Transport (Re-organisation of Córas Iompair Éireann) Bill, 1986 [ Seanad ]: Second Stage.

I move: "That the Bill be now read a Second Time".

Córas Iompair Éireann is undergoing an exciting period of change and development. This Bill is a major milestone in the evolution of the board and the public transport services operated by it. The changes which I am proposing now in relation to CIE amount to an historical step equal in importance to the step taken in 1944 when legislation founding CIE was enacted. There are striking differences between the two events. The calendar alone demonstrates that the planning for the establishment of CIE was undertaken in a war time situation where all judgments were uncertain. Prophecies of what might happen in the years following the end of the war were completely speculative. The fact that CIE succeeded at all is a tribute to the planners of those far-off days.

In their thinking, it is fair to say, financial considerations took great precedence. The conventional wisdom of the twenties and thirties in the failing public transport industry was that the strong could help the weak.

Our planners believed then, and for the best part of 20 years thereafter, that an industry which through no fault of its own could no longer survive, mainly due to increasing costs and a threatened market, would be sustained and maintained by the cash contributions of strong members such as Dublin buses, and by a multiplicity of secondary elements such as line cross-subsidisation. There were further expected benefits based on concepts like economies of scale, or integration which, in the transport area, are not as relevant as many believe them to be and probably played only a limited part.

The money end worked reasonably well for nearly 20 years. It was in the early sixties that it was finally acknowledged by the then Minister, the late Erskine Childers, that CIE had to go the way of national transport systems in almost all countries and depend on a permanent rail subvention.

The management and market assumptions were less sound than the financial ones. It suffices to distinguish between those planning days 40 years ago, when there was virtually no private transport at all, and the market of today where private transport occupies an overwhelming position. It is extremely difficult to see how a unified management structure such as that which grew up between 1944 and more recent times coped at all with the increasing complexities of economic and social life and the pressures and changes internal to itself.

The complaints so often heard about CIE have originated as much in the management and market sectors, including the work of serving the market, as in any other. I see my role in relation to CIE in three aspects: (i) I have to get the subsidy right — it must never again revert to the excesses of growth that characterised the seventies. The correction process is well in hand but more has to be done; (ii) the overall direction of the undertaking has to be got right; and (iii) service of the market has to be got right. The Bill deals with the second and third points.

The financial arguments based on cross supports for holding CIE together were exposed to chill reality 20 years ago. In all respects every major activity started to head for losses. The management of CIE became increasingly pre-occupied with the financial struggle and their reputation in the market had to suffer. With the ending of the financial argument for an amalgamated system there were questions that might be asked about the system itself but they seemed to escape notice. It did not really emerge that running a railway company was not the same task as running a provincial bus service and that the demands and needs of these two were different from the demands of a major urban transport system which in the case of Ireland and Dublin had always been a self-contained and distinctive activity until the creation of CIE.

It amazes me that a relatively small central management team kept the whole unwieldy structure going at all or managed to deal on any rational basis with all the problems of infrastructure, rolling stock, supplies, staffing, industrial relations and service. The thought applies not alone to distinctive major activities on rail and road but out to the fringes of tour management, hotel operation, running Rosslare, keeping the canals passable and running ships to the Aran Islands.

The Board and Management of CIE were not invariably helped by Government. I do not wish to recite faults in government of any party. I can say, however, that this vast agglomeration could have been helped often by clear delineation of what Government expected from it, by some better financial judgments and by less interference with the revenue earning plans of the undertaking.

I have no hesitation in complimenting CIE for the benefits they did produce during what I think should now be identified as years of struggle. And I am happy to put this positive aspect against the criticisms which have been made often and which I, occasionally, found it necessary to make. I also give the highest praise to the whole hearted effort by CIE at all levels to implement and bring to fruition the changes I have already introduced. I know I can rely on a continuation of this effort to bring about this more or less final set of necessary improvements.

The Bill provides for retention of CIE as the parent of three new operating subsidiary companies registered under the Companies Acts. The new companies will have full responsibility under the board of CIE for the operations of the railways, Dublin city bus services and provincial bus services.

I think it would be useful to describe in a little more detail how CIE have developed over the years. CIE were established on 1 January 1945 and resulted from the dissolution of the Great Southern Railways Company and the Dublin United Tramway Company Limited and the transfer of the undertakings of the dissolved companies to the new company, Córas Iompair Éireann. Thus, the Transport Act, 1944, brought about the incorporation of Corás Iompair Éireann as a State-sponsored transport company and the country's principal transport operator. The Transport Act, 1950, established Córas Iompair Éireann as a statutory board to replace the State-sponsored company and the Grand Canal Company.

In the Great Northern Railway Act, 1958, the Great Northern Railways undertakng within the State was amalgamated with CIE. At that time the board had responsibility for the railways, passengers and freight, bus services in Dublin and the provinces, road freight, coach and tour services and canals. Their mandate embraced Rosslare Harbour, a number of hotels and the Galway-Aran ferry serivce. Later legislation made some small adjustments to the CIE role and mandate. These adjustments included the transfer of Great Southern Hotels, then a big loss maker from CIE to CERT in 1984 and the transfer of canals earlier this year to the Office of the Public Works. However, the statutory structure of the organisation remained intact.

Over the years, CIE have adapted their services to meet the needs of the times. The early fifties brought a major dieselisation programme. Since then rolling stock has been periodically updated and the current mainline carriage programme commenced in late 1982 and involving the construction of a fleet of air conditioned carriages, is in progress at the CIE Inchicore works. As a native of Inchicore I was delighted to be able to give the final go-ahead for that programme. These new carriages and the upgrading of track and signalling systems have reduced journey times and improved very considerably standards of passenger comfort. The Howth-Bray railway has been electrified at a cost of £113 million and this development has brought the railways right up to date in technological terms — the DART service is technically among the most advanced of its kind in the world.

There has been periodic updating and replacement of CIE's urban and rural bus fleets. Since 1980 CIE have undertaken a major programme of bus replacement and since then about 800 new buses have been purchased by the board at a cost of about £100 million. Fifty new tour coaches were acquired by the board for this year's tourist season and for the CIE cross-channel Supabus services. These are major capital investments but they had to be matched with station and garage renewals and the acquisition of ancillary equipment to ensure that maintenance and support services were upgraded in line with needs. So it will be seen that CIE have had a lot of renewal in recent years.

Against their financial background, it is not surprising that down through the years CIE have been the subject of a number of in-depth studies, the most recent being the McKinsey study "The Transport Challenge" published in February 1981. When I was appointed Minister with responsibility for transport matters in late 1982 the serious situation in regard to the CIE finances and indeed in relation to the overall image and effectiveness of CIE was one of my immediate priorities. The deficit had spiralled and in the period between 1969-1970 and 1982, during which the consumer price index had increased by a factor of only 5.4, the deficit had increased from £3.234 million to £109.373 million, a factor of 33.8 — over six times more than inflation.

These facts dictated that, on coming to office in late 1982, I set to work immediately on the financial problems and simultaneously began to look at the CIE organisation in the context of the McKinsey recommendations. As a first step in tackling the financial problems, the Government approved in June 1983 a package of measures, which I proposed, aimed at not only reducing CIE's cost to the Exchequer over a five year period but also paving the way for a new operating environment in CIE. These measures included a new basis for determining the CIE subvention which now limits it effectively to one-third of the board's expenditure. This was in CIE's interest as well as the Exchequer's. The package also provided for the payment of the subvention "above the line" in recognition of CIE's social role in providing commercially unprofitable, but socially desirable services.

Expenditure restrictions were imposed on CIE as a means of introducing cash limits to contain costs. An obligation was placed on CIE to reduce the level of their expenditure in real terms by 2½ per cent per annum up to 1988 and the purpose of the formula was to obtain a reducing subvention in line with a reducing expenditure. For 1983, 1984 and 1985 I am glad to say the targets have been met or bettered and this is a cause for congratulation to all in CIE and to all in my Department. After taking account of the State subvention in 1985 the board returned a surplus of close to £7 million, that is to say that CIE beat the target set for it by £7 million. The target itself was 2½ per cent below that for 1984 after allowing for inflation whereas between 1969 and 1982 the deficit had gone up by an annual average of 17 per cent above the inflation rate. The 1985 results represent a very fine achievement and a reflection of the hard work put into CIE in the past three years. So far in 1986 CIE are again on target.

