Committee Reports > List of Committees > Joint > 1979 > Committee on Commercial State-Sponsored Bodies > Report No. 04 - Córas Iompar Éireann

MIONTUAIRISC NA FIANAISE

(Minutes of Evidence)

Dé Céadaoin, 2 Bealtaine, 1979

Wednesday, 2 May, 1979

CÓRAS IOMPAIR ÉIREANN

Dr. Liam St. J. Devlin, Chairman, Mr. J. F. Higgins, General Manager, and Mr. M. Grace, Assistant General Manager, of Córas Iompair Éireann called and further examined.

88. Senator Keating.—Last day we had a computer printout showing a very up-to-date gathering of statistics. I have the Economic Series 1977/1979 dated 30 April 1979. Sections 45 to 48 relate to railway receipts, passengers, merchandise, railway services and so on but there is no figure for last December. There is no other source but CIE for those statistics. It is a small point but in Ireland it is often irritating to have figures as late as that when Japan, America and other huge places can have them faster.

Dr. Devlin.—We had the figures for that period, which was period No. 13, for the board in the third week of January. We had the estimated figures on 3 January.

Mr. Grace.—We have the figures period by period. For internal purposes they are on a weekly basis. Is the document the Senator is referring to a Central Statistics Office publication?

Senator Keating.—Yes. It is dated 30 April.

Dr. Devlin.—We will look up that point but it is not a question of the figures not being available.

Mr. Grace.—In regard to the buses figures are on a daily basis with 27 different reports being issued locally regarding passenger numbers, mileage and so on.

Dr. Devlin.—There is no shortage of figures.

89. Deputy L. Lawlor.—What is your actual requirement at this stage in order to bring the rolling stock on the main lines to a greater degree of satisfaction?

Dr. Devlin.—We have about 283 mainline coaches inclusive of heating vans and catering cars. In addition we have 74 suburban coaches. Of the 357, 246 are 25 years old. Everybody wants air conditioned coaches. We have 61 of those, including kitchen carriages. We got them in 1972. Previously, we got 50 non-airconditioned coaches in 1962. Our statistics show an overall figure of 357 coaches. Any respectable railway would write off the 74 we are using now on the suburban service.

90. Deputy L. Lawlor.—Is there a demand to the Department of Tourism and Transport for X number of £’s to tool-up the mainline?

Dr. Devlin.—There is a submission before the Department of Tourism and Transport in regard to our plans for building mainline stock but that submission is in abeyance until a decision is taken in regard to the suburban railways. Once a decision is taken in regard to the suburban railway the next decision to be taken relates to the coaches; that is whether they are to be imported or whether our plan is accepted for setting up an industry at Inchicore.

Mr. Higgins.—We have a specific request for 100 mainline coaches which would comprise 72 passenger carriages. The remainder would be made up of kitchen cars and baggage vans. The cost of those is approximately £16 million. That is an absolute minimum immediate requirement. Running up towards the end of the century we would have a demand for replacement and for additional stock to take care of a growing traffic requirement of something of the order of 400 coaches.

91. Deputy L. Lawlor.—Even if the funding is approved is there any facility for building any of those coaches here?

Dr. Devlin.—We need the air-conditioned type coach to supplement our present stock and that is a much more complicated and sophisticated construction job. There is in progress all the time a maintenance-type operation at Inchicore where we are patching and rebuilding coaches. There is a great difference between this type of operation and a production operation. If you turn a maintenance operation into a production operation, the cost involved is limitless because you are really turning a jobbing activity into a production activity.

92. Deputy Kenneally.—There was reference last day to some liaison with the Northern Ireland railways. Have they any facilities in this regard?

Dr. Devlin.—We said that ultimately we would hope to provide Northern Ireland Railways with their requirements. Eventually I should like to see finance houses owning the carriage stock used by both the Northern Ireland Railway and ourselves so that there would be inter-changeability, the only difference being in regard to the livery. This is more or less what happens on the Continent. Last day we said that we had opened negotiations with a public sector company in Germany, Linke, Hofmann and Busch, who have a substantial export business. We had reached agreement with them to set up an industry at Inchicore and to manufacture the stock for us. That plan has been submitted to the Department. We are awaiting a decision in regard to suburban railways, we may then get a decision concerning the coaching stock.

93. Senator Cooney.—Then CIE would be leasing their rolling stock from that company?

Dr. Devlin.—The company would build the stock but the point I made the last day is that we should be able to get finance companies in this country to buy and then to lease the stock to us, so that there would not be a big cash outflow in any one year. There is a precedent for this. When I was Chairman of B+I we arranged for Allied Irish Banks to buy the ships and lease them to the company. There is no reason why that same exercise cannot be done with regard to railway rolling stock.

94. Senator Cooney.—How does the electrification stock compare with the main line rolling stock? Are they the same type of carriage?

Dr. Devlin.—No. As I said last week, no decision has been taken concerning the future of the railway. Therefore, no decision has been taken in regard to the provision of additional coaches. That could go on were it not for the fact that a decision must be taken sometime in regard to suburban railways. When the decision is taken in regard to the suburban railways the Government will have to consider where we will get the coaches. Do we import them fully built or do we start to manufacture them? That is how we hope to get a decision in regard to the main line passenger coaches; it will arise from the decision on the suburban re-equipment.

At the moment the capacity that we have available is fully utilised. I will give the Committee an example. We operate trains in sets. There is a ten-coach set on the Dublin-Cork route. It leaves Dublin at 5.30 a.m. arrives in Cork at 9.30 a.m., leaves Cork at 10.20 a.m., reaches Dublin at 1.00 p.m., leaves for Cork at 3.00 p.m., arrives there at 5.45 p.m and returns to Dublin at 6.30 p.m. That train makes four trips a day. That is 4,000 miles a week. The coaches in that train were built in 1962; some in 1953. That gives an idea of the utilisation of coaches.

95. Senator Cooney.—I take the point that the coaches are on the way out. The scenario that Dr. Devlin suggests for their replacement is that a German company, or some company anyway, will come in here to set up an industry to manufacture coaches and then CIE will look to finance houses to buy the coaches from the manufacturing company and lease them to CIE. Is that what is awaiting Government decision?

Dr. Devlin.—What is awaiting Government decision is; should we build coaches for the main line? Should CIE have coaches for their main line business? That question has to be answered. Perhaps the first question is, do we run a railway?

Senator Keating.—Exactly.

Dr. Devlin.—That is what it goes back to.

96. Senator Keating.—He has taken the step back that I was proposing. Perhaps the easiest way to ask this question is to make a few tendentious statements and then ask for comments. I will preface them by saying that my prejudice is towards railways, and if better arguments were produced for another way I hope that I would be scientist enough to abandon my present position. I will describe the situation. A number of decisions, some major, some minor, are pending and they are interrelated. In the meantime, the railways deteriorate. Therefore, the service the railways give deteriorates. Therefore, the commitment of the community as a whole to the railways diminishes, and therefore, what I would hope for, the basic and very central long-term favourable decision towards railways, becomes hard to take. Dr. Devlin suggested last week that CIE did not want too much, so to speak, in the way of transport policy, but it seems absolutely central that for them and indeed everybody else—all the different planners, all the people trying to plan new towns, all the people trying to make decisions about how much goes into their roadways, where the fly-overs and bridges are to be—that there be an absolutely fundamental policy decision taken at Government level which answers the question as to how much future and subsequently how much priority we give to railways. Unless that policy decision is taken, nothing else that CIE, we or most of the other people involved in transport in Ireland do, will make any sense at all.

Dr. Devlin.—I said last week that I do not see any sense in a national transport policy because I see that including the private sector. We cry out for a policy for public transport, but first what we are crying out for is a policy for CIE. Because we are in a period of inflation, because we cannot renew our investment, the situation is going to deteriorate at a faster rate than would allow the railways to wither away. That could have been allowed happen 20 years ago but not now.

97. Senator Keating.—I have a more detailed question. A lot of CIE’s rail planning goes back to The Way Ahead. They have emphasis on radial rail, and that makes sense in terms of traffic, but do not the extra miles of track that convert a number of radii into an integrated system produce a reward of total mobility of goods through the system which is greater than an extra mile of radial? The radial lines are all there anyway. There is the short-term and the long-term. There is Claremorris-Limerick, Limerick-Rosslare. That converts radial into integrated. Is the emphasis on radial of necessity or because CIE believe that is all that is needed?

