Committee Reports > List of Committees > Dáil > 1973 > Committee of Public Accounts > Report - Appropriation Accounts 1970 - 1971

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 5 lúil, 1973.

Thursday, 5th July, 1973.

The Committee met at 11 a.m.

DEPUTY de VALERA in the chair

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.

VOTE 41—TRANSPORT AND POWER.

Mr. D. Ó Riordáin called and examined.

1. Chairman.—Paragraphs 87 and 88 of the Report of the Comptroller and Auditor General read as follows:

“Córas lompair Éireann

Subhead D. 1.—Grant to Córas Iompair Éireann

Subhead D.3.—Grant to Córas Iompair Éireann under section 2 of the Transport Act, 1969

Subhead D.4.—Additional Grant to Córas Iompair Éireann

Section 6 of the Transport Act, 1964 enabled the Minister for Transport and Power to pay to Córas Iompair Éireann a subvention by way of a non-repayable grant of £2 million in each year in the period 1 April 1964 to 31 March 1969. The Act also enabled the Minister to vary the amount of the grant in the year 1969-70 and the annual grant for that year and each of the four succeeding years was increased to £2,650,000 under the Transport Act, 1964 (Section 6) Order, 1969 (subhead D.1).

As the subventions paid to CIE in the five years ended 31 March 1969 were inadequate to the extent of £642,460 a grant of this amount was paid in the year (subhead D.3) under the provisions of the Transport Act, 1969. A further additional grant of £2,980,000 was made to the company in the year (subhead D.4) under the terms of the Transport Act, 1970.

The following information has been extracted from the published financial accounts of Córas Iompair Éireann for the years 1964-65 to 1970-71:—

To further alleviate the strain on CIE’s cash resources payment of interest on Central Fund Advances for the years 1969-70 and 1970-71 was deferred by the Minister for Transport and Power with the consent of the Minister for Finance. A supplementary estimate passed by Dáil Éireann in 1971-72 provided non-repayable grants for the company from which it will discharge its liability for this interest.”

Mr. Mac Gearailt.—These paragraphs give details of the subventions received by CIE in the seven years to March, 1971, from the Transport and Power Vote. They highlight the large increase in the board’s net deficit in 1970-71 and the corresponding increase in the State subvention in that year. Further reference to the board’s financial problems is made in the Report on the 1971-72 Appropriation Accounts.

2. Chairman.—As the Comptroller and Auditor General has said, there is a large increase in the grant required corresponding to an increase in the deficit. I take it that the grant is simply geared to supply the deficit?

Mr. Ó Riordáin.—Yes.

3. That is a matter of policy?

—Yes.

4. You are not accountable either for the reasons for the deficit or for how the moneys voted are applied?

—That is correct, at least not in the capacity of accounting officer.

As far as we are concerned you are not accountable.

5. Deputy MacSharry.—Who determines the amount of subsidy?

—We get CIE estimates and we examine them with the board to see if they are reasonable. We make proposals to the Department of Finance and eventually the amount to be sought from the Dáil is settled by the Government.

You are in on discussions to assess the grant?

—Yes, we examine the board’s proposals.

6. Deputy Tunney.—What expertise do you have to satisfy yourself that the demands of CIE are reasonable?

—We have the experience of previous years. We can examine the reasons given for the increases in wages and costs. There is no reason why they should be dishonest with us because the accounts at the end of the year will show the actual position. They are reasonably accurate in their estimates. They have been doing this for a long time and past experience helps them very much.

7. Deputy Crotty.—Is it left to CIE to form their policy? Do you interfere in that? Do they say what they are doing and what they want?

—Within the limits of Government policy they are free and in matters of detail the board have full discretion. For instance, they have authority under existing legislation to reduce railway services but the Minister made it clear previously that until the Government have considered the report of McKinsey and Company and have taken decisions CIE should not act on the recommendations in that report regarding the closing or reduction of railway services.

8. Is it the position that the programme is settled by the board and you have no say in it, if you want to do something else?—

—It would mean reducing services in order to reduce their costs. That would not be within their discretion unless the Government took an overall decision that CIE should reduce services in order to bring about a reduction in costs. In relation to the estimates generally, we are concerned with the accuracy of their estimation.

9. Chairman.—The policy is to service the deficit?

—Yes.

10. In that case the Minister has a right on your advice either to grant or not to grant?

—That is so.

11. In the advice which the Minister gets, there is an element of examination by his Department and by you as his Secretary and Accounting Officer?

—That is correct.

12. In fact, in your capacity as Secretary of the Department you are in possession of detailed information concerning the running of this concern, this semi-State body, CIE. Is that correct?

