Written Answers. - Cost of Providing Social Service.

Seamus Brennan


265 Mr. S. Brennan asked the Minister for Transport, Energy and Communications whether he has identified and quantified the cost to each semi-State under his direction of providing a social service; and if he will publish such information as promised by the Government in its programme A Government of Renewal. [1707/96]

Not all of the ten commercial state companies under my Department's aegis have social obligations. To that extent not all of these companies have to bear social costs.

The Irish National Petroleum Corporation, Bord Gáis Eireann, Aer Rianta, Bord na Móna and the Irish Aviation Authority all operate on a purely commercial basis and have no social mandate.

Aer Lingus Group also operates on a purely commercial basis but under the Essential Air Services Programme (EASP), approved by the Government, it is currently providing air services from Dublin to both Galway and Kerry regional airports. The Exchequer refunds the company approximately £900,000 per annum for operating this service.

In the case of Coras Iompair Eireann, the company receives a substantial Exchequer subvention each year in support of the provision of socially necessary, but commercially unviable, public transport services. The breakdown of this subvention for 1994 the most recent year for which published figures are available was as follows:

Bus Ath Cliath

£5.0 million

Bus Eireann

£4.0 million

Iarnrod Eireann

£85.0 million

DART interest

£8.18 million

This year's subvention will amount to approximately £100 million. The board has not yet decided on how this will be broken down. However, as I have made clear on a number of occasions recently, it is my intention to replace this subvention arrangement with a system of public service contracts, commencing in the 1997 financial year. This new system will improve transparency and accountability and will help to ensure optimum value for money in respect of State financial support to public transport.
In the context of the ESB cost and competitiveness review (CCR), it has been accepted that ESB, like many electricity utilities in other countries, has to bear extra costs at a result of national energy policy. These costs, which are recognised in the draft EU Electricity Directive, are more generally referred to as "Public Service Obligations" (PSOs). It has been accepted in the CCR that PSOs are within the remit of Government as policymaker and that the identification and quantification of such obligations are necessary in a future competitive electricity market. Accordingly, appropriate mechanisms to address these PSOs will be provided for in new legislation. The proposed regulatory authority for the electricity industry will oversee the quantification of future PSO costs and will ensure that they are recovered in a fair manner from all electricity consumers connected to the network. However, at present, no precise independent estimate is available of the magnitude of such obligations.
My Department has not, as yet, identified or quantified the cost of the social services provided by both Telecom Éireann and An Post. However, with regard to Telecom Éireann, the planned establishment of an independent regulatory authority for the telecommunications sector later this year means that work to this end is currently being undertaken. This exercise will involve the proper identification of the universal service obligation in Ireland and the manner in which all telecommunications operators and service providers should contribute to its cost. The gradual liberalisation of the postal sector as envisaged in a recent draft EU directive on "Common Rules for the Development of Community Postal Services and the Improvement of Quality of Service" will necessitate a similar exercise in the future in relation to the postal services.