The main thrust of my contribution in this debate is to indicate in the strongest manner my condemnation, in association with that of the people whom I represent in the Cork area and in the south-west generally, of the totally unacceptable decision by this semi-State body to withdraw their activities in the south-west via the port of Cork. We are being asked to approve further expenditure of £38 million additional equity for the B & I. In the aftermath of withdrawing a service from the port of Cork to the United Kingdom, we in the south-west very naturally have reservations about this volume of expenditure. The discontinued service was very valuable to the south-west and was an economical and socially needed link with the United Kingdom. I intend to reinforce my comments by quoting from reports I mentioned the previous day.
I have come to the conclusion that members of this Government believe the people of Cork do little through their public representatives but complain about what is happening in the region. They say we are doing nothing for ourselves but complaining. We have many complaints to make and there are many indications of the lack of concern by this Government as far as the Cork region is concerned. This is just another episode in the continuing saga of this Government's total disregard of the problems and needs in the Cork region and the south-west region as a whole. One Minister of State said recently that when the people of Cork get off their behinds and do something the Government will respond.
I intend to emphasise once again that there is an urgent need for a shipping link from the south-west to the United Kingdom and specifically from the new deep water berth at Ringaskiddy to Swansea. This link must be restored and any assistance needed must be given by the Government because they allowed the B & I to pull out of Cork.
The Government say the people of Cork should do something for themselves. Efforts have been made not just by the local authorities of Cork city and county but by the Kerry local authorities and various other bodies — tourist bodies, export groups, the taxi association and so on. They came together to impress on the Government the need for this link with the United Kingdom and to prove their point they commissioned two reports which I have no doubt are with the Minister and the Department. Hopefully they have read those reports and having analysed them, they must come to the same conclusion as the people of the south-west region, and that is, the urgent need for a ferry link with the United Kingdom. I have described the required ferry link — a service the B & I abandoned — as the emerald gateway. When we consider some of the material contained in the reports compiled at the request of the interested organisations and the local authorities in the Cork area, we must commend these bodies for their initiative and their effort to show the Government that there is need for this ferry link.
When we consider the competitive position of the B & I, it is very difficult to avoid the conclusion that that company's dash for growth in the late seventies paid inadequate regard to the cost of capital, efficient use of manpower and, above all, satisfying the customers. Despite massive investment — £110 million since 1965 — and the reported satisfactory performance of their freight service, the overall accomplishments of the company have changed from profitability in the 1974-78 period along the following lines: the profit in 1978 was £1.35 million but in 1979 there was a dramatic loss of £1.48 million; in 1980 a loss of £2.8 million; in 1981 a loss of £7.5 million; in 1982 a loss of £8.5 million; in 1983 a loss of £10.2 million; in 1984 a loss of £12 million; and in 1985 a dramatic loss of 400 jobs and a financial loss of £6 million; and an estimated loss in 1986 of £4 million. This eventually brought about the sale of vessels and the closure of routes, and indications are that further measures may be necessary.
In the not so distant past Sealink freight manager summed up the situation by commenting that the Irish Government's policy was to run the line for the benefit of the company's exporters and to promote tourism; that the B & I policy was to increase market share rather than make a profit but that financial consequences were forcing commercial realism and Ireland's severe economic problems suggested that Government support for these objectives had to be very limited in the future. How can we in the south-west region be expected to reconcile that sort of comment with the request in this Bill to provide £38 million in additional equity for B & I? Operationally the aim now seems to be to achieve much better utilisation of assets by route concentration, but the location of terminals on the southern Irish Sea coupled with customer resistance to such location leaves them extremely vulnerable to competition from larger sectors of the market, and here we see a total disregard for satisfying the customer.
We have noted that the trend in the ongoing development of B & I activity across the Irish Sea is primarily to adopt the shortest possible route for the operator. I do not see much wrong with that if the infrastructure to service those short route terminals is such as to encourage the customer in the widest sense to use a facility provided along those lines. The whole thrust of my contribution, not argumentative but arguing the point, is that the decision to leave the south-west coast without a ferry link to the UK is absolutely unacceptable. No doubt flows and seasonality are considerations amongst others and in considering what type of service is to be provided undoubtedly importance will be attached to the relative generation of business at either end and the seasonality of the flows. For that purpose, to strengthen our argument in the south-west region, and to compile support for this Government we sought the assistance — which we acknowledge — of the British tourist authority's digest of tourist statistics which gave the following indications.
In 1976, UK residents travelling to Ireland were 64 per cent and visitors to the UK from Ireland were 36 per cent. In 1978 the comparative figures were 61 per cent and 39 per cent; in 1980, 60 per cent and 40 per cent, and in 1981, 60.5 per cent and 39.5 per cent respectively. For the purpose of analysing the likely market available for a Cork-Swansea operation it is assumed, therefore, that 60 per cent of passengers and accompanying traffic are generated in Britain and the balance of 40 per cent is generated from the Irish Republic.
