Estimates, 1992. - Vote 35: Tourism, Transport and Communications (Revised Estimate).

Thursday, 28 May 1992

Dáil Éireann Debate
Vol. 420 No. 5

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Acting Chairman:  The Minister and the spokespersons for Fine Gael and Labour each have 15 minutes and all other Members have five minutes.

Minister for Tourism, Transport and Communications (Mrs. Geoghegan-Quinn): Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  I move:

That a sum not exceeding £132,759,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1991, for the salaries and expenses of the Office of the Minister for Tourism, Transport and Communications, including certain services administered by that Office, and for payment of certain grants and grants-in-aid.

I understand that separate questions will be put in respect of tourism, transport and communications.

This year's Vote for tourism shows a slight increase of just £1 million on the 1991 figure. In view of the importance and size of the sectors covered by the Vote, I have agreed to deal with the Estimate under the three separate headings of Tourism, Transport and Communications.

The year 1987 was a milestone for Irish tourism. The Government identified the sector in that year as a major force for [996] inducing wealth and job creation in this economy. Ambitious new strategies and real growth targets were agreed with the social partners in the Programme for National Recovery. The Government's commitment to and confidence in the sector continues in the Programme for Economic and Social Progress.

The most recent analysis of the industry shows that Irish tourism contributed three-quarters of a percentage point each year to the increase in GNP since 1987; is now our principal internationally traded service, contributing more than £500 million annually to the overall balance of payments last year; and most significantly, the sector has been responsible for one out of every three new jobs created in the Irish economy in the past five years and now supports one in every eight jobs in the services sector.

From 1987 to the end of 1990 overseas visitor numbers to Ireland grew at more than twice the annual growth rate for world tourism generally. Annual visitor numbers increased by 50 per cent, including a 115 per cent increase in tourist numbers from continental Europe. In 1990, for the first time ever in the history of the State, overseas visitors exceeded the three million mark and foreign tourism revenue the £1 billion mark.

The increased economic contribution of tourism led to the creation of new jobs at an average rate of 5,000 per year, bringing the total numbers of jobs now sustained by the sector to approximately 82,000. These results are a testimony to the Government's assessment back in 1987 of the growth potential of Irish tourism.

Last year was a particularly difficult year for international tourism and travel. Yet despite the combined and potentially devastating effects of the Gulf War and economic recession in some of our main markets, visitor numbers last year were just over 2 per cent short of our record 1990 performance while overseas revenue actually increased by 6.5 per cent.

This was a tremendous result at a time when most of our European competitors suffered a significant decline in tourism performance. In fact, it brought overseas [997] revenue from tourism to £1.2 billion- an increase of £482 million or 66 per cent since 1987. In other words the Government's target of increasing tourism revenue by £500 million in the five year period 1988-92 had almost been achieved in the four years to end 1991.

That performance, under very difficult international trading conditions, means that Irish tourism is well placed to return to growth again this year, confirmed by recently released estimates by the Central Statistics Office for the first quarter of 1992.

Despite the fact that Easter was not until April this year results for the first three months show a 3 per cent increase over the same period last year. The level of inquiries and bookings to date is quite promising but obviously continued economic recovery in our main markets will be a very important factor in determining performance for the year. Tourism is an internationally traded service and is accordingly subject to fluctuations which are totally out of our control. The effect of the Gulf War last year was a prime example. This year the German market has been upset by a series of pay disputes and other economic difficulties. However, Bord Fáilte and the industry will be pulling out all the stops to achieve our targets.

A key factor in the dramatic turn around in performance since 1987 has been radical re-appraisal of our strategy for marketing and promoting. The emphasis has moved away from general promotion of Ireland to a more sophisticated market-led approach. This approach concentrates on the development and marketing of specialist holiday products suited to the modern demands of key affluent markets. These products include top class golf, equestrian, cruising, cultural and heritage facilities. Promotional programmes are now clearly focused on real selling opportunities, with close linkages with favourable access developments created by our liberal access transport policies.

The industry itself is also becoming much more market oriented. Irish tourism products are on sale in an ever [998] increasing number of markets and the industry has realised that every product must be strenuously pushed in the market place if a return on investment is to be secured.

My Department's Estimates include an allocation this year of £21.5 million to Bord Fáilte towards their overseas marketing and promotion. This will be supplemented by almost £7 million assistance for marketing and promotion by the Irish tourism industry available from various sources including the EC assisted Programmes for Tourism, Interreg and the International Fund for Ireland.

This year's provision for Shannon Development, who are responsible, inter alia, for traffic and tourism development at Shannon and in the mid west region, is £1.775 million. In common with airports all over Europe, passenger traffic at Shannon in 1991 — and tourism in the mid west — was affected by the Gulf crisis and the economic recession in the US and UK. Despite these adverse trading conditions, an increase of 27.3 per cent was achieved in European traffic, making 1991 the most successful year ever in this sector and helping to contain the overall drop in traffic at Shannon to just over 5 per cent.

The prospects for Shannon for the present year are looking good, with new air services either just started or about to commence shortly. The major French tour operator Nouvelles Frontieres will be introducing two new charter series from Paris and Toulouse into Shannon for the first time this season. Aeroflot, which already operates 2,500 flights through Shannon each year, will be introducing new services linking Shannon with a number of new points, including Chicago in the US. They are also stepping up the frequency of their flights to Miami.

Last month, I signed an order providing for an extension to the existing customs-free zone to facilitate the establishment of a number of major aviation related developments planned for Shannon. The decision is further proof of the Government's determination to provide [999] all possible opportunities for the expansion of the aviation industry at Shannon.

Tourism investment will continue to grow in 1992, directed mainly to increasing the range and quality of our visitor attractions. This year will be the second last in the five year EC co-funded programme to which the European Regional Development Fund is contributing £118.4 million and the ESF is contributing £28.5 million. The objective is to provide financial assistance for investment in certain priority, product related infrastructural work and in the provision and development of certain other amenities specifically aimed at attracting additional foreign tourists and revenue to Ireland.

Over £128 million of EC aid is now committed to projects and training initiatives and the programme is expected to generate in excess of £300 million in new investment in Irish tourism by the end of next year. Assistance is also available for tourism development under the Interreg Programme. This programme was drawn up by the EC Commission to assist internal border areas in overcoming the special development problems arising from their relative isolation within national economies and within the Community as a whole. The objective of the tourism sub-programme within Interreg is to develop and market our Border area as a desirable holiday destination. Over £7.5 million is available under Interreg for tourism development on the southern side of the Border.

This provision has come at a timely juncture and gives the Border counties additional opportunities to maximise the benefits that will come with the reopening of the Ballinamore-Ballyconnell canal. Substantial progress has been made on this project and the canal is expected to open next year, on time and within budget.

The International Fund for Ireland, IFI, is also helping tourism investment in the Border counties under a number of schemes administered on the Fund's behalf by Bord Fáilte. They provide assistance for investment in tourism [1000] amenities and facilities; for joint marketing of Ireland by both tourism boards; and, in certain circumstances, for the upgrading of lower grade hotels and guesthouses. To date, the fund has committed almost £22 million to tourism in the South, including generous assistance for an all-Ireland computerised reservation system and an all-Ireland genealogy project.

Looking beyond 1993, my Department have already begun preliminary work, in consultation with the Department of Finance and other relevant organisations, on formulating proposals for our bid for the next round of EC Structural Funds. The sector's strong performance in recent years, in terms of visitor numbers, revenue and ability to respond to investment incentives, leaves us well placed in these negotiations.

The recent budget again reaffirmed the Government's strong commitment to tourism with specific measures in relation to VAT, excise duties and car hire which are of particular benefit to the indutry. These included the retention of the special 10 per cent VAT rate for accommodation, the lowering of excise duty on cars and petrol and the special provision of £1 million towards relieving an anticipated shortage of cars for hire during the coming peak tourist season.

The Government have also taken a number of other recent initiatives with a view to the further development of this important sector. These initiatives include the establishment of a tourism task force——

Mr. Farrelly: Information on John V. Farrelly  Zoom on John V. Farrelly  Are they still in existence?

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  ——our participation at Expo '92 and the recent Japan tourism mission to Ireland.

A special task force, appointed by the Government, are continuing their deliberations into the long term prospects for Irish tourism and I look forward to their conclusions later this year. The task force have been asked to review recent performance and future prospects, identify new commercial and marketing opportunities [1001] and prepare new mechanisms for development with roles for the commercial and community sectors.

