have a huge upsurge in traffic. In the first two years after the policy was changed, there was an increase of a million passengers on the Dublin/London route alone. Today the routes on which Aer Lingus has a monopoly have very low carryings of passengers, whereas on those on which there is genuine competition passenger numbers are extremely high.
The figures in proof of this were given by the Minister. He said that last year passengers between Dublin and the cities of Birmingham, Manchester and Glasgow grew respectively by 83 per cent, 45 per cent and 96 per cent. One of the things the three routes have in common is that Ryanair began to operate on them last year and revolutionised them. It doubled the carryings into Ireland straight away. I have recently seen figures for the total carryings of passengers between Dublin and London now compared to 1984 and 1985 when the Aer Lingus/British Airways high fares cartel policy was in operation. There is not just a marginal increase, five times more people are coming to Ireland on that route. The same principle applies elsewhere.
It was interesting to hear the Minister paying tribute to City Jet's decision to commence air services on the Dublin/Brussels route from 19 June. I am delighted to see this because this route is a complete rob. There is a cartel operating between Sabina and Aer Lingus where they keep all the fares high. There is one flight allowed on some but not all days by Alitalia, which operates from Dublin to Brussels and then to Milan. The Alitalia fares are half those of Aer Lingus and Sabina. City Jet have now begun operating on this route and, suddenly, we are told Aer Lingus will announce new business fares in Europe. We have heard all this before. The more companies like City Jet and Ryanair we have and the greater freedom given to them, the better it will be for everybody.
The Minister speaks about the regulatory role of his Department. To reiterate what I have already said, to have the regulatory role carried out by the same institution which is the shareholder in the major companies here is entirely wrong and does not happen in the vast majority of countries. It is inherently wrong that the shareholder in certain competing companies should also be the regulator. The Minister said that:
The regulatory role of the Department is essentially to ensure that EU Single Market rules are implemented in Ireland and, secondly, that in devising Single Market rules in Brussels, the interests of Ireland's airlines and aviation sector are adequately represented.
I suggest that the Minister reflect on the latter part of that sentence. The function of the Department in devising Single Market rules in Brussels should not be to represent the interests of Ireland's airlines and aviation sector; it should be to represent the interests of Ireland, of which they are just a part. The overall national interest lies in getting the maximum number of people into this country as tourists or on business. It does not lie in protecting airlines against competition, which is the way it has traditionally been seen.
I notice a reluctance on the part of the Department to enter into the spirit of the liberalised regime, which is the official polity of the EU at present. Its attitude is that it is being imposed on us by law and it will go along with it to the minimum extent legally permitted. It will not move ahead of what it is being forced to do. A good example of this is the anxiety to protect Telecom Éireann by derogations and so on when ideally this country needs a proper telecommunications service at reasonable rates.
I revert again briefly to civil aviation. Although everything covered by this Department is important, civil aviation policy is crucial. I refer to the position in Shannon Airport, which has been concealed somewhat by what the Minister said. He quotes selectively and, like all Ministers these days, he pays great lip service to Shannon. While lip service is being paid, Shannon is in great difficulty. The tourism situation in the mid-west and adjoining regions is serious, notwithstanding the great growth in tourism this year and last year in the country as a whole.
The Minister said that there was an increase of 10 per cent in transatlantic terminal traffic at Shannon so far this year over the same five months last year. The figures are not comparable because the changeover took place during that period last year. I would like to know how the figures are made up, because the change in policy took place in the earlier part of last year so we are not comparing like with like. But assuming that we are, the Minister goes on to say that it should be remembered that it is terminal traffic rather than transit which underpins tourism employment in the region, that is, the mid-west, and that overall it is up 6 per cent in the first five months of this year over the small period last year.
If transatlantic traffic is up by 10 per cent and overall traffic is up by 6 per cent, it suggests that there is a drop of 4 per cent elsewhere. In fact, it is larger, because transatlantic traffic is greater at Shannon than that from the UK and Europe. The drop appears to be between 5 and 6 per cent in arrivals from the UK and continental Europe. That is a serious situation when compared with increases in Dublin and the eastern region of 17 per cent and more during the same period. There is a chill in the mid-west region because of the visible absence of any increase in visitors compared to the large number of people visiting the eastern region. Numbers visiting the west and mid-west are static or slightly declining.
Why does the Deputy not get Ryanair involved?
That is what we are trying to do. Ryanair was in Shannon until a year and a half ago, but it withdrew because of the policy being pursued by Aer Rianta, which is a wrong-headed policy and an anti-competitive one. Aer Rianta owns the three State airports, which constitute 95 per cent of foreign business or more, perhaps 97 per cent. It charges the same landing fees and other charges at each of the three airports in spite of the fact that capacity at Shannon is seriously underutilised, while capacity at Cork is also underutilised. However, capacity in Dublin is almost entirely utilised and it is now considering extending Dublin Airport considerably or opening a new airport at Baldonnel, which seems to be the more sensible of the two proposals.
I fail to understand why Aer Rianta continues to charge the same at Shannon for a particular flight or aircraft landing when it is so heavily underutilised. In fact, it is a training airport even throughout the summer. It has driven away Ryanair and there is no low cost carrier into that airport. Arrival and terminal figures are falling at a time when arrivals in this country are rocketing upwards. If the Government is committed to regional policy it should redress the balance in favour of Shannon and that region because it is losing out badly. In recent weeks I spoke to people with hotels in that region and elsewhere and they confirmed that without a doubt that region is doing badly, although there is a demand for more rooms in other parts of the country, particularly along the east coast.
The Minister should contrast the position in Shannon with that in Dublin where several low cost airlines fly in and out on various routes, including the Continent, and that it now costs £49 return to London, which is the second busiest route in Europe. In addition, there is now access by surface to the east coast both at a cost and at a speed which was not available before. Certain ferries can now land a person in Ireland in an hour and a half from Holyhead or from Pembroke. Fares are low, so there is cheap access to the eastern part of the country. I am glad that is the case, but I am concerned that it is not available in the western part. The results are to be seen at present.
I wrote to the chairman of the Competition Authority to draw his attention to the practices of Aer Rianta in this respect. I asked him if he considers it an abuse of a dominant position under section 5 of the Competition Act, 1991. It is unacceptable at a time when Shannon Airport finds itself in such a situation that Aer Rianta is bidding to purchase airports in other parts of the world. Its sense of priorities is wrong and it does a disservice to the country.
Shannon is the most westerly airport in Europe. In European terms, as opposed to transatlantic terms, it is not on the way to anywhere; therefore special incentives are required to encourage people to go there. In other airports that have the locational disadvantages of Shannon it is not uncommon to have either very low charges or no charges at all in order to encourage carriers to use the airport. The proposal to spend £2 million marketing Shannon Airport is misplaced. The Minister acknowledges that there are interests in the region which believe it to be misplaced and I agree with this. We do not need more marketing or bodies of this kind; we simply need a policy of no charges into Shannon from the UK and continental Europe. such a move would transform the situation. It would cost approximately £0.5 million to £0.75 million per year, but it would solve the problem. Ryanair would be back; other carriers such as Virgin would use the airport and routes would be opened up to the Continent. At present there is no scheduled route between Shannon Airport and the Continent of Europe, nor has there been such a route for a very long time. It is a serious matter. Only one carrier operates between Shannon Airport and London and that is a high cost carrier.
The Minister should not regard my view as radical. It may be radical in terms of traditional policy, but it is not radical if it is considered internationally. It is a cheap way of overcoming the difficulties and losses that exist at Shannon Airport at present.
A number of questions have been asked. I now suggest that we consider the subheads, including whatever questions arise from them. The Minister can then reply to all the questions rather than proceeding on an individual basis. As there are no representatives from the Independent group, I proposed that we go on to discuss subheads A.1 to A.8.
with regard to the consultancy services mentioned at subhead A.7, the Minister mentions one off consultancy assignments proposed for 1995. What are these assignments?
I now suggest that we proceed to subheads B.1 to B.7.
What is your proposed procedure, Chairman?
I suggest we take all the questions and then give the Minister a chance to respond. This would also allow the Minister's officials an opportunity to brief him. I propose we proceed to subheads B.1 to B.7.
Is Deputy S. Brennan's question in respect of last year's figure or this year's figure?
It is in respect of the 1995 figure of £2.3 million, representing an increase of 227 per cent.
