That a supplementary sum not exceeding £10 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1970, 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.
Deputies will recall that the Vote for Transport and Power was passed without a debate on 20th November, 1969, and that a Supplementary Estimate for tourism was passed on 5th December, 1969. The purpose of this token Supplementary Estimate is to enable the Dáil to discuss the main Estimate.
The principal increases in 1969-70 are in the provisions for grants for harbours, £148,000 (subhead E); grants-in-aid under the Tourist Traffic Acts, £850,00 (subheads F1 and F3 including the Supplementary Estimate already passed); acquisition of land, buildings, etc, at airports £71,000 (subhead G1); constructional works at airports £750,000 (subhead G2); radio equipment £84,250 (subhead I); rural electrification £121,500 (subhead N); investment grants for ships £2,024,000 (subhead S). Small increases in other subheads amount to £28,260 bringing the total increases to £4,077,010.
The decreases in 1969-70 are in the provisions for Post Office services £16,000 (subhead B2); equipment stores and maintenance £54,650 (subhead C); Córas Iompair Éireann redundancy compensation £8,000 (subhead D2); transport of staff £9,000 (subhead H); small decreases in other subheads amount to £7,590. Owing to the transfer of the management of Shannon and Cork Airports to Aer Rianta Teoranta with effect from 1st April, 1969, there are no provisions in the current year's Estimate for maintenance works at airports or for fuel, water, light and cleaning at airports. This gives decreases of £152,200 and £91,500 respectively, bringing the total decreases to £338,940. To this amount must be added the increase of £172,070 in appropriations-in-aid which is equivalent to a decrease in the net grant and brings the total decrease to £511,010.
The increase in appropriations-in-aid is due mainly to increased estimated receipts from Eurocontrol organisation, £71,000, and from the sales and catering service, Shannon Airport, £67,000.
On the basis of actual increases and decreases as stated above, namely £4,077,010 increase and £511,010 decrease, the net increase compared with the 1968-69 provision is £3,566,000.
As the House will be aware, the Department of Transport and Power has overall responsibility for air, sea, road and rail transport, for harbour development, for fuel and power and for tourist development. Many of the activities in these fields are, under statute, the responsibility of State-sponsored organisations and the role of the Minister and the Department in relation to these bodies is analogous to that of a holding company. There is also an extensive range of functions discharged directly by the Department including activities designed to ensure safety of operations in the field of transport.
Although there are a large number of bodies that can be described as State-sponsored, those operating in the sphere of transport, tourism and power are of great significance. They comprise Aer Rianta and the two air companies, the two shipping lines, B & I and Irish Shipping Ltd., CIE and its hotels subsidiary Óstlanna Iompair Éireann Teo., the ESB and Bord na Móna, Bord Fáilte Éireann and Shannon Free Airport Development Company Ltd., which is answerable to the Minister for Transport and Power in respect of its aviation and tourism activities. The various scheduled harbour authorities must be added to this list.
It will be clear that these bodies constitute an important force in our economic development. In terms of direct employment, the four major bodies—CIE, the ESB, the air companies and Bord na Móna—provide jobs for 40,000 people, or approximately two-thirds of the total employment in the State-sponsored area. Moreover, the activities of these bodies provide a stimulus in many other areas and, when account is taken of this factor and the multiplier effect of tourists' spending, the significance of the State-sponsored bodies will be clearly evident. A further measure of the importance of the transport and power sector is the fact that in the current year capital investment arising in the sector accounts for one-third of the total public capital programme.
I do not propose to take up the time of the House with a detailed review of the current activities of each of the State-sponsored bodies. The annual reports of these bodies have all been presented to the Oireachtas and Deputies have received copies of them. In addition, I have circulated to Deputies some notes which include summaries of the recent results recorded by each body. These documents between them contain a great deal of information on the affairs of the State-sponsored bodies and, in the circumstances, I consider that the most appropriate course for me in addressing the House would be to comment generally on the financial results, on important developments and trends and on future prospects One exception is in relation to the affairs of CIE. I have introduced legislative proposals to provide additional finances for CIE and this has provided Deputies with an opportunity for a comprehensive debate on the affairs of that body. Neither should it be necessary to deal with tourism in any detail in view of the recent debate on the Supplementary Estimate for Bord Fáilte.
I propose to deal first with the fuel and power sector. Deputies will have seen from their copies of the Annual Report of the Electricity Supply Board for 1968-69 that our national consumption of electricity continues to increase at a very high rate. The high rate of growth in demand, which is among the highest rates in Europe, gives us cause for considerable satisfaction as it is a good indicator of increasing economic activity and improving living standards.