Ireland's participation in Expo '92, which runs from April to October, in Seville, should give a considerable boost to the profile of Irish tourism in the fast growing Spanish market. Over 100 countries are taking part and best estimates suggest that 18 million people from around the world will visit the Exposition.

The total cost of Ireland's participation is estimated at £3.5 million, of which £2.7 million has been allocated for the design, construction and fit-out of the Irish pavilion. The balance will go towards staging our calendar of cultural events and for the staffing of the pavilion. A sum of £2.25 million, sourced from the national lottery, has been included in my Department's Vote in 1992. The House passed a Supplementary Estimate last November to meet expenditure costs of £1.25 million in 1991.

The Irish pavilion makes a strong statement about Ireland. It underlines our attractions as an industrial and business location and a source of high quality products. It also emphasises our appeal as an attractive, quality tourist destination. Inside the pavilion we have mounted a visual presentation on the best of Ireland. We expect that approximately 500,000 visitors will visit the Irish pavilion and that our participation presents us with a very attractive promotional opportunity. In the first five weeks since the exposition opened visitors to the Irish pavilion topped 150,000, well ahead of expectations. I hope many Irish people, including Members of this House, will avail of the opportunity between now and October to visit the exposition.

This year also saw, in April, the first ever tourism mission from Japan to this country. The mission was led by the Vice Minister, Ministry of Transport, Tokyo, and included senior executives of the Ministry of Transport, Japanese airlines and leading Japanese tour operators and hoteliers. Although approximately 10,000 Japanese visitors came here in 1991, Ireland is still largely unexplored [1002] by the Japanese tourist market. Based on our assessment of the Japanese Government's plans to further develop export tourism by breaking the 20 million mark within a decade, we are confident that Ireland has all of the necessary facilities to attract a significantly increased proportion of Japanese tourists travelling to Europe.

I was pleased to be able to announce, following my discussions with the mission, the agreement of the Japanese authorities to begin talks on an air transport agreement between our two countries to prepare the way for direct air services between Ireland and Japan. In another major breakthrough for Irish tourism during the visit of the mission, Miki Tourist Company Ltd., Japan's biggest ground operator to Europe, signed a contract with Air Lingus and Bord Fáilte which aims to treble the number of Japanese visitors to Ireland to 30,000 by the end of 1993.

Irish tourism has already established itself as a major force for economic progress, as a vehicle for regional development within the country and, in particular, as a cost-effective means of generating sustainable jobs. The Government and I will spare no effort in ensuring that Ireland gets its share of this growth.

Mr. Farrelly: Information on John V. Farrelly  Zoom on John V. Farrelly  I thank the Minister for splitting up the tourism, transport and communications aspects of her portfolio in the debate. This will give the spokespersons for the various parties an opportunity to contribute on the different areas.

The Minister said that £2.25 million had been made available from the national lottery for Expo '92. I welcomed that allocation when the Supplementary Estimate was brought before the House last year. While I welcome the fact that this money is being spent to promote Ireland abroad, I wish to point out that many Irish people also promote Ireland throughout the world. Every time one of our athletes wins a competition they help to promote Ireland. Another example is the Eurovision Song Contest, which was won this year by Linda Martin and [1003] Johnny Logan. Approximately £2 million will be spent in staging the Eurovision Song Contest here next year. This will enable us to promote Ireland to approximately 500 million viewers throughout the world.

I regret that the Government do not see fit to allocate money from the national lottery to people involved in sports. Later this year 60-70 people will represent Ireland at the Olympics. If any of our athletes win a medal no doubt various Cabinet Ministers will be at the airport to greet them. Taking into consideration the important job done by these people in promoting Ireland abroad, I hope sufficient funds will be allocated to the Olympic Council of Ireland to enable them to prepare properly for the Olympic Games.

I wish to refer to the figures given by the Minister in her speech. Reference is continually made to the necessity to develop our tourism industry. A plan was put together by the Government four or five years ago to double the number of tourists coming to Ireland. Four hundred applications for grant aid were submitted by people involved in the agri-tourism business. Up to last August 210 applications had been approved, with £5.3 million in grant aid. The total investment in this area in real terms was £16 million. I should like the Minister to say whether extra funding will be provided for the 190 applications on hands?

The Minister mentioned a figure of £1.2 billion in foreign earnings. Income from home holidays last year was £0.5 billion and tourism related income amounted to £1.7 billion. The Government have reduced continuously since 1988 the amount of money made available to Bord Fáilte, from £28.5 million to £21.5 million this year. The income to the State in taxation has increased to £500 million. Bord Fáilte have been requested to increase tourism numbers into the country by one million in the next year or year and a half. Having had the opportunity of visiting the UK and Amsterdam and speaking to the Bord Fáilte representatives there, I do not believe that [1004] it is possible to increase the numbers visiting Ireland without making available further funds to promote Ireland. In North America promotions are carried out on a three monthly basis. Similar action should be taken here if we are to promote Ireland on a continual basis. In addition, funds should be made available to the offices in the various countries on the basis of the increase in numbers to Ireland from those countries.

With the implementation of the Maastricht Treaty a number of changes will take place. From an Irish tourism point of view we welcome the declaration in the Treaty that by 1996 tourism will become a recognised, full-blown activity of the Community. The implications of this for Irish tourism are enormous. It recognises that tourism, in all its components, is now the single largest industry in the European Community and is in a position to receive much higher priority in the political concerns of the Community.

A wise Irish Government would ensure that in the interim between now and 1996 a series of measures would be drawn up and pressed home with the Community to move tourism to the top of the agenda. At present it is sixth place on a list of ten, with industry at the top of the list. I would ask the Minister whether she is in favour of a full commissionership portfolio for tourism post-1996, with a separate tourism budget. That is the only way we will gain in the area of tourism post 1996.

A European centre for tourism must be established to undertake the co-ordination of tourism research, development and analysis throughout the Community. Through new tourism products we must provide for a more diversified and larger tourism sector than we have known heretofore. Tourism will become the largest single industry in Europe in the not too distant future. The principle of convergence, leading to cohesion — the cornerstone of the Treaty — must be applied in relation to all future Community tourism funding policies. The principle of subsidiarity, respecting and promoting local and regional folklores and customs, must be enshrined in all future Community tourism policies. We must ensure [1005] the preservation of the natural environment on which the tourism industry ultimately depends.

We must establish a European social idea whereby all workers and the least advantaged in society will be guaranteed the right to take holidays. We must seek the integration of existing tourism services such as a Euro-register of travel agents and a Euro-consumer charter of tourism rights in relation to accidents and criminal attacks. Only a short time ago we witnessed a number of such attacks in this country. I hope that the Government have made arrangements with the Garda to ensure the protection of tourists. We must ensure that Community policies in the field of taxation are tourism friendly and are so recognised in policies promoted throughout the Community. It is a matter of regret that the Government have not so far seen fit to initiate discussions at home or abroad to ensure that tourism is included more centrally in Treaties. To date the Irish Government have not worked on this most important area.

The fact that under this Government jobless figures have soared to 300,000 means that job creation must be a political priority for any succeeding Government. We believe that the present Government have not examined, explored or unleashed the massive job creation potential of a well planned, expertly managed, successful tourism industry. That is regrettable. In the tourism area, this Government are the worst Government in the history of the State, considering the reductions in the amount of money made available for that industry. When the previous Minister — I cannot say the same about the present Minister — at the end of a three or four year period, found he had done nothing to promote and provide adequate funds for tourism, he set up a task force, which is on the verge of falling apart at present. Last week I received a reply from the Minister to the effect that the task force would report in three or four weeks' time. However, she has said today that the task force will not report until later in the year. Therefore, it is evident that they have run into difficulties.

[1006] Let us consider what has happened in the last five years. The five year plan for tourism, 1988-93, has collapsed. There was the rod licence debacle, the abolition of the business expansion scheme and a year by year reduction in the annual tourism budget, which I have mentioned. In the agri-tourism programme there are 190 applications awaiting approval for funds. Neither the Minister nor the Government are prepared to deal with any of the thorny problems in relation to the interpretative centres around the country. I proposed that these centres be constructed partly underground, which would solve the problem relating to objections. I have asked the Minister about the centre to be provided in my constituency but he has not responded. Proper negotiations should take place on this matter.

