Committee Reports::Report No. 02 - British and Irish Steam Packet Company, Limited::21 March, 1979::Report


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Committee Reports > List of Committees > Joint > 1979 > Committee on Commercial State-Sponsored Bodies > Report No. 02 - British and Irish Steam Packet Company, Limited

SECOND REPORT

BRITISH & IRISH STEAM PACKET COMPANY LIMITED

I INTRODUCTION

(a) Background

1. The British & Irish Steam Packet Company Limited was formed originally in 1836. It was purchased by the State from Coast Lines Ltd. in 1965. The Company, which now trades under the name of “B+I Line”, engages in the transportation of freight, cars and passengers to and from Ireland. The Company was taken into public ownership to secure a greater measure of Irish participation in the cross-Channel trade. On the change of ownership, it was decided that the Company should “…continue to be operated on strictly commercial lines”¹

2. The decision to purchase the Company was taken at a time when the cross-Channel shipping business was in a state of radical change. Change was occurring in the mid-1960’s with the rapid innovation of unit load freight systems and the advent of car ferries. These changes required shipping companies to undertake substantial investment programmes in order to remain competitive. Over the past decade, the Company has undergone a considerable amount of structural change. The fleet has been replaced and new purpose-built terminals constructed. The B+I in 1978 carried nearly 1.5 million tons of freight, around 760,000 passengers and 154,000 cars. It provided employment for 1,953 in 1978.

(b) Legal Character

3. The B+I is governed by the British & Irish Steam Packet Company Limited (Acquisition) Acts, 1965 to 1976. It is incorporated under the Companies Acts. It is responsible to the Minister for Tourism and Transport The Minister appoints the Chairman and directors, and he controls the share capital. Moreover, the Company has to submit audited annual accounts and reports to him. Matters such as manpower policies, including recruitment and internal organisation, are regarded as the responsibility of the Company.

4. The authorised share capital of the B+I is £20 million divided into twenty million ordinary shares of £1 each. At the end of 1978 the issued share capital was £18.4 million. This compares with an issued share capital of £1.6 million in 1965, when the Company was acquired by the State. In the interim, the authorised share capital was raised to £4.6 million (in 1971) and to £20 million (in 1976).

5. A maximum number of directors on the B + I Board—seven including the Chairman—was permitted under the 1965 Act. However, following the enactment of the Worker Participation (State Enterprises) Act, 1977,² the number has been increased to twelve. The additional directors are the Chief Executive of the Company and the four employees elected by the B+I workforce.

(c) Resources and Operations

6. The B+I at present operates a total of nine vessels. These comprise—four car ferries and one freight vessel owned by it; two freight vessels on long-term lease to it and manned by its personnel; one freight vessel jointly operated by the Company and P & O on the basis of a long term charter; and one small freight vessel on short-term charter.

7. The main freight and passenger services provided by the Company are set out in Appendix I. The terminals used by the Company in Ireland and Britain are under its own control. On the Continent, the Company has stevedoring agreements at each of the ports served. It maintains a fleet of vehicles in Dublin, and has subsidiary road transport companies in Liverpool, Fleetwood and Rotterdam, to provide an integrated “door-to-door freight service”. Freight liner trains, which are chartered by the B+I, service traffic between Dublin and Cork. In addition, the B+I uses CIE’s scheduled freight liner services.

8. As regards management, direct responsibility for the execution of Company policy and day-to-day performance rests with the Chief Executive. He is supported by four Assistant Chief Executives, each of whom has responsibilities relating to the main operating and administrative divisions of the Company. The Freight Division is responsible for organising and marketing the lift-on/lift-off, unaccompanied trailer and “groupage” freight services;³ it also has responsibility for the terminals and road transport fleets operated by the Company. The Motorway Division is responsible for organising and marketing the passenger services; roll-on/roll-off freight services on the car ferries also come within its ambit The Marine Fleet Division is responsible for the technical side of B+I’s operations—the maintenance and operation of the fleet; the purchase of new vessels and marine personnel. The Finance Division is responsible for company accounts, budgets, shore personnel and corporate planning.

