Wednesday, 1 July 1970
Dáil Eireann Debate
Mr. T. O'Donnell: When I reported progress I had been dealing with the implications of EEC membership on the road haulage industry here and I was going on to deal with the implications of EEC membership for rail transport. Unfortunately, I ran into a little bit of difficulty with the Chair. I now apologise because, on reflection, I realise now I was wrong in referring to past legislation. I assure the Ceann Comhairle now that I will endeavour, as best I can, to keep within the scope of the debate.
The common transport policy formulated as a result of the provisions of the Treaty of Rome, articles 74 to 84, enshrines numerous rules and regulations in relation to rail transport. In the event of our application being accepted we will have to agree to and accept the rules and regulations already in force. Up to now Common Market transport policy has excluded air and sea transport and has dealt solely with road, rail and internal waterway traffic.
A number of very important regulations have now been made in regard to rail transport. I submit these are of very great significance to CIE; they are of particular significance to the 20,000 who earn their livelihood in the service of this company. I do not intend to deal with all the decisions, rules and regulations. They run into several hundreds. However, one particular decision taken quite recently by the Transport Commission of the Council has very serious implications  for CIE. I quote from Common Market Memo. No. P.13/68:
In this county our policy has been to give a blanket subsidy to CIE. This will no longer be permissible under common transport policy and the commercial operations of CIE will have to be accounted for separately from what might be described as “social services” provided by CIE. This will lead to a new approach to the presentation of the annual accounts of CIE. The type of State subvention we are accustomed to give will no longer be permitted but the State will be permitted to give a special subsidy to the transport company in respect of certain services of a social character. CIE operate a number of uneconomic services in, for example, isolated rural areas but, because of the community need for transport in these areas, CIE is compelled to provide these services. Under the new system operating in the EEC the State will be allowed to compensate the transport company for services of a social nature provided by it. This will be shown clearly in the presentation of the annual accounts.
There are certain categories of obligations which can be compensated for; we will be allowed to subsidise CIE in respect of certain obligations; the obligation to employ staff in excess of requirements; expenditure of a social nature incurred, particularly in the form of health care and family allowances of the railway undertaking; costs of retirement and other pensions borne by the railways; expenses for expenditure on equipment used jointly with other means of transport.
There are various other provisions. I do not intend to go into them in detail, but I have here a copy of Administration: Winter Edition, 1968 which carries an article by Mr. B. M. O'Farrell, Financial Controller of CIE. He states that the full normalisation of accounts will apply in the case of CIE.
Adjustments would be necessary in respect of the following: (1) unremunerative  transport and other services supplied for non-commercial reasons; secondly, pensions: the annual cost to CIE of superannuation and pensions is in the order of £730,000. Infra-structure costs: that is inequality of costs to be met by rail and road operators by virtue of the disparity between permanent way costs and costs associated with the upkeep of roads, welfare schemes and financial charges.
At present the blanket subsidy which the State gives to CIE is distributed generally over all the various operations but under the EEC common transport policy the Dáil will be allowed to compensate CIE only in respect of those services which I have mentioned, that unremunerative transport to meet community social needs. I have raised this matter of the normalisation of accounts on previous occasions in the Dáil. I realise that it is a very complex problem, that it would take a considerable amount of time and reorganisation and that CIE would have to incur a considerable amount of expense to reorganise their accounting procedure to comply with this system of normalisation of accounts. The matter is serious because as from 1972 all railway systems will have to pay their way in the sense that the purely commercial operations undertaken by the railways will have to be self-sufficient. The big question which arises here for CIE, particularly in the light of the recent statement by the general manager regarding the financial difficulties of CIE, is whether or not the State subsidy which CIE will receive under the normalised accounting procedures, which will be obligatory following our accession to EEC, will mean that the State will have to provide a greater subsidy to CIE than they are providing at present.