During questions in the House on 6 November I promised Deputy Wilson to include in my speech today further details on the Exchequer subvention to CIE for 1985.

Before dealing with the subvention, I wish to mention the arrangements between CIE and the Departments of Defence, Education and Social Welfare for the carriage by the board of certain categories of passengers at State expense. In the case of the Department of Defence, CIE received £1.9 million in 1985 for providing travel for veterans of the War of Independence, civil servants of the first and second Dáil and certain widows. They received £20.6 million from the Department of Education for school transport services provided by the board themselves and £23.8 million from the Department of Social Welfare for travel for invalidity pensioners, recipients of the disabled person's maintenance allowance, blind adults and persons aged 66 or over. The total for these services amounted to £46.3 million. This is treated in the CIE accounts in the same way as receipts from other passengers and is included under passenger traffic receipts.

As regards the Exchequer subvention of £115 million, this is made up of £104 million for normal subvention, £8 million for interest charges on DART and £3 million to cover the repayment of principal for 1985 on a £30 million loan. The £104 million was allocated as follows: Railways other than DART, £75.6 million; DART, £7.0 million; Dublin Bus Services, £16.8 million; Provincial City Bus Services, £2.1 million; Other Provincial Bus Services, £0.3 million; Canals, £1.4 million; Galway-Aran Ferry Service, £0.8 million.

In addition to setting the financial targets for CIE, the Government also decided it was necessary to supplement the Board's mandate to ensure that the national economic situation and Government objectives were fully reflected in the formulation and development of board policies. A number of specific objectives were identified for CIE and included:—

(i) to review in depth all aspects of CIE's operations in the interests of reducing the board's dependence on State subvention;

(ii) to review the effectiveness and organisation of CIE management and to undertake any restructuring found necessary;

(iii) to regard the improvement of staff morale and motivation throughout CIE as a major aim;

(iv) to extend and strengthen the role of the financial control function so as to improve the cost effectiveness of expenditure;

(v) to review board policy in relation to capital works and proposals for new developments; and

(vi) to arrange at maximum advantage to the board's financial position the disposal of surplus assets or the development of those assets by third parties.

When the package of measures was in place it was then necessary to turn to fundamental issues. McKinseys had come to a number of conclusions based on the decline in the board's market share and projections. They recommended:

—complete disestablishment of CIE into three separate organisations;

—the introduction of one-person-operation in the Dublin city bus services; the closing of CIE road freight operations, and the elimination of the sundries rail service;

—centralising freight management to Dublin with operations limited to bulk traffic and the carriage of dangerous goods; and

—dismantling of the company's area management structure.

Having considered the future of CIE in the context of the McKinsey report, other related documents, observations furnished in response to the report and the views of the Chairman of CIE, the Government were convinced that a major reform of the CIE organisation was essential. While many of the consultants' conclusions were found to be valid, the McKinsey recommendation for the disestablishment of CIE was rejected because of the value perceived in a single board continuing to have overall control of the organisation's operations.

Another option considered was the re-organisation of CIE's responsibilities as an internal CIE matter without new legislation. It was rejected also because such a response was not considered sufficiently far reaching to give the results desired. The route chosen by the Government had a number of main objectives: first, to keep the deficit under control without major disruption to services or employment; secondly, to improve morale and the working environment generally in CIE; thirdly, to improve the reliability and attractiveness of services at the lowest possible fares and fourthly, to obtain greater transparency of the allocation of costs between the various CIE activities.

In the light of this, the Government decided that the reform of CIE must be such as to transform CIE into smaller, more compact operating organisations, with clearly defined functions; hence the provisions of this Bill.

Re-organisation is not the whole story. For clarity it was also necessary to set financial objectives for such an enterprise. As a result the Government announced their intentions inBuilding on Reality 1985-1987 in October 1984. Members of the House will recall some of the main elements of the Government decisions, which covered such matters as:

1. The requirement to reduce expenditure in real terms on the railways was extended to include 1889 and the objective was revised to the reduction in real terms of railway costs by close to 20 per cent over a five year period, an average of 3.7 per cent per annum;

2. The halving again of the 1984 deficit, itself half the 1982 deficit, by 31 December 1989 in real terms was set as the objective for Dublin city bus services. That is to say that the 1989 deficit would be one quarter of that of 1982. This aim is on target;

3. The formula for reducing costs by 2.5 per cent per annum was extended to 1989 for the provincial bus services and the services should become profitable by that time. This aim is also on target.;

4. CIE rail sundries and road freight services to be discontinued by 1 January 1986 unless they proved profitable in 1984 and 1985. I am glad to report that such is the improvement in these areas that their future is now assured.

It is emphasised that the railway objective needs to be achieved without endangering rail safety.

There are significant advantages in retaining the board of CIE as the parent to the three subsidiary companies. The subsidiaries would be more manageable units having chief executives with clear objectives and targets to achieve. The board will vet the plans of the companies, monitor their performance and assess their competing demands for investments and funds. The board will also be an instrument for promoting an efficient, coherent overall approach to CIE transport services generally and will determine competition issues which may arise between the companies; this will avoid a situation where the CIE companies are engaged in disruptive competition with each other. At the same time the setting up of the companies will introduce greater flexibility into the CIE organisation with each of them having their own board of directors whose objectives will be influenced mainly by the more limited mandates of the individual companies and with management closer to their staff and operations.

That in summary is the background to the Bill before the House today.

As I said earlier, already two aspects of reorganisation have been put in place, namely, the transfer of the hotels owned by CIE to CERT and the transfer of responsibility for the Grand and Royal Canals from CIE to the Commissioners of Public Works which took place on 1 July 1986. These changes were designed to allow CIE to concentrate more completely on their transport activities and to facilitate the reorganisation.

Now we must build on the financial improvements of the past few years and turn to the more fundamental reorganisation as soon as possible. This is reflected in the Bill which is not so complex as to delay its enactment but comprehensive enough to achieve the desired results. Under the Bill, CIE, I must emphasise, will not relinquish any of their statutory powers and duties or privileges but rather will use the new subsidiaries as instruments for implementing CIE policy and as the board's agents in carrying out more effectively the functions entrusted to them by the Oireachtas.

The Bill requires the board of CIE to establish three new operating subsidiaries responsible for railways, provincial bus services and Dublin city bus services and to register them under the Companies Acts. It deals with the delegation of functions and responsibilities to the subsidiary companies in respect of operational matters and for the provision of rights, duties and liabilities for the subsidiaries to allow them to carry out their functions. It sets out the principal objects of the companies and provides for the assignment of CIE staff to the new companies and the protection of conditions of employment of staff transferred.

The Bill also contains provisions dealing with certain financial matters arising from the proposed reorganisation. While I circulated an explanatory memorandum with the Bill, I would like to highlight some of the more important provisions, particularly those which involve fundamental changes for CIE. I would also like at this point to draw the attention of the House to the fact that in the course of an interesting and constructive discussion on the Bill in Seanad Éirann I introduced a considerable number of amendments to take account to the maximum extent possible of concerns expressed by members of that House as regards the doubts and fears of the employees of CIE in regard to the reorganisation. The net effect is that the Bill, as passed by the Seanad, is in some aspects different from that introduced.

I must underline, however, that the intentions behind the Bill and the fundamental principles of the original text remain unchanged. The detailed changes give more explicit expressions to some of the original provisions, particularly in the area of conditions of employment. The revised text reflects the assurances I gave to the effect that employees transferred to the subsidiaries will find their conditions of employment unaffected by this Bill.