In relation to car hire for the tourist industry, I suggested to the Minister that excise duties be postponed until these cars are resold. The £1 million that has been allocated will simply provide the 2,500 extra cars required this year. In order to reduce the cost to the consumer we should consider the system operated in Denmark where duty does not have to be paid until the cars are resold.

The outbreak of public and private sector strikes in areas such as transport, banking and postal services destroy confidence in the tourist industry. Many people providing services such as holiday houses and bed and breakfast accommodation find they have received no bookings for the last month because of the postal strike; but, unfortunately, nothing is being done to solve this problem. As a result, the income of people in rural areas will be greatly reduced.

Finally, I would like to refer to the task force on tourism. Obviously, the Minister does not believe that this task force will come up with a positive result. Only a few days ago they were going to disband. It is interesting that the Minister said they will be finished at the end of the year. Has the Minister brought them back on the rails? At the end of the debate will [1007] the Minister inform me of the position in connection with this?

The allocation in the budget this year for tourism is inadequate considering the £500 million of new product which has been created through private sector investment, grants and so on, since 1989. A reduced budget in order to sell that product will not work because of the far greater competition in world tourism. If we are in earnest about tourism we must provide an adequate amount of funds to deal with the markets abroad. The Minister should ensure that next year adequate funding will be made available to market Ireland abroad. The extra one million visitors cannot be persuaded to come here unless the money is provided. The Minister is the only person who can ensure that it is.

Mr. Moynihan: Information on Michael Moynihan  Zoom on Michael Moynihan  I welcome the Minister to the first tourism discussion in the House on the presentation of her Estimates for 1992. I wish the Minister well in the management of what will now be the country's major wealth and employment creation industry. Tourism can create much needed employment. Tourism is now one of the major service industries and accounts for up to 30 per cent of world trade. In Europe, the hotel catering and tourism industry is one of the fastest growing industries. Getting a share of that lucrative market will not be easy in view of international competition. There is a great need for a substantial increase in Government funding for the promotion and marketing of Irish tourism throughout the world. Because tourism is a vital part of our economy it should have a separate Minister and a separate Department. The tourism industry has tremendous potential for growth and development.

Within Europe the budgetary programme for tourism has been given low priority as it has in the Republic. In Europe we also need a commissioner to deal with tourism and its development in the Community. One can have the best product in the world but if nobody knows about it there is a problem. The promotion [1008] which the industry and the Government manage to do overseas is totally inadequate and the lack of promotion will become more acute unless it is addressed.

A serious problem for Irish tourism relates to travel especially from north America from where it is substantially cheaper to fly to Britain. A 1992 schedule of costs from the north American continent shows that on American airlines, United Airlines and on British Airways the fares in the shoulder season are: to London $448, and to Europe is $548 and these flights do not touch down in Ireland. Delta airlines which does, has a main fare of $448 to London, $548 to Europe and $748 to Shannon. This clearly indicated the disadvantage to the north American commuter of landing in Ireland. Aer Lingus who do not fly direct from the north American continent to either London or Europe has a fare of $579 to Shannon. During the peak season they have flights to mainland Europe, London and Shannon. The three American airlines during peak season have fares of $548 to London and $648 to Europe, and they do not service Ireland. Delta during the peak season have a fare of $548 to London, $648 to Europe and $878 to Shannon. This exposes our noncompetitive position with regard to flight to Shannon. The Aer Lingus rate during the peak season to Shannon from the north American east coast is $699. The Minister can readily see our lack of competitiveness in this area and that this substantially damages our American tourist trade. Admittedly, many tourists will come back to Ireland from London for a short time.

We need to expand the sea ferry business to keep pace with the expansion of tourism. With the completion of the channel tunnel we will be the only island destination of the EC without direct land access. Many tourists like to take their own cars here in view of the totally inadequate car hire service we have in peak season. The success of the Cork-Swansea ferry gives an indication of the potential for an expanded sea ferry business. Prior to the combined efforts of the Cork Corporation [1009] and Cork and Kerry county councils in giving the financial guarantees for the service, the project was written off as a non-starter by all the officials in this county. Its success is an indication of the opportunities in this area.

The cost of holidays in Ireland is of major importance. Tourists are very price conscious. We must pay attention to the attractiveness and the availability of the Irish tourism product and that includes price. Our competitiveness and our product as well as effective marketing combine in determining our market share of world tourism. We must have a full discussion on Irish tourism, its potential and its impact on employment. I am sure the Minister would agree that devoting one hour today on the Estimates is not enough. Whether the Members of this House come from urban areas or rural areas every one of them is interested, if not involved in some way, in the development and promotion of the tourism industry. There is need for major expansion.

It is 37 years since the last legislation on tourism. That was in 1955 when Bord Fáilte were established. The organisation were set up with a board of nine, nominated by the Minister and the Government. I would suggest, in view of the sectors in the economy which are deeply involved in tourism, that a democratic system of election to the board of the organisations either in whole or in part, should be considered. Well recognised bodies such as the Hotels Federation and others representing restaurants, town and country homes, guest houses and tour operators are the framework on which tourism is built, as well as many thousands of unionised workers who have wholetime employment in that industry. Many of these people could make a valuable contribution to the development and management of the tourist industry. They are fully conversant with all its aspects and aware of its potential. I am not in any way critical of the excellent people who have been members of the board, but in many cases they are people who have not been totally involved in the business and have had [1010] other interests. New legislation might be considered on which the House could express its views.

I now refer to the rationalisation of the marketing and promotion work being done by Bord Fáilte and Shannon Development, budgetary provision for which is made by the Government. Bord Fáilte provide for the marketing and promotion of the Republic in north America, continental Europe and Britain. Shannon Development receive an allowance for the marketing and promotion of the mid-west. These organisations have separate offices and different personnel working in the same market. This matter should be examined. If there is not rationalisation and the Oireachtas continues to provide funds for these two separate bodies, will other bodies in other localities have the right to seek recognition and specific budgetary provisions from the Exchequer?

The Minister must consider how the grading of tourism structures here compares with standards throughout Europe. It is time for further legislative proposals which could be fruitfully considered by this House to provide a more comprehensive tourism service.

I appreciate the importance given to the development of regional airports. These are necessary facilities in the expansion of tourism. Nobody from the continent wishes to drive a car for very long journeys on Irish roads. For this reason the development of airports is vital.

I would stress the major contribution to Irish tourism which can be made by international conferences and congresses, especially at the shoulder periods. There is new growth in incentive conferences held by major international firms. Tourism promoters must be aware of the potential business.

Mr. McEllistrim: Information on Thomas McEllistrim Jnr.  Zoom on Thomas McEllistrim Jnr.  I congratulate the Minister on the excellent manner in which she has handled her portfolio as Minister for Tourism and Transport.

Mr. Farrelly: Information on John V. Farrelly  Zoom on John V. Farrelly  I notice the Deputy did not include Communications.

[1011]Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  He meant to say it.

Mr. McEllistrim: Information on Thomas McEllistrim Jnr.  Zoom on Thomas McEllistrim Jnr.  Tourism has become one of the most important industries, generating a very considerable revenue. I will concentrate on County Kerry where we have developed our tourist business very considerably. Revenue from tourism in Kerry last year was a record £145 million, surpassing agricultural income. That is no mean achievement.

On 1 September 1989 County Kerry was divided for tourism promotion purposes. North Kerry was transferred to the mid-west region, to be promoted and administered by Shannon Development. South Kerry remained in the south-west region to be promoted by Cork and Kerry Tourism. Kerry County Council considered on a number of occasions the impact of this division on the promotion and development of tourism in the country as a whole. They unanimously resolved at meetings on 16 September 1991 and 20 January 1992 that County Kerry should be united and promoted as a separate and distinct region for tourism purposes. I appeal to the Minister to make the decision that Kerry should be marketed as a single region.

Employment in County Kerry in tourism is estimated at 7,500, 17.5 per cent of the labour force. County Kerry has 8,210 bedrooms in hotels and guest houses and 7,524 beds in self-catering units and hostels. Dublin has 5,210 beds and Cork has 2,474. These are very important figures. Revenue from tourism in Kerry was £145 million last year. The present promotional literature shows a separate north Kerry and a separate south Kerry. The map showing north Kerry has no reference to the Dingle peninsula or Killarney. This is absurd. It is essential to advertise Kerry as one unit. At present we are extending Kerry Airport at a cost of £12.5 million. This will facilitate many more tourists coming into our country. The airport, which is being promoted by Cork and Kerry tourism, is a half mile from north Kerry, yet Shannon development cannot promote it.