Nevertheless, in the present situation when capital is expensive and relatively scarce, the sustained and continuing growth in demand raises considerable problems of finance for new generating and distribution capacity. Over the next seven years or so demand for electricity is expected to double and the Electricity Supply Board must commission as much new generating plant in this period as has been constructed since the Shannon scheme began, over 40 years ago. The electricity industry is, of course, an industry absolutely basic to national growth and it cannot be restricted in its essential capital development, high though its capital requirements may be. Over the last decade, the capital requirements of the ESB have amounted each year to about one-eighth of the total State capital budget. The board's capital expenditure is now running at about £20 million a year. Formerly the board could obtain their capital requirements from the Irish market and by the reinvestment of their depreciation reserves. This is no longer possible. Their requirements now exceed what is available from these sources and recourse must be had to foreign borrowing. Loans, generally, are not now available for the long terms—20 or 25 years— for which the board were in the habit of borrowing to allow of amortisation over the full life of the assets. The shorter term loans available, often repayable by annual instalments, will create quite a problem for the board in finding from revenue the repayment instalments as well as the normal contribution to the year's new capital finance.
Despite these additional financial burdens, the ESB have so far managed to keep electricity prices down to a level which compares very favourably with electricity tariffs abroad. The board are, of course, required by statute to balance revenue and outgoings, taking one year with another. In 1968-69 they had a deficit of £343,000 which is quite small in relation to their total turnover of £38 million. Their costs continue to rise, however, and an increase in charges has therefore been necessary. The increases, which have already been announced, will come into effect on 1st January, 1970.
Deputies will be interested to know that the average price per unit sold in 1968-69 was less than the corresponding price in the year 1958-59, despite the depreciation in the value of money in the interval. The figures are 2.06 pence per unit in 1968-69 as against 2.14 pence per unit 10 years ago. The board's revised tariffs, after the increase which comes into effect in January, will still compare favourably with most west European tariffs, especially for domestic consumers. Admittedly, there is cheaper power for big industrial users in Norway, Sweden and Switzerland, but in these countries hydropower is prominent or predominates. British, French and Dutch tariffs for big industries give about the same order of costs to the user as those of the ESB. It is a major challenge to the ESB to maintain electricity prices here at attractive levels. More densely populated and industrialised countries have much more favourable conditions for minimising distribution costs and getting the cost advantages of very large generating plant, including nuclear plants, which require a very high load factor.
During 1968-69 the board made 8,725 new connections in rural areas. Work under the rural electrification post-development scheme continues. The reductions in high special service charges—which some consumers were required to pay because of the high cost of connecting their premises— arranged by the Government in June, 1968, have proved very popular. Far more people than had been expected now find it possible to accept the board's terms for supply, according as their areas are reached under the post-development scheme.
These increased acceptances, coupled with the increased demand from existing consumers and the need to provide supply to priority cases such as new rural industries, schools, hospitals, etc. have inevitably affected the progress of the post-development scheme. Thus, while the board are working to the full limits of their capital resources and the number of rural connections remains high, the progress of the scheme, in terms of areas completed, is not as fast as was expected. This year about £2.6 million will be spent on the scheme. The amount provided for in the estimates this year to amortise the State capital already made available for rural electrification is almost £1 million. The total capital cost of the scheme to the end of March last was nearly £44 million, of which almost £14 million was provided by State subsidy.
Because many rural consumers do not give an economic return on the capital involved in giving them supply, despite the State subsidy, substantial deficits are incurred by the ESB on rural sales of electricity. In 1968-69, the revenue deficit on rural account was over £2 million. This deficit, which has to be borne by the board's nonrural consumers, is likely to increase in years to come according as additional uneconomic extensions of supply are given. Nevertheless, it remains Government policy that as many rural houses as possible be connected to the electricity supply on reasonable terms.
The total of the actual capital expenditure of the ESB plus their commitments is at present nearing the limit of the capital expenditure which the board are authorised to incur for general purposes, viz. £225 million and the Electricity (Supply) (Amendment) Bill, 1969, which I have recently introduced, proposes to increase the limit to £290 million. General purposes, in this context, means all purposes except the electrification of rural areas, which is separately provided for in legislation. The extra £65 million will enable the board, in due course, to enter into contracts for additional generating plant—probably two 200/240 megawatt oil-fired units—and the ancillary transmission and distribution equipment.
