Before the Minister moves the Vote may I ask if, in view of the fact that every Member of the House has been circulated with a copy of the Minister's statement and in view of the length of the statement, more than 50 pages, it would be in order to suggest that, instead of reading the entire statement, the Minister would just comment on it?
Committee on Finance. - Vote 41: Transport and Power.
The notes would not indicate policy trends or would not give the up-to-date information contained in the speech and, of course, the Supplementary Estimate has been so delayed that I have added material which brings the report on the various companies to the current position. I am sorry that I did not deliver the notes to Deputies at an earlier stage. I am afraid this was frank misjudgment on my part. Having seen how the debate on the Supplementary Estimate for Health proceeded for a very long period, I did not think that my Supplementary Estimate would arise for consideration today and I apologise to Deputy Donegan and others.
The Minister need not apologise. He is more efficient than some of them.
But a statement of 50 pages is very long.
This is due to the fact that Deputies expressed the feeling that they did not have sufficient information on the last occasion of an Estimate. I was glad that Deputies from all sides of the House did pay tribute to the amount of information made available upon which a discussion could take place on such a large number of State companies and on the other activities of my Department, most of which involve highly technical matters.
I move:
That a supplementary sum not exceeding £10 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on 31st March, 1969, for the Salaries and Expenses of the Office of the Minister for Transport and Power including certain Services administered by that office, and for payment of sundry Grants-in-Aid.
The purpose of this token Estimate is to enable the Dáil to discuss the 1968-69 Estimate for the Department of Transport and Power.
The principal increases in 1968-69 are in the provisions for Salaries, Wages and Allowances, £45,000— subhead A; Grants for Harbours, £58,000—subhead E; Grant-in-Aid for Tourism under the Tourist Traffic Acts, £792,000—subheads F.1, F.2, and F.3; Acquisition of Land, et cetera at Airports, £64,000—subhead G.1; Constructional Works at Airports, £450,000 —subhead G.2; Grant-in-Aid and Housing Subsidies and Grants for Shannon Free Airport Development Co. Ltd., £212,000—subheads K.1, K.2, K.3 and K4; Rural Electrification, £95,500 —subhead O—and a new provision for Investment Grants for Ships, £440,000 —subhead T. Small increases in other subheads amount to £96,540 bringing the total increases to £2,253,040.
The increase in the provision for salaries, wages and allowances is due to authorised salary increases, normal incremental progression, provision for new posts and overtime. The new posts arise principally in the Meteorological and Aviation Operations Services and in the provision for airports construction and maintenance due to increased activity in these fields. There is, however, a partly offsetting reduction in the staff of the Aviation and Marine Communications Service following the introduction last year of automatic communication equipment. I will be dealing with the various other increases in the Supplementary Estimate separately.
The decreases in 1968-69 are in the provisions for Córas Iompair Éireann Redundancy Compensation, £21,000 (subhead D.2); Technical Assistance, £8,500 (Subhead N) and Rents on Lands etc. at Airports, £34,500 (Subhead S) bringing the total decreases to £64,000. To this amount must be added the increase of £108,050 in Appropriations in Aid which is equivalent to a decrease in the net grant and brings the total decrease to £172,050.
The increase in Appropriations in Aid is due mainly to increased estimated receipts from landing fees at Shannon Airport, £90,000.
On the basis of actual increases and decreases as stated above, namely £2,253,040 increase and £172,050 decrease, the net increase compared with the 1967-68 provision is £2,080,990.
CIE's net deficit for the year ended 31st March, 1968 amounted to £2.48 million which was £480,000 more than the Board's annual subvention of £2 million.
Total operating receipts for 1967-68 at £27.396 million showed an increase of £2.273 million on the receipts for the previous year. Approximately £700,000 of this increase, however, can be identified as revenue which was lost in the previous year as a result of industrial unrest.
The operating expenditure for the year amounted to £28.512 million, an increase of £2.2 million on the previous year. Reduced working hours and other improvements in conditions of service, as well as increased social insurance, accounted for £1.43 million of this increase. The devaluation of sterling and the Suez closure resulted in an increase of £80,000 in the cost of fuel and other materials.
I should explain that of the total net deficit of £2.48 million financial charges amounted to £1.363 million. This represents an increase of £154,000 on financial charges in 1966-67, reflecting the increase in Exchequer advances made to the Board in respect of capital expenditure under section 4 of the Transport Act, 1964. The total amount of capital advances made to CIE by the Exchequer up to 31st March, 1968 was £5.409 million and the balance of the £6 million, which is the limit on such advances under the 1964 Act, has since been advanced to the Board. A sum of £6 million was the amount which it was estimated CIE would require by way of capital advances during the five years ending 31st March, 1969 and legislation will be necessary later this year to extend this limit.
In order to meet rising costs, CIE increased fares and rates from 1st January, 1968. Because of the Board's financial position, an increase from an earlier date would have been justified but was deferred in an effort to keep down prices as much as possible. However, because of the subsequent impact of the 11th round and other improvements in conditions of service, the Board's financial position deteriorated and a further increase in fares and rates, from 2nd December, 1968 and 1st January, 1969, respectively, became essential. I have already explained to the House, in reply to Parliamentary Questions, the reasons why these increases had to be introduced. Briefly the position is that, since the January 1968 increases, labour costs in CIE had risen by over £3 million a year. Other costs, including materials costs, fuel costs and financial charges had risen by £1.255 million a year, making a total increase of £4.3 million in a full year. The impact of rising costs has been offset by CIE to a substantial extent by increased business and greater productivity. Over the five years ending 31st March, 1969, new business totalling £6.5 million has been gained, an average annual increase of 6¼ per cent; this excludes additional revenue secured under the Department of Education free transport scheme for school children. Greater productivity has also been achieved. The labour force has remained unchanged during recent years although business has been expanded, the working week reduced and extra annual leave granted; this represents in all an increase in productivity of 13 per cent.