Dr. Devlin.—We always keep in mind that we are in transport and that our task is to transport people and goods. We have control of the railways and the buses. Therefore, we must utilise these to the best benefit and at the least cost. By concentrating on the radial lines and by upgrading them and by improving the stock we can get a bigger market share on those lines. In regard to the inter-radial lines, while we might maintain them for special freight operation, it would be a waste of money to maintain them for passenger railways because even if we got 100 per cent market share it would not be enough to justify them whereas with a bus or a series of bus routes we can give a better service to the community. We have proved this on the Claremorris-Limerick route which has now four bus services a day. The total number of people that we are moving on elements of that route is two or three times as many as we were carrying on the railway service on the route.

The difficulty is that if you want to operate a railway route so that you increase market share, you must have a high frequency of service and a specific level of population to serve. What I mean is that a train should have two or three stops only. There may be twelve stations on that line, if these are divided amongst three trains, then the journey time is shortened. Then you are in the business of providing an alternative to the motor car. But if you run only one train a day, then you stop at every station and you are not offering an alternative to the motor car.

98. Deputy L. Lawlor.—Is it the position that the requirement to put the railways into the condition in which we would all like to have them is interlinked with the over £200 million investment in Dublin that you have requested?

Dr. Devlin.—Senator Keating made the point that there are many things dependent on one another. That may be our fault because we felt there was no point in going piecemeal to the Department looking for the crumbs, and having to go again. It may be that in our effort to integrate the whole lot we have produced a very big problem for the decision-makers. We could have gone piecemeal and asked for 50 coaches, and having got permission for them, then go back for more in later years. We could not see it that way because we believe that we need a total commitment to public transport. The one element of this which does not enter the picture is the £200 million for the rapid transit for Dublin because we do not see that as something that has to be done within the next ten years. We think the rapid transit and underground can be a red herring. Essentially we want to electrify the suburban line, to get coaches for our main line services and get on with the job of operating a railway. If, as a result of energy requirements or traffic problems, we have to implement a rapid transit system in Dublin, that is a separate decision. The £200 million for the rapid transit in Dublin has made both Governments hesitate because they feel that, if they agree to suburban electrification, they may be committing themselves to the next stage.

99. Deputy L. Lawlor.—Which they might be?

Dr. Devlin.—Let us put it this way: we are not prejudicing the decision in regard to the rapid transit if we go electric. If we re-dieselise, then we are prejudicing that decision.

Mr. Higgins.—We will need new carriages for the Dublin area no matter what we do, whether we go electric or diesel. We will have to acquire coaches for the present suburban line. We will have to give a service to western towns, whether it is rapid transit, diesel or any other form of rail transport. We will need a large number of new carriages if we are to keep the main line railway together. When the two are put together the numbers are sufficient to justify setting up an industry at Inchicore. When we were looking at the Dublin scene the obvious question to ask was “what will we need in the longer term on the main line?” As our Chairman has said, it would not make much sense to, say, import carriages for the Dublin suburban when we might decide we needed a lot more carriages in a year or two years time for the main line. It seems more logical now to consider the Dublin and national situations in terms of setting up an industry with a reasonable chance of being efficient.

100. Chairman.—If you electrify the suburban line will the carriages be interchangeable with the main line?

Dr. Devlin.—No.

101. Chairman.—They would be special ones?

Dr. Devlin.—But the signalling on the track is common to suburban and mainline.

102. Chairman.—But it cuts down your flexibility somewhat if you electrify. I thought at present you used some carriages some days in the city and some days on the main lines.

Dr. Devlin.—At the week-ends but that is only because of necessity.

Mr. Higgins.—At the expense of giving a very bad service in the city.

103. Senator Cooney.—For how much longer can you continue with your present rolling stock before your service is very adversely affected?

Dr. Devlin.—What worries me and the board is that we have been building up passenger numbers. Now we will not be able to cope with the volumes we are generating for the main line. We could continue to struggle along using carriages for the next ten years on the main line. But then we would be frustrating a traffic which we have started to build up.

104. Senator Cooney.—You reckon that the build-up would increase and perhaps accelerate if you could improve on the quality of service and coaches?

Dr. Devlin.—Yes. If you are ever depressed in CIE all you have to do is walk into Heuston Station on Friday evenings and see the number of people we are facilitating and putting through that station to get them home. That is encouraging.

Senator Cooney.—I often see the crowds heading there.

Dr. Devlin.—That shows the build-up in numbers. Every train now, even midweek, is more than 60 per cent full.

Mr. Higgins.—We had a 9-10 per cent increase in traffic terms last year on the railway. The figure to the end of March this year is 9 per cent and the figure for April is substantially ahead of that again. The predictions on which our requirements for new carriages for the main line is based is a 3 per cent per annum increase. Therefore last year, and it would appear this year also, we will treble the earlier estimates, provided we can keep the situation going.

105. Senator Cooney.—What effect will that tremendous improvement have on the financial position?

Dr. Devlin.—For the railway we need volume. There is no way of reducing the subvention on the railway unless we get volume. If we are curbed in regard to increasing our volume then the deficit will rise in the case of the railway.

Mr. Higgins.—Fixed costs represent 50 per cent of total costs. Obviously then the more volume we get the more advantageous will be the situation.

106. Deputy L. Lawlor.—The solution to the problem appears to be this German connection at Inchicore. Was it an initiative on the part of the board of CIE to go to Germany and establish contact with this company? Will they be commercially viable for their production with any outlets other than CIE? Is there any possibility that having come to Ireland they would in time become a problem area?

Dr. Devlin.—We decided four years ago that as we were reducing numbers we should make some contribution to the economy to make up for that. We are very big purchasers. Therefore, we decided that we should use our purchasing muscle to develop industries for export. For that reason we went to Linke, Hofmann and Busch because they have a very extensive export business and they are a public sector company. We invited them to come to Ireland on the understanding that they would not be totally dependent on CIE. Now it appears that even if they do not get sufficient export business, there is sufficient business in CIE to keep them going for a number of years.

107. Deputy L. Lawlor.—What investment would they put in?

Dr. Devlin.—The total investment would amount to about £3 million over a period of 2½ years. Linke, Hofmann and Busch would contribute £1 million in equity, I.D.A. almost £1 million, and the balance in long term credits. In the event of Linke, Hofmann and Busch backing-out, failing or leaving for one reason or another —we would be able to take over, having attained the necessary expertise and the benefit of research and development in the interim.

Mr. Higgins.—I might add that they are quite optimistic about the prospect of export of small orders from Ireland. Their labour costs in Germany are very high by our standards and it does not suit them to tool-up for smallish orders. Also there are possibilities of using sub-assemblies from Dublin for use in their manufacturing in Germany. They are reasonably optimistic that they could generate export from Dublin.

Another aspect which should be mentioned is that within the EEC they are now talking about rationalising the railway rolling stock manufacturing situation so that there would eventually be a small number of manufacturers within the EEC. In these circumstances it is envisaged that there would probably be a share-out of components amongst individual countries. Therefore, we see possibilities in that area also. We would see advantages in actually being in the business at an early stage and being able to prove that we had something to offer.

108. Senator Keating.—Is there a circumstance in which we could insist on the so-called juste retour to our own industry in proportion to its existence? I mean to our railway manufacturing industry.

Dr. Devlin.—Not yet. At present we are concerned solely with maintenance. We build our own freight wagons but it is not a production line.

109. Senator Keating.—I take it the normal IDA incentives would be available in these circumstances?

Dr. Devlin.—As I understand it the IDA are very happy with Linke, Hofmann and Busch. They have checked out their references and have had discussions with them. I believe they have recommended the project to their own Minister. We are awaiting a decision from our Minister who must await agreement at Cabinet level.

110. Senator Keating.—If this was not in the State sector, on the basis of its being adjudged commercially viable by the IDA, it could, in fact, proceed without any such decision?

Dr. Devlin.—I do not know about that but the IDA seem happy about this project. They have told us so.