Part I of the Bill, comprising sections 1 to 5, contains standard-type provisions of a general kind and for the repeal of certain sections of existing legislation. Section 14 of the Transport Act, 1950, which empowers the Minister to grant, by order, additional powers to the board, is being replaced by section 25 of the Bill which extends the scope of the existing provision to include specifically functions relating to the development of the assets of the board. This is in keeping with the revised mandate given to the board by the Government in 1983.

The repeal of section 35 (2) of the 1950 Act dispenses with the requirement on CIE to hold open public examinations for the recruitment of clerical staff and thus will allow greater flexibility to the board and their subsidiaries to determine recruitment policy and procedures in keeping with modern practice in major commercial and semi-State organisations. This change is something which both management and unions have been seeking for some time.

Part II of the Bill, comprising sections 6 to 24, provides for the formation of the three operating subsidiary companies. It also contains provisions relating to certain financial matters, staff transfers and protection of conditions of service and other general provisions, which are features of Acts dealing with State-sponsored bodies.

Section 6 obliges the board to form and register the new limited liability companies conforming to the conditions laid down in the Bill and provides for the appointment, by order made by the Minister, of a vesting day, that is the day on which the re-organised CIE will commence operations. This order will be irrevocable except by an amending Act of the Oireachtas.

The proposed names of the new subsidiaries are listed in section 7. Since the Bill was introduced a considerable effort has been devoted to trying to find more attractive names for the companies but so far without success. I will be glad to consider any suggestions which Members of the House may wish to offer. Section 7 also specifies that the share capital of each of the subsidiaries shall be wholly owned by the parent board and prohibits the transfer or disposal of any share in the companies. This clarifies beyond doubt that the purpose of the Bill is to reorganise and revitalise a State company which will continue to remain in State hands unless the Oireachtas decides otherwise on some future occasion.

The Government's intention for continuing on a long term basis the national transport undertaking is also reflected in section 17 which enables the board to transfer assets to the subsidiary companies for the purposes of their operations but excludes from those assets land and buildings; these will remain in the ownership of the parent board.

The principal objects of the companies and the general statutory basis for carrying out their functions subject to the directions of the parent board are set out in section 8.

These provisions lead naturally into treating of the roles envisaged for the parent board and their subsidiary companies. Overall general objectives for the CIE organisation as a whole will continue to be set by the Government. The board of CIE will settle, within overall sums provided by the Government and, well in advance, the financial targets and allocations for the subsidiaries. In setting these allocations the board will consult with the Minister where necessary. The annual recommendations of the new Dublin Transport Authority on transport funding, together with the authority's objectives for public transport services, will be important considerations in deciding on objectives for CIE and their subsidiaries in the Dublin area.

It will be the responsibility of the board: to agree with the boards of directors of the subsidiary companies their annual budgets, including capital investments; to monitor the activities of the subsidiaries: to ensure that the subsidiaries achieve any financial targets set for them and to provide an assessment of the performances of the operating companies in the board's annual report to the Minister.

More generally the board will be expected to foster the development of a more commercial approach across the spectrum of the activities within the overall CIE remit. In addition to the responsibilities in relation to the subsidiaries, the board will be responsible for actively pursuing the development of CIE property and other assets, the operation of the board's International Tours Company and providing common services, such as pension schemes and computer services, etc, for the subsidiaries. I want CIE to fully utilise their many human skills and property assets to the benefit of the board, their workforce and the public generally.

I see potential for expansion here and this is something I have been encouraging the Chairman and board of CIE to pursue. This could well be a vital contribution to the financial success of the organisation in the future and to providing the outlets for these relatively untapped, but rich, resources.

The boards of directors of the subsidiary companies will be responsible under the board for the operations and activities of their companies. This will include responsibility for finances, staff and industrial relations, marketing and customer and other services, business development, operating procedures, etc. They will be accountable to the board in regard to their performances.

Specific requirements as to the articles of association are contained in section 11 which sets out particulars of the size and structure of the boards of the operating subsidiaries. The directors will be appointed by the Chairman of CIE with the consent of the Minister, and it allows for the possibility of the chairman being appointed chairman or director of a subsidiary company or companies.

Deputies will notice that I propose to limit the membership of each of the new boards to six members and to include two of the four members elected to the board of CIE by the CIE workforce as directors in each of the three subsidiaries.

Fears were expressed in Seanad Éireann about the risks which had been associated with competition between the rail company and the national bus company. In response, I agreed to introduce an amendment providing, in subsection (4) of section 11, for a majority of the directors of these two companies to be common to both companies. This should ensure that the boards of the companies will take full account of the interests of the individual companies in exercising their functions. I see these boards as executive in nature in the interest of efficiency and effectiveness and this arrangement introduces into the State sector here a two-tier type board system, which in a somewhat different format has been so successful in West Germany.

The value of worker directors in the State boards is now clearly established. In order, however, to avoid a situation which would cut across the electoral arrangements in CIE, the Bill includes a provision in section 14 to ensure the new structures maintain intact the total CIE constituency for electing worker directors to the board.

Section 14 of the Bill also provides for the transfer of staff of the board to the companies and for the protection of their existing pay and conditions. It empowers the board to designate existing employees for employment by a company and it obliges staff so designated to transfer to that company. It also allows flexibility for the transfer and promotion of staff between the companies within the group. This provision highlights, yet again, the continued coherence of CIE. This is underlined by section 15, an important provision, which enables the board of CIE to continue to organise and operate existing pension schemes for both the staff of the board and those of the companies. It provides for service with any of the companies to be treated as employment with the board for pension purposes. This should further facilitate intercompany transfers of staff in the future. Other important provisions in relation to staff are contained in section 11 (2) (f) which requires the companies to set up negotiating machinery for the purpose of negotiations concerned with pay and conditions of service and for every reasonable endeavour to be made to reach agreement with the trade unions concerned on that important issue.

The escalation of CIE's losses between 1969 and 1982 was all the more disastrous when it is considered that overall employment in the board fell by nearly 4,000 in that period. I am glad to be able to tell the House that I have been assured by the chairman of CIE that any further reductions will be achieved through natural wastage or where necessary by using the existing arrangements agreed with CIE trade unions concerning redundancies.

The principal financial provisions of the Bill are contained in sections 19 and 20. Section 19 is based on the usual formula for the accounts and audits of State bodies. Section 20 outlines the borrowing powers and procedures to be followed in the case of the subsidiary companies. I envisage, as I hope is clear from the text of the Bill, a vital role for the parent board in regard to control of borrowings by new companies. The powers to borrow for capital purposes are being retained by the parent board because of their overall responsibility for the CIE group.

Subsection (3) of section 20 prohibits the giving of State guarantees for moneys borrowed directly by the companies. This will not hinder the subsidiaries in obtaining their capital needs as the board of CIE will be able to on-lend to their subsidiaries. They will therefore be able to carry out their capital investments in line with the capital programmes agreed by the parent board. The guaranteeing by the State of borrowing by the CIE board is not affected.

The existing statutory borrowing limits and controls will continue to apply to the new organisations as a group. All capital borrowings will continue to be subject to the approval and control of the Ministers for Communications and Finance, subject to the overriding statutory limits determined from time to time by the Oireachtas. The Bill empowers the companies to borrow temporarily, with the consent of the board, for day to day operating purposes subject to existing controls and within such statutory limits as may be determined from time to time.

Section 21, on the disclosure by directors of certain interests, and section 22, on the prohibition on unauthorised disclosure of information relating to the CIE groups, resulted from suggestions made in Seanad Éireann.

Section 23 of the Bill was drafted before the decision to disband the National Prices Commission was announced because experience had shown that the extent to which CIE could raise fares and rates was strongly influenced by what the market could bear and that was invariably less than what would be permissible under the national price control criteria.

CIE fares and rates will, however, continue to be subject to approval by the Government. The new Dublin Transport Authority will have a role in the approval of CIE fares increases for Dublin bus and suburban rail.

Part III of the Bill, comprising sections 25 to 31, contains a number of provisions relating to CIE and the subsidiaries. The statutory obligation imposed on the board by the 1950 Act to appoint a secretary and a general manager is being replaced by section 30 of the Bill which will allow the board greater flexibility in the appointment of officers and servants. This flexibility is desirable in the situation where the chairman holds office on a full-time basis and where the organisation is undergoing a period of major change and restructuring.

