Committee Reports::Report - Appropriation Accounts 1946 - 1947::07 July, 1948::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)


Dé Céadaoin, 7ú Iúil, 1948.

Wednesday, 7th July, 1948.

The Committee sat at 11 a.m.


Members Present:

Deputy

B. Brady.

Deputy

Dockrell.

Briscoe.

Gilbride.

J. J. Collins.

Kitt.

Commons.

Sheldon.

DEPUTY SEÁN MacENTEE in the chair.


Mr. J. Maher (An tArd-Reachtaire Cuntas agus Ciste), Mr. G. P. S. Hogan and Miss Máire Bhreathnach (An Roinn Airgeadais) called and examined.

VOTE 55—INDUSTRY AND COMMERCE.

Mr. John Leydon called and examined.

762. Chairman.—Paragraph 49 of the Comptroller and Auditor-General’s Report reads:—


Subhead L.—Food Subsidies.


“The expenditure charged to this subhead, totalling £2,702,830 12s. 3d., was made up as follows:—


 

£

s.

d.

Flour

...

...

2,515,076

2

6

Wheaten Meal

...

33,636

13

5

Bread

...

...

147,617

16

4

Tea

...

...

6,500

0

0

 

£2,702,830

12

3

The flour subsidy, paid to Grain Importers (Éire), Limited, was the amount required to control the price of flour and to regulate the milling industry’s earnings which were limited to a percentage of an agreed figure representing capital employed, together with the cost of any additional capital employed in excess of the agreed figure. As in previous years, Grain Importers (Éire), Limited, imported wheat for allocation to the flour millers and from September, 1946, flour imported by the company was also allocated. The payments made to the company in the year under review comprised £2,440,844 2s. 6d. in respect of losses incurred in connection with the allocation of imported wheat and flour during the period 24th February, 1946 to 22nd February, 1947, and £74,232 in recoupment of adjusting payments made by the company following examination of the millers’ accounts by officers of the Department, being a balance of £5,007 due to the milling industry for the cereal years 1942-43 and 1943-44, and £69,225 due for the cereal year 1944-45.


Subsidy on wheaten meal was paid at varying rates representing the difference between the cost of production, together with a profit of 2s. per sack, and the controlled selling price. The subsidy was ordinarily paid on the total quantity of meal manufactured and sold by individual millers, but proportionate reductions were made in cases where wheat was milled in excess of specified quotas. The payments to wheaten meal millers totalled £35,218 10s. 3d., but the charge to the Vote was reduced to £33,636 13s. 5d. by the receipt from Grain Importers (Éire), Limited, of £1,581 16s. 10d., being the net profit on imported wheat allocated to certain wheaten meal millers by the company.


Subsidy at the rate of ½d. per 4 lb. loaf was payable in respect of batch bread baked and sold up to and including 26th January, 1946, by all bakers licensed under the Emergency Powers (Bakers) Order, 1941 (Statutory Rules and Orders, No. 453 of 1941). In July, 1946, the Government authorised an increase of ¼d. per 4 lb. loaf in the rate of subsidy payable to certain Dublin bakers, with effect from 27th January, 1946, and the expenditure charged to this subhead includes payments at the new rate to the bakers concerned. The rate of ½d. per 4 lb. loaf continued to be paid to other bakers in Dublin and throughout the country.


A payment of £6,500 on account was made to Tea Importers (Éire), Limited, in recoupment of trading losses incurred during the year ended 31st March, 1946, together with estimated losses incurred after that date. Including £200,000 advanced in previous years, the total of advances made to the company to 31st March, 1947, amounted to £206,500.


Token provision was included in a Supplementary Estimate for the remission of penalties incurred by flour millers under the Emergency Powers (Cereals) Acts, 1933 to 1939, in certain circumstances, but no charge to the subhead was involved. I understand that the penalties remitted related to the cereal years 1944-45 and 1945-46 and amounted to £25,160 1s. 1d.”


Chairman.—It might be well if the Accounting Officer would establish this formally. Grain Importers (Eire), Limited, is a non-profit-making concern? —Yes.


763. So that, so far as the subsidy is payable, it is due entirely to the difference between the price which they paid for imported wheat and the price at which that wheat was supplied to the millers? —Yes.


764. Deputy Sheldon.—I presume there will possibly be an adjusting payment for 1946-47 similar to that made for previous years?—Yes. It has been quite impossible in our experience to get the precise amount of this subsidy fixed within the year.


765. Chairman.—If there is no further question arising on the first paragraph, we will proceed to the consideration of the second paragraph, which relates to the subsidy on wheaten meal. In this case, Mr. Leydon, you have no distributing or purchasing company dealing with all the wheat meal millers? The subsidy is paid direct to the wheat meal millers, the individual millers?—Yes, that is so.


766. The third paragraph relates to the subsidy payable on bread. This does not properly arise in relation to the account, Mr. Leydon, but is the subsidy on bread still payable—is bread still being subsidised?—Yes, it is being subsidised, but the mechanism has been changed. It is done now through an adjustment in the price of flour rather than a subsidy to the bakers. That is a recent arrangement.


