Tuesday, 26 March 1957
Dáil Éireann Debate
That a supplementary sum not exceeding £300,000 be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1957, for certain Transport Services; for Grants for Harbours; for the Salaries and Expenses of the Marine Service (Merchant Shipping Acts, 1894 to 1952, and the Foreshore Act, 1933 (No. 12 of 1933)); for certain Protective Equipment for Ships; for certain payments in respect of Compensation, including the cost of  medical treatment (No. 19 of 1946); and for the Coast Life Saving Service.
I do not like to suggest to the Dáil that I have succeeded in disentangling in my own mind the financial position of C.I.E. I think it is clear that it is a very serious one and I do not want to do more than give the House the general picture in so far as I understand it at this stage.
On the revenue side, Deputies, I think, are aware that no provision has been made for the payment of grants to C.I.E. in respect of losses for some time past, and at the beginning of this financial year C.I.E. had a revenue debit of approximately £870,000. On the capital side C.I.E. were authorised in 1955 to issue stock to the extent of £4½ million, which they did, and that covered its expenditure on capital account to the end of March last. Authority to raise capital by further stock issues in 1956 was not given to them. It is quite obvious, therefore, that with a substantial revenue debit and no provision for new capital to meet its obligations on capital account, C.I.E. ran out of cash fairly early in this financial year. It carried on by means of temporary borrowings, by negotiating for the partial deferment of payments due to suppliers of diesel locomotives and other capital equipment, and by obtaining from the Exchequer by vote of the Dáil an advance described as a repayable advance of £1,000,000 to meet its capital obligations to the end of November last.
The £700,000 for which authority is now being sought is also to be classified as an advance on capital account. It is money required to meet the obligations of the board in respect of capital expenditure due for payment by it before the 31st March next. There is no provision being made to meet its operating losses. It is estimated that the losses of C.I.E. in the present financial year, 1956-57, are £1,825,000, of which very nearly £800,000 represents interest due upon its Stock which will fall to be paid from the Exchequer under the State guarantee.
 These substantial losses arose notwithstanding the fact that a 10 per cent. increase in rail fares and in road and rail freight charges was brought into operation during the year. It is not yet clear to me, I must say, how the deficiency was financed, but presumably there are still amounts due by the board to creditors and there probably has been some running down of stocks.
Mr. S. Lemass: At present the board's powers of temporary borrowing under the Act appear to be exhausted and it is again clearly in urgent need of funds. The estimate for the current year, as Deputies will have seen, provides for £1,250,000 to meet cash requirements. The board's estimates of its capital requirements in 1957-58 exceed £1,500,000, so that the provision which is being made in the estimate against C.I.E.'s cash needs appears to be insufficient even to meet its commitments on capital account, and certainly it contains no provision of any kind for operating losses during the year.
I am not presenting this as a complete picture of the position; I merely mention these facts to make it quite clear to the House that in providing this £700,000 to meet capital commitments already entered into—the money has already been spent in fact—the financial position of C.I.E. is not made any easier. It is starting the new financial year much as it started the last financial year—without cash in sight to meet its outgoings. The provision in the Estimate is not nearly enough to cover this cash deficiency. It is obvious that some major decisions affecting the future of C.I.E. will have to be taken very soon.
I understand that the Committee  which my predecessor in office set up to examine and report upon inland transport problems is likely to report next month. The submission of that report will be the occasion for the examination of these major problems to which I have referred and it probably would be wrong for me to express any personal view regarding them until that report has been received.
The actual amount which the Estimate will provide for C.I.E. is £700,000. The total the Dáil is asked to vote is £300,000 because, as indicated in the Estimate, there was a saving on other sub-heads of the Vote.
Mr. Sweetman: I want to refer to the sum of £700,000 which is the additional provision necessary for C.I.E., as the Minister has stated. It is for capital works and it has not been so described in the Supplementary Estimate. If the position is as the Minister has indicated it to be, I feel it should be so described here.
I have no way of segregating the savings on the other sub-heads as between capital and income. When the Minister was specifying that the £700,000 was a capital item, it would have been desirable that the savings would be segregated as between capital voted services and non-capital voted services. Obviously the Minister is not in a position to answer that point to-day. No doubt, however, he will be in a position to do so at a later date.
Mr. S. Lemass: It is quite true that the Estimate as circulated describes the £700,000 as provision towards approved expenditure of C.I.E. That change was made in the Estimate by my colleague, the Minister for Finance, at very short notice. It is a more accurate description of what the Dáil is asked to vote money for—to meet capital requirements only. I think there is one substantial liability of C.I.E. which must be discharged by the end of the month and that is to the  Minister for Finance in respect of income tax.
|Last Updated: 19/05/2011 22:11:36||Page of 50|