As in previous years the Board's losses in 1967-68 are attributable almost entirely to the railways on which the operating loss was £2.185 million, an increase of £327,000 on the loss in 1966-67. In addition to general increases in costs referred to earlier, rail depreciation costs were also greater than in the previous year reflecting higher replacement costs and a full year's provision for 12 new diesel locomotives. There was an improvement of 9.4 per cent in rail freight tonnage which was contributed by increased carryings of petrol and oil, fertilisers, cement and beet, partly offset by a fall in mill stuffs, sugar and grain tonnage. There was a fall of 4.6 per cent in the number of passengers carried by rail caused principally by a decline in the number of visitors from the United Kingdom, resulting from the travel restrictions necessitated by the outbreak of foot and mouth disease there. Week-end rail passenger traffic continued to increase.
In order to maximise rail passenger traffic, CIE offer a wide range of reduced fares. Special reductions are available on scheduled rail services for groups of eight adults or more (two children being equivalent to one adult) and for families of not less than the equivalent of 2½ adults. Day excursions at single fare operated on selected days each week and are popular for shopping expeditions. There are reduced fares for two-day and week-end return journeys and during the off-season from October to May, special week-end bargain return tickets, at single fare and valid for return up to Monday, are offered about every second week-end. On Sundays there are cheap excursion return fares at less than single rate and during the Winter season these fares are still further reduced. Various season tickets at reduced rates are available for railway passengers travelling daily to and from work; there are special season ticket rates for children under 16 years and for students under 21 years. Holiday travel by CIE services is encouraged by the issue of Rambler tickets which allow unlimited travel for 15 days on scheduled rail services for £9 standard class or on rail and bus scheduled services for £11 standard class; reduced Rambler rates are available for parties of at least six adults and for families.
Recent improvements in passenger train services include the provision of a new fast service between Limerick and Dublin and the reduction of journey times on many services.
With regard to the suburban rail services, CIE are fully conscious of the need to ensure that these services are utilised as effectively as possible both as an economic asset and with a view to making the maximum contribution to the relief of road congestion in Dublin city. Season tickets including monthly and weekly tickets are provided at attractive fares. Suburban stations have been improved and modernised and, following a series of market research studies, additional services have been provided to reflect the demands of the public, including cross-city services linking suburban stations on the Northern line with stations on the South-Eastern line. The station at Howth Junction is being rebuilt and a new station is being provided at Kilbarrack to cater for the new residential development in the area. The feasibility of extending railway commuter services to Clondalkin, Ballyfermot, Cabra, Glasnevin and Drumcondra is being studied by an independent market research company commissioned by CIE and the potential for commuter services on the main railway line for Naas, Newbridge and Kildare is also being examined. CIE are also undertaking an intensive marketing drive to attract more commuters to rail services, including an advertising campaign and door-to-door distribution of timetables and information to every householder within convenient reach of the suburban rail services.
Is there any way in which the Minister could have this statement put on the Records of the House without reading it all? This was discussed at the Whips meeting yesterday and I understood some arrangement would be made. It must be very boring for the Minister to have to read all his statement and we have copies of it here.
So far as I know there is no arrangement.
We have no objection to any course you wish to adopt.
There is no way by which this can be done.
This is something which the Committee of Procedure and Privileges were to examine but they would have advised us if they had found any way to get around this. You could have something like the situation in Congress in America and the result would be that piles of papers would accumulate. I do not know how Deputies would like that.
It must be very hard on the Minister having to read this.
And without even a glass of water in front of him.
Or a glass of Irish whiskey. I am sorry for interrupting the Minister but because we discussed this yesterday I was under the impression that it might be possible to do something.
I inquired about this and I was told that it would require a change in Standing Orders. Is that not correct?
I was under the impression something could be done.
We are not raising this in a spirit of criticism. It is in a spirit of helping. We realise the Minister has to go through all this detail.
An important development in rail freight operations is the recent introduction of a fast liner freight service for container loads between Dublin and Cork and Dublin and Limerick. The purpose is to attract to the railways as much as possible of long haul freight now being carried on Irish roads. Attractions offered customers by the new service include faster inter-city movement of freight, better rates than those offered by road transport, same day delivery in Dublin of containerised freight from Cork and Limerick and same day shipping for export traffic. The Board's ultimate plan is to provide a national network of liner freight trains and terminals.
The operating profit on the Dublin City passenger road services in 1967-68 amounted to £264,000, an increase of £64,000 on the result for 1966-67 which, however, was affected by losses incurred as a result of strikes by the board's employees in 1966. The operating profit on the provincial road passenger services increased from £224,000 in 1966-67 to £487,000 in 1967-68, largely as a result of a substantial improvement in business.
The Dublin city passenger road services have to contend with serious traffic congestion. A complex system of communication is in operation to try to combat the problem—involving a central control in radio contact with patrol cars, inspectors located in the central city area and injection points for extra buses throughout the city.
1967-68 was again another record year for CIE coach tours with revenue going up to £394,000 as compared with £284,000 in the previous year. The marketing of off-season tours in North America contributed to the increase and the expansion of business from there was, of course, greatly facilitated by the establishment of a new sales office in New York. A further sales office was opened in Los Angeles in September. About 75 per cent of CIE's coach tour business comes from North America and it is confidently hoped that the opening of these new offices in New York and Los Angeles will improve selling and marketing on the North American Continent and provide for a substantial increase in this business in future years.
Revenue from extended tours increased considerably during 1967-68. The demand for the 21-day tours of Ireland and Great Britain, which were introduced in 1967, has continued to be highly satisfactory with numbers participating in the tours rising from 1,490 in 1967 to 1,900 in the 1968 season.
Coach tourist traffic has continued to grow at an encouraging rate and there is every indication that this important sector of tourism will continue to expand. As far as foreign tour operators are concerned, in 1968 such operators offered approximately 35,000 passenger seats in Ireland.
There was also an increase in the operating profit on CIE's road freight services, the profit for 1967-68 being £222,000 compared with £187,000 in 1966-67. The total tonnage handled was, however, about 4.5 per cent lower than in 1966-67 mainly because of a decrease in the amount of haulage for county councils and reduced carryings of agricultural limestone and sundry traffic.
CIE have been active since 1960 in the development of container services between this country and Britain under the trading name "Irish Ferryways". The first such service was established by the Board in 1960 in co-operation with British Road Ferry Services and co-operation continues with that concern's successor "Ferry Trailers Ltd." Irish Ferryways participate with the B and I in the unit load service between New Ross and Newport, Wales —the B and I providing the ships and Irish Ferryways the containers.