767. That change was not made in the year under review?—No; it was made in the course of the year 1947-48.


768. Chairman.—The next paragraph relates to a payment of £6,500 to Tea Importers (Éire), Limited, in recoupment of trading losses.


769. Deputy Sheldon.—The Report refers to “estimated losses”. How did the actual loss work out as compared to the Estimate?—The actual loss for the financial year 1946-47 was less than the Estimate by £1,120. This, I might mention, was rather fortuitous because it was largely due to the fact that Tea Importers. Limited, succeeded in recovering an insurance claim about which there was some doubt at the time the Estimate was prepared.


770. It was not really due to any change in the price of tea?—No. it has nothing to do with the price.


771. Is that saving carried forward or do they surrender the balance?—It would be set off against the subsidy for 1947-48. It has already, in fact, been taken into account.


772. Chairman.—Would you be in a position to say what the total losses incurred by Tea Importers, Limited, has been to the 31st March, 1948?—No, Sir, I am afraid we have not got the accounts for the last year.


773. Can you say what were the total losses incurred up to the end of 1946-47? —Up to the 31st March, 1947, the figure would be that given in the paragdaph, £6,500 less the £1,120 which I have just mentioned.


774. Deputy Dockrell.—That is a net figure?—Yes, it is a net figure.


775. Chairman.—The next paragraph relates to the provision made for the remission of penalties incurred by flour millers.


776. Deputy Sheldon.—How does it occur that though penalties were remitted there is no charge to the subhead? Apparently £25,000 was remitted but there is no charge to the subhead?—It is not charged to the subhead because there is no payment made. You remit the penalty which is due but which is not collected. I do not think there is any question of a charge to the subhead. We just do not collect the penalties which we would have been entitled to collect under the Cereals Act.


777. Chairman.—You do not take any credit for them as an Appropriation in Aid?—No, Sir. It was brought to the notice of the Dáil through a Supplementary Estimate. In effect, the Dáil was being made aware of what was being done.


778. Deputy Sheldon.—It was a token provision?—Yes.


779. Chairman.—Paragraph 50, which deals with subhead M-Fuel Subsidy reads:—


“The arrangement with Fuel Importers (Éire), Limited, under which losses incurred by the company in the marketing of turf and timber fuel were borne by the company and issues were made from voted moneys in recoupment thereof, continued in operation throughout the year, and the vote provision was again utilised in full. The total payments to the company, including £1,258,000 advanced in the year under review, amounted at 31st March, 1947, to £4,701,000.”


That is merely an explanatory note?


Mr. Maher.—That is so. The issues are made following an examination of the periodical accounts by the Audit Office


780. Deputy Sheldon.—Is there a balance one way or another? The amount paid to the company was precisely the estimated amount. It is highly improbable that at the time the estimates were prepared, you could know the exact figure to the £. Yet the amount paid was the estimated figure. Is there a balance due to the company on that year or do they owe you a balance?—I am quite certain that the figure would not be exactly the figure estimated. There would be an adjustment but the company’s accounts would not have been received at that time.


781. Chairman.—In any event the account is not yet closed?—No, it is continuing in operation and that there would be an adjustment from year to year.


782. Chairman.—Paragraph 51 reads:—


Subhead N.—Miscellaneous Turf Production Schemes.


“The estimate for this service indicated that the provision was for the recoupment of losses incurred by local authorities since 1941 on the sale of turf otherwise than to Fuel Importers (Éire), Limited, government departments or local institutions. With the sanction of the Minister for Finance, payments were made in respect of these losses on the basis of claims certified by the Department of Local Government and Public Health, subject to any necessary adjustments when the audit of the relevant accounts of the local authorities concerned had been completed. Recoupments in the year under review amounted to £110,133 7s. 7d. and related mainly to provisional payments made under the approved arrangement.


A payment of £14 19s. 6d. made to a county council, representing, as stated in a note to the account, a remanet of the expenditure on turf carbonisation experiments borne on Subhead H. of the Vote for Supplies 1944-45, accounts for the balance of the charge to the subhead. Sums received from certain county councils in connection with the experiments referred to, amounting to £216 11s. 1d., are included in the exchequer extra receipts.”


This is also an explanatory statement?


Mr. Maher.—Yes, the figure of £110,133 7s. 7d. given in the Report relates to payments made to 23 local authorities. Of that number, nine payments, totalling £11,508 were final whilst the remaining 14 payments amounting to £98,625, were provisional.


783. Chairman.—I suppose you have no idea of the final sum payable to local authorities up to date?—No, because the audit of the local accounts by the Local Government auditor has not yet been completed.


784. Chairman.—Paragraph 52 reads:—


“The charge of £54,500 to Subhead P. 1. represents advances made during the year to Mianraí, Teoranta, under Section 10 of the Minerals Exploration and Development Company Act, 1941, as amended by Section 16 of the Minerals Company Act. 1945.


