SELECT COMMITTEE ON PUBLIC ENTERPRISE AND TRANSPORT debate -
Wednesday, 9 Dec 1998

Vol. 1 No. 9

Estimates for Public Services, 1998.

Vote 32: Public Enterprise.

Chairman

On behalf of the Select Committee I welcome the Minister for Public Enterprise and her officials. The purpose of the meeting is to consider a Supplementary Estimate for 1998, falling within the remit of the Department of Public Enterprise, namely, Vote 32 - Public Enterprise.

The items before us are subhead A3 - Incidental Expenses; subhead A9 - Fees and Expenses related to the Sale of Shares in Telecom Éireann; subhead D2 - Essential Air Services Programme for Regional Airports and subhead F - Appropriations-in-Aid.

The meeting allows for opening statements by the Minister and the Opposition spokespersons. The discussion on the Supplementary Estimate will then be opened by way of a question and answer session with reference to individual subheads. Is that agreed? Agreed.

Mr. O’Flynn

Are Government Deputies allowed to ask questions?

Chairman

Yes. They will be welcome to do so. I now invite the Minister to make her presentation.

Minister for Public Enterprise (Mrs. O’Rourke)

I thank you, Chairman, for the opportunity to make a speech, but I do not intend to do so. The growth requirement is £5.3 million and I wish to explain the matters which led to that. As regards subhead A3 - Incidental Expenses - three legal actions occurred involving Carrigaline Community Television Broadcasting. One of them took place during the period in office of the former Minister for Justice, Mrs. Geoghegan-Quinn, while another was dealt with by the former Minister for Transport, Energy and Communications, Deputy Dukes.

The case of the four communications assistants employed by the Irish Aviation Authority went from court to court. I decided that they should be paid what they were owed. The Irish Aviation Authority paid some of it, which accrued to them, and we had to pay the amount which fell in our bailiwick. The IAA's liability was £206,000.

Subhead A9 refers to fees and expenses related to the sale of shares in Telecom Éireann. As you know, we are proceeding towards an initial public offering, hopefully in June 1999. That is our target and we need assistance in that regard. We have made provision in next year's Estimates for it, but some extra money will arise from it this year.

Subhead D2 refers to the essential air services programme for regional airports in Donegal, Sligo, Galway and Kerry. We will go through that subhead and I will deal with any questions that may arise.

Subhead F refers to appropriations-in-aid. The section of the Act setting up the Office of the Director of Telecommunications Regulation - Ms Étain Doyle - provided that the surplus of income over expenditure was to be credited directly to the Exchequer rather than through the Vote.

In one year, we did not need to spend as much on Eurocontrol as we had budgeted for. Payments sought and paid to Eurocontrol in 1998 amounted to about £1.8 million. Thus, the overall reimbursement for appropriations in aid to the Department was correspondingly lower by that amount.

Rather than me praising people and making statements, we would be better occupied in dealing with these matters.

Chairman

Thank you for your contribution, Minister. I call on Deputy Yates.

Mr. Yates

I am disappointed that we do not have a meaty Supplementary Estimate to deal with the crippling transport crisis the country is facing. I would like to have seen the Minister being in a position to provide a transfusion of money for buses and the various transport issues, not only in Dublin but in other urban areas. I would like to have seen the vital money necessary to upgrade our railways being provided. A Private Members' debate on this issue is running concurrently in the Dáil with this Estimate discussion. I will say more about that later.

Those issues need money, not more reports. I am dismayed to see, arising from the Minister's comments last night, that all we are being offered is a fare increase in January, an ERSI report and another Arthur Andersen report. From a Minister who is knee-deep in reports, two more reports make it harder to fathom where we are going on these issues.

I wish to make specific comments on subheads A3 and A9. The Minister will recall that, when we discussed the Estimate here previously, I strongly raised the issue of the TV deflector groups at the end of the debate. I see that subhead A3 is to pay out the Carrigaline Community Television Broadcasting Company. I am not in favour of all this litigation. I am in favour of switching them on. The Minister and the Telecommunications Regulator, Ms Étain Doyle, should get together and agree, as she has signalled to the committee.