The operating profit on the hotels and catering service was £181,000, an increase of £25,000 on the previous year. The operating loss in the maintenance of the canals and operation of vessels was £86,000, a reduction of £12,000 on the 1966-67 figure.
Capital expenditure by CIE in 1967-68 amounted to £3.8 million. New road passenger vehicles introduced during the year included 130 Atlantean double deck buses, 16 tour coaches and 81 school vehicles. The equipment of rail and road freight services for the increasing trend towards unit load traffic continued and heavy gantry cranes were erected at a number of centres to facilitate the use of containers. As part of a bridge renewal programme, a new railway viaduct was provided at Malahide. This bridge, which is the largest pre-cast concrete bridge in Ireland, was designed, manufactured and erected by CIE personnel. A large computer installation was brought into operation which will provide more economic and more effective data processing. Other works included the renovation of stations and the improvement of car and passenger handling facilities at Rosslare Harbour.
As Deputies are aware, the Transport Act, 1964, set the amount of the annual grant payable to CIE, with the aid of which the board are required to breakeven, at £2 million. The amount of the grant may be varied at five yearly intervals commencing in the year 196970. The deficits incurred during the first two years of the initial five year period, 1964-65 and 1965-66, were contained within the limits of the annual grant with a small surplus to spare. In 1966-67, however, a net deficit of £2.398 million was incurred and the surplus remaining from the first two years was not sufficient to offset the excess of deficit over grant in that year. The position worsened with the deficit of £2.48 million in 1967-68 and, despite the recent increase in fares and rates, it is expected that the deficit in the current financial year will also exceed the amount of the annual grant. Because of the board's difficult financial position the Minister for Finance agreed to a deferment of payment by the board in 1967-68 of interest amounting to £309,364 on Exchequer capital advances and he has agreed to do the same for 1968-69.
The two main factors responsible for the increase in CIE's losses are (i) the upward moving costs of increases in pay and improved conditions of service and (ii) the losses incurred as a result of industrial disputes. Increases in labour costs bear very heavily on an organisation such as CIE where such costs amount to about 65 per cent of operating expenditure. It should, however, be noted that were it not for the effect of strikes within CIE since 1964, which cost the board an estimated £677,000, the break-even target could have been achieved for the four years ended 31st March, 1968.
As I have already indicated CIE are continually striving to lessen the impact of rising costs and have achieved considerable success in increasing productivity and attracting new business. I have asked the board to maintain their efforts in this respect so that the amount of the annual subvention may be kept within reasonable limits.
With the growth in volume of goods transported by road, changes in methods of distribution, establishment of new industries in rural areas and improvement in the motor vehicle, the pattern of freight transport throughout the country has been constantly changing. The evolutionary changes have been recognised in various concessions extended to licensed hauliers down through the years and this process continues. Following a review of road freight transport policy carried out in my Department in 1968, I removed the restriction on amalgamation of licences by transfer with a view to encouraging the emergence of large sized and more efficiently operarted units, allowed increases of up to 25 per cent in the lorry weights of vehicles which may be operated under licence and, in the case of all eligible licensees, agreed to extend the range of commodities they were authorised to carry to include merchandise of all classes.
I also established an inter-departmental study group to examine in greater depth the desirability or otherwise of further long-term measures to liberalise road transport for reward. The examination will be completed as speedily as possible but owing to the complex issues involved some time must necessarily elapse before the Study Group will be in a position to furnish its final report to me. I am at present studying an interim report on livestock haulage from the group and I hope to be able to make an early statement on the matter.
As Deputies are aware, Ireland is a member of the European Conference of Ministers for Transport. The Conference was established in 1953 but this country did not become a member until 1962. The membership of the Conference which has its headquarters in Paris consists of the Ministers for Transport of the following States: Austria, Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, United Kingdom and Yugoslavia. The United States and Canada are associate members.
The main purposes of the Conference are to secure the rational development of European transport and to co-ordinate the activities of international organisations working in this sphere. Problems dealt with by the Conference in recent years include the financial situation of the railways, road safety, the co-ordination of road traffic regulations, investment in transport, container traffic and preliminary studies aimed at the development of a general transport policy.
The Conference honoured me by electing me as Chairman of its Council of Ministers for the year 1968. The Council of Ministers meets twice a year, once in Paris and once in the country of the Chairman of the Conference. Accordingly the 27th Session of the Council was held in Dublin in June, 1968, and I am glad to say that the many delegates who attended from the various member countries were very favourably impressed by the efficient manner in which the arrangements for the meeting were organised.
Through our membership and in other ways we are able to keep in close touch with a common transport policy by the EEC countries so that we may be ready to adapt ourselves when necessary for membership of the community.
During 1967 Ireland adhered to an International Convention known as the TIR Convention. This Convention provided for the issuing of special carnets for exemption from Customs examination en route, of goods carried in road vehicles or in trailers or in containers throughout the international journey on one set of wheels. The Association of Irish Transport Operators and other interests which have been established under the name of Lastas Éireann Teoranta acts as issuing and guaranteeing association for the purposes of the Convention in this country. My Department is the Authority responsible for the issuing of certificates of approval in respect of the vehicles constructed to TIR requirements. A number of certificates have already been issued in respect of containers.
The reciprocal arrangement whereby licensed hauliers in the State contiguous to the border and licensed hauliers in Northern Ireland may engage in cross-border haulage for reward, has been continued. The arrangement will be subject to further review early this year and I am keeping the matter under close scrutiny with a view to ensuring that the traffic does not adversely affect our interests.
Óstlanna Iompair Éireann Teo. operate a chain of seven top-grade Great Southern Hotels situated at Killarney, Kenmare, Parknasilla, Galway, Mulrany, Sligo and Bundoran. In addition the Company opened a medium priced motor inn at Killarney in 1968 and will have their second motor inn in operation at Rosslare for the coming tourist season. In 1967-68 the operating profit earned by OIE was £160,417 as compared with £133,700 for the previous year. This increase was attributable in the main to a rise of 8.7 per cent in the number of bed nights sold and was achieved despite the unsettled international situation and the foot and mouth epidemic in Britain.