Nuclear generating plant is not yet competitive with conventional fossil fuel plant in the sizes which the ESB could use economically. It is to be expected that with the technological development of nuclear generating plant and the growth in unit size of ESB plant the board must be prepared to plan for nuclear capacity in due course. Another reason for considering nuclear capacity is our growing dependence on oil. For these reasons, the ESB are training engineers in nuclear technology so that the technical competence for the design and construction of a nuclear power station will be available when it is required.
I hope to introduce a Bill shortly which will empower me to set up a board which will advise on the implications for this country of developments generally in the nuclear field.
Bord na Móna had the benefit of above-average weather conditions in the 1968 production season and this was reflected in record production. The 1969 season was also very successful with all production targets met and those for miled peat considerably exceeded.
In 1968-69 the board had an operating surplus of £1,267,000. Interest on Exchequer advances, had it been paid, would have reduced this surplus to £14,000. However, as a result of the difficult financial position of the board in recent years, caused by a succession of poor harvesting seasons, the Turf Development Act, 1968, was enacted to give the board temporary relief from their obligations to pay interest on capital advanced from the Exchequer. Interest totalling £3,086,000 due in respect of the period of 2½ years ended on 1st April, 1969 has been waived and a further £570,000 due on 1st October, 1969 has also been waived, bringing the total amount of interest waived so far to about £3.66 million.
Repayments of Exchequer advances were also deferred under the Act. By 1st October, 1969, the total of the capital repayments outstanding was £1.46 million. The board have made a payment of £466,000 in reduction of this amount and they hope to pay the balance by 31st March next.
The financial breathing space for Bord na Móna which was provided by the 1968 Act has another year to run and, notwithstanding the improvement in the board's financial position, resulting from the interest waivers and two good production seasons, it seems likely that further waivers of interest will be necessary during the remaining year if the board's deficit is to be eliminated. At 31st March, 1969 the accumulated deficit had been reduced to £1.7 million from £4.8 million at 31st March, 1968.
On the passage of the 1968 Act, consultants were appointed to take a new and searching look at the overall operations of the board. They were to examine the affairs of Bord na Móna, both from the engineering and financial standpoints, and to assess future prospects. The consultants are nearing completion of their investigation and I expect to have their final report before the end of the current financial year.
When this report is available, we will have a better idea of the board's prospects and be in a position to decide what measures are necessary to put the board in a sound financial position for the future. In this way, Bord na Móna's substantial contribution to the national fuel requirements, both for direct consumption and for electricity generation, as well as the preservation of the jobs of over 6,000 employees, can be assured.
I may mention that the full expansion of the turf for the electricity programme will be reached with the construction of an additional 40 megawatt generating unit at Shannonbridge, County Offaly. This unit, which I hope will be commissioned by 1973-74, will be fuelled from the Garryduff group of milled peat bogs, centred in County Galway, which are being developed by Bord na Móna. It is expected that the development of the bog and the extension of the station will provide about 215 permanent and 40 seasonal jobs for men.
Moving on now to transport affairs, I shall deal firstly with developments in civil aviation. Traffic at Shannon Airport continues to increase. Total passengers in 1968 were up by 29 per cent to 719,000, an increase of 12 per cent in terminal passengers to 463,000 and an increase of almost 80 per cent in transits to 256,000. Terminal traffic continues to build up satisfactorily and it was heartening after a long downward trend to see transits increase for the second year in succession. The upward swing has continued for the first nine months of 1969 when total passenger traffic was up 30 per cent to 759,000. As to the future, air traffic is forecast to increase at about 13 per cent a year and this underlines the great potential of Shannon which is well placed to participate in and benefit from the expansion.
Shannon continues to attract training programmes of major airlines and has been chosen by BOAC for their Jumbo jet training. Aer Lingus, BEA and KLM also use Shannon for training.
Air traffic at Dublin Airport has now a strong competitor in the surface car ferries. This and other considerations caused a decline in 1967. As time goes on, however, air traffic will be able to contain this competition and resume its normal expansion. There was a recovery at Dublin in 1968, when passenger traffic increased 3 per cent to 1,572,000 and freight was up 12 per cent to 34,000 metric tons. There was a further improvement in the first nine months of 1969 with an increase of 8 per cent in passengers and 13 per cent in freight.
Cork Airport was also affected by the increased competition from the surface car ferries. Passenger traffic was down 3 per cent to 163,000 and freight also down 3 per cent to 740 metric tons. Here again, there was a recovery in the first nine months of 1969 with an increase of 5 per cent in passengers and 19 per cent in freight. Aer Rianta have now taken over the direct management of Cork Airport and are co-operating with local interests to develop traffic.
