We are resuming the debate on Vote 18, Transport, Energy and Communications, which we adjourned on 1 June. A Supplementary Estimate has been circulated to Members. Two hours remain for this question and answer session, as the opening statements have been made. It remains for the Minister to make a concluding statement from 3.50 p.m. to 4 p.m., but I suggest we continue until 4.10 p.m. because we are late starting.
Vote 18 — Transport, Energy and Communications (Resumed).
Supplementary Estimates, 1993: Vote 18 — Transport, Energy and Communications (Resumed).
How is the Supplementary Estimate to be dealt with?
Under subhead D 10, Civil Aviation, as an extension of the original.
Is that in order?
I am advised that it is in order.
The Book of Estimates is published in November and amendments are usually made after the budget. We have the text of the Estimate for a long time to allow us time to reflect on it. A Supplementary Estimate is usually dealt with in a separate debate in the House and it seems somewhat cavalier, to tack on a sum of £1.5 million at the end of an Estimates debate as if we had the information it contains for some time. This is not the way to do business; it should be the subject of a separate debate in the Dáil.
I raised this question with the Clerk and was informed it was quite legitimate to discuss this matter today under a separate subhead, subhead D 10.
I do not have any difficulty with that. My concern is whether this will be the final debate on the Supplementary Estimate, or will the Minister be obliged to go before the Dáil with one in the autumn?
If the Committee wants to propose that we defer discussion until another day, it is entitled to do so. In view of current events it is in everybody's interest to discuss it at the earliest possible date. We are approaching the recess and it is a problem we have to deal with.
The proposal in the Supplementary Estimate, that a sum of money will be allocated for the promotion of regional airports, will have the approval of almost all Members and the issue itself could be dispensed with quickly. There will be other occasions when significant Supplementary Estimates will be introduced for other Departments. We should not adopt a precedent that a Supplementary Estimate can be introduced and dispensed with at a select committee meeting, without adequate notice to other Members.
The Supplementary Estimate was circulated to all Members this morning in advance of this meeting. Our discussing it now is not necessarily setting a precedent. This committee is in its infancy and there are many aspects of it that will have to be put right. I would ask for the indulgence of Members to allow us to go ahead with the Estimate before us. The Minister will have to seek formal approval to move the Supplementary Estimate and I suggest we discuss it now, without setting a bench-mark for future years.
The Chair has not clarified the point I made. If we deal with the Supplementary Estimate now, does that remove the obligation on the Minister to introduce a Supplementary Estimate in the autumn?
From the information I received from the Clerk, the Minister will be seeking leave from the Dáil to introduce the Estimate next week.
To introduce the Supplementary Estimate?
That is right.
Are not all Estimates to be taken next week?
I am proposing that we take them. We will discuss this Supplementary Estimate now and move it with the general Estimate next week.
I suggest that we take subheads D1 to D9 inclusive, before subheads C1 to C6 inclusive.
That would be a dangerous precedent because everybody would list their own priorities. It would be chaotic if we were to deviate from the important matters we adopted in that regard. Therefore, I suggest that we would take programme C, subheads C1 to C6, inclusive. I am allowing questions from any Member on them.
Will there be an allocation of time. At which stage will we discuss subheads D1 to D9, inclusive, because, on the previous day we discussed this Estimate, the Minister was courteous, helpful and informative but we spent Friday discussing Energy. We could all talk about CIE related matters from now until 4 p.m., but here are also important matters relating to our national air carrier we want to discuss,
I have no doubt that programme C is equally important to people who are involved in road and rail transport and I suggest that nobody goes off the rails, that we confine ourselves to the Estimate and try to get through it as expeditiously as possible.
Road and rail issues are also important to me.
Will the Minister say when it is proposed to provide a diesel commuter rail service serving north Kildare, Lucan, Clondalkin, Ballyfermot and Inchicore? When is work likely to commence? Is it proposed to open a railway line under the Phoenix Park and link it to Connolly and Pearse stations?
Can the Minister comment on the trajectory of the subvention for CIE and what he expects to happen to the subvention for Irish Rail, Dublin Bus and the provincial bus. Does he accept that the interest payments on the DART system are, effectively, a subvention to that system?
Will he also bring us up to date on the industrial problems CIE are having in respect of Dublin Bus?
Can he indicate what EC funds are available for the upgrading of our railway network and if he has made any progress in getting EC agreement that funds for mobile assets be allocated to Ireland in respect of the railways and, more importantly in respect of communications with the United Kingdom?
Will the Minister report on the deliberations of the Dublin transportation task force? What stage is it at and how do the activities of that group relate to the Dublin Transportation Initiative which is about to produce its final report shortly?
The answer to the question from Deputy Lawlor is that we expect work to begin early in 1994. I understand it will not be going under the Phoenix Park, the route he mentioned.
In relation to Deputy Noonan's questions, it is fair to say that CIE has performed well over the past five or six years. It has operated within tight financial constraints in terms of the level of subvention it has been allocated and the performance of the company has improved. This is not to say that there is no more room for improvement, but it must be acknowledged that the performance of this semi-State company has improved. The subvention is approximately £108 million this year and the vast bulk of that would be in respect of Iarnród Éireann. Proposals for investment in the railway system will be considered in the context of the National Deveopment Plan which will be submitted and, hopefully, approved by the Commission.
On the trajectory of future subvention, it is important that the amount of funding and the intervention rate available to us for investment in the railway system through the Structural Funds mechanism will determine the future subvention to a large extent. An assessment will be done after that investment to assess the extent to which that investment will improve the revenue capabilities of the railways.
Because we are talking about the prospect of significant investment in the railways in the years ahead under the Structural Funds programme, it is difficult to outline specifically what the trajectory of the subvention will be, because for the first time we will have a major investment in the railways.
There was an old mathematical formula in use up to 1991 which determined the level of subvention CIE received for the railways. That is no longer operable. At the moment the Department is talking to CIE officials about that and, perhaps, will come up with a better methodology for arriving at the real subvention rate. This should be consistent with increased competitiveness by Iarnród Éireann within the overall transportation network. The level of funding available from the Structural Funds for future investment in the railway system will determine to a great extent what the subvention will be in future for Iarnród Éireann.
We will not know what level of EC funding will be available until the National Development Plan is finalised, and approved by the Commission. With regard to the question about mobile assets, this has been going on for some time and many Ministers have been pursuing it. We have not met with much success with the Commission, as I outlined in replies to parliamentary questions recently. The Government continue to pursue this matter and no decision has been taken following our renewed representations.
The Commission has twice formally rejected a very detailed submission submitted by Irish Governments to this issue. We have been persistent in trying to find a way around what is basically the Competition Directorate's refusal to acknowledge that we would not be distorting competition rules should we get some funding for mobile assets. We are continuing to put our case to the Commission.
The Dublin transportation task force has been doing valuable work for some years. The DTI is taking a complete new look at the situation. We are happy with the interim report of the DTI. We believe that, subject to adequate funding from the European Community, we can go ahead with a light rail system in Dublin and that the other initiatives, such as the quality bus corridors, will greatly enhance traffic management systems in Dublin city which are the real transport problems. Those recommendations have been submitted by the task force and they will be considered in the context of the National Development Plan.
In relation to the DTI, there were proposals for an underground route to the port either through a Liffey tunnel, which I understand would cost in the region of £100 million, a link from the eastern bypass to the north side or a route crossing the city. Will the Minister say whether the original proposal still stands, or whether the only proposal now under discussion as a route to Dublin port is the proposed Liffey tunnel?
Have any discussions taken place between Iarnród Éireann and the Croke Park authorities about the development project which will cost between £105 million and £110 million. The original proposal was to open up a spur at Croke Park to enable demolition material to be removed and avoid using the narrow side streets and to allow easy access for the increased numbers of spectators expected at the grounds. Are there any plans for a DART extension either on the north side or the south side of Dublin?