The British and Irish Steampacket Company made a total loss, after all charges, of £398,403 in the year ended 31st December 1967 as compared with a net profit of £86,019 in the previous year. The company were very badly affected in 1967 by the Livestock Dock Strike and by the foot and mouth epidemic, those two items alone costing the company £230,000. The balance of the loss was mainly due to exceptional development costs which totalled £130,372.
As I have indicated on other occasions, the whole basis and method of cross-channel shipping is changing rapidly, the old conventional type passenger and cargo carrying ships giving way to more specialised types of vessels and handling methods. Conventional cargo ships are rapidly being replaced by unit load vessels and the conventional passenger vessels by passenger/car ferries. The B and I company are well to the fore in effecting these changes. In the past few years the company have been changing over rapidly from conventional to unit load carrying. For passenger/vehicle transport, they introduced a new car ferry vessel on the Dublin/Liverpool route in May last. This year they will introduce a second vessel on that route and a car ferry vessel on the Cork/Swansea route. One of these vessels is being built at Cork Dockyard.
The company recently announced their long-term proposals in regard to freight services, namely, the operation of a fully automated unit load system via the Dublin-Liverpool route and a freight service on the Cork-Swansea ferry. These proposals involved the termination as from 1st January, 1969, of the Cork-Liverpool twice-weekly unit load service and its replacement by a liner train on a daily basis between Cork and Dublin for the carriage of containers for onward shipment to Liverpool. The company are satisfied that this would give shippers a better and cheaper service.
Considerable public concern was expressed, however, about the effect of this proposal on the port of Cork and on employment there. In these circumstances, the company, at my request, agreed to defer the implementation of this part of their proposals so that I could examine the matter fully in the light of the representations made by those concerned. The company have agreed to continue the existing service until May, 1969. In the interim period, full discussions and consultations in regard to the company's operations in Cork will take place.
Because of the effective closure of Fishguard to livestock services arising from the withdrawal by British Railways of the supply of cattle wagons to that port and also because of the underutilisation of the Cork-Birkenhead service by the cattle shippers, who have been chartering ships to meet their needs, the company's livestock services have been confined to the Dublin-Birkenhead route for some time past. The company are converting one of their existing general freight vessels for livestock carrying and this vessel, together with the two existing livestock vessels, will provide a guaranteed weekly capacity of 6,000 head of cattle.
This re-orientation of the company's operations involves very heavy capital investment but the board are confident that the profit which will be generated when the new assets are fully operational will be sufficient both to service the capital involved and to show a reasonable return on the State investment in the company. Apart from their importance in the company's own affairs the developments now taking place are significant in the context of the national economy in that the new car ferry services will be of increasing benefit to tourism while the unit load services will benefit our external trade by reducing transport costs and providing more efficient services.
Irish Shipping Limited made a small profit of £20,345, after all charges, in the year ended 31st March, 1968, as compared with a net loss of £67,471 in the previous year. The increase was due to an improvement in freight rates, greater efficiency in operation and administration and the elimination of certain uneconomic vessels.
During the year the company continued the recasting of their operations in order to achieve greater efficiency. Particularly noteworthy is that the company succeeded in cutting their administration costs by £60,000 in contrast to the general rising trend in recent years. The transatlantic liner services which the company had operated at a heavy loss were discontinued and were replaced by a service operated jointly with Manchester Liners.
The company also made arrangements during the year for the operation, in partnership with a British and French company, of a car ferry service between Rosslare and Le Havre. The service commenced in May, 1968, and has proved very successful, so much so that an increase in services in 1969 has been announced.
The company also took delivery of a new 38,000-ton dead weight bulk carrier, the "Irish Elm", which is being operated on a profitable long-term charter. The company also have on order two 29,000-ton dead weight bulk carriers for which long-term charters have been negotiated. The vessels, one of which is being built at Verolme Cork Dockyard, are due for delivery in September, 1969 and early in 1970.
In pursuance of the policy of disposing of the older and less economic ships, two vessels—the "Irish Maple", a dry cargo vessel of 11,671 tons dead weight and the "Irish Larch", a dry cargo vessel of 11,677 tons dead weight—were sold recently. Two smaller dry cargo vessels—the "Irish Rose" of 1,971 tons dead weight and the "Irish Fir" of 1,941 tons dead weight—have also been sold.
The preliminary indications are that the company's operations in the year 1968-69 will yield an appreciable profit.
The Shipping Investment Grants Bill, 1968, which provides for the payment of investment grants at a rate up to 25 per cent to Irish ship owners for the purchase of new ships and the conversion of existing ships, is at present before the House. Accordingly, I do not propose to elaborate on the scheme at present beyond saying that it should provide a considerable incentive to Irish ship owners to modernise their fleets, and also benefit the Irish shipbuilding industry.
With effect from 4th October, 1968, Ireland has implemented the International Load Line Convention, 1966, which replaces an earlier Convention of 1930. The load line, more commonly known as the Plimsoll line, is a marking on the sides of a ship to show the maximum depth to which the ship can safely be submerged. The Convention permits of the carriage of larger cargoes by vessels which apply the higher safety standards made possible by modern techniques, and makes provision for the first time for the very large sizes of vessels, especially tankers, now coming into use. The Convention, at the same time, in the interests of safety and in the light of statistical experience, has reduced the permissible submerged depth for smaller vessels.
The question of oil pollution continues to engage the attention of my Department. Ireland already subscribes to the International Convention for the Prevention of Pollution of the Sea by Oil, 1954-1962, the aim of which is to prohibit, or to allow only within specified mid-ocean zones, the discharge from tankers and oil burning vessels of oil or oil-contaminated water.
However, the "Torrey Canyon" disaster of March, 1967, has focussed world-wide attention on the fact that, even if the Convention were fully observed, the escape of crude oil from a tanker involved in a casualty or collision would still constitute probably the greatest source of oil pollution. This risk is magnified by the ever increasing size of tankers used.