Deputy Brennan referred to the situation at An Post. I have heard a rumour, and perhaps the Minister could confirm this, that the instruction given to An Post with regard to sorting out the situation was to the effect that it must clean up the mess left behind by Deputy S. Brennan, Deputy Geoghegan-Quinn and Deputy Cowen. Will the Minister confirm this?
With regard to the group of subheads under B, I note that the Minister made no mention in his statement to the committee of the alternative energy requirement. This may be covered under one of the subheads or there may some other way of proceeding. My understanding of the situation is that the objective is to secure the generation of somewhere in the region of 100 megawatts of alternative power, 70 per cent of which is to be from wind farms. I am aware that the Minister for the Environment made an announcement on this and it may be that the question could be more properly addressed to him.
Technology is available to deal with domestic waste. It sorts it into the different kinds of waste, recycles much of it, recovers metals and so on. In addition, a substantial proportion of it can be used for electricity generation. At least one project was proposed under this heading for the last alternative energy requirement. It was turned down because it was the only project at that time where a grant was requested in order to make the project work. I understand that this kind of project could be put forward again under a second alternative energy requirement. Is the Minister open to receiving a project of that kind?
In keeping with the business of ethics and so on, the reason I express an interest in this issue is because one part of the project would interest me from a waste management viewpoint. It would use up to 150,000 tons of domestic waste from Dublin which would avoid this waste being dumped in outrageous circumstances in a disused quarry at Arthurstown in Kill, County Kildare. The fuel base that would be recovered from those 150,000 tons of domestic waste would be used to generate electricity on the site of the now closed Allenwood power station. This site is suggested because it contains an interconnector into the national grid, thus avoiding the need to provide a new one. Will the Minister indicate his thinking on this issue? With such a project there are a number of substantial advantages in terms of waste management and the recovery of metals that will not then be finding their way into our ecosystems and in the generation of electricity.
Subhead B. 6 concerns expenditure on the farm electrification grant scheme. The provision for 1995 is 38 per cent greater than that for 1994. Will the Minister advise how many applications are outstanding under the scheme and when it is likely that the grants will be paid? Doubtless the Minister is aware that in previous years there was a good deal of discontent about the length of time it took to pay grants under the scheme.
Can the Minister be any more specific about the proposed 120 megawatt power generating plant that is to be built somewhere in the midlands? Lest the Minister think I am locationally biased on this, it is proposed that it would be built somewhere in west County Kildare or in north County Offaly. I am indifferent as to where it would be located and people in the area are of a similar view. If it is to be built in this area it would make sense to build it in the place that can be most conveniently serviced from the bog complex in the area. The Minister will be aware that there is an ideal site at Moneymore on the site of the old peat briquette factory with all attendant services. Some of the costs of a green field operation may thus be avoided, if that term can be used with regard to something to be built in a bog area.
I understand that the Minister's intention is to seek, on a kind of public tendering basis, private participation in the region of £70 million on a build, own and buy basis. I do not wish the Minister to disclose anything that would be confidential at this stage, but could he give an indication of what kind of time frame he has in mind for this process?
I welcome the Minister to the committee and I congratulate him on the energetic way in which he has tackled the Transport, Energy and Communications portfolio. I also congratulate the Minister in relation to the recent developments at Bord na Móna and the good news this entails for the midlands generally.
In the areas of radiological protection and energy, does the Minister intend to take any more decisive action on the radiation emissions from Sellafield that are being transmitted to our east coast? I know you also have an interest in this matter, Chairman, and that Deputies of all parties support STAD, the Dundalk group who recently went to court on this matter.
We are well aware of the general figures on energy generation — some 35 per cent of total energy generation in the EU comes from nuclear power — but the THORP facility and the problems that it could generate in a NIREX plant facility like Sellafield could cause a major environmental danger. Sellafield has caused serious health problems for our east coast population, especially from Counties Louth to Dublin. Can the Minister do anything about this? I remember asking the Minister's predecessor, Deputy Cowen, to put on his famous boots, go out on the pitch and take on the British Government in court.
Has the Minister looked at the possible cost of an international court action? Deputy Molloy, when he was Minister a few years ago, said that the Government would not win, but that is not a good enough reason for not going to court. The point is to generate an international debate. I know we have acted on this matter at the Paris Convention, but there is a growing sense of urgency among Deputies of all parties about the problems with Sellafield emissions. We would like to see the Minister take up the standard and bring this to court. What may be needed is for the Irish Government to stand up against the British Government.
It was striking that on the day of the Downing Street Declaration, Minister John Gummer gave permission to start construction on the THORP facility. I do not think that was an accident. It was a deliberately planned political move by the British Government to deflect our attention from the damage this was doing to our country by announcing this Northern Ireland policy at the same time. I would like to hear the Minister's comments on this matter and whether he will be able to move ahead more swiftly than his predecessor on it?
My colleagues in the Labour Party would be unhappy to see any type of private monopoly being established in relation to the Electricity Supply Board. In Britain we have recently seen directors of privatised state utilities awarding themselves lotto type salaries each year. Even if only generating stations are privatised, we would fear that this would be the end result. There would then be an effective private monopoly in one vital link of the energy generation chain.
Many of us have extreme reservations about the retail distribution function of the Electricity Supply Board, particularly those of us representing constituencies with huge areas of social deprivation. The old ESB shop was often the only way in which one could get an appliance like an iron or a microwave and it gave many of our constituents cheap credit. We would be alarmed to find the ESB retail distribution network being dismantled.
Unfortunately, Deputy O'Malley is not here, but his comments on Ryanair and Aer Lingus are totally groundless and fantastic. There has been a huge expansion of air travel in this country and we knew that had been projected. Deputy O'Malley's true agenda is revealed by the fact that even when we have a profitable, innovative and energetic public utility such as Aer Rianta — Deputies who have been to Russia know about the tremendous work it did there for a number of years — he is still unhappy. Clearly, Deputy O'Malley's agenda and that of the Progressive Democrats is to destroy and wipe out State enterprise. Why did we set up State enterprises in the first place? Why did the 1927 Administration embark on that road with the ESB unless it felt that it was one way of securing employment? The true ambitions of the Progressive Democrats can be easily laid bare.
When the cold wind of competition blows at Shannon Airport, Deputy O'Malley is immediately looking for extra facilities. When the Deputy gets competition in his own backyard, he cannot take it. Deputy O'Malley's true agenda is clear; it is not about competition. I know we will be discussing civil aviation later——
The Progressive Democrats are not even entering into competition in the County Wicklow by-election either.
I was hoping that you would stick within the grouping. Deputy Broughan, otherwise we will only be rehashing the issue.
I join with other Members in congratulating the Minister on his comprehensive address on this Vote. The Minister has shown foresight and great interest in his Department and I must congratulate him for the way in which he has handled it since he was appointed Minister.
Like Deputy Broughan, I am annoyed at the highhanded decision of the ESB to close its retail outlets in two of the towns in my constituency, Skibbereen and Dunmanway. Skibbereen was the hub town catering for the Mizen Head peninsula, in which there are places up to 40 miles away from Skibbereen. It is the only big mart town catering for that area. Farmers and consumers in that area had easy access to Skibbereen to pay their monthly bills and buy their electrical appliances. The ESB should be asked to think again before it allows this to happen. The same pertains to Dunmanway. South-west Cork, which is bigger than County Carlow or Louth, will now have only two ESB centres, in Bandon and Bantry, catering for the huge hinterland of three provincial areas in west Cork.
None of the 28 or so ESB centres earmarked for closure appears to be east of a line from Dundalk or Waterford. The ESB shops on the east coast are held intact while the west coast is being booted about by a semi-State body threatening to close down these outlets. It is only saving the wages of two jobs by closing the ESB shops in Skibbereen, Dunmanway and Macroom. This is desperate. I ask the Minister to intervene immediately with the ESB to see if it would think again and give our rural community the same opportunity their urban counterparts enjoy.
Furthermore, an independent regulatory authority should be established to ensure fair and open competition and to protect consumer interests. The Minister is not protecting consumer interests if he allows the ESB to close down these outlets. In fact, it is working against them. The Minister should review this with the ESB as quickly as possible.
When was the cost and competitiveness review established and whose brainchild was it? That concludes my remarks under subhead B and I ask the Minister to bear what I have said in mind.