It is difficult to assess this situation at the moment but from what I can gather from inquiries I have made and from studies I have made into this particular question if the accounts of CIE are normalised, as they will have to be, then a much greater State subvention would be permissible. I should also like to point out here that many of the employees in CIE have in recent times been expressing concern about their  future. I have been approached by representatives of some of the unions catering for CIE employees who are concerned about the effect on their employment and so forth in the event of our joining the EEC. I should like to quote a statement in this information memorandum of March, 1968, which should serve to reassure the employees of CIE who might have fears about their future livelihood. It says:
The measures taken to give effect to the proposed re-arrangements regarding the presentation of accounts must not make existing social arrangements less favourable for railway staff or constitute an obstacle to or a brake on the improvements of their living and working conditions which is one of the objectives of the EEC Treaty.
This paragraph is most significant and encouraging particularly from the point of view of the 20,000 people who are employed in CIE. As is pointed out here, and has been pointed out by various speakers in this debate, in the sphere of transport and in all other fields of human activity the social objectives of the EEC are very much uppermost in the minds of the Community. I would say, summing up the implications of EEC membership for Córas Iompair Éireann, that it will create certain internal difficulties. It will mean the company will have to employ a new system of accounting procedure and so forth, which will take time and will cost a considerable amount of money, but from the overall picture, as far as I can gather, there is no cause for alarm. The employees of CIE can be assured that their welfare will be safeguarded. In fact, I would at this stage—although it might be dangerous to hazard a guess or to forecast anything in relation to the outcome of the negotiations—express confidence that the working conditions of the employees of CIE would be greatly improved under the regulations of the EEC common transport policy.
Apart from the implications which the EEC common transport policy has for internal transport organisations in this country the most important implication of EEC membership and the  real importance of transport arises because of the fact that this country is farthest away from the centre of the European market and, by reason of our remoteness from the heart of the European market, transport will play a very significant part in ensuring our competitiveness. Therefore, the various transport services between Ireland and the Continent will be of vital importance. It is particularly important then that the Government should see to it that the transport services already in existence and at present operating between Ireland and the Continent will be improved as far as possible so that the Irish exporters will have at their disposal the best possible transport services from the point of view of speed, reliability, efficiency, frequency and at the lowest cost.
Up to the present exporting to the Continent has been a very difficult business, particularly the transporting of goods by surface transport. This has involved very intricate and sometimes really forbidding procedures. Exporters have had to deal with a number of different carriers, various sets of carrying conditions involving insurance calculations, difficult banking arrangements and authorisations to forwarding agents or shipping agents. Those and many other difficulties had to be encountered, I was very glad to learn, when I began to look into this whole question of transport, that considerable progress has been made in recent times towards rationalisation and improvement of the procedures and particularly towards the simplification of the documentation and so forth. I was very glad to see, in that respect, that CIE were to the forefront in initiating many moves towards the improvement and simplification of the transport of goods between Ireland and the Continent.
Over the past few years, new services, new equipment and new legal relationships have been devised and introduced on the continental services. There has been a number of examples of very close co-operation between the various carriers involved in this type of traffic.
At the present moment, then, while considerable improvement has been  effected and the time has been reduced considerably and the speed of delivery has been stepped up, there are still some improvements to be effected. I have already referred to the fact that CIE have been to the forefront in these developments. I would mention the existence of an organisation of which very few people in this country are aware. In fact, I was unaware of it myself until I began to study this whole business in recent weeks. I refer to an organisation known as Leaslas Éireann Teóranta. This organisation has been set up to co-ordinate the activities of various transport operators, particularly those engaged in road haulage, with a view to rationalising road transport services to the various ports and even through the ports to destinations abroad through the various ferries.
Then, in so far as shipping is concerned, CIE and Irish Shipping and British Rail and other organisations have been in close contact with international organisations on the Continent in recent times. Considerable progress has been made towards the simplification of shipping procedures and the various transport documentations that are necessary. CIE, in particular, is linked up with the freight liner services in Great Britain and also has valuable connections with Inter-container, as it is known, which is a European international organisation which operates a container service through practically all the countries of Western Europe. There is another international transport organisation which is of vital importance in view of the fact that a significant proportion of our exports will be agricultural produce, some of a perishable nature where speed of delivery, refrigeration, and so on, are vitally important. CIE and, I understand, other private transport operators here are members of an organisation known as Interfrigo which specialises in refrigerator container packaging. There are things to be straightened out still in relation to this particular type of traffic and in relation to the export of agricultural produce. There is considerable room for improvement still in the simplification of the veterinary controls at the various ports. I understand that the veterinary regulations differ from place to place.