In exercise of the powers conferred by Sections 11 (2) and 12 (3) of the Minerals Exploration and Development Company Act, 1941, and Section 8 (2) of the Minerals Company Act, 1945, the Minister for Industry and Commerce has with the consent of the Minister for Finance agreed to the postponement to 1st July, 1947, of the payment by the company of interest on advances and of the repayment of instalments of advances which fell due on 1st July, 1946, and 1st January, 1947. In accordance with Sections 11 (3) and 12 (4) of the Minerals Exploration and Development Company Act, 1941, and Section 8 (2) of the Minerals Company Act, 1945, the company became liable for interest on the deferred payments and the Minister for Finance directed that this interest should also be paid on 1st July, 1947.”


That is an explanatory note?


Mr. Maher.—That is so. It is for information only.


785. Chairman.—The last portion of the paragraph reads:—


“Payments of compensation in respect of mineral rights acquired by the State, charged to subhead P. 3., amounted during the year to £208 13s. 10d., and these payments, together with similar payments made in the year 1945-46 amounting to £4,554 17s. 0d., are treated as advances to the company. Including these amounts the total of advances to the company up to 31st March, 1947, was £367,083 6s. 2d’.


786. Deputy Sheldon.—I suppose there is still no prospect of any recoupment?— I do not want to be taken as holding out any prospect.


787. Chairman.—Paragraph 53 reads:—


“The Industrial Research Council, which was appointed by the Minister for Industry and Commerce on 20th March, 1934, was dissolved as on and from 3rd October, 1946. By section 4 of the Industrial Reasearch and Standards Act, 1946 (No. 25 of 1946) the Institute for Industrial Research and Standards was established and financial provision therefor was included in a Supplementary Estimate. In accordance with the provisions of the Estimate a sum of £5,542 charged to subhead U. 3. was paid to the Department by the Institute for Industrial Research and Standards in respect of equipment and publications transferred from the Industrial Research Council, and this amount has been brought to credit as an Appropriation in Aid.”


Mr. Maher.—That is for information also.


788. Chairman.—Does the Institute for Industrial Research and Standards account in detail for its expenditure under this Vote?—No, Sir.


789. Is it autonomous in regard to expenditure?—Yes, in regard to the Grant-in-Aid they are autonomous, but if it were given for a special investigation, they would have to account for the expenditure. No such special investigation has been taken up to the present.


790. Chairman.—In fact the accounts have not yet been audited.


791. Deputy Sheldon.—One point strikes me about this payment, that it is a mere book-keeping entry. There was an Appropriation in Aid of £5,542 and also a payment of £5,542 under Subhead U. 3. The one cancels the other out?—Yes, except that the outlay might have taken place in an earlier year. Originally, the Exchequer paid that money to purchase equipment.


792. The note of it is only necessitated by the change over to the new body?— That is so.


793. Chairman.—The Comptroller and Auditor-General points out that we were not strictly correct in saying that they have not been audited yet.


Mr. Maher.—A note in the Estimate indicates that the accounts of receipts and expenditure by the institute will be audited by the Comptroller and Auditor General under Section 37 (3) of the Industrial Research and Standards Act, 1946.


794. Chairman.—Note 54 of the Comptroller and Auditor-General’s Report reads:


Operations of the Turf Development Board, Limited, and of Bord na Móna.


Subheads R. 1. to R. 5.


“Under the terms of the Turf Development Act, 1946, and of an Order made thereunder (Statutory Rules and Orders, No. 212 of 1946) the Turf Development Board, Limited, was dissolved and Bord na Móna established on 21st June, 1946.


Issues during the year, made from Grants-in-Aid with the consent of the Minister for Finance, comprised £349,000 for the production of turf for use in non-turf areas (subhead R.1) £15,200 for administrative expenses (subhead R.2.), £3,500 to meet expenditure on publicity (subhead A.3.) and £6,000 for experiment and research (subhead R.5.). Of these amounts, issues made to the Turf Development Board, Limited, prior to 21st June, 1946, were £170,000 under subhead R.1., and £7,000 under subhead R.2., the balances being issued to Bord na Móna. Receipts amounting to £223,326 18s. 9d. in respect of sales of turf produced under the turf camps scheme were remitted to the Department and are included in the exchequer extra receipts. I have asked for information concerning State property held by Bord na Móna in its capacity as an agent of the Government for the operation of the scheme.”


Mr. Maher.—We have not yet received a reply from the Accounting Officer, but I understand that he has this matter in hand.


795. Mr. Leydon.—It is a question of preparing an inventory and I will give an undertaking that the inventory will be prepared as required by the Comptroller and Auditor-General. I have, as a matter on fact, already given instructions to that effect.