The international festival of Kerry [1012] brings approximately £15 million in revenue to Tralee in one week. Indeed, the Minister for Tourism. Transport and Communications has had experience of it as I met her there on a couple of occasions——

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  Late night frolics.

Mr. McEllistrim: Information on Thomas McEllistrim Jnr.  Zoom on Thomas McEllistrim Jnr.  ——when the festival was in progress. It is great to have a Minister who visits these places——

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  I hope the car did not turn over.

Mr. McEllistrim: Information on Thomas McEllistrim Jnr.  Zoom on Thomas McEllistrim Jnr.  ——and so has first hand knowledge of the type of festival involved. Kerry has the best beaches in the world and a number of major national visitor attractions such as Muckross House, Crag Cave, Siamsa Tire, the Geraldine experience at Tralee town, Blenderville Windmill, the National Transport Museum in Killarney and Derrynane House, all of which are marketed by different groups as well as by Shannon development and Cork and Kerry tourism. This is not right, Kerry should be marketed as one unit and I would request the Minister to have this done in the very near future.

Mr. Byrne: Information on Eric J. Byrne  Zoom on Eric J. Byrne  As a Dublin TD I am saddened at the almost daily reports of muggings and robberies of our overseas visitors. This is only the month of May, we are not yet into our peak season, and yet there has been an onslaught on our visitors as they walk the streets. I would ask the Minister to treat this matter seriously. For those of us who live in the city and are conscious of the benefits of tourism, the sighting of cars with foreign number plates parked in certain streets, particularly at locations in the inner city, makes one apprehensive. Last year I reported on at least four occasions to gardaí in and around Kevin Street on cars which had been broken into.

Mr. Farrelly: Information on John V. Farrelly  Zoom on John V. Farrelly  Mine was broken into too.

[1013]Mr. Byrne: Information on Eric J. Byrne  Zoom on Eric J. Byrne  The sighting of a car with a foreign number plate and a smashed side window is very disturbing but, of course, attacks on tourists are not confined to the inner city. It is disturbing and sad also when one goes to an isolated area, such as the Sally Gap in Wicklow, to see roadsigns advising people that the area is preserved, that shooting of deer, grouse and other wildlife is prohibited and then to see signs nearby reminding tourists not to leave their cars unattended and not to leave valuables visibly on display in cars. This isolated area which attracts tourists attracts thieves and robbers in turn.

There were frightening reports in the newspapers last week of an incident at the Sally Gap where tourists who were taking photographs and enjoying the scenery had their car, with an infant asleep on the back seat, stolen. This drives home the message that the thieves who are travelling around the countryside in search of easy victims are ruthless. The incident involving the murder of a German tourist in the Phoenix Park last year adds to the litany of ever increasing attacks on tourists. I am reminded of the need for safe, secure camp sites, particularly in the Dublin area, not only for young campers but for those using caravans.

Can the Minister tell the House what she intends doing to ensure that our tourists are protected from attacks? One can imagine the huge cost to the tourist industry when, having attracted these tourists in the first place, they return home the victims of muggings or robbery. I would urge the Minister to address this problem. Is she aware of reports that there are organised gangs specialising in the robbing of tourists? Can she arrange with her colleague, the Minister for Justice, to have more plain clothes gardaí on the beat in the city and especially on the tourist trails earmarked by Dublin tourism. These trails take visitors along the various roads throughout the city, often along side streets and through the old Viking parts of the city. I would particularly ask that such areas as St. Patrick's Cathedral, Thomas Street, Christ Church [1014] Cathedral, Francis Street, Kilmainham. Fishamble Street and the City Hall be earmarked for special attention. These areas attract an increasing number of tourists but unfortunately, in turn, they seem to be targeted by robbers.

Miss Coughlan: Information on Mary Coughlan  Zoom on Mary Coughlan  Ba mhaith liom ar dtús comhghairdeas a ghabháil leis an Aire úr agus a ghuí go néire léi go han-mhaith ina cuid poist.

I regret very much the negative tones from Opposition Deputies in this debate. It does not help the promotion of tourism to emphasise the problems. As I have only a couple of minutes I should like to draw one or two points to the Minister's attention. I am enthused by the tremendous encouragement the Government have given towards tourism development but I would ask the Minister to consider, by way of encouraging investment especially in the north west region, the reinstatement of the business expansion scheme as it applied to this industry. I realise there were abuses of the scheme but the general tourist industry has sufferred as a consequence.

Bórd Fáilte are of the opinion there are sufficient beds available in this country: in the north west, and in Donegal especially, we are not of that opinion. I would like to see an upgrading of the available accommodation. Those in the industry need encouragement. I hope grant aid will be available to upgrade accommodation not only in the hotel business but also in guesthouses, town and country homes and in self-catering accommodation.

There is a need also to address the car hire problem which, when compared with other countries is exorbitant. Perhaps consideration would be given to the possibility of not charging VAT on cars being used for hire to encourage a greater volume of business in that area and also to reduce the costs to the hirers.

In her contribution the Minister referred to the new ties with the Japanese market. I am anxious that there be further progress in relation to marketing. I hope the Minister will take an opportunity to go abroad and further promote [1015] the country and, especially, to promote our facilities for golf. Such facilities are readily available in the north west and in Donegal particularly and are of much interest to visitors from the Far East, for instance, especially Japan. We have not realised any of our potential in that part of the world. I would ask that special efforts be made to promote that aspect of tourism. There seems to be a line drawn from Dublin to Galway and everything goes to the south of it. There must be greater marketing of the north-west region. Donegal, Sligo, Leitrim, Cavan, Monaghan and Mayo really have a lot to offer. Unfortunately, we have not been able to realise our potential. I hope the Minister will do her utmost to encourage the investment that is required.

I would like to congratulate the International Fund for Ireland for the tremendous input into the Border counties especially. I hope that will continue. In the negotiations for further European Regional Development Funds. I hope we will get a greater slice of the cake. We deserve it and I hope there will be some positive discrimination in relation to the less developed areas.

Ba mhaith liom a rá, san bomaite amháin atá fágtha agam, go bhfuil díospóireacht anois idir an Aire agus Údarás na Gaeltachta faoi chúrsaí turasóireachta a bheith ag an Údarás. Tá súil agam, cé go bhfuil an Ghaeltacht gar dá croí, go ligfidh sé don Údarás na dualgais sin a chomhlíonadh.

Within quite a short space of time I feel that Udarás have been very much tuned in to tourism in the Gaeltacht areas. I hope the Minister will see her way to off-loading some of her tremendous portfolio to such a body.

Acting Chairman (Mr. Hilliard): Information on Colm M. Hilliard  Zoom on Colm M. Hilliard  We shall now debate the transport element of the Vote.

Mrs. Geoghegan-Quinn: Information on Máire Geoghegan-Quinn  Zoom on Máire Geoghegan-Quinn  The completion of the Single European Market on 1 January next will place even greater pressures on our transport links with our main trading partners. If we are to avail [1016] fully of the market opportunities that the Single Market will bring we need more than ever to have efficient transport systems and services.

At £108 million the Exchequer grant to CIE is the single largest item of expenditure in my Department's 1992 Estimate. The 1992 provision represents a cut in real terms of over £5.5 million, since 1988, on the CIE subvention. Policy in recent years has been to encourage a reduction in CIE's dependency on State funding through a combination of innovative marketing strategies, cost reductions and optimum utilisation of group resources.

Support for the railways over the years has accounted for a very substantial proportion of the subvention. Between 1980 and 1991 total direct State funding to the railways amounted to over £940, in addition to capital investment by CIE of almost £230 million in the rail network over the same period.

This year, of the total Exchequer subvention to CIE of £108 million, £90 million is being allocated to Iarnród Éireann. Some £45 million will go to the maintenance and upkeep of rail infrastructure. CIE will use the other £45 million to support the operation of socially necessary services which cannot operate on a fully commercial basis and to make interest and other exceptional payments, including £10 million in respect of interest on loans which financed the development of DART. Apart from DART interest, the deployment of Exchequer support is a matter for the parent company, CIE, and Iarnród Éireann themselves.