At some stage, the clerk of the committee should communicate with Ms Doyle because she promised that by the end of the year she would have the regulations with a view to the interim licensing arrangements for TV deflector groups. You will recall that we met a number of them, including one from the south-east. We passed a resolution which we sent to the Minister and to the regulator, Ms Doyle.

The truth is, however, that people cannot watch BBC's Grandstand or Channel 4 programmes in areas where deflectors have been shut down. They have the luxury of TnaG, RTE 1, Network 2 and TV3. In this day and age, that is a disgrace. Is the Minister able to report any progress on that issue which is very close to my heart? A large area of the south-east is devastated by this, particularly the pensioners who cannot afford the MMDS. To rub salt in their wounds, when they go to the franchise operators they are told they have no signal in their area.

Subhead A9, the share sale in Telecom Éireann, is a very important issue. We are providing an extra £1.1 million in this regard. What is the Minister's thinking on this issue because it is a long time since the decision was taken for the IPO in mid-year 1999? The State owns 50.1 per cent. What proportion of the shares will be sold or will they all be sold? Will it be done in a one share sale? From the British experience and that of other European countries, I have been advised by brokers that if one wishes to maximise the price one needs to create a market in the share, a tradable share, and not sell it to the institutions.

It now transpires that, after deregulation on 1 December, people have been paying way over the odds to Telecom Éireann, particularly if one looks at the wholesale charges on Esat and others for the use of the network. The most deserving people for shares are the subscribers, the hard paying Joe Public who put Telecom Éireann where it is today and who had no choice except in relation to international calls.

Perhaps the Minister will make a good news announcement - not that she is prone to making too many lately - that subscribers will be given free shares or the option to buy shares. I have been advised by brokers that if one creates a trade in shares, it will stimulate the price upwards because if the institutions are not able to buy their full complement, they will have no choice but to go to the market to buy shares. We do not want what happened in the UK where shares are offered at a particular price but when they start trading, they are worth 40 per cent or 50 per cent more and speculators make a killing. If anyone is to make a killing, it should be the Exchequer. I understand Merrill Lynch and AIB are the designated consultants and that is why £1 million is being provided. What is the situation as regards the volume of shares to be sold?

Last night the Minister made the comment that she would seek investment for public transport, which we accept and support. Her Department, however, will have a huge windfall of capital as a result of the sale of these shares next year. Surely there is a fair case that it should be retained in her Department for the purpose of public transport. The Minister said there were demands from CIE for over a £1 billion of public expenditure for rail, the Luas, buses and so on. Why not earmark the proceeds of the Telecom Éireann share sale for this purpose and replace one capital asset with another which is very badly needed? That is the best way to finance the public transport requirement. It is an affordable and accessible way and is not wishful thinking.

I saw a statement attributed to the Minister or the Department saying there is a shortfall in the pension funds of Telecom Éireann and that much of the proceeds of the share sale will go towards this purpose. What is the shortfall in relation to the pension funds of An Post and Telecom Éireann? What are the Exchequer's options in that regard?

Chairman

I call Deputy O'Shea who is substituting for Deputy Stagg.

Mr. O’Shea

Deputy Stagg is particularly concerned about an omission in this Supplementary Estimate - the radon gas remediation grant scheme which he introduced. It is estimated that 200 people die each year from radon omissions. According to Deputy Stagg's calculations, the scheme he introduced would cost about £1 million in one year. It seems extraordinary that at a time of buoyant Exchequer returns funding for such a scheme, which effectively concerns houses in south and central Leinster, is not included.

Another issue raised by Deputy Yates and on which I have strong feelings relates to deflector television operators. The Minister will tell us she has no responsibility in this regard. If, however, the Director of Telecommunications Regulation asked her to bring regulations before the Dáil to provide for licensing of deflector operators, how would she respond to such a request?

Mrs. O’Rourke

I missed the Deputy's point.