796. Chairman.—The second paragraph of the Note reads:—


“As indicated in the account, the provision made under subhead R.4. for the preliminary development of certain bogs was not required, advances for this purpose being made from the Central Fund under section 53 of the Turf Development Act, 1946. Section 52 of the Act provides for the payment out of voted moneys of grants to Bord na Móna in respect of expenditure on experimental and research work during the year 1946-47 and in each of the nine subsequent financial years, and limits the total amount of such grants to £120,000. As stated above, issues under this head in the period ended 31st March, 1947, amounted to £6,000 (subhead R.5.).”


Mr. Maher.—That is for information only.


797. Chairman.—The third paragraph of the Note reads:—


“Payments amounting to £164,383 were made by the Turf Development Board, Limited, and by Bord na Móna in respect of advances made for the development of certain bogs and are also included in the exchequer extra receipts. In addition, under section 64 (1) of the Turf Development Act, 1946, the liability of Bord na Móna in respect of repayable advances made for the development of Clonsast bog was reduced by £31,058 15s. 2d’., representing so much of the State debt as equalled the certified deficit on the accounts of the Turf Development Board, Limited, as at 21st June, 1946.


At 31st March, 1947, the amounts outstanding, including interest in respect of advances made from voted moneys for the development of bogs were:—


 

£

s.

d.

 

Clonsast

...

214,487

19

8

 

Lyracrompane

...

26

16

3

 

Lullymore

...

2,069

17

1

 

Kilberry

...

4,970

4

9

 

Glenties

...

8,950

0

0

 

Other bogs

...

70,145

0

0

 

 

£300,649

17

9

798. Deputy Sheldon.—The amount which could be spent on research was very much less than was anticipated?—Yes.


799. That will only have the effect of leaving more money for such work in the remaining period?—That is so.


800. Chairman.—In fact, the new legislation provides for the substitution of the Central Fund for the Vote as the source of advances to be made to the company for the preliminary development of the bogs and for research.


801. Deputy Sheldon.—I presume that one refers to research in the use of turf and the other to the opening of new bogs. One is in respect of the development of certain bogs and the other experimental and research work. Research work would be done through voted moneys and development through grants from the Central Fund?—Not from the Central Fund. You are looking at subhead R.1.


802. Chairman.—I am afraid I am responsible for the confusion, because I understand that, in consequence of the new Act of 1946 the Central Fund would henceforward be the source from which moneys would be advanced for the preliminary development of a bog and for experimental and research work.


803. Deputy Sheldon.—Not for research work. Section 53 refers to development.


804. Mr. Leydon.—Capital issues for future development will be from the Central Fund, but research, as it is ordinarily understood, will be provided for by voted moneys.


805. Chairman.—The first paragraph of Note 55 reads:—


Extra Receipts payable to Exchequer.


“In my last report I referred to the transfer from the Emergency Scientific Research Bureau to the Turf Development Board, Limited, of plant for the production of turf charcoal, to the decision to close down the plant, and to the receipt from the Board of £3,583 14s. 3d. in connection with the disposal of buildings and plant, and sales of charcoal. A further sum of £573 was received from Bord na Móna, representing, I am informed, a final payment in respect of the sale of the assets of the turf charcoal plant, and is included in the receipts.”


Mr. Maher.—The reference to plant for production of turf charcoal is in continuation of the first sub-paragraph of paragraph 96 of the Report on the Accounts for 1945-46 and completes the history of the plant at Turraun.


806. Chairman.—I assume that there is now no person producing turf charcoal?— Not so far as I am aware.


807. At least, Bord na Móna are not producing it?—They are not producing it on a commercial scale. Whether they are doing any research in connection with it, I could not say, but I should think not.


808. Chairman.—The second paragraph of the Note reads:—


“As will be seen from the account, licence and other fees payable under section 8 of the Emergency Powers Act, 1939, amounted to £6,483 0s. 9d. The principal items were Duplicate Ration Books £2,013 10s. 9d., Fabrics (Import Licences) £2,001 0s. 3d., and Textiles (Manufacturers’ Licences and Permits) £1,040 10s. 0d. The obligation to pay prescribed fees was in general imposed by Orders made under the Emergency Powers Act, 1939, prior to the expiration of that Act on 2nd September, 1946, on and after which date such Orders as were then operative were continued in force under the terms of the Supplies and Services (Temporary Provisions) Act, 1946.”


Mr. Maher.—That is for information only.


809. Deputy Sheldon.—With regard to subhead C.2.—Census of Population, 1946 —I take it that where the Note refers to expenses of the Garda Síochána, it only means payments made to the Guards for carriage. No payment is made to the Guards, as Guards, for work done?—No. They get no remuneration.


810. It refers only to expenses?—Yes.


811. The note in connection with subhead H. says that the claims from the vocational education committees for fees due did not come in course of payment within the year of this account. How did it occur that no such committee made claims?—I am afraid I cannot explain why they did not send in the claims. There are two courses provided in Dublin at present by the City of Dublin Vocational Education Committee, or were provided at that time, and the fees payable to the committee for the attendance of those who are covered by the apprenticeship committees were recoverable from the subhead. I am afraid I cannot explain why we did not get the claims. Possibly they were not submitted in time.