The Irish and British Governments recently announced approval at a meeting of the Anglo-Irish Conference for the upgrading of the Dublin-Belfast line, costing IR£73 million. It is expected that preparatory work will commence shortly on the project which is due for completion within five years. Estimated costs on the Southern side of the Border amount to over IR£43 million with the European Community providing 75 per cent of the balance being financed by Iarnród Éireann from own resources.

Meanwhile a detailed assessment of [1017] the strategic options for the future of Irish railways is currently being carried out by CIE in conjunction with my Department and the Department of Finance. Consultants are being engaged to assist, and are expected to report later this summer. The results will form an important element in the formulation of an investment programme for the further development of the railways. I intend to pursue vigorously the possibilities of EC assistance for such an investment programme. CIE are allocating approximately £11 million of the 1992 subvention to Bus Atha Cliath and £4 million to Bus Éireann.

While international air transport experienced serious difficulties in 1991 because of the Gulf War and the effects of the recession in the key UK and US markets, current indications are that air traffic is making a recovery. Carriers are already reporting increasing buoyancy in the Irish Market, with healthy growth at State airports on cross-channel and continental European routes. Ryanair have doubled capacity on the Dublin-London route and Lufthansa have begun a new Dublin-Cologne service.

Transatlantic traffic is up almost 25 per cent on last year. Earlier this year, I granted Aeroflot fifth freedom rights on the Shannon-Chicago route, and have licensed a new Irish carrier — Translift Airways — which I hope will add new charter capacity next year on the transatlantic. Aer Lingus and Aer Rianta will both be seeking to capitalise to the maximum extent on this recovery.

For the reasons already outlined, Aer Lingus were particularly badly hit on the air transportation side in 1991, leaving them with a very tough task in getting airline finances back on course. This will call for unstinting effort and co-operation from both management and the work-force.

The 1992 public capital programme include £111.71 million for expenditure by Aer Lingus, a small drop of about 7 per cent on last year's outturn. Some £70 million of this will go on the European fleet replacement programme. Four new aircraft have been delivered in the last [1018] two months leaving Aer Lingus with one of the newest fleets in Europe. No further acquisitions are planned for the time being.

TEAM Aer Lingus have completed their first year of operation and I recently opened a new £5½ million light maintenance hangar at their Dublin Airport base which is expected to lead to the creation of a further 170 new jobs there over the next few years.

Aer Rianta were also hit by the downturn in international transport last year. Passenger traffic at the State airports fell by 5 per cent. There was a marginal fall of £0.2 million on the contribution made by the company's subsidiaries again reflecting the difficult trading conditions, including decreases in passenger numbers at airports in the former USSR which affected turnover and profits in the overseas joint ventures. However, their overall trading performance still meant that Aer Rianta could show a profit, after interest and overheads, of £22.2 million and make a contribution of over £18 million to the Exchequer for 1991.

Aer Rianta invested some £33 million in fixed assets last year, financed from own resources, borrowings and some £7 million from the European Regional Development Fund towards airport development costs. Aer Rianta plan to invest another £18 million this year, again financed from a mix of own resources and borrowings, with an expected £6 million in European Regional Development Fund assistance. Almost £14 million will be invested in the three State airports: Dublin, Cork and Shannon, and projects will include adaptations to terminal buildings and aprons at Dublin and Shannon, continuing development of the new multi-storey car park at Dublin and the major extension to the terminal building at Cork. Four and a half million pounds will be invested in Aer Rianta's Great Southern Hotels operation.

The process of creating a more liberal regime in air transport within the European Community, which commenced in 1987, is due for completion, on target, by 1 January 1993. The new regime will give carriers much greater freedom to pursue [1019] their commercial interests particularly in the areas of fare setting, access to markets and rights of establishment. This freedom will, of course, be subject to certain safeguards which have been specifically designed to prevent market behaviour which is anti-consumer or not in the interest of developing orderly and fair competition.

Under a recent air agreement with the EC, Norway and Sweden will become part of the EC air transport market, and the agreement creating the European Economic Area opens the way for further liberalisation, in due course, on a multilateral basis between the EC and EFTA countries. Meanwhile, new commercial opportunities are also emerging from outside the EC. My Department and the State agencies have been in contact with a number of Eastern European states to identify and develop opportunities for Irish operators.

Recently I signed an air transport agreement with Malaysia which, I hope, will lay the groundwork for improving links between Ireland and Australia. My Department are currently pursuing an air transport agreement with Japan, another market with significant potential for Ireland, and I expect formal discussions to begin later this year.

Before concluding on air transport I wish to say a few words about the Shannon stop-over. Since my appointment I have had a series of discussions with the interests involved. While the pros and cons of a change in policy have been well articulated and publicised by the various interest groups there is one issue which has not. Both proponents and opponents of change have emphasised the need for certainty on this issue for a number of years to come. I have been asked to ensure that whatever decision is taken will last for some years irrespective of changes in administration or Ministers and not to take a decision on this issue until I can be reasonably confident of achieving this objective. This is a request I have informed all concerned I will respect.

I have not as yet formulated proposals [1020] for Government on this issue. There have been a number of proposals put to me in recent weeks which I wish to consider further and my Department have also to conclude discussions with certain interested parties. However, I can tell the House that I am particularly concerned to ensure that the pivotal role which transatlantic air services play in regional development and employment creation in the west of Ireland is in no way undermined. At the same time, I am acutely aware of the financial difficulties facing Aer Lingus which the airline itself has to address and which, I want to emphasise, are not solely attributable to the Shannon stop. I am also aware of their inability to undertake the investment in fleet replacement so urgently needed on their transatlantic operations.

When the Channel Tunnel is opened Ireland will be the only EC member state without a land link to Europe. As Europe's most peripheral member state, Ireland has unique transport needs. In 1990 KPMG Stokes Kennedy Crowley, on behalf of the Irish Government and the EC Commission, examined Ireland's requirement for improved access transport services. Based on their recommendations, the Government applied to the EC Commission for initial priority investment in direct shipping services to mainland Europe, which were regarded as essential by the consultants. However, the EC Commissioner for Regional Affairs, Mr. Bruce Millan, wrote to my predecessor and to the Minister for the Marine at the end of last year rejecting Ireland's application. Following discussions in early March with the EC Commission on the reasons for their refusal, I decided that a further submission should be made for EC funding for access transport services. This application addressed the concerns expressed by the Commission, who are expected to respond shortly.

The Irish Government in conjunction with the EC Commission are currently implementing an operational programme for peripherality involving major transport investment amounting to over £865 million. The EC contribution towards [1021] this investment will be £555 million. Investments totalling £18.6 million up to the end of 1993 have been approved under the programme for the six privately owned regional airports at Sligo, Carrickfin, Galway, Connaught, Farranfore and Waterford, co-financed from the European Regional Development Fund and local sources. The objective of this development programme is to ensure that facilities at our regional airports will be adequate to enable them to cope with traffic demands for the foreseeable future.

Other public transport projects under the programme include work on the replacement of freight gantry cranes at Limerick, Sligo, Cork and Dundalk rail stations. Meanwhile, my Department are currently discussing with the EC authorities the possibility of European Regional Development Fund assistance under the current programme for the provision of commuter rail links on the south west rail corridor, including Clondalkin, and for the development of a rail link to Belview Harbour at Waterford.

Looking ahead to the possibilities for EC assistances for public transport in the next round of EC Structural Funds and the new proposed Cohesion Fund — bearing in mind the latter may have intervention rates as high as 85 per cent to 90 per — I intend to pursue vigorously every possibility, including funding for a public transport based solution to Dublin's particular traffic and transport problems. We are eagerly awaiting the results of the Dublin Transport Initiative, about which I spoke at some length in this House earlier this week.

This and other major studies and assessments will enable the Government to take decisions in due course on investments in public transport over the next four or five years, for which I will be pursuing the EC authorities for the maximum assistance possible.

Mr. Yates: Information on Ivan Yates  Zoom on Ivan Yates  As this is a limited debate and the Minister has covered several areas, I shall concentrate my contribution on the aviation sector. The Dáil has recently debated matters relating to both [1022] light rail in Dublin and the railways. Inadequate opportunity has arisen for debate on aviation matters.

I put on the record of the House my very deep concern at the looming crisis in Aer Lingus. I do not share the Minister's optimism as outlined in her speech that a recovery is under way. I regret to say that my understanding from the accounts to be published this July is that the air transport loss to be recorded by Aer Lingus for 1991-92 will be £38 million. I am also advised that the loss for this year will not be on line with budget. I fear that, after borrowing is repaid there will be an air transport loss of £42 million. I believe that the position is worsening and that the present market indications are very difficult.