Success will depend largely on the extent of the co-operation which will be forthcoming from local interests. This is particularly so in the case of freight and tourist traffic. Tourism, by way of package tours and charter flights, is one of the most promising areas of growth. It was obvious, too, that Cork Airport should help in the industrial development of the area. Both these fields point to greater use of the airport by the local community.
Expenditure for the year on the operation of the three State Airports at Shannon, Dublin and Cork, including the cost of airport management and of the associated air traffic control, radio and meteorological services, amounted to £2,961,000, but this was more than covered by the revenue from landing fees, concession fees, catering surplus, and other sources, to give a cash surplus of £423,000. However, after depreciation and interest on capital expenditure at airports was charged, there was a net deficit of £847,000 on the three airports compared with a net deficit of £780,000 in the previous year. The overall deficit of £847,000 was made up of, Shannon £212,000, Dublin £362,000, and Cork £273,000. A feature of the Shannon operations was the continued expansion of the sales and catering service, which made a record profit of £278,000 for the 14 months to the 31st March, 1969.
With a view to increasing airport revenue and making the operation of the airports a more viable proposition, landing fees were increased with effect from 1st April, 1969, by 20 per cent at Dublin and Shannon airports. The additional revenue expected in 1969-70 from the increase is in the order of £300,000.
The growth in traffic and the advent of Boeing 747 aircraft requires substantial expenditure on the provision of additional passenger and other terminal facilities at Dublin and Shannon Airports. Work is in progress at both airports on the construction of new terminal buildings, additional apron space and other facilities. The various projects have proceeded more rapidly than was anticipated due to expeditious placing of the contracts involved, efficient management and exceptionally favourable weather. As a result, it is expected that expenditure on airport construction works during the current year will exceed the estimate. Adequate facilities will be available in time to cater for the Boeing 747 aircraft when they are introduced into service at Shannon and Dublin Airports. The new terminals at both airports have been designed to meet requirements for a considerable number of years.
A new runway system is proposed for Dublin Airport. A new east-west runway will be provided within the next few years and a parallel runway will be provided at a later stage when traffic growth requires it. The extention of the main runway and the strengthening of a subsidiary runway at Shannon are also planned.
Before leaving the airports, I would like to advise the House of the position in relation to the changes being made in the arrangements for airport management. Deputies will recall the announcement made early last year to the effect that, as a preliminary to the setting-up of an airports authority, Aer Rianta would assume responsibility for the management of Shannon and Cork Airports on the same basis as the company managed Dublin Airport as my agent. The transfer in management has, in fact, taken place since 1st April, 1969, as planned, and the new arrangement is operating satisfactorily. In the meantime, preparatory work on legislation to constitute the proposed airports authority with responsibility for the three airports is in hands.
As a result of the introduction of larger, faster and technologically more advanced aircraft, of the sharp growth of transatlantic traffic, which is expected to continue, and of intensified international competition, the air companies have been obliged, in order to maintain their competitive position, to embark on a large-scale re-equipment programme, which is estimated to cost a total of £71.5 million over the five years up to 1972-73. While it would have been possible for the companies to finance all of this very heavy expenditure from internal resources and from borrowing, to do so would have imposed on them an undue burden of debt servicing, and would have brought about a disproportion between loan capital and share capital, which would have militated against their further progress in the future. Consequently, the Government agreed to assume part of the burden of financing the re-equipment programme and, with this end in view, legislation—the Air Companies (Amendment) Bill, 1969—was enacted by the Oireachtas last summer whereby the Minister for Finance would provide the companies with a further £15 million, consisting of £10 million additional share capital and £5 million non-repayable interest-bearing advances.
The companies in 1968-69 earned a surplus of £1,752,804, as compared with £1,195,661 in the preceding year. Passengers totalled 1,361,277 as against 1,317,724, and cargo and mail 43,745 metric tons as against 34,629.
Aer Lingus passenger traffic, which accounts for over five-sixths of the total numbers carried by the two companies, showed only a small increase over the previous year. As I have already mentioned, the main reason for this was the competition from car ferries on cross-Channel and continental routes.
Aerlínte continued to operate successfully. Nevertheless, the growth rate of Aerlínte traffic in 1968-69, while higher than the average of its competitors, was the lowest recorded by the company since it commenced operations in 1958. Traffic on the route was affected by President Johnson's appeal to Americans at the beginning of 1968 to restrict travel to Europe and by the unsettled state of Europe and the Middle East, while competition from charter companies limited the airlines' share of the total. To help offset charter competition and to help fill the large capacity aircraft, the company has introduced new promotional-type fares on the North Atlantic.