—We have certain information relating to their estimates. We have estimates of the cost of wages, the effect of wage rounds and the cost of replacement and maintenance during the year. We might look for more information on particular items. We have an amount of information which comes to our attention even about things in which we do not have direct responsibility.

In which you have no accounting responsibility in the technical sense?

—No.

13. Is it not true that the Minister is, apart from general policy, in a position to control a certain amount of detailed administration of this semi-State body?

—It varies a bit with the different bodies according to their terms of reference. In the case of CIE the Minister has very little statutory power of intervention. In law, his main tool in dealing with CIE is to refuse supply or to change the board. Day-to-day management and operation, apart from broad elements of policy, are under the statutes entrusted directly by the Oireachtas to CIE.

14. You have accounting information about CIE which may affect policy decisions but which are not strictly or technically within your ambit as Accounting Officer?

—Yes, a great deal. In my capacity as Secretary of the Department I was chairman of the committee which employed the McKinsey consultants and supervised their work in CIE. All the material they got from CIE is available to us.

15. Thank you very much. I was tempted to pursue the point as to how much information the Minister had about this concern at any time but this does not affect the accounting. The Committee are interested not only in the policy control of the Minister but also the executive control, even if indirect, which he has in connection with such semi-State bodies for which Parliament cannot hold him accountable.

—Quite.

16. We will now move on to paragraph 89 of the Report of the Comptroller and Auditor General which reads:

“Subhead D.2.—Córas Iompair Éireann Redundancy Compensation

Section 15 of the Transport Act, 1958, authorises the payment of grants from voted moneys to Córas Iompair Éireann to meet the cost of compensation paid under transport legislation to employees whose services were dispensed with or who were transferred with a worsening of conditions in the period from 16 July 1958 to 31 March 1964. Including £316,999 charged to this subhead, grants issued amounted to £4,541,146 at 31 March 1971. Grants are supported by auditors’ certificates of the amounts expended on compensation.”

Mr. Mac Gearailt.—This paragraph gives, for the information of the Committee, the cumulative grants under the compensation arrangements provided for in the Transport Act, 1958.

Chairman.—I do not think there is any question on that.

—It is a diminishing sum.

17. Deputy MacSharry.—Is the redundancy an on-going thing?

—No. During the period 1958 to 1964 the Government undertook to meet the cost of redundancy in CIE as a contribution to the reorganisation of the undertaking. It did not prove very successful and we returned the obligation to the company.

18. Chairman.—Paragraph 90 of the Report of the Comptroller and Auditor General reads:

“Bord Fáilte Eireann—(Grants-in-Aid)

Grants issued to Bord Fáilte Éireann to 31 March 1971 are shown in the following statements:—

The accounts of Bord Fáilte Éireann are audited by me”

Mr. Mac Gearailt.—This paragraph shows the cumulative grants paid to Bord Fáilte Éireann up to 31 March, 1971.

19. Deputy Tunney.—Your position with Bord Fáilte is akin to that which exists between yourselves and CIE?

—Yes.

It is no worse and no better?

—It is considerably better.

20. Deputy Bermingham.—Actually you grant certain moneys for certain objectives and they spend it as they please?

—Yes.

21. Chairman.—It must be more difficult for you to control this type of expenditure than CIE’s?

—Not really, because CIE incur a loss and it is practically impossible to control it without doing drastic things like closing down the railway service, but Bord Fáilte perform a kind of promotional function and a large part of that expenditure can be turned on or off to a considerable extent. You could stop advertising for a year; you could stop local grants. So, Bord Fáilte finance is more flexible and may be increased or decreased as a matter of Government policy.

22. Deputy MacSharry.—That is between Bord Fáilte and your Department?

—Yes.

You do not have any consultation about it?

—As Secretary of the Department I would. It is a matter of Bord Fáilte’s relations through the Department to the Minister and the Government.

23. Deputy Crotty.—Who takes the decisions on where the promotional moneys are spent?

—Broadly speaking, the money is provided under different subheads of the vote. Within F.1 it is split into their general administration and the interest grants and these are separately approved. Within the general administration expenses they have a fairly free hand but they give us particulars. In fact, their annual accounts include a good deal of information about how this money is spent.

24. Apart from the information given afterwards, the Department do not interfere with them as to where this money might be spent? Do you give them a free hand? Do they take the decision on where the promotion is to take place?

—Broadly speaking, they do because they are the expert body. They are a statutory body and they are the people who have the initiative in saying how tourism should be promoted. We may take a critical view and say they are spending too much. If their proposals for expenditure in a year are higher than the Minister for Finance is likely to be agreeable to then, in the first place, we suggest that they cut down their estimates or that they cut out a particular service. The Minister may or may not have a view as to whether they should do it that way. If he had, we might confer with them as to whether there were alternative ways of cutting back expenditure. In general, within the limits of the subhead, the initiative lies with them.

