Dáil Éireann díospóireacht -
Wednesday, 12 Dec 1934

Vol. 54 No. 6

Adjournment Debate. - Londonderry and Lough Swilly Railway.

Mr. Davin:

On Thursday last I addressed the following question to the Minister for Industry and Commerce:—

To ask the Minister for Industry and Commerce if representations have been made to him by the Londonderry and Lough Swilly Railway Company and by the railway trades unions requesting a continuance this year of the Government subsidy paid in previous years towards the maintenance of this line; whether in response to these representations he has declined to consider the payment of any subsidy for the current year, and, if so, whether he will state the grounds upon which he made his decision; further, whether he has indicated to representatives of the company, in reply to suggestions that in the absence of a subsidy the line might have to close down, that such a development would be favoured by the Government, and, if so, whether he is aware that the closing down of this railway line, or parts of it, would not be in the best interests of the travelling and trading communities in the districts affected.

The Minister in reply stated:—

Representations of the nature indicated in the first part of the question have been made by the railway trades unions but not by the Londonderry and Lough Swilly Railway Company. As regards the second part of the question, the grant of a subsidy to this company in respect of the year 1933 was conditional upon an undertaking that no further application for a subsidy would be made, and that steps would be taken forthwith under the powers conferred by the Railways Act, 1933, and the Road Transport Act, 1933, to effect such a reorganisation of the undertaking as would obviate the necessity for further subsidies. Until the economies in working, possible under such a reorganisation, have been fully explored, the question of any further subsidy does not arise. The answer to the third part of the question is in the negative.

I want to say, on raising this matter on the adjournment, because of the unsatisfactory nature of the Minister's answer, I have no desire whatever to interfere with the affairs of the constituency of County Donegal. I am raising this matter principally because it affects roughly about 151 railway workers at present employed on the Londonderry and Lough Swilly Railway, some of whom are colleagues of mine in a trade union.

Mr. Dillon:

You would not oppose the Minister's action when I opposed it here before.

Mr. Davin:

The Deputy will have an opportunity of saying something on this matter later. Sixty out of the 100 miles of this small railway, which runs throughout the county, was constructed under the Railways (Ireland) Act, 1898, and was built by the Board of Works out of State funds provided at the time. I think it is fairly obvious to anybody who has studied the history, particularly the financial history, of the working of the company, that it was never intended that this State-built section of the line should pay. The last year for which the subsidy was granted, made up as it was by the Government of Northern Ireland and the Free State Government, it amounted to the figure of £9,000. I think it is quite true, as the Minister stated in his reply, that payment of the subsidy for that year was conditional, so far as the company was concerned, upon no further application being made by the company for a subsidy. The company say, as far as I am informed on this point, that they gave that undertaking under duress. As a result of having given the undertaking, under duress or otherwise, they have not, as the Minister has stated, asked for a subsidy for the present year. The case made for the subsidy, as far as I know, was put up by the trade unions.

The Minister is, I believe, in possession of figures to prove that the financial condition of the company is very serious at the present moment. He is in possession of figures to prove, I understand, that the overdrafts and other debts of the company are only secured to the extent of about 50 per cent. by the present Chairman of the Company, the Directors and other friends of the company. He is also aware that the rates of wages now received by the 151 employees of this company are 25 per cent. lower than the wages received by men employed in comparative grades under the Great Southern Railways Company. The reductions agreed to by the men— agreed to mainly for the purpose of making their contribution to the continuance of this railway system— imposes a very great sacrifice on the men concerned. I can state positively that the men who have made this sacrifice—32½ per cent. on the existing standard rate of wages—are not prepared under any circumstances to bear any further cuts.