Aer Lingus's operations are less profitable than those of Aerlínte. This is in line with the universal experience that short- and medium-length airline services are relatively more expensive to operate, and are more vulnerable to competition from other forms of transport. Nevertheless, it must be recognised that the role which the Aer Lingus services play in the national economy is a vital one, since apart from acting as a feeder for the more profitable transatlantic routes, they make major contributions to tourism and to Irish business.
To cater for growing freight traffic, Aer Lingus opened a new cargo terminal at London while a new cargo terminal with automated cargo equipment is nearing completion at Dublin. Another major technical development has been the detailed preparation for introducing jet engine overhaul facilities at Dublin. This work was hitherto contracted out to firms abroad. In April of this year the company introduced a computerised reservation and data processing system of an advanced type, which enables instant reservations to be made for any service in the company's network. The system will also be extensively used within the company for such matters as pay-roll, flight planning and control of stores.
The air companies' combined fleet consists of 13 viscounts, 4 BAC one-eleven jets, 3 Boeing 737 jets, 6 Boeing 320's and 2 Boeing 720's. Five more Boeing 737's are on order and, when these have been received, it is intended to phase out the viscounts and dispose of them as opportunity offers. Two Boeing 747's, or jumbo jets, are on order, and these are due to come into service on the transatlantic route in summer, 1971.
The prospects before the airline industry are of further intensified competition. The Irish air companies have not so far provided a direct return to the Exchequer on the State moneys invested in them but their record of efficiency and enterprise gives reasonable ground for belief that they will in due course provide a direct return, after the difficulties involved in financing the new generation of aircraft have been overcome. The companies are meantime planning to undertake in 1970-71 a review in depth of their capital programmes and commercial prospects and will engage specialised consultants, as necessary, to assist them in doing so. I am satisfied that the Irish carriers will meet successfully the challenge of new intensified competition and continue to show profitability in a very difficult business.
Another aspect of the air companies' activities which should be borne in mind is their indirect value to the national economy. The companies recently commissioned a firm of consultants to examine this question. The consultants reported that, while the total indirect and social benefits could not precisely be measured, they represented not less than 11 per cent, and possibly as much as 26 per cent, on the total capital investment. They also pointed out that the airlines earned 70 per cent of their revenue outside of Ireland, but incurred only 45 per cent of their expenditure abroad, thus producing a substantial favourable balance. The study also calculated that, without our national airlines, we would have expended another £1.6 million annually in payments to foreign airlines. The net contribution of the Irish air companies to our foreign earnings was of the order of £6.4 million per annum.
I now turn to shipping, an area which has seen considerable change and development in recent years. Taking the B and I Company first, this company was acquired by the State in 1965, at a time when dramatic changes in the whole concept of sea transport were taking place and shipping companies generally were faced with the problem of replacing the old conventional methods of sea transport by new and revolutionary techniques.
At that time the B and I Company were operating with equipment and methods which were inadequate to keep the company in a competitive position against rivals who were recasting their services and modernising their fleets in order to derive the full economic benefits involved in the shipping revolution. The B and I Company had to follow suit if they were to compete successfully on an economic basis. The company had been given a mandate to operate on a strictly commercial basis without any State financial assistance for their operations.
The most significant feature of the new concept of sea transport operations is, perhaps, the trend towards specialised vessels. Instead of the old multipurpose passenger cum-cargo-cum livestock vessels, the trend is towards purpose-built vessels to cater for special trades. The B and I Company as a first priority reorganised their passenger and car carrying services and introduced three new passenger-cum-car ferry vessels on the Dublin-Liverpool and Cork-Swansea routes.
The next step was to tackle the freight sector of their business with the aim of providing a comprehensive freight service on the most modern lines which would be competitive and at the same time economic for the user.
This aim is being realised in the company's freight plan which is based on the complete unitisation of all cargo and the mass movement of cargo in specialised container ships and liner trains and as roll on/roll off units by the passenger-car ferries.
The company have also had to recast their livestock services. In recent years they have sustained heavy financial losses on their livestock carrying and, indeed, a further heavy loss is predicted for this year. The rates being charged by the company are not sufficient even with greater utilisation of the service to obviate substantial losses. The company have undertaken to provide facilities for the shipment of 6,000 head of cattle a week but these facilities are being decreasingly used by shippers.
