The purpose of this Bill is to make provision for the maintenance of a shipping service between Galway and the Aran Islands, and for the payment of subsidies to the company operating that service. As I think most Senators will be aware, the steamship service is the only regular service available for the transport of passengers and goods between the mainland and the islands. The maintenance of this service is, therefore, essential to the life of the community living on the islands. The service has been in operation for a number of years but owing to the limited amount of traffic available it has never been self-supporting. To ensure its continuance it has been necessary to subsidise it from public funds, and the Galway Bay Steamship Company has been in receipt of subsidies for that purpose since the year 1891. Before 1930 the total subsidies amounted to £1,000 per annum. Between 1931 and 1945 the annual average subsidy was approximately £500.
The Aran Islands Transport Act, 1936, which it is now proposed to repeal, made provision for the payment of annual subsidies in respect of the operation of this service, and it provided also for the payment of occasional subsidies to meet the cost of overhauls of the vessel used in the service.
The amount of the annual subsidy was limited to £300 and it was provided in that legislation that the subsidy would not be paid for any year subsequent to 1945. In accordance with the provisions of that Act, an agreement was made with the Galway Bay Steamship Company for the operation of a regular service. That agreement provided for fixed annual subsidy of £300 and, in addition, an occasional subsidy to be paid when the vessel engaged in the service, the Dun Aengus, had to undergo a periodic overhaul. The occasional subsidy was limited to the amount by which the cost of the overhaul exceeded £1,200 and was not recoverable from insurance or other sources. That agreement in accordance with the provisions of the Act terminated on the 31st December last.
Owing to the shortage of coal and the poor quality of the coal available the service has been greatly curtailed during the emergency. The main items of expenditure are fuel costs and wages paid to the crew. Despite the reduction in the service occasioned by the curtailment in the supply of coal, the expenditure both in respect to fuel and wages has actually increased. Furthermore, the company formerly earned a substantial revenue by the provision of a tender service for ocean liners which is no longer available to it. To offset the increased cost and to make up for the loss of the company's other sources of revenue, increased charges were made, but despite these increased charges the company has been operating for some years at a heavy loss. So critical was the company's position in 1945 that it was found necessary to make an extra subsidy payment of £700 under the authority of an Emergency Powers Order.
The vessel is now due for overhaul, and the company have no funds available for this purpose. There is at present no statutory provision for the payment of subsidies to meet the costs of overhaul, or to cover the annual loss incurred in working the service. This Bill now before the Seanad proposes to re-enact the general provisions of the 1936 Act, which empowered the Minister for Industry and Commerce to contract for the carrying on of a shipping service for the carriage of passengers and goods between the City of Galway and the Aran Islands. Such contracts may include provisions relating to the maintenance, repair, insurance and disposal of the vessel; frequency and times of service; the regulation of charges and other relevant matters. Provision is also made in the Bill for the continued payment of an annual subsidy in respect of the operation of the Aran service, and for an occasional subsidy to meet the periodic overhaul of the vessel. The amount of the annual subsidy necessary to ensure the continued operation of the service is not specifically determined. The amount may vary, depending on operating costs, the availability of supplies, and the possibility of the resumption of certain other profitable services by the company, such as tending liners. With an improvement in conditions generally, there should be a reasonable prospect that the amount of the annual subsidy will tend to diminish progressively. The amount of the subsidy is subject to the sanction of the Minister for Finance, and will be included in the Estimates submitted annually to the Dáil. It is anticipated that the amount of the subsidy for 1946 will be £500.
The vessel in question, the S.S. Dun Aengus was acquired by the Galway Bay Steamship Company by means of a loan of £7,500 granted to them by the Congested Districts Board in 1912. An outstanding balance of £3,694 of the loan was remitted by means of a Supplementary Estimate in 1935. In consideration of that remission, the Minister for Industry and Commerce acquired by the terms of the agreement, which was made in 1938 and to which I have referred, the right to enforce the transfer to him of the vessel on the termination of the agreement. The agreement, as I have mentioned, terminated on the 31st December last, but it is proposed to defer the enforcement of the provision for the transfer of the vessel for the time being. Section 4 of this Bill, and the new agreement which it is proposed to enter into with the Galway Bay Steamship Company for the operation of the service, will postpone the date of the transfer of the vessel while it continues to be used on the Aran service in accordance with the terms of the agreement.
The vessel was last overhauled in 1941. An overhaul is now due, and provision will be included in the Estimates for 1946 for the amount necessary to cover the cost of overhaul. It now appears from information received, as a result of a dry-dock examination of the vessel, that more extensive repairs than could have been ascertained when the vessel was originally examined, will be necessary, so that the total cost of the overhaul will be about £6,000. An estimate for that amount, less whatever sum may be recoverable by way of insurance, will be introduced in the Dáil this year. These are the main provisions of the Bill. I think the House will agree that it is desirable that this service should be continued, and as it cannot be continued without assistance from public funds, the proposals concerning subsidies are, therefore, necessary.