9. The Company plans its business strategy on the basis of five year corporate plans, updated on a six monthly basis to take account of changes in economic environment and traffic forecasts. This, in turn, provides the basis of the Company’s investment programme. Each year, apart from the corporate plan review, the management builds up a detailed operating budget for the forthcoming year, which when complete has to be approved by the Board of the Company. A Cash Flow and Capital Budget is also prepared in the light of the operating budget. The budgets arc monitored regularly during the year against actual performance.

II THE ROLE OF THE COMPANY

(a) Objectives

10. The Board of the Company in 1965 formulated the following corporate objective :

“To provide and develop a modern, efficient, profitable, national and comprehensive surface transport system to and from Ireland.”

Prior to 1965 the B+I was in a weak financial position, with insufficient resources to meet the investment demands required for the rapidly changing environment, both in the freight and the passenger markets. It undertook large scale investment in vessels and shore facilities to provide a range of modern freight services. Its passenger services were also modernised; the traditional passenger vessels were phased out of operation and were replaced by car ferries. These modern vessels enabled the B+I to pioneer roll-on/roll-off services to Ireland. In addition, the Company extended its operations into transporting freight to the Continent.

11. The Company contends that the Government’s original mandate has been (and is being) fulfilled, in so far as it is now in a strong position in the markets for passengers, cars and freight.⁴ This allows the Company to influence the competitiveness of prices and quality of service for tourism and freight. The Company has varying shares of the different markets—with over 42% of the cross-Channel car (and passenger) market; 36% of the cross-Channel freight market; 27% of the cross-Channel foot passenger market and 25% of the Continental freight market The Joint Committee was impressed by the Company’s market performance and expansion of trade in the passenger and freight markets —the Company has recorded considerable growth in the numbers of cars (and passengers) carried and the volume of freight handled since its acquisition by the Government. Table 1 shows the growth in output between 1966 and 1978.

TABLE 1

Growth of B + I Line’s Traffics 1966-1978

Sector				1966	Average Annual % Increase	1978
Cars	..	..	..	21,800	17.7%	154,000
Passengers*		..	..	378,600	6.0%	758,300
Freight tonnes			..	381,000	11.9%	1,468,000

12. The B+I itself performing a primarily commercial role; to that extent it retains a strong market orientation and a desire for financial targets. However, it would appear to the Joint Committee that it includes in its corporate aims, obligations of a broader nature. This view was confirmed during the taking of evidence, when a B+I representative stated that the Company had an overriding social obligation to the community and that concrete evidence of that is the money expended in the building of new ships at Verolme, so as to keep the business at home in Ireland.⁵ To the extent that the Company has to incur significant expenditures in meeting social and national obligations, because the Government requires it to do so, the Joint Committee recommends that such costs should be clearly identified and an indication given of the extent to which they affect the commercial success of the Company.

(b) Relationships with Government Departments

13. The Department of Tourism and Transport, as the parent Government Department, performs a variety of functions in relation to the Company. These include advising on and implementing Government policies; administering the relevant Acts, control of share capital; and the appraisal of short and long term financing. The financial policies of the Company are subject to the control of the Department of Tourism and Transport in conjunction with the Department of Finance. Moreover, the Company like all shipping companies, is subject to the regulations governing the carriage of passengers and freight by ship. These regulations are administered by the Department of Tourism and Transport and so it consults the B+I with regard to the implementation of the regulations. All proposals for increases in the Company’s rates and charges are first submitted to the parent Department for approval.

14. The foregoing functions are recognised as being appropriate ones for a Government Department. The B+I in its evidence accepted the broad responsibility which the Department of Tourism and Transport has with regard to the overall operations of the Company.⁶ Notwithstanding the disciplines which this necessitates at times, the Company felt that by putting forward rational cases for future action, intelligent and reasonable responses were forthcoming. The Joint Committee believes that any uncertainties that might arise in the future as between the parent Department and the Company could be dispelled by having a sufficiently long-term policy framework for transport.

(c) The Board

15. The Board of the Company is now comprised of eight directors (including the Chief Executive of the Company) appointed by the Minister for Tourism and Transport and four employee directors. The Company was the first State-sponsored body to elect employee directors under the Worker Participation (State Enterprises) Act, 1977. The election took place in December 1978, following a preliminary poll which indicated that a majority of B + I’s employees favoured worker representation on the Board. The four successful candidates in the December election were duly appointed directors of the B-I Board in January 1979. One of the most significant features of the election was the fact that over 86% of the staff entitled to vote actually voted. It is the hope of the Joint Committee that the employee directors will play a significant role on the Board of the Company, in effecting policy decisions and monitoring performance of the Company against the official annual budgets.