The Minister in his reply stated—and I am not quite sure whether the company agree or not—that part of the undertaking was that the company would proceed to take advantage of the benefits of the Railways Act, 1933, and of the Road Transport Act, 1933, for the purpose of reorganising the railway service as a whole. I want to ask the Minister how it could be possible for a railway company, in the financial condition in which he knows this company now is, to take advantage of the Railways Act and the Transport Act? It requires money to enable this company or any other company to purchase lorries. If, as is supposed to be the case, the Minister favours the idea of closing down the railway line and of operating lorries over the roads that run parallel to the present railway system how could this be done without financial assistance, either from the State or from some other source? Personally I cannot imagine the company in its present financial position being able to find the necessary money from any private source. Therefore, if advantage is to be taken of the Railways Act, 1933 or of the Transport Act of the same year, the State will have to come to its assistance. I am not, however, advocating financial assistance for that particular purpose.

The most important question of all is: Does the Minister definitely favour the closing down of the Londonderry and Lough Swilly Railway or that portion of it which was built out of State funds? If so, does he believe and will he give the House an assurance, that the roads over which this traffic may be carried in future, are capable of bearing the heavy traffic now borne over the railway line? If so, does he believe that the ratepayers of the County of Donegal should be made responsible for the increased road maintenance which will naturally arise, if the traffic now carried by rail will in future be carried by road? That is a very important point which the Minister should bear in mind before he comes to any definite decision as to whether any further subsidy will be provided for the railway line.

I have reason to believe that the railway company has not been giving the service for passengers or goods which would induce the traders of the county to patronise the railway. For instance, I am informed that what is supposed to be a passenger train leaves Derry about 4 p.m. and reaches Burtonport about 10 or 11 at night. It takes, roughly, about seven hours for this great, mysterious railway company to run a passenger train from Derry to Burtonport, a distance of 67 miles. It would seem, therefore, that the company does not make proper provision for the carrying of passengers apart from the fact that they do not make proper provision to retain the limited amount of goods traffic they have on the line at the present time. The total staff at present employed on the railway numbers 151, and 115 of these are residents or citizens of the Free State, while the remaining 36 belong to Northern Ireland. It was suggested to me that before the Minister takes this final and, perhaps, fatal decision which will tend to close down this railway line perhaps for all time, he should have some kind of searching inquiry instituted into the system of administration, the finance and the assets of the company.

Mr. Dillon:

Is he not going to build a deep-sea port up there?

Mr. Davin:

Perhaps the Deputy knows more about the Minister's intentions in that respect than I do.

Mr. Dillon:

Troth, I do—it is to pull wool over the eyes of the people of Donegal.

Mr. Davin:

There was a Commission which investigated some time ago important matters affecting the development of the ports of Donegal. Perhaps it might not be out of place if the Minister would let us know whether the members of that Commission have given him any information as to the possibility of carrying on this railway line, or what their views are with regard to the future of the London-derry-Lough Swilly Railway Company. I quite agree that that may not have been included in the terms of reference of the Commission, but perhaps the members were asked to furnish the Minister with their views in that respect.

Mr. Dillon:

Their only function was to pull wool over the eyes of the people of Donegal.

Mr. Lemass:

The Deputy was not on it.

Mr. Dillon:

No, but I gave evidence at it.

Mr. Davin:

This is an important matter for the people of Donegal, including the constituents of Deputy Dillon, who appears to be making a laughing stock of the whole thing.

Mr. Dillon:

It is rather late in the day that you discovered them.

Mr. Davin:

I am speaking mainly in the interests of the people who will be affected by the closing down of this line. Suitable alternative employment cannot be provided for the men who will be thrown out of work if the line is closed down. I ask the Minister, now, seriously, to consider the question of providing a further subsidy towards the maintenance of this line until such time as he is able to go into such matters as the administration, the financial position and the assets of the company. I would very much regret the closing down of what might be regarded as a main line railway. I hope the Minister is not going to take the final step in a hurry. I trust that on further consideration he will be prepared to provide financial assistance to enable the line to be carried on until he has a better opportunity of investigating the whole question. I will now give an opportunity to Deputy Dillon, who has appeared so anxious to interrupt me, to say whether he supports the request I am making to the Minister.