I have three specific questions under subhead B. First, in the capital programme the ESB intends to spend £192 million in 1995 by way of capital investment, £110 million of which comes under the heading of customer services. On what does the ESB intend to spend this sum of £110 million in 1995? There are other headings there — power generation, national grid and so on — but I am rather intrigued by that one because it represents the major portion of the ESB's capital expenditure for the next year.
Second, is the Minister satisfied — and he is in a better position to decide this than I am — that Bord na Móna should be entering the business of producing electricity? They have not done this before. Has the Minister undertaken the necessary studies and independent assessments of whether Bord na Móna is genuinely in a position to become a generator of electricity? Has the Minister considered asking Bord na Móna to stick to their own business? I am not in a position to decide that because I would need to see what assessments have been undertaken.
Third, the Minister plans to invest £120 million by way of equity into Bord na Móna, in three tranches: 1995, 1996 and 1997. I do not see any item in the Estimates for the 1995 tranche for Bord na Móna. Can the Minister indicate where that is contained in the Estimates, either current or capital? Perhaps it is outside of the Estimates in some way and comes from EU funding or other moneys available to the Minister.
We will now deal with subheads C.1 to C.4, road and rail transport.
The Minister has spoken about mainline rail services, transport in Dublin and, indeed, the DART. These are all issues that are clearly of some importance. If I may slightly reprove the Minister, he has left one element of commuter traffic out — the area covered by the new Arrow system, which, as it happens, brings people from my constituency into Dublin. It is no coincidence. It was quite deliberate. It is a growing area. It is a very good service, I am delighted it is there and it has brought about a major improvement in access, after some initial hiccups. Indeed, I remember the Minister of the day got left on the platform when the first train departed — but Deputy Cowen recovers from these things.
Will the Minister give some thought in looking at these matters to the extension of the Arrow service? There is a strong argument for extending it as far perhaps as Portarlington, which would seem to be a logical end point for it. Curiously enough, some of the demand will be generated in years to come by improvements in our road system. There is a proposal now — and I hope we will see some construction on it soon — for a motorway by-pass of Kildare town and, further along the line, one of Monasterevan to link up with the Portlaoise by-pass. I am convinced that will lead to a further urbanisation of that corridor. There is already some demand for an Arrow service from as far away as Portarlington. I would like the Minister to give some consideration to opening the old station at Monasterevan and extending the service to Portarlington. In future years it could help to alleviate the traffic problem in Dublin.
It is well known fact — and many commentators have said this — that as we improve the road links between Dublin and other parts of the country, one of the by-products is inevitably an increase in commuter traffic in Dublin, made possible by the fact that people can get there more quickly along the motorways. Therefore, a parallel development of that useful rail service would be helpful.
I see Deputy Broughan has gone, because I am about to run the risk of offending him with my next question on the liberalisation of private scheduled passenger bus services. I raised the issue with the Minister on a couple of occasions and he told me the matter is under consideration. The performance of Bus Éireann in providing services leaves a great deal to be desired. I know it is probably unfair to pick out particular episodes but, for example, a bus leaves Kildare at an early hour of the morning to bring people to the university campus at Belfield so they can get there in time for 9 a.m. lectures. Unfortunately, it does not operate during examination times. A couple of months ago, the bus broke down one morning between Newbridge and Naas on the old dual-carriageway and it took over an hour to find a replacement bus. Quite a substantial number of students were late for their lecture in UCD. It is an important service and to treat it that way is not good enough. There is a curious routing on the service which is dictated more by the convenience of Bus Éireann than the needs of the passengers and that is not at all unusual.
I know there are difficulties in providing the kind of service people believe they would need on fairly thin rural routes, but there are operators who are prepared to do it. There are operators who sometimes operate, I would say euphemistically, on the margin of the law and have been providing reliable and relatively cheap services. It is sometimes contended that they are creaming off routes and taking business away from Bus Éireann. Quite often that is not the case, because we have found time and again that where a service is provided Bus Éireann suddenly decides after some time to match it. Then the full weight of officialdom and the panoply of the law descends on the private operator who pioneered the service, they find they are being reminded of their obligations and they have to cease providing the service.
I believe a much more creative look should be taken at the provision of private bus passenger services. In the nature of it, I suppose Bus Éireann has inherited a certain kind of thinking from its past. It is largely a Dublin based service. It is oriented towards bringing people from other places to Dublin. To a lesser extent, there are centres in Cork, Limerick and Galway; but even there the purpose of the service is to get people from rural areas into the major centres of population. That is not always where people want to go. There are other requirements for satellite services that can be met by private bus operators that are not being met by Bus Éireann and which the present legislative framework stultifies. We have been a long time hearing about proposals to liberalise the provision of private services. I say that and draw attention to it not because of any particular philosophical view I take of public enterprise but because of the situation I see with the enterprises that are now on the ground. In the nature of things, localised enterprise can respond more imaginatively and more flexibly to local needs.
We do not have that ability under the law as it stands at the moment. The law is designed to maintain a monopoly of service in conditions that were largely defined in 1936 or 1933 — some time in the 1930s, anyway — and they do not respond to new patterns of settlement and activity in our rural areas or to an increasing trend for people to want to work in towns but to live in rural areas. The service is just not responding to those changes. There is a strong case for looking at our legislation, in the light of the readiness of private operators to provide services in this area, to see if we can give people the kind of service they need. We have an unbalance already with one third of the population living, working or on the dole in the greater Dublin area. If we have legislation that tends to exacerbate that tendency, we should change it to allow new services to emerge which would help to slow down that kind of concentration. There is an opportunity for doing so.
There is provision for the expenditure by Iarnród Éireann of £94.2 million and I see that the bulk of that is for buying rolling stock — rail cars and carriages — but very little of it seems to be for track renewal. Can the Minister indicate how much of CIE's £94 million capital budget for 1995 will actually go into new tracks?
Dublin Bus is getting a £3.9 million subsidy under the current budget in section C for the year 1995, if I read it correctly. On the capital side it is proposed to give Bus Éireann £11 million, presumably for expenditure. In view of the level of State funding still being used by Dublin Bus, has the Minister any thoughts on whether a bus competition Bill would be useful, given his earlier apparent commitment to open up the Dublin Bus area to the private sector.
My third question is whether the DART is profitable? The DART's interest charges are £7.8 million. Leaving aside those interest charges, which I appreciate we have to fund, and assuming there was no interest to pay, is the DART making money on a day to day basis or is it losing money?
As regards Rosslare Harbour, I see an item in the capital budget of £5.7 million. I understand that Rosslare Harbour is extremely profitable in its own right and I presume that that £5.7 million is coming from its own resources and not from the State. If it is, I suppose that it is fair enough.
Finally, I welcome the Minister's point about Dublin light rail. Is the figure of £750,000 in the current budget to be used for environmental impact or other studies on the Tallaght and Dundrum lines and is the Minister committed to having both lines up and running by the end of 1999? The Minister said that the sum of £200 million cannot handle the entire system and I appreciate that. I want to thank the Minister for his commitment to the light rail system, which is appreciated.
On public transport, the Minister stated in his speech that in the past ten years a total of over £1 billion has been provided by way of an annual Exchequer subvention to the CIE group. It seems to me that what he is talking about there is the direct subsidy paid by his own Department.
One thousand million pounds has been paid in ten years, plus God knows what before that, all of which is down the drain. It does not include the substantial subsidy they get from the Department of Education, which is in the region of £30 to £35 million extra; nor does it include the subsidy they get from the Department of Social Welfare, the amount of which I failed to find out when I inquired before.
£25 million.
£25 million? Well, that means a direct State subsidy, that I am aware of, of £155 million a year. So, the figure of £1 billion in ten years is more accurately around £1.5 billion which is an appalling thought. We should ask ourselves the fundamental question whether we need public transport of this kind at that cost, and would it not be provided elsewhere if it were not available?
Running through the Minister's speech is an assumption that we will have to continue with everything we have. The buses do not lose very much, perhaps £6, £7 or £8 million a year, but at the moment there are private bus services in places where CIE does not provide them. If they are in such remote places and on such unlikely routes, is it not likely that every CIE bus service would be provided by somebody else if CIE was not there.
The benefits of privatising the bus side of CIE are not just in what you would get for whatever assets they have. The real benefits are in saving the annual subsidy, which is substantial. The great bulk of that subsidy is on the railway side and it seems to be assumed that we are going to continue with railways in this country. I wonder if it is time to ask the question whether we should.