By reason of the large volume of tanker traffic passing close to our shores, oil pollution is an ever present danger for us. The off-shore oil traffic is the greatest threat of pollution and the new traffic to Bantry represents in this context only a slight additional risk, particularly of a small-scale handling spillage, against which, however, every precaution must be taken. From the inception of the Bantry project my Department have, therefore, given particular attention to the precautions to be taken against pollution. Among the measures adopted are improved lighting facilities in the approaches to the bay, a buoyed approach channel to the terminal, centralised automatic control of the pipelines at the terminal and the pumping system on the ship, provision of a boom and oil recovery barge at the terminal to retrieve any escaped oil, and the provision of detergentspraying equipment at the terminal and on board the four service tugs and three launches in the bay. Our only previous experience of crude oil handling on a large scale has been at the Whitegate Oil Refinery, which has handled over 16 million tons of crude oil in the last ten years without any serious case of oil pollution.
I am sorry to interrupt the Minister, but there has been a considerable amount of oil spilled on to the beaches on the Meath coast during the last couple of weeks and it appears it is not possible to do anything with it. I do not know how it can be cleared for the summer. It is an awful mess and obviously has come off ships.
I am afraid they do not all observe the Convention.
Is there any way in which the State can help to have the beaches cleaned?
It is a matter for the local authority concerned.
Is it purely a matter for the local authority?
It is. As a result of world-wide reaction to the "Torrey Canyon" accident, the Inter-Governmental Maritime Consultative Organisation (IMCO) have undertaken urgent studies of all aspects of the problem including legal, operational and financial aspects. Ireland, as an active member of IMCO, is participating fully in these activities.
In addition, an inter-departmental working group set up by me is studying particularly the most effective and least harmful method of dealing with escaped oil at sea and on the coast, and the speediest and most efficient organisation of resources to combat pollution. The group will no doubt be greatly assisted in their work by the various scientific and governmental organisations in many countries which are also studying the problem.
There is a provision of £212,000 in respect of grants for harbours. Of this amount £100,000 has been allocated to Waterford, where a major improvement scheme, comprising the reconstruction of the north wharf to provide additional deep sea berthage and facilities for the port's rapidly expanding container traffic, is planned. These works are estimated to cost £430,000, and a grant subject to a maximum of £260,000 which represents 60 per cent of the cost, has been made available. The balance of the provision is for improvement works at Ballina, Drogheda, New Ross and the completion of a new jetty at Foynes, which is now in operation for the export of ore concentrates. Provision has also been made for an increased grant, from £15,000 to £44,000, to Sligo Harbour Commissioners, for the acquisition of dredging equipment.
I am glad to say that with the publication of a report commissioned by the cross-Channel shipping companies some progress has been made towards the goal of improving port productivity and better conditions for dockers at Dublin port. I do hope that progress will continue to be made and that the objectives will be attained in the near future in the cross-Channel section of the port. I also look forward to progress being made towards securing the decasualisation of dock labour and increased productivity in the deep sea section.
Aer Lingus incurred an operating loss of £140,479 on cross-Channel and European operations in the year ended 31st March, 1968 compared with a profit of £315,885 in the previous year. Revenue increased by 3 per cent to £11,315,606 while expenditure increased by 7 per cent to £11,456,085. In the same period Aer Lingus carried 1,159,400 passengers, a decrease of 5 per cent on the previous year. Freight carried by the company during the year amounted to 24,760 metric tons, an increase of 6 per cent. These figures again reflect the changing character of traffic with the advent of car ferry services, foot and mouth disease precautions and to some extent the British recession. A growth by 6 per cent to 130,000 in passenger traffic between Ireland and the Continent offset to a great extent the decreases on the British services. Aer Lingus maintained their services on all routes during 1968 and on 29th May inaugurated a non-stop service between Dublin and Madrid.
For the winter 1968-69 Aer Lingus, in co-operation with the Irish hotel industry, car hire firms and other tourism interests, arranged a wide variety of inclusive tours to attract visitors to Ireland. The tours which are available through travel agents in North America, Britain and the Continent are expected to attract over 10,000 visitors from these countries who are estimated to spend £500,000 in Ireland.
Tours for visitors from Britain are marketed under the title of "Value Holidays" and provide a range of 31 different types. The programme, which includes self-drive car holidays, golfing holidays, fishing holidays and racing week-ends is expected to attract 5,000 British visitors. A similar programme of winter holidays for British visitors had been planned for the winter of 1967-68 but had to be abandoned due to the foot and mouth outbreak. Aer Lingus now have sales offices in 14 European cities and winter and offseason selling has become an urgent priority for the company's sales force. It is expected that sales promotion should attract 1,000 continental visitors to Ireland in the 1968-69 winter season.
The Aer Lingus North American winter tour programme was first intro duced in 1966 and in that year 800 visitors were attracted to Ireland. In 1967-68 the figure exceeded 2,500. In the winter of 1968-69 it is hoped to attract 4,500 from the U.S. and Canada. Tours for North American visitors are (a) auto vacations round Ireland which include a self-drive car, hotel accommodation, tickets to the theatre in Dublin and medieval banquet at Bunratty Castle and (b) 15-day conducted tour of Irish beauty spots, sight-seeing tour of Dublin and an evening at a cabaret in a Dublin hotel. In support of their programme Aer Lingus are spending £125,000 on a press and radio campaign in North America.
Our transatlantic airline continues to operate satisfactorily. In 1967-68 Aerlínte made an operating profit of £1,336,140, compared with a profit of £790,000 in 1966-67. This is the highest profit yet made by the company and reflects their very satisfactory progress on the North American routes. During the year ended 31st March, 1968, Aerlínte's passenger traffic rose by 21 per cent to 213,442 while freight increased by almost 9 per cent to 4,545 metric tons. Once again, the airline had the highest load factor of all operators on the North Atlantic route due to the company's intensive promotional activity mainly in North America. The Aerlínte service between Shannon and Chicago via Montreal inaugurated in May, 1966, has developed strongly and as from 1st June, 1969, Aerlínte propose to provide a direct service to Chicago daily except on Sundays when it will operate to Chicago via Montreal.
The present fleet of Aer Lingus consists of 14 Viscounts and four BAC One Eleven jet airliners, while Aerlínte operate with four Boeing 320's and two Boeing 720's. The fleet proposals of the air companies involve the operation by Aer Lingus of a mixed jet fleet of Boeing 737's and BAC One Eleven aircraft and the purchase by Aerlínte of Jumbo Jets. Standardisation of equipment to a maximum degree is evidently sound policy.
