I was speaking on the section when the Dáil adjourned last week, with particular reference to the provision in sub-section (2) (b) which limits the amount of new transport stock that may be issued to a total of £7,000,000. So far as this Bill is concerned, the amount of new capital which can be invested in the Córas Iompair Éireann undertaking without amending legislation is limited to £7,000,000. When the Minister was speaking on the Second Reading, he stated that the figure of £7,000,000 was suggested in the Milne Report as the further capital which would be necessary for development purposes. That was not quite correct. Deputies who read the Milne Report will remember that Sir James Milne estimated the capital needs of Córas Iompair Éireann for five years at a figure of £9,750,000, plus a further £700,000 for the completion of schemes already authorised, including £300,000 for the Store Street station.
I am anxious to get from the Minister now some division of the total sum between the various heads of capital expenditure contemplated in view of the rather ambiguous position which has resulted from the decision of the Government not to proceed with the completion of Store Street station but, instead, to acquire the building from Córas Iompair Éireann, involving, presumably, repayment of the amount already expended.
It would seem that Córas Iompair Éireann will have available for capital development under this Bill a larger sum than Sir James Milne estimated as necessary for five years, but, of course, that larger sum is for an indefinite period, unless the Minister contemplates that within or at the end of five years further legislation will be proposed. It is true, of course, that the figure of £7,000,000 was mentioned in the Milne Report because, of the £10,450,000 which was estimated there to be required, some £3,450,000 will become available from the estimated accruals for depreciation, leaving £7,000,000 to be raised in the form of new money. The first and main question which the Dáil has to ask itself is whether the amount is enough.
We have been discussing transport policy on and off for a long time and, while we have had explained to us a plan for the reconstitution of Córas Iompair Éireann, involving mainly a new method of electing directors to the undertaking, and have had various discussions concerning things that happened in the past or are happening now, we have had no serious attempt made to outline to the Dáil a reconstruction plan which would include particulars of the capital expenditure considered necessary and an estimate of the effect of that capital expenditure on the revenue of the undertaking and which would hold out the prospect of revenue equalling operating costs at some stage, thus obviating the need for a subsidy from taxation.
The nearest we have got to a plan is in the Milne Report. Sir James Milne did attempt to estimate capital needs for five years ahead under broad headings, but even there, however, we are left in considerable doubt as to what he thought was desirable. Certainly, he did not attempt to propose any revolutionary changes either in the equipment or in the organisation of the undertaking. To a large extent his recommendations were based upon purely financial considerations. Of the £9,500,000 new investments which he considered necessary in the five years' period, £2,900,000 was earmarked for the permanent way; £3,000,000 for rolling stock; £1,600,000 for road vehicles; £750,000 for plant and machinery and £1,500,000 for the improvement of goods stations.
I think it must be clear that a substantial part of that expenditure, possibly the whole of the outlay on the permanent way and a large part of the outlay on rolling stock, cannot properly be described as capital expenditure at all. No extension of the permanent way is, I take it, in contemplation. Ordinarily the cost of maintaining the permanent way is a charge on revenue and it is merely a financial device to avoid a charge on revenue in the present year, to postpone, it to the future, which is involved in this proposal that a substantial part of the maintenance expenditure for the five years should be charged to capital instead of revenue.
The same is true in respect of the proposed expenditure on rolling stock. It may be true that arrears of permanent way maintenance which arose during the war and arrears of rolling stock maintenance and replacements are so heavy as to necessitate the issue of new capital to finance them. Ordinarily, however, new capital should not be issued for any purpose which does not hold out the prospect of increasing the revenue of the company sufficiently to meet the higher interest charges and provide for the sinking fund associated with the stock issue. We know from what the Minister has told us following his conversation with the old Córas Iompair Éireann Board that it was contemplated in 1948 that a much heavier investment in the Córas Iompair Éireann railway undertaking would be necessary.