It is envisaged that apart from the annual subvention approaching £100 million a year to the railways, there will be an expenditure of £275 million between now and 1999 on the capital side, even though the railways are very little used. A lot of money is going to be spent on the Dublin-Belfast railway, but it would be far more appropriate to spend it on the Dublin-Belfast road. More of it could be spent on the Dublin-Derry road and similar roads instead of a rail service which is very little used. I understand that the average daily usage on the Dublin-Belfast route is less than 1,000 people. In that case does it warrant the expenditure of such a vast sum of money when there are so many other places where it could be spent more usefully?
Ireland does not qualify under the two main criteria for successful railways — long distances or large numbers of people — because we have neither. The distances are short and we have only small numbers of people, most of whom are not well disposed to using public transport, whether we like it or not. Some fundamental questions should be asked in this regard.
The level of subsidy is so vast that the Minister should seriously examine how it can be avoided. I welcome the fact that a marginal decrease has been made in the subsidy this year, but it is so minor as to be insignificant. Some more fundamental step needs to be taken.
I would ask Members at this stage to keep an eye on the clock because we must complete our business by 6 o'clock.
This Estimate must be completed today by instruction of the Government Whip's Office. If we cannot finish by 6 p.m. we will have to return to it after tea. With Members co-operation, we could finish by 6 p.m.
Can we take it that we can tell our colleague, Deputy Kemmy, that Deputy O'Malley is in favour of abolishing the Limerick railway line? Deputy Kemmy and many others will have to find an alternative means of transport to Limerick. It is another interest cutback from——
He comes by car.
He comes by train.
I do not think he can come by carrier pigeon.
This is astonishing. The Dublin-Belfast line has always had a fair amount of traffic. One must look at the overall cost to the environment of having those people travelling in cars. It would be a major cost.
In relation to the DART extensions, while everybody welcomes the programme for the two southside rapid rail lines in Dublin and, indeed, the extension to Greystones, which is so topical at the moment, we are very unhappy on the northside of Dublin that we seem to have been effectively shafted in relation to public transport. Areas of deprivation there had been promised a light rail line. These are places where people do not have any private transport and have nothing else to rely on except public transport, yet we are the one area of Dublin city which which does not get the light rail line.
I know the leader of Fianna Fáil is preoccupied at the moment with whether to run in Dublin Central or Dublin North-West. If he was running in Dublin North-West, it would be taken for granted that he would call once again, as he did in Government, for another DART rail line from the existing rail network through Broadstone and perhaps Drumcondra as far as Ballymun. Is the Minister able to give the deprived northside area of Dublin any encouragement, because we still feel we are the cinderella of public transport. Our area is the one that needs it. Deputy S. Brennan's area has received the go ahead for a major investment. People will say they have cars which will now be left at home, but our area has no form of transport other than public transport and we are upset.
I am amused by the comments of a number of Deputies about so-called competition in bus services. Deputies might be interested to hear that in the late-night bus service in Dublin, where private operators were allowed to compete, CIE and Dublin Bus wiped the floor with them. Dublin Bus carries the vast bulk of late-night passengers and I think they would quite easily wipe the floor in other contexts too. When Mr. Montgomery was in charge of Dublin Bus, he carried out some innovative reorganisation of the company with the development of a small rapid bus service. Will the Minister expect the new chief executive and his staff to carry forward a similar policy and have more innovation in Dublin Bus services?
I want to come back to the issue of the school buses raised by Deputy O'Malley and the amount of subsidy that is coming from that direction. One cannot help wondering if there could be some consultation between the Departments to try to alleviate the enormous amount of waste there. The big 60 seater CIE buses do a run in the morning, a run in the evening and sit there for the rest of the time and all summer. Some areas are being covered by private transport with much smaller buses, especially in rural areas. They can go up many of the by-roads and cause fewer problems for all concerned. Can some savings be made in that area?
I welcome the comments about the need to spend some of the money now being spent on the Dublin-Belfast railway on the N2, the road through Monaghan to Derry, because we do not have the facility of a railway. I can assure the Minister that we will be glad to see better communications in that area. Has the Minister or any of his colleagues looked at the possibility of reopening the line from Monaghan town to Armagh as part of cross Border co-operation in the light of the fact that a lot of the heavy goods leaving Monaghan go through Larne and could link up with the rail services to Larne harbour?
Finally, I wanted to address an earlier subhead but I was not here in time. While I appreciate the ESB must be run commercially, is it fair that one old age pensioner simply could not afford light. Although he is 50 yards from the nearest pole and only needs one light and one plug, the ESB insisted the only way it could supply power to him was by installing a new structure for which he would have to pay. We have reached a fine balance when the ESB can judge power requirements to this level. A light and a plug for an old age pensioner, who needs help from the health board, could not be facilitated without a major upheaval in the whole system.
On the rail services, you either do it or you do not. Deputy O'Malley spoke about the possibility of closing them down. In reality, one finds that that is not practical for all sorts of reasons. Furthermore, if one looks at the Dublin-Belfast line, for example, up as far as Dundalk it is a commuter route. That is as far as CIE must maintain the permanent way. I do not think anybody is saying that the commuter lines can afford to be closed. In fact, they are becoming more and more necessary.
I do not think rail journeys are viable in the long term unless the money is put in to make the time by rail significantly shorter that that which is possible by car. Either do it properly or do not do it at all. We have to run with it 100 per cent or forget about it. That means one needs fast, regular servces with good flexibility.
Can the Minister assure us that no permanent way will be sold, whether it is to be used in the long term for either railways or other purposes? For example, I speak particularly in the west of the line between Collooney and Claremorris. It has been closed for a long number of years but the rail track is still there. In previous times in situations like that — and I think there is another line from Waterford to Dungarvan — the tradition has been to lift up the track and sell the permanent way. Rights of way were sold that could have been put to a huge amount of alternative uses even if the railway was not going to be reinstated. Sometimes there is a case for reinstating the line for goods use, at least, particularly for timber and so on at low cost.
It always intrigues me how things never channge. The Galway-Aran ferry service subvention comes under the Department of Transport. The ferry services to other islands come under An Roinn Ealaíon, Cultúr agus Gaeltacht and the poor people who live out on the non-Gaeltacht islands have to do without any subsidised services. I know there are historical backgrounds, but it often amazes me that this is now 1995 and we are still living with arrangements that were made at the beginning of the century. Some of them were made even before we got our own Government. First, are there any plans to put all the ferry services to all the islands under one Department? Second, are there plans to ensure the non-Gaeltacht islands get treated equally with the Gaeltacht islands in regard to the provision of subsidised ferry services? Will they be treated equally with all the people — including those in Dublin, Galway, Cork and all the major urban and rural centres — who get subsidised transport services every day of the year? A small subsidy given to private enterprise would provide an adequate all year round service to the offshore islands and would guarantee winter services and the quality of boats.
Rapid technological change is taking place in the service to the Aran Islands. The private carriers operating the passenger services have cornered 90 per cent of the market in the unsubsidised services. Are there any plans in the short term to revamp that service, separate freight from passenger, and make sure the service is demand led and gives a value for money, top quality service to the islanders? It is ironic that there is a heavily subsidised passenger service which no one is using and an unsubsidised passenger service which everyone is using. This should be re-examined with a view to getting value for money.
I call Deputy Creed. I ask that we conclude this section of the Estimate, otherwise we will not be able to take the final set of subheads.
The owners and operators of private bus fleets are having considerable difficulty in securing and maintaining business, given the system of vehicle registration applying to bus fleets. The Minister may say this is an issue for the Department of the Environment and local authorities, but as he is reponsible for transport I would like to hear his views.
My understanding is that anyone operating a fleet of buses, trying to attract a certain category of business, has to secure bus fleets under five years of age. Many private bus operators import secondhand vehicles from the UK and elsewhere. The vehicles may be between six and ten years of age but they have to meet a Department of the Environment test as to their suitability and roadworthiness. However, the operators are not in a position to secure or maintain contracts for passenger transportation because the vehicle is over five years old. That is a significant problem for many people operating a tour transport service. I accept vehicle registration is not in the Minister's specific area of responsibility, but since it is a transport issue which affects many private operators he might raise the matter with the Minister for the Environment to see if an alternative arrangement can be put in place for registration of tour buses.