III OPERATING EFFICIENCY AND FINANCIAL RESULTS

(a) Revenue and Profits

16. The total operating receipts of the Company increased nearly tenfold between 1966 and 1978—from £4.3 million to £42 million. When allowance is made for inflation, this represents a real increase of almost 9% per annum over the twelve year period. During the period of the radical reorganisation of the Company in the late 1960’s, the levels of profits recorded were not significant. Indeed, it made losses in both 1967 and 1968. The Company ran into severe difficulties in 1972 and 1973 with the downturn in tourism and losses were recorded in both these years. However, since then the Company has been recording increasingly larger profits, despite the impact of the economic recession on trade and the escalation in fuel costs.

17. In the course of evidence to the Joint Committee, a representative of the Company stated that 60% of revenue came from freight. As regards the profitability of the different divisions, it was stated that the passenger side of the operations were more profitable. However, it was pointed out that to the extent that the car ferries catered for joint products, namely roll-on/roll-off freight and passenger cars and because of the joint use of terminal facilities by passenger and freight vessels, it was not possible to be specific about the revenue/cost allocations of these activities. It was stated that the lift-on/lift-off side of the freight business had undergone three fundamental changes since 1965 and that it was still in a transition stage; hence the returns from it were lower.⁷ While the Joint Committee recognises that the modes for shipping freight continue to change in the light of new techniques, nevertheless it believes that where cross-subsidisation of one mode of transport by another does occur, the facts should be clearly stated in the Company’s annual report and the reasons for doing so indicated.

18. The overall rate of return on capital employed was quite small (in some years even negative) in the five years to 1970. In 1971 profit before interest represented just over 6% of capital employed. There was a negative return in 1972 and 1973, the years of downturn in tourism. However, in the most recent five year period the profit rate averaged over 7% on capital employed. The Company is projecting an average profit return of approximately 8% on capital employed, over the period 1979 to 1983. An adequate level of profits is essential for any commercial company. The B+I has submitted that its return on capital compares favourably with a cross section of shipping companies, although there are some, such as European Ferries, who show a much higher rate of return.⁸ It is the view of the Joint Committee that through an adequate level of profits, the Company can help to minimise its requirements for additional share capital in the future.

(b) Productivity

19. The B+I uses “payroll as a percentage of turnover” as the yardstick for measuring improvements in productivity. This relationship has improved in the past decade :

1966	payroll as % of turnover					=	44%
1971	„	„	„	„	„	=	30%
1977	„	„	„	„	„	=	27%

The B+I hopes to reduce the percentage even further in the future. Part of the reason for the improvement to date is the beneficial impact of large increases in capital in the Company. Labour productivity, as a measure of performance, always favours industries with relatively significant increases in capital per worker. In the case of B+I, productivity as measured by real added value per person employed,⁹ showed an average growth of 4% during the period 1965 to 1978. When allowance is made for the increase in employment over the period, total added value showed an average real growth of around 6%. The number employed in the Company showed little growth up to 1976, with the exception of 1971. But since 1976 the number has increased by 25% to over 1,950 employees at the end of 1978. The real increases (having adjusted for inflation) in employment, value added and productivity are measured in Table 2 over the period 1965 to 1978.

TABLE 2

Growth Rates of B + I’s Value Added, Productivity and Employment Percentage growth rates (compounded annually)

Period			Real Value Added*	Real Productivity† Fíor	Employment
1965—1971	..	..	8.2%	6.5%	1.6%
1972—1978	..	..	6.7%	3.0%	3.6%
1965—1978	..	..	5.8%	4.0%	1.8%

Improvements in productivity are of critical importance generally to the economy and specifically to individual companies. One of the main ways in which the ability of a transport company, like the B + I, to compete in the market place can be affected is through variations in productivity. The Joint Committee recognises that increases in productivity are the means through which jobs can be safeguarded and increased in the future.