111. Deputy L. Lawlor.—Assuming that the Government vote the capital to CIE and that the company commence operations here what would the buying policy be? Would there be any control or would this be purely a private company producing a product for CIE to purchase? If that is to be the case we could be faced with the Van Hool situation again; if they jack up the price you would not have any option but to buy the coaches.

112. Dr. Devlin.—It is a different situation to the Van Hool one in that we have agreed to the specification and basic fixed price, with certain formulae for escalation. That has all been tied up.

Mr. Higgins.—Van Hool would never agree to that and that was one of the issues we fell out over eventually.

113. Chairman.—If for any reason the coaches could not be manufactured here would you be in the position to import them?

Dr. Devlin.—There is no difficulty in that regard. British Rail would be delighted to sell us their production. It is important that we have a continuing source of coaches and there is nothing wrong with that. The time has come when a decision must be taken in regard to the railway. It is not enough to give CIE 50 coaches and hope that they won’t come back for more for another ten years.

Mr. Higgins.—The labour aspect would be very important. The trade unions would react strongly if coaches were imported.

114. Chairman.—If there was to be a delay you could buy some to keep you going?

Dr. Devlin.—We do not envisage any problems or delays. In fact, they have drawn up all the plans and layouts for certain buildings which we are going to lease to them. We have reorganised our operation at Inchicore. We can vacate those buildings within the next six weeks without any difficulty and continue our own operation. Their production line plans have been drawn up. In fact, the delay is a matter of great embarrassment to the board because we were virtually ready to go ahead two years ago.

Senator Keating.—I can corroborate that. In my time as Minister the IDA aspect of this case came before me.

Dr. Devlin.—L.H.B. had to get agreement from their trade unions because their board, which has worker representatives on it, was very much against starting up another unit. They finally got agreement from their trade unions because, as I understand it, they pleaded that we were also in the public sector. Having got that agreement, nothing has happened and that is a source of embarrassment to us.

115. Chairman.—You seem confident of getting an increase in the number of passengers on trains in the future and I should like to know if you have the same confidence in regard to freight on the railways?

Dr. Devlin.—In regard to bulk commodities we have done extremely well. For example, we transport a large volume of bag and bulk cement and fertiliser. As long as we can run full train loads we will do very well. We are doing this in regard to a number of commodities. There is always new business coming up. For example, we have got the contract to move anhydrous ammonia for NET from Cork to Arklow. We are continuing to explore new possibilities in this area. We are well equipped to deal with chemicals. We believe that when the road by-laws are revised, particularly in regard to the movement of chemicals, we will get a lot more of that traffic. Unit-load is a traffic which is not expanding very rapidly because there is indecision amongst the shippers as to whether they should go totally for roll-on /roll-off or whether they should go for lift-on/lift-off. The lift-on/ lift-off is business for us. We are now carrying for all the major forwarders of unit load, B+I, Bell and Freightliner. The sundries traffic was a very labour intensive business. However we have introduced a new system. We have had a lot of problems because this new system meant considerable change for the people involved. This takes time but the new system is installed, the investment has been made and I am satisfied that when we have it working smoothly we will get the major part of the sundries business in Ireland. I foresee us carrying post parcel business on the same system. It has taken a little longer that we anticipated due to the personnel problems involved. I feel reasonably confident that we have got over these problems.

116. Chairman.—Rolling stock is not a problem?

Dr. Devlin.—Equipment is not the problem.

117. Deputy Kenneally.—Will the introduction of the tachograph put road haulage into a high cost bracket because of the limit on the number of hours drivers can spend on the road?

Dr. Devlin.—On journeys up to 60 miles it will not make much difference. Road transport will still be more competitive over that distance but for longer distances it will certainly divert more traffic to the railways. We see ourselves getting a greater percentage of the unit-load traffic as a result. At present we have 18 locations equipped to handle loads up to 25 tons and we have 20 locations for ten foot boxes, that is up to 7¼ tons. Running out of North Wall daily we have 15 scheduled trains or about 420 units capacity. We see ourselves in a favourable competitive position for unit load traffic.

In relation to bulk traffic, we are demonstrating that we are the only people who can do this efficiently and economically. We run full trains. For example, I believe we are carrying almost all of the cement traffic.

Mr. Higgins.—We are scheduled to do 80 per cent of cement distribution in 1979.

Dr. Devlin.—In many cases the goods stores we have vacated have been converted into bag cement stores. We have trains running all the time from Platin and Limerick supplying those stores. We have the same situation in relation to fertilisers. Those who travel by train will see that we provide a lot of accommodation for fertiliser at our stations. We also move large quantities of ore and we move chemicals to Asahi. I have also mentioned the new business from NET. Movement of bulk traffic in full train loads is an expanding business.

Mr. Higgins.—Last year we had an increase of about 8 per cent in tonnage compared with the previous year. This year the increase is expected to be at least on the same level. We are predicting an almost three-fold growth in tonnage up to the end of the century. 1978 and 1979 are well ahead of target.

118. Deputy Kenneally.—The tachograph would have a bearing on that?

Mr. Higgins.—Yes, a big effect, if the law is applied. The problem is that it may not be applied rigorously in the private sector.

119. Senator Keating.—May I turn the question round the other way and visualise a situation in which world energy supplies of hydrocarbons specifically would be such that each year each nation would get, say, base year minus 5 per cent or base year, unchanged. Presumably there is need for planning to take care of a natural rate of industrial growth on the basis that the business which cannot be handled by way of road because of Hydrocarbon shortages moves towards you. Let us talk of a circumstance in which we would be faced with a damper on industrial growth because of a hydrocarbon shortage. Is it possible to give a figure for the greater efficiency of diesel rail as against diesel road in terms of movement of goods?

Mr. Higgins.—We do not have a specific plan for dealing with a situation in which there would be a scarcity of hydrocarbons. We are planning on the basis of a fairly natural growth assuming certain levels of economic improvement, population changes, changes in industrial output and so on. There is no doubt but that we can handle both goods and passengers on a very much more economic basis than they can be handled by road in terms of energy utilisation. I do not have the figures with me but on the goods side it is of the order of 25 to one compared with the road and on the passenger side it is between five and 10 times more efficient again. We are planning mainly and, arguably, a little conservatively, in terms of the future but against that we have lots of options in terms of spreading the peak through the day and of spreading the demand.

Dr. Devlin.—It is interesting that there has been a directive to British Rail recently to commence feasibility studies on the electrification of those lines which had been considered previously not to be suitable, from the point of view of cost, for electrification. This is because of the fear that there will be a shortage of hydrocarbons. British Rail are going ahead with feasibility studies on total electrification irrespective of the economics of the proposition.

120. Chairman.—Perhaps Mr. Higgins would let us have the figures he has in relation to comparisons between road and rail?

Mr. Higgins.—We will let you have those.*

121. Deputy L. Lawlor.—On the bulk traffic side I am sure you will be pleased to note that the CII consider you provide an efficient service. On the sundries side I recall from visiting B+I that they have a very elaborate break-up area for imports and they seem to have a fairly extensive road network delivery for small traffic. Is this a sort of semi-State versus semi-State situation in terms of competition for the one product?

Dr. Devlin.—No. B+I are concerned with the groupage in and out of the country. They collect sundries traffic, they group it in boxes and then send it to the UK where they break bulk. Our volumes of internal sundries traffic would be much higher than B+I. There is no overlap.

122. Deputy L. Lawlor.—Should they not be giving to you what they are breaking up for internal distribution?

Dr. Devlin.—They are generally concerned with distribution in the Dublin area. If they were distributing outside the Dublin area we would get that traffic. It is much more efficient for them to distribute their own traffic within the Dublin area. For the same reasons, we do likewise.

123. Deputy L. Lawlor.—There is criticism that the smaller items are being delayed?

Dr. Devlin.—There is no doubt about that. This relates to what I said earlier about the sundries. We experienced more delay in resolving the personnel problems than we had anticipated. These delays arose for several reasons. For example, as a result of the new system we have virtually eliminated pilfering of one kind or another.

Mr. Higgins.—It is working satisfactorily.

Dr. Devlin.—Complaints up to Christmas were justified but having regard to the changes that have taken place in the whole system as a result of the whole new approach to sundries, one recognises that this problem could only have been resolved with patience and negotiation.