25. Deputy MacSharry.—The conferences take place with the Minister? They negotiate with the Minister?

—They are started at the official level, at the level of the principal officer in the tourist division and the officers of Bord Fáilte. The Minister would not necessarily come into the discussions directly with the board unless there was a very difficult situation in which the board took a strong view. The Minister would deal with the board and not with the officials of Bord Fáilte.

A lot of the administrative contact with the Minister and Bord Fáilte is with the officers of your Department?

—Yes. The normal contact is between the officers of the Department and Bord Fáilte.

26. Chairman.—In this case the accounts are audited and in that way controlled by the Comptroller and Auditor General?

—Yes.

27. Chairman.—Paragraph 91 of the Report of the Comptroller and Auditor General reads:

“Subhead G.2.—Constructional Works, at Airports, including furnishing of Buildings

The expenditure under the subhead is made up as follows:—

Included in the above expenditure are amounts of £1,763,597 and £1,371,731 being the outlay in the year under review on the new terminal buildings at Dublin and Shannon Airports which are required to service the Boeing 747 aircraft. The total expenditure on these projects at 31 March 1971 amounted to £2,649,814 and £2,092,972, respectively.”

Mr. Mac Gearailt.—This paragraph is for information only. It gives the breakdown of the expenditure on the constructional works over the three airports as well as the cumulative expenditures on the new terminal buildings at Dublin and Shannon.

28. Deputy Tunney.—I think we are in the position that we have to accept that the expenditure here, as has been indicated, is necessary but the people whose business it is know whether it is or not?

—Yes, that is true.

29. Chairman.—Paragraph 92 of the Report of the Comptroller and Auditor General reads:

“Subhead S.—Investment Grants for Ships

In paragraph 81 of my previous report I referred to the Shipping Investment Grants Act, 1969 under which grants were made to Irish shipowners towards capital expenditure incurred by them in acquiring, for use for the purposes of their business, a new ship or a new part for a ship or in converting a ship for such use. The aggregate amount of grants issued to 31 March 1971, including £1,117,528 in the year under review, was £3,367,445 and relates to eleven ships.”

Mr. Mac Gearailt.—This paragraph is for information only. The Scheme has been withdrawn from 1st October, 1971, but payments will continue to be made for a number of years to come.

30. Deputy Tunney.—This, apparently, is a system whereby a grant is given to private owners of ships?

—Yes, but not only private owners. As a matter of fact, one of the reasons the scheme was withdrawn was that only Irish Shipping and B & I benefited from it to any substantial extent. It was introduced in the first place because the British introduced a similar scheme and our shipowners, both public and private, complained that this altered the terms of competition and that without similar assistance they could not compete. It was also looked on as a means of stimulating expansion of the merchant fleet. It was not very successful in that regard because the money could have been provided directly to the B & I and Irish Shipping Ltd. anyway. The British withdrew their scheme and substituted different income tax arrangements so, as the two merchant fleets are largely in competition on much the same basis as regards wages and so on, we more or less followed suit.

Chairman.—This is a transfer business, in effect?

—Yes. Some of the payments are still on-going, but the scheme itself is terminated.

31. Deputy Bermingham.—On subhead A —Salaries, Wages and Allowances—why was there a saving?

Chairman.—It is unusual in present circumstances to see a saving on that subhead?

—The original estimate was £1,915,000. It was increased by a supplementary to £2,239,000 but the saving was only £1,332. It is completely insignificant. A delay of a month in recruiting a few people could account for that.

32. What was the necessity for a Supplementary Estimate in this case?

—The 12th round wage increase.

33. At what rate did that, in effect, work out as an increase in actual wages and salaries?

—I could not say offhand. This is all dealt with by the Department of Finance. We do not have any say in this, so offhand I could not say. About 7 per cent.

This was the 12th round?

—Yes.

34. Deputy MacSharry.—That is an increase of £134,000 on the original estimate?

—Yes, but this would cover all sorts of things. The same rate would not apply over the whole year. Offhand I think it is the kind of thing you would want a written reply on if you wanted detailed information.

35. Chairman.—It covers more than the mere increase in wages?

—It would be reflected in overtime on which it would have a different effect, and so on. The main reason for it was the 12th round wage increase and its impact on our staffs. The levels at which the increases were given were different. The senior officers would have got less.

36. On B.1—Travelling and Incidental Expenses—there is a note: “Excess due to unanticipated increase in travelling expenses and to a lesser extent in incidental expenses.” This seems to be a very large increase. It is more than double for travelling expenses. On what basis would that estimate have been arrived at?