Mr. O’Shea

As the Minister knows, the Director of Telecommunications Regulation is anxious to introduce competition into the marketplace. I understand this would require regulations to be brought before the Dáil. If the director made such recommendations to the Minister, would she respond favourably? On the essential air services programme for regional airports, I note Donegal, Sligo, Galway and Kerry benefit. Are there any proposals for Waterford Airport?

Mr. O’Flynn

I am concerned about the level of compensation. What compensation has been paid to persons sacked from the CIE board by the last Administration? How many cases are before the courts and how many have been dealt with? What are the legal costs to date? Will the taxpayer pick up the bill for the actions of the former Minister, Deputy Lowry?

Chairman

That does not arise under the Supplementary Estimate.

Mr. O’Flynn

Have we paid money from this year's Estimate? I know CIE will appear before the committee after Christmas and I have asked the Chairman if I may ask specific questions to the chairman and chief executive. I would, however, like to be armed with some information on what the taxpayer has paid in relation to this fiasco. Is any of it reflected in this year's Estimate?

Mrs. O’Rourke

A case was taken by Ms Kay Mulrooney from Galway who was sacked by the previous Government from the board of CIE. Her legal costs have yet to be submitted to the Department and I understand there are three or four others. One case is listed in the Circuit Court and I am sure there will be others. Payment has not fallen due this year but there is no doubt it will come up in 1999. There is also the long standing case taken by Mr. O'Leary who was the chairman. His case was entered, taken out and entered again, so we do not know at what point it is. There will be a follow up to that. If I am in this job next year and if Deputy O'Flynn is in his, greater legal costs will for those cases.

Mr. O’Flynn

Has the Department estimated the legal costs or the level of compensation?

Mrs. O’Rourke

No, because one does not know until a judgment is made or what a judge will say in the circumstances. A case was taken by Ms Kay Mulrooney but the Department apologised beforehand and the case did not go to court. She received an apology from the Department and her legal costs remain to be seen. The other cases have yet to come forward. One is listed and another was listed, taken out and entered again. I guess they will come forward again.

Mr. Lawlor

The Minister will eventually have to pay the bill for the decisions of the board to pursue these cases but we do not want another Kay Mulrooney situation. The State seemed to fight the case until the last minute thereby accruing substantial costs only to capitulate on the steps of the court, apologise and pay all the costs. Do we want to continue to pay costs in these cases? If there is a liability on the part of the State, the Minister should obtain legal advice whether it is worth pursuing them or minimising legal costs. When such cases drag on and are then settled, the legal bill is huge, even though it could possibly have been identified to begin with that the State was liable.

I know of a deplorable situation where a former chief executive was allocated by a decision of the board a severance package and his car. However, the car still sits in his drive three years later because the new chief executive will not give him the tax book, even though the former chief executive won his court case. That type of nonsensical, head in the sand managerial approach should be examined because it is deplorable. Some solution should be found. The former chief executive, Mr. Kennedy, finalised his affairs with company and decisions were made by the board only for a new board to be appointed which brought a change of attitude. It is ridiculous that a man's car sits outside his home and he is unable to take it out on the road because he has not been given the tax book. He worked for CIE for 38 years and that is the net result. There are no grounds for that nonsense.

I request that, in other outstanding cases, the State does not end up giving the grovelling apology it had to give to Kay Mulrooney while incurring legal costs in the interim.

Mrs. O’Rourke

Regarding the cases raised by Deputy O'Flynn, one has been brought by Ms Mulrooney and she received an apology before it went to court. We have not yet received the legal costs of the case. Regarding the matter raised by Deputy Lawlor, the Secretary General did not know anything about it but I have asked him to follow it up. I do not have the facts of the case but, if it is as the Deputy outlined, it should be examined.

Mr. Lawlor

I only heard one side so I may not be absolutely correct.

Mr. Daly

Deputy Yates mentioned deflectors and we had a long discussion on the matter so I will not deal with it again. However, he will be aware that deflectors and MMDS have been overtaken by digital television. Sky television is already vigorously advertising in the digital market. Is Ireland entering the digital television business? If so, at what stage are we and what are the prospects? Unless action is taken quickly, companies like Sky will capture the market and we will be left trailing behind.