Analysis of the sea passenger movements in 1981 gives a good indication of seasonality of the sea passengers and, by the implication, the accompanying car movements. While 46.5 per cent of total movement takes place in the busiest months of the year, confined to about three months of high season, the peaking is not as severe as may be experienced on other routes and the levels of carryings in the spring, autumn and winter are all 20 per cent of the carryings in the peak months. Of course, within the busiest months further peaking will occur especially at weekends.
I have indicated in my previous contribution to this debate how important it was to have a facility like Cork-Swansea which had been used extensively for the short term visit to the UK, the weekend trip for people in this country who wished to visit their kith and kin in Britain and those from the other side who wish to pay a short visit to their homeland. In one fell swoop B & I switched from Swansea to Pembroke which meant the beginning of the end of that ferry service.
The origin and destination of passengers and their cars are a vital consideration in the debate on the essential decision to have this ferry link with the UK. Of crucial importance to the viability of a Cork-Swansea service is the size and share of the market it may reasonably hope to attain. This in turn depends on the time and cost which customers will incur in getting to our ports as opposed to competing ports. Another significant element I must continue to stress is the importance of our customers, our people, and the manner in which they have to get to the ferry ports on either side. That must be borne in mind right through the debate.
The transport infrastructure associated with Cork and Swansea, the roads in particular and the railways, is never inferior to that serving competitors. On the contrary, in most cases it is very much superior to that available to competitors and it is contended, therefore, that the distance based analysis is the most useful tool of assessment and will not overstate the advantage of the Cork-Swansea route since speed and quality of the journey are generally superior compared with competing routes. The south west region was accustomed for 160 years odd to a ferry link with the UK and it is absolutely essential for the economic life of that region that we have such a ferry link.
Another relevant, point is that the Swansea-Cork catchment tends to be considerably understated since Holyhead in practice acts effectively as an alternative to Liverpool but involves a substantially longer journey for the majority of passengers and travellers on these routes. The limited availability of sailings from and to Liverpool, with the requirement of sailing tickets for passengers via Liverpool at peak times, has the effect of forcing passengers to Holyhead; but, for purposes of our analysis, it is assumed that Liverpool is always an available option. In practice, of course, a significant number of travellers who find Liverpool unavailable may well choose Cork-Swansea as the alternative rather than Holyhead-Dublin. In every examination and analysis, the trend and emphasis is to divert travellers from the south, south-west and south-east to the east coast.
Apart from the points which I made in regard to the non-availability of the Cork-Swansea ferry service to which we became accustomed over the years and the diversion of travellers, Swansea-Cork is the best option. It was very difficult to understand the thinking behind the decision to allow the B & I to discontinue their connection from the southern port when no alternative was provided. As a result of the Cork-Swansea operation, there have been considerable savings in time and inland transport costs for passengers. The Minister, the Government and the B & I have disregarded the passengers in their assessment. They also disregarded the exporters in the south-west region who are faced with the transport costs of hauling container traffic right across the country. I was going to say from the Dingle Peninsula, but that would be incorrect because no road on the Dingle Peninsula would be capable of taking the multi-wheelers and the freight which we are accustomed to seeing on the roads of north Cork having come from Tralee or Listowel on through Mallow heading for Rosslare. I am not suggesting that Rosslare should not be a ferry port or that it should not have the availability of freight traffic through the port but it certainly does not make sense, as far as commercial life is concerned, that a link with the UK which was in Cork for 160 years, should have been discontinued.
I have no doubt that the south-east in its own right could adequately support the Rosslare ferry port and the adjoining counties but it does not make sense to require passenger and container traffic to do all this travelling on, for the most part, substandard roads until they reach the national primaries to take their produce across to the UK. Just imagine the extra cost to exporters. I sincerely hope that the decision makers have taken into account all the elements to which I referred and that they will support the initiative being taken in the south-west to provide this ferry and not to leave it too late.
The savings to passengers using a Swansea-Cork service as opposed to the next nearest service was calculated at £4.9 million in 1983. I am not suggesting that even the most sophisticated pricing structure could obtain the full benefit of that figure for the operator but it indicates that the Swansea-Cork service could operate at a significantly higher rate than competing services without losing a significant share of the available market. There is no doubt that the market exists although the operator, in conjunction with the travel trade, should determine the degree of price discrimination which can be successfully applied to the different segments of the market. The calculations to which I referred apply to basic fares and do not take account of further revenue which may be earned by the vessels in other ways, for example, on duty free goods. In that connection I must mention the fact that the B & I in their efforts to substantiate their decision indicated by a juggling of the figures— I am not suggesting that anybody was dishonest in this regard — that duty free goods in the Cork port was such a loss-maker that it was relevant to the decision of the B & I to discontinue the link from Cork. However, gift shops, restaurants, bars and the hire of reclining seats also provided money to balance the books.