—The original estimate was £62,000. There was an excess of approximately £13,000 on that, due almost entirely to training and transfers of technical staff at Shannon in connection with the training courses and the installation of new radar, or the transfer of radar from Shannon to Dublin. That accounted for £11,000. The main figure is an incidental expenditure rather than travelling expenses. That was £137,000 paid to the British Navy for the search work carried out for the Viscount that crashed in the Irish Sea.

37. Deputy MacSharry.—It seemed to be an enormous new estimate?

—It is a non-recurring expenditure. At least I sincerely hope so.

38. Deputy Crotty.—It might have been no harm if there had been a note saying it was that type of expenditure.

Deputy MacSharry.—I agree that that note should have been made.

Chairman.—It might have been a little more explicit.

Deputy MacSharry.—Is that an incidental expense?

—Yes.

39. To that extent it is misleading because the bulk of it is incidental.

—This would not normally be an incidental expense. They are usually minor ones.

You would agree that the note is misleading where it refers to “to a lesser extent”?

Chairman.—In what terms was the Supplementary Estimate introduced into the Dáil? Was this adverted to? Was this reason given?

—Yes, it would have been given. It was done subsequently to meet the bills we received because we had to move to get the men on the job very, very quickly. We arranged it over the telephone.

40. Deputy Bermingham.—That explains it but, looking at this account, one could not know what the explanation was?

—It would certainly be more helpful.

Deputy Crotty.—You would think someone ran amok somewhere.

41. Chairman.—On subhead B.2.—Post Office Services—there is a note: “Savings due to postponement of the provision of a new telephone line and to the fact that certain claims which were the subject of correspondence with the Post Office did not mature for payment within the year.”

Deputy MacSharry.—Have you got fixed charges with the Post Office which other Departments have?

—We have, yes.

42. Chairman.—“… a new telephone line. . . .” Can you say what that line was?

—It was a private circuit for facsimile exchange of weather data between the Dublin Meteorological Office and the Meteorological Office at Bracknell, England. Its installation was delayed. This is the one that prints out the weather map.

43. Deputy MacSharry.—The rest is telephone bills?

—We have telephones, teleprinters, telex, and so on. The estimate is £110,000. That includes that. There are postal services, handling of stores, the recoupment of the salaries of the engineers on the aviation/ telecommunications service. We employ the technicians and the radio operators. The graduate engineers who manage the service are seconded from the Post Office and we pay the Post Office their salaries.

44. On subhead C.—Equipment, Stores and Maintenance—there is a note: “Savings due to deferment of the establishment of an additional weather satellite reception station and to the postponement of proposed work on weather radar installations for technical reasons and non-availability of equipment.” Can you state the nature of the “technical reasons”?

—Not in detail offhand.

45. Deputy Tunney.—About the £10,794, would that represent exactly the estimate in respect of the items which were intended to be represented?

—That was a saving. I presume so. The delay with the weather satellite led to a saving of £7,000. Delay in the work on the relay of weather radar display from Dublin Airport to O’Connell Street led to a saving of £4,000. Due to the non-availability of equipment the adaptation of radio sonde equipment was postponed with a saving of £3,000.

That is in excess of £10,000?

—Of course, there was an excess by which it was offset on the new equipment for the Dove aircraft, an excess of £588.

46. Deputy MacSharry.—Do these weather satellite reception stations receive any information other than on the weather?

—No.

Can they be used for any other purpose?

—I do not know much about the technicalities but I do not imagine they can. These facilities are provided entirely for the meteorological service. They are highly specialised. They have the teleprinters which print out data and figures and words and they have these other machines which print off maps either from radio or land line sources.

47. Chairman.—The important thing is that these were specific savings on the Estimates?

—Yes.

But they were savings in excess of the figure shown here?

—The gross saving was £16,682.

48. There was, therefore, an excess in other areas in that subhead of £6,000?

—It was £5,888.

49. What accounted for that?

—That was the famous or notorious Dove aircraft in which your Committee was interested two years ago. We acquired this aircraft secondhand and it was to be reequipped and fitted out for testing radar installations. We had an unfortunate experience because the company concerned went bankrupt and we had to start all over again. There was a great deal of nugatory expenditure involved.

Deputy MacSharry.—It was not so bad that you ended up with a saving.

—The Committee went into the matter in depth a few years ago.

50. Deputy Crotty.—The figure of £91,000 for equipment, stores and maintenance appears rather small. What is covered by this?

—The meteorological service accounted for £44,000, the Dove aircraft accounted for £44,000—this was in the Estimate—and the rest was for the coast life-saving equipment which that year consisted of rocket equipment at £2,600.

51. Chairman.—Subhead D.4—Additional Grant to CIE—original nil and supplementary £2,980,000. This is a big grant.

Deputy Staunton.—Subhead D.3 refers to a grant to CIE under section 2 of the Transport Act, 1969. There was a Supplementary Estimate in this case. Why did that take a different form to the Supplementary Estimate in subhead D.4?