124. Chairman.—Is there any intention within the foreseeable future of closing any further lines, stations, depots and so on?

Dr. Devlin.—We will not be closing any more lines in the immediate future. However, I could see us withdrawing passenger services from, for instance, Limerick Junction to Waterford and Rosslare. Eventually I could see us withdrawing the Knock pilgrimages services from the Limerick-Claremorris line. There are Sunday services on the Cork-Youghal line but I cannot see those being continued indefinitely.

125. Chairman.—But you would not be closing lines?

Dr. Devlin.—No. Withdrawing passenger services maybe. We had discussed closing the line between Waterford and Rosslare and converting the Barrow Bridge into a road bridge. In this way we thought we could provide a better service for the people in south-east Wexford who normally would have to go to New Ross in order to go to Waterford. It was our opinion that we would open up the whole Waterford economy by this service but the idea was not very well received. One of the problems which arose related to the beet traffic from south-east Wexford. We were accepting beet at a number of stations on the branch but we could not continue to do so in the long term because of the shortage of wagons. During the past two years we have been negotiating with the Sugar Company who have agreed in principle to the establishment of beet depots at a limited number of stations. This puts the railways into a very favourable position for the movement of beet. The first depot is being set up at Wellington Bridge this year. For this reason we see the Waterford-Rosslare branch line being maintained. We regard this development in regard to beet as being sensible and useful from the railways point of view because now we will be able to move full trainloads in the manner of other bulk traffics. The testing of beet will be carried out at the depot rather than at the factory. This will allow for flexibility in the movement to, or if necessary the diversion of beet trains to, the sugar factories. Last year, for example, consignments were diverted to Mallow. This flexibility suits the railways, it also puts us in a strong competitive situation.

126. Deputy Kenneally.—Is there an intention to improve the Waterford-Dublin line?

Dr. Devlin.—Yes. There is a plan for a loop outside Kilkenny.

127. Deputy Kenneally.—So that it will be possible to go through from Waterford to Dublin without having to go back again to Kilkenny?

Mr. Higgins.—Yes. We would reduce the running time to about two hours. We consider that to be very necessary in order to compete effectively with the car. We will need to upgrade the line from Kilkenny to Waterford but that work is all part of our development plan. With additional coach stock we could run a very good service.

128. Deputy Kenneally.—Would that mean cutting out the service from Kilkenny?

Mr. Higgins.—We would run a separate service.

Dr. Devlin.—The problem is that going from Waterford to Dublin it is necessary to go into Kilkenny and run the locomotive around to the other end of the train before leaving. We can cut that out when we build the loop and have direct services Waterford-Dublin and Kilkenny-Dublin.

129. Deputy L. Lawlor.—Is that modification with CIE’s own capital expenditure and are they proceeding with that?

Dr. Devlin.—Yes. But there is no point unless we get the coaches.

Mr. Higgins.—We have to run more trains to serve Kilkenny and Waterford and we feel that by giving a faster service we will get more business and we can justify our initial outlay, but if we do not have more coaching stock we cannot run additional trains.

130. Deputy L. Lawlor.—Are some very necessary modifications held up because of the overall capital complications?

Dr. Devlin.—I would prefer to say that the development of the railway is, to some extent, held up pending a decision in regard to passenger service.

131. Deputy L. Lawlor.—CIE appears to give the impression that it is doing nothing while awaiting a major decision and that, if indecision is allowed to roll on and on, the operation could be phased out over ten years if there was a very bad coach situation. Is it quite as bad as that?

Dr. Devlin.—No, we have made tremendous strides in the last four years. We have spent on average about £8 million a year in developing the railway in the last three years. We would not have been able to reduce the numbers without investment. We would not have got 80 per cent of Cement-Roadstone traffic unless we had had the rolling stock and the facilities at our locations. We have been spending money on the freight railway and we have done the best we can to improve the passenger railway. We have put a lot of money into the maintenance of tracks and we have improved the permanent way enormously.

132. Deputy L. Lawlor.—Can we interpret the fact that you have been allowed to spend £3 million in investments as an indication that there is a commitment to the railways?

Dr. Devlin.—Yes, but is is a very small commitment.

133. Senator Keating.—It seems that if £X million is not invested productively for want of permission to do so, then exactly the same sort of sums have to be given to CIE in subsidies anyway. It is then lost.

Dr. Devlin.—The board feel that if we do not get capital the current deficit is going to increase, and if the current deficit increases the opportunity of getting capital becomes less and less. We put it to our own staff when we were negotiating productivity that we were endeavouring to cut down our dependence on current subvention in order to get capital to invest in our development. If the present situation continues Governments will have to pay us more and more on current subvention and we will have lost the opportunity of developing the railway.

134. Senator Keating.—I do not suppose that CIE’s economists would do anything so tendentious and I do not ask them for the answers. The situation is that the delay is quantified in millions of £s of public money.

Dr. Devlin.—I would far prefer to be told that the intention is to contract the railway or develop the railway rather than to have no decision. At least we could plan and or adapt our whole future to whatever decision is taken.

135. Senator Keating.—I want to raise something about rates and fares policy. There is an observation in The Way Ahead which says “provided that a reasonable rates and fares policy is permitted”. What is the function of CIE in the context of the National Prices Commission? Is there any comment CIE would like to offer on the NPC’s influence? I say this defensively to the extent that in my time, having dealt with it, I believe the NPC tried to function with an eye to the economic realities in not trying to force it. Of course, the cost of transport is a central issue as is the cost of rail, but they did not try to behave in a way damaging to the basic function of whatever unit or part of the economy they were dealing with.

Dr. Devlin.—We have no complaint whatsoever with the NPC. Any time we have gone for an increase in rates and fares it has been well within the criteria which they use. They have been helpful on occasions and some of their comments have sought the freedom we needed.

136. Senator Keating.—Why was the phrase used in The Way Ahead, that CIE “would aim to keep rail deficits constant at 1975 levels provided that a reasonable rates and fares policy is permitted”? That suggests that somebody is not permitting it.

Dr. Devlin.—I will give an example of the sort of freedom that we would like to have. Last week we spoke about flat fares. In 1977 we did not make any increase in rail fares. We made an increase of 10 per cent in 1978. This year we have to make an increase of 15 per cent. That is an average. It may not suit us to increase the rates by 17 per cent. 15 per cent or 10 per cent. We may want to do it in a different way. Our freedom to do it in a different way is limited because that could have political implications. In regard to the flat passenger fares, we are not allowed to reduce the number of fares because that could mean that the lowest fare would be increased by 50 per cent whereas the highest fare might be left alone. We must have one eye on diminishing returns. We need certain freedom to do that. For example, our budget has provided for an increase in rates on 9 April of this year. We have not been allowed to implement that increase yet but the budget is based on increases to come into effect on 9th April. We had to go to the NPC and ask them to deal with our application on an urgent basis. Delay arises for political reasons and understandably so.

137. Chairman.—A report before us seems to imply in several places that part of CIE’s financial problem is that they do not put up fares and charges enough; that for whatever reason, they have failed to put them up as much as they should.

Dr. Devlin.—We are not our own masters in that. We are not our own masters in the amount of increased fares or the timing of increased fares. I do not know which document you are referring to. Is it from the Department?

138. Chairman.—Yes—the Assessment of CIE’s Performance prepared by the Department’s Planning Unit. They do not say it absolutely baldly but they are hinting in some places that CIE is not putting up fares and charges as much as it should.

Dr. Devlin.—There may be a suggestion that the fares on the suburban line are not high enough. Certainly the fares on the suburban line are very good value. In 1977 we increased the fares on the suburban line by 16 per cent. We started from a very low base. If one goes to the National Prices Commission naturally one has to justify the increased cost. But one cannot suddenly say to the National Prices Commission: “Look, the base has been far too low, we are now talking about increases on a base that is unrealistic”. One cannot say that to the National Prices Commission. One must justify the increase on the existing base. Perhaps it could be said that the fares are not sufficiently high on the suburban line—I have answered that criticism by saying that one cannot justify increases more than the increased costs would qualify to the National Prices Commission. In regard to other fare increases, I do not remember in my time—and that is not very long, 5 or 6 years—when we have been in a position to implement fare increases from the date on which we put them in the budget.