Mr. Dillon:

Deputy Dillon will speak when and how he pleases.

Mr. Lemass:

I have not followed Deputy Davin's remarks sufficiently closely to be able to know whether he contemplates this particular railway line at any time in the future working on an economic basis and without the aid of Government subsidies. If he does not contemplate the possibility of this line getting itself into a position in which it will be able to continue working on a paying basis, what does he contemplate?

Mr. Davin:

On that point, I understand the people responsible for the working of the line at the present time have expressed the view that it is possible to work the line without a subsidy inside about two years. I did not make that statement before, because I could not prove it, and I have not had access to the figures.

Mr. Lemass:

Nor do I think that any responsible person could make that statement in the light of the experience of past years. We gave them a subsidy last year, a subsidy which they undertook would be the last of its kind.

Mr. Davin:

Under duress.

Mr. Lemass:

What was the duress? We said: "Here is a subsidy. Use that money we are putting at your disposal to reorganise your system, to eliminate unnecessary expenses, to reduce working costs and to get the system on a paying basis; but if you do not succeed, do not ask us to subsidise you again."

Mr. Davin:

Was not that amount intended to enable them to purchase lorries?

Mr. Lemass:

The Deputy apparently does not understand the position. It would seem that his idea of the reason we gave the subsidy was to enable the company to purchase lorries.

Mr. Davin:

No.

Mr. Lemass:

Then why did the Deputy interject that remark? If there is any basis for his remarks here it must be a belief held by him and those for whom he speaks that the railway system can be put upon a paying basis despite the experience of past years. Is it conceived by anybody that this system, burdened by debt, unable to provide for a wide part of the County Donegal the cheap, speedy and frequent service both for passengers and goods that modern conditions require, could in any way establish itself upon a basis that it will be able to continue operating indefinitely in the future without Government subsidies, or does he ask us frankly to recognise that this is a losing proposition, that the railway is unable to pay its way, that the public will not use it in such a manner as to enable it to cover its expenses but, for the sake of the men employed on it, we should vote £3,000 or £4,000 a year to keep it going?

Mr. Dillon:

What about the people in West Donegal? What is going to be done towards accommodating them?

Mr. Lemass:

Deputy Dillon got an opportunity to speak and he did not avail of it.

Mr. Dillon:

I will make my speech in good time.

Mr. Lemass:

At the moment the Deputy is not entitled to speak, because I happen to be in possession. I am not saying that any question of financial assistance to the company is ruled out of consideration, but certainly no such question of financial assistance will arise unless and until there is evidence that the company and those associated with it are facing up to the problem in a realistic way, contemplating the transport needs of that area, the basis upon which the transport needs can be provided on a paying basis and setting out ruthlessly to effect whatever reorganisation is necessary to do that, even if it means the scrapping of the railway. We are not committed to railways as a means of transportation if they cannot be made pay and if other means are obviously more profitable and can be conducted more cheaply and can be organised on a basis that is going to yield some return on the capital invested.

Mr. Davin:

At the expense of the ratepayers.

Mr. Lemass:

Why at the expense of the ratepayers?

Mr. Davin:

They will have to pay for the road maintenance.

Mr. Lemass:

Who is paying for road maintenance?

Mr. Davin:

Revenue should by right.

Mr. Lemass:

There is nothing to prevent the company deciding to-morrow to get out of the business of running that railway, and in that case the ratepayers of Co. Donegal would have reason to realise what the decision would mean for them, because the ratepayers have guaranteed the payment of the interest upon the debentures of that company. In any event the Deputy can take it that road transport can be made to pay. I appreciate that the scrapping of the railway line in West Donegal is going to involve the construction of new roads in that area and that it would be unreasonable to ask the County Donegal to bear the cost of the construction of these new roads entirely. There is no reason why County Donegal should not be asked to maintain these roads, when constructed, assisted, as they would be assisted in the ordinary way, by grants from the Road Fund, which is produced by the taxation of motor vehicles; and in so far as the motor vehicles operating on these roads would increase in number, the revenue of the Road Fund in consequence would be inflated, and the Road Fund would make whatever contributions it deemed reasonable and fair to the County Donegal County Council, to assist them in maintaining the roads of the county used by these vehicles.