I touched on the market for freight in addition to passengers and accompanying cars. The amount of freight which may be attracted is also crucial and could be of considerable importance to profitability, particularly at off-peak times. The peak period in the operation of the ferry is the three months in the summer. The market for freight through the port of Cork is available if the service is there for it. Freight traffic in the Irish Sea has been extensively reported on in the past and most operators are familiar with the basic pattern.
The freight connection with Cork goes back a long way. Apart from the monastic settlements the city of Cork and its hinterland developed around the port. Its coats of arms, Statio Bene Fida Carinis means well protected harbour for ships. It is unpalatable to the people in the south west, to the people in Cork, when people in authority, like the Government, allow this long established commercial sea link with Britain to be discontinued by an Irish semi-State company for which we are asked in this Bill to provide £38 million in additional equity. I am not saying that the B & I should not be supported as a service to our people. But this sticks in the throats of the people of Cork, the few who are still working and paying taxation. It sticks in the throats of those suffering the ravages of unemployment and paying indirect taxation out of their social welfare benefits.
It is interesting to note that 1978, the last full year of operation of the Swansea to Cork service, was a very profitable year with passenger round trips in thousands, 110; accompanied cars round trips in thousands, 24; freight tonnes in thousands, 51. With 260 round trips per annum the vessel serving that link could be fully loaded without bringing increased capacity to cater for the demand. The schedule takes no account of dry docking and assumes that seven round trips per week can be achieved for four continuous months. In practice such a schedule might be too demanding but capacity at peak times would clearly need to be maximised.
My contribution is an attempt to cover a very wide subject in a limited timescale. I am well aware that some simplifications and assumptions have to be made but it is to be hoped that these do not distort the essential facts. There has continually been caution in regard to the available market for a potential Swansea to Cork service. The facts support that concept. I am attempting to make a commercial case. I am presenting the facts as they are and no amount of propaganda will distort the facts. But feelings and emotions should not be ignored and if at times during this debate I have shown some feeling and some emotion I think I am justified in doing so.
I have shown that the link between Cork and the UK is viable particularly the route that paid its way and was a commercially proved success, that is, Cork to Swansea. It was a B & I decision which altered that link from Cork to Swansea to Cork to Pembroke, and that was the beginning of the end. The B & I must stand indicted for that mistake. On many occasions the commercial viability of the link, the social necessity for it and the economic reasons were pointed out by many deputations and delegations to Ministers of this Government. If one wants to throw them in, the proud feelings and the emotions we have shown clearly indicate our ongoing commitment to use every opportunity to ensure that the Government will help the initiative being taken by the local authorities and others in that region to restore a link with the United Kingdom. There is widespread dissatisfaction on both sides of the Irish Sea with existing services and strong feelings that an obvious link is being ignored. I fail to understand why the semi-State company and then the Government have failed to acknowledge this. Some of the dissatisfaction felt has been expressed by Deputies from other areas who have contributed to this debate.
My principal theme is the need for a UK link with the port of Cork. There is a fund of goodwill among a wide variety of organisations to support a Swansea-Cork service. I have mentioned the three local authorities, namely, Cork Corporation, Cork County Council and Kerry County Council, the tourist boards, the chambers of commerce, the trade associations — the list is extensive. Those which I have mentioned are just a sample of the groups who are willing to do all in their power to assist such a project and have assisted. Their willingness to do something for themselves has not been acknowledged by Government, with the exception of a subvention of £300,000 which I have acknowledged repeatedly. It must, however, be stated that the delay in approving that subvention operated to the detriment of the proper marketing of the service that we were endeavouring to introduce.
I accept that competition must not be under-rated. Existing operators undoubtedly will fight very hard to protect their businesses. The little assistance of £300,000 is a pittance by comparison with the £38 million talked about in this Bill and we realise that the operator assisted by the taxpayer will go into competition with the possible link from Ringaskiddy to the UK. They would be correct in fighting hard to protect their business all the more fiercely if they were to see that a new service is proving more viable and more attractive than their own. Any potential operator will have to face considerable hostility from those whom he aims to displace. One element of the competition with which a ferry link from Cork would have to contend is the provision of free transport from the city of Cork to passengers travelling through Rosslare, supported by the taxpayers' money. The operator would have on his side two port authorities who are extremely conscious of the need to get the politics as well as the economics right.
I am not so naive as to suggest that there is any profit without risk but the risk of losing this opportunity of a ferry link between Cork and the UK is much greater. On that statement hinges the whole case for such provision. It is unacceptable that there should be no link with the second city of the Republic, situated in the greatest tourist earning region of the country. The Government should be not be allowed to abrogate their responsibilities in this matter. They must respond to the initiative shown by the various groups of Cork people.
I understand that there are other speakers who wish to participate in this debate and it would be incorrect of me to take the lion's share of time.