(c) Operating Environment

20. As regards the operating environment for freight, it is to be noted that there is an imbalance between the volume of Irish goods exported and the volume of goods imported into Ireland. Accordingly, the carrying capacity required to handle the volume of goods to Ireland is greater than that required to freight goods out of Ireland. To the extent that a number of shipping companies operate services from Ireland, Irish exporters are generally in a buyers market. In order to minimise the extent of the “empty backhaul” problem, competition between shipping companies is quite keen for exports. Indeed, the B + I have pointed out that the average price for moving goods rose by only 22% per ton between 1965 and 1975, compared with a rise of over 120% in the general price level during the period; and that the differential charge, in favour of an Irish exporter, as against an importer, could in some cases be as high as 40%.¹⁰ While recognising the inbalance of trade, the Joint Committee believes that the Company should not charge rates which are inadequate to cover costs merely to fill spare capacity. The Joint Committee believes that such uneconomic costings might be avoided if the Company concentrated to an even greater extent than at present on the quality of service being offered to Irish exporters.

21. The Joint Committee noted with interest the marketing strategies adopted by the Company to attract tourist traffic. The Company provides a range of ‘ package’ holidays, special excursion fares and other promotions as means of attracting the ethnic tourist market from Britain. The success of this policy is evidenced by the fact that nearly three quarters of the passengers carried by the B+ I have Irish connections.¹¹ At an overall level, the tourist market was stimulated in 1976 by a reduction in fares by the shipping operators. At the same time the level of fares vary between different times of the year i.e. relatively higher fares at the Summer peak season and relatively lower fares in the off-peak seasons. With regard to the Summer fares, the highest demand occurs on a limited number of week-ends during July and August. The Joint Committee believes that consideration should be given to differentiating fares even further within the peak season, provided such differentiation does not affect any particular categories of passengers too harshly. The rationale behind this suggestion is that the peaks of demand might be reduced even further by diverting some traffic to days of relatively less-than-peak demand, thus reducing the volume of resources needed to meet demand at all times.

22. Reference was made during the taking of evidence to the introduction in March 1978 of duty free sales to travellers on car ferries on the Irish Sea.¹² The B+I submitted that the absence of such a facility had put operators on the Irish Sea at a disadvantage in the past vis-à-vis operators from Britain to the Continent. It was stated that duty free sales were profitable and had helped to stimulate extra traffic. The Joint Committee views the introduction of duty free sales as a positive contribution to the development of tourism, all the more so if the profits made from such sales help to keep down the level of fares.

IV CAPITAL STRUCTURE

(a) Government Equity

23. On acquisition by the Government in 1965, the Company had an authorised share capital of £2 million. This was increased to £5 million in 1971. It was further increased by £15 million in 1976, of which £10 million was for the new car ferry (m.v. Connacht) and £5 million for working capital. The increase in capital helped the Company to overcome the imbalance it had had in its capital structure. The imbalance stemmed from an undue dependence on foreign loans with consequent high interest rate burden and currency exchange losses. At the end of 1978 the issued share capital was £18.4 million.

24. In a written submission to the Joint Committee in September 1978, the Company indicated that an additional £5 million share capital was being sought as partial finance for a new roll-on/roll-off vessel. However, as a result of its latest six monthly review of the corporate plan, the Company concluded that the building of additional freight capacity would no longer be in its best interest in the light of the continuing world surplus of freight tonnage and depression in the freight rates. In this regard, the Chairman of the B+I pointed out to the Joint Committee that there were surplus freight vessels on the market at present and, accordingly, the Company could take charter on a long term basis at competitive rates.¹³ It is now proposed by the Company to substitute the order for the roll-on/roll-off vessel with an order for a larger car ferry vessel, as part of its fleet replacement programme and to cater for the upturn in the tourism market. The choice between purchase on the one hand and leasing or chartering vessels on the other, is obviously determined partly by financing and partly by operating considerations. To the extent that the balance of advantage may change over time as between the different options, the Joint Committee noted that the B+I Line does keep the methods of acquiring new capacity constantly under review.

(b) Capital Gearing

25. The total capital employed by a company can be split between debt and equity. The larger the proportion of debt in a company’s capital structure, the more highly “geared” the company is said to be. The yardstick used to measure the relationship between debt and equity is the debt equity ratio. Using B+I’s Balance Sheet at end-1977, the debt equity ratio was 0.4:1. This, however, takes no account of long-term leasing, which might reasonably be included as part of long-term debt In the course of the taking of evidence, a B+I representative stated that long-term leasing did form part of its measurement of gearing. In short, the B+I considered it desirable that shareholders’ funds (equity and reserves) should not fall below 35% to 40% of its total capital commitment (loans, leases and long-term commitments).¹⁴ The Joint Committee agrees with this capital gearing criterion and recommends that in the notes to the B+I’s future annual reports reference should be made to the matter of gearing, particularly with regard to off-balance sheet leasing.