The construction of new roads is a different problem in so far as the question of providing proper transport in that end of the county is concerned. It seems to me a matter of re-organisation to an extent that will ultimately mean the elimination of the railway and its substitution by road services. At the present time, the position, as I understand it, is that the omnibus services operated by the Londonderry and Lough Swilly Railway Company are, in fact, maintaining the railway. The profits realised by that company from omnibus services are helping to meet the loss on railway working. If the railway was not there, if the company could by some means get rid of the railway and of the liabilities attaching to the railway, it would be in quite a comfortable financial position. It is because the railways are there, and because the problem of even getting rid of the railway is going to impose new charges on the company, that it finds difficulty in effecting the change over to the roads which involves the purchase of new vehicles for the transportation of goods and the new omnibuses for an extension of its passenger service.

That is a matter in which they might possibly look to us for assistance, and I am prepared to consider the affording of that assistance if I am satisfied that the plans of the company are prepared with a full realisation of the facts, with a full knowledge of what is contemplated and with all the various difficulties faced up to and solved, so that we can point to a date, with some degree of definiteness, on which all question of State assistance for transport in County Donegal can be ended, and the services, whatever they are, then operating, maintained on a paying basis. The railway employees are part of the problem. The railway company, as the Deputy knows, is obliged, under the terms of the Railway Act, 1924, to provide compensation for its employees if they lose their work, in consequence of an order made by the Minister for Industry and Commerce terminating any of their railway services.

That is one of the problems. The financial burden which the provision of that compensation imposes on the company is one obvious reason why it is finding difficulty in procuring the finances to effect the re-organisation which we contemplate, but that has got to be faced, and the responsibility of deciding that a certain number of these railwaymen are going to lose their employment and get their compensation will have, at some stage, to be taken. A number of them, possibly a majority of them, can be provided with employment in the substituted road services. Some of them, because of age and other considerations, will be unsuitable to take that employment, and for them, under the terms of the Railway Act, compensation has got to be provided, and that compensation is going to impose an annual charge on the company for a number of years to come.

The question is: Can the new services of the company, the reorganised services, the road services, meet their own working expenses and meet the charges on the additional capital which has got to be secured, in order to provide them, plus these charges which will be inherited from the railway system, the uneconomic railway system now working, because not only will these charges arise in respect of compensation for workers, but the existing load of debt which the railway is carrying will have to be shifted, to a considerable extent, at any rate, on to the backs of the new transport organisation that succeeds it? These are all parts of the problems, and I agree that the company might, with some show of reason, look to the State for financial assistance for the purpose, and only for the purpose, of effecting that change over which will obviously put Northern Donegal transport on an economic basis, but if the only question that arises is one of providing a subsidy from State funds to keep going an uneconomic system, which is bound to collapse some day, no matter what subsidies we continue to give it, I think it is a waste of time providing money for the purpose. In fact, we extracted, as the Deputy says, from the company, a promise, when we gave the subsidy last year, that they would not approach us again for that purpose nor have they done so.

This matter is, of course, not merely one for us. In the past, the subsidies given to that company were contributed, one half by the Government of the Free State and one half by the Government of Northern Ireland, and if financial assistance for the reorganisation of the services provided by that company in order to release it from its difficulties, is to come from State funds, presumably the Northern Government must be expected to contribute equally with the Free State Government to that end, but, in any event, the position, so far as the Free State Government is concerned, is that its assistance is conditional upon the company's plans being based upon a realisation of its position, and on a determination to put its services on an economic basis, no matter what is involved in that.

The Dáil adjourned at 10.55 p.m. until 3 o'clock on Thursday, 13th December, 1934.