A large organisation such as CIE have need of continuous review so that they can adapt to the various challenges as they appear. In transport, changes can arise from many influences, including changes in technology and equipment, barriers to travel and trade, the relative competitiveness of the various transport modes and the transport preferences of the customers.

The proposed re-organisation of CIE and the financial measures which I have outlined are designed to put the board's finances on a firmer footing and to secure the future of CIE, having due regard to what the Exchequer can afford, the interests of the taxpayer and the need to provide reliable services for the public. The Bill is designed to ensure and strengthen the future of the organisation.

The re-organisation now proposed is, I am convinced, in the best interests of the travelling public, the CIE workforce and the Exchequer. The smaller units should be susceptible to more effective management in a manner which is not possible in the case of very large and diffuse organisations and should, I hope, contribute greatly to improved industrial relations.

The implementation of the re-organisation provided for in this Bill is, of course, a matter for the board of CIE in the first instance. As I said in my opening remarks I am confident that I will have the full backing of CIE management and general workforce in carrying through the new arrangements which are so necessary for their future. The board and management are dependent on the support of all CIE employees in order to effect a smooth transition. The future success of the new CIE will rest squarely on the shoulders of the parent board, the subsidiary boards and the workforce. CIE and their employees have shown in recent years what it was possible to achieve in regard to CIE finances. This inspires confidence for achieving objectives set for CIE by the Government in the years ahead. It is relevant that in 1985 CIE have had their best year for many years.

General public confidence in the transport services provided must be increased. This will be achieved mainly by improving the quality and especially the reliability of the services. In that connection there is hardly need to emphasise the importance of a stable industrial relations climate. I have spoken on a number of occasions about industrial relations in CIE, particularly in the Dublin City Services. My more recent references were rightly devoted to improvements in that climate.

Recent experiences are quite positive and augur well for the future. The introduction of one person operated buses and DART feeder buses in Dublin, following agreement between the board of CIE and the unions, happily brought to a satisfactory conclusion that long drawn out saga. The new structures with less remote management should also contribute to good industrial relations throughout the organisation. Transport services which arrive on time and which are not prone to unpredictable stoppages should bring increased passenger numbers, and hopefully in time, cheaper fares.

While I have set tough targets for CIE in the past three years and for the next three, I have also given a very substantial commitment to the board. For 1986 the subvention, based on the subvention formula, comes to £104.5 million. In addition, since I came to office, provision has been made for the Exchequer to take on board directly the interest payments on DART which is the correct approach for infrastructural projects of this kind. Moreover, the problem of CIE's short term borrowings has been addressed and £30 million is being remitted by the Exchequer over ten years, having commenced in 1985.

The capital provision for 1986 is £34.4 million mainly for new railway carriages, signalling and communications and the acquisition of buses for CIE Supabus and tour activities. These represent a very big investment, without which the CIE services would inevitably run down. It will be readily clear, that the renewal of CIE which this Bill seeks to bring about has been accompanied by very large investment to give them the modern tools to do the job.

The Green Paper on Transport Policy and the publication of the national plan raise a number of very important issues which have a bearing on the longer term future of the new CIE group.

In so far as the railways are concerned, the new organisation and management structure, together with the investments made in the railways, give all concerned an opportunity to prove the worth of the railways and thereby guarantee their long term future.

The many views on the Green Paper which have been furnished, for which I am grateful, are currently being assessed. The conclusions which we will draw from the contributions on that paper will be taken account of in a White Paper now in preparation.

The problems in relation to the structure of CIE which we are tackling here have been ventilated freely in the past few years. A certain negative approach which is based on so called privatisation has been imported into the discussion. I do not wish to say anything about privatisation in connection with this Bill for the simple reason that privatisation has nothing to do with the Bill and is simply a red herring in the debate. There are also arguments based on what is seen as a threat within CIE — the threat of competition between rail and road services. This seems to mean that there must be no competition, irrespective of cost to the taxpayer or service to the public, as between CIE's rail and provincial road services. I utterly reject that approach. There must be some competition to ensure that each new operational company will be kept on its toes, that each worker in each company will identify with the public entity to which he or she is attached, work to further its aims and take pride in its new identity.

The board of CIE will still retain their powers and responsibilities. The board will guard against reckless or ruinous competition between the subsidiaries. Indeed the proposed structure gets close to the optimum. It maintains the overall framework of the integrated approach which many see as essential to our transport system. It allows also for specifically identifiable sharing of services and supports where sharing is necessary — another argued benefit of integration.

National transport issues such as CIE and their services provide a basis for a very broad debate covering a very extensive field. I have endeavoured to give the House a comprehensive statement on the background to the changes proposed in the Bill, the motivation and the objectives. It goes without saying that there may be some issues which Deputies consider relavant but which I have not touched on. Omissions are inevitable in a situation like this. I will, however, endeavour to reply to any such points in the course of my reply to the debate.

I commend the Bill to the House.

I go along with the general tone of the Minister's endeavours to improve morale and strengthen CIE's belief in themselves. This is important and I agree with the Minister when he says that over many years they have been the target for criticism, often ridicule, and the butt for jokes in music halls and elsewhere.

CIE have a large workforce recruited by public competition allied to training in apprenticeships etc. over the years. The potential of the workforce of CIE is great and there is an onus on the Members of the House to see to the greatest extent possible that that potential is realised. From reading their magazines and trade union publications it is quite clear. That in many areas there is a significantesprit de corps in various matters which they undertake relating to charity or in the cultural area. Anybody serving in this House would benefit from reading the autobiography of Dr. Tod Andrews who was once head of CIE. He paid tribute to the workforce in CIE and also underlined the fact that the basic problem to be solved is that of industrial relations. I do not think the case is proven but if this Bill makes it easier, because of smaller companies and the fact that the management are more involved with the workers, to improve industrial relations, we will welcome it.

The Minister also referred to an improvement in finances. I asked for a breakdown of the £115 million subsidy to which the Minister referred in his speech. During Question Time a few days ago I talked about the importance of transparency. The Minister today devoted a section of his speech to transparency. I cannot go along with him that he has made the subvention as transparent as I would like it to be. It is opaque in certain regards.

In the statistical extract 1982 to 1985 there is an account of the payments to CIE. The net deficit for 1980 was £74.5 million; in 1981, £94.8 million; in 1982, £109 million; in 1983, there was a dip to £106.6 million; in 1984, £112 million and in 1985, as we know from the Minister, £115 million. That figure is also listed in the Book of Estimates. The Book of Estimates for 1984 also quotes the figure of £112 million.

The DART payments are added.

I accept that the DART payments are added but I am talking about what this House has to do by way of sustaining CIE and about the desirability of the House having clearly before it details of what the money is being spent on. In the 1985 annual report of CIE, the most recent one available, the figures for State grants received or receivable are included and are as follows: 1980, £70 million; 1981, £85 million; 1982, £96 million; 1983, £86 million; 1984, £112 million and 1985, £119 million.

It is not comparing like with like. The DART subsidy has to come out of it.

We are both trying to clarify the issues. All I am reading from the report are the State grants, received/receivable, which rose from £70 million in 1980 to £119.490 million in 1985. If we want to make that sum of money transparent we have a good but more to do than what the Minister has done either in answer to my question in the House or in today's speech.

The Minister gave a breakdown of the Exchequer subvention of £115 million which was allocated as follows: railways other than DART, £75.6 million; DART, £7 million, the Dublin bus services, £16.8 million; provincial city bus services, £2.1 million; other provincial bus services, £0.3 million; canals, an item which will now disappear, £1.4 million and Galway Aran ferry service, £0.8 million. We have received more information and I am grateful to the Minister for that. What is opaque to me is that £75.6 million mentioned in connection with railways other than DART and £7 million, which is quite transparent, mentioned in connection with DART are due to pay off capital charges. On 13 June 1983 the Minister issued a press statement in which he stated that one of the main advantages of the new system is that CIE would have the opportunity to record a profit after bringing the subvention into account. He believed that this incentive was the key for substantial improvements in the standard and quality of the board's services. The one thing I do not want to happen — if we want to record a profit — is for accounts to be presented to the House in a certain way which will indicate that a profit has been made when the above the line payment has been taken into account but when in fact there was no profit at all.