The fall off in the numbers of cattle carried has followed the decision by British Rail to concentrate their declining fleet of cattle wagons at Holyhead and to withdraw their guarantee of supply of wagons at Birkenhead. This has meant that the cattle trade through Birkenhead is now dependent on road transport for onward movement of cattle from that port. As a result the B and I service via Birkenhead is less attractive to shippers than the Dublin-Holyhead service. The B and I Company have been exploring with British Rail for some time past the possibility of rationalisation of the cross-Channel cattle shipping business. The necessary investment in ships, wagons and other facilities required by the cattle trade can, in the long term, be guaranteed only if the trade is put on a sound and rational basis from the point of view of the transport interests concerned.
The reorganisation of their operations has involved the B and I in heavy capital investment. New vessels had to be bought, portal facilities had to be re-equipped and specialised cargo handling gear had to be provided. Since the takeover, the total capital commitment of the company is about £14 million and the financing of this huge investment will impose a continuing burden on the company's revenue.
The company had a total loss after all charges of £54,231 in the year ended 31st December, 1968, as compared with a loss of £398,403 in 1967. The main causes of the adverse result were a loss of £215,000 on cattle services, a cartage strike at Liverpool and the foot and mouth epidemic in Britain. A heavy charge for long-term loan interest, £86,000, is also reflected in the result.
The company's reorganisation programme has been fully justified. The car ferry services, in particular, have been a success and very high utilisation has been achieved. Freight targets have also been exceeded and many new customers have been gained because of improved facilities and service. The company are confident that when the new assets are fully operational an acceptable level of profitability will be achieved.
While the B and I company are involved on the cross-Channel routes, Irish Shipping Ltd. operate in the deep sea trade. When this company were set up, their essential role was to provide and operate a fleet large enough to meet the country's basic strategic needs. With the delivery in the near future of two further vessels, the company's fleet will be well above the basic requirement. The policy now is to add to this fleet only if long-term profitable employment for the new vessels can be secured.
Two bulk carriers of 29,000 tons each are at present on order, one with the Verolme Cork Dockyard and the other with Cammell Laird, and will be delivered shortly. In the case of each of these ships, a long-term charter on a profitable basis has been negotiated successfully by Irish Shipping Ltd. in this highly competitive market. The Irish Elm, the largest of the company's other vessels, also operates very profitably on a long-term charter.
I should mention that the activities of Irish Shipping Ltd. abroad earn valuable foreign currency and the company can, therefore, be regarded as equivalent to an export industry. The company's foreign currency earnings are quite significant amounting to some £3 million a year.
The continental car ferry service between Rosslare and Le Havre which was opened in 1968 was so successful that it was extended for the 1969 tourist season. This service, catering as it does for freight as well as passengers, is operated by Irish Shipping Ltd. in partnership with British and French interests.
The company's net profit, after depreciation, increased from £20,000 for the year ended 31st March, 1968, to £315,000 for the year ended 31st March, 1969. The improvement was achieved in the face of falling freight rates and, it must be added, in the face of world competition. There are no protective tariff barriers in shipping. Intensive planning, greater operating efficiency, tighter cost control, elimination of uneconomic vessels and success in the search for profitable employment for ships are all reflected in this improved situation. I am confident that the company's expectations of continuing profitability in the current year will be realised.
During the year the Shipping Investment Grants Act, 1969 became law and the grants scheme was brought into operation on 20th June last. Some time ago Irish shipowners had requested that grants be made available to them for the purchase of ships, on the lines of a scheme of investment grants which has been in operation in Britain since 1966. Irish shipowners are in direct competition with British shipowners both on the cross-Channel and deep-sea trades and consequently the existence of the British scheme without a corresponding scheme in this country would have severely affected the competitiveness of the Irish shipping industry.
The rate of grant under the scheme is 25 per cent of approved capital expenditure and the grant provision for the current year is £2.464 million. While it is not a statutory requirement that the payment of grant be confined to cases where the vessel is built or the work carried out in this country, I am most anxious that the scheme should benefit the shipbuilding industry here. Accordingly, before a grant is approved in the case of a ship built abroad, I will require to be satisfied that there are good and sufficient reasons why the work cannot be done here.
The 23 harbours scheduled in the Harbours Act, 1946, come under my general supervision. The authorities for these harbours are autonomous bodies elected every five years. The various port users, the local authorities and labour interests are represented on the harbour boards, some of whose members are also nominated by me.
My functions in relation to harbour authorities are, in many ways, akin to those of the Minister for Local Government in relation to local authorities, though less far-reaching. My functions include a measure of control in matters of finance, the appointment and qualification of certain officers, the fixing of maximum rates and charges, the acquisition or disposal of property and the preparation of superannuation schemes.
