I move that the Bill be now read a Second Time.
This Bill, as the House is aware, is designed to give legal effect to the agreement which was reached with the Ministry of Commerce in Belfast for the acquisition jointly of the G.N.R. and for the future management and operation of that undertaking. It is hardly necessary to state that the proposals in this Bill for the joint acquisition of the G.N.R. are not the result of any desire to extend the interests of the Government in railway undertakings but have rather been forced on us by the circumstances in which the company found themselves.
In common with other transport undertakings, the G.N.R. went through a period of depression in the 1930's from which they were temporarilyrelieved by the increased volume of rail business during the war years. As soon as traffic conditions began to approach normality after the war, and particularly on the return of road competition, the company were again faced with serious difficulties. These difficulties assumed serious proportions in 1948 and the company again found themselves, as in the pre-war years, unable to pay interest on their ordinary stock. In 1949 an operating loss of £68,000 was incurred and that loss increased to £106,000 in 1950.
The position of the company had been causing concern both in Dublin and in Belfast. Deputies will recollect that there were discussions between the Chairman of C.I.E. and the Chairman of the Ulster Transport Authority which, however, did not result in acceptable proposals. In August, 1950, on the initiative of Mr. McCleery, the position was reviewed at ministerial level in Dublin. Later in that year, November, 1950, again on Mr. McCleery's initiative, these discussions developed into negotiations of a more formal type, negotiations which started from the position, on which there was general agreement and on which I am sure general agreement still persists, that the railway could not be allowed to close and which were directed towards investigating the possibility of taking joint action in the position.
While the negotiations were proceeding, the G.N.R. Company informed both Governments that they would have no alternative but to curtail services and to reduce staffs, and on December 20th, 1950, the company intimated that they proposed to publish a notice that railway services would be discontinued from February 1st, 1951.
In January, 1951, following on a further meeting between Ministers in Dublin, it was agreed that the G.N.R. Company should be informed that the Governments had decided jointly to acquire the undertaking and that the purchase price would be £3.9 million. It was also agreed then to accept jointly responsibility for the financial results of the operation of the G.N.R. Company pending acquisition, as a result of which the notices to suspendservices and to reduce employment were withdrawn and various payments have been made both here and in the North to the company to offset losses arising in the meanwhile.
Following the intimation to the company that agreement had been reached to acquire the undertaking, it became clear that difficulty was likely to be experienced in concerting viewpoints as to what should happen after acquisition. Further negotiations at ministerial level did not resolve that difficulty and negotiations were for a time suspended. In the meantime, the proposed purchase price was rejected by the G.N.R. Company.
Following the change of Government in June, 1951, negotiations were resumed and eventually led to the agreement which is scheduled to this Bill.
When it became clear that an inter-government agreement on the general lines of policy was likely to be realised, a meeting was held with the directors of the company, who were informed orally both by Mr. McCleery and myself that we were prepared to proceed with the compulsory acquisition of the undertaking for the sum of £3,900,000; that we would have greatly preferred to have proceeded on a basis of agreement; and that if a proposal were made on behalf of the stockholders for a voluntary sale on terms slightly more favourable than the original offer, we would be prepared to recommend acceptance of that proposal. In November, 1951, a ballot of the stockholders was taken by the company at the instance of the directors, who suggested for consideration by the stockholders that if compensation was fixed at a sum of £4,500,000 it should be allocated between the various classes of stockholders on a basis which would provide for distribution per £100 stock as follows:—debenture stock, £89 2s. 6d.; guaranteed, £66; preference, £35; ordinary, £28 10s.
The majority of the stockholders voted for acceptance of the terms put to them by the directors. In communicating the result of the ballot to Mr. McCleery and myself, the directors pointed out that neither they, the company,nor the stockholders had power to sell the undertaking or to offer it for sale, but intimated that they wished the result of the ballot to be regarded as tantamount to an offer for sale if the necessary statutory powers for that purpose existed. This offer was accepted subject to the approval of the respective Parliaments. The Bill provides in Section 46 for compensation of £4,500,000 distributed in accordance with the scheme of apportionment on which the ballot was taken. Interest will also be payable on debenture stock in the interval between the establishment date and the distribution of the compensation, subject to a limit of two months.
For the future management of the undertaking it is proposed that a board should be set up consisting of five members appointed by each Minister. The terms and conditions of appointment, including remuneration, will be settled by the Ministers jointly. The joint interest of the two areas is evident in the arrangement that the chairmanship of the board will alternate annually between the members nominated by each Minister to be the senior members. Apart from this feature, the other usual conditions will apply to members. A member may be removed from office for stated reasons by the Minister who appoints him; a statement of the reasons for the removal to be laid before each House.
It is proposed that the title of the present undertaking should as nearly as possible be retained. This has obvious advantages. The name of the new board, therefore, will be the G.N.R. Board.
The duties of the new board are set out in Section 7. They are, briefly, to carry on the undertaking which, up to now, has been carried on by the G.N.R. Company. The board will inherit the present powers and rights of the G.N.R. Company other than the powers of raising capital. A specific duty is imposed on the board to secure as soon as may be, taking one year with another, that the revenue of the board shall not be less than sufficient to meet charges properly chargeable to revenue. In other words, the boardis to aim at making the organisation pay its way. In including such a provision it is not intended to minimise the problem of making railways pay. The Government has no illusions about the magnitude of that problem. We do not think it will be solved by putting a clause in an Act of the Dáil. As I have indicated, however, on previous occasions, it is not the intention of the Government that the railway should constitute a permanent drain on the Exchequer and it is essential that the new board should have their attention directed, by the terms of this Bill, to the problem of balancing their budget.
On the establishment of the board, the property of the company, except for land, but including the Dundalk works, will be transferred to the board. The land in this State, except the Dundalk works, will vest in the Minister for Industry and Commerce, but the Bill will operate to grant to the board the right to occupy and use this land for the purpose of carrying on the undertaking. The company's land in the Six Counties will vest in the Ulster Transport Authority but, under the legislation introduced in Belfast, the board will be authorised to occupy and use that land also.
