This Bill, as the Seanad is aware, is designed to give legislative effect to the agreement which was reached with the Ministry of Commerce in Belfast for the acquisition jointly of the G.N.R. and for the maintenance and operation of that undertaking.
Like every public transport undertaking, the G.N.R. Company went through a period of difficulty in the years before the war from which they were temporarily relieved by an increased volume of rail business during the emergency years. As soon as traffic conditions began to approach normality after the war, and particularly on the return of road competition, the company were again faced with serious difficulties. These difficulties assumed serious proportions in 1948 and the company again found themselves, as in the pre-war years, unable to pay interest on their ordinary stock. In 1949 an operating loss of £68,000 was incurred. This was increased to £106,000 in 1950.
The position of the company had been causing concern both in Dublin and Belfast. In August of 1950, on the initiative of Mr. McCleery, Minister of Commerce in Belfast, the position was discussed at ministerial level at a conference held in Dublin. Later in that same year, in November of 1950, and again on Mr. McCleery's initiative, these discussions developed into negotiations of a more formal type. While negotiations were proceeding, the G.N.R. Company informed both Governments formally that they would have no alternative but to curtail services and to reduce staffs and on December 20th, 1950, the company intimated that they proposed to publish a notice that railway services would be discontinued completely from February 1st, 1951.
In January, 1951, following on a further meeting in Dublin, it was agreed that the G.N.R. Company should be informed that the two Governments had decided jointly to acquire the undertaking and that the purchase price would be £3.9 million. It was also agreed then to accept jointly responsibility for the financial results of operating the G.N.R. Company pending its acquisition. Following the intimation to the company that agreement had been reached to acquire the undertaking, it became clear that difficulty was likely to be experienced in concerting viewpoints and reaching similar agreement as to what should happen after the undertaking had been acquired. Further negotiations at ministerial level did not resolve that difficulty and eventually negotiation was suspended. In the meantime, the proposed purchase price had been rejected by the G.N.R. Company.
Following the change of Government in June, 1951, new negotiations were initiated and led eventually to the agreement which is scheduled to this Bill. When it became clear than an inter-governmental agreement on the general lines of policy was likely to be realised, a meeting was held with the directors of the company who were informed orally, both by Mr. McCleery and myself, that we were prepared to proceed with the compulsory acquisition of the undertaking for the sum of £3.9 million, but that we would have greatly preferred to have proceeded on a basis of agreement.
We told them that if a proposal were made on behalf of the stockholders for a voluntary sale on terms slightly more favourable than the original offer we would be prepared to recommend acceptance of that proposal.
In November, 1951, a ballot of the stockholders was taken by the company at the instance of the directors, who suggested for consideration by the stockholders that if compensation was fixed at the sum of £4,500,000 it should be allocated between the various classes of stockholders on a basis which would provide for distribution per £100 of stock as follows: debenture stock, £89 2s. 6d.; guaranteed stock, £66; preference, £35; ordinary, £28 10s. The majority of the stockholders voted for acceptance of the terms put to them by the directors.
In communicating the result of the ballot to Mr. McCleery and myself, the directors pointed out that neither they —the company—nor the stockholders had power to sell the undertaking or to offer it for sale, but they intimated that they wished the result of the ballot to be regarded as tantamount to an offer for sale if the necessary statutory powers for that purpose existed.
The offer was accepted subject to the approval of the two Parliaments. The Bill provides in Section 46 for compensation of £4,500,000 distributed in accordance with the scheme of apportionment on which the ballot was taken. Interest will also be payable on debenture stock in the interval between the establishment date and the distribution of compensation subject to a limit of two months.
For the future management of the undertaking it is proposed that a board should be set up consisting of five members appointed by each Minister. The terms and conditions of appointment, including remuneration, will be settled by the Ministers jointly. The joint interest of the two areas is evident in the arrangement that the chairmanship of the board will alternate annually between the members nominated by each Minister to be senior members. Apart from that, the usual conditions will apply to members. A member may be removed from office for stated reasons by the Minister who appoints and a statement of the reasons for removal will be laid before each House.
It is proposed that the title of the present company should as nearly as possible be retained. This has obvious advantages. The name of the new board will, therefore, be the G.N.R. Board. The duties of the new board are set out in Section 7 of the Bill. They will provide that it will take over the undertaking which up to now has been carried on by the G.N.R. Company. The board will inherit the present powers and rights of the G.N.R. Company other than the powers of raising capital. It is a specific duty imposed on the board to secure as soon as may be, taking one year with another, that the revenue of the board shall not be less than sufficient to meet charges properly chargeable to revenue. In other words, the board is to aim at making the organisation pay its way.