812. I take it that there are probably only one or two committees involved?—So far as I know, only one—the City of Dublin Vocational Education Committee.


813. Deputy Sheldon.—Knowing that there were a number all over the country, I thought it odd that none put in a claim, but the fact that there is only one committee involved explains it.


814. Chairman.—How did you over-estimate to the extent of 5/7 in respect of subhead J.1.—International Labour Office?—Probably fluctuations in the rate of exchange.


815. Deputy Sheldon.—Has the auditing of the local authorities’ turf accounts been brought nearer to a normal close?— You are thinking of the present position as distinct from the year of account?


816. Yes?—It has. Of course, we are very anxious to get it closed down. Substantial progress is being made, but it has not yet been completed.


817. Chairman.—It is not a very significant item, but I note that item (8) of the extra receipts payable to exchequer relates to fees under the Trade Union Act, 1941. They were estimated to realise £60. In fact, they realised only £6. What is the nature of those fees?—Fees paid for negotiating licences by trade unions.


818. Deputy Sheldon.—I take it the first two items under the heading “Details of the miscellaneous receipts” were unexpected. The estimated provision was only £1,000. That roughly corresponds to the other items. The very great excess seems to be due to the turf business. Did these payments come in in an unexpected way? —It might be true to say it was unexpected when we got it. We expected to get it, but when we would get it we did not know.


819. Chairman.—You got it earlier than you expected?—Yes.


820. But you knew it was coming?— Yes, Sir.


VOTE 56—TRANSPORT AND METEOROLOGICAL SERVICES.

Mr. John Leydon further examined.

821. Chairman.—On this Vote there is a number of notes by the Comptroller and Auditor-General. Note 56 relates to civil airports. It states:


“Expenditure incurred during the year on constructional works at Dublin, Shannon (Rineanna) and Shannon (Foynes) airports amounted to £124,655 5s. 3d. (subhead B.5.), £289,438 4s. 5d. (subhead B.6.), and £35,614 17s. 7d. (subhead B.7.), respectively, bringing the total expenditure as at 31st March, 1947, to £491,838 11s. 4d., for Dublin Airport, £1,159,122 17s. 9d. for Shannon Airport (Rineanna), and £153,974 2s. 7d. for Shannon Airport (Foynes) exclusive of expenditure on the acquisition of land.”


Mr. Maher.—That paragraph is for information only.


822. Chairman.—Paragraph 57 relates to subhead B.5.—Constructional Works, including furnishing of buildings—Dublin Airport—and is as follows:—


“A contract placed for the construction of hard-surfaced runways at a cost of £302,356 included provision for the labour element at a rate higher than that actually paid by the contractor for part of the time. I have asked whether in these circumstances any adjustment of the amount paid to the contractor falls to be made.”


Has the Comptroller and Auditor-General anything to add?


Mr. Maher.—Since the date of the report I have been informed that the contractor has agreed to have the adjustment made and I understand the matter is in hand.


823.Chairman.—The first paragraph of note 58 is as follows:—


Subhead B.6.—Shannon Airport.


“In paragraph 53 of my last report I referred to certain contracts placed on a cost plus profit basis. While certain work was again undertaken on this basis in the year under review, contracts in a fixed sum were placed for most of the major works. One of the contracts placed on the cost plus profit basis was for increased customs and catering accommodation in the temporary terminal building. The operating companies having represented that the proposed customs accommodation would be inadequate, work was stopped after it had been some time in progress. After revision of the plans building operations were resumed. I have asked whether any of the expenditure incurred prior to the alteration of the plans has proved to be fruitless.”


Has the Comptroller and Auditor-General anything to add to that?


Mr. Maher.—I have been informed that fruitless expenditure amounting to £15 was incurred and that the Department of Finance has been advised of this fruitless expenditure.


824. Chairman.—The second paragraph of the note is as follows:—


“With a view to the early completion of two fixed sum contracts of a total value of £130,359, labour was employed directly by the Department on the initial stages pending the commencement of work by the contractors, it having been agreed that the cost of such labour at the rates quoted in the tenders would be deducted from the amounts payable to the respective contractors. In connection with another fixed sum contract, the lowest tender received amounted to £41,951, but by the deletion of certain items, including top-soiling and grass surfacing for which a sum of £1,810 had been quoted but which the Department considered could be carried ou more economically by the employment of direct labour, the amount of the contract was reduced to £36,425. I have inquired as to the amount expended on direct labour in these cases.”


Mr. Maher.—I have been informed that the cost of direct labour, exclusive of overheads, in the three contracts under notice was in No. 1 contract, £8,353; in No. 2 contract £5,658, and in No. 3 contract, £744.