—Because under the earlier Act we provided for a fixed grant of £2,650,000 per annum to CIE, the idea being that by confining them to a fixed figure we could exercise pressure on management to live within it. Unfortunately, it was not successful because the growth of inflation led to increases in the deficit. When we were putting this Bill through we provided for an increased grant for that year. The position has got even worse since and we have been passing Supplementary Estimates to increase the amount provided statutorily.

52. I should like to ask a general question which the Chair may not consider relevant or Mr. Ó Riordáin may not be disposed to answer. Earlier we discussed the question of semi-State bodies and various other bodies for which his Department has responsibility. For some time there has been a certain amount of public disquiet in regard to the accountability of semi-State bodies so far as the expenditure of public funds is concerned. Obviously they were set up in their original form in order to give them more freedom of action than a Government Department but, as the years have passed, there has been a substantial increase in the extent of the semi-State activities which accounts for a high proportion of public expenditure. There have been suggestions that a new approach might be made towards a situation where the Dáil would have more direct control over their activities, at least within limits. Possibly in the form of a committee such as this, there might be dialogue with the responsible people in the semi-State bodies? Would you be prepared to comment on what I have said?

—Only to this extent; it is a subject in which I have personally been very interested and I have read a great deal about it. However, it is basically a political subject and this is a political forum and I do not think I should outline my attitude.

Chairman.—This is a policy matter and we cannot press the Accounting Officer on the matter.

Deputy Staunton.—I agree and that was why I prefaced my question with the remark that Mr. Ó Riordáin might not be disposed to answer it.

—It would not be proper for me to do so.

53. Deputy MacSharry.—Do you find yourself frustrated in your dealings with these people?

—Not really.

54. Chairman.—The fact is you have the information.

—Apart from that, I do not feel frustrated. It depends on one’s concept of one’s functions. The policy lies with the Minister and the Government and if they do not accept my views that is their responsibility.

You have all the information you require intelligently to advise the Minister on whether grants should be made or expenditure incurred?

—We get all the information we require.

55. Decisions are made on foot of the information, even though the matter might be classed as policy for which you are not technically accountable here. Is that the position?

—Yes.

You have all the information under your control?

—Yes.

Deputy MacSharry.—You have all the information but you have no control?—

—I have not come across any case where a company refused information requested by the Minister or the Department.

56. Chairman.—As you have pointed out, you have a quick and summary way of dealing with such a situation. It is not too much to say that, notwithstanding the fact that you are not the Accounting Officer for that purpose here, your Department and your Minister have control over these bodies?

—That is true.

And they exercise that control?

—The Minister does.

57. We must keep within our own rules of order. I should like to thank Mr. Ó Riordáin for his comments. Subhead E— Grants for Harbours—has a note which states: “Work involving grant expenditure did not proceed at one harbour and expenditure at two other harbours was less than expected.” Are there any comments on that?

Deputy MacSharry.—What was the harbour where work was not carried out?

—Progress on works at Drogheda and Sligo was slower than expected and there was a saving of £37,000. We provided for an improvement scheme at Dundalk; it did not proceed during the year and, consequently, there was no payment in respect of that scheme. I am always apologising to the Committee for this Vote because almost invariably we appear grossly to over-estimate but we must make provision for approved schemes. Very often there are delays of a few days at local level, generally while they are trying to pressurise the Government to increase the grant. Sometimes we do better than others but we tend to have an over-estimate.

58. Is there any reason for the delay in carrying out the works?

—The delay occurs at local level generally. We only make a grant but the harbour authority is the responsible authority which enters into contracts, which engages consulting engineers, and so on. Very often there are local difficulties such as the fishing difficulty at Drogheda. There may also be the situation where they hope to get a larger grant and do not want to commit themselves until they have exhausted every effort to get it. The difficulties vary from place to place. Sometimes they are technical or political difficulties and sometimes they are due to unforeseen circumstances.

59. In view of our saying that the delays in relation to the non-expenditure of money are invariably at local level—

—The harbour authority are the responsible authority which do the work. The role of the Department is to make a contribution towards the cost. The Office of Public Works help us to supervise to see that money is not wasted and that the job is carried out properly. We also have a say in approving the contract to see that there is no waste of money.

60. You approve of all the activities of the harbour board in regard to consultants? You have to approve of what they put forward. The delays are between the board and the Department?

—Not necessarily. Generally, it is not with us. Generally, the delay is in starting a scheme rather than a delay in carrying it out.

61. It has to be approved by the harbour board before it starts?

—Yes.