I see the subvention the Minister is making to Dublin Bus services has fallen by 30 per cent this year. I take it that the Minister has abandoned the subvention and that the improved efficiency of Dublin Bus is resulting in a net gain for the Exchequer. What is the Minister's strategy in regard to subventing a Dublin city bus service? Does he simply take back any gains that are made or is there a formula by which the Minister hopes to promote the use of public transport in Dublin.
Will the Minister comment on what impact the proposed light rail system might have on the annual subvention to CIE? Will we see a substantial reduction in the subvention or has the Minister thought that through? Will the establishment of a light rail system necessitate the reorganisation of the State companies? Dublin Bus may have a big problem in having to take routes off if light rail is developed on those routes.
My final question relates to the present dispute in Dublin Bus. This strike is very damaging at a time when the company is trying to introduce new services. Will the Minister comment on his failure to persuade the transport companies to agree to the code of practice in relation to future essential services? Will he also advise if he has any initiatives planned to ensure that the transport companies agree to this code? This code, if observed, would have guaranteed that during disputes this year the public would not have been without services.
Regarding the extension of the DART system, will the Minister advise on the areas in north Dublin the system is being extended to, and will he consider an extension to Dublin Airport? It is important that there is a public transport system connecting Dublin Airport to the rail system. If the system is being extended to the airport, will it be extended also to the town of Swords?
The quality of the rolling stock on the north line as far as Balbriggan leaves much to be desired. The Minister commented that this company has performed well over the past five or six years. However, this figure of grants to CIE would also add up to £108,400,000 together with, I suggest, the amounts paid to the company for school transport and by the Department of Social Welfare for senior citizens. If there are separate figures for these two items perhaps the Minister might advise us.
How does a company that is performing well when getting this type of subvention compare with a company that has been much criticised recently? The company's workforce helped produce a group profit in eight of ten years and now face major redundancies. The company is to suffer major transformation, if the leaked Cahill plan is to be believed, with the sale of subsidiaries and the tendering out of some of their basic services such as cleaning and so on. How does that fit in?
The Deputy is going on to the next topic. Will he confine his remarks to programme C?
In relation to programme C, CIE receives £108 million directly from the Department of Transport, Energy and Communications. How much more of a subvention does the company receive from the Department of Social Welfare and the Department of Education? What is the position of this committee in regard to a company which, according to the Minister, performed well in five or six years and which we are still prepared to subvent? How does this compare with another semi-State company under the Minister's remit?
Compared to previous performances, CIE is doing well. I have not suggested that it is at the maximum of its capacity in terms of delivering the best possible service at the least possible cost to the taxpayer. However, certainly regarding the period under consideration it has performed well. It is not a proper analogy to compare a commercial airline with a public transport system. It is accepted throughout the developed world where such systems operate that there is a social obligation to undertake what is socially necessary. This must be balanced against what is economically viable or possible.
It is important that we maintain a railway network here. In purely economic terms, clearly, the vast majority of railway routes are uneconomical. However, from an environmental and other points of view, such as the level of investment they represent and the fact that those who do not have access to private transport such as social welfare recipients, old age pensioners and others, should have access to a public transport system such routes are desirable. That is the starting point for a public transport system and it means that, by definition, not necessarily every single route should be based on economic criteria. Social criteria also apply.
It is only fair to point out that this is different to the situation referred to by Deputy Burke. Nevertheless, while the performance of CIE has improved the performance of the other company has significantly disimproved. Therefore, from a relative position the validity of my statement continues to apply.
Regarding the rolling stock on the Balbriggan line, which Deputy Burke spoke to me about on a number of occasions, I take the point that there is a need for improvments. It is only fair to point out that Iarnród Éireann is embarking on an investment programme in rolling stock with 17 new diesel rail cars starting from next year which should significantly improve that service to the north side and beyond.
In relation to other matters raised by Deputies, for example, the extension of the DART system to Malahide, Swords, Dublin Airport and Greystones, and the River Liffey and Phoenix Park tunnels all those are being considered by the DTI at present in the context of how the new rail system should operate. Therefore, the full report of the Dublin Transportation Initiative is awaited before detailed and accurate replies can be made to the concerns of Deputies from Dublin.
Deputy Bruton mentioned the code of practice and the fact that had this code of practice for essential services been established, the industrial action which re-appeared, however intermittently, in the CIE group of companies may not have materialised. The code of practice is a voluntary mechanism, as is the structure of our whole industrial relations procedures. I observed the benefit of this when I was in the Department of Labour.
The code of practice has been drawn up as a guideline by the LRC for those companies in essential services. It is unfortunate that it is a code which has not been taken up by every company that is involved in such services. They must be continued to be encouraged to do so. I agree that it would be helpful if the code of practice was adopted by this company. However, that is a matter for agreement by both sides in the industrial relations network. We can only encourage people to do so as the recent disputes have caused hardship on consumers, those who depend on the public transport network.
In fairness, the recent disputes in the company must be set against the background of greatly improved industrial relations in the CIE group of unions over a period of years compared to the turbulent days of approximately a decade ago. Everything must be viewed relatively. Sometimes, unfortunately, a dispute arises. The question of whether it is avoidable or not is sometimes a subjective one. I do not wish to make a judgment on that. I will simply say it is not in the interests of the company or the consumer if we have even a slight re-emergence of disputes which lead to stoppages or curtailment of services. There is a greater focus on this group of unions in terms of supplying the best possible quality of service to the customers. This has shown the increased esteem in which the group of companies is held by the public who now see an improving service.
There is an investment programme for the bus services and Dublin Bus in particular. It is clear the quality bus corridors if allowed to work will be a great improvement, facilitating much speedier access from the suburbs into central Dublin for customers and commuters. The whole image of the company has been improved and the developments are there for people to see particularly in the commuter buses which are feeding into other routes. A review of those routes is taking place to ensure a customer orientated service is provided and maximum possible usage is made of our public transport bus service in Dublin and throughout the country. That is to be welcomed and it is a great improvement compared to some years ago.
Does the Minister see room for ministerial initiatives?
My experience as Minister for Labour has led me to understand the voluntary nature of our industrial relations. Despite some difficulties occasionally in the industrial relations landscape it serves us far better than would any mandatory solutions. It is far better to encourage companies which provide essential services to see the common interest of both management and unions identified by the workers in the company. They should see the benefits deriving from the adoption of guidelines like the code of practice for essential services. I regret that is not the case and I encourage them to do so. I do not see how further intervention by me would facilitate the adoption of such a code of practice. It has been of benefit in those essential services where it has been adopted. If people make comparisons it will be seen to be in the interests of everybody that it be adopted. I will not go any further than that.
The Minister mentioned the system of giving the subvention to CIE had changed. Can he explain why that happened? The previous system gave a great boost to the morale of CIE workers. Had the performance of CIE improved so much the Minister felt it would do too well from the system and it was time to change that? That is how it is seen. The Minister urged the companies to improve their performance and when they improve it an agreement that has been made is changed.
Of the money given to the rail services is it possible to say what proportion would be for work towards the permanent way or signalling? For anyone who drives a car or lorry roads are provided but the railway system is different. It has to look after its own infrastructure unlike other systems. I accept we pay road tax but the railway has to pay for its own maintenance. Of that £80 million is it true about half is for the upkeep of their infrastructure? As such the figures are distorted.
I am glad the Minister mentioned he saw the railway system receiving some money under the new national development plan. My information is while the railways have improved over the past couple of years no money has been put into that system. One cannot continue squeezing a tube of toothpaste for ever. The company has cut back as far as it can and the equipment cannot continue to be used for much longer. New locomotives, and more modern signalling equipment are needed. The development plan should make a meaningful statement and show commitment to the future of the railways.
Will the Deputy put his question, please?
I hope I have put a number of questions. Rural Deputies used to protect their local railway line or station but lately that seems to have changed. They have lost interest in the railway system. They all want an airport runway in their counties. I hope that trend changes.