The extent of Aer Lingus's difficulties goes way beyond what might be attributable to an international recession, a UK recession, a US recession or even the negative effects on aviation of the Gulf War. We are dealing with a very serious and medium-term crisis. The cumulative position up to March 1992 shows an air transport loss of £100 million, and, as I have said, I believe that that will be worse for the current year from March 1992 to March 1993. That demonstrates that the recovery plan put in place by the management of Aer Lingus is not working and is not adequate. The air passenger market is very soft and the air fare war on cross-Channel UK routes — with Ryanair offering a £58 return fare, matched by Aer Lingus — will result in even higher losses on the cross-Channel routes. I believe that these losses are the most serious in the history of Aer Lingus.

The Minister will be aware that in the past few days Aer Lingus made a detailed submission to the Oireachtas Joint Committee on Commercial Semi-State Bodies. I am not a member of that committee but I received a copy of the submission. It is clear that on top of those losses the capital requirements of Aer Lingus for the nineties are very substantial. From now until 1996 Aer Lingus require £700 million and from 1996 to the year 2000 they will require £600 million, [1023] giving a total capital requirement of £1,300 million.

I tabled a Dáil Question to the Minister in relation to the Exchequer injecting equity or giving money to Aer Lingus. The Minister said — quite rightly — that there is a limit to what the taxpayer can afford and it is unlikely that there would be any resources available. Without misrepresenting the position, that seems to indicate a “No” response if Aer Lingus were to seek a major cash injection.

What other options do Aer Lingus have? Already one of the company's problems is that their gearing in terms of their rates of borrowing is very high. Interest on air transport last year amounted to £25 million, a multiple of four of the cost some years ago.

Aer Lingus have serious losses on the European and, in particular, the UK routes. The group have huge capital requirements and, on top of that, they face the transatlantic situation. The transatlantic situation is very simple, and whether one comes from Dublin or from Shannon it needs to be spelt out. There are three 747s in excess of 20 years old. In a couple of years those aircraft will be clapped out and will have to be replaced. My understanding is that the cheapest price on which replacements could be financed is on the basis of $800,000 a month or $10 million a year. The present economics of the transatlantic routes, which are not loss-making, will mean that Aer Lingus will face losses under the present arrangements. We all know of the intense competition that is now taking place on UK transatlantic routes. Therefore, it will be increasingly difficult for Aer Lingus to hold its market position. An array of enormous problems have to be faced.

The Fine Gael Party believe that the Aer Lingus legislation needs to be changed. The current position of Aer Rianta and Aer Lingus is no longer sustainable. It is now a matter of fact that Aer Rianta are technically insolvent and cannot continue trading. The management of Aer Lingus verified that fact [1024] to the Oireachtas committee. Several steps need to be taken. When I suggest reviewing the legislation, I mean a 10-year corporate plan that would secure the future of Aer Lingus. It seems obvious that an outside equity injection into Aer Lingus is necessary, be that from an outside investor or be it by way of merger with another airline. There is no escape from this reality. If the Government do not have the £13 million and if Aer Lingus cannot borrow it, it must come from an outside source, it is as simple as that. This matter must be addressed urgently.

The recovery plan needs to be renegotiated because Aer Lingus costs are too high. There are excellent industrial relations in the company, I do not want to say anything provocative in that regard, but I do not believe the recovery programme is sustainable given Ryanair's advantage.

We should not throw the baby out with the bathwater in relation to competition on cross-channel routes because I fear that the plan of Aer Lingus is to bear the pain in the short term and to put Ryanair out of business by matching the £58 fare, which was originally for an off-peak period, but which will now apply to the whole season. The Minister did not refer to it but she will know that in December this year the previous three-year agreement in relation to the two airlines policy will expire and that she will have to make a decision as to whether it will be continued. It needs to be continued because competition has meant an increase in volume and passenger numbers which, in turn, has led to lower fares. If the Minister decided to revert to just Aer Lingus and British Midland it would mean going back to the bad old days of the cartel and lack of competition.

I am worried about the viability of regional airports. I do not know if they are all viable but cutthroat competition between airlines is not the way to solve the problem. The regional airports will not believe this but, in terms of the economics of regional air services, there should be a specific allocation of routes to individual carriers on an agreed basis. There is a case for Aer Lingus and [1025] Ryanair to stop knocking the stuffing out of each other, to get together and to work out a rational approach to fares. I do not believe Aer Lingus will succeed in putting Ryanair out of business but they will do each other enormous damage in the short term. My information is very up to date in relation to the market and winning back markets by the surface carriers; the competition is so intense that ships are excellent.

A ten-year corporate plan for Aer Lingus is not enough to solve the aviation problem. We have been told that Aer Rianta made something in the region of £22 million this year. I want to give them credit for what they have done abroad but it is a scandal that airport companies make record profits while airlines make record losses. Our airport charges are too high; the Minister will be aware that in Britain the Civil Aviation Authority have now implemented a five-year formula whereby in the first and second years they must reduce airport charges by 8 per cent less than the consumer price index, in the third year by 4 per cent less than the consumer price index and in the fourth and fifth years the increase must not be greater than the consumer price index. Our airport charges must be reduced as they are amongst the highest in Europe. If that must come from the profits of Aer Rianta, so be it, it will boost aviation and benefit air passengers.

The Minister should follow the British example and set up a civil aviation authority in this country. To put it mildly, in the past there has been a conflict of interests in that the owner — the Department of Transport in effect — of Aer Lingus is the statutory authority in regard to aviation matters. Such a civil aviation authority would give an independent analysis in relation to matters of vested interest, such as the Shannon stop-over. It would provide an opportunity to have an independent investigation in relation to everything from the transatlantic issue to the way competition should develop. The Minister has again kicked to touch in relation to the transatlantic issue. I know that there are difficulties in my party in regard to this matter. I have [1026] every concern for the mid-west group although I am fortunate not to be depending on them, or Dublin, for votes. It means that I can be objective about the matter.

I have contempt for the way the Minister for Industry and Commerce, Deputy O'Malley, attacked Aer Lingus. It is disgraceful that a company who are bringing nine out of ten passengers into Shannon should be castigated for explaining their problems in relation to fleet replacement. they have a bona fide case to make. I am sure that any State company reporting to the Minister, Deputy O'Malley, and showing the losses about which I am talking — £38 million last year. £42 million this year and £100 million in the last three years — would be asked serious questions. The cost of their fleet replacement must be addressed. The difficulty is the aspect of the bilateral agreement which would open the floodgates if it was changed. Shannon could be undermined and lose out. I do not believe that there should be a change if it would result in the position of Shannon being undermined. They deserve their position because they have built up the business. However, the question of a Los Angeles route is different, it is a new route which will not fly to Shannon and, therefore, the question must be teased out, through independent analysis, as to whether the bilateral agreement can be changed and copperfasten Shannon's position. If it cannot be done we will have to go back to the drawing board or maintain the status quo. If, as Aer Lingus and Delta say, they can create new routes while guaranteeing the Chicago, Boston and New York services, provided that we are only talking about extra flights going to Dublin, then it should be considered. My comments are personal as my party have not finalised their position. The position of Shannon should be underwritten in that regard.

The indecision of the Government is damaging all parties. I assure the Minister that I will give a very constructive analysis to any proposal she may bring forward in this regard. The problem will not go away, it must be dealt with. The situation in relation to aviation is very [1027] serious, our recovery is not under way. I support the role of Aer Lingus in providing transport and developing tourism but I greatly fear that matters are not recoverable under the present structures.

It is unsatisfactory not to have a single Minister dealing with all aspects of transport. This will come to a head in the submissions about which the Minister spoke relating to the EC discussions on the next tranche of 1994-98 money because the Minister for the Environment, Deputy Smith, and the Minister for the Marine, Deputy Woods, will also have their hands out for money. If there was one Minister for Transport we could co-ordinate all aspects of prioritising EC funds to try to reduce our transport costs, which are twice the European average in terms of product prices.

In relation to the railways, I ask for fair play from the Government. I know the Minister is committed to seeking funds in this area but, unless we separate the funding of tracks and rolling stock, unless we have an investment programme for continuous welded rail on our mainline routes and automatic signalling, we will not be able to secure the future of the railways. We have discussed a system of light rail for Dublin and the future for Dublin transport lies in the development of public transport instead of catering for more motorists.