 These are the different aspects of a very important problem. These are matters to which the Government, and particularly the Minister for Transport and Power, should be devoting attention. I referred to the fact last evening when I made a general comment in relation to the Government White Paper on the implications of EEC membership for Ireland. I criticised the fact that the chapter on transport was so vague and so lacking in information. Indeed, reading the chapter on transport one would assume immediately that transport is no problem at all or that the EEC common transport policy has little or no implications for Irish transport at all. No acknowledgment or no effort is made in that chapter to point out the absolute importance of transport to this counry in view of its remoteness and the fact that it is the longest distance of all the countries in the EEC from the mainland of Europe and this includes the four new members whose applications are now before the Commission. Transport, therefore, is very important.
I feel that the Minister for Transport and Power will have to take a much more active interest in this whole question. While I acknowledge the fact that the various transport operators here, including our own national transport company. CIE, have been keeping abreast of international developments, as have other organisations, and making every effort to gear themselves for the competitive era that lies ahead, the Government will have to waken up. There are certain types of assistance that might have to be given to these operators to gear themselves for continental traffic. The Road Transport Association which caters for the licensed hauliers of this country in a recent memorandum submitted to the Minister for Transport and Power made some very valid suggestions to the Minister in this respect. They pointed out that the road haulage industry in this country, if they are to avail of the number of international licences that will be granted and if they are to equip themselves with the modern advanced and highly-equipped vehicles which are common in continental countries, must get some measure of assistance by way of grant  or otherwise. This is not available to them at the moment.
I have been referring in general to the services between Ireland and the Continent. I believe there are two particular developments in transport or transportation which are of vital importance— (1) the development of containerisation and (2) the development of the roll-on/roll-off services. According to a recent report by Mr. St. John Devlin in relation to the B & I ferry services—he was referring to the one between Cork and Swansea—the traffic returns of that particular route over the past 12 months demonstrate in a very dramatic way the increasing use that is being made of the ferry services by hauliers. This idea of drive-on/drive-off allied to containerisation is the thing of the future. I have seen two large trucks with trailers with foreign registrations, bigger than any I have ever seen in this country, parked in Rath Luirc or Charleville overnight. My interest was aroused and I made inquiries about them. I was informed they had come from Italy to a local meat factory. They load up at the factory with various meat products and drive on to the ferries and proceed by road down into southern Italy. This is the type of service for which I feel there will be more and more demand. From inquiries I have made about the availability of such vehicles in this country I have been told that CIE have one such vehicle on order. In fact, it has been delivered and a number of trial runs to the Continent are to be made in the coming months.
Apart from road, rail and sea transport, against the general background of the ability of our exporters to sell their products competitively on the European market, there is another type of international transport which is the ideal but because of the high costs included it is not economic to use it except for a very limited number of products. I refer to air freight. I would envisage a considerable expansion of air cargo traffic within the next decade. For the purpose of getting products on the market in the shortest possible time, air transport is the ideal method. Already certain types of perishable horticultural products are being flown  to Britain daily and to a limited extent to various centres on the Continent. Air freight charges are very high, on an average five times higher than sea transport. Nevertheless, we should not lose sight in this country of the possibilities of air transport and particularly of international developments which are now taking place where specially designed aircraft are being developed for the economic transportation of cargo. I hope Aer Lingus, our national airline, will keep abreast of these developments particularly the most recent developments where, in addition to the Jumbo passenger jets, new Jumbo cargo aircraft are now being developed. I would see great possibilities for an efficient air transport service between Ireland and the Continent particularly for various types of agricultural and horticultural produce.