Mr. Grace.—In 1976 we were but, thereafter, ‘no’. The history of it goes back to about 1972 when the Economic Advisory Group and the NPC became involved. I think they made an interim recommendation of an increase of about 2½ per cent which certainly on urban passenger fares one just could not apply. For example 1p on a 10p ticket is 10 per cent. That was held up for quite a period of time. As Dr. Devlin has said, the National Prices Commission did not create a great problem. They used the normal criteria to deal with it. Their examination of CIE applications is probably more extensive than it is for most other applications. When we get a decision it has to go through other machinery which tends to slow it down. On suburban fares, that is our problem. We have made recommendations to increase the fares much more significantly than were subsequently approved, primarily to overcome that problem. I do not think anybody could say that we have not increased our Dublin City bus fares sufficiently.

139. Chairman.—Is it the Department that prevents you from putting up fares?

Dr. Devlin.—I gave the example that this year the pressure was on to get increases in fares and rates by 9 April. The National Prices Commission asked me to appear before them personally and the first question they asked me was: “why the rush; why did you not produce the figures sooner?” We produced the figures sooner but they did not get to them sooner. We eventually were advised that the NPC had cleared our application in time for 9 April. Now it is 2 May and the increases are not being implemented.

Mr. Grace.—I think the traffics in the document the Chairman is quoting from are freight traffics rather than the passenger traffics.

Chairman.—I think that is true, yes.

Mr. Grace.—One of the problems of freight is that one is talking about a whole mix of traffics; bulk traffics, sundries, unit loads and so on. We take a global statistic—the rate per mile from one point to another. If one looks at British Rail and their rate per ton mile on freight in absolute terms it is much lower than ours going back a couple of years. Apart from that, their business is comprised of four major traffics, iron, steel, coal and coke; they are bulk traffics at a low rate, which affects the average. We are beginning to have a switch now from the parcel type traffic to the bulk traffic. That has been happening over a period of time and will have the effect of diluting the rate per ton mile. We also recognise that the rates on the sundries type traffic need to be changed; the whole charging system needs to be changed. Again, through the National Prices Commission, we have cleared a new rate and agreed with them a new basis of charging. They have given approval but again we have not had a government decision as to when we should implement it.

Dr. Devlin.—We have the example of a fare subsidy in lieu of an increase in 1974, 1975 and 1976. That fare subsidy is part of our subvention now.

140. Senator Keating.—Am I correct in my recollection that you have two barriers to cross—firstly, the NPC and secondly, as in the case of any semi-State body raising prices, getting formal government approval?

Dr. Devlin.—I would say three barriers. First of all, we have the Department who may not accept our proposals. When we adjust our proposals at their request, we go to the National Prices Commission and, when we have overcome that barrier, we have to wait for approval to implement.

141. Senator Keating.—So with something as sensitive as passenger fares particularly it means that there must be a government decision?

Dr. Devlin.—We are dealing with Dublin City services which are the most political. We are dealing with very small fares. If we get 3 pence increase on 10 pence, it is not big money but it is 30 per cent of an increase.

142. Deputy Kenneally.—In regard to the flat fares system about which Dr. Devlin spoke earlier, has that experiment been successful?

Dr. Devlin.—As the Deputy knows, we have tried it in Waterford. A condition was that we would have cancelling machines on the buses, and that we would not need conductors and thus have a one man operation. In Waterford we sold 70 per cent of our total tickets in advance. But we did not reap the benefit of the one man operation because the Trade Unions resisted our proposals. So we give the discount because of the flat rate but we still have the original costs. The result is that we lost 26 per cent of our revenue in Waterford.

Mr. Grace.—But as an experiment——

Dr. Devlin.—It worked very well and in fact got people into the habit of buying in advance.

Mr. Grace.—One had to make the prediction of how they are likely to split— proportions who would buy and proportions who would not and the impact that would be likely to have on the shift in revenue. The actual experience proved significantly better than we had anticipated.

143. Deputy Kenneally.—What was the National Prices Commission’s view of the flat fare?

Dr. Devlin.—They are not objecting to it. They are continually suggesting that we should have flat rate fares, so are we.

Mr. Grace.—The problem with the flat fare, in Dublin for example, is that one might decide to increase the minimum fare by 40 or 50 per cent, because you will have to bring down the range of fares from perhaps an 8 fare value down to about a 3 fare value. It means you would actually have to strike points at which, from a company point of view, you must protect your revenue. Secondly, one must have regard to the price elasticity as well. Therefore, it means that one puts some up, some will tend to go down slightly and some will remain as they are.

144. Deputy Kenneally.—You work a stage system on your fares do you not?

Dr. Devlin.—With a flat fare you eliminate those stages and bring all the stages together.

145. Chairman.—In an endeavour to sum up the question of prices, has the restriction on increasing prices, or varying prices been a serious factor in your finances, or is it marginal?

Dr. Devlin.—No, it affects the subvention straightaway. The opening question last Wednesday was: you got a subvention of £30 million last year and you finished up with a subvention of £37 million; what happened to the £7 million? To the ordinary person in the street reading the newspapers the implication is that CIE management have made a mess of it.

146. Chairman.—Are you saying—that it was partly because you could not put up prices?

Dr. Devlin.—It is because of a number of factors. I explained it is because of the budgeting system. It is because we are never quite sure when we will get the opportunity to implement our fare increases.

147. Chairman.—This may be an unfair question to ask, but could you put a percentage on it. taking one year with another— a percentage on the loss you have suffered by not being able to charge the prices and fares you would like with effect from the date you would like?

Dr. Devlin.—If the increases this year are implemented towards the end of May the delay will have cost us £1 million. If we got it on 1 January, which is the time when we like to get it, we would have £2-£3 million in hands. However we have reached about the limit on Dublin city fares. For example, we will collect something like £4 million if we get the increase we are looking for on Dublin city fares this year but that amount will only meet the recent Labour Court award to the busmen. Another factor which must be taken into consideration is that 60 per cent of our expenditure goes on wages and salaries.

148. Deputy L. Lawlor.—Is it the intention of CIE to make their financial reports in the way they have done in the past, because there has been a lot of public misinterpretation of the figures. Do CIE intend trying to present the figures in such a way as to get a better hearing from the public?

Dr. Devlin.—In my review last year I spoke about the contract price for the job and gave an indication of CIE’s contribution to the economy. All the press were concerned with was the audacity of the Chairman to talk about the contract price of the job. Nobody is interested in that. We have got to improve the quality of the service before we get the listening ear. To get the quality of service we must fight against the infra-structural problems and we also must deal with the quality of the equipment. We must convince people on all fronts. We must get acceptance that we are trying to do the best we can. We have done remarkably well. There is obviously a demand for the electrification of the suburban line and that shows that there is public support. People may not say that they approve of CIE in so many words but at least we have produced the plans, we have conveyed the message that we are thinking. When we drew up our plans for the railways five or six years ago we knew where we were going; we knew we were going to have the new sundries system and operate block trains. Every step was planned. The board felt that they should articulate their plans for urban transport in Dublin. We planned to do that last month but because of the go slow on maintenance we decided that the time was not opportune. Was the Deputy referring to the treatment of the subvention in the accounts?

149. Deputy L. Lawlor.—I was referring to the headlines which were to the effect that CIE had got it wrong again. The stories were to the effect that the Company started by losing £30 million and got another £7 million on top of that.

Dr. Devlin.—As the Deputy will see from the figures before him the greater part of that subvention, about £31 million, went to the railways. The logic behind the EEC regulations was how could one expect the railways to compete with roads when they have to maintain their own roads. Therefore, a certain amount of money was allowed as an aid in order to equalise competition. If that is so then railways should get the benefit above the line; it should be treated as revenue. In the case of most European railways, German, French, and Danish, they get it above the line. For example, if we were able to apply the three EEC regulations above the line the deficit on the railways last year would be £10 million rather than £30 million. £10 million if they interpret those three regulations rigidly. The third regulation permits a further subsidy for residential loans. A £10 million loss looks a lot better than £35 or £37 million loss. In Ireland the logic is that if subsidies come out of the central fund then it should appear below the line in railway account.