It is important that the management and staff of CIE feel they have the support of this House in making an effort to bring the finances under control, to cut the subvention and to make a profit, if possible, in certain areas. There are areas where substantial profits could be made with good management and marketing. We can put the new companies on the spot in that regard. The Minister said that CIE will have an opportunity to record a profit. That is precisely what was announced this year, that CIE made a profit of £7.6 million but all that evoked from those who watch the scene were cynical remarks about heavy State subsidy and that by a method of accounting a profit had been made.

We should look at the £75.6 million subsidy for railways other than DART to see if we can find out where we have rail services which are being subsidised. I have before me a map of the railway system in Ireland. There is always the suspicion that if we examine individual routes and find that a profit is not being made that that is an indication we are putting that particular service under threat. I submit that that is not the case. The people who have such fears should have those fears removed for them. The House should know if the service from A to B is paying its way and making a profit or if the service from A to C is not paying its way and must be subsidised to the tune of so many millions of pounds. For example, is the Dublin-Cork line making a profit? It must be. It is a splendid, punctual and fast service. Is the Dublin-Belfast line making a profit? We are responsible for most of that service which is a good one when it is allowed to run, if bridges are not blown up. Is the Dublin Ballina service making a profit and if not to what extent is it subsidised? Are the Dublin-Westport, Dublin-Galway, Dublin-Wexford, Dublin-Kilkenny-Waterford, Dublin-Killarney-Tralee and the Dublin-Limerick services making a profit? What about the service from Limerick to Rosslare which is an important line? Lest this House should be accused of trying to ferret out services that are not making a profit in order to abolish them I want to state that that is not the purpose of my submission on this matter. I want the House to have full information on this.

The Minister, the chairman of CIE, and others, have stated that we must bluntly face the fact that a substantial amount of the money spent by CIE must be regarded as a social service. I was taken aback when the Minister, in answer to my question in the House recently, said the full subvention was a social subvention or, consequently, "above the line" but he excluded from that the specific social services provided by CIE in accordance with decisions of the House to provide transport for various categories in our community. We should concentrate on getting full transparency in regard to the railways, the areas that are profitable and those that are not. If we get that, the House will be able to know what we are doing. Figures should not be lumped together. If they are people may be in the dark about the expenditure.

In the course of his speech the Minister said that there was a time when the idea was that there should be cross-subsidisation, with the services that were paying their way subsidising those that were not. I can recall citizens of Dublin — such people when they become aggrived are very interesting — complaining that by their fares in Dublin city they were keeping services going in the rest of the country. They were angry about this but we see from the Minister's speech that the Dublin bus service has to get £16.8 million to keep going. That is one area where there should be a heavy concentration of marketing and management expertise because there is no doubt that the customers are there. The buses are available although they may not be the proper type for such a service. A good effort in marketing and management should be able to bring that service back into profit.

Will the Minister, when replying, give us an internal breakdown of the £75.6 million? I am aware of the cost of the DART system and the Dublin and provincial bus services. It has been said by way of rebuttal to this line of argument that one cannot be running around getting accounts from here and there on a small scale but I do not think that argument stands up. Nowadays very sophisticated systems exist with computers and there should be no bother in putting a finger on the costings or the revenue of specific operations in CIE.

I should like to put on record the policies which I have put together and given to the policy committee of Fianna Fáil and remind the House of the policy put forward by Fianna Fáil in 1982 in relation to CIE. Our policy document then dealt with the McKinsey recommendations. I should like to put it on record that the Fianna Fáil Government in 1982, contrary to certain indications in the Seanad, did not decide to adopt the McKinsey report, nor did I in the Department decide to adopt it and I understand from my predecessor, Deputy Reynolds, that such a decision was not taken. The 1982 document stated:

If the Government decide to continue the railway system the present "open-ended" type of subvention should be discontinued. Criteria should be established for the payment of subvention in respect of services which are uneconomic but which are recognised as essential in the public interest. Such payments should then be made "above-the-line", i.e. as payments for service rather than as at present "below-the-line" i.e. in recoupment of losses. The issues involved are at present under discussion between CIE and the interested Government Departments.

The House will gather from that that the "above the line" payments had been decided on by Fianna Fáil in Government. Fianna Fáil had set the discussions going between the Departments of Communications and Finance in the main. The 1982 document continued:

Decisions are about to be taken on the major issues relating to the railways, the structure of CIE and the reporting relationship with Government. Clear guidelines will be established in regard to manning levels, a market oriented approach to services based on improved pricing systems and the cost of providing services. The overall Government objective will be to ensure that the public transport system provides services effectively on the principle of commercial viability, with departures from that principle permitted only on the basis of specific criteria as to the manner in which the function will be discharged.

The steps being taken by the Dublin Transportation Task Force to reduce Dublin's traffic congestion and hence improve bus utilisation will be continued and intensified when the Dublin Transport Authority (DTA) is established in 1983. These steps, coupled with CIE's investment in new buses, should result in improvements in the efficiency of Dublin City Bus Services. The DTA will be a regulatory body and will help to improve the administration of Dublin transport in four major respects....

The four major respects listed were transport planning, transport budgeting, public transport services and traffic management. The policy I submitted to the Deputy in charge of our policy documents was to establish the Dublin city services on their own.

This ties in with what I have just said about the huge conurbations with large numbers not now using the public transport service but who by democracy, good management and good services could be attracted to use it. The Minister did say that the numbers were up in regard to Dublin city services. I have here some statistics which I got from the Dáil Library. These are important when we are considering the Dublin city services. They are: 175 million in 1980; 158 million in 1981; 163 million in 1982; 158 million in 1983 and 156 million in 1984. The statistic I got from the Library for 1985 is not for the full year — it is up to 2 November 1985 and is 137 million. I got elsewhere, possibly from some document of the Minister's, 161.8 million as the figure for 1985. The figure was reduced, as we can see, from 175 million in 1980, going as low as 156 million in 1984 and we are still 14 million behind for 1985 compared with 1980.

That is highly relevant to the Bill before the House because one of the companies, as the House knows, are a company who will be totally dedicated to the development of the Dublin city services. My contention was, and my policy document stated, that that particular company should be set up on their own but relating to the Dublin Transport Authority as I had envisaged it and which was fully debated in this House, but which was totally changed and practically wrecked by the Bill the Minister brought before this House and which is now an Act on the Statute Book. I am grateful to the Minister for sending me a document stating that November 12 is the vesting day, or the inaugural date. He was possibly avoiding the 13th. That Act is so weak that the ideas I had about the development of the Dublin city services would not be able to work within its provisions.

As the House will recall there was to be a traffic plan for the area covering Dublin Corporation, what was then Dún Laoghaire Borough, and Dublin County Council. There are now many new fangled councils and I have not time to go through them. The idea was that a plan would be elaborated on in consultation with everybody concerned and giving even the individual citizen an opportunity to make an input, that that particular authority would have a budget and that CIE would be the agent of the authority, not operating independently of it as it will be now. In that situation, there was a commercially viable company. As I said, the Bill was emasculated and we have an Act on the Statute Book which will not really be relevant to any great extent to the company being set up under this Bill here. I know what happened. The Department of the Environment counterattacked on the Department of Communications and weakened the legislation. Deputy Richard Bruton, now a junior Minister, supported me in the contention in this House that the Bill was too weak.