The significance of this is that we must lose no time in equipping our airports with all the modern handling techniques and facilities. This is being done at the moment at Shannon and Dublin in preparation for the arrival of the Boeing 747 and other large aircraft but cargo handling facilities at the airports need improvement. It is significant to note that one of the largest American air cargo operators, Seaboard and Western, have now decided to use Shannon Airport as a trans-shipment centre for Europe. The goods will be transported to Ireland in large aircraft and will then be broken up and sent to Europe and Britain in smaller aircraft. This type of development holds out great potential.
The question of transport is not merely complicated, it is also highly technical. I shall sum up what I have been trying to say about the implications of the common transport policy of the EEC for Irish transport. I have pointed out the various rules and regulations relating to road haulage which are operating now with which we will have to comply, the implications regarding rail transport and the implications for our national transport system. I believe it is vitally important at this stage that we should get down to the important and urgent task of formulating  a comprehensive national transportation plan which will co-ordinate investment in inland transport so that each particular type of transport, that is road and rail, and its corresponding infrastructure—the railway lines and the roads—will develop harmoniously without surplus capacity. I believe road and rail transport should complement each other and not counteract each other. It is vitally important that we should formulate such a national transportation policy without delay so that when we become members of the EEC we will have taken the necessary steps to ensure that all our transport resources will be utilised to the maximum degree possible and that the socially optimum balance between road and rail transport will be arrived at. I believe that, with the type of competition that is going on between the various modes of transport in this country, there is great need for rationalisation. There is a need to examine the possibilities which are being closely studied now by Germany, Britain, France and other countries of siphoning off as much heavy transport as possible from the roads on to the railways. There is no easy solution to this. It is a highly complex problem, the examination of which demands expertise in many fields but I respectfully submit to the Minister for Transport and Power that he should lose no time in getting down to an examination of this very important problem. I feel that a White Paper on transport should be produced without further delay. This has been suggested by many experts in the field of transport in recent times but, as far as I am aware, the question has not been looked at as yet.
At the outset I pointed out that the common transport policy which has been evolved from the provisions of the Treaty of Rome, Articles 74 to 84, did not make any provision for air and sea transport. However, a recent decision of the Transport Commission is of importance to us. It has now been decided that, because of the fact that the four new applicants for membership are from maritime countries and that each of the four, including ourselves, has a very large interest in air transport,  air and sea transport will be brought within the scope of the common transport policy.
Certain guidelines have been laid down already by the Transport Commission of the Community for co-operation between the different airlines. I want to point out that moves have been made in Europe towards the grouping of airlines. I am a bit concerned about the vulnerability of our relatively small airline in the light of any such groupings or amalgamations which might arise. I and many other people here have been concerned about this.
We are fortunate now, and we have one tremendous advantage, in that, assuming our application for membership is accepted, we will be in at the beginning and we will have a voice in the formulation of the common air transport policy. Looking at the whole philosophy of the EEC and the manner in which it has recognised social problems and so forth, I feel that our national airline has very little to fear from the guidelines and suggestions that have already been made to the Transport Commission.
I would point out—and I should like to put it on record—that air transport is already an international business. Fares and routes and schedules have to be hammered out at international gatherings. The best known one is IATA, the International Air Transport Association, which endeavours to lay down standard fares between various destinations and lays down a number of basic rules to which all airlines subscribe. In Europe there are a number of special organisations of a co-operative nature. The European Civil Aviation Conference has come into being in recent years. It is an agency of IATA and, through the intervention of the European Civil Aviation Conference, a certain number of rules and regulations have been laid down and a certain amount of co-operation has been undertaken.
At present there are two main groupings of airlines in Europe, of one of which KLM, UTA, SWISSAIR and SAS, the Scandinavian airline system, are members. The other is called ATLAS, of which Air France, Alitalia,  Lufthansa and Sabena are members. One of these groupings is referred to as KUSS and the other as ATLAS. These are two groupings of the major airlines of Europe and already they have gone a long way towards working in close co-operation. There has been no suggestion of amalgamation so far as I am aware, as yet, but the group of which Air France, Alitalia, Lufthansa and Sabena are members is standardising aircraft and co-operating in aircraft maintenance. Whether or not the next logical step will be taken and these four will amalgamate into one major combine it is difficult to say. From what I can gather from the inquiries I have made, such amalgamation will not be permissible within the context of the EEC common transport policy.