150. Deputy L. Lawlor.—Did it go above the line last year?

Dr. Devlin.—No. It will always go below the line here. There may be an argument to the effect that we must have a realistic indication of what the railways cost and therefore we must put the figure below the line but our colleagues on the Continent insist on getting it above the line. Therefore on looking at their account one will see that they have a small deficit compared with their total turnover or they may have a small surplus.

151. Senator Keating.—In regard to what Deputy Lawlor stated about CIE having got it wrong again, is CIE’s call on public moneys, when published before the relevant year, partly an estimate, partly a portion of the battle on the wages front, and partly a portion of the effort by the State to keep down the deficit? If CIE made a genuine effort to predict exactly the figure put in for wages would it then become a football? Every time CIE make an estimate prior to the year in question that estimate to the knowledge of the Department, the Government and CIE is too low. In a sense is CIE being held by its own punch because it cannot put an estimate which it knows would be the real loss?

Dr. Devlin.—I would not worry too much about that because I do not believe that people think in terms of £35 million or £37 million. What matters is that we provide a mixture of social and commercial services. The services we provide are mostly social because if the railway is losing £30 million why are we running it? We are doing so because it is socially desirable to run the railways. We are a State-sponsored body who lose money because we have to get more than £30 million from the State but if we were part of the Department of Tourism and Transport that Department would have a vote for their activities and would supply transport to the country. That would not be a loss; that would be a social service which they would be providing for the country. We are State-sponsored and therefore are considered to be one of the lame ducks. No one suggests that the medical, social or postal services are lame ducks.

152. Chairman.—It could be argued that CIE have not convinced the public that transport is a necessity in the way that the public are convinced that hospitals, education and other matters are necessities.

Dr. Devlin.—I agree. That arises because of the quality of our equipment and the other problems I mentioned. I believe we have convinced the public of our problems in regard to suburban services. Those who use it, bad and all as it is, realise that they have a service. I do not believe that the people using the 46A bus accept it as a service because the bus may be delayed for traffic or other reasons. I am aware that the people on the Cork-Dublin line realise that they have a very good service and we would like to supply that type of service to the people in Sligo and Galway but we are inhibited from doing so because we have not the equipment. This was touched on at the last meeting when the point was made that Governments in other countries regard public transport as something which can contribute to the development of the economy. Their approach is how can public transport be used to stimulate the economy. They think in terms of how it can be used to stimulate business in conurbations. Consequently, public transport is regarded as something total—a movement of people and goods from A to B. The question of whether that service is best provided by bus or by train is decided upon and the funds are allocated for the service. Because of the fragmentation of responsibility between the Department of the Environment and the Department of Tourism and Transport, it has not been possible to have a unified approach to transport here in Ireland or to regard public transport as a means of stimulating the economy.

153. Senator Keating.—To take a narrower element—when Dr. Devlin was talking about the quality of the service the point arose that some aspects of the service are good—for instance, that it offers reasonable value and reasonable comfort—but we have been supplied with the Bord Fáilte submission which takes to task such facilities as waiting rooms, platforms, catering facilities, toilets and public address systems.

Dr. Devlin.—Let us take first the question of catering on trains. We provide excellent catering on the very busy trains, the express trains. But there is little justification for providing special catering on a train which, say, leaves Galway at 10 a.m. and reaches Dublin before lunch. We provide catering on those services which give us a profit or even a break-even situation. The same applies on many Continental trains where catering is not provided on non-express trains. There may be a drinks or a trolley service but not full catering. Bord Fáilte visited some of the stations, asked a few questions of people they met and then expressed concern to us. Our people read the report. If we had sufficient money, Heuston Station could be changed to become a very elaborate station. We have plans in that regard. At their last meeting the board decided to provide for 400 parking spaces at that station and they assessed the station plan which they would implement within the next 12 years if there is a commitment to the railways. The decision in respect of the parking spaces was in the context of a completely developed station, development which may or may not take place but at least the board has planned that far ahead in order to ensure that whatever is done now will not inhibit the move towards such development.

We have similar plans for the provision of parking spaces at Connolly Station. Gradually, we have been improving the platforms and the quality of the stations throughout the country. Here again, however, we are hampered by considerations of finance. We cannot simply spend £10 million—and that amount would not go very far—in terms of modernising stations —and then try to recoup that money.

The only area in which I considered a complaint to be justified was in respect of trolleys. We need more trolleys so that when people step off trains there are sufficient trolleys nearby. We are doing something about that.

154. Chairman.—Criticism came from the Consumers Council about public transport services to railway stations. They say, for instance, that if one uses a provincial bus to go to Cork to catch a train, there is a ten minute walk to the station.

Dr. Devlin.—They picked the only station in the country at which there is a problem in this regard. In both Galway and Limerick the bus stations are also the railway stations but that is not the position in Cork. If one wishes to go into the middle of Cork city from the railway station one must first go out of Cork because of the road system and must go for about three quarters of a mile down the Glanmire road before going back to the city centre. Before the introduction of this road system buses were stopping at the railway station. We have been arguing this matter with the Garda on the basis that there is plenty of room for a contra bus lane between Cork station and the Colosseum corner. We cannot provide buses and send them all around the city before they can be brought back to the centre. That is the one area in which there is a difficulty but we must find some way of resolving it. We have considered ways of getting out by way of other parts of the station but there are difficulties in that respect.

155. Chairman.—Regarding provincial bus services what is the position so far as breaking-even is concerned?

Dr. Devlin.—Provincial services consist of (a) provincial city services, these are the services in Cork, Galway, Limerick and Waterford. (b) long distance stage services, (c) expressway services and (d) school transport services. In the case of (a) provincial city services, because these services are in urban situations we lose about £1 million on a total cost of about £4.6 million or about 22 per cent. We lose £390,000 on (b) stage services because the buses stop at every village or wherever somebody hails them. We make money on (c) the express services and this counteracts the loss on (b). We are remunerated by the Department of Education for (d) the school transport services. Over all, the loss on provincial services is very small and arises essentially from the urban situations, particularly in Cork where the traffic problems are extremely difficult.

156. Chairman.—I was really trying to ascertain whether the situation is becoming better or worse.

Dr. Devlin.—Though the position is becoming worse in the cities the hopes are very bright. In the Cork transportation study there is a recognition of the role that public transport can play and there is a projected increase in traffic volume of about 60 per cent by 1991. Bus priorities are promised and we will have video control of buses, similar to the television cameras which we have in O’Connell Street, Dublin. These are located on the roofs of buildings and make it possible for the inspectors in the garages to see what the situation is in O’Connell Street. In Cork we will have a wider spread of this kind of control. In addition, we will have control on the ground and the bus identification system which we developed for Dublin will also be used in Cork. In the event of our being given special concessions in the new Cork city plan we would need to increase our frequency of services especially at peak hours because we will have to provide the necessary capacity. Whatever savings we might make as a result of being able to operate effectively we would lose in the provision of improved frequency but such extra cost would be justifiable in terms of the greater use of public transport.

157. Chairman.—Are CIE satisfied with the recommendations of the Cork Transportation Study Group? If they are implemented will the company be happy with the situation?

Dr. Devlin.—We have promoted the study and contributed to the costs. We are very pleased with the report. I also think that there is a general acceptance by the community in Cork.

158. Deputy L. Lawlor.—Development of the expressway bus services cushioned the impact of contraction of the rail network, but for such areas as Donegal and Kerry which are not being served Bord Fáilte request that expansion of summer season routings for such locations be considered.

Dr. Devlin.—Bord Fáilte must not have seen our time table. From June to September we put on additional services for both Donegal and Kerry. A very good service operates between Galway and Killarney. It goes by the Killimer ferry via Tralee to Killarney. There are also express services from Cork to Killarney during the summer season.

159. Deputy L. Lawlor.—Donegal town and Letterkenny are long served?

Dr. Devlin.—In Donegal there are additional services put on during the summer.

160. Deputy L. Lawlor.—Do you specify a touring coach as a provincial service?

Dr. Devlin.—Yes. We have a problem. The age of our touring coaches is too old for the business. In recent years, pending the building of our own coaches, we have leased coaches from the UK for use during the summer season, but we accept that we need to update the coaches for the tourists.