Subhead D2 deals with the essential air service programme for regional airports. I am concerned about this and have raised it before, especially the adverse impact it will have on Shannon Airport. This subsidisation of regional airports will bring business to Dublin Airport at the expense of Shannon. I object to that because Dublin is already over-burdened with business and, as the Minister knows well, Shannon is fighting for survival. Subsidies such as these disadvantage Shannon and I would like to see either Shannon being included or fair competition between it and Dublin, in which case I would not object to subsidisation of regional airports.

I compliment the Irish Aviation Authority on its magnificent work and achievements since it was established. Its financial returns show what a huge success it has been. It has started to introduce training schemes for people from abroad who want to train in the aviation business. There is a lucrative market in this and it should be followed up; perhaps the Minister could impress upon the IAA to become more actively involved.

Chairman

Deputy Sargent has the facility as party spokesman to make a presentation. Perhaps he could do that now before the Minister answers the questions.

Mr. Sargent

I apologise for being late. Can the Minister address the concerns of people with disabilities about public transport? It is currently the subject of a demonstration at Heuston Station because accessibility to public transport for people with disabilities is causing considerable anxiety and anger. They have called on the Government to halt the purchase of inaccessible transport for which £26.5 million has been set aside. They ask what is our definition of public transport if it is not accessible to all members of the public. Perhaps that could be taken into account in the Supplementary Estimate.

Mrs. O’Rourke

Deputy Yates spoke about deflectors and said I had commissioned the ESRI to carry out a study. I have not; it was the Department of Finance. Arthur Andersen is conducting a study on public/private partnership for Luas. The Deputy was correct to say I might have good news. At the telecommunications council meeting I attended last week, Commissioner Karl Van Miert singled out and congratulated Ireland for the strides we had made in the past 12 months in the telecommunications industry. While I have not publicised the fact, I would nonetheless like to share my little moment of glory with the committee. I am not one to go jumping on buses and have my photograph taken. I do my business quietly.

Mr. Currie

The Minister does her business quietly and then attends this meeting and trumpets about it.

Mrs. O’Rourke

I have not received any recommendations from the Director of Telecommunications Regulation, Etain Doyle, on the deflector issue. Nonetheless, the committee should invite her to attend a meeting. It would be a good idea. I am awaiting her proposals on the deflector issue. Until I receive them, I cannot sign them or tell Deputies what I think of them. I know the director is keen to come to the committee, but she has been very busy with the derogation being brought forward by 13 months; it has meant flat out work. I do not know the final outcome because she has not brought the proposals to me, but as soon as she does I will be willing to work on them.

Deputy Yates spoke of shares and tranches. The amount to be sold will be a matter for Cabinet, and I have not yet gone to Cabinet with that matter. People have been paying over the market issue. The money does not come to me - would that it did - but goes to the Minister for Finance. It would be nice if a Minister who has been very good got his or her share, but that it does not happen like that. The State has huge debts of £700 million for Telecom and £400 million for An Post which have been incurred by employees over the years. Those are debts on the State. I cannot wipe them out; they are cash debts of £1,100 and are a fact of life. What the Minister for Finance decides to do is a matter for another day.

We have share advisers, but giving shares free to consumers is not part of my agenda. Having wide public ownership of the shares would be a very proper way for them to be divided out, and I hope there will be public purchase of the shares. We are hoping for June, but our positioning will depend on the market. It is a huge job, but the pension share debts are there. What the Government will do with the money for the IPO when we have made a decision is another question. I have no opinion on that for public consumption at the moment.

Deputy O'Shea mentioned Waterford Airport. Waterford got £375,000 in capital in 1995, and there is some carryover of works from 1998 into 1999. It will get £152,000 for marketing in 1999. Deputy Daly referred to the deflector question and television digitalisation. That comes within the remit of the Minister for Arts, Heritage, Gaeltacht and the Islands, and she hopes that this will come to pass by the end of 1999, as do I. The Deputy is right in that the study Etain Doyle did shows that any line to be followed on the deflector issue will be temporary because of the onset of digital Whatever licences are issued - if that is her course of action - will be overcome by technological events when digital television comes in.