825. Chairman.—I suppose you have no estimate of what the cost of the overheads would be in relation to the third contract, Mr. Leydon?—No, Sir. But I would submit, with all respect, that it is really a theoretical computation because, in fact, we were not involved in any additional expense. The overheads would be the cost of supervision by full-time officers who were in any event being paid by the State and, therefore, for the Committee’s purposes, if I may suggest, with all respect, the net figure is the figure given by the Comptroller.


Mr. Maher.—£744 for direct labour.


826. Mr. Leydon.—The same consideration applies to all three contracts and I hope the Comptroller and Auditor-General will agree that in all three cases there was a definite saving.


827. Chairman.—There was certainly a substantial saving in the third contract.


Mr. Maher.—The purpose of the note is to bring out the fact that direct labour was employed and to bring out the cost. No criticism was intended as to the method adopted.


828. Mr. Leydon.—Now that the point has been raised, I think the Committee are entitled to know that in all three cases I think it is correct to say there was a saving.


829. Deputy Sheldon.—I think the Committee also wants to express its pleasure that we are getting back to fixed sum contracts and away from cost plus profit.


830. Mr. Leydon.—I think the Department probably dislikes the time and material contracts even more than the Committee does. We do not like them at all.


831. Chairman.—Note 59 relates to subhead B.7 and is as follows:—


Subhead B.7.—Foynes Hostel


“As a temporary expedient, bedrooms in the hostel built at Foynes were furnished during the year for overnight accommodation of passengers pending provision of such accommodation at Rineanna, the approximate cost being £3,600. It would appear that it was anticipated that this amount, together with the running costs involved, would be recovered by way of rents receivable from the operating companies. I have asked for information as to the extent to which the accommodation was availed of by the companies, the amount of rent received, and the present position regarding the occupancy or disposal of the hostel, the expenditure on which amounted to approximately £53,000 on 31st March, 1947.”


Mr. Maher.—I have been informed that the receipts, which amounted approximately to £6,000 to the 31st October, 1947, were not credited directly to the vote, but were retained and credited in the catering comptroller’s account. I have also been informed that efforts to dispose of the hostel have been made but, so far, without success.


832. Chairman.—It still remains the property of the State?—Yes.


833. Deputy Dockrell.—It is unoccupied at the moment?—It is unoccupied.


834. If it is unoccupied then it is not bringing in any revenue?—It is not bringing in any revenue at the moment. There is a caretaker there.


835. None of the air companies is availing of it?—No. There is accommodation at Shannon Airport and the companies do not need it.


836. Chairman.—The accommodation at Shannon airport is sufficient, is it?—Yes, except on very, very rare occasions when there is a complete stoppage of all services. I heard of one occasion when the accommodation at Shannon Airport was not sufficient.


837. Deputy Dockrell.—Are passengers accommodated there, too?—They have been on a few occasions, but not if we can possibly avoid it. The hostels at Shannon airport are primarily for passengers in transit who may be delayed overnight. They are for that type of passenger only.


838. Chairman.—I understand that during the period when Foynes hostel was being utilised by the companies a revenue of £6,000 was obtained from it?—That is correct.


839. Over what period would that be? —From November, 1946, to the end of May, 1947.


840. It is not all within the present accounting year so that credit cannot be taken for it in relation to the accounts we are considering?—No. I should mention that even after the 1st June, 1947, there were rare occasions when we did get some revenue from the companies. From the 1st June to the end of October it amounted to £537. It is small in comparison with the other figure.


841. Is there any skeleton staff kept at the hostel as well as a caretaker?—There is a caretaker—that is all.


842. If it were necessary to utilise the hostel again you would have to recruit a temporary staff?—That would not present any great difficulty. It is operated by the catering comptroller at Shannon Airport and the staffing would not present any great problems.


843. Deputy Sheldon.—I take it that the expenditure of £3,600 was fully justified in the event?—I think so. We got it back.


844. Chairman.—Is the restaurant still maintained at Foynes?—The restaurant is not maintained now.


845. Foynes is completely closed down then?—Yes.


845a. Chairman.—Paragraph 60 of the Comptroller and Auditor-General’s Report reads:—


Subhead B. 15.—Catering ServiceShannon Airport.


“Under this subhead £2,000 was provided to meet the deficit on the catering service for passengers and airport staff but, as stated in the account, no payment was made in the year under review pending clarification of the position regarding the treatment of certain items in the catering account. I have asked for further information on this matter.”


Mr. Maher.—I have been informed that the loss in catering services for the year ended 31st January, 1947, amounted to £302 18s. and that the principal items are still awaiting clarification of charges in respect of accommodation and electricity. As was noted in the previous paragraph, the catering account has been credited with the sums received in respect of the passenger hostel at Foynes.


846. Deputy Sheldon.—I take it then that, in effect, there was a loss on the catering itself of something over £6,000; there was a net loss of some hundreds after £6,000 had been paid in from the moneys received at Foynes?—I do not know whether Mr. Maher can correct me on this, but that £6,000 was a gross figure.


Mr. Maher.—It probably was. We are simply taking the figure as supplied to us.