I am tempted to raise the west Cork railway line, which closed about 50 years ago. Deputy Finucane wants to raise the Kilmallock railway line and I saw on today's Order Paper that Deputy Bhamjee wanted to raise the west Clare railway. However, I will desist.
I propose to combine subheads D and E and take the remaining subheads, D1 to F, in order to conclude. We will give ten minutes to Members and 15 minutes to the Minister, if he can possibly reply to all the questions. I call Deputy Finucane.
Deputy O'Malley touched on the Shannon Airport issue earlier and I support some of what he said. The Minister said transatlantic flights were up, so that is positive, although transits are slightly down. There is a certain amount of optimism about Shannon's status as a hub for the CIS. As it was only set up in May, we will have advances in that direction.
What concerns me is subhead D2, the special promotion measure for Shannon. It is a substantial amount, almost £2 million. This appears to follow the special task force set up in 1933 with the object of marketing Shannon. A certain amount of funding was spent at that time. I hope we get value from this £2 milion because, as Deputy O'Malley said, concern was expressed at the airport about his operation. Perhaps the Minister could tell us more about this special promotion measure, who is behind it and what their objectives are.
Following from Deputy Finucane's point, the mandate for Shannon Airport marketing is to increase traffic at Shannon Airport through the stimulation of new traffic from North America, securing a second Shannon-London scheduled service, a new scheduled service to continental Europe and new services to UK provincial cities, which is fine. The Minister has dealt with Aeroflot and the development of further links between Shannon and Europe.
Although he mentioned the Ireland/US agreement, I do not find any explicit or implicit reference in his remarks to something which is a necessity for the development not only of Shannon but of tourism, which is the fostering of further links between Shannon and the North American continent. As long as we are limited to the current operations — New York, Chicago and Boston — there will be limits to development. Deputy Brennan and his successor has this experience and the Deputy is a good man for continuing rumours after he has left office.
Deputy Dukes should leave me alone.
I would hate Deputy Brennan to feel lonely. Various carriers in the US wanted to open new services, but it never amounted to much. If we have money to be spent on marketing Shannon, it should be spent on a campaign to have more links between Shannon and other points on the North American continent because that is the most effective way of expanding not only total terminal business in Shannon but also total inbound tourism. It is not easy to do this and I am not saying there is an immediate, obvious way of doing it; but effort should be put into marketing Shannon as a destination for more centres in North America. I am delighted to hear about Aeroflot and a way forward for CIS services, but we should see where the big money is.
I wish to raise points about civil aviation concerning the activities of the Irish Aviation Authority, but the Minister may not be able to deal with these. The fashionable business of hiving bodies out of Government to give them more independence has the substantial disadvantage that those of us interested in policy do not have a handle on them. However, I will make the point because if I cannot make it in this discussion it cannot be made anywhere.
The Irish Aviation Authority has a separate mandate and it should be developing the opportunities for various aviation services in this country, including the development of what is known as general aviation. We have spoken about the airlines, but general aviation is a growth area in many countries. I am not convinced the Irish Aviation Authority knows what to do in this area.
Two matters arise, the first concerning a simple request made by Weston Aerodrome near Dublin, which is not in my constituency although it borders on it. A slice was taken from the Dublin control zone; it was said originally this was to facilitate Weston so it could carry on VFR operations without interference. What happens is that air traffic control for Weston is carried out at Dublin Airport and sometimes by ATC at Casement, and this works quite well. There are no electronic landing aids at Weston Aerodrome and operations there have to close down at nightfall because night VFR flying is not allowed. That is still the case although in response to a segment of business which is there that would unload some of the facilities at Dublin Airport, there have been requests for night VFR flying at Weston Aerodrome. The answer I keep hearing is that night VFR operations are not allowed in this country.
The reason for this goes back some time. A ban was put on it in order to prevent the Provisionals dropping bombs from aircraft at night. That threat appears to have gone. In every other country in western Europe night VFR operations are allowed. They are common in the US, where the safety record is best. Newtownards Airport has the same standing in relation to Belfast City Airport as Weston Aerodrome has to Dublin Airport and night VFR operations are allowed in Newtownards.
Will the Minister take some energetic action to get the Irish Aviation Authority to open its mind and catch up with the times? Local authorities in that area have been very helpful, to the extent of reducing the height of lamp standards on a nearby motorway round-about. The tutelary authority should wake up and deal with the real world.
I have to interrupt you, Deputy. The time for finishing was set at 6 p.m. and you agreed with that. I have to operate in accordance with those arrangements. The Minister has to reply to a large number of questions, more than all the other Estimates we have dealt with put together. If Members want to speak at length at this stage we will not have time for other speakers, the reply from the Minister and possible supplementary questions. Unless we cut the discussion short we will have to extend the finishing time of the meeting.
That would not be the end of the world. Having myself chaired a similar discussion in another committee on an Estimate, I would be delighted if the Chairman would, in his capacity as Chairman, point out to whatever authorities impose this formula on us that it is not satisfactory. It is not satisfactory for the Minister or the Members.
That is unfair. The schedule was put to the committee, but the Deputy was not here.
I am not arguing with that.
The Deputy cannot argue with the decision of the committee. It gave the instruction and he was not present at the time.
I am not arguing with the decision of the committee. I am commenting, as I think is my right.
Is the Deputy proposing an extension of the time?
The difficulty the Chairman is having with me — I am normally a very submissive committee Member — and others today indicates that the formula handed to us by the Government is not satisfactory for dealing with the Estimates. I will support the Chairman if he makes that point to the Government Whip.
As the Chairman of a committee the Deputy should have a better understanding of the problems I have.
I know how far I can go and I have got away with it so far.
I will have to ask the Minister to reply.
The Irish Aviation Authority is now involved in discussions at European level on new rules governing pilot training and the conditions under which pilot training is given. A counsel of perfection is being urged upon us. It is being opposed by general aviation interests in the UK, here and I hope, elsewhere in Europe. Is there anything the Minister can do to take steps to ensure we do not have counsels of perfection imposed on us that will put this training beyond the reach of many of the people who up to now have been trained in that way and have subsequently become highly qualified commercial pilots?
I congratulate the Minister on his support for Aer Lingus and TEAM in relation to their restructuring programmes and the way in which he facilitated backbenchers recently in that regard. Is he heartened by recent reports in the press that the Virgin contract may be restored to TEAM and that there will not be any lay-offs there this summer? If that is the case it is a remarkable achievement.
Dublin Airport has a seven million passenger throughput. Due to the previous misconceived policy we allowed Manchester Airport to become the natural hub in the area — it has about double our throughput. I urge that Aer Rianta be given permission to build a second terminal at the one location in Collinstown. Facilities for ongoing passengers would be best located in a single major airport. Aer Rianta staff who have briefed Deputies from Dublin and the eastern region have a good plan to develop an airport that can give Manchester Airport a good run for its money.
I am heartened by the Minister's comments on his policy on the strategic alliance for Telecom Éireann and that his aim is get the partner most suited to assisting Telecom Éireann develop into a strong, modern customer-focused company. It was rumoured that Fianna Fáil was prepared to offload Telecom Éireann to Cable and Wireless, the former British semi-state company, without such guarantees that Telecom Éireann's development would not be stymied in return for a few hundred million pounds toward budgetary problems. I hope the Minister will continue his policy and take account of the document produced by the Communications Workers Union.
In the Dublin area we are still unhappy with our reformed postal service. We were assured we would get our post earlier and more efficiently. Deputy McDowell has made this point on many occasions. In a wide area of the north side of Dublin we get the post an hour to an hour and a half later. It is unacceptable to business and house-holds. Perhaps the Minister might convince the An Post Chief Executive, Mr. Hynes, and his staff to get their act together and at least give us the basic old service we had from the Sheriff Street depot. It was not computerised but the postal delivery service was better than it is now with the new major facility in the west of Dublin.
We will have to make some time arrangement.
I am open to proposals. I have to operate on the basis of what was agreed, but if the Members wish to propose an alternative and the Minister is available we could go on to 6.30 p.m.
I have no difficulty answering the questions, but I have difficulty with the 6 p.m. limit. I have another appointment now. I will answer what questions I can within the time left to me and I will make the officials of the Department available to any individual Deputy who wishes to follow through on questions.