So far as our national airline is concerned, I believe that membership of the European Economic Community will bring, perhaps indirectly, a considerable number of advantages. We must remember that the European network at the moment is the one which is least profitable for Aer Lingus. I believe that, following our entry to the EEC, there will be a greater flow of people between one country and another and a greater flow of goods and so forth, and there will be a distinct possibility of new air services being opened up between Ireland and various continental destinations which our airline is not serving at the moment.
Taken in conjunction with what I have been saying about air freight and the possibilities for developing air freight traffic to the Continent from Ireland, I would hope that membership of the EEC would have great possibilities for Aer Lingus. One possible line of action which could be undoubtedly taken under the common air transport policy is that the EEC could negotiate with the American authorities with regard to the vexed question which has arisen here time and again of landing rights. It has been suggested that in future, instead of the American airlines and the Civil Aeronautics Board in the States negotiating individually with each country, the EEC Transport Commission could  negotiate on behalf of the different airlines. We have had considerable trouble here in recent years when the very delicate question of the granting of landing rights to American airlines at Dublin Airport first arose. This is one possible line which the air transport policy might take. It would lead to a rationalisation of the whole trans-Atlantic air traffic which at the moment is a rat race bedevilled with fare wars, as they are called. I hope our trans-Atlantic air services will be safeguarded in the event of our joining the EEC. We shall have to watch this very carefully during negotiations and later when we become a member and have to subscribe to a common air transport policy. It is just as important to safeguard the livelihoods of the thousands —I cannot think of the exact number at the moment—employed in our national airlines as it is to safeguard the livelihoods of the 20,000 employed in CIE. I have every confidence that our national airlines will not only survive but will prosper and expand provided they are given a fair set of rules of competition. I cannot see anything in the suggested common air transport policy for the EEC which gives cause for alarm, except the question of landing rights.
I must apologise to my friend the Minister for Industry and Commerce because I told him I would conclude by 10 o'clock but I have yet to speak about tourism, power and nuclear energy. I assure the Minister I have not done this deliberately; it is very difficult to judge how long one will speak for but when the Minister gets in tomorrow he will have plenty of ammunition from me to deal with.
I want to refer to the greatest opportunity this country has ever had in the field of national transport, namely, the Shannon estuary. The Government missed their opportunity very badly here. We all know, indeed, the Leas-Cheann Comhairle knows more than most, because he is on the banks of the Shannon Estuary, the great potential there is there. I may be accused of being parochial because of the clear association my constituency has with the Shannon estuary but looking  at the international transport scene I am maddened by the way in which the Shannon estuary, which is a tremendous national asset, has been neglected.
We in the south were always aware of the potential of the Shannon estuary as a deep sea port and anyone who studies the international transport scene will realise the tremendous potential that is there. I have already referred to the fact that the Shannon Airport nearby is being utilised by Seaboard and Western Airlines as a transhipment centre for Europe. The Shannon estuary is the only port in western Europe at the present moment, which, without any modification of its structure, can carry ships in excess of 220,000 tones. The only thing preventing ships of 500,000 tons from docking there is a sand bar at the mouth of the estuary. I condemn the Government for the manner in which they have neglected to undertaken the necessary work during the past decade. I would condemn them also for the manner in which they have ignored the advice of experts and international businessmen who have seen the tremendous potential of the Shannon estuary as a transhipment centre for Europe. Numerous reports and surveys have been presented to the Government, I have them here if the Minister would like to check them. The Shannon estuary has all the natural facilities to enable it to become the most important port in Western Europe at very little cost. Huge ships would be able to dock at the estuary and their cargo could be broken down and transhipped in smaller ships to the various European ports. I want to refer the Minister for Industry and Commerce to the Sunday Press of 31st January, 1960, where the banner headlines read, “The Estuary Project”. The text announced that a group of businessmen had plans submitted to the Government to develop the Shannon estuary as a deep sea port. We heard no more about that. The announcement was made before a general election.