847. Mr. Leydon.—It was not £6,000 net profit but it is true it was brought into account here. It was brought in as part of the catering account here because the catering comptroller operated the hostel. It was part of his responsibility just as he is responsible now for the hostels on the airfield at Rineanna.


848. Deputy Sheldon.—If he had not that income what would the loss have been?—It would certainly have been more.


849. Chairman.—Can you give us any idea as to the amount of the charges in respect of accommodation and electricity which are under consideration?—They are very substantial. Taking an accumulative figure for the period February, 1944, to January, 1947, the charge for rent is £8,043; light, heat and power, £12,763.


850. Chairman.—That covers practically three years?—It covers from February, 1944, to January, 1947. The figures are of a very high order. The cost of staff transport is £6,944. There has been a considerable amount of discussion with the Electricity Supply Board about electricity charges. The Department quite frankly thinks they are too high. The Electricity Supply Board has agreed that we should get a rebate and the argument is still going on as to how far back that rebate should be made retrospective and what the amount should be. We feel, too, that the rent charge is too high against the catering service; for example, he was charged 7/6 per square foot. Not merely was he charged on the part which was used as a restaurant but he was also charged on the part which is used as a lounge. I have always thought that unfair. It does give a distorted picture of the catering account.


851. If we are going to have an airport at all we must have some place for the passengers to sit down while they are waiting. Has the Department of Finance anything to say in that matter?


852. Miss Bhreathnach.—The Department of Finance have not been approached in any great detail about it yet. We shall look into into it when we get all the representations.


853. Deputy Sheldon.—Is the cooking done by electricity?—Yes.


854. Could they not use an Aga cooker with a 24-hour service; that would be much cheaper?—During the emergency it was impossible to get either the cooker or the fuel.


855. Chairman.—These debits have accumulated. Does the catering comptroller provide any capital or is he bound to provide any capital under his agreement?—No.


856. The position is that the entire belongs to the State?—Yes.


857. Therefore, many of these items might be taken to represent working capital used in building up a business?— That is so. The catering comptroller was not provided with any working capital, nor was he required to provide any of his own. He is a paid employee of the Department of Industry and Commerce.


858. He would have had to incur expenditure on staff and rent. Naturally he would have to incur expenditure on electricity and all these other items that are outstanding as between the catering comptroller’s section and the vote?—Yes. We decided to have separate accounts for the catering service as such for quite a number of reasons. As far as possible we wanted to make it pay its way. The comptroller’s remuneration was also fixed on a basis which gave him a definite interest in making a profit.


858a. Chairman.—Paragraph 61, Comptroller and Auditor-General’s Report reads:—


Subhead C.—Subsidy in Respect of Air Services.


“The charge to this subhead represents payments to Aer Rianta, Teoranta, under the Subsidy (Aer Rianta, Teoranta) Order, 1946 (Statutory Rules and Orders No. 146 of 1946) and the Subsidy (Aer Rianta, Teoranta) (No. 1) Order, 1947 (Statutory Rules and Orders No. 101 of 1947) to meet the estimated losses of the company and of the subsidiary company, Aer Lingus, Teoranta, on the operation of air services during the year ended 31st March, 1947. The actual losses of Aer Rianta, Teoranta, and of the subsidiary company, for the purpose of the Orders mentioned had not been determined by the Minister for Finance and the Minister for Industry and Commerce at the date of my report.”


Mr. Maher.—It had not been determined at the date of the report. I am not aware whether it has been determined since. The Accounting Officer may be able to give later information.


859. Chairman.—Are you yet in a position to give that information?—The actual loss has now been determined at £79,244 3s 6d. That is for the group. It includes Air Rianta’s share of the Aer Lingus loss, which is £70,869 3s. 10d.


860. That is for the year ended 31st March, 1947?—Yes.


861. Chairman.—Paragraph 62 in the report of the Comptroller and Auditor-General reads:—


Subhead D.—Management of Dublin Airport.


“Under an agreement between the Minister for Industry and Commerce and Aer Rianta, Teoranta, Dublin Airport is managed by the company. The agreement provides that the profits arising in any year will be paid to the Exchequer, but that should the management costs exceed the revenue the loss as determined by the Minister in agreement with the Minister for Finance will be made good to the company. At the date of my report the amount of the loss for the year ended 31st March, 1947, had not been so determined, and the charge to the subhead, £19,220 0s, 5d., is the loss as shown in the accounts submitted by the company to the Minister.”


Mr. Maher.—The amount charged to the subhead had not been formally approved by the Minister in accordance with the agreement at the date of the report.


862. Mr. Leydon.—It has since been determined in the usual form. The figure is £19,220 0s. 5d.


863. Chairman.—That is the final figure?—Yes, and there has been the appropriate refund.


864. In fact, so far as the management of the Dublin Airport is concerned, there has been a saving of over £11,000 on the amount in the subhead for that purpose? —Yes. The loss for 1947-48—perhaps this is not relevant—is estimated at £12,000.