(c) Depreciation

26. The treatment of depreciation of vessels requires special consideration.¹⁵ For normal accounting purposes, the B+I calculates its annual depreciation charges by writing-off its vessels, valued on a historic cost basis, over a period of years. Where profits are not distributed the level of depreciation charge does not affect the cash availability for asset replacement. It was noted that the B+I regard the rate of profit return on turnover and cash flow as more significant for its purposes than the traditional method of comparing profit to capital employed. However, the B+I has, in the past, speeded up the depreciation of its vessels by reducing the number of years over which vessels are written-off. For management purposes, it can be argued that it is necessary to take greater cognisance of the rising depreciation levels caused by the rapidly increasing costs of new vessels. The Joint Committee recommends that the B+I should examine the feasibility of increasing the levels of depreciation used in its accounts, over and above the levels calculated by reference to the historic cost of vessels.

(d) Corporate Plan

27. The B+I has developed a formal corporate planning procedure which relates to a five year cycle. The plans are reviewed regularly to take account of changes in the economic environment and traffic forecasts. The current plan covers the years to 1983 and provides for additional vessel capacity, improving port facilities, and developing new port facilities and route structures where necessary.¹⁶ It includes the recent introduction of the fourth passenger car ferry—the M. V Connacht. It also provides for the introduction of a jetfoil passenger vessel on the Dublin/Liverpool route in 1980, and increased freight capacity on services to Britain and the Continent is also planned. It involves £50 million investment (at constant prices) over 5 years and an average profit of £1½ million per annum is forecast over the years to 1983. Employment for an additional 650 people is projected under the plan. In addition, indirect employment for 1,300 people in related activities arising out of the implementation of the plan is estimated.

28. The Joint Committee views the corporate planning cycle as a necessary discipline and one which can provide the wider perspective within which the Company’s investment programme can be appraised. The B+I undertakes its investment appraisal in constant prices i.e. the profits of a particular investment project are computed at today’s prices. The investment procedure involves making assumptions regarding the future level of economic activity and translating it into forecasts of passenger and freight markets. The B+I then projects a certain share of the different markets. In the course of the taking of evidence, representatives of the B+I stated that the Company invests and services the growth areas of the market.¹⁷ In appraising new investment opportunities the Company uses techniques such as discounted cash flow¹⁸ to measure whether new projects would show positive returns. The Joint Committee believes that because shipping is a more risky business than most (because of the uncertainties involved in forecasting traffic levels), a significant rate of return should be expected from investment by the B+I in any new projects.

29. The B+I has projected that its shareholding funds, including reserves, will be £31 million in 1983 (at constant (1978) prices). This projection is based on an average profitability over the next five years of £1½ million per annum. To the extent that profits are greater (or less) than forecast, the shareholders funds will be increased or reduced. Accordingly, it is important for the B+I to make a thorough appraisal of the risk aspects of its projections (e.g. traffic generation, cost escalation, etc.). For example, fuel is a vital raw material for the Company and any disruption of supply would obviously jeopardise operations.

Accordingly, securing adequate supplies may result in relatively higher prices in future years than at present. In other words, it cannot be assumed that future pricing will automatically compensate for future cost increases. It is the view of the Joint Committee that underlying assumptions regarding relative cost increases, for materials such as fuel, should be spelt out by the B+I in its commentary on the corporate projections. It is only in this way that the true funding implications of B+I’s future operations can be gauged by the Department of Tourism and Transport, particularly in the context of additional equity requirements. The Joint Committee takes the view that, unless all of the assumptions underlying the current B+I plan are realised, serious funding problems could arise over the next five years.