62. The delay is part of your responsibility or as much of your responsibility as that of the local authority?

—If we unduly held up the approval of contract documents the delay would rest with us. If the harbour authority having had approval of the broad elements of a scheme estimated to cost, say £200,000, with the Government paying £50,000, do not make detailed proposals to us we do not enter into the matter at all.

63. You are saying that the reason basically for delays in regard to non-expenditure has been the responsibility of the harbour board concerned?

—Yes, in general. I would not go into the details of the precise cause or causes of delay in each case but I am not aware that there has been any excessive delay in carrying out contracts or in dealing with contract documents. Sometimes there are delays about starting a scheme. When the actual work starts the contractors may meet rock which would delay the scheme and make it more expensive. If you would like to have details about the causes of delay we would be happy to send in a note.

64. I would like to have a note of the up-to-date position in relation to Sligo from the time it started until now?

Chairman.—That would be helpful.

—I have a note here that the works at Sligo have been completed. We will let you have a note.* There seems to be some discrepancy in the notes I have here.

Deputy MacSharry.—That scheme should be completed.

65. Chairman.—The Committee are still dealing with 1970-71. The next item deals with Bord Fáilte. The relevant subheads were discussed at the beginning of this meeting. We come now to subhead G.1— Acquisition of Lands, Buildings, et cetera at Airports.

Deputy Tunney.—Which airport attempted to get the biggest acreage?

66. Deputy MacSharry.—You went through the subheads about Bord Fáilte.

Chairman.—If the Deputy wishes to go back he can do so.

Deputy MacSharry.—I am sure many Deputies would like to know the details of grants towards the resorts.

—They are published in the accounts.

They were published earlier?

—At the end of the accounts you will get particulars of contributions to major resorts and also to hotels. In response to requests in Dáil Éireann they were included in the annual report of the board.

Chairman.—They have been published. We have a list. Is that all right, Deputy MacSharry?

Deputy MacSharry.—They are being published in detail now.

67. Chairman.—Is there anything further on that before we go back to subhead G.1? The greater part of the provision has been expended?

—Yes.

68. What was anticipated by way of expenditure?—

—The £105,000 was in respect of Dublin Airport and £5,000 was in respect of Shannon Airport. There was delay in Dublin because acquisition of land around Dublin Airport is slow and tedious and we have to resort to compulsory purchase in most cases in the long run.

69. Deputy Tunney.—Last year I mentioned this. I have a feeling for land. I am familiar with that area. Dublin Airport hold a considerable acreage of land. We all know it is valuable land. Do the aeronautical people, in acquiring land, consider the possibility that in ten or 15 years’ time there may be vertical take-off and there may be no need for all the land being acquired at the moment?

—We have to look ahead in Dublin to the provision of two major runways. The existing runway system is over a quarter-of-a-century old. It will not last indefinitely. We envisage that a new major east-west runway will be needed towards the end of the 1970s. We also foresee the possibility of a second major runway parallel and lying to the south of the new runway. It is impossible to say now when they will be required. It will depend on the rate of development of the airport but we are moving towards the acquisition of land for both runways. Land will become more expensive and we must sterilise development as far as we can. Development could take place which would be costly to buy out later. There could be objections about noise from aircraft also. We are moving towards the acquisition of land in this area to provide for the extension of the airport. Between the time of acquisition and the time of bringing it into use, the land will either be let or will remain in the hands of the present owners under some arrangement or otherwise used to the best advantage.

70. Deputy Tunney.—I can understand that people who are directly connected with the airport would be concerned. A 100 acres of land in County Dublin is very valuable. The economics of the potential of arable land around Dublin must be considered. Would the Department feel obliged to have any regard to that?

—We have to have regard for it in two ways. It is either acquired voluntarily or by compulsory acquisition so that in either case the price will reflect the best possible utilisation of the land. When it comes into the ownership of the airport authority in the future—it is in the Minister’s ownership now but it is managed for him by Aer Rianta—they will have to look to maximising the output from that land. Generally speaking, they rent the land but in some cases it remains in the possession of the present owners. I think we have one case where we do not expect to take over occupation for several years even though we are acquiring the land now. It will be up to the management of Aer Rianta to use the land to the best possible advantage from their point of view.

71. Deputy MacSharry.—On subhead H.—Transport of Staff—is that for leaving the hostesses home?

—No, this is our own staff actually employed on the ground at the airport. Their rates are subsidised because the airport is so far from centres of population.

72. Chairman.—On subhead J.—Shannon Free Airport Development Company Limited—Administration and General Expenses (Grant-in-Aid)—why was this procedure adopted rather than any other?

—It was a purely budgetary measure. The Minister for Finance imposed a cut. At the time there was a cut all round and this was one of the contributions we had to make to the needs of the Exchequer.

That is the reduction in the grant?

—Yes.