During the year ended 31st March, 1968, the air companies secured new office premises at 5th Avenue, New York, and opened a new booking office in Regent Street, London. They also acquired an office in Poland Street, London. The companies' premises at Nos. 40 and 41 Upper O'Connell Street have been leased for the construction of a hotel in which the company will have a new passenger booking office.
The combined financial results of Aer Lingus and Aerlínte for 1967-68 showed an operating profit of £1,195,661, an increase of £89,736 over the previous year. Revenue increased by 11 per cent to £24,038,131 while expenditure rose by 11.5 per cent to £22,842,470.
The joint total revenue of the two air companies in 1967-68—£24 million, made up of £11.3 million earned by Aer Lingus and £12.7 by Aerlínte— will, it is currently anticipated, increase to £30 million for 1968-9, an increase of 25 per cent.
The capital programme of the two companies over the next five years involves capital expenditure of an unprecedented magnitude, due to the rapid technological changes taking place in the world air transport industry. The emergence of the giant Boeing 747's (Jumbo Jets) together with the changeover to jet aircraft by Aer Lingus' competitors on the short-haul routes and the resulting fleet requirements of the air companies have implications for their capital structure which may require legislation in the near future.
The profitability of an air company, assuming good management and established productivity growth techniques, varies in different periods according to the relative impact of the following factors: accelerating demand; competition from surface transport, e.g., car ferry operations; surges of charter traffic at cheap rates where revenue earning potential may be low in initial stages; competition with other airlines under bi-lateral agreements; devaluation costs; initial impact of loan repayments on aircraft coming into new operation and on computer reservations systems and offices; wage costs exceeding rates at which fares can be increased; world and area economic recessions and booms. The pattern of the air companies' increases can be related to these factors. The overall progress of the companies is evident.
Since the passage of the Air Companies Act, 1966, Aer Rianta's functions have been confined almost exclusively to the management of Dublin Airport on my behalf. Early last year I announced that the company would be given responsibility for the management of Shannon and Cork airports on the same basis as the company manage Dublin Airport at present as my agent. Arrangements are being made for the transfer which I expect will become fully effective by 1st April, 1969. It is intended in the light of the experience gained by the new management to enact legislation in due course to establish a statutory body as an airports authority with responsibility for the three State airports. It is unlikely that this legislation will be enacted before the summer of 1970. As I have indicated to the House on a number of occasions in the course of the year, the interest of the staffs at Shannon and Cork airports involved in the change in management will be safeguarded.
The Shannon Free Airport Development Company's finances are provided from the Exchequer by way of (i) grant-in-aid to meet running expenses and grants to industries, (ii) housing subsidy and grants, (iii) share capital for the construction of factories and (iv) repayable advances for the provision of housing and community services.
The Shannon Free Airport Development Company Limited (Amendment) Act, 1968, which became law on 11th June, 1968, increased the limits on (a) the total amount which the Minister for Finance may subscribe in taking up shares in the Company to £8 million, (b) the aggregate of grant-in-aid to £6 million and (c) the total amount of repayable advances to £7 million.
The allocation of grant-in-aid provides an amount to meet running expenses (subhead K.1) and an amount in respect of grants to industries (subhead K.2). The grant-in-aid towards running expenses is arrived at after taking account of receipts from the company's revenue earning activities— mostly rents from factories and houses. The provision for 1968-69 is £300,000 or £100,000 more than for 1967-68. The increased allocation includes provision for promotional expenses related to the achievement of the growth in tourist numbers and industrial employment projected for 1968-69. The grant-in-aid in respect of grants to industries amounts to £400,000 or £100,000 more than for 1967-68. This reflects the increasing rate of industrial development at Shannon. Up to 31st March, 1968 the total amount paid to the company by way of grant-in-aid for running expenses and grants to industries was £2,855,500.
Grants are also payable for housing subsidies (subhead K.3) and housing grants (subhead K.4). The amount of subsidy payable for each dwelling is the difference between the economic rent and the rent actually charged. The total amount paid by way of subsidy to 31st March, 1968 was £178,100 and the provision for 1968-69 is £57,000. The housing grants payable to the company are equivalent to those available to private persons and public utility societies under the Housing Acts. The total amount paid to 31st March, 1968, was £104,340 and the provision for 1968-69 is £35,000.
The allocation for 1968-69 of share capital for factory and warehouse construction and repayable advances for houses and community services is £1,850,000. This is an increase of £750,000 on the allocation for 1967-68. The amount of share capital and repayable advances paid to the company up to 31st March, 1968, was £8,101,000.
The company have been making steady progress in attracting new industries to Shannon. At 31st March, 1968 there were 25 manufacturing and five warehousing concerns in operation at the Airport. From 1st January, 1968, to the end of February, 1969, nine manufacturing concerns and businesses had contracted to commence operations. Of these, three are Irishowned or part-owned. In addition 12 commercial and service concerns were operating on 31st March, 1968, with a proposal for a further concern under consideration. The commercial activities include data processing and consultancy and trading business.
A total of 60 factories and ten warehouses were occupied at 31st March, 1968. Twelve more factories and two warehouses were under construction and a further 31 sites have been reserved by existing firms with a view to expansion of their activities. The total area of completed factories, warehouses and offices at 31st March, 1968 was 1,057,000 sq. ft.
In the calendar year, 1967, exports from the industrial estate amounted to £32.6 million and imports were valued at £22.5 million leaving a net balance of £10.1 million. This balance gives an idea of the volume of work being carried out at the industrial estate and its contribution to the country's balance of payments. Of the total national exports of manufactured goods in 1967, 29 per cent came from Shannon. In relation to total national trade in 1967, Shannon accounted for 10 per cent of total exports and 5 five per cent of total imports.
Air freight generated by the industrial estate in the year 1967-68 was 3,631 metric tons, an increase of 65 per cent over the previous year. It accounted for over half the total terminal air freight at Shannon.