To add insult to injury, we have a Bill before the House now, the Dublin Metropolitan Streets Commission (No. 2) Bill, which weakens the Dublin Transport Authority still further. In other words the Department of the Environment have made another grab for power in so far as transport and infrastructure for transport are concerned, all to the detriment of developing an efficient and profitable, dare I say, transport company running the Dublin city services. I want to reiterate what I said — I have not a formal script so that I may be a little discoursive — that no decision was made by the Fianna Fáil Government who left office in the winter of 1982 to implement the McKinsey report. Senator Flor O'Mahony in another place, Seanad Éireann, made that statement and the Minister, so far as I remember, did so also. I know quite well because I was ten months in the Department then. I had An Post and Bord Telecom and the Dublin Transport Authority, three major items which required a great deal of hard work and of discussion to get them through Government and so on and I think that I was highly productive for those months. I reiterate that the above the line subvention was a decision we had made and published in our programme,The Way Forward.

If we had started with the Dublin city services company, this would have left the two other companies, the National Bus Company and the National Rail Company, together and my idea was that they would be together for some time, pending the results of the refurbishment of the Dublin city services. This brings me to the Fianna Fáil Party attitude to the national bus and national rail companies. Incidentally, I agree with the Minister about the names, but I have been asking people if they could get names that were more euphonic than those that have been chosen. I noted in the Seanad that the Minister invited people to try to suggest better names and he repeated the invitation today. I cannot help in any way. I did try to have an Irish name given to what is now called The DART. The suggestion was Fast Line or Mear Line, but that did not find favour with those who named the line. It did not improve my acceptance of the word DART to find when I was in San Francisco this summer that DART is named after the suburban San Francisco service, which is called BART. That is Bay Area Rapid Transport and we have Dublin Area Rapid Transport here. It is bad enough for streets and roads to be named after the soap operas which are polluting the country and to be imitating pseudo colonial architecture but if we have to go to San Francisco to get a name for our most efficient suburban rail service we have reached a bankruptcy of ideas. I am pleased that the Minister is still searching for a name and that he has power in the Bill to name it. Surely we have enough imagination to think of something better than the names which are incorporated here.

I will put down amendments with regard to the triple company, in other words I shall try to persuade the House to rely on two companies, namely, the national bus company combined with the rail company on the one hand and Dublin city services on the other hand. For the sake of viability and harmony that would be the best arrangement.

When the Minister made the announcement I examined the provisions incorporated in the Bill and was of the opinion, admittedly without our party having fully debated the matter at the time and without having had representations from various trade unions, that the three companies might work and might be the best solution. After much debate and having received submissions from various people, particularly trade unions, I am convinced that it would be better if we did not split the rail side from the provincial bus services. My arguments are based on the fact that they are both supplying services for passengers very often to the same towns and following the same routes. It will prove very difficult in practice to separate them. They are in many ways complementary to one another. Passengers use roads to feed to railway stations and are glad that there is a complementary element.

What will happen with regard to the staff? The Minister outlined the duties of the parent board. The parent board will have enough on its plate with regard to general policy, organising finances, looking after the three companies and so on without having to act as a boxing referee and settle difficulties which will arise between the national bus and rail companies. The Minister indicated that he rejected the idea that there should be no competition. I can see his reasoning but in the context of the national rail and national bus service I do not think it is valid. If there is competition it would be almost an eating of their own innards. There is a direct involvement at present between rail and bus staff. Clerical, supervisory and operative rail staff have a direct involvement with road passenger services. There would be plenty of trouble. If there was a manager responsible to the bus company and one responsible to the rail company trying to grab passengers there would be many disputes which the board would have to settle. There will be nothing but chaos if we have a manager running out at a railway station which is also used by buses trying to grab passengers for the railway andvice versa. The board would become involved in the running of the company which should not be its purpose. Rest rooms, booking offices and waiting rooms are shared by rail and road passengers. The workers are not anxious for a separation. If they were in favour of it there would be some chance of a reasonably smooth transition but since they are not in favour of it there will be plenty of difficulties ahead.

I had consultations with the ICTU and ITGWU and they say it is difficult to see how this will not mean a rise in costs instead of a reduction for the companies. I would be interested to hear the Minister's argument that outright competition, modified and monitored by the parent board, will not damage one or other of the companies. The suspicion among the workers is that the rail company will be damaged. I find it hard not to see that there is some substance in what they suspect.

In the Green Paper on transport policy there are some pointers that could cause worry. There are arguments given for doing away with the railways and for maintaining them. Particular emphasis is laid on the 6,800 railway employees who would have to find new jobs. The Minister said that at the IDA's current cost of creating new industrial jobs it would cost £100 million to provide replacement jobs for the railway workers. In general the workers could be reassured by that. Paragraph 229 states that by virtue of the investment decisions referred to in the previous paragraph the Government have in effect decided to retain the railways in the medium term. Those words are a source of worry. The breathing space provided by this decision allows time to consider whether the existing railway network should be retained in the long term, whether retention should be on the basis of a reduced railway network or the railway network should be eventually closed down. If I was a railway worker and read that I would feel entitled to ask more questions and be a little worried.

I have already commented on the information — for which I am grateful to the Minister — about what is paid by the Department of Social Welfare to CIE. If we can make the rest of the accounts as transparent as that, I would be very pleased. The House would be the better for it, the people who are often hypercritical of CIE would be better for it, and CIE themselves would be better for it. The enlightened social welfare legislation with regard to old age pensioners, introduced by Deputy Haughey when Minister for Social Welfare is important to the people, to the House and to CIE, even though in comparison with other sources, the amount of revenue is not great.

I would like to hear the Minister's comments on the difficulty for the board and the danger of paralysis if they become involved in dog fights at local level about the rail and bus companies. I understand the transport salary staff association, representing management for the most part, would not find any great difficulty in dealing with two companies rather than the three, namely, a joint rail and provincial bus service on the one hand and city services on the other. We have to be careful about two tiers, seeing the parent board is still in existence. If the people who are actually dealing with the problems are satisfied that they would be able to cope with the Dublin city services on the one hand and a single company for rail and bus on the other, what they have to say should be listened to very carefully.

The contention of the Congress of Trade Unions is that Dublin city services alone, and separating them from CIE as it exists, is a man sized job without taking on the other possible contentious division of rail and bus. To avoid chaos merely setting up the Dublin city services which, topographically and operationally, is compact and concentrated in a limited area, the people who understand the problems at ground level are worried that that in itself will be such a major task that the idea of separating the other two should be got rid of altogether.

I had an opportunity of being briefed by the consultants CIE employed. They gave me a magnificently lucid explanation of what they intended. I told them I would be making a comment on the proposal for the three companies and I had a full debate in my own party and with our front bench about it. I am not taking away from the clarity with which they explained what was behind the triple company with the parent board, and I want to take this opportunity to thank them.

With regard to the capital investment mentioned by the Minister, he claimed some credit — he is an Inchicore man and I do not want to take it away from him — for the programme that was launched for building carriages. In the interests of a proper record of the affair, I have to say that I am responsible for that. Having done that for Inchicore I think I am in my rights to appeal to the Minister to see to it that a proper bus station is built in Cavan town. He should indicate to the chairman and board of CIE that a quick decision should be taken. It is the shabbiest place. When I pass this station I look at the other side of the road because it is one of the scandals of south Ulster that this station should continue to be the offices and headquarters of the national transport company.

The people interested in the development of Rosslare Harbour are anxious for the speedy provision of rail cars. Perhaps the Minister would indicate what is the present position. From the capital point of view the most urgent question is the provision of buses. There is no renewal of the school bus fleet. The policy on school busses should command the attention of this House. I know decision and expenditure are the responsibility of the Minister for Education but this Minister has responsibility as commander in chief of transport, of dealing with the provision of buses. GAC have closed and I want to say a few words about that.

At the moment there is no place where school buses can be provided within the country. Is there any plan to reactivate bus building here? I am speaking not merely of school buses but the larger buses used for normal bus services by CIE. This is a very serious question. As I understand it, CIE owned the machinery and equipment of the GAC operation. That was a substantial investment. What is the position at present? Is any use being made of it? Is there a proposal to sell? Is there any invitation to any other company to try their hand at building school buses, or the larger buses, or perhaps a smaller bus which could be used even in the Dublin city services area in off-peak hours and in rural areas? It is illogical from an economics and management point of view to be using large buses, often no more than quarter full, at certain periods of the year.