I did not set up Etain Doyle's office; it was set up by the 1996 legislation, and that legislation was faulty in that it did not make her accountable to anyone. She has been gracious to admit that the gap exists in the legislation and has come here when requested by the chairman. I understand she will continue to do so and I will seek early legislation to insert a clause introducing accountability. On an allied issue, the ESB legislation allows for very full accountability of the regulator in that regard.

Deputy Sargent referred to public transport for people with disabilities. I cannot withdraw the order that has been made for buses. The Minister of State at the Department of Justice, Equality and Law Reform, Deputy Mary Wallace, met with a group——

Mr. Sargent

The Centre for Independent Living.

Mrs. O’Rourke

Yes. The buses ordered are double deck models. Only now a model is being constructed in London to make the bottom deck accessible, and three or six of those are being sent to Dublin Bus to see if they are satisfactory. If they are, they will be used in Cork and other areas but they have to be made first. There is no available stock of bottom-accessible double deck buses, but a prototype is being made. A serious effort is being made, but if the current order for 150 buses is stopped, it would be two years before we got buses.

Mr. Sargent

Some of this money is European Structural Funding.

Mrs. O’Rourke

Yes.

Mr. Sargent

The guidelines - if they are not stronger than guidelines - require access for people with disabilities.

Mrs. O’Rourke

Yes. The first tranche covers those prototypes.

Mr. Sargent

If an argument can be made that the guidelines are not being complied with, I would not like it if we disqualified ourselves from this funding because we did not think the order through.

Mrs. O’Rourke

When we got the funding there was no such clause, but Dublin Bus wants to try out this prototype. There is also a new bus, which appears to be a cross between a one and two deck bus. Prototypes will be tried out. I imagine Dublin Bus understands the EU requirements in this regard and that the EU would not insist that every bus be accessible to the disabled, but that every bus will eventually be accessible to the disabled. I hope that is what they are aiming for.

Mr. Sargent

We are talking about people with children and shopping.

Mrs. O’Rourke

Yes. The Deputy has tabled a Parliamentary Question on this matter for tomorrow. There are already 11 buses in Dublin that are suitable for people with shopping, buggies——

Mr. Sargent

Broken legs.

Mrs. O’Rourke

——so it is not just for people with disabilities. I am determined that we will be progressive on this matter. Public transport must serve the public, which is made up of people with all sorts of requirements. They are not all the same. I hope CIE make their vehicles accessible. They have information that I am going to ask them to put into a booklet for all the stations in Ireland, more and more of which are being made accessible for those with disabilities. A person in every station with responsibility to meet the requirements and answer the queries of people with disabilities will also be a good innovation. It must be realised that not everybody is the same.

Mr. Sargent

Does the Minister's policy include access to all transport for those with disabilities?

Mrs. O’Rourke

Yes, but I cannot do it overnight.

Mr. Sargent

But it is policy.

Mrs. O’Rourke

Yes.

Mr. Sargent

Dublin Bus will be looking to the Minister for that policy?

Mrs. O’Rourke

That is my policy and I am glad to be able to say it publicly, although possibly no one is listening.

Mr. Roche

I compliment the Minister on the extraordinary investment in public transport, the biggest we have ever seen, which is prudent and timely. We are talking about Dublin buses and the Centre for Independent Living, in which I have a personal interest because my wife is secretary of the Bray centre. Can LPG be used in buses to cut down on emissions? When we met Dublin Bus we were critical of the standard of maintenance and the black clouds coming from bus exhausts. It would be sensible to fix LPG as the norm, particularly for city based buses. Has the company received a directive in that regard? That may an operational detail rather than a policy issue but it seems to straddle the boundary between the two.

The next item is purely operational. Part of the investment sanctioned and funded by the Minister is the 30 per cent additional money for the DART fleet. The DART seems to have a fundamental design flaw in that the carriages have relatively few doors compared with the Paris Metro. A Metro train can be cleared in 15 seconds but it takes a lot longer to clear a DART train. Has Iarnród Éireann been given a directive on that point?