On the establishment of the board the property of the company, except for land, but including the Dundalk works, will be transferred to the board. The land in this State except the Dundalk works will vest in the Minister for Industry and Commerce but the Bill will operate to grant to the board the right to occupy and use the land for the purpose of carrying on the undertaking.
The company's land in the Six County area will vest in the Ulster Transport Authority, but under legislation introduced in Belfast the board will have the right to occupy and use that land also. As a corollary to the use of land vested in the Minister for Industry and Commerce here or in the Ulster Transport Authority, there will be an obligation on the board to maintain the property and to discharge outgoings on it.
The preservation of the Dundalk works as the main workshops of the undertaking and the maintenance of the substantial volume of employment given by the works in Dundalk has been one of our main objectives throughout the negotiations. I may say that of the company's 7,278 employees, more than 1,000 are employed in the Dundalk workshops. A provision is included in the Bill requiring the board to comply with any direction which may be issued to them by the Ministers on matters of policy. The terms of the joint direction providing for the future management and operation of the Dundalk works have already been agreed.
A letter in identical terms will be issued to the new board on its constitution from the Minister of Commerce in Belfast and from the Minister for Industry and Commerce here. I read the terms of that letter to the Dáil when introducing the Bill, and it will probably suffice if I summarise them for the information of the Seanad. The joint direction will provide that the Dundalk workshops will be maintained as the main workshops of the whole system. The board must, however, run the workshops on business lines and contracts may be placed elsewhere if commercial considerations justify that course. When, however, the board are estimating the weight of the commercial considerations arising in any particular case, they must have regard to their obligation to maintain the workshops and the placing elsewhere of contracts which might permanently reduce the scope of the workshops or cause a diminution of employment must be approved by not less than seven members of the board. Similarly, any extension of the workshops or any proposal to dispose of part of the workshops must be approved by not less than seven members of the board.
Under existing legislation maximum rail and road charges on the G.N.R. system may be increased only with the sanction of a ministerial Order. The House will remember that under the Transport Act, 1950, C.I.E. were left completely free to make such charges as they may think fit. In the case of the G.N.R. it was felt that the board should be given a greater degree of discretion as regards its charges than is at present exercised by the company. In the special circumstances of the case, however, and particularly in view of the fact that the board's charges in the Six Counties would be subject to the Six County transport tribunal, it was decided that some measure of control should be retained here also. The Bill, therefore, provides in Section 12 that the board must give to the Minister one month's notice in advance of any proposal to make a general increase in charges and such increase may not take effect if the Minister, within that period, notifies the board of his disapproval.
The G.N.R. Company may not at present terminate a railway service unless authorised to do so by an Order under the Railways Act, 1933. There is also a statutory procedure to be followed in the Six Counties in the case of the closing of a line in that area. A number of the company's rail services is operated through both areas and one of the most difficult problems that arose during the negotiations was to devise a procedure for the termination of such common services, if at any time their termination should be considered desirable, without having recourse to two distinct procedures. The common service railway lines which are listed in the Fourth Schedule to the Bill are: Dublin— Belfast, Cavan—Portadown, Dundalk —Derry via Clones and Enniskillen and Bundoran Junction to Bundoran.
Under Section 23 of the Bill it is provided that services over any of these lines between this State and the Six Counties may not be terminated except with the agreement of both Ministers. The Ministers, before coming to a decision on any proposal to terminate a common service, may seek the advice of the chairman of the transport tribunals in the two areas. The chairman of the transport tribunal here, jointly with the chairman of the Six County tribunal, may engage the services of other persons to assist them in considering a proposal. They may also hold a public inquiry.
It may be that one Minister is prepared to authorise the termination of a common service but that the other Minister considers it should be continued. In such an event the board is required to continue the service but the Minister who has withheld his consent becomes liable to make good any loss sustained by the board by the continuance of the service. In the case of other railway lines it is provided in Section 24 that public notice will be given of a proposal to terminate a service and in the event that objections are made the proposal will be referred to the transport tribunal for decision and thereafter the procedure followed will be similar to that which applies in the case of the closing of a C.I.E. line.
It is recognised in the Bill that the termination of a local service in either area might have repercussions in the other area and for that reason there is provision for consultation between the Ministers on any matter of mutual interest before a local service can be terminated. If a service is continued in the Six Counties, that is to say, a local Six County service, as a result of a request from the Minister for Industry and Commerce here, then we are required to undertake to make good any resulting loss. A corresponding provision is included in the Northern legislation.
I have already referred to the financial difficulties of the present company and to the joint undertaking which was given to them in January, 1951, to meet the losses of the company between that date and the completion of the acquisition proceedings for this present period pending the establishment of the new board. It was agreed that the Six Counties should meet 60 per cent. of the losses on railways and that we should meet 40 per cent. In addition, it was agreed that we would be responsible for the results of the company's road operations which are entirely in the Twenty-Six Counties area, getting credit for any profit and being liable for any losses. That, however, is only an interim arrangement.