That is the point I was trying to make to Deputy Dukes. Members keep contributing and rambling about their constituencies. The Minister must share some of the responsibility for overrunning the time.
Why do we have to finish today, Chairman?
I understand from the Government Chief Whip's office that the Estimates for this Department have to be concluded today.
We have taken a note of the questions asked. If it can be arranged, I have no difficulty in coming back specifically to answer the questions but not get involved in a rehash of the same debate. At a date to be arranged I will answer the specific questions that have been asked.
Can the Minister come back this evening?
I will not be able to do so this evening.
There was a long overrun earlier when the Minister was speaking. He had a lot to say and we welcome all the information. It is a pity——
My limit is 6.15 p.m.
We will conclude then and the Minister will have 15 minutes to reply.
With regard to the amount of £15 million for the regional airports, does the Minister have any figure for the overall losses of the regional airports? I take it that the Minister will ensure that Aer Lingus will bring in accounts for 12 months from now on and will not do what was recently done giving 21 month accounts up to the end of December, 1994. That is not acceptable and the Minister should not accept it.
What are Aer Rianta's landing charges? Am I right in assuming that Aer Lingus pay £30 million per annum to Aer Rianta in landing charges and that Ryanair pay about £7 million to Aer Rianta for landing charges? Is it not impossible for Aer Lingus to continue to pay £30 million or more per annum to land their aircraft in Dublin? It seems silly, as does charging a small airline like Ryanair £7 million to land their aircraft. Deputy O'Malley mentioned this. Are those figures correct? What is the Minister's view on the proposal for Baldonnel, if he has a view on it, and the £200 million proposed to be spent at Dublin? Is there a case for a new airport at Baldonnel? What is the State's exposure in the Aer Rianta bid for Birmingham Airport management? Is the Department of Finance aware of an absolute figure of exposure? Some of our State companies have been successful abroad and some have been notoriously unsuccessful. What is the people of Ireland's exposure in this particular venture?
I see regular references throughout the Estimates to office accommodation in the capital programme for the ESB, Telecom, Aer Lingus and so on. I have not had a chance to add it up, but it runs to many millions of pounds in office accommodation for 1995. Is there an overall figure available to the Minister for office accommodation for all the State companies in 1995? I suspect it is quite large and I wonder if it is necessary.
Under subhead A, the question of pensions has been raised. Will the Minister confirm publicly to the committee that all the pension funds of the semi-State companies for which he is responsible are fully in order, up to date and that they are not unfunded?
Finally, in regard to Telecom Éireann, I was surprised to hear Deputy Broughan's effusive support for the sale of shares in Telecom Éireann. It is a new version of socialism, but I welcome it all the same. I am sure we will hear more of it in time to come. Is a sale of shares envisaged for Telecom Éireann and when it is likely to happen?
I want to raise the issue of postal deliveries in the Dublin area. I have raised this on a number of occasions. I am concerned about the impact on businesses of the continuing late deliveries. This is a particular problem in Dublin 6. I have a letter from somebody who runs a small business which refers to the permanent unsatisfactory situation with regard to the late deliveries of post every day since the so-called "new system" was introduced in January, 1994. Is the Minister confident that the situation is going to improve and what sort of timetable would he expect before there will be improvements in all the business areas of Dublin?
I congratulate the Minister on the efforts he is making in relation to the provision of better public transport in Dublin, but I want to emphasise the serious problems in south and southeast Dublin which impact on the quality of life, the environment and safety considerations, with the increasing traffic in that area. Again, on timetables, what indication can the Minister give to people living in that area about improvements in transport and the moving of the heavy traffic which is going through those areas at present?
I will ask the Minister to reply. If I have any time afterwards, I will allow Deputy Ó Cuív speak. Let the Minister finish on schedule.
This is outrageous. We are here to debate Estimates.
I appreciate the contributions that have been made by many Deputies. Numerous questions have been asked and it is not possible for me to respond to all of the questions put to me. Members must appreciate that I am operating within the constraints as set down by the Whips and the way the committee system operates. If there are deficiencies in it, then there is an obligation on all of us to ensure that these deficiencies are corrected. Several questions have been asked, so where does one start?
I have been asked about the competitive review of the ESB. The CCR process is an involved one — it is a tripartite discussion between the ESB management, the unions and my Department. We are talking about negotiations which involve fundamental and radical change within the ESB. It is a complex and detailed negotiation proces. Complex and sensitive decisions have to be taken. I have been actively involved in promoting and supporting the negotiations and I am heartened and encouraged by the level of commitment displayed by all parties to the negotiations. We have made significant progress. There are some serious issues outstanding. Next Thursday I will be meeting with the management and the unions to clarify issues that have arisen as a result of recent Government decisions. The memorandum, which was brought before Government and which was accepted by Government, was necessary to enable the CCR to reach conclusions. There were certain issues which were raised during the CCR process that needed clarification and a Government decision. For that reason, it was brought before the Cabinet.
The principal question that I have been asked on a number of ocasions with regard to the CCR process is the issue of competition, both on the supply side and the generation side. On the generation side, competition will be available through the new peat-fired power station which will be built in the east midlands. That project involves capital expenditure of something in the region of £90 million. It will be funded by way of £21 million from the EU Commission.
People have been referring to why the decision has been made on this. The reality is that I am in office six months; but listening to some people here today, one would get the impression that I was the cause of all the problems and ills in the semi-State sector. In that period of time I have identified a number of key issues, I have addressed those issues and I have brought forward what I consider to be the best possible solution to them. One of those is the peat-fired power station. I am conscious of the fact that this is of crucial importance to the people of the east midlands, who are so dependent on the activities of the ESB and Bord na Móna, without which we would be talking about an economic wasteland. That is the reality. We have an indigenous source of raw materials there, we are fortunate in having it and we have a 40 year supply of it left. we are the only country other than Finland that has that source available. It is imperative that this project would be up and running at the earliest possible date.
Deputy Brennan asked whether it was desirable for Bord na Móna to be in the competition for the construction, operation and maintenance of this plant. That is something for Bord na Móna to assess. The reality is that they have access to the raw materials to generate the electricity. They have had a good working relationship with the ESB up to now in terms of the inter-relationship between the ESB and the bogs. That is a decision for Bord na Móna. It is an open competition and I will not be discouraging Bord na Móna from actively participating in that competition.
Deputy Dukes asked what the timescale involved was. The tendering process will take 12 months to complete and the construction phase will involve approximately three years. The plant will be constructed to the highest international environmental standards, which will significantly reduce CO2 emissions.
I was asked why the next tranche for Bord na Móna is not included in the Estimates. It was included by the Department of Finance in this year's budgetary proposals. The second tranche will be included in next year's budgetary proposals. It is a direct equity injection from the Exchequer to Bord na Móna.
The alternative energy requirement was originally set at 75 megawatts and the ESB had £15 million for grants. There was exceptional interest in this competition and the ESB received bids for 100 megawatts not requiring any State aids or grant support. The waste fuel idea mentioned by Deputy Dukes was included in the biomass waste section. None of these proposals in the last round was successful but my colleague, the Minister of State, Deputy Stagg, recently announced that he will be bringing forward proposals in the near future regarding a new competition for waste biomass. That is being actively pursued at the moment and we will soon have the proposals.
The gas interconnector will be fully operational when the compressor is finally commissioned. As I stated, the start up process is already well under way. They encountered some structural problem with the pipework and that is now well on the way to being rectified. Obviously, if we discover offshore gas and there is enough to export, we will export. On the other hand, if our best hopes are not realised, we may need a pipeline to import gas, so it is a two way process. If we have surplus, we export and if we do not have sufficient gas, we import.
The farm electrification scheme receives between 900 and 1,000 applications each year and that is the number we expect in the current year. Last year there were fewer applications and 490 were approved. However, only one third of these were completed by the ESB. This was due partly to the delay in applicants completing their part of their works. This is a common theme with these schemes. People make an application and then are slow to proceed and fulfil their obligations in respect of the application.
The ESB shops is a matter for discussion through the CCR process. It is part of the rationalisation programme of the ESB. The unions, management and my Department have been involved in that process. It is a question for the ESB itself. I am concerned about any undue impact the closure of these offices would have. For that reason we insisted, through the CCR process, that where an office closes, the payment of bills and any services normally provided through the offices other than the sale of white goods could be conducted, for instance, through the banking or other institutions in the town where the office closed.