The company promote tourism through Shannon in conjunction with other promoting bodies including Bord Fáilte, the air companies and CIE. This promotion is reflected in the growth of terminal passenger traffic at Shannon. Terminal traffic in the year ended March, 1968, exceeded 320,000, the highest figure in the airport's history. The tours, banquets and other tourist activities promoted by the company catered for over 100,000 in 1967. Tourist income in County Clare is, in fact, well over £1 million.
Following the success of their tourism promotion to date, the development company are now promoting development in the new field of providing traditional style cottages for letting in counties Clare and Limerick. It is expected that there will be a strong demand for this type of accommodation from North America, Britain and the Continent. It is planned to have the accommodation available from the beginning of the 1969 tourist season.
At 31st March, 1968, 3,942 people (2,238 males and 1,704 females) were employed in the industrial estate. The number at the end of January, 1969, was 4,150. The total employment in the whole Shannon complex at 31st March, 1968, was over 6,000 people and their total annual income has been conservatively estimated as being in the region of £4 million. The number of people then resident in the Shannon community was 2,128. A total of 433 houses and 137 flats had been constructed by the company for rent or sale and almost all of these were occupied or allocated. A further 140 houses were under construction and planning was in progress on an additional 170 houses.
In addition to the company-built houses, 28 had been constructed by private builders on developed sites provided by the company and 14 such houses were in course of construction. Arrangements have been completed with a speculative builder who proposes to build further houses for sale. The Clare County Council also plans to construct houses in the new town. However, the bulk of the housing requirements at Shannon will have to be provided by the company for a number of years to come. In addition to housing developments, certain community services have been provided by the community, the company or by other authorities. These now include two churches, a comprehensive school, a community hall, two primary schools, shops and recreational and library facilities.
As I indicated when presenting the recent amending legislation to the House, the company are satisfied that the minimum viable community which must be aimed at in Shannon's particular geographic environment is one of not less than 6,000 people and planning is geared to attaining this objective early in the 1970's.
Deputies will be aware that it has been decided to expand the company's functions to enable them to function as an organ of industrial development in the Clare, Limerick and North Tipperary region. In this respect and in respect of industrial and related matters at the Shannon Industrial Estate, the company will report to the Minister for Industry and Commerce. The company will continue to report to me on their tourism and aviation activities.
In retrospect I look with pleasure and pride at the success of the industrial estate. The success of this promotional venture is due to many factors. In my view the pre- and postcare service for industrialists so well administered by the chairman, board and staff, are pre-eminent and of greater importance than the customs free area and the Government aids which are comparable with those available elsewhere. The success of Shannon Industrial Estate, as the House knows, has led to the now increasing emphasis on industrial growth centres.
In 1967 Dublin Airport showed decreases in both passenger and freight traffic compared to 1966. The passenger traffic at 1,526,900 represented a decrease of one per cent but freight traffic at 30,273 metric tons was down by 11 per cent. The reductions were due to the economic situation in Britain, the restriction on travel caused by the foot and mouth epidemic, diversion of traffic to the surface car ferry services and the withdrawal of the air car ferry service. The position showed an improvement in 1968 with an increase of three per cent in passenger traffic and 12 per cent in freight traffic.
As well as Aer Lingus, regular services are operated to and from the airport by eight foreign operators— British European Airways, BKS Air Transport Ltd., British Midland Airways Ltd., Cambrian Airways, British United (CI.) Airways, Autair International Airways, Scandinavian Airlines System (SAS) and Iberia Airlines.
Horse ferry services continue to be operated at the airport.
Dublin Airport has been bursting at the seams for some years past. Down the years traffic has out-grown the most optimistic concepts of the original designers. Past traffic growth and future projections leave no alternative to a large scale development programme over the next five years or so. In 1967, Aer Rianta, who are charged with the management of the airport, commissioned a firm of US consultants to advise on the planning of a new passenger terminal. A scheme, based on their report, has been prepared. The consultants were favourably impressed by the layout they found at the airport and had no difficulty in formulating a scheme for a new terminal which would dovetail with the existing complex and give a highly functional airport not only on completion of the new terminal but during the intermediate stages while the terminal and related services were being developed.
The scheme proposes that the terminal should be centred on the existing Pier No. 2 which is the pier more remote from the existing terminal building. A further pier would be provided on the south side of the new terminal. The eventual complex would consist of the central terminal with three piers stemming from it. Pavilions would be provided at the ends of the three piers around which aircraft would be closely parked in a "nose-in" manner. The existing terminal building would be used for the technical and other services which do not require to be housed in the central passenger handling area. Detailed planning of the new terminal and of the manner in which it will be phased over the coming years is well advanced.
It is also proposed over the next five years to provide an new east-west runway as well as additional apron and taxiway facilities. Provision is also being made in planning for the provision in due course of a second east-west runway parallel to the first to take care of future traffic growth. This second runway may not be required for possibly ten or 15 years but there is no doubt that it will be required ultimately. Substantial works at present in progress include the provision of a new cargo terminal which is nearing completion, a new catering building and approach road.
The capital expenditure on Dublin Airport up to 31st March, 1968 amounted to about £5,659,000. For the year ended 31st March, 1968, total revenue at the airport was £995,000 and expenditure was £793,000, the operating surplus therefore being £202,000. When allowance is made for depreciation and interest on capital expenditure amounting to about £484,000, the overall deficit on the airport in 1967-68 was about £282,000. If, however, the airport accounts are relieved of air navigation charges, in keeping with procedures in other countries, the overall deficit becomes a surplus of about £24,000.
The total number of passengers at Shannon Airport in 1967 increased by 19 per cent to 558,000; terminal traffic increased by 21 per cent. Terminal traffic has been increasing steadily for some years and the drop in transit traffic was halted in 1967 when it too increased by 14 per cent to 144,000. Total freight traffic at the airport amounted to 18,400 metric tons, an increase of 4 per cent over the 1966 total. Terminal freight increased by 23 per cent to 8,500 metric tons. The growth rate was maintained in 1968 when the total number of passengers increased by 29 per cent to 719,000; terminal traffic increased by 12 per cent to 462,600. Total freight increased by 61 per cent to 29,700 metric tons while terminal freight increased by 30 per cent to 11,000 metric tons.