In the context of this Estimate we have to acknowledge that public transport, and particularly the railways, have a major contribution to make to a balanced regional development policy here. It is in that context we should be loooking at the subvention. To be fair to CIE as it was or, indeed, Irish Rail and Dublin Bus, we have to look at them in the context of their performance. Their performance in recent years in relation to subvention has seen major improvements.
I ask the Minister to comment on the fact that out of the £80 million subvention to Irish Rail last year, or the £80 million projected for this year, that some £45 million is for infrastructure alone. In addition to that we must consider the interest on borrowings approved by various Governments. When people say more than £100 million is being provided, the full facts should be made known because road and rail infrastructure are not on a level playing pitch. Is there a mechanism to allow the State pay for the infrastructure? Until that happens there will be problems.
We should also acknowledge when trying to attract people to the railways or, indeed, to the bus service, statistics have shown——
May I interrupt the Deputy for a moment? We are trying to pursue a hefty agenda and I would ask him to put his questions, please.
I have some questions for the Minister.
Could you be more direct in your questioning then? We have until 4 p.m. Then an important section is to follow that I would like to tackle and allow the Members the maximum possible time. I ask you to just put the questions.
I will put them for the people who elected me to Dáil Éireann to represent them.
What will be done about the locomotives? The Minister referred to rail cars. Is he aware, or indeed is the select committee aware, that many of the locomotives are between 30 and 40 years of age? What plans have we to provide extra locomotives? Many rail cars are nearly as old. In addition to the 17 new cars the Minister referred to, have we further plans for rail cars? Until those are obtained we will not get the efficient service we are seeking.
I fully support what Deputy Burke said about the DART system. Dublin Airport needs a direct service from the city centre and I am asking the Minister to comment on the possibility of extending that to the capital of Fingal, Swords.
I also ask for the Minister's comments on proposals for signalling and improvement of the rail tracks between Dublin and Belfast. Given that there were many protests about the rail service in other parts of the country, and rather than direct our attention solely to the greater Dublin area, what proposals has the Minister to improve the Cork and Sligo rail lines? Is the Minister aware that, despite the problems with its service, more people used the rail service to Sligo during the past year? In recent weeks there has been an indication of a slight change of emphasis from the rail network to the roads. Is the Government committed to providing the sums of money spoken about earlier from the Cohesion and Structural Funds?
It is important to show that progress has been made. I compliment Dublin bus on the quality of its bus corridor service where fantastic progress has been made. The late night service at Christmas clearly showed that Dublin Bus, and, indeed, our public services, can compete with private operators if they have the facilities and structures available. I ask the Minister, and the Government, to clearly indicate that its commitment to public transport is as strong now as it was when it was formed.
I have three questions. One relates to provincial buses. The subvention to CIE for provincial bus services has been increased by £100,000. Is it proposed to introduce legislation for private bus services? It would introduce competition for CIE and might relieve some of the losses that continuously occur in the provincial bus services. I know it is difficult to maintain some services which are loss makers. However, they provide a social service and that is essential also. I would like the Minister to comment on that and on his policy for the future of provincial bus services.
With regard to subhead C — Galway-Aran Ferry service — there is a slight increase in the subvention. A new vessel is now in operation. Will the Minister say who is receiving the subvention now? Is the amount provided paid to the private operator who has taken over the service from CIE or is it also paid to the Rossaveal inter island scheduled service? What are the costs in the figure of £515,000.
In regard to Subhead C.6 — Rail Services — the Minister mentioned the possibility of Structural Funds. However, the Estimates do not indicate that there will be any major improvements in that area. The Minister referred to the need to provide for the capital costs of extending the rail network. Would that include the provision of new rolling stock — locomotives and carriages — or is it just in relation to the rail network? Will the Minister outline the plans to improve the rail lines from the main western stations in Galway, Mayo and Sligo, to Dublin?
I am sure the Minister is aware of the great anger and dissatisfaction among people in the west with the standard of the rail service. Deputy Ahern said that where formerly Deputies sought support for their local rail service, nowadays they are seeking the provision of an airstrip for a jet service to every county. That is not true. The rail service is a vital link for provincial areas to the capital. Many people avail of the service but criticisms of it, particularly that from Sligo, are growing.
The quality of the rolling stock is poor. There is also much criticism of adherence to schedules which I take it, is also poor. The Galway/Dublin railway line certainly needs to be upgraded, as do all the rail lines mentioned. I am familiar with the Galway line and I have no doubt that the journey to Dublin could be reduced by 30 to 40 minutes if the line was upgraded and scheduling was improved. We should not be obliged on the Galway train to sit out on the line somewhere in the country to allow the Cork train go ahead every morning. It is absolutely antiquated the way the system is run. The staff make a tremendous effort and the rail line is well supported by the community. Of course, it is the only form of transport to Dublin for many people and they avail of it in great numbers.
The Minister is providing a disappointing sum. I would like him to outline his policy and hopes for the improvement of the rolling stock and the rail network.
I have a short question. Under Subhead C.4, there is provision for a pension for the former chief executives of the Dublin Transport Authority. Who is the beneficiary and why is the estimate not included in the Minister's A.1 Vote for pay and pensions for the Department? It is peculiar to hold a subhead indefinitely for the payment of a pension to one person.
I wish to bring to the Minister's attention the decline in the standard of the rail service between Dublin and Limerick and the down-grading of the service from Mallow to Tralee. The latter is the only rail artery into Kerry and it is important for transporting tourists on whom we depend so much into our county. There is an inordinate occurrence of breakdowns in the service to Limerick and trains are generally late because they are over-crowded. We need new locomotives and the service is stretched due to lack of investment.
The Mallow/Tralee train service has caused extreme difficulties for commuters and it is rarely on schedule. A survey carried out by the ESB workers group during which they logged the trains over a period of time showed that the train was rarely on schedule. This line appears to be on a par with the Sligo line, due to delays and so forth, and it should be given some consideration when the allocation of Structural Funds is being decided.
The locomotives that connect the Cork train to Tralee are, as Deputy Molloy said, rather antiquated and the carriages are out of date. It gives a bad impression to the tourists who are obliged travel in them. I know the Minister is concerned about his paper but I ask him to refer to these points when he finds the time.
I will try to cover all the points raised by Members. Deputy Noel Ahern mentioned CIE and the 50 per cent proportion of the subvention spent on the permanent way infrastructural developments. The total subvention is £90 million —£45 million is spent on the permanent way infrastructural maintenance and the other £45 million is for supporting services of a social nature.
It is not true to say that an agreement was broken. The agreement or the formula for determining the subvention lapsed in 1991. Before deciding what new formula should apply, one must first determine what level of investment there will be over and above the infrastructural investment coming from the existing subvention through the national development plan before properly assessing what it should be in the future.
The 17 diesel cars mentioned by Deputy Seán Ryan are on suburban lines. CIE has submitted other investment proposals for the provincial lines which cover signalling, tracks, rolling stock and the capital investment required to improve the services of which some Deputies have complained. Operational matters of that kind are for the chief executive of the company. I deal with general policy issues on a wider basis.
It would be wrong to suggest that investment has been on hold in the meantime on the provincial services. A much-mentioned example is the Dublin Sligo line. In 1992, more than £2 million was spent on track renewal of almost seven miles. A further £2 million is planned to be spent on track renewal in 1993 and this work is ongoing. A new freight gantry crane, costing approximately £1 million should be operational in Sligo station by the end of this year. In 1993 £300,000 is to be spent on upgrading Sligo station. The delivery of ten new locomotives early in 1994 will result in an improved standard of service on the Sligo line. Special promotional fares have resulted in a significant increase in passenger numbers on the line with a fare of £11 for a day return and £13 monthly return.
Proposals are being prepared for major investment in the mainline rail network on the basis of the EC funding we receive. I agree an increased level of funding will be required and is appropriate for our railway network. The Structural Funds is our best and only opportunity to make significant progress on that. My Department and I will be pushing strongly, in the context of the national development plan, for that type of investment to be now put into our railways to secure investments already made and improve passenger numbers on the railway network to make it more economic. Social services will always be required for people who use public transport exclusively. I do not think we should not provide for such people. That is not a philosophy to which I would subscribe.