161. Deputy L. Lawlor.—Is there any restriction on private operators in that area?

Dr. Devlin.—Not for tourists.

162. Deputy L. Lawlor.—Do they fill up the vacuum?

Dr. Devlin.—They do, but we are the largest operators of tour coaches.

163. Deputy L. Lawlor.—Everybody asks why private enterprise is not growing rapidly in that area.

Dr. Devlin.—Their area is the coach business and they are doing quite well. They offer us considerable competition. In fact, we use them sometimes as we use private sector hotels in addition to our own hotels for the tourist business. We happen to have the biggest coach fleet and we need to update it. One reason that we need to update it is that the quality of the private coaches is very good.

164. Chairman.—Do CIE consider that private enterprise has a role to play in remote areas? Instead of having a centralised operation, would it be possible to have something like a school bus converted into a local bus to bring people into local towns? Could this be operated locally probably by private enterprise? Is there room for that?

Dr. Devlin.—My board is very anxious to do something for the rural communities who are denied transport because the volumes are too small. As an experiment we tried using mind buses. We have a minibus working very well between Birr and Roscrea. We ran into problems with the trade unions in regard to other areas. The drivers felt that they were too near to the customers, that there was not enough baggage room, and that the ceiling was too low. There were various cribs of this sort and this delayed the implementation of the mini-bus operation. The board did decide to acquire 10 mini-buses and to put them into operation. In the end we acquired two and only one is in operation because of personnel problems.

We also felt that we could use the school buses more effectively—for example, for taking school children to Feiseanna or matters associated with school activity. A number of school buses are operated by part-time drivers—and if our own crews insisted on manning the buses, it would not be economic to hire them for post school activities. We went to the Labour Court and made the case that if one of our own drivers was free and had not work to do we would employ him on private hire school buses, and if there was a loss of earnings for any individual because of our use of school buses we would compensate him. The Labour Court recommended in our favour but we have not been successful in getting acceptance from the busmen. I have observed that rural bus staff will not hesitate in a case of necessity to use a school bus for a provincial service. This shows some common sense; if their own bus breaks down they will use a school bus. However, in regard to the general use of school buses there is a feeling that if school buses are in use and if the part-time drivers are using them to a greater extent than at present the result would be a loss of earnings for regular CIE drivers; that is understandable.

The other point that must be made is that school buses are not up to standard of service buses and the school buses are not intended to be used for public transport services.

165. Chairman.—Because of the difficulties mentioned, is there not a case to be made for allowing and encouraging people in remote areas to organise their own bus services?

Dr. Devlin.—A number of people who have acquired buses for schools services do use them for private carriage. In many cases the school business is their bread and butter and it enables them to operate mini-buses for social events.

166. Deputy L. Lawlor.—As a regular service are they restricted in doing town-to-town passenger transport?

Dr. Devlin.—In some cases they have the right.

167. Deputy Kenneally.—In some cases there could be operation of private buses which would not be profitable. At the last meeting Dr. Devlin mentioned what he would like to see in regard to expressway services. Coming back to the lucrative end of this business, he expects the private operator to provide a further service. Why can CIE not give the expressway to the private operator? CIE is being subsidised while the private operator has no hope of being subsidised. Despite representations on several occasions there is no hope of a subsidy from the Exchequer for a private operator.

Dr. Devlin.—On the express bus service we do make a profit and that offsets the loss on the services that the Deputy mentioned, the feeder services.

168. Deputy Kenneally.—CIE will accept that there would be a difficulty about the private operators?

Dr. Devlin.—If one looks at public transport as an instrument which one can use to stimulate the economy, then there is some rationale in giving subsidies to private people as well as to the public sector if the result is a good service for the community. But I do not see any rationale in saying that CIE should give away its express services which is a new market created by CIE.

Senator Keating.—I know.

Dr. Devlin.—But that is the argument private bus owners would advance.

169. Senator Keating.—I should like to pass on from that and make a comment from the opposite point of view, that if one wants to have a demarcation line between public and private, of course the private will go to the places already well-serviced because that is where the population is. Of course they will not service the places in greatest need, because that is where the population is thinnest and there is no money to be made. That is just the way it is. I wanted to ask a more general question— there is probably an answer; I just do not know and forgive me if it is an ignorant question; it seems to me that, with the existence of telephones, when they are functioning properly, and with computers— which are now small and cheap—that it would be possible at least to examine the question of assembling a system containing a number of elements—school buses, for one. The Department of Posts and Telegraphs have a lot of vehicles on the road moving a lot of stuff. The role of that Department is increasing as is its number of vehicles. Then there is this ‘jidney’ thing—I do not know what they are called in this part of the world. These are vehicles, bigger than motor cars, that ply for hire. Then there is the question of sharing, of company buses, of individual private enterprise companies, of firms that own their own transport. Has it not become possible, in the days of cheap computers, random computers, to build a network into which these elements can be fed to produce a total system in rural areas, or do present management, public resistance and trade union difficulties make it totally insoluble?

Dr. Devlin.—I think it can be done without any trouble—you can feed in the information and the output will indicate the ideal pattern of operations. But each change has to be negotiated—it may not have to be negotiated with the private sector where there are people operating their own equipment—but certainly it has to be operated in the public sector. I gave the example of the school buses. According to the Labour Court Recommendation No. 4163:

The Company explained that in order to quote rates which would be competitive enough to attract the new hireage business it would be necessary to use part-time drivers on the buses. It agreed, however, that if a regular driver was available at any location where the booking occurred he would be given preference and also that any trips originating in, terminating at or passing through

in this case it had to do with Galway:

Galway or Salthill would be operated by regular drivers. The Company added that the scheme would result in a large number of extra bookings and that the regular drivers as well as the part-time drivers would benefit from this increase. However, in the unlikely event of a driver suffering a loss of earnings as a result of the scheme the company was prepared to compensate him.

and the Labour Court said:

The Court recommends that the scheme proposed by the company should operate Mondays to Saturdays inclusive. On Sundays regular drivers should be allowed to operate the school buses in accordance with the present practice for manning hired buses.

170. Senator Keating.—But the response was?

Dr. Devlin.—Rejected. And we could not be fairer in our proposal.

Mr Higgins.—In response to the Senator’s question, it is an interesting line of development. Certainly the “dial a bus” concept has been talked about for quite a long time. The idea is one would ’phone a control point, when a bus would be directed to you. This would ensure better utilisation of the buses; a service would not be given where there was not a demand for it. This has been tried in a number of urban areas in the United Kingdom and on the Continent. It has not worked very well in terms of cost; it is very expensive. At one stage we were going to try it here in Dublin but, when we assessed all of the running costs involved, we kept away from it. The other point I would make is that, in effect, there is a lot of car pooling going on in rural areas at present. People are banding together and doing that sort of thing themselves. It is a very rational development.

Deputy Kenneally.—No doubt it could be illegal but it is happening.

Mr. Higgins.—Certainly the post office is another question, in terms of using buses for carrying mail but, again, it is not as simple as it looks.

171. Deputy Kenneally.—One more question about the Department of Education arrangement with CIE in regard to the school bus system, is the charge to the Department?

Dr. Devlin.—The Department of Education lay down the rules and we implement them. The Department of Education send out their inspectors to ensure that we are implementing the rules rigidly. If a child is 2.9 miles from the nearest school when the rule says that the minimum distance for free transport is 3 miles, then that child does not qualify for free school transport.

172. Deputy Kenneally.—Are the actual charges based on pence per mile?

Dr. Devlin.—There is a very big bureaucracy in CIE justifying the cost of school transport. Where the social welfare free transport is concerned the cost is based on a survey and there is very little bureaucracy. But in regard to bus transport we have clerks all over the country working on school transport paper in order to justify every penny spent.

173. Deputy L. Lawlor.—Do you think that is necessary?

Dr. Devlin.—I do not think it is necessary. In the case of senior citizens a survey is conducted. On the basis of that survey we are paid for a year or two years.

174. Deputy Kenneally.—The Department of Social Welfare accept the survey and the Department of Education do not?

Mr. Higgins.—Yes, but to some extent perhaps they are different requirements. Broadly speaking, the system which operates for the Department of Social Welfare is a very simple one and quite effective. The system we have for the Department of Education is certainly bureaucratic. The system has to be bureaucratic and tends to upset a lot of people as well as costing a lot of money.