One of the first tasks which will confront the new board will be to devise and to submit to both Ministers a scheme for the apportionment of profits or losses of the undertaking. The scheme of apportionment will be made in accordance with certain general principles which are included in an agreement to be made between the Minister for Industry and Commerce and the Ministry of Commerce as set out in the First Schedule to the Bill. It is accepted as a general principle that each area will be responsible for the results of the operation of the undertaking exclusively in that area.
Where profits or losses cannot so readily be apportioned—as, for instance, the services of the management staff or the expenditure and receipts resulting from the transport of goods between one area and another —it is agreed that they shall be equitably apportioned between the parties. The proposal is that the board of the company will be required to prepare a scheme of apportionment. The Ministers, by agreement, may alter or amend that scheme. If the Ministers fail to agree in any respect on the alteration or amendment of the scheme, then the scheme comes into operation in any event within six months. When a scheme of apportionment has been adopted, it will remain in force for a period of three years and subsequently revision is to be made at three-yearly intervals.
The arrangements for providing further capital required by the board are a logical development of the proposals for vesting the assets of the company. All land in this State, with the exception of the Dundalk works, will vest in the Minister for Industry and Commerce. The moneys required for the development of lands or premises in this State, other than the Dundalk works, or for the acquisition of chattels for use in or in connection with such land and premises will be provided by the Minister for Industry and Commerce, and the proceeds of any sale of such land or premises or chattels will accrue to him. Moneys required for similar purposes in the Six Counties will be the responsibility of the Ministry of Commerce, and the proceeds of the sale of assets there will accrue to that Ministry. Money needed for the acquisition of railway rolling stock or for the purpose of the Dundalk works will be provided in equal shares by the Minister for Industry and Commerce and the Minister of Commerce. Similarly, the sale of rolling stock or of assets used in connection with the Dundalk works will accrue to the parties in equal shares.
The subscription of capital for the road services, all of which are operated here, will be a matter exclusively for us. These financial arrangements are all included in the agreement and legislative effect is given to them in the various sections of the Bill. The agreement may not be amended for a period of five years. The rights and obligations of the Ministry of Commerce may be exercised by the Ulster Transport Authority and will, I understand, be so exercised.
There is a provision in Section 33 for the payment of interest on advances made for the purchase of assets by the board. Whether interest will, in fact, be charged may have to be considered in the light of the circumstances prevailing when the advances are made. It is important, however, that the full cost to the community of maintaining the services should be apparent in the board's accounts.
The board will be required under Sections 19 and 35 to keep all proper and usual accounts and to furnish any further accounts or information that may be required. In addition, an annual report on the operations of the undertaking must be submitted. The audited accounts together with the auditor's report on them and the annual report on operations will be presented to the Oireachtas. The Minister will have power under Section 18 to make an investigation into the operations of the undertaking exclusively in the State and to make an investigation jointly with the Minister of Commerce into matters of common interest.
On the establishment date, the existing staff of the G.N.R. Company will be transferred to the employment of the board, their present rights and privileges being adequately safeguarded. In the event of the termination of a railway service, employees whose employment is terminated or whose conditions of employment are worsened will be eligible for compensation. In the case of employees resident in this State the position will be in accordance with the scale applicable to C.I.E. employees in similar circumstances.
The superannuation rights of existing employees of the company are preserved under the Bill and there is power to make new schemes or to revise an existing scheme. The terms and conditions of service of rail and road employees will continue to be settled in accordance with agreements made between the undertaking and the appropriate trade unions.
The obligation of distributing the compensation of £4,500,000 will devolve on the present G.N.R. Company. When they have discharged that obligation the continued existence of the company will become unnecessary. Its existence will then be terminated by an Order made by the Minister for Industry and Commerce.
I have outlined the main provisions of the Bill. Its terms, as the House will have observed, are, except for those of purely local relevance, identical with the Bill which was passed by the Parliament in Belfast. The Seanad will appreciate, therefore, that amendments can be made only in agreement with the Belfast authorities. Any amendment in our draft will probably also mean an amendment in theirs. Because of this when recommending the measure to the Dáil I asked Deputies to refrain from pressing amendments unduly, and I am glad to acknowledge the co-operation which I received. I now make the same request to this House and I recommend the measure for their acceptance.
The position in respect of the Six County Bill is that it has been passed by the Parliament in Belfast and is, like our measure, now under consideration by the Senate there. It is contemplated that the two Bills will become Acts some time during the course of the present month and come into operation early next month. I have great pleasure in recommending the adoption of this Bill.