Also, we have approved significant investment in the Dublin-Belfast line, the Dublin-Waterford line and western lines which pass through my own area to Westport, Galway and Sligo. We hope these can benefit from the increased level of investment that we hope to secure in the context of the national development plan.
In relation to the provincial bus services, Deputy Molloy raised a number of issues. The "expressway" service makes money. Local rural services, by reason of their social character do not prove economic but are nevertheless essential. My predecessors looked at ways to improve the services in provincial Ireland and that is being reviewed by me currently.
We can learn not to follow the UK example. There, deregulation on a massive scale did not provide for an orderly delivery of service. It would not be appropriate to allow that the happen on our routes. Certainly, we can examine means of improving provincial services for an orderly provision of service and to make sure that we get the best possible value for money. That is the aim for all Government expenditure, given the tight constraints on us.
The 1993 allocation for the Aran Islands is £515,000 and £40,000 of that is for the Rossaveal services and the balance for the main service to Galway. That is given to the operators of the service at that cost to the Department to ensure that people on the Aran Islands have a better service than previously and have access to services they require on the mainland for social and economic benefits to that island community
Deputy Noonan's question under subhead C4 relates to a special situation. The person concerned is not a civil servant and, therefore, cannot be considered under the A Vote. That is the reason it was considered on its own.
Deputy Deenihan raised operational matters in his area of which CIE will be aware. Again, improvements in those services can only be seen in the context of the allocation we can get for capital investment in the railway services generally when the national development plan has been finalised.
I wish to bring to the attention of Deputies the order of 22 June, that consideration of this section of the Estimate was to terminate at 3.50 p.m. followed by a statement from the Minister for ten minutes. We were late starting today and for that reason I intend to continue until 4 p.m. and then call on the Minister to respond. I ask Deputies to bear in mind this is a general question and answer session and to confine themselves to questions. I have no doubt there will be many questions put to the Minister.
In relation to civil aviation, it is interesting there is nothing under any of those subheads about assistance to Aer Lingus the critical situation now evident. There was not even a subhead for Aer Lingus. The critical problems in Aer Lingus are not helped by ill-considered plans, such as the plan of the chairman appointed by the Government in March last. That is not the solution to the problems of Aer Lingus. It is also not helpful if we have what I would consider to be distortions of the real scene.
I will try to be brief if I have the opportunity of putting a further supplementary question. I am not questioning the statement that the company is losing £1 million per week, but I am questioning the figure of group loss of £116 million for 1992-93. In that £116 million is there a figure for the redundancy package being offered to the workforce? What is the breakdown of the £116 million? How does it go from £1 million per week to £116 million? Is any of the redundancy package being written into the 1992-93 figures? I am deeply concerned as to where this company is going when all this major surgery is complete.
This company went through a similar situation about 25 years ago with Mr. Dargan as chief executive, and diversified into a very active establishment of subsidiaries that brought the company to the group status it has today. It is going through some rough times at the moment but it is basically a strong group. If we sell all the subsidiaries and go back to the core business, is that not a recipe for disaster in the future?
In relation to the support activities such as cleaning, catering, and baggage-handling, will the Minister agree that to take those services away from the company and put them on a stand alone basis, as has been suggested, would critically and seriously damage the whole aspect of the customer service which is related to Aer Lingus? Could we end up in future getting on an Aer Lingus plane, with baggage being handled by some outside operation and the food being supplied by SAS? That would be moving away totally from the concept of a national airline as we know it? What is going to be left when we are finished with this surgery that is going on at the moment?
I wish to remind Members that we have a Supplementary Estimate, under subhead D 10, for £1.5 million is to be moved in the House today.
Is that the marketing and promotion fund for regional airports?
It is the Supplementary Estimate.
Yes, that is the one I have in front of me.
Regarding supplementary questions, which Deputy Burke is proposing, I will take them but I want to give everybody an opportunity to speak.
How is the Minister going to deal with, by way of discussion under the Estimates, the decision of the Government in principle to put equity into Aer Lingus. I presume that will be done by way of a Supplementary Estimate. Whatever the final amount is, whether it is the £175 million requested or not, it seems that the Government has now taken a decision in principle to put some equity in and, therefore, the Minister should be in a position to advise us on how that will be discussed. Does he envisage it being done before the House or this select committee? The Chairman might also like to comment on the procedure because the figure of £175 million for equity for Aer Lingus is greater than the total Vote, if I recall correctly, for the Minister's Department. We are talking about a sum later in the year which will be more than the Vote for all the Minister's responsibilities. We need clarification on that.
I wish to raise questions in relation to subhead D.10. in the Supplementary Estimate but also in respect of subhead D.9. £500,000 to promote Shannon Airport and the setting up of a task force for that purpose. The new subhead D.10. is for £1.5 million to promote regional airports. I would like to ask the Minister for some clarification. About three weeks ago an announcement was made that SFADCo, which has the statutory obligation for promoting Shannon Airport, would be asked in future to promote Kerry County Airport at Farranfore. That airport is outside SFADCo's functional area and does the Minister consider it necessary to introduce legislation to regularise the position there.
Secondly, in respect of the Estimate, would the promotion of Kerry County airport at Farranfore come out of the SFADCo vote under the Vote for the Department of Enterprise and Employment or can it draw on the new Supplementary Estimate of £1.5 million for the promotion of regional airports? Will the Minister clarify that position?
Does the Minister consider it a little peculiar that SFADCo, which was established in the first instance to promote Shannon, was allocated money to promote Farranfore and the following day an announcement was made that a task force under Miss Gillian Bowler would be set up to promote Shannon? So, the statutory body which is obliged under law to promote Shannon is being sent to promote Kerry County Airport and a new task force is being instituted to promote Shannon Airport. This happened about a week before Mr. Cahill published his strategy in respect of Aer Lingus which, as we know, proposes major changes to the transatlantic fleet, which will be based partly in Dublin. That plan proposes changes which will have a major effect on the way Shannon will operate. Will the Minister agree that three decisions like that within a week of each other in respect of Farranfore, the transport task force for Shannon, and the future strategy, give the impression that we have no aviation policy? Can the Minister see that elements of this are totally contradictory?
The Minister also indicated that the air navigation Bill will be going through the House this week. This is another air-related measure which does not seem to tie in anywhere but certainly it has consequences for staff both at Shannon and Dublin. In the three weeks prior to these announcements, without any announcement, the fares on the transatlantic route were reduced to bring them into line with what American carriers are charging on the London route, and the fares on the London-Dublin route were increased by £20. This series of decisions taken place over a period of four or five weeks would indicate that there is no aviation policy here. Will the Minister clarify his intention in producing a transport policy for Ireland and say what part aviation will play in that? We have a further example of this today in the Supplementary Estimate. In the middle of all the controversy about Aer Lingus, the concern for jobs in Dublin, and the anxieties in the mid-west region about Shannon, the Minister proposes another initiative; £1.5 million for the promotion of regional airports. We do not know whether Kerry County Airport is included or not, we do not know what is in it, and it seems to be totally out of context with any overall plan.
I put it bluntly to the Minister that we are not sure at the moment what level of service will be flying in to the main civilian airports, operating out of Dublin into London, or on the transatlantic route either to Shannon or Dublin. Then we had this £1.5 million for the promotion of regional airports and a mechanism for airport boards to apply with some kind of programme to the Minister's Department. Is a new agency being set up? If a new agency is not being set up, will the airports use the money to promote themselves or will they get grant-in-aid? What regulations will be laid down before money is drawn down from these?
The main point I want to put to the Minister is that when all of these piecemeal decisions — many of them contradictory — are taken into account, there is a yawning vacuum in aviation policy — they are all stand alone decisions. The sum of past decisions does not amount to a complete policy.