In addition to Aerlínte, scheduled transatlantic services are operated to Shannon by Pan-American Airways, Trans-World Airlines, Air Canada, KLM (Royal Dutch Airlines), Air France and Seaboard World Airlines. In 1969 turn round flights will continue to be operated by Trans-World Airlines and Pan-American Airways as in previous years.
The Aer Lingus services between Shannon and Belfast, London and Manchester continue to operate; British European Airways also operate on the Shannon-London route as in previous years. A new service between Shannon and Dusseldorf was inaugurated in May, 1968. The Shannon-Paris service has been discontinued as an alternative service at a higher frequency is being provided by Air France.
The turnover of the Shannon Airport Sales and Catering Service for the year up to 31st January, 1968, was a record £2.36 million, an increase of £0.56 million on the previous year. The total net profit for the year was £105,000 as compared with £62,000 in the previous year, when the first impact of the American Government restrictions on duty-free imports imposed in October, 1965, was experienced for a full year.
The growth in traffic and the advent of the giant B747 aircraft will require fairly elaborate and costly works at Shannon. The greatest need is extended passenger handling accommodation. Existing accommodation for customs clearance, check-in and catering needs is already fully taxed. The additional accommodation required will be provided by the extension of the existing terminal complex to the west. The extension will be in the form of a new arrivals and departure building of sufficient size to accommodate 1,500 arriving passengers and the same number of departing passengers at the one time. A pier building parallel to the front of the extension will also be constructed. This should take care of our needs in this area for a considerable number of years to come. There will be provision for a further extension when traffic growth requires it. The arrival and departure areas of the existing building will be used to provide extended check-in and other facilities. It is also proposed to provide a new catering block in which all airport and flight catering will be concentrated. Planning is at an advanced stage and work started in January of this year. Considerable additional apron space will also be required. Other major works at present under consideration include the provision of additional taxiways, the extension and strengthening of a second runway suitable for use by future aircraft and the extension of the main runway.
The total capital expenditure on Shannon Airport up to 31st March, 1968, amounted to about £6,405,000. For the year ended 31st March, 1968, total revenue at the airport was £1,344,000 and expenditure was £1,047,000, the operating surplus, therefore, being £297,000. When allowance is made for depreciation and interest on capital expenditure, amounting to about £564,000, the overall deficit on the airport in 1967-68 was about £267,000. If, however, the airport accounts are relieved of navigation charges, the overall deficit becomes a surplus of about £139,000.
The conditions affecting traffic at Dublin Airport also affected Cork with the result that the pace of activity there slowed down. Passenger traffic went up by 5 per cent to 167,700 but freight dropped 64 per cent to 760 metric tons. In 1968 passenger traffic declined by 3 per cent to 163,000 while freight traffic also declined by 3 per cent to 740 metric tons. Regular services are operated to Cork by Aer Lingus and Cambrian Airways.
The total capital expenditure on Cork Airport up to 31st March, 1968, amounted to about £1,568,000. For the year ended 31st March, 1968, total revenue at the airport was £118,000 and expenditure was £213,000, the operating deficit, therefore, being £95,000. When allowance is made for depreciation and interest on capital expenditure amounting to about £137,000, the overall deficit on the airport in 1967-68 was about £232,000. If, however, the airport's accounts are relieved of air navigation charges, the overall deficit is reduced to about £128,000.
There have been very few complaints of noise disturbance at the airports. All practical measures consistent with safe operation are taken to minimise this nuisance. For instance at Dublin there are no scheduled flights by jet aircraft between approximately 11 p.m. and 7 a.m. and special noise abatement procedures are used where applicable. Arrangements have also been made with the Institute for Industrial Research and Standards to measure noise levels at Dublin Airport and from these to obtain typical noise contours. This information will be necessary for any further abatement procedures that may be devised.
Deputies will be aware of the problem of sonic boom which may arise with the introduction in the near future of large passenger aircraft flying at supersonic speeds. Legislation is in the course of preparation to restrict such flying over Irish territory. It is proposed to introduce the legislation at the point where reports show that the boom would be obnoxious and inimical to the tranquillity of the Irish countryside. It will, of course, be difficult to enforce the restrictions provided for by law without full international co-operation. Accordingly, I have had the matter raised at international level. I am glad to say that the International Civil Aviation Organisation at its assembly in Buenos Aires in September, 1968, accepted the resolution put forward jointly by Ireland and some other European countries in this matter. Briefly the resolution provides for action to achieve international agreement on common procedures for measurement and control to ensure that no unacceptable situations are created for the public.
The provision for tourism takes the form of four grants-in-aid to Bord Fáilte Éireann under subheads F.1, F.2, F.3 and F.4.
I am proposing that the provision under subhead F.1 for 1968-69 should be £3,100,000. This grant-in-aid provides for the financing of all the activities of Bord Fáilte, except the specific grant schemes for the development of major tourist resorts and the development of holiday accommodation. Out of this main subhead, the board meet the cost of all their marketing activities including printed publicity, advertising, the operation of overseas offices and various promotional activities. The subhead also covers the general expenses involved in the administration and operation of the board, including a wide range of activities such as improvements at minor resorts, the carrying out of various access and amenity works at national monuments and places of special interest, the provision of road amenities and signposting, the payment of interest grants on loans raised for accommodation and resort development, the promotion of angling, game shooting etc., and assistance for festivals and for special sporting and cultural attractions. The provision under this subhead shows an increase of £542,000 over the total amount voted for 1967-68 (having taken account of a Supplementary Estimate voted in March, 1968) and this should enable Bord Fáilte to continue and intensify their programme for the development of the tourist industry.
The moneys in subhead F.2 are used to finance the scheme for the development of major tourist resorts. As Deputies will be aware, the scheme is carried out in co-operation with the local authorities and local development interests, who must contribute at least 20 per cent of the cost of the development works. The provision this year is £400,000 which, taking into account the reallocation of funds after the Supplementary Estimate taken in March, 1968, represents an increase of £150,000 on the amount issued under this subhead last year. Under the Tourist Traffic Act, 1966, there is an overall limit of £3.25 million on the sums that can be expended on this scheme. The allocation of £400,000 this year will bring total State expenditure up to 31st March, 1969, to nearly £1.9 million and this will have been accompanied by a further expenditure of about £650,000 by local authorities and local development bodies.
Progress reported; Committee to sit again.