Mrs. O’Rourke

I thank the Deputy for the compliment.

Mr. Roche

It was due.

Mrs. O’Rourke

I felt that myself, because I fought hard for it. Last year I met a group on the LPG issue and we conveyed their wishes to CIE. All the vehicles would require different equipment, fuel tanks, engines, etc., but I think we will have to begin to do it. However, the company cannot wave a wand and do it overnight. Members regularly cross this street, which is not a particularly busy for buses, and can see the constant belching of smoke, which has nothing to do with the driver. We have to live with the restrictions of the Kyoto protocol, which was discussed at today's parliamentary party meeting. This is a policy issue which I will have to raise with Bus Éireann and Bus Átha Cliath.

Mr. Roche

A decision must be made on this issue at some stage since the company is ordering 150 buses, surely now is the time.

Mrs. O’Rourke

It has gone ahead with the order.

Mr. Roche

It would be a bit short-sighted not to consider this.

Mrs. O’Rourke

I asked the Secretary-General about the DART; he said he told the company - it must have been before my time - that the trains should be more accessible and have more doors. I will check on those matters because they are important.

Mr. Roche

The DART issue is critically important because one can speed up the trains.

Mrs. O’Rourke

Yes, and turnover increases because output and input are quicker. We will take those issues up with the company.

Mr. Yates

I was interested in the Minister's response on Telecom and ask her to expand on the pension fund. She said £700 million was required——

Mrs. O’Rourke

It is £725 million to Telecom and £400 million to An Post.

Mr. Yates

The Minister may not have the information to answer this question and if so perhaps she could forward a briefing note. How many employees has Telecom Éireann - would there be 20,000, including pensioners?

Mrs. O’Rourke

Perhaps, including pensioners. Currently there are about 9,000.

Mr. Yates

That amounts to £40,000 per worker. What sort of pension fund was this? Some 40 per cent of the value of the company is to be paid in pensions. I do not wish to personalise this, I am simply taken aback. I thought the figure was about £200 million. In terms for the negotiations for the sale of the company, the Exchequer put in a lot of money. When Deputy Albert Reynolds was Minister for Posts and Telegraphs he claimed he had got the 'phones going because he had invested hundreds of millions of pounds in the late 1970s and early 1980s. This strikes me as extraordinary. Were the employees making no contribution to the pension? Was no one contributing to it since the vesting day when An Post and Telecom Éireann were established? I would like, not necessarily today, a briefing note on these figures - the amount of money per worker before and after the vesting day and the history of the fund. The Government has the option of putting a once-off capital investment into the pension fund and discharging the debt. What are the accruals? What falls due by the turn of the century? Any information is welcome.

Mrs. O’Rourke

I have that in the note and we will send it to the Deputy.

Mr. Yates

How many other time bombs, in terms of under-provision for pensions, are there in the other ten semi-State companies? These are phenomenal sums. Perhaps the Department could assess Aer Rianta, Aer Lingus, etc. Is this company the only one, because it has a Civil Service history, or is there a series of huge debts? This was not shown on a balance sheet.

Mrs. O’Rourke

The company was part of the former Department of Posts and Telegraphs. When the company went to buy under the ESOP it had something to sell because the workers were on a particular pension scheme which they would not have had if they were not in a semi-State company. The IAA is the other body.

Mr. Yates

The Irish Aviation Authority is the only other semi-State in the Minister's Department for which there is an under-provision of pension?

Mrs. O’Rourke

Yes. This has gone on over the years.

Mr. Yates

I appreciate that but it is a phenomenal amount of money, over £1 billion.

Mrs. O’Rourke

It is £1.15 billion.

Mr. Yates

Is the fee growing?

Mrs. O’Rourke

It will grow until we pay it.

Mr. Yates

I would like the details. Does the Minister or the Secretary-General know, in ball-park terms, how much money per worker this works out as a capital sum?

Mrs. O’Rourke

I do not have the figures but I will get them.

Mr. Yates

It is tens of thousands of pounds per employee.