The task force at Shannon which is being allocated — under subhead D9 —£500,000 will have difficult job. Was the chairperson and members of the task force informed that Mr. Cahill's forthcoming strategy for Aer Lingus would change the parameters of their job completely, because of the proposals on the transatlantic routes, when they were appointed? Any group promoting Shannon Airport at present, whether it is SFADCo, Aer Rianta, or the task force, is facing an enormous credibility problem because people in the region do not trust Aer Lingus.
They believe that Aer Lingus has deliberately falsified figures and changed their accountancy procedure to show Shannon's activities in an adverse light. The transatlantic service was the only service that was making a profit for Aer Lingus as shown in the 1991-92 accounts. We are told that, although the accounts have not been published yet, there will be a loss of £14 million this year. Aer Lingus accounts have never been transparent and are less transparent now than in the past.
Is the Minister aware that sources of revenue on the transatlantic routes, for example, the handling of baggage for Virgin Airlines in New York and the handling of baggage for Aeroflot in Shannon, are not included in the accounts relating to the transatlantic routes? They are being put under the ancillary subhead. The costs are being loaded onto the transatlantic side of the books, yet, revenue is being extracted and shown separately in the accounts. I do not know whether the Minister had the pleasure of travelling on the route or not, but he knows transatlantic flights that stop in Shannon become the commuter flights from the mid-west to Dublin later in the morning.
Much later.
I will make a point about that, shortly. People also travel from Dublin to Shannon and last year 50,000 people availed of that service. I travelled to Shannon on a commuter flight from Dublin after the meeting of Aer Lingus workers in Dublin Airport for £52 which is good value. If 50,000 people pay, on average, £40 that is £2 million. Is the Minister aware that in Aer Lingus' accounts that revenue is not credited to the transatlantic crossing but all the costs of that flight are charged to it. The landing charges in Shannon and Dublin are charged to the transatlantic accounts but the £2 million revenue is put in the UK and European accounts. This is ludicrous.
One of the worst decisions Aer Lingus management made in recent times——
I have no doubt the Deputy has points to make but he should please put his questions.
I am putting a question. The Shannon task force, under the chairmanship of Miss Gillian Bowler, has been charged with developing the airport. Is the Minister aware of the difficulty of their task, in the light of the suspicion in the region about the intentions of Aer Lingus' management? The local workers do a fantastic job. One of the worst decisions senior management made — apart from Aer Lingus holidays which I do not want to go into — was the purchase of the 767s. Two 767s which were supposed to fly to Los Angeles never left the tarmac. Yet, all the leasing costs of the 767s are charged against the transatlantic fleet and used to show the losses made in Shannon. I do not know the cost of leasing the 767s but a figure published in The Sunday Tribunelast week put the leasing costs at £13 million. Is it any wonder their are difficulties if charges are shown against the transatlantic fleet which have nothing to do with it, and none of the revenue which arises from ancillary services or from flights between Shannon and Dublin is attributal to it? Is it any wonder the accounts are not transparent?
Regarding the Shannon task force and, more importantly, the Government's assessment of the Cahill plan, will the Minister, please, not accept the figures at face value? If there are not qualified accountants in the Department will the Minister bring in a firm of accountants, to help him see behind the figures and not accept propaganda as proper accounting?
I would like to move on to the Estimate for Aer Rianta which is doing a fantastic job. If one looks at the appropriations-in-aid, one sees the company is forwarding a large amount of money to the Exchequer each year — about £14 million. Has the Minister considered, in view of the facts that Aer Rianta is a highly profitable company and that landing charges are such a significant cost to Aer Lingus, the application by Aer Rianta to increase landing charges by 6 per cent yet? It shows an absence of aviation policy if a State company that is showing a significant profit and transferring large sums of money to the Exchequer is looking for an increase in landing fees well in excess of inflation which is adding to the costs of Aer Lingus.
The Minister is aware that an internal Aer Rianta document was leaked last week. Without going into detail it is now a matter of public record that Aer Rianta has come out strongly against the reasoning underpinning Mr. Cahill's plan. I would like to ask the Minister what he did when he saw that leaked story in the paper. It is peculiar that management in Aer Rianta are ringing Government Deputies and asking them if they received leaked documents. Whatever comes in on my fax or in my post is my business; if Aer Rianta management, under instructions from the Minister, is carrying out a witch-hunt I would prefer if it stopped outside the door of Leinster House. They have no access to my office and no right to ask me questions. Other Deputies have been put in the same position.
What is the question?
The question is, when the Aer Rianta internal document was leaked to The Irish Timeslast week did the Minister, or his officials, contact the chief executive of Aer Rianta and senior members of Aer Rianta to instigate an investigation? The investigation is not being carried out properly and is interfering with parliamentary privilege.
I expected the 1992-93 accounts for Aer Lingus to have been published by now. I am talking about the accounts up to March of this year. Is the annual report and statement of accounts ready for publication? Is it being held up at present because of the Cahill plan or will it come out in the usual way? In advance of publication, will the Minister state what the total write-off is in respect of GPA shares? Comments are being made by eminent people about the situation and it would be interesting to see to what degree the deterioration in Aer Lingus' accounts is due to a once-off write-off of GPA shares.
I would like the Minister to deal with one final point. The Minister, very kindly, briefed the Transport spokes-persons of the Opposition parties, Deputies Cullen, Gilmore and I in great detail. He told us that the transatlantic fleet would be based in Shannon and that it would serve Boston and New York and he gave us the configuration. Is the Minister aware that Mr. Cahill has changed that and that there is a different set of proposals in respect of the transatlantic fleet? One 747 will remain in Dublin Ariport and there will be no direct flights from Shannon to New York for almost seven months of the year. That is totally at variance with what the Minister told us only a week ago.
What is the status of Mr. Cahill's proposal now? Is it an evolving situation? Is it some kind of rolling maul or is there a fixed set of proposals that everyone can stand over? I cannot understand how on a Wednesday, the Minister for Transport, Energy and Communications can give me a full brief, without giving me confidential financial information and within a week the Chairman of Aer Lingus can give me a contrary brief in respect of one of the main components of the plan, how the transatlantic fleet will be treated. What is the configuration of flights from Shannon through Dublin to the United States, from Shannon direct to the United States and what is the variation between on-peak and off-peak?
Is the Minister aware, and I suspect he is not, that there is a major conflict at the moment. The Taiseach made a speech in Shannon Airport yesterday, and in two sentences of it he referred to the three 747s being based at Shannon, which is exactly what the Minister told me a week ago, but on the Friday previous to the Taoiseach's speech, Mr. Cahill had a different story, which with all authority he read out as the proposal he had put to the Government.
The Deputy must conclude.
I am concluding. The Chairman has been very patient. He understands how difficult this decison is for us. It would have been better if Aer Lingus had met the Joint Committee on Commercial State-sponsored Bodies. Will the Minister clarify that point? What exactly is the status of the proposals on which we have all been briefed and what leeway has Mr. Cahill got to vary those proposals because he is now varying them substantially?
Both the Aer Lingus unions and staff have been extraordinarily prudent and responsible in dealing with this issue and I hope that their interests will be taken into account. In Dáil Éireann, we have argued for the past three or four years that the first national priority is job creation. However, 1,500 jobs will be lost in the national carrier and the taxpayer will be asked to subscribe £43 million of equity to abolish those jobs. This fits uneasily with the national priority. Jobs are so hard to create at the moment that the Minister should do anything he can to save them. In Aer Lingus, the priority must be twofold. Aer Lingus must be put on a sound financial footing, but the——
I have to remind the Deputy that other Deputies have indicated that they wish to speak. The Deputy had a fair innings.
I wish to thank the Chair; he has been fair.
We have had many questions from Deputies Burke and Noonan and before I invite the Minister to reply, I would like to respond to the question put to the Chair regarding the ordering of business; that is not a function of this committee. Business is ordered by the Dáil. The Chair has no role in that regard. I will take what is handed down to me from the House. I have no say in how the business is presented.
