The welcome extended to this Bill, and the general support expressed by Deputies for the policy of extending our merchant shipping services, are very encouraging. In my view, we have, in the development of our merchant shipping organisation, not done much more as yet than make a good and encouraging beginning. I believe that a great deal more is possible, certainly as a long term objective, and it is the Government's aim to promote a much more substantial achievement than we have yet recorded.
The development of Irish merchant shipping services is not, however, a matter for Irish Shipping alone. Private enterprise has its part to play in that field and, indeed, we would wish to see it playing a much bigger part than at present. In order to secure greater activity in the merchant shipping field by private interests and to encourage the existing firms to extend the scale of their operations, important tax concessions were made in last year's Finance Act. The results of these tax concessions have been not discouraging and, indeed, in recent times these private companies have acquired, or ordered, some five additional vessels. These vessels are, of course, of the smaller size intended for trading with the North Sea continental ports and on similar routes. Irish Shipping do not compete with them on these trades and indeed it is, I think, necessary to give them an assurance that Irish Shipping will not compete with them at any time. The main objective of Irish Shipping is to develop deep sea services, requiring generally the operation of much larger vessels than the private companies control.
Deputy Cosgrave asked me what is the policy of Irish Shipping in regard to the extension of its fleet during the present period of depression in the shipping business. As I stated, the aim of building up a minimum fleet of 200,000 tons dead weight in dry cargo vessels is related to our experience during the war, and represents what we regard as the minimum size of fleet required to maintain essential supplies to this country in circumstances of an international emergency during which ships of other nationalities might not be available to us. The decision to build up a fleet of that minimum size, was taken at a time when it was uncertain that Irish deep sea shipping services could be operated profitably and, by and large, that aim is to be regarded as independent and separate from the commercial results of the company's operations. By that, I mean that the decision to secure and operate a fleet of that size is based upon factors which are not directly related to the prospects of successful commercial operation.
The company will, no doubt, take into account, in preparing their plans, trends in shipbuilding costs and it is important that they should do so. It is necessary also to take note of the fact that the company have no financial reserves, that by Government decision, the whole of the surplus revenues which they have earned in recent years were utilised in acquiring new tonnage, so that they are not in a financial position to meet the consequences of repeated deficits on their operations. I intend, after the enactment of this Bill, to consult with the board of the company as to their future programme.
Deputy Larkin emphasised the necessity to have modern, economic ships. I think it is true to say that new ships could operate, certainly without loss and possibly with some margin of profit, even at the present level of freight rates. The aim of the company is to replace their ships after ten or 12 years so that they always will have a fleet comprised of modern, economic vessels.
I notice a report in this morning's newspapers that the President of the Irish Exporters' Association has been urging consideration of the possibility of buying ships, now that a large proportion of the world's merchant tonnage is laid up. I think that would be a wrong policy. There would be no future for Irish Shipping, in the circumstances which we foresee, operating uneconomic vessels even though they could be acquired at a low, initial price. The policy of maintaining a modern efficient fleet is, I think, the right one to follow.
It is important that the House should understand that Irish Shipping are engaged, in the main, in the tramping business, that is to say, their vessels are employed wherever in the world there is business for them and, indeed, much more than 80 per cent. of their total revenue is derived from carrying traffic from one foreign country to another, traffic which has no relation to this country at all.
Many of their vessels, when they leave this country, do not return here for some years, being completely occupied in foreign trade during these periods. There is, perhaps, a need— and again what I have to say in this respect arises out of remarks attributed to the President to the Irish Livestock Exporters' Association—for what are called liner services, that is, cargo vessels which operate on regular routes on regular occasions, but the operation of services of that kind requires association, it seems to me, with an organisation which can secure for them traffic at intermediate ports on the selected routes. I do not think it can be said that the volume of business which is likely to be generated here for ships on such a service could, by itself, be sufficient to maintain the service, even if we were able, by exhortation and otherwise, to secure the bulk or all of the available business from Irish firms for it. The possibility of developing services of that kind will, of course, be always kept in mind and we should like to see them being organised, but the practicability of the undertaking is a matter for expert examination by people who are intimate with all aspects of the business.