The Minister did not refer to the bus competition Bill. I will not be here when she replies to the debate but perhaps she will state whether she intends to go ahead with this Bill. I have tabled questions in the House regarding this. I should like her to outline policy direction on when we will have competition.

A very serious crisis is looking in Aer Lingus. Perhaps the Minister has not been advised of its extent. I hope the problem will be dealt with speedily through legislation and by a proper capital investment programme. Otherwise, as an island economy, in the new era of a very competitive transport transnetwork, there will be disastrous consequences for the whole economy.

[1028]Mr. O'Shea: Information on Brian O'Shea  Zoom on Brian O'Shea  Like Deputy Yates, I would like to spend most of my time dealing with the question of aviation, with particular reference to the sector that I have been involved in for over ten years, that is, the regional airports. Deputy Yates referred to the problems being encountered by these airports. I would like to refer in particular to the problems facing Waterford airport at present. It would be ungracious of me not to acknowledge that funding has been provided by the Minister's Department for the development of the airport. I note that my constituency colleague has just entered the Chamber. Like myself, he has been involved in this area for a long time. As I know he is on my side, I will address my comments to him.

In 1990, £1.6 million was raised locally, from shareholders, to form a public limited company to guarantee the future development of Waterford airport. Structural Funding was provided by the Minister's Department and thus the sum was raised to £3 million. Improvements have been made at the airport, which include the provision of navigational aids, the introduction of a localiser — a non-directional beacon and a DME were already available — the upgrading of runway lighting, the precision approach indicators, approach lighting, fire fighting equipment and air traffic control. Next month the new terminal building will be opened. Of all the regional airports Waterford airport caters best for passengers.

While great progress has been made in relation to the infrastructure of the airport there is a need to find a carrier to service it. Previously Aer Lingus operated a service to the airport. However this has now been withdrawn. There is not much point in going over the history of this and we should deal with the present situation.

Recently a report was commissioned by the airport company which was compiled by Coopers and Lybrand. It has been forwarded to Aer Lingus to make Waterford's case for the reintroduction of an Aer Lingus service to the airport. [1029] The positive points developed in the report relate to the tourism industry. The report highlights the fact that in recent years £90 million has been invested in the region. However hand in hand with this there has been a reduction in the number of seats available out of the airport. In relation to scheduled services between Waterford and London, this year Ryanair will provide only 23,000 seats, whereas the demand last year was for 40,000 seats. This means that there will be a shortfall of 17,000 seats.

In 1990, the amount of revenue generated in the overseas tourism sector increased by 80 per cent over 1989. While the figure for 1991 is not yet available the indications are that it will match the 1990 figure. This was a tremendous achievement given all the problems encountered by the sector last year.

While I have mentioned the new terminal building, it is important also that I highlight the fact, in relation to the service operated by Aer Lingus to the airport, that a Shortts 360 was used. This plane, which is manufactured on this island and which has given good service, cruises at an altitude of 8,000 feet, whereas the new aircraft purchased by Aer Lingus, the Saab 340, cruises at an altitude of 20,000 feet, is pressurised and more speedy. Therefore if a service was to be reintroduced the Saab 340 would be much more acceptable to customers.

The area has a large population and industrial base. In her speech the Minister made a passing reference to the Belview development at Waterford. I welcome her comment that she is seeking European funds to develop a rail link with that terminal. Waterford port is the second cheapest container port in northern Europe, and when the Belview development has been completed — I hope the rail link will form part of it given its importance — the area will be much more attractive in relation to industrial development. However if we are to attract new investment to the area an air-link to Dublin will be very important.

Other countries wish to become members of the enlarged European union; these include Austria. There is a [1030] great affinity between the Austrians and the Irish which goes back to the time St. Colman and St. Feargal went to Austria. Our trade figures with Austria are quite considerable and the balance is in our favour at present. However the Austrians are anxious to develop further trade links with this country. While many new opportunities are now available the lack of an air link between Waterford and Dublin with onward connections to European destinations will have a detrimental effect on industrial development.

Deputy Yates dealt with this point at some length but I should say that Aer Lingus have major financial problems. There is no getting away from that but the project which has been presented to Aer Lingus by Waterford Airport plc. through their consultants, Coopers and Lybrand, will not be a drain on their resources. It is envisaged that a feeder service would be of assistance to Aer Lingus in filling empty seats not only on their present services but on the services they wish to develop.

I wish to highlight the developments which have taken place in the tourism sector in the south-east region. In my home town of Tramore, Celt World will be officially opened tomorrow. This is an imaginative heritage project involving a total investment of £4.5 million. It is projected that between 200,000 and 300,000 people will visit this project per annum. In Cashel, another important tourist centre in the south-east, we have another heritage project, Bru-Boru, which again, is attracting large number of tourists. Furthermore, Waterford Castle which has benefited from Structural Funds and the business expansion scheme is comparable with Ashford Castle or Dromoland Castle, offering excellent golf and country club facilities. Indeed, the type of tourist/client this development will attract to the area will be the person who will require a speedy air link into the Waterford area. Then there is Mount Juliet in the chairperson's Deputy Pattison's constituency — again a golf and country club designed by Jack Nicklaus. The type of overseas tourist or client this development will attract would also [1031] require speedy transport links, the bottom line being air links.

There has been considerable expansion of self-catering accommodation throughout the region. For instance, in the village of Dunmore East in County Waterford 100 additional units have been provided since 1989. There are many other tourist attractions such as the Rock of Cashel, Kilkenny Castle, the Waterford Crystal factory, running hand in hand with which there has been substantial investment in hotels in the area. In my area I might instance the Granville Hotel and the Tower and Jury's Hotels in Waterford.

What we are talking about here is integration and cohesion, part of the thinking of Maastricht, if you like, in another sphere — the tourism package to be implemented in conjunction with the transport package. I would earnestly request the Minister to use her best offices to convince Aer Lingus of the validity and urgency of Waterford's case to have the national carrier provide a service into Waterford. I stress this is not a begging bowl approach on the part of Waterford, the south-east region or indeed on the part of the airport company. There are clear indications that the provision of a feeder service from Waterford to Dublin would yield much extra business to Aer Lingus in terms of a greater inward passenger flow and additional tourists, making the important south-east region more accessible to those we want to attract to that region. I would ask the Minister to make every effort to assist Waterford and to persuade Aer Lingus of the validity of the case. I know this is not the first time she has heard of this. I know that her colleague, the Minister of State at her Department sitting beside her, has been pushing this case also.

I will refer briefly to Shannon. The Minister has said that she has not yet reached a decision in regard to the Shannon stopover, that she is listening carefully to the pro and contra lobbies and wants to reach a decision that will obtain over many years, thus bringing some certainty [1032] into the overall position. I put it to the Minister that essentially this is not a mere commercial decision; rather it is a matter of overall regional policy as distinct from mere commercial interests. We cannot regard this matter as a single, isolated issue. Throughout the history of this State the west has been neglected and the only oasis in all of that area has been the development of Shannon. I might issue this warning to the Minister. When one examines what occurred at Prestwick Airport after the withdrawal of Atlantic services from that airport one finds a frightening scenario. I contend the Minister should take her decision in regard to the Shannon stop-over in the context of overall regional development, its importance to the Shannon region and the whole of the west. No doubt the Minister, coming from the west, has a great personal interest in the matter.

I should like to draw the attention of the House to a document produced by the Labour Party members of Dublin City Council and Dublin County Council. This is a submission on transport development for economic growth in Dublin which has been presented to Commissioner Bruce Millan, which also has the support of the Socialist Group. It is a very detailed document of much merit. One aspect interests me particularly and it logic becomes clear when one looks at European cities. I refer to the introduction of a light rail transport system in Dublin. Those of us who travel to and from Dublin, who encounter long delays and traffic congestion on our journeys to and from this House, will realise that the transport problems of the capital city must be tackled in an imaginative way that will solve those problems once and for all rather than merely engaging in piecemeal solutions. Such an overview is extremely important. The Labour Party will be strenuously promoting this document in ensuing months. We believe its contents constitute a formula/package which, if implemented, will greatly improve the present transport system in our capital city, which we all agreed is far from being satisfactory.

I would appeal to the Minister to do [1033] her level best for Waterford by trying to pursuade Aer Lingus to provide the service to which I have referred, particularly bearing in mind that such an air link would augment tourism figures and revenue in the south east region generally. This would yield a proper and full return not alone on the investment of the State and the public in Waterford Airport but also on State and other investment in tourism facilities throughout the south-east region.