I wish to thank the Chair for allowing me to reply at this stage. A number of statements should be made to put this discussion in perspective. I was asked about job creation and the need to look at this and that aspect of proposals, which are presently being considered by the Cabinet sub-committee, who will then report to the full Cabinet before final decisions are taken. I would forcibly make the point, with all the clarity at my command, that Aer Lingus is in a perilous financial situation and time is not on its side. Unless decisions are taken urgently, we put at risk not only the proposals for redundancies which are in this strategy for survival, but the company itself. When Members discuss this matter, they might keep that in mind.
Unless serious remedial action is taken as a matter of priority, which will involve pain and difficulty for everybody concerned, the future of the company and the group is put at risk. That peril and serious difficulty has not gone away just because the initial first few days have passed since the survival strategy was forwarded to my Department, which, as I said, is now before the Cabinet sub-committee for evaluation. When people, and Deputies, are addressing this issue, they might keep that in mind. My primary responsibility is to ensure that this company has a future and that those who wish to discuss the details or aspects of the strategy, which I am prepared to do, should bear in mind that the overall position is so serious that we simply have to make the decisions quickly. The various considerations being evaluated, the degree of consultation since publication — which has been established — and the meetings which have been held allow the Department to put the case for those interests to the Cabinet sub-committee for its consideration. The discussions and decision-making process are in the interests of the future and sustainability of the company.
In reply to Deputy Burke, who raised a number of issues, the company, as we know, is suffering such serious losses that the ability to pay wages will shortly be at risk unless action is taken. The company does not have access to funds to make redundancies payments to people who may, unfortunately, not hold their jobs as a result of the remedial action which must be taken. There is a serious cash crisis in the company. The £116 million figure does not include the restructuring costs being provided by the company. If one were to include those, it would bring the total losses up to £272 million. The exceptional items, for example, like GPA, totalling——
Is the redundancy package included?
No. The point I was making is that it is not included in that figure. The exceptional items, including the GPA write-off, are of the order of £70 million. Therefore, there are operating losses thereafter to make up the overall loss, which are exclusive of restructuring costs of £116 million.
I am now addressing an issue of paramount importance, the survival of this company. To those who take issue with whatever plan or aspects of a strategy produced I would simply remind them that the position is serious and precarious. We cannot lose sight of that. The unsustainable lines of credit being increasingly unavailable and creditors being entitled to ask to what extent the action to be taken will be sufficient to meet the magnitude of the problem have been outlined by me on a number of occasions. I will always return to the central argument when we are discussing aspects of this issue, that what is at issue here is the very survival of the company and this must be of paramount importance.
In relation to some ancilliary services provided by the airline, which Deputy Burke mentioned, and the question of how such services will be provided in the future, once the cost reduction programme is met — this brings me back to the £1 million per week loss which is the core problem in this company — whatever is agreed by management and unions is a matter for themselves. One thing is sure, that those services must be competitive with the best benchmarked practice with which Aer Lingus will have to compete if it is to secure its future. The day to day operations, as to how those services are to be delivered as part of the general airline service, is a matter for agreement within the company. The benchmark as far as we are all concerned, in and outside the company, employees or general taxpayers, is that the company will have to be competitive in those stand alone businesses which will have to play their part and not be a drain on any other aspect of the company.
When I am asked rhetorically and understandably what will be left after this, I respond by asking, what will be left if we do nothing? What will be left if we modify the status quo to the least extent possible in the short term? That is the question I ask, given the magnitude of the financial problem I outlined. Clearly there is no escaping the fact — I have emphasised this on a number of occasions since I first brought the problems that this company is facing to the attention of the Government — that serious, urgent and extensive remedial action has to be taken in the day-to-day operations of this company if it is to have a secure and viable future. I say that both in the interest of Aer Lingus and of maintaining the maximum number of jobs which will be consistent with a viable company. We seek to minimise job losses but there is no getting away from the fact that, given the structure of its costs, particularly the fact that payroll costs represents 70 per cent of controllable costs, there is no way in which one can bring forward a viable future for this company without, unfortunately, the substantial number of jobs losses indicated. We seek to minimise those and I am sure management and unions will seek to minimise them and that is their position.
It is in the interests of Aer Lingus that that be done if it is to provide jobs for the maximum number of people possible. It is also a requirement for me, as Minister, to enable the Government, the shareholder, to provide equity for this company. EC approval will not be forthcoming unless a viable recovery and survival strategy is being implemented. Therefore, both in terms of the balance sheet and the profit and loss account, it is vital that the necessary cost reductions of the magnitude which I have outlined in general terms is implemented as a matter of urgency.
In response to Deputy Noonan, I emphasise the context in which this discussion has to take place. Therefore, the room for manoeuvre is very limited, if available.
On the question of equity and how that would be dealt with, it will be necessary to introduce regulations under the Air Companies (Amendment) Act to ensure that that level of funding can be made available. The Deputy made a very good point that when people talk about the adequacy or otherwise of the proposed contribution, £175 million is in excess of the Estimate we discussed on the previous occasion and today. With regard to meeting my wider responsibilities to the general taxpayer, almost one million of whom will be required to pay £198 each as a contribution towards providing equity for this company, it is vital that the terms of the equity injection which the Government has indicated it is willing to supply, given the strategic importance of the company and the national aviation sector, will only be provided on the basis of a viable company and a viable solution being found.
Another issue which is continually raised in the context of the crisis that is facing this company, and which I have sought to address as a priority since I became Minister for Transport, Energy and Communications, is that we do not have an aviation policy. I refute that. Am I to presume that it is an accident and fortuitous that tourism numbers have increased from 800,000 to 2.3 million from the mid-1980s to date? Is that a fortuitous circumstance which happened despite people operating in an aviation policy vacuum? I wish to reject that notion. I do not wish to repeat what I said in the House on many occasions and which I am prepared to say in the future and expand upon. There has been an aviation policy here. The problem is that, perhaps, the analysis that Aer Lingus had of the transformation in the air transport business since the mid-1980s when liberalisation became a reality was that its problems were simply cyclical in nature; and that that cyclical change would return it in some way to profitability without the need to look at the company's structural operations or revamp the company to meet the keen competitive needs of the day.
It is true, as Deputy Burke said, that in the pre-liberalisation days diversification was an excellent policy and provided much more employment. It also provided a range of interests which gave an excellent service and, indeed, built a critical mass of aviation expertise in Ireland. It also got involved in diversified businesses which did not have an immediate synergy with the airline business on the type of business that it was primarily set up to do. When liberalisation came perhaps the proper analysis is that because that diversification there was not a focused enough approach on the core airline business and the need to impose necessary disciplines then to meet what was happening in international aviation where competitors were making the necessary changes to meet the new challenges that liberalisation posed.
Unfortunately, and ironically, it was the attention that diversified subsidiaries and businesses in Aer Lingus necessarily meant for management and those in charge of Aer Lingus that meant we were not focused enough and did not address these issues soon enough to avoid the situation that now exists and which is deteriorating daily and must be addressed as a matter of urgency. That is an analysis which I use to counteract the ideas there is no aviation policy, or that the strategy proposed in some way seeks to denude the companies which made such a good contribution in the past. Unfortunately because they are procyclical with the core business, we now have a problem where throughout the company we have loss-making operations which must be addressed. As a result of the overhang of significant debt in the company, of almost £540 million as of March this year, the ability to generate profit to pay interest on that debt is no longer available.
The need to cut costs is absolutely necessary from an operational basis. A judicious assets disposal programme is also required over a period to contribute to debt reduction and to enable the company breathe again and survive in the future in a keen, competitive business. The whys and wherefores of the past do not interest me in terms of how we solve the problem for the future which is my primary objective. An attempt by people to revert does not serve any purpose given the urgency of the present situation. My primary responsibilty is to find an urgent solution which meets the magnitude of the problem facing us.