Deputy Crawford raised a specific instance of supply for an old age pensioner. I will contact the office and we will take up the individual case to which the Deputy has referred.
Two big decisions have been made in respect of Telecom Éireann. The first is the strategic alliance partner and the second is the GSM licence. The reality is that within a very short time I made a decision in respect of the GSM licence. There was no reason why this could not have been taken by the previous Government and by the previous seven Fianna Fáil Ministers who had responsibility for the Ministry.
The position with the GSM licence is that this is a high growth area which has not been capitalised to a full extent. In Ireland hardware for mobile telephony is expensive, as are changes. The only way to reduce them is to give choice to the customer and this can only be done by introducing competition. There has been exceptional interest in this competition. The final selection will be determined by independent consultants. I am quite satisfied that when the process is over and the final selection made, we will have an operator in place who will give us a quality nationwide service but, more importantly, a service——
The Minister will not give a nationwide service.
We will give a nationwide service. We might not be able to cover the islands the Deputy represents, but so far as it is practical and possible, we will give a nationwide service.
But that is not a nation-wide service.
Is the Deputy expert in this area?
Yes.
All of the independent advice available to us is that it is possible to give a nationwide service within a reasonable time scale. That is the reality. Eircell are not in a position to give it at the moment because they do not have sufficient resources to invest in the technology required to give a nationwide service.
The principal criterion that will be adapted will be not include the size of the cheque. The size of the cheque certainly will not determine the winning applicant. We will make a decision on the best business plan put forward by the people competing for this licence and that will be the principal criterion in determining the successful applicant.
I was asked why it will be a duopoly and why we do not open it up. It is considerable progress to get to the stage where we are bringing in competition and are about to have duopoly. All the other European nations bar two open competition in terms of the fee payable and they started off with duopoly. Ireland is a very small nation. At the moment there are about 80,000 consumers in the mobile telephony area. The best possible indications are that we are talking about a maximum of 300,000 potential new customers. Competition between Eircell and a new operator in that sector will give us the best return and it is sufficient at present. With advanced technology in the years ahead, it may be necessary to extend that, but at the moment there is no deliberate decision to do so.
I appreciate there is much anxiety to ensure a decision is taken quickly in respect of the strategic alliance partner for Telecom Éireann. I am in the process of finalising a memorandum for Government which will set the terms and conditions under which Telecom Éireann will finalise discussions with potential partners. Preliminary discussions have taken place between Telecom Éireann and numerous potential partners and we are anxious to bring this to a conclusion. We have had consultations with Telecom Éireann and the CWU. We have had ongoing discussions and deliberations and, arising from that, I hope to be in a position shortly to bring this memorandum to Government.
I appreciate that I stated previously that it was a priority. It is still a priority, but because of the complexity of the issues that had to be addressed, it has taken a little longer than I originally anticipated. It is a priority and we are moving in that direction. I am anxious that when the conditions are set down for those negotiations to be conducted, they will be conducted with a low number of key players. We are greatly encouraged by the interest that has been shown by international consortia and global telecommunications networks in seeking to be the partner for Telecom Éireann.
We are anxious to ensure that the new partner will bring to Telecom Éireann the necessary expertise and technology to ensure that business and industry will be provided with modern telecommunications networks. The reality is at the moment — people may not agree and I see Deputy Brennan shaking his head — that Ireland is disadvantaged because it does not have access to the type and level of technology required in modern day society. That is the reality.
I will argue with the Minister some other time.
That is how I see it. It is also important to recognise that Telecom Éireann, while it has made significant and substantial progress, has a level of debt which makes it impossible to invest in the technology that is required for it to compete. Of all things going, technology will wait for no one. Advances have been made in technology and if we do not keep up with them, our economy, Telecom Éireann and its workforce will suffer. It will be unable to compete in a very competitive area.
Deputy Brennan made a point about contracts and said I put a scare into the arena recently. He was obviously referring to An Bord Gáis. As far as I am concerned, that unfortunate episode is now in the past. I want An Bord Gáis to plan for the future and ensure it continues to be successful and prospers in the future.
As far as I and my Department are concerned, mistakes were made. The board availed of an unacceptable level of discretion which was at their disposal under the existing tendering procedures. I will be moving to strengthen those guidelines and procedures to ensure there is no recurrence of this in the semi-State sector. There should and will be in the future open tendering competitions for all semi-State requirements. I want to ensure equal opportunity for every business in this country which wishes to conduct business with the semi-State sector.
A number of Deputies raised the postal services. Deputy Fitzgerald contacted me on a number of occasions in recent weeks with regard to this matter. I indicated in response to a Dáil question that agreement had been reached between An Post management and the unions on measures to improve the quality of delivery services. These measures included the transfer of the processing of some mail from the Dublin mail centres to Cardiff Lane, which is in Dublin 2, and also revised weekend working arrangements to cater for heavier mail deliveries on Mondays in particular.
I also stated in my response to the Dáil question that I had asked my Department officials to closely monitor the level of success of the new measures. As far as I am concerned, the primary function and responsibility of An Post is the delivery of mail. It must ensure that it gives a quality service, that mail is delivered on time and that the service is reliable. What is happening at present in parts of Dublin, particularly Dublin 2, is totally unacceptable. I have been in contact with the chairman and executive of An Post through my officials to ensure that this matter receives priority.
It is receiving priority and progress has been made, although the level of progress is not as expeditious as I would wish. However, fundamental change has taken place within An Post. New procedures and mechanisms have been put in place and investment has been made in other technology. There are teething problems, but I will ensure that the views put forward today are brought to the attention of An Post. I will also ensure that this area is dealt with as a priority and as a matter of urgency.
Deputy O'Malley and others mentioned airport charges. From my discussions with Aer Rianta I am aware there is constant pressure to reduce charges at State airports. However, I must point out that airport charges have been frozen and have not increased since 1987. An extensive package of discounts was introduced in 1994 and has been implemented in recent months. It will be extended in 1995 with a view to increasing passenger traffic.
I met the chairman and I asked him, in view of the level of correspondence I received from public representatives, to take a fresh look at this issue. Improvements have been made and Ryanair contacted me to say it appreciated the new working arrangements. It appreciates the facts that efforts have been made to lift the burden of charges. I am very conscious that charges of this magnitude can and will be an inhibiting factor in terms of access to our country. It is important to reduce them to the lowest possible level. That is already bearing fruit and there has been an 11 per cent increase in total traffic at the airports and a massive 17 per cent in traffic at Dublin. It is important to bear that in mind.
International comparisons of airport charges is a very difficult exercise in terms of comparing like with like. The elements which make up airport charges vary from country to country. I do not disagree with any of the comments made and I will encourage Aer Rianta to continue to assess the level of charges and ensure a downward trend as far as possible.
My point is that the charges are uniform throughout the country when they should not be. There is one fully utilised and two heavily underutilised airports. The charges should not be uniform.
In comparative studies already carried out, consultants clearly state that Irish airports rate among the cheapest. This includes even our most expensive airport. We are at the bottom of the European league in terms of the level of charges, according to official consultants. I understand the Deputy's point and I have made it to Aer Rianta on a number of occasions. At present it is the subject of ongoing discussion between my Department and Aer Rianta. However, the proposal regarding discretionary powers in terms of charges at the various airports is, to say the least, receiving opposition from within Aer Rianta. Nevertheless, I will take the Deputy's point on board and pursue it.
The figures at Shannon regarding terminal embarking and disembarking traffic from the US are up. It is directly comparable with the 1994 figures. I do not have the exact statistics but I can supply them to the Deputy if required.
Deputy Dukes raised Weston Aerodrome and he has been in contact in writing with the Department in connection with this matter on a number of occasions. I understand ther are very good safety and operational reasons for the IAA decision on Weston. Nevertheless, I will ask the IAA to have a further look at it in view of the Deputy's strident comments today.
They manage it in Belfast with no problem and all over the United States and the UK. We do not have fast jet traffic.
Deputy Brennan said I am not doing enough to secure approval from the EU for the final £50 million tranche. The Deputy knows that is untrue. The reality is that a report has been sought regarding an update on the restructuring programme for Aer Lingus. They need that report by the end of June and as soon as they receive it, they will assess it. The timescale for the payment of the £50 million is not June but rather the end of the current year, so we have until 31 December this year.