Mr. T. O'Donnell: The Minister for Industry and Commerce and myself  should remember that because, if I remember rightly, we were both elected in that general election. Probably I would have got a few thousand more votes but for the publicity in the Sunday Press a short time earlier.
Mr. T. O'Donnell: I do not want to treat this subject in a flippant manner. I want to deal with it as it should be dealt with. The Government had the advice of all the experts including an international development corporation which submitted plans in 1967 for the development of the estuary, the proposals of a major oil company in 1968, the report of Arthur D. Little & Co. which has carried out various survey projects for the Government and all these have been almost unanimous in their recommendations that the Shannon estuary had a tremendous potential for development and that the sand-bar at the mouth of the estuary could be removed at a cost of £1 million of £1½ million. If this were done, ships up to 500,000 tons could dock there. This might appear to be a substantial amount but it is very small compared with what has to be spent by various European ports to deepen approaches to harbours. In 1969 the harbour authorities at Rotterdam spent £7 million in dredging the approaches to Europe's greatest port.
I do not know whether it is too late now to do something about developing the Shannon estuary but one must criticise the Government for their apparent lack of interest in this project. I cannot understand why these various reports were produced and why the necessary work was not carried out, why the various proposals put forward were turned down. The situation was very well summed up in the Sunday Times of the 7th December, 1967, a paper that is not given to scare stories or sensationalism. The heading here is: “Shannon—the neglected emerald —a magnificent sheltered deep-water port, plenty of labour, available power, an international airport. These are Shannon's credentials for giving a  boost to Ireland's west coast economy. So far they have been neglected.” I am aware of recent developments at local level and moves towards exploiting the vast potential of this natural waterway. There is a move afoot now to set up a common estuarial authority. We have had different authorities looking after the estuary, Limerick Harbour Board, Foynes Harbour Commissioners and Kilrush. I think agreement has been reached now to have a common authority. Anybody who takes the trouble to study the various proposals that have been made and ignored by the Government in the last decade cannot help but regret the lack of initiative and interest shown by the Government in this project. If the recommendations that have been made, if the proposals put forward and announced in the Sunday Press in 1960 had been heeded by the Government we could have in the Shannon estuary today an asset of tremendous value now that we are contemplating entering the EEC. We could have the greatest and deepest seaport in western Europe, ideally suited to transhipment, close to an international airport, a most valuable asset on the eve of our entry into the Common Market.
I can only deplore the lack of initiative on the part of the Government in the last ten years. I cannot understand why this project was overlooked and neglected in view of the fact that the constituencies adjacent to the Shannon estuary on both sides are constituencies that have consistently returned strong Fianna Fáil representation and, in recent years, constituencies which have had strong representation in the Cabinet and which at present have three Ministers in the Cabinet. Perhaps the Minister when speaking tomorrow will be able to throw some light on this problem. I understand some of these proposals  date back to the time before the Department of Transport and Power was established. Probably there are some records available. Again, I remind him of the Arthur D. Little report, a screening presentation by Litton International Development Corporation in 1967, the proposals of an international oil company in 1968. These and other reports on the potential of the Shannon estuary have been furnished to the Government and have been left to languish.
I have the Sunday Times here and the final thing I want to say about this—I find it difficult to speak about the Shannon estuary without becoming emotionally aroused and blowing my top—is to quote from the Sunday Times of December 7th, 1967:
“Businessman, after businessman, American, British, Dutch, even German and Japanese, have spotted the advantages of Shannon estuary and tried to do something about them in the last 20 years. Yet in the tangle of Irish politics and parish pumpery little is actually achieved. Report after report languishes in the Dublin pigeon-holes”.
That is a perfect summary of what I have been saying. I shall be looking forward to the Minister's contribution to this debate tomorrow telling us why steps were not taken long ago to develop the potential of the Shannon estuary.
|Last Updated: 15/09/2010 06:14:16||Page of 39|