Mrs. O’Rourke

It has accrued and stands as a debt on the Exchequer. What the Minister for Finance and the Government do with it is another matter. When people talk about the Celtic tiger and look for more money, they do not know about things like this, but it is a fact of life.

Mr. Roche

To be fair to Telecom, when the workers became employees of a State-sponsored body as opposed to civil servants, part of the deal was that they carried their pension rights. It was well signalled at the time. I should declare an interest as an former employee of the Department of Posts and Telegraphs of that period.

Mrs. O’Rourke

It was mentioned in Dáil Éireann on several occasions, under several Bills. It should be no surprise to us but it is when one sees the cumulative amount.

Mr. Sargent

Something which comes to mind when discussing this Department is the court case being taken by STAD - the Stop THORP Alliance Dundalk. It has been the subject of considerable discussion, particularly relating to funding and the Government's commitment to the case. From whose coffers is that funding to be sourced - is it from this Department's Estimates?

Mrs. O’Rourke

We have paid £76,000 already but it does not come under these subheads so I have no information with me. My colleague, the Minister of State, Deputy Jacob, deals with it.

Mr. Sargent

I know, but it is from the Department's coffers?

Mrs. O’Rourke

Yes.

Mr. Sargent

That is why I mentioned it. I did not know if there were any other headings under which it could be raised.

Mrs. O’Rourke

It does not fall within the terms of these Supplementary Estimates.

Mr. Sargent

I thought it might be a Supplementary Estimate in itself.

Mrs. O’Rourke

No.

Mr. Sargent

My second point relates to the report on rail safety. Is that to be funded out of Supplementary Estimates for this year?

Mrs. O’Rourke

I presume it is paid for.

Mr. Sargent

It does not sound as if it is all paid for.

Mrs. O’Rourke

Is the Deputy talking about the report itself or the implementation?

Mr. Sargent

I am talking about the implementation of the report - I am not talking about the cost of printing paper. I understand the report was initially the subject of a loan.

Mr. Yates

That was the £23 million.

Mrs. O’Rourke

That is right.

Mr. Sargent

And there is a lot more.

Mrs. O’Rourke

That is to be done immediately.

Mr. Sargent

From where is the money to be sourced?

Mrs. O’Rourke

The Minister for Finance gave CIE permission to raise the money because it is £100 million below its statutory borrowing limit. That was because the report identified that £23 million had to be spent immediately. The report also identified that a small group, which was set up the next day, would decide by the end of January the next spending stages and how the money was to be got. That group has had two meetings and will make its report at the end of January.

Mr. Sargent

There is no provision in these Supplementary Estimates to provide——

Mrs. O’Rourke

No, because this has to be spent now. The Supplementary Estimates are for money that was spent during the year.

Mr. Sargent

The initial report on sanctioning a loan did not sound as if it was being given sufficient political priority——

Mrs. O’Rourke

It was.

Mr. Sargent

——given the scale of the problem.

Mrs. O’Rourke

Even if a fairy godmother called Telecom landed on the Cabinet table and said " Here is £590 million" - which is the amount - it could not physically be spent. The report outlines stages of how it is to be spent because that much money could be physically spent on signalling, level crossings, embankments and so on. It will be a long process for which the money must be got.

Mr. Sargent

But not just by loans.

Mrs. O’Rourke

No, there are several ways of getting the money. We will see what the report comes up with. I am glad the Department of Finance is involved because it knows the extent of the need. I have just received a report from the chairman of CIE on what it could put towards railway investment. There is also a need for Exchequer funding and EU funding. We have commissioned a report from Arthur Andersen on how we can get public/private funding. It is ahefty sum of money which will have to be got from many quarters. I will have to fight like hell to get it. Every Minister knows they have to fight their corner with the best of them at the Cabinet table.

Mr. O’Shea

I wish to make two brief points. The Minister did not respond to the question on the radon gas remediation scheme. Is the marketing figure for Waterford Airport next year £152,000?

Mrs. O’Rourke

The figure for 1999 is £152,500. A scheme was not brought in for radon gas. Deputy Stagg had the shape of a scheme but the money was not provided for it in that 1997 Estimates.