865. So that it is becoming self-supporting. The advocates of air development will be glad to hear that.


865a. Chairman.—The Comptroller and Auditor-General has the following note in paragraph 63:—


Subhead G.—Appropriations in Aid. Receipts in respect of Landing and Accommodation Fees at Airports.


“The receipts during the year in respect of landing and accommodation fees amounted to £37,335 17s. 2d. as against an estimate of £37,500. I have inquired regarding fees outstanding on 31st March, 1947, and also regarding the assessment and collection of fees at the various airports.”


Mr. Maher.—I have been informed that the amount outstanding is £38,292 3s. 5d. A reply has recently been received regarding the assessment and collection of fees in connection with the various airports, but we have not yet had an opportunity of examining the report. The matter will be referred to in the report for the following year.


866. Chairman.—If no member of the Committee has any question to ask we will now take paragraph 64 of the report of the Comptroller and Auditor-General:—


Permanent Records of Lands, Buildings, etc.


“I am in communication with the Accounting Officer concerning the present position as regards the compilation of the register of lands and buildings under the control of the Department to which I referred in paragraph 60 of my last report.”


Mr. Maher.—I have recently been informed that the register has now been completed.


867. Chairman.—The matter has been satisfactorily disposed of?


Mr. Maher.—Yes.


868. Chairman.—I think we may now turn to the Vote itself. The notes would seem to cover fairly fully the various subheads of the Vote.


869. Deputy Sheldon.—On subhead C. —Subsidy in respect of Air Services— the note states: “the amount required in respect of depreciation of aircraft was less than anticipated.” Was that due to the fact that there were fewer aircraft to maintain than you anticipated?—I am afraid I could not answer that without looking into it more fully. I think it may be that the air company did not buy all the aircraft they expected to buy at the time the Estimate was prepared, and, therefore, the depreciation charges did not materialise to the extent anticipated. I would not like that to be taken as a final explanation, but I think that, as a surmise, it is fairly correct. If the Committee wish, I shall be glad to send a note on the matter.*


870. Unless it is due to some other cause, there is no need to send the note? —Very well.


871. I observe that the note on subhead A.2, states: “the full provision was not required as the barges were sold during the year.” This refers to the maintenance of canal barges. Are all the canal barges now disposed of?—Yes, they are all gone.


872. There is a further note which states that “during the course of the year four members of the public were unconditionally released from contracts to purchase certain State-owned canal barges for £120.” I take it that they were sold for less than £120?—It is true that we got less than that for them. I am afraid I cannot give any explanation as to why those people were released from their contracts, but I can send a note to the Committee on the matter.


873. If the Department of Finance was satisfied, I take it that it was all right.


874. Miss Bhreathnach.—It is all right. Some people tendered for the barges without seeing or inspecting them. They were not in good shape, and we did not feel that there was a case for enforcing the terms of the contract.


VOTE 58—MARINE SERVICE.

Mr. John Leydon further examined.

875. Chairman.—There is no note from the Comptroller and Auditor-General on this vote.


876. Deputy Sheldon.—On subhead F. —Services in connection with Wreck and Salvage—the note states that “following the cessation of hostilities the quantity of wreck dealt with by Receivers was considerably less than was anticipated. The costs incurred were less than the relevant receipts under subhead L. (Appropriations in Aid)”. How did his end up? On balance did we get as much from the sale of the wreck as we had spent?—I should have to look that up. It goes back over a long period.


877. Would it be true to say that we made a profit on the whole transaction?— I think we probably did.


878. Chairman.—You appear to have made a profit in the year under review because sales of wreck realised £3,030 odd, while expenditure was £2,258 odd. Under subhead I.3, how are pensions and allowances determined? Is that done by agreement?—There is a scale which is fixed. It is related to the scale which the British have in operation for their seamen.


879. Is there any element for discussion as between the claimant and the State?— There is room for argument about dependants, and also complicated questions about the rights of seamen as against a ship owner. So far as the scale itself is concerned, it is a straightforward scale.


880. Deputy Sheldon.—Under subhead J.—Grants in respect of the equipment of ships for protection against magnetic mines—has this matter been finally disposed of?—The accounts have not been finally disposed of, but the service itself has been.


881. Chairman.—How does the Vote for Marine Service come to be relevant to a claim for arrears of rent in respect of an oyster bed?—There is a note on that to the Appropriations in Aid. It is probably on foreshore which is the property of the State.


882. It does not appear to be very profitable.


VOTE 60—INDUSTRIAL AND COMMERCIAL PROPERTY REGISTRATION OFFICE.

Mr. John Leydon called.

883. Chairman.—The subheads are very simple.


VOTE 71—REPAYMENT OF TRADE LOANS ADVANCES.

Mr. John Leydon called.

884. Chairman.—There are no questions. We are all very grateful to the Accounting Officer, Mr. Leydon, for the help which he has given to the Committee.


The witness withdrew.


The Committee adjourned.


* See Appendix XI.