Deputy Broughan mentioned Aer Lingus and TEAM. I am confident Aer Lingus is doing exceptionally well at present. It has made significant progress and the core airline business is buoyant. We recently approved a five year plan for TEAM, which had been endorsed by the Government, the Department and the board. They are working towards the implementation of this five year operational plan——
Any chance of seeing it?
——which will return TEAM to a viable and profitable operating future in addition, for the first time in many years TEAM has reached up to 80 per cent capacity. For the first time in many years there will not be summer layoffs as there is sufficient work and capacity to engage the workforce on a commercial basis.
In respect of the £50 million, I am confident there will be no difficulty, provided the TEAM Aer Lingus problem is resolved by agreement. As the Deputy is aware, negotiations are under way in respect of the recent five year business plan. As soon as that is agreed I will be in a position to report to the European Commission. Arising from that I expect we will receive confirmation from the Commission that it has no objection to the final equity injection of £50 million.
The profitability of DART was raised by Deputy Brennan. The service receives a revenue support grant of about £5 million annually, excluding payments for capital. The Deputy requested information about the light rail expenses of £750,000. That provision is to cover measures such as the independent evaluation of the environmental impact study, the holding of a mandatory public inquiry and the provision of independent advice on safety matters. Irish Rail capital expenditure is £94 million. Expenditure on track renewal from Dublin to Belfast, Cork and so forth is likely to be more than £24 million. Dublin Bus has capital expenditure of £11 million which will be funded commercially by the company from its own resources or by borrowing. No Exchequer funds will be made available for that purpose.
Deputy O'Malley asked if we had to spend £150 million per annum on CIE. First, the social welfare and educational subsidies must be paid and they account for £30 million and £25 million respectively. The railways will continue to run at a major financial loss. Successive Governments have concluded that all the benefits, including access to regional areas, merit this and justify retaining our railways. However, that is not to say that they should continue to cost us £90 million. I am conscious of the necessity to ensure that the cost base and cost structures are reduced significantly.
Over the last ten years there has been a substantial reduction in the level of subvention to the CIE group. That is an ongoing process and we must always be mindful of that. With regard to an overall decision on the way forward, I believe we should invest in the railway system. In view of the huge traffic congestion in our cities and towns and the environmental impact of such congestion, it is essential that we invest in our railways. However, that must be done in a pragmatic and cost effective manner. In view of the level of our investment in CIE it is crucial to have a top quality management team with the necessary expertise and skills to oversee that level of expenditure for the future to ensure that we get value for money.
Deputy Brennan asked about the rationalisation programme for the ESB and the costs involved. he mentioned a figure of £400 million to £500 million. It is not that high. We are talking in terms of £250 million. The ESB has 1,400,000 captive customers. It has revenue of £977 million per year. It has a capital investment programme of £1.5 billion over the next five years, which is £300 million per annum. Looking at the payback period of an investment of £250 million, which is an investment in efficiency and in making the ESB competitive, I believe it is a good judgment. It is a necessary decision which will bring the ESB into the future.
Deputy Dukes asked about changing the law to provide for proper competition for Bus Éireann. I have discussed this with the Minister of State, Deputy Stagg, who has responsibility for this area. While we have doubts about the timing we have no doubt about the principle of introducing competition. We both agree that reform of the bus service outside Dublin should be carried out as soon as possible. This is our priority for new legislation and the Minister of State is working on it. I hope we will be in a position to introduce a Bill to address this issue at the earliest possible date.
Deputy Brennan has asked about competition for Dublin Bus on a number of occasions. We have not completed a review of the bus licensing issue. This is included in the delegation order for the Minister of State. I have not published a view on competition for Dublin Bus.
Deputy Brennan was in charge for the last seven and a half years.
I left the Bill in the drawer.
The Bill obviously needs a great deal of modification and must be defective if it is sitting there for that length of time. We will have a look at it and bring it forward at the earliest possible time. I am reviewing this matter and the Minister of State is actively pursuing it. We will introduce a Bill at the earliest possible date.
There will be a Bill?
I understand that there will. The Minister of State, Deputy Staff, is actively pursuing this issue. It appears at present that a Bill will be necessary. If that is the case it will be introduced at the earliest opportunity.
The Minister of State, Deputy Stagg, is likely to introduce a Bill permitting competition in Dublin city?
The Deputy is misinter-preting what I am saying. This issue must be addressed. The Minister of State, Deputy Stagg, is reviewing the situation at present. When that review is completed the Minister of State and I will bring forward proposals which might or might not involve the introduction of a Bill.
With regard to pensions, I confirm that all pensions in respect of the semi-State sector are in order. The Minister for Finance has accepted the State's liabilities with regard to An Post and Telecom Éireann charges for their prevesting date and service. Arrangements are now in place to discharge that liability and there is provision in the Estimates in that regard. Last year an additional allocation was made from the tax amnesty revenue. That is the reason for the difference between the 1994 and the 1995 provisions.
The semi-State sector plays an influential and important role in ensuring the competitiveness of our economy. My demand from the semi-State sector is that it be efficient and deliver quality and reliable services at the lowest possible cost to the consumer. I am aware that the semi-State sector faces many painful decisions. A rationalisation programme must take place in that sector. Much of it is happening because of decisions that were taken by previous Governments. The rationalisation programmes in Telecom Éireann and the ESB are a result of the policy pursued by the last single Fianna Fáil Government when the semi-State sector was instructed to recruit additional staff regardless of the consequences in order to massage the unemployment figures at the time. I am in the process of negotiating with the semi-State sector to ensure its continued and future viability. Unfortuately, I am obliged to talk in terms of disemploying huge numbers of people at a huge cost to the Exchequer because of decisions taken in the past.
I asked two questions and received no answers. One question was about the disposal of permanent way in the railway lines.
I have given no instruction to CIE or to any semi-State body about the disposal of assets. That is a commercial decision for the body concerned.
Can we take it that permanent way will not be disposed of?
I will address the Deputy's concern to CIE, which is the relevant authority. I invite the Deputy to do likewise and I hope he will receive a response from the management.
One of the big problems with the Semi-States is that they do not answer to TDs. If I write to Telecom Éireann to ask when it will provide an Eircell system in Connemara, although it already has the telecommunications tower, I will not receive an answer. If I contact CIE or Iarnród Éireann about the disposal of permanent way, I will not receive an answer. There is no answerability to public representatives. When we ask parliamentary questions about these matters we are told that it is not the Minister's responsibility.
The Deputy has a legitimate concern. He should write directly to me and I will forward his letter to the relevant authority. I will ask them to respond directly to him.
I also asked about ferry services to the islands.
The Deputy will be aware that there is a committee under the chairmanship of the Minister of State, Deputy Donal Carey, looking at this issue. Obviously, it in an issue that requires attention.
That committee has been sitting for a number of years under various Governments. I would not like to use the terminology used in our part of the country about what they should do. A considerable amount of money is being spent on the Aran service. This should be reviewed and the service should be put in line with the needs of the people. It is about time that the question of responsibility for a steady service to non-Gaeltacht islands be addressed once and for all. It is not satisfactory to say that a Minister of State without any money is chairing a committee.
Those issues will be addressed by the group.
Report of Select Committee.
We are entering the realms of argumentative debate. I have to put the question before we conclude. Our meeting tomorrow on the Casual Trading Bill is rescheduled for 11 a.m. in room G5. Notification to that effect has been sent to each Member. I propose the following draft report:
The Select Committee has considered the Estimates for the Public Services, 1995 for the following Departments: the Department of the Marine; the Department of Agriculture, Food and Forestry; the Department of Tourism and Trade; the Department of Enterprise and Employment; the Departmnt of Transport, Energy and Communications, and all other Estimates relevant to these Departments. The Estimates are hereby reported to the Dáil.
Is that agreed?
Report agreed to.
Ordered to report to the Dáil accordingly.
I thank the Minister and his officials. This was a fairly intensive debate.
On a technical matter, when you say the Estimates are reported to the Dáil, do you mean they are passed?
They must be reported to the Dáil. We do not have the function of agreeing or disagreeing with them. We simply report that we have dealt with them. I thank spokespersons and Members of the Committee for what was an excellent debate on a heavy programme of Estimates. We will meet tomorrow at 11 a.m.
The Select Committee adjourned at 6.30 p.m. until 11 a.m. on Thursday, 15 June 1995.