Harbour authorities are responsible for the management, control and operation of their harbours. They have a statutory obligation to provide reasonable facilities at their ports for vessels, goods and passengers. They must take all proper steps for the maintenance and operation of all works, structures, bridges, equipment and facilities under their control. Evidence that harbour authorities are fully alive to their responsibilities is proved by the many improvements at present under way at various ports to enable them to cater for the needs of new traffic such as container traffic, roll-on/roll-off services and car-ferries.
State policy with regard to harbours is that they should operate as commercial undertakings and be self-supporting. The Government recognise, however, that in special circumstances some financial assistance to harbours may be justified, for instance to meet the requirements of new trade or industrial development and, in the current year, I am providing £360,000 for grants for harbour improvement works.
The Shannon Free Airport Development Company falls within the responsibility of the Minister for Transport and Power in so far as its activities relate to the promotion of tourism and the development of traffic generally at Shannon Airport.
This company has been distinguished by its imaginative approach to tourist promotion, as exemplified in its "castle" entertainments and folkpark attractions. An interesting new development in the tourism field is the rent-an-Irish-cottage scheme which has been promoted by the company. This venture is a further example of the resourceful and imaginative approach of the company, and I hope that it will serve as an example to be followed elsewhere in the country. The scheme is being operated by a separate company in which the majority of the shares are held by local authorities and other local interests. The scheme, which enjoys the support of the Shannonside Regional Tourism Organisation and the county development teams in the region, has the merit of bringing the benefits of tourism to small communities off the main tourist routes. The development of these attractions has been one of the factors leading to the growth in terminal traffic at the airport.
I have been dealing so far with matters which are in the main the responsibility of State-sponsored bodies but, as I mentioned earlier, there is also a wide range of activities which are the direct responsibility of the Department. Many of these are related to the technical and safety aspects of transport. It is a measure of the significance of these functions that out of a total Departmental staff of approximately 1,150, professional and technical personnel account for about 930.
The question of air safety is of course of particular importance. This covers the airworthiness of Irish registered aircraft and the provision of the technical services and facilities necessary for the safety of operations at our airports and in Irish airspace in accordance with the requirements of the International Civil Aviation Organisation. The aeronautical service certifies the airworthiness of aircraft and is also responsible for the approval of maintenance and operational procedures and for the licensing of flight personnel and ground engineers.
The aviation meteorological service provides weather information for operators and for air crews before and during flight. There are meteorological offices at each of the three State airports. The offices at Dublin and Shannon are equipped with weather surveillance radars which "see" weather within a radius of 100-150 miles; it is hoped to have this facility provided at Cork also in the future. Pictures from over-passing weather satellites are intercepted several times a day at Shannon and disseminated to other meteorological offices by facsimile. Ireland is participating in the international plan (known as World Weather Watch) to improve meteorological service to all users by making greater use of new observing devices such as satellites, new processing methods such as computers, more efficient transmission and increased research output.
The air traffic control service clears flight plans and maintains watch and control to ensure adequate separation and safety of aircraft in flight. The radio service provides communications with aircraft and between the various ground centres concerned and is responsible for the provision of ground-based radio navigational facilities for both en-route navigation and terminal area approach and landing purposes. A secondary surveillance radar facility provided by Eurocontrol at Shannon will come into full operational use during 1970. It will help the smooth flow of traffic under air traffic control supervision and will ease the problems of aircraft identification and segregation thus enhancing safety along air routes.
Increases in the size and speed of aircraft, the development of jet power and the growing complexity of airborne electronic and other equipment place new responsibilities on the aeronautical services. The increasing number of aircraft movements demanding the optimum use of the available airspace, the growing speed of aircraft including the introduction of supersonic aircraft in the 'seventies, the extension of jet flight to the upper altitudes and the problems created by the ascent and descent of aircraft to and from airports are reflected in the growing variety and sophistication of navigational aids and of the equipment which must be provided to enable the air traffic control service to perform its functions.
The increased speed of aircraft outmodes air traffic control systems based on natural boundaries and necessitates the introduction of means of communication involving the minimum delay and the rapid processing and presentation of information in a way which will leave the controller free to concentrate on his primary function. The Eurocontrol organisation, which comprises Ireland, the Federal Republic of Germany, Belgium, France, Great Britain, Luxembourg and Holland, is already studying the introduction of an automatic data processing system to ensure the speediest and most suitable means for the dissemination of information for air traffic control purposes. The organisation is at present responsible for air traffic in the upper airspace, that is to say, above 25,000 ft., of the seven member-States but the convention provides for the extension of the organisation's responsibility to the lower airspace. There are no plans for such an extension at present but such a development might arise later on.