Minister of State at the Department of Tourism, Transport and Communications (Mr. Kenneally): Information on Brendan Kenneally  Zoom on Brendan Kenneally  The Minister has already covered the broad range of current issues in Irish transport. However, there are some ongoing developments in the legislative area on which I would like to update the House.

The House will recall the announcement last year by the Minister's predecessor of the Government's decision to establish a commercial semi-State company to operate air navigation services. I can now advise the House that the draft scheme of a Bill for that purpose has been approved and I hope to introduce the relevant Bill in the House later this year.

The new authority will control air traffic in Irish and neighbouring airspace in accordance with international agreements. It will also be the regulatory authority responsible for licensing pilots and certifying the airworthiness of aircraft. However, overall responsibility for safety policy and for the investigation of accidents will rest with the Minister.

The new authority will operate on a fully commercial basis and will continue the commitment to maintain the highest safety standards. The cost of services will be recovered by charging their users. I am also confident that the authority will be able to identify and exploit profitable opportunities in areas such as training and consultancy.

The five-year major equipment renewal programme at State airports, which commenced in 1987 and involved total budgeted expenditure of £20 million, is in its final phase and will be completed this year. As a result of this re-equipment [1034] programme Ireland's air traffic control system and equipment are now on a par with the best that Europe can offer. However, air traffic congestion has been and continues to be a considerable problem throughout Europe. While we have addressed the problems in our airspace we are nevertheless dependent on our European partners doing the same in theirs. Ireland is to the fore in supporting the development of an air traffic control strategy programme for Europe initiated by the European Civil Aviation Conference (ECAC). This programme, adopted by the ECAC Transport Ministers in April 1990, is aimed at harmonising and integrating the multiplicity of air traffic control systems in Europe.

Speaking about air traffic control affords me an opportunity to respond to a couple of points raised by my constituency colleague, Deputy O'Shea, who spoke about tourism generally in the south-eastern region, placing emphasis on an air link between Waterford and Dublin to be provided by Aer Lingus. As he said, I am fully aware of the position at Waterford Airport since I have been a member of that board for quite some time. I am fully aware of the Deputy's interest and concern in the matter. I have been engaged in efforts to persuade Aer Lingus to reinstate their former flights linking Dublin and Waterford. To that end I have already met Mr. Bernard Cahill, the chairman of Aer Lingus and I have also spoken to him on the telephone. I already have a copy of the Coopers & Lybrand report, to which Deputy O'Shea referred. I have made arrangements for one of the authors of that report to meet with senior executives in Aer Lingus. That meeting has already taken place. I am committed to trying to re-establish the air link between Waterford and Dublin and let me assure Deputy O'Shea that my efforts in this regard will continue. In the course of his speech Deputy O'Shea referred to the local contributions to Waterford airport and he also acknowledged the part the State played in establishing and improving it. The Government are committed to that airport and moneys have been [1035] provided to erect a new terminal building that will open shortly. It is hoped that the Taoiseach will come to Waterford in the near future to perform the official opening.

Deputy Yates referred to the bus competition Bill and I assure him that legislative proposals on competition in the bus industry are under consideration. Proposals are being examined in my Department to liberalise the industry with the objective of improving the level and quality of service available to the general public as well as introducing competition on a sensible and orderly basis.

Meanwhile the liberalisation process has been moving apace in the road haulage sector. A licensing framework on a harmonised basis throughout Europe, based on professional standards governing access to the occupation of road haulier rather than any quantitative restrictions on the number of licences, is now firmly in place and our attention has turned towards securing a free and more integrated road haulage market. While final agreement on the post-1992 regime is still outstanding, it is most likely that from 1 January next all properly established hauliers in each member state will have automatic access to operations of an international nature in the Community. The opportunities for Irish hauliers to seek business abroad continues to be facilitated not merely in the EC but through the wider forum of the European Conference of Ministers of Transport, representing 22 western and central European countries, and through the many bilateral road transport agreements that Ireland has and is continuing to forge with other European countries. The Minister and I are committed to creating the administrative and legislative framework which will allow Irish transport to expand and grow and to capitalise fully on the opportunities which the Single Market will open up for our transport industry.

Mr. Byrne: Information on Eric J. Byrne  Zoom on Eric J. Byrne  The Minister, I am sure, is aware that drastic problems require drastic solutions and it is no exaggeration [1036] to say that Dublin is now facing a traffic crisis of drastic proportions. Unless urgent remedial action is taken there is a real danger that the city centre will grind to a virtual halt with a consequent disimprovement in the quality of life for those who live and work in this city.

The main problem is cars. Stark statistics show that 55,000 cars and commercial vehicles stream across the 25 Grand Canal bridges each morning between 8 a.m. and 10 a.m. and return home each evening. This constitutes what can be accurately described as an avalanche of motorised iron which, if left unchecked, will steadily choke the city centre to death. We firmly believe that this avalanche must be stopped if the city is to survive.

At present approximately 52 per cent of commuters travel to work in the city by car or commercial vehicle compared with the 34 per cent who travel by bus or rail. We believe that any solution to Dublin's traffic problems requires an incentive for commuters to use public transport. We have to take a carrot and stick approach: there has to be an incentive to the commuters to leave their cars at home and use public transport together with a distinct disincentive to motorists who bring their cars into the city. We believe there is no other way to solve this problem. One of the most effective ways in which this change can be achieved is through road pricing. We appreciate that some people may see proposals for road pricing as “anti-motorist”, but this is not quite so. We believe the enemy is not the motorist: the motor car in the city at peak times is the common enemy of everyone who has to use the city and the people who reside in the city.

Road pricing proposals should not and would not be designed to discourage car ownership but simply to encourage a more discriminate use of the car. Because of the controversial nature of road pricing may I make two important points: first road pricing could only be introduced as part of an overall transport package which would provide for a vastly improved public transport system; second, motorists are already paying [1037] heavily, though indirectly, for the chaos in additional fuel consumption and time wasted in traffic. The limited charges to be imposed on motorists who bring their cars into the city at peak times would almost certainly be cancelled by the saving in terms of time and fuel consumption.

I was delighted that the light rail transit system got such an airing as we essentially led that campaign. However, we have always argued that a light rail transit system of itself would not be the solution to our problem; it is only if we put in place a comprehensive and integrated transport plan that we can be successful.

Dublin is at an historic crossroads and is faced with the stark options of regeneration and survival or death by decay and abandonment, when those who live in the city leave and when others fail to move in. The survival of Dublin as a lively and thriving city depends on the survival of its inner core. The continued depopulation of the inner core with movement to the outer suburbs indicates that urgent steps are required if Dublin is to be saved as a real living city. Transport policies have a knock-on effect in many areas——

Acting Chairman (Mr. Pattison): Information on Séamus Pattison  Zoom on Séamus Pattison  May I remind the Deputy that he has exceeded his five minutes?

Mr. Byrne: Information on Eric J. Byrne  Zoom on Eric J. Byrne  We usually get a minute's warning and I am almost finished anyway. As I am saying, transport policy has a knock-on effect on many areas and has a major influence on the quality of life of citizens in the capital. An integrated transport policy could play a key role in shaping the future of Dublin. A real living city needs people living in the city centre. In order to attract families back into the city centre and to stem the flow of existing inhabitants migrating from the centre, the quality of life must be improved as roads and more cars make the city a less attractive place in which to live. Crucial decisions will have to be made in a number of areas which will determine whether the city will live and thrive or linger on by being commercially [1038] alive during the day but being crime ridden at night.

Mr. Stafford: Information on John Stafford  Zoom on John Stafford  I have one or two points to make, but it looks as if I will make only one, and that is on the question of direct transatlantic flights into Dublin. I believe we should at all stages ensure that the agreements made will not unduly affect the status of Shannon Airport as a hub airport for transatlantic flights. However, we should be encouraging other airlines to operate in and out of Ireland. If we do not do this we will be in the serious position where people in North America will not perceive Dublin as the capital city of Ireland.

If we succeed in attracting transatlantic flights directly to Dublin we should ensure that at all stages Shannon Airport remains the premier airport for transatlantic services, but at the same time we should also ensure that Dublin, as our capital city and one of the major cities of Europe, should be a destination for direct transatlantic flights.

Debate adjourned.

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