73. Why? Was it originally a grant-in-aid?

—Yes. Subsequently a reduction was requested by the Minister for Finance and imposed on the company in the course of the financial year. Actually, it was done in October, 1970, so that the company were instructed to keep their expenditure under tourist development heads within a lower figure than was originally estimated.

74. Deputy Staunton.—We have the accounts of semi-State bodies for which the Department of Transport and Power have responsibility but in those I have received there is no report for SFADCO. Is that available?

Mr. Mac Gearailt.—SFADCO is mainly financed from the Vote for Industry and Commerce and the report and accounts will be circulated when that Vote comes up for consideration.

75. Deputy Staunton.—I realise that the industrial operations of SFADCO are substantial but in general terms do these administration and general expenses not relate to Transport and Power?

—The development of tourism in the Shannon area and the development of traffic to the airport, including tourism, and encouraging new airlines to come to Shannon are generally supplementary to the activities of Bord Fáilte and the airlines and are co-ordinated with them.

76. Presumably the salaries of the people engaged in industrial promotion are covered under the Vote for Industry and Commerce?

—Yes.

77. Deputy MacSharry.—Is this grant-in-aid a continuing one?

—Yes. SFADCO are still discharging this function and getting the grant-in-aid every year.

78. On subhead L.—Expenses in connection with International Organisations—is this our commitment to international organisations?

—Yes. There are a large number of them.

79. Chairman.—On subhead N.—Rural Electrification—the figures balance nicely here?

—The ESB are paid the capital cost of rural electrification from the Central Fund and then the Central Fund is re-imbursed on an annuity basis from this Vote so it is practically the same thing.

80. Deputy Bermingham.—On subhead O.—Grants for Bottled Gas Installations— is this where it is not practical to supply electricity in rural areas?

—This is in the case of people whose terms for rural electrification are so high as to be impossible. If they do not get rural electricity they can apply for a grant towards the cost of bottled gas. In fact, it is the estimated cost of a full bottled gas installation.

81. Would you know from the ESB who those people were?

—No, we pay this directly.

I know that, but how would you estimate how many of those people there are?

—We have a check system with the ESB. I forget the details but I think the Comptroller and Auditor General has inspected our arrangements for this and is satisfied.

82. Deputy MacSharry.—Could somebody who could get rural electrification but preferred gas avail of the bottled gas grant scheme?

—There is a limit. It has to be a case where the special service charge is above a certain figure—I forget the figure—and it has to be a case where it is uneconomic to have electricity.

83. Deputy Crotty.—Is this for individuals?

—Yes. Some years ago we had a review of the scheme and we found those people who were excluded because of the very high special charge felt they were getting nothing while others were getting a lot so we thought that bottled gas, having emerged at that stage, was a useful substitute for everything except TV.

84. What are the expenses connected with the installation of bottled gas?

—I understand this grant of £35 is adequate to get in cooking facilities, some heating and lighting. There is very little capital expense. It does not supply the cooker, but it supplies the internal piping.

Deputy Bermingham.—It is reasonable for the people who cannot get the benefits of electricity.

85. Deputy MacSharry.—Is it not obvious from the grant that the number of people throughout the 26 Counties who apply is very small?

—It is still continuing but, of course, the number of people who cannot get electricity on fairly reasonable terms is small too.

86. Deputy Staunton.—In the part of the country where I live there are instances where even under the subsidised rural electrification scheme the cost is prohibitive. I am aware that this scheme has worked well. It has been beneficial in such areas. It is very minor relative to other schemes.

—It is a minor amenity but I think it is very welcome where it is used.

87. On subhead P.—Commissions, Committees and Special Inquiries—I think it would be useful if we had a breakdown on this because there is no note on it.

—These were payments incurred during the year on two inquiries which were carried out for us by McKinsey International Incorporated. One was on the problems of freight transport on the Irish Sea. There were certain differences of policy between British Rail, B and I and CIE. They were getting into deep water, so, by general agreement of the three firms, we brought in McKinsey to advise them on this and to explore the situation. They happened to be particularly well equipped to do so having already advised British Rail on the British side of the services and British Rail were prepared to allow their data to be used for an international investigation. The other one, of course, was part of the payment for their subsequent investigation into CIE.

88. How does it break down in regard to costs?

—That was not the total expenditure. These were the payments arising in that year.

89. Chairman.—Expenditure of £54,000 related to inquiries into cross-Channel freight trade and £2,854 incurred in respect of Ireland’s share of the cost of a study of developments in sea and air traffic.

—It does not break it down between the two separate McKinsey inquiries because there were payments arising in that year, some under the first inquiry and some under the second. We paid them as we got their bills from month to month.

Mr. Mac Gearailt.—It is normal in the case of committees of inquiry to show the expenditure on a cumulative basis and that has been done in the 1971/72 accounts.