When I was Minister I launched the first coach bus in County Clare. I think it is thriving, but I wonder if there has been any extension of that or any thinking along the lines I am mentioning now. In some continental countries there are small buses used for cross services at times when there is not a heavy demand. I remember seeing and examining one small Mercedes bus. I do not know whether it would pass the safety test here in that there were two seats on either side of the central passage. Then there were tuck-in seats one could pull out so that whoever was in the centre passage could sit down. Those tuck-in seats were tucked away under the proper two seats when not needed and pulled out for use when needed. We are very strait-laced in our vision of double deckers, having them running at hours when there is not heavy traffic. There is the example of the large provincial ones running at times when they cannot hope to command sufficient passengers to render their operation economic.

Another point I want to raise is that I have an idea that the super buses that were requisitioned, bought, purchased, leased or whatever, had to be imported at heavy expense. Is that so? I want to know. I may not be right but I have an idea that that is so, that the tourist scene was served this year by imported buses.

I am not advocating any wild goose scheme with regard to Shannon but a good, hard look should be taken at that operation, at the capital that is locked up there, as far as I know, to ascertain whether we could come up with any sensible, employment-giving scheme — God knows we need employment — that would put that capital investment to work for the benefit of the State.

The Minister mentioned amendments made in the Seanad. I am glad that the Fianna Fáil Party in the Seanad, and I have a suspicion that the Labour Party in the Seanad also, did work hard to amend the Bill. Might I ask the Minister what is the position with regard to staff recruitment. There was a tradition in CIE of holding a national examination for staff recruitment. The idea was that people who had just passed their leaving certificate examination would be recruited for training in the clerical division of CIE. Is it true that this national examination has been suspended or abolished? If so, is it the intent of the Minister that some similar, equitable system of recruitment should replace it? It is important that anything in which this House has a hand should be seen to operate — as in the case of recruitment systems — above reproach as far as fair competition is concerned. The most recent report on this morning's news is that leaving certificate holders with good qualifications are now competing very heavily with each other for manual work, that one in four girls only who have a leaving certificate, plus an extra year's acquisition of secretarial skills, is at present being employed. Therefore the whole area of employment in CIE is very important. I should like to know what are the Minister's views on that, whether it is still the intention that there should be a national, fair, equitable examination system, with recruitment taking place on that basis.

The Minister did mention that under the 1985 Act he provided £30 million, to be financed by way of a £3 million loan per annum for 10 years, with CIE — if my memory serves me correctly — being responsible for the payment of the interest on that loan. Again the transparency syndrome enters in. When we are dealing with the finances of CIE we should not merely discuss in this House the annual subvention, now above the line, which is categorised as social expenditure — but also take the global financial position into account.

In the Seanad on 10 July 1985 the Minister made a statement about the provision of money, £16 million annually for the years 1985, 1986 and 1987. That was an original method of funding decided on but not adhered to. There is mention by the Minister that £32 million of that total of £48 million will fall to be paid in 1987. That is because £8 million only was paid each of the years 1985 and 1986. I can foresee a problem arising in 1987. I think this was a bit of shuffle the brogue financial management, when £32 million of the total was put back for payment in 1987. I hope the finances of this country will be in a better position in 1987 than they were in 1985 and 1986 but I do not think it is a fair way of financing — shoving the debts forward to the following year. I do not think it is fair for the Department of Finance, if they were responsible, or the Minister himself, if he was responsible, to do so. If there is a change of Government I would find it even more distasteful to have to rustle up £32 million whereas, in accordance with the original ministerial decision, £16 million was all that would be required.

There should be a substantial saving to CIE which should show itself in the amount of subsidisation required or not, as the case may be, in the drastic drop in the price of diesel of which CIE is a very heavy consumer. I got some statistics for the benefit of the House on that matter. These are crude oil prices, Arab, light, on-the-spot market, which was the standard used for reporting for a considerable period.The Economist has now switched to North Sea Brent but these prices are the same. For example, in the last two years of the 1977 to 1981 administration the price of crude oil per barrel zoomed up. This has never been properly taken into account in estimating the economics of that period of Government.

Admittedly, possibly Fianna Fáil did not give sufficient credit to the Coalition Government of 1973 to 1977 for their difficulties when the price of oil increased in 1973 but the increase of 1973 was chicken feed — if one can describe diesel as chicken feed — compared with that in 1979. I will give an example. When I came to office the price of a barrel of crude oil was $12.57. In January 1979 it cost $15.95; in February, $19.50; in March, $20.80; in April, $21.20 and in May, $34.25. The average price for 1981 was $39.25. In other words it was well over 300 per cent up on what it was when we took office. The average price for 1982 was $34.12. On October 28, and I checked this in the Dáil Library, the price of a barrel of oil was $13.25 or one-third of the cost of what it was in 1981. That should show in CIE's finances. The management in CIE, the Minister and this House cannot claim any credit for that drop. It is simply a matter of the way it worked out. We should take note of it and CIE should also be asked to take note of it.

The Minister mentioned Inchicore and he is justly proud of it. There is a great mass of skills in Inchicore. There is no doubt about that. Over the last few years we have been toying around with the idea of entrepreneurs, enterprise, encouraging entrepreneurship and so on. To try to create that kind of atmosphere is a valid and worthy aim of a person in public life. In Inchicore there is a large workforce with a great body of skills. I see nothing wrong with either the Minister for Communications or the chairman of CIE trying to instil a spirit of entrepreneurship in the people there. They should encourage them to come up with suggestions as to how their skills could be used in manufacturing, even outside the remit of CIE. It does not matter what they do provided they indulge in profitable and productive manufacturing.

As I said before in the House, Mr. Kieran Kennedy who is currently head of the Economic and Social Research Institute carried out a study of the economy of Denmark some years ago. It was published in the Central Bank report. Admittedly, Denmark's economy is not anything to write home about at present. One very effective point he made was that there had been a big proliferation of small companies in the engineering field, using engineering in its widest sense. Eighty per cent of those developments came from people who were working in a major engineering company. They developed ideas of their own and set up their own small industries. The people in Inchicore could be given a lead in that regard and there is nobody better than the Minister, being an Inchicore man, to do so. He would have to do it through the board of CIE and the rail company. That possibility is there. It was not until I sanctioned the £43 million programme in 1982 that I realised the vast potential in that place.

Mr. Conlon, the chairman of CIE, stated that the rail sundries and road freight were on trial and if they had not made a profit by 31 December 1986 the prevailing thinking was that it would be closed down. The Minister did not say that they made a profit. His words were interesting. He said that they were safe and that they were going to carry on. Perhaps when the Minister is replying he would indicate to the House the position with regard to the sundries and freight area. In his speech he stated:

CIE rail sundries and road freight services to be discontinued by 1 January 1986 unless they proved profitable in 1984 and 1985. I am glad to report that such is the improvement in these areas that their future is now assured.

That falls a little short of saying that they made a profit. If the Minister would indicate in his reply the exact psoition I would be grateful to him.

With regard to staff reductions, when speaking to Mr. Conlon and some of his managers it was indicated to me that the staff redundancies had taken place some time ago. They were reduced by 500. I am in general agreement with the humane approach of the Minister on this, that it will all be done properly with due consideration and in a voluntary manner in so far as that is possible. In regard to the transfer of staff the provisions in the Bill are above reproach. I hope that things will work out as the Minister indicated, namely, that the transfer will be one which will not damage in any way existing staff. However, I have information that the chief civil engineer and his staff at Pearse Station in Westland Row — I think there are between 80 and 100 staff there — are making representations with regard to a transfer which is about to be imposed upon them. That is not in accordance with the spirit of the Bill or with the sentiments expressed by the Minister in his speech. The general idea is that, without any regard to the interest of the staff, they have been told that they are to move from Pearse Station, Westland Row, to the North Wall Quay.