The Department is keeping abreast of all these developments to ensure that Irish airports and the Irish aviation services continue to measure up to international requirements.
Under the Merchant Shipping Acts, the Department administers many regulations designed to ensure the safety of shipping operations, both passenger and cargo. The duties include supervising the standards of ship construction, certifying the load-line to ensure that a vessel is not overloaded, certifying the adequacy of life-saving, fire-fighting and radio equipment. These functions are carried out by the officers of the marine survey office who have the additional duty of investigating the causes of shipping casualties which, happily, are rare occurrences for Irish ships. These officers also conduct oral, written and practical examinations for sea-going personnel, on the basis of which my Department issues the appropriate certificates of competency which ships' officers are required by law to hold.
The Department also operate the coast-life saving service, a mainly volunteer organisation which provides a weather-watching and life-saving service based on stations located at strategic points around our coasts. The mercantile marine offices at the principal ports are also the responsibility of the Department. These offices supervise the engagement and discharge of seamen and deal with matters affecting discipline on board ship and health and accommodation of seamen.
I have mentioned earlier the operation of the new Investment Grants Scheme and the administration of the Harbours and Pilotage Acts. The Department is also responsible under the Foreshore Act, 1933, for the management and control of State-owned foreshore so as to ensure that developments do not take place which are contrary to the public interest.
I think it is worth making particular reference to the question of the pollution of the sea by oil. An existing international convention, to which Ireland is a party, is enforced in this country by the Oil Pollution of the Sea Acts. Legal proceedings under these acts have been taken by my Department and by harbour authorities as appropriate. Two further conventions have been recently drawn up under the auspices of the InterGovernmental Maritime Consultative Organisation (IMCO). Ireland has taken an active part in the preparation of these conventions, which are designed to deal with instances of major oil pollution following shipping casualties.
As well as international and legislative measures, we have also been considering the steps which should be taken to deal with the possibility of our coast-line becoming seriously polluted following a major shipping casualty. An inter-departmental working group was set up to study the experience gained as a result of the Torrey Canyon casualty and to indicate what measures would be necessary here to deal with a similar spillage. The group have completed their work and their report is now being carefully examined in my Department with a view to formulating policy.
Under the Road Transport Acts, the Department regulates the carriage of merchandise and passengers for reward and this involves the operation of a licensing system for hauliers, coach operators, etc. Deputies will be aware that the general question of liberalisation of road haulage has been under consideration. As it becomes clear that new or special measures are desirable it is my intention to take the necessary steps to give effect to them. On the basis of conclusions reached after full consideration and consultation, I informed the House a short while ago that I had decided to introduce a Bill removing cattle, sheep and pigs from the scope of the Road Transport Acts so as to allow their carriage for reward without a merchandise licence.
The Bill will also permit each holder of an "existing carrier" licence to carry all classes of merchandise throughout the State with the number of vehicles he had plated under his licence on a retrospective date, probably 1st January, 1969, to be established in the enactment. I mention this date because it has been erroneously suggested that hauliers might gain some advantage by increasing the number of lorries they have in operation between now and the enactment of the legislation. There will be no limitation on the weight of individual vehicles, which will continue to be subject to road traffic legislation. These relaxations will not apply to "non-existing carrier" licences which were granted for limited or specific purposes.
The work on the preparation of the Bill is proceeding and I hope to introduce it at an early stage.
In all these spheres, the Department has responsibility for international relations, for adherence to and implementation of international conventions and recommendations and for activities arising from membership of the various international organisations such as the International Civil Aviation Organisation, the European Civil Aviation Conference, the Intergovernmental Maritime Consulative Organisation, the European Conference of Ministers of Transport, OECD, the International Atomic Energy Agency (of which we are now becoming a member) and various other lesser known bodies dealing at international level with problems arising in the spheres of transport and energy.
I have now completed my review of the main developments in the areas covered by the Estimate including the ten State-sponsored bodies. It will be seen that there is a wide area of responsibility involved and that the various activities in transport, tourism and power have a significant impact on the pace of our economic development. As I said at the outset, I have tried to confine my comments to matters of importance rather than burden the House with details that are already available to Deputies. However, if there are aspects which Deputies feel have received inadequate coverage in my speech or if there are particular matters on which they would like to have further information, I shall do my best to deal with them when replying to the debate.