With regard to Shannon airport, it is important to focus on the core issue. Unless we have a strong Aer Lingus, which is the main customer of the airport, other issues which are causing concern are not as important although they have their own importance from a regional perspective. In order to have a strong Shannon, we must have a strong Aer Lingus. I ask people to bear that in mind when seeking to balance interests here and examining how progress can be made to meet the varying prospects of the people concerned.
I interrupt the Minister to point out that several other Members have indicated that they wish to contribute and we have very little time left.
I will finish up on this aspect in the next two minutes.
As regards the Kerry County Airport, the £1.5 million earmarked is available to it as it is to other regional airports. With regard to the ANSO Bill, the transformation of ANSO into a semi-State company has been considered for some time, It does not have immediate implications for Shannon or Dublin staff, as was suggested. With regard to Aer Rianta, it is not possible, because of EC competition rules, to unilaterally offer lower landing charges to any carrier over another. There have been no changes in the rates since 1 April 1987. Applications for increases are constantly being made by a myraid of semi-State bodies and it is a matter for Government decision at the end of the day whether those will be granted.
In relation to the leak to which Deputy Noonan referred, I asked for an explanation — as I would after any incident involving a so-called leaked document — as to the status of the document. The document is not an Aer Rianta document, it is a draft based on speculation by one individual who is part of an overall operation. The company has not come to that decision. I never asked nor intended that any Aer Rianta investigation should pursue Members of the Oireachtas. It is clearly an internal matter which Aer Rianta must deal with in the usual way. There is certainly no direction from me nor would I contemplate any such direction to pursue Members of the Oireachtas in relation to positions they may take as a result of something coming into the public domain. I am simply anxious to establish the status of that document. The handling of it is an internal matter for Aer Rianta.
Aer Rianta should withdraw it or put its status on the public record because it was left hanging as being an Aer Rianta document.
I understand that Aer Rianta has done so.
We would all be aware of the serious situation and I have no doubt but that the staff are also aware of it. They are also concerned about their future. If we do not get this plan right, it may be the last opportunity for Aer Lingus.
A plan was put to the Government in January of this year which was not at that stage acceptable to the Government.
Mr. Cahill, Mr. Owen and their team then came forward, without any consultation with the staff, with a plan which is going to change the entire shape and character of the company. There will be massive job losses which, as far as I am concerned, is totally excessive. There is a proposal to do away with successful and profitable subsidiaries.
How can we be assured that this plan is the one that is going to secure the future of Aer Lingus? What feedback or information has the Minister received to ensure that we have the best chance of doing that? What scope is there for meaningful negotiations between the company, the staff and the Government to formulate a plan which will secure the future of the company? I acknowledge that there are financial difficulties and we heard previously that the banks are threatening to foreclose in August and so on. I do not think any Government could allow that situation to occur. Hopefully, the Government, and the Minister, will give us some time to ensure that the best possible opportunity is given for the future survival of Aer Lingus.
Interest payments are relevant to the company's losses particularly in light of the fact that successive Governments have not put much equity into the company even to cover borrowing etc. Would it be possible to inject more than £175 million in equity to ensure that one gets the same end result, that is, a viable company and perhaps more people employed in the company?
May I inquire if this meeting is going to finish at 4 o'clock?
No, at 4.10 p.m. We will have to allow the Minister some time to respond.
Could we have extra time?
We are working to the Order of the House and I have no discretion there.
I do not think that the Order of the House lays down exact times for starting and finishing.
It was agreed that this session would be from 2 p.m. to 4 p.m. I am allowing it to run a little over time because we were late starting.
We have never been able to debate these problems in the House or in any committee up to now and this is the first opportunity anybody has had in the last two weeks or so to talk about them within the Oireachtas. The problems are very serious and the Minister does not exaggerate them but that is not to say that I agree with his analysis of where one goes from here. It is a very sobering thought that we have discussed two organisations today. Both are State owned transport companies, the first of which the Oireachtas is asked to give £108.5 million of a subsidy. That is described as satisfactory. The company was even praised for having reached the stage where it only had a small increase in its subsidy for this year. This is another instance of, as the Minister pointed out, the amount of subsidy or injection of funds being greater than the total Estimate, which is very frightening. We do not know where it will end.
The first thing which strikes me is that it is impossible to have a meaningful debate where most of the people involved do not have the document about which the debate is taking place. I cannot think of any major national debate, either here on in any other country, where the matter which people were debating and which was of great importance to tens of thousands of people was not published. It is unsatisfactory, to say the least, that the select committee is without the document when debating this issue.
The Minister has indicated that it will be necessary to bring forward legislation to deal with the funding for Aer Lingus. We are considering the Estimate for the Department.
If legislation is necessary, which I am sure it is if the Minister says so, the Government do not propose to bring it forward before the summer recess. Am I correct in that?
It will not be introduced before the summer recess.
Therefore, it will be debated next October at the earliest. I am sure the die will be cast one way or another long before next October because we are told that this company will go out of business in August if something radical and major is not done in the meantime. It is no use to say that there will be a debate in several months time.
This select committee is dealing with the Estimates for the Department today, and the Oireachtas Joint Committee on Commercial State-Sponsored Bodies of which I am a member, invited the chairman and chief executive of Aer Lingus to meet them ten days ago but received a fairly peremptory refusal, despite the fact that the Minister also wrote to the committee saying he was sure the chairman would attend.
He was busy in Shannon.
This was long before he was sent to Shannon.
He would not attend a meeting of the select committee, he ran to Shannon.
It is meaningless to debate this issue when a newspaper is able to make comments arising out of the document because, apparently, it has possession of it and we do not. I am not talking about the Aer Rianta document which caused an inquiry but the Aer Lingus proposals. Could this committee and the joint committee not be given the document? If necessary the members can be enjoined to confidentiality about aspects of it.
I am sorry I missed part of this meeting because I had to be present in the Dáil Chamber. The other matter I would like to raise is the bilateral agreement which has not been touched on by the Minister. The terms of that agreement with the United States are absolutely crucial and if the Minister is proposing change, and he seems to make it clear that he is, he must take account of the terms of that agreement. Is he doing this? Is he suggesting that we make the change and then try to renegotiate the agreement afterwards?
Any change in the present status, whether one agrees with it or not, will lead to a potential free-for-all under which anybody can fly to and from Dublin. That is a completely uncontrolled situation and one which has to be unacceptable not just to people in the Shannon region, because this issue is portrayed as if it were purely parochial, but to anyone who has the welfare of the country at heart and who realises that there are regions outside Dublin which need nurturing and assistance from time to time. Such a person could not agree, under any circumstances, to the ground being cut from under this country under the terms of the existing agreement.
Deputy Noonan asked the Minister a number of questions, many of which I thought were quite apposite. The Minister, in his reply, did not get round to answering them. In fairness, he was cut short by the Chairman because of the lack of time and perhaps, he would otherwise have got round to answering them. They are apposite questions and I am sure the Minister, while he lays great emphasis on the necessity for a total radical rethink and a major programme to overcome the awful situation in which Aer Longus finds itself, will have to take account of the other factors.
In particular, I put to the Minister that it does not follow that because Aer Lingus is terminally ill, as appears to be the case——
I do not accept that.
——or virtually terminally ill that the cause of that is related to some of the existing arrangements, particularly in regard to Shannon, or that the removal of those would immediately restore a company which was otherwise in dire straits to good health. I do not see that there is necessarily a connection between the two matters.
That is borne out by the fact that for many years, on the Atlantic route in particular, Aer Lingus was able to make a substantial profit under present arrangements. The connection between the problems of Aer Lingus and the existence of Shannon Airport under its present status are not two sides of the same coin. If they are going to be looked at, as they obviously must, they should not be looked at as one causing the other.
Before I ask the Minister to respond I must put to the select committee, subheads E.1., E.2., E.3., F. and G. which cover payments to An Post, grant-in-aid to An Post, subscriptions to international organisations and appropriations-in-aid. Will a Member move their adoption?