I would like the Minister to assure me that the interests of those people will be taken into account, that he will approach the management of CIE on the matter and that he will see to it that there is no summary order for them to move out. They are particularly worried about losing, for example, the advantages of rail travel to and from their work. That is something which many other people have to put up with. The staff there are brought straight to their place of work. If those people are sent to the North Wall it cannot be said that their conditions are not disimproving. The transport service to the North Wall — the 53A bus goes there — certainly does not compare with the service made available through DART to the people working in Westland Row. The staff point out that British Rail offices are a mile from O'Connell Bridge. These are the offices they have been asked to switch to. Apparently Sealink gave this place to CIE for nothing. If I know Mr. Sherwood, he does not go out to give valuable presents to anybody, so there must be a problem about the use of this building.

Another point they make which the House will recognise as valid is that the safety of the staff going to and from the North Wall should cause concern to CIE. In general they feel that they are isolated in a way. They cannot even go for a walk at lunchtime. There is not much substance or validity in such arguments although they should be taken into account.

I ask the Minister to have consultations with Mr. Conlon and his management team with regard to the staff of the chief civil engineer in Westland Row. The chief civil engineer was not on to me himself but I have had representations with regard to the position, and the purpose of the Minister's representations, should be to see to it that the staff there do not have to suffer any deterioration in their place of employment or conditions of employment in accordance with the spirit of the Act.

I will be going through the Billseriatim in a moment. I gather that the amendments which were introduced in the Seanad were to fend off a major revolt there with regard to a number of points. The first is one that I have been discussing, namely the desirability of maintaining separate rail and national bus companies. Second, there was a strengthening of the section with regard to trade union and industrial relations activities. This in a sense is in accordance with what the Minister said. I agree with him that industrial relations, as Dr. Todd Andrews said, was the basis and essence of the development of CIE. I will be having a look at section 11 as amended later on.

The borrowing for capital purposes has to be done by the board. The Minister may clarify this. The borrowing for ordinary running expenses, I understand, can be made by each of the individual companies with the overall safeguard of an upper limit to the amount that can be borrowed. The system of reporting from the company to the parent board will be important in this regard so that the parent board can keep an eye on the amount of borrowing that takes place for ordinary running expenses.

With regard to fares and rates, as the Minister indicated, the prices commission has been abolished but still the Minister has retained for the Government the right to approve or disapprove of proposed fares. I presume that the Minister feels that that is necessary. One could imagine CIE making a pitch for such high fares as to damage the citizens, although I cannot really see how that could happen because naturally if they go out of kilter altogether they will lose customers and the whole purpose of the exercise is to make the company more competitive and in whatever areas possible, profitable. As I have said, I think that they can be made profitable in the Dublin city services area.

Section 29 of the Bill as originally published read:

In determining the remuneration or allowances for expenses to be paid to its officers or servants or the terms or conditions subject to which such officers or servants hold or are to hold their employment, the Board and each company shall have regard either to Government or nationally agreed guidelines which are for the time being extant, or to Government policy concerning remuneration and conditions of employment which is so extant, and, in addition to the foregoing, each of them shall comply with any directives with regard to such remuneration, allowances, terms or conditions which the Minister may give from time to time to it with the consent of the Minister for the Public Service.

In the Seanad Bill as passed, unless I am blind, section 29 seems to be eliminated altogether. It was a section that came into a number of Bills that came before this House for some time and it was resented by Members on all sides of the House because it seemed to be interference with the principle of free collective bargaining by the workers in particular State companies. The Minister can comment on it but I think I am right in saying that that was removed during the Seanad debate.

Sometimes during debates in the House I raise points and when the time comes for reply the Minister has not time or is crushed into a corner and so on. I do not believe that that will happen on an important Bill like this, but if there are some points that the Minister does not succeed in reaching I would appreciate it if I get a reply from the Department of Communications on the points I make.

In passing, I suppose it would be strange if we did not mention the plan that has been bruited abroad about the headquarters for CIE. I asked a question in the House about it. It is still insuspenso, but it is highly relevant to this Bill because if a decision is taken to go ahead with the scale plan, as it is called, that will have an important bearing and impact on the running of the Dublin city services particularly, other national bus services out of the city and, if I am right in what I recall, the feed into Heuston and Connolly Stations. I know that CIE had been purchasing buildings along the quays. This seems to have been going on for some time. Certainly an objective was for some form of development in that area. Perhaps the Minister might mention this in his reply. It depends on when the reply comes, because I gather a date has been given for publication of a reply to the proposal by Caneire for that development. It is very important to make the right decision. It is important not to refuse a capital input if we are sure there is such capital input with all its implications for employment and development in the capital city. It is important that it be got right and that the country will gain from it if a decision is taken to go ahead with it.

The quays were decided upon a long time ago. The Earl of Ormond was responsible and an attempt was made to build warehouses or other houses right down to the edge of the river. There was in that man a sound sense of urban planning and he should get credit for the quays as they are. Admittedly we have not looked after the houses along the quays as we might and the whole area could do with an overall architectural plan. As far as I know, the Caneire or Skelly plan would not change the face of the quays. It was designed to go underground for the most part. I do not have the details nor does anybody else but any interference with the quays architecturally or as routes into the heart of the city would be wrong.

I was speaking to tourist interests recently and as far as CIE are concerned they are very anxious that we get it right with regard to Rosslare and the rail service particularly from Rosslare to the south and south west. Co-ordination of boats and trains and bus services in the areas of Waterford, Kilkenny, Wexford, Limerick, Cork, Killarney and Tralee are important.

A point was made in the Seanad debate about CIE's role as an employer, and I would add to that, their role as an educator. Every Member of this House has had at some time representations from young people anxious to train as fitters, electricians and so on and asking us to see if there were any vacancies in CIE. I hope the new parent board and the new subsidiary companies will keep their educational role in mind. There could be a danger that the educational role would be minimised because of the split up. The board may have to address the whole problem of apprenticeships right across the activities of CIE so that apprentices may be trained for the national bus company and the railway company — if we do not succeed in persuading the Minister into having one company — and for the Dublin city services.

I intended to tackle the Minister about his statement in the Seanad that 1982 was a dreadful year and so on. It happened to be the year of my consulship and that is why it attracted his attention to the extent that it did.

That is not true.

I have already given figures which are to the credit of 1982 so I will not go into greater detail on that. I just wonder about the Minister's argument that because units of management are smaller we will have a better industrial relations climate or that it will necessarily be more efficient, particularly where there is cross competition. I know there is potential for a quicker response to outside competition. The only outside competition that CIE really have is private cars, private haulage, private coaches and so on.

The Minister at the end of his speech mentioned privatisation and made it quite clear that there is no purpose of privatisation behind this Bill. I fully accept that but I also maintain that there is a need for legislation with regard to private transportation particularly now that the Minister intends to have two separate companies which will compete with each other to some degree with the old father figure of a board moderating and modifying the competition. I would like if in the Minister's reply he would indicate if he has any intention of bringing forward legislation with regard to private coach operators and so on. The trade unions are opposed to any development along that line and I would be interested to hear the Minister's views. There is a big operation in private coaches and they have a large constituency supporting them, particularly among young people. All one has to do is have a look at what happens around Parnell Square and O'Connell Street at the weekends to see how big that constituency is. It is incumbent on this House to address itself to the problem of private coaches.

The Minister has also set people's minds at rest about the danger of the companies going into liquidation. I can see why workers develop fears and phobias about this having regard to what happened to Irish Shipping Limited. One group of workers put it to me that if in the competition between the national bus company and the national rail company, the national bus company won out, unless it was built into the Bill that there could not be liquidation, this could be used as an excuse to liquidate the railway company. I thought it was a far fetched argument and said so but the reply I got was "well, you know what happened to Irish Shipping Limited".

An interesting area is the role of the Department of Communicationsvis-à-vis the new CIE board and their companies. The McKinsey report addressed this problem in their study of CIE. I agree that there should be a regular and frequent reporting procedure developed between CIE and the Department of Communications.

Debate adjourned.