Mr. Yates

That was a long time ago.

Mrs. O’Rourke

I am coming to the fact that we did not bring in another one. A very prudent note went to Cabinet with it from the then Minister, Deputy Dukes. I can say no more about that.

Mr. Yates

That is because the Minister does not know the answer.

Mrs. O’Rourke

The answer is that there is no scheme - there is no ambiguity about it.

Mr. Yates

If it is not in the 1998 Supplementary Estimate, is it in the 1999 Estimate?

Mrs. O’Rourke

No, it is not.

Mr. Yates

That is not Deputy Dukes' fault.

Mrs. O’Rourke

No. The context was that Deputy O'Shea said that Deputy Stagg brought in a scheme - I was saying that the then Minister, being a good senior Minister, brought it to Cabinet but it had a prudent envelope on it.

Mr. Yates

Does the Minister feel equally prudent about it?

Mrs. O’Rourke

I do. I forgot to answer the question about the regional airports. The previous Government had a policy on regional airports, which I was glad to continue. We got EU aid at that time for them. I take the Deputy's point about the smallness of the country and that Shannon Airport may feel its nose is put out of joint by Waterford, Kerry or Cork airports. However, it is up to everyone to assert themselves, to find their markets and to work for their customers. I think they are all doing their best to do that.

Mr. Daly

There is a subsidy which reduces the fare for a passenger who flies into Dublin Airport.

Mrs. O’Rourke

There is.

Mr. Daly

Perhaps we could get the same subsidy for Shannon Airport. There is some evidence that passengers availing of this subsidy are on transatlantic flights which they could have taken from Shannon. I do not wish to make a big issue of this but it should be kept under close observation. There is some evidence that lines which are not economically viable are being subsidised - the Minister mentioned a line which went into liquidation.

Mrs. O’Rourke

If firms say to the Minister that Galway, for example, is a good area for investment because it has a good airport with good flight times, it is then taken as an arm of industrial policy rather than domestic policy. There is clear evidence that firms are interested in locating industries in areas with a regional airport.

Mr. Roche

It strikes me that the subvention on the Dublin-Donegal route of £717,000, which is £357,000 more than in 1998, is phenomenal. How many people use the route?

Mrs. O’Rourke

I am sure it not viable.

Mr. Roche

I know it is not viable. If that sum were capitalised over ten or 15 years it could be spent on many infrastructural investments instead of flights which are not used by anyone. I know it must be regarded as a social investment in the area. However, while one hears the west never gets anything, it could do a great deal with £717,000.

Mrs. O’Rourke

I know.

Chairman

Donegal is in the north-west.

Mr. Yates

The Chairman is very sensitive to the difference between the west and the north-west.

Mr. Roche

I do not know the passenger figures for the route but it seems an astronomically high level of subvention for a route which is not heavily used.

Mrs. O’Rourke

The company operating the route went belly-up. There was a week during which there was no service to Donegal and we went through a confined tender process because we wanted to get an immediate service, which we did. That caused the price difference. We have seen what is happening with Fruit of the Loom. Donegal is so far away that it needs every help to make it accessible.

Mr. Roche

I was wondering about value for money. If that subvention were converted into a capital sum, could one get better investment in the infrastructure? I am not suggesting for a moment that Donegal is not remote and does not need specific help.

Mrs. O’Rourke

It takes four or five hours to drive there.

Mr. Roche

Anyone who has done the Seanad campaign trail around Donegal knows how remote it is.

Mrs. O’Rourke

The Deputy asked for figures. In 1997, the number travelling was 21,681.

Mr. Roche

That is a good number.

Mrs. O’Rourke

I am sure the figures for this year will be available shortly.

Mr. Daly

Lest there be any misunderstanding, I fully support regional airports. The money spent on them is not considerable. I do not like to see the subsidy of flights into Dublin. I would like to see a similar subsidy on flights into Shannon from regional airports.

Chairman

That concludes questions to the Minister. If the Minister would like to make some concluding remarks she is welcome to do so.

Mrs. O’Rourke

I think everything has been said.