The sole purpose of this short Bill is to increase the approved limit on the borrowings and leasing arrangements of Irish Telecommunications Investments Limited which the Minister for Finance may guarantee from £350 million to £600 million. The increase is needed to enable Irish Telecommunications Investments Limited, ITI for short, to arrange, through new borrowings and leasing arrangements, for the major proportion of the national telecommunications development programme for 1983. The present guarantee limit of £350 million, which was fixed by section 6 of the Irish Telecommunications Investments Limited Act, 1981, is now nearly used up and, since ITI are scheduled to raise nearly £200 million for telephone development this year, early enactment of the Bill to increase the limit is essential.
ITI Limited are a wholly-owned State company who were set up by the Minister for Posts and Telegraphs on 1 April 1981 to obtain funds from the private sector, either by borrowing or leasing, to help finance the telecommunications development programme. Their activities reflect the policy of stimulating and encouraging private participation in investment in infrastructural services.
Statutory control of the company is provided for by the Irish Telecommunications Investments Limited Act, 1981, which is broadly on the same lines as legislation governing other State-owned companies. In particular, the prior consent of the Minister for Posts and Telegraphs, given with the approval of the Minister for Finance, is required for all borrowing and leasing arrangements by the company.
Capital expenditure on telecommunications development was roughly £220 million in each of the years 1981 and 1982. The amounts raised by ITI were £92 million and £141 million in 1981 and 1982 respectively. Of the projected capital programme of £226 million for 1983, £194 million will be raised by ITI.
The limit of £350 million on ministerial guarantees under the 1981 Act was determined on the basis that it would be adequate to meet likely needs to 1982. The intention had been that, by then, the Postal and Telecommunications Services Bill, 1982 would have been enacted. Under that Bill, as Senators will be aware, two new State-sponsored bodies would have been set up to take over the operation of the postal and telecommunications services from the Minister for Posts and Telegraphs. ITI would become a subsidiary of the telecommunications body, Bord Telecom Éireann, which would be wholly responsible for arranging for the financing of telecommunications development. In the event, the Postal and Telecommunications Services Bill, 1982 had only passed Second Stage in the Dáil at the termination of the last Dáil. I should say, however, that the Government are committed to pressing ahead with the reorganisation of the Department into State-sponsored bodies and the Minister for Posts and Telegraphs proposes to put a motion to the Dáil shortly after the Recess for the restoration of the Bill to the Dáil Order Paper for its Committee Stage.
The future role of ITI in the financing of telecommunications development will be a matter for Bord Telecom Éireann when it is established because, as I mentioned earlier, the company will become a subsidiary of the new State-sponsored body. However, the provisions of the Postal and Telecommunications Services Bill, 1982 would apply to any subsidiaries of Bord Telecom Éireann as well as to the company and borrowing and guarantee limits would apply for the board and its subsidiaries as a group. Accordingly, the financial activities of ITI will be subject to statutory control whether it is retained as a subsidiary of Bord Telecom Éireann or is wound up.
Until Bord Telecom Éireann is set up, however, it is necessary to ensure that ITI will be in a position to make their contribution towards the funding of telecommunications development and that is the object of the present Bill. The increase in the guarantee limit to £600 million provided for in the Bill would meet requirements for at least another year or so. As Senators will be aware, the basic target of the current development programme which covers the five-year period 1980 to 1984 is to raise the standard of our services to that of our EEC partners. I should say, a point which previous Ministers for Posts and Telegraphs also stressed, that this would be a considerable achievement. It was never to be expected that the service would be transformed quickly but progress has nevertheless been steady and we are broadly on target to meet the programme objectives by the end of next year. The first essential has been to build up the infrastructure of the service itself in terms of buildings, exchanges, trunk systems and main cabling. This has necessarily taken time and has involved very heavy financial investment but it is paying off and will yield increasing returns in service improvements as time goes on.
The three major aims of the current programme are to improve greatly the quality of the internal trunk service, to give all subscribers an automatic service and extend the areas to which calls can be dialled, and to eliminate delays in connecting new telephones, telexes and data lines. In all of these, substantial progress is being made. I will give a few examples.
The Minister for Posts and Telegraphs opened a major new digital trunk exchange in Dublin last week which will provide greatly increased capacity for switching trunk calls in Dublin exchanges and will enable many more trunk circuits to be provided to centres throughout the country which are still suffering congestion. About 92 per cent of subscribers have automatic service at present and well over 100 of the remaining 400 manual exchanges are scheduled for conversion this year. It is possible since late last year for subscribers to dial calls to all areas in Northern Ireland and, from the end of this month, it will be possible for subscribers on Dublin exchanges and in Cork to dial calls to all parts of Britain. This facility will be extended to the rest of the country over the next few months. Up to 70 per cent of our subscribers can now dial their international calls to some 70 other countries. Progress is also being made, though unevenly in different parts of the country, in getting to a position where new facilities can be provided promptly. By the end of this year we expect that in virtually the entire Cork, Limerick, Waterford and Portlaoise districts — four of the eight engineering districts — waiting lists will have been cleared and all applications for telephones will be capable of being met promptly. By the end of next year the remaining four districts should be in the same position.
I want, however, firmly to dispel any notion that the programme targets will be attained easily. We still have some significant current problems. Senators from Dublin in particular will be aware of the problems in regard to underground cable repairs and the delays in getting telephones. There is clearly much work still to be done and it will require an allout effort to meet the objectives of the programme. Clearly, one essential requirement is that the necessary finance should be provided and that is the purpose of the Bill.
As the Bill is concerned with investment, I think I should conclude by making the point that the substantial investment which is being made in the infrastructure of the service will largely meet requirements for a number of years ahead. The cost of servicing the investment has weighed heavily on the service and, largely because of it, there have had to be substantial increases in charges in recent years. It is expected that the service should move into modest surplus this year and make some contribution towards past deficits. Furthermore, in the years ahead, when the current programme has been completed, it will be possible to add many more subscribers to the system and to handle a greatly increased volume of traffic with relatively small additional increases in resources. The financial performance of the service should therefore improve steadily and it should be possible to contain increases in charges well below the rate of inflation. It goes without saying that investment in telecommunications is essential for the economic and social well-being of the country. I am happy to say that I am confident it will also yield a positive and significant financial return.
I ask for the co-operation of Senators in ensuring a speedy passage for this short Bill, which I commend to the House.