Dr. Devlin.—My concern about the cost of school transport is that if a government ever decided to operate school transport in another way it could cost us a very large sum of money because of the bureaucracy and the potential costs of redundancy.

175. Chairman.—How do you mean “in another way”?

Dr. Devlin.—There was a survey conducted three or four years ago. The Government of the day commissioned a survey to ascertain if there was a better way of operating school transport. They got one consultant who went around the country assessing the situation. He had very little discussion with us, yet we were the people who implemented and devised the present scheme. I do not know what the recommendations were. But there was some talk that instead of operating school services, people would be given grants and allowed to make their own arrangements. If that happened and if as a result the present scheme was suspended, that could cost us a lot of money.

176. Deputy L. Lawlor.—Through loss of income?

Dr. Devlin.—Through severance and redundancy pay.

177. Deputy Kenneally.—Have you a loss on school transport at present?

Dr. Devlin.—No, we are fully compensated for all our costs. Our costs are governed by Departmental rules and regulations. We can only carry children of certain ages who live certain distances from schools. The Department lay down the requirements. We are fully compensated for our costs.

178. Deputy Kenneally.—In the Department of Education Estimates is there a capital sum included for CIE?

Mr. Higgins.—For the purchase of buses. That is in accordance with our requirement. We indicate what we need in terms of capital.

179. Deputy Kenneally.—And they purchase the vehicles for you?

Mr. Higgins.—No, they give us the money and we purchase them.

180. Deputy L. Lawlor.—This bureaucracy has been built up which costs a lot of money. You are willing to work the scheme because you get fully paid for it. Have you any recommendations for its improvement or revision?

Dr. Devlin.—It is a matter for CIE to negotiate with the Department better ways of operating the bureaucracy. The system works very well. We are carrying the can. More Parliamentary Questions are asked about school transport than any other issue and that is because it is an issue which affects every constituency. The Department of Education must have rules and must control the system in some way. Inevitably this will give rise to queries. It often happens that if people get a benefit they milk it. They might be prepared to walk 10 minutes to a public bus service but in the case of a free transport system they want the bus to come to their door. People can be very demanding in regard to free service. The regulations are sensible enough, we carry the can because we implement the scheme, but that is part of our job.

I should like to mention that last year we got from the Exchequer £31 million for the railways, £5 milion for Dublin City services, a small amount for provincial services and everything else broke even.

181. Deputy Kenneally.—Have CIE cut down on road freight services?

Dr. Devlin.—We have. A great change has taken place in that service but this was deliberate policy of the board. The policy of the board was that road freight should not compete with rail. Road freight rail-head services should be developed and road freight services, other than rail-head services should complement the railway operation and road freight should not incur losses.

182. Deputy Kenneally.—I should like to deal with the question of hotels. What does CIE intend to do with the hotel in Northern Ireland? Is it their intention to get rid of it or to keep it?

Dr. Devlin.—The Northern Ireland hotel is a political matter. It was built on borrowed money and the interest charges on that money average £360,000 a year. After operating the hotel for about six months it was bombed. As soon as it was renovated it was bombed again. We entered into negotiations with Northern Ireland officials and proposed that the Department of Industry take an equity investment in the re-instatement of the hotel. We looked for funds from our own Department. We put it to the Department that we could reinstate the hotel and operate it or, on the other hand, liquidate the hotel company. If we were to adopt the latter course we would need funds to clear the loans raised to build the hotel. We put the matter to the Department because we felt there was a political connotation which was outside our province. We did not feel it was for us to decide whether the bill would, for political reasons, justify the retention of the hotel in Belfast. The Department had been considering the options for more than a year but have not reached a decision. I was appointed to CIE in January 1974 and two days before I took up that appointment the hotel’s section in the Company contacted me because of what they described as a crisis in the Northern Hotel. That crisis has never been resolved.

183. Deputy Kenneally.—What is the position in regard to the proposal to equip CIE vehicles with power packs from General Motors?

Dr. Devlin.—The deal with Van Hool was a cost-plus agreement and they treated everything as a cost. We have already equipped 60 buses with the G.M. pack and they are performing extremely well. We hope to be in production in Shannon within the next six months.

184. Deputy Kenneally.—Is the company experiencing union problems there?

Dr. Devlin.—I believe we will be able to get over the union problems because the unions in Limerick are very much in favour of this industry. We have the designs and the prototypes. I have been told that we have developed another kind of bus driver, the man who will not drive anything else but a G.M. bus.

185. Chairman.—Last year CIE made a profit on tour and private hire operations but it appears that private hire pulled it down. Will that happen again?

Dr. Devlin.—Private hire has not been doing very well and we decided to be more selective in private hire. There was no point in using equipment and staff on additional work if that work was not profitable. For the year 1978 we made a profit of about £28,000 on private hire as against the loss of £46,000 in 1977. That was because we were more selective. We negotiated with the trade unions for special rates to operate buses on private hire. When we stopped hiring out buses they complained. We pointed out that it was not worth our while and as a result we worked out an agreement.

186. Chairman.—Is the Company anxious to hold on to Rosslare?

Dr. Devlin.—When we prepared the report The Way Ahead we indicated that we wanted to shed Rosslare. Rosslare harbour is owned by the Fishguard and Rosslare Railways and Harbours Company. There are certain debentures on which we pay the interest. These debentures are held by institutions and private individuals. An attempt was made in 1966 by CIE to buy their way out of the Fishguard and Rosslare Railways and Harbours Company but that did not materialise because it would have required a Bill in the Oireachtas and a Bill in the British Parliament. In recent years we considered the situation and expressed the opinion that there might be a better way of dissolving the company. There is no legislative problem in regard to buying out private individuals. We put it to the Department that we should buy our way out. We held discussions with the institutions concerned. We could buy back the debentures for something in the region of £500,000 to £700,000. Our intention was to extricate CIE and hand the matter over to the local authority. We were concerned about spending money on the development of Rosslare which no longer provided business for the railway. It was our opinion that the capital sums that would be expended on the development of Rosslare could be employed more usefully on railway development. However, we did not succeed in dissolving the company. The Department did not give their sanction to the redemption of the debentures. We were told to construct a new pier. We have done that and now that we have responsibility for the capital expenditure, we wish to retain our interest in Rosslare.

187. Deputy Kenneally.—Might it be an advantage to CIE to retain its interest in Rosslare?

Mr. Higgins.—Yes. It is profitable.

188. Chairman.—You are handing over the canals?

Dr. Devlin.—There was a feeling in CIE that we needed to retain the canals because our railway line ran along the bank of one of the canals and, therefore, in order to protect the railway line it was necessary to have control of the canal. If, for example, the canal were allowed to dry, the terrain on which the railway was built would be affected. We have reviewed this matter in recent years and decided that the Board of Works could maintain and develop the canals. We convinced the Department that the responsibility should be transferred to the Board of Works. We have no interest in developing the canals as an amenity because whatever cost is involved is added to the CIE subvention.

189. Chairman.—What is the present situation?

Dr. Devlin.—Canals will be transferred as soon as the Bill goes through, in about 18 months perhaps.

190. Deputy Kenneally.—Is there any possibility of transferring the staff concerned from CIE to the Board of Works?

Dr. Devlin.—They will have the option of transferring to the Board of Works.

191. Chairman.—Have you responsibility for the canal banks?

Dr. Devlin.—Yes.

192. Chairman.—This responsibility extends out as far as roads and to the maintenance of items on the banks?

Dr. Devlin.—That is so. There is no incentive for us to spend money on the canals. At present they cost us between £600,000 and £700,000 per year. The canals could be developed as an amenity and that would require an entirely different approach.

193. Deputy L. Lawlor.—There are people who are very interested in doing small local projects on the canals but I take it that CIE have no enthusiasm for negotiating with these people?

Dr. Devlin.—We could spend all our time dealing with the canals and the railways preservation societies, running steam engines and so on.

We welcome the establishment of this Committee because it gives us an opportunity to explain ourselves, an opportunity that does not exist outside this Committee.

The witnesses withdrew.

*See Appendix 2.