Is the Chair proposing to conclude the debate on the Estimate without Members having an opportunity to raise more questions?
We have run out of time, Deputy. It is a matter for the Whips to decide and to make the time available to us.
A county council committee can get extra time. If a committee of this House cannot get extra time to deal with an important issue such as this——
Speeches are being made rather than questions asked.
It was supposed to be a general question and answer session and, with all due respects the Deputy got a little more latitude than others.
I did not get answers to my questions.
I listened to the Deputy for half an hour and I feel I am entitled to respond in some way in defence of the Chair's position. An order was made on 22 June ordering this business. We were confined to two hours debate today to consider the outstanding Estimates. It was not of our choosing. The order was made by the House because at the inception of this committee we failed to reach agreement on an allocation of time for which everybody must accept their share of responsibility.
We are hoist with our own petard once again and we are now complaining that we do not have sufficient time. That is not a matter for the Chair, it is a matter for the Whips to decide with the Government Chief Whip. If he will make time available to us I am prepared to stay here three hours longer, if necessary, but we should make up our minds. We had dificulty getting a quorum at the start of the meeting. We had to delay the start by ten minutes because we could not get 11 Members in attendance and now the Deputy wants to extend the time. I accept that Deputy Noonan was here on time.
I propose that we ask the Whips to give us extra time now.
It is not possible at this stage because the Members who are not present are entitled to be notified that we are going to extend the time.
May we see a copy of the order of the House that states we can only sit for two hours?
I respectfully suggest that the Deputy consults with his Whip. It was an order of 22 June——
Surely if this committee is going to mean anything it can fix its own sitting times.
That was the original idea but, unfortunately, as we were unable to reach agreement the Chief Whip took it upon himself to introduce an order in the House setting times for this committee and the other select committees to sit. We were not mature enough to come to an agreement among ourselves.
In anticipation of these problems I suggested at the outset that we deal immediately with the Aer Lingus problem because it was current and most urgent matter before us. We did not; we ended up taking about it for about 45 minutes.
That it because we had more than an hour's discussion on the rail service which was quite in order. That service is also entitled to some consideration by the committee. When the committee decides that it wants to extend the time or is prepared to sit on Friday we will then sit as long as we wish. Members should intimate that to their party's Whips.
The Whips have nothing to do with this. It is a matter for the committee to fix its own times.
I regret to say it is not a matter for the committee any longer. That was the original idea but by virtue of the fact that this committee, on which the Deputy is a substitute at present, could not arrange its business it had to be referred back to the Government Chief Whip.
I am told that is not right.
We decided ourselves——
I have now called on the Minister to respond.
That is not accurate. We decided at the outset that we would decide our own business and the Whips took it in hand and took it away from us.
Might I suggest to Deputy Burke that in one of his absences that decision was taken.
Some Members speaking here at the first meeting refused to arrange meetings, did not want to meet on Fridays, did not want to make time available and now they are looking for time. There were all sorts of parochial reasons why that did not suit, Dáil reform, extra sitting hours, extra time, non-Dáil sitting days, availability of venues and so forth. They wanted it to be integrated into the existing procedures. That is why we have the difficulties with regard to time.
In response to Deputy Ryan, I again emphasise the point that the level of equity does not determine the future of this company. The level of equity simply improves the balance sheet and provides for finance via restructuring costs to which this company has no access either in its own funds or in any funds from any bank. The level of equity does not solve the problem.
We have committed ourselves willingly and openly, giving the strategic importance of the company, that, subject to the necessary cost reduction programme being put in place which will ensure a viable future for this company, the Government stands ready as a shareholder to play its part. Others must also play their part because we have a responsibility to the taxpayer which cannot allow a situation to develop where equity which will put it in a non viable situation. As I pointed out, we would not be allowed put it in in the first place because it would not have EC approval, it would be a State aid which is against EC competition law. However, even if we could do that, apart from the EC Commission discipline that is imposed, it would be wrong because of a general duty to the taxpayer to so do. We would simply be postponing the day and not addressing the core problems we have to address.
We are all interested — I more than anyone else given that I have front line responsibility for and am au fait with the dilemma and the seriousness of the situation — in securing a long term future for this company. It must be on the basis that it can operate profitably and viably. The shareholder will pay its part in providing improved equity injections on that basis and on no other basis because, first, we would not be allowed to do it by the European Commission and, secondly, we would be failing in our general duty to the taxpayer to do so.
Negotiations and consultations are taking place. The cost reduction programme is a matter for urgent negotiation and agreement betwen management and unions. The longer there is a delay in that the longer it will take for the shareholder to meet the responsibilities it would like to meet, which is to provide an equity injection. Until such time as that viability programme is agreed and implemented equity cannot be injected in the company. I made that patently clear on behalf of the Government and before any plan or any survival strategy was issued when I took it upon myself to have these matters clarified by Commissioner Van Miert and by Commissioner Matutes. When I explained the position I was told that was not the case but it is the case and everyone now agrees that it is.
With regard to the bilateral agreement, which Deputy O'Malley raised, there has been no change in the policy in relation to that agreement as of now. The Cabinet sub-committee is evaluating a survival strategy brought forward by Aer Lingus which involves a modification of the Shannon stopover policy. If it is taken on board by the Cabinet — it will make is decisions after looking at all interests, particularly the national interest and the interest of maintaining this critical mass of aviation expertise in Ireland, and Aer Lingus, whose survival, everyone agrees, is at stake — it would be a question of negotiating a new bilateral agreement between Ireland and the US. Until such time as that agreement is negotiated there will be no change in existing arrangements because the bilateral agreement will continue until such time as a satisfactory renegotiation takes place.
There have been five modifictions of the Shannon stopover policy since 1957. Originally, if one came into Irish airspace one had to come into Shannon and there have been modifications of that as people from that region would well know. The question of renegotiation of a bilateral agreement can only come on foot of a Government decision to change present policy. That policy is being evaluated at present in the context of the survival of this company and no change in the bilateral agreement arrangements will occur until such time as a satisfactory renegotiation takes place on a bilateral basis.
I take this opportunity of thanking Deputies for their interest and the questions they asked. There will be other fora, parliamentary questions this week, for example, which will allow me to go into more detail in relation to the issues raised.
I have sought to accommodate, on a broad canvas, as many of the questions as possible and I can refer to them with Deputies in parliamentary questions later this week.
I thank the Minister; he has been very helpful.
May we have written replies to questions that have been noted by the Minister's officials and to which he had not enough time to reply?
I can arrange for communication to be made to the Deputy.
Will communication be made to Deputies who did not get the opportunity to ask questions?
I would suggest that parliamentary questions will allow for further consideration of issues, some of which have been indicated by Deputies already in their parliamentary questions. Following those discussions we will see what outstanding information is required in so far as I can give it given the commercially sensitive nature of the policy involved. If we leave it at that I will be as accommodating as possible after that.
I do not know how the Minister is going to accede to Deputy Bruton's request.
I have not acceded to it, nor have I acceded to Deputy Noonan's yet, until after parliamentary questions.
A Deputy
Chairman, you did not allow any questions on An Post.
I put it to the meeting, before I invited the Minister to contribute, if subheads or programmes were aceptable. It was largely due to——
A Deputy
I know the Chairman has an interest in An Post.
More so than my colleagues as I would be one of the beneficiaries. I will be entitled to a pension before long, maybe in the current year. I have a great personal interest in it because in the next 12 months I shall be qualifying for a pension under one of these headings.
On the Supplementary Estimate for £1.5 million, this was placed on the Order Paper in the House today and it will be considered next week. That concludes our consideration of the Transport, Energy and Communications Estimate. I thank the Minister, and his officials, our Clerk, Mr. Pádraic Donlon and the Members of the committee who contributed to this debate. The committee has now completed consideration of all Estimates referred to it by Dáil Éireann and I now propose the adoption of the draft report which has been circulated. Is that agreed? Agreed.
The Select Committee adjourned at 4.20 p.m.