Deputy Cosgrave asked about the intentions of Irish Shipping with regard to building new vessels in Ireland. I take it he has in mind, in that respect, the larger type of vessel which constitutes the bulk of Irish Shipping's fleet. I think it is known that the plans for the development of the Verholme United Dockyards at Cork involve at a later stage the undertaking of building work there. It is contemplated that two slipways will be built upon which vessels of quite large size, up to 45,000 tons dead weight, can be constructed. It is likely to be some years before building operations upon vessels of that size will be undertaken. Meanwhile, any vessels which Irish Shipping decide to buy will be purchased by them to the best advantage. In that connection, I think I should say than on each occasion in the past on which Irish Shipping required vessels of the larger size, they invited Messrs. Harland and Wolff, Belfast, to tender, but that firm were not in a position to do so. Indeed, a Government direction which I conveyed to the company in 1951 when the company's third building programme was being initiated, required them to explore the possibility of placing orders for their vessels with Messrs. Harland and Wolff, if that firm was in a position to tender. Some repair work for Irish Shipping has been done in Belfast. By and large, it must be the policy of the company to acquire the ships they need wherever they can get them at lowest cost.
In connection with the new building programme of Irish Shipping, it will be appreciated that it has to be considered in two parts. There is the programme that would represent an extension of the fleet and the immedate objective is to extend the 140,000 tons up to 200,000 tons dead weight and there is also the programme which covers replacement of existing vessels as it is decided to effect replacement.
Deputy Lynch and other Deputies referred to the size of the ships to be acquired by Irish Shipping. That is a matter of some difficulty. It is obvious that to the extent that the company is acquiring a fleet which has the specific purpose of being available to meet the essential needs of the country in time of emergency the ships must be of a character that can be utilised at more than one Irish port. There is room for doubts, however, as to the extent to which the company should have any economic penalty imposed upon them by that overall strategic consideration, if I may so describe it. I may point out that of the company's existing fleet of 17 dry cargo vessels six are under 4,000 tons. These are quite small vessels which can operate into many Irish ports. Only six of them, leaving out the deep sea tanker, are over 9,000 tons. At the most recent annual meeting of the company, the chairman in his speech in relation to a new ship which they are about to order, said:—
"We have not yet decided on the exact size and type but since I referred to this matter last it has become more evident that the 14,000 ton size has attractions for charterers in many trades. It is obvious that during a period of very low freight rates such as that through which we are passing ships of this and of even larger size can operate much more economically and to keep abreast of this type of competition we shall (although very few ports in this country can accommodate ships of this size) be bound to add units of this type to our fleet."
The aim of the company must be to maintain a fleet which is flexible and with so many categories of ships within it that it can operate with commercial success, taking any trade that may become available to it.
Deputy Cosgrave and other Deputies referred to the possibility of Irish Shipping interesting itself in the cross-Channel trade. That question is one which has been considered on many occasions, but the consideration given to it brought to light many substantial practical difficulties. Some years ago, Irish Shipping were authorised to construct two ships suitable for the cross-Channel coal trade. They built those ships; indeed, the ships were engaged in the cross-Channel coal trade under charter for some time and when the charter expired Irish Shipping did their best to get someone else to take over the charter or utilise the ships on that service, but without success. Ultimately, the boats had to be adapted for foreign trade on which they are now engaged. The whole question of Irish participation in cross-Channel services is, as I have said, a very difficult and complicated one. The possibility of securing some satisfactory solution to the problem is, however, under active consideration at present and I hope to be able to inform the House in due course of the outcome.
In that connection, I feel I should say something about the comments made here by some Deputies regarding the cross-Channel passenger trade. In so far as inconvenience or difficulty arises in the handling of the cross-Channel passenger trade, it is associated with two very brief periods in the year when traffic reaches its peaks, one in mid-summer and the other, perhaps, around Christmas time. Clearly, the only way of meeting the requirements of peak traffic of that kind is to have other vessels available which can be added to the service and it would be a particularly difficult operation for an Irish company, with no other interest in the passenger trade, to have vessels which would be available for peak needs and which would not be required at all or could not be utilised at other times of the year.
The present arrangements, whatever may be said about them, do offer the possibility of additional vessels being made available to meet peak requirements and, by and large, I think the difficulties which have been encountered in that respect in recent years have been more or less overcome, but there are problems there which no organisation can cure completely, unless one is prepared to contemplate a substantial fleet of high-class passenger vessels being utilised for three or four weeks in the year and lying in dock for the rest of the year. While the cross-Channel passenger trade could be a very remunerative operation, if the passengers could be spread evenly out over the whole year, that is never likely to be the situation.
I do not think there is any other point made in the course of the debate to which I need refer now, but I should like to thank Deputy Kyne for his tribute to the merchant shipping section of the Department of Industry and Commerce. I have heard similar tributes from other sources and personally I think they are well deserved.