90. Deputy Crotty.—To what extent were these reports acted upon?

—With regard to the first report their precise recommendations were not accepted as made by the three companies but they led to other settlements between them and helped bring them to understandings especially as between British Rail and B and I in regard to joint terminals and joint use of ships and so on. The second one, the CIE report, is still before the Government and no final decisions have been taken by the Government on the McKinsey report on CIE. Their recommendations in relation to the form in which we should subsidise CIE so as to maintain efficiency we will not be able to accept now because we find a clash with the requirements of the Common Market. We are engaged at the moment in discussions with CIE and the Commission in Brussels to draw up a form of subsidy which will comply with Common Market regulations. It is a bit more complicated. We would prefer the McKinsey formula but alas it does not fit in with the existing transport regulations in Brussels.

There are reservations about the McKinsey one?

—In this case they happened to have a lot of expertise because of their previous work.

91. Deputy MacSharry.—On subhead Q —Grants for the Improvement of Roads to Generating Stations—were these grants made to the ESB?

—No. These are simply to serve the four small stations in Gweedore, Connemara, Clare and Kerry. In many cases the roads leading out of the bogs were not adequate to cover modern vehicles and these special grants were provided. They are paid to the local authority who actually carry out the work.

92. Chairman.—On subhead R—Rent on Lands, etc. at Airports—there is a note: “Savings arose because lump sum payments provided for in lieu of rent were not required.” Why were they not required?

—This is to cover small payments at airports. If we want to put up a telegraph pole or some small instrument and if we require a small parcel of land we may either rent it or pay a small lump sum for it. This is just estimated costs. It did not arise during the year.

93. Deputy MacSharry.—Under the heading Extra Remuneration I see that 505 employees received extra payments. I should like an explanation of the £167,256 paid in overtime to the staff?

—We have a large overtime bill every year in the normal nature of things because the staffs at the airport are employed on shift work and it would be grossly uneconomic to employ sufficient permanent staff to eliminate all overtime. Therefore, there is always a certain amount of overtime. We have had a problem during the years regarding recruitment of technical staff. It is difficult to get them and recruitment is slow. Whenever there are vacancies the overtime increases. In the last few years we have had the problem of overtime for the security staffs because of the North of Ireland situation.

94. How many vacancies are there?

—At the moment we have authority to recruit 35 additional radio officers and 22 technical officers. The recruitment process will be slow and the men will have to be trained.

95. Are the vacancies advertised?

—They are advertised through the Civil Service Commission.

96. Is it the position that although the overtime bill is high you are trying to recruit staff all the time?

—Yes. We have had a certain amount of success. For instance, in 1971-72 the total expenditure on overtime was down to £135,000. In earlier years frequently there were arrears payments arising out of increases in wages that had retrospective effect and, therefore, they affected the overtime figures.

97. Chairman.—Of the overall staff, what number was involved in the overtime figure?

—In the aviation radio service at the moment we have an authorised staff of 33 communications assistants, 150 radio officers and 98 technical officers.

Did the people who received overtime comprise the entire staff or were there some who did not have overtime?

—Some people did not wish to do overtime, while others tend to volunteer to the maximum extent.

My question was what is the overall size of the staff to which this figure relates?

—About 1,000 staff members would be involved in overtime to a certain extent.

98. Deputy MacSharry.—You are having some success in this matter and the overtime bill is being reduced?

—Yes. The overtime bill goes up and down. It is necessary to expand staff and there are delays in recruitment. The security officers were paid by the Department in the year now being reviewed, but at the moment they are under Aer Rianta and are paid by Aer Rianta.

99. Is it true that the technical skills necessary for these posts are not available in Ireland?

—I would not say that, but they are in great demand everywhere.

100. Are we not paying them enough? Why can we not get them?

—We get them but the process is slow. I would not say we are not paying enough. If we were prepared to pay more we might recruit them more quickly.

101. Chairman.—Would it be possible to say what relation the sum of £167,000 for overtime has with regard to the total wage bill for the 1,000 staff members?

—The total Vote under subhead A— Salaries, Wages and Allowances—was £2,239,000.

The sum of £167,000 would be related to that?

—It would be related to at least three-quarters as there would not be much overtime in head office among the administrative and clerical staff.

Do you consider that reasonably efficient?

—Yes, having regard to the nature of the work because it consists so much of shift work.

The witness withdrew.

The Committee adjourned.

*£2,000,000—Section 6, Transport Act, 1964

£1,000,000—Section 13, Transport Act, 1963 as amended by Section 7, Transport Act, 1964

†£2,650,000—Transport Act, 1964 (Section 6) Order 1969

£642,460—Section 2, Transport Act, 1969

£2,980,000—Section 1, Transport Act, 1970

* See Appendix 4.