V INDUSTRIAL RELATIONS AND CONSUMER CONSULTATION

(a) Industrial Relations

30. The re-organisation of labour under the Car Ferry and Freight Development Plans (1966-1970) was undertaken with the minimum of disruption. It involved 580 redundancies and took place with the cooperation of the wide range of trades unions which represent the staff of the Company. Staff consultation takes place through works councils in the main geographic centres. In addition, as mentioned earlier, the employees are represented on the Board of the Company (see paragraph 5). The total numbers employed by the Company hardly changed, from just over 1,500, as between 1966 and 1976. However, with the improvement in the trading environment, the number employed has been increasing in recent years. At the beginning of 1978, there were over 1,750 employed. Under the current plan, a further 650 jobs is envisaged by the end of 1983. Approximately half of this target has already been achieved.¹⁹ The Joint Committee welcomes this achievement in job creation.

31. One significant feature of the Company’s industrial relations was the Employee Loan Scheme. This was an agreement between the employees and the Company whereby increases in pay arising during the first twelve months following the termination of the 1975 National Wage Agreement were left with the Company to be repaid out of future declared profits. During the period of the loan, management regularly met a policy committee (representatives of staff and trade unions) to review Company performance and development. Because of improved trading results, the Company was able to complete the repayment of the Employee Loan Scheme in 1977. It was clear that management not only recognised the direct benefits of the loan but also the indirect benefits, such as the positive interest generated amongst staff in the overall perfomance of the Company.¹⁹ At present, the Company is exploring with the Department of Tourism and Transport the feasibility of further participation by the staff i.e. in a project whereby the employees would purchase a vessel and charter it to the Company. While the Joint Committee recognises the exploratory nature of the proposal at this stage, nevertheless it views the proposition in a positive light and suggests that the examination of its feasibility should be completed as soon as possible.

(b) Consumer Consultation

32. The B+I operates in a highly competitive environment, and so efficiency of service is paramount in maintaining consumer goodwill. For that reason, the Company engages in consumer consultation with a wide range of freight and passenger interests. The Company also has a close working relationship with the relevant port authorities. Moreover, it is in continuous liaison with bodies, such as Coras Trachtala, Bord Failte Eireann and the National Tourism Council, regarding the specific needs of Irish industry in exporting and the development of tourism.²⁰ These bodies are also consulted by the B+I in the context of the Company’s own forward plans with regard to future prospects in the different markets.

33. In providing “door-to-door” freight services, the B+I uses CIE’s services to a considerable extent. Not only does the B+I charter a freight liner train to service the volume of traffic between Dublin and Cork but it also uses some of CIE’s scheduled liner services. The Joint Committee was impressed with this information, not only because it demonstrates a degree of co-ordination between two State-sponsored bodies but also because it displays an attempt to get heavy traffics off the roads and on to the railways.

VI THE FUTURE

(a) Future Developments

34. The general approach adopted by the B + I with regard to planning future developments has already been examined (see paragraphs 27-29). The system of investment plans, with a rolling five year horizon seems to be well developed by the Company. It is sufficient for the Joint Committee to restate at this juncture that it recommends that the Company should aim for a sufficiently high rate of return on its investments.

(b) Jetfoil

35. Turning to specific developments, the most novel one is the proposed introduction by B + I of the jetfoil in April 1980 on the Liverpool/Dublin rout.²¹ The crossing will take just over three hours, which reduces, by over a half, the time taken by comparison with more traditional vessels. This development in commercial hydrofoil passenger travel is a relatively new innovation in marine transportation and it will be the first vessel of its type operating on the Irish Sea. The B+I estimates that it will carry over 150,000 passengers on the jetfoil in its first year of operation, which if realised will make a significant contribution to the growth of the Irish tourist market. The vessel will be leased. As regards the projected profitability of the operation the B+I supplied the Joint Committee with information regarding the positive contribution which the investment is expected to make in the five years commencing 1980. The Joint Committee decided to treat this information in confidence and therefore not to publish it with this report.

(c) Liaison with Irish Shipping Limited

36. In a written submission to the Joint Committee, the B+I indicated that it was considering the “Introduction of a Continental car ferry service" in 1980. The Company is already operating freight services to the Continent and in addition about 6% of its passengers on its Irish Sea services are travelling to or from the Continent via Britain.

37. In so far as Irish Shipping Limited is engaged in car ferry operations from Ireland to the Continent, the Joint Committee is of the view that any new services to the Continent should only be introduced following consultation and co-ordination between the two State-sponsored bodies concerned. The B+I have proposed a joint enterprise to Irish Shipping, involving the co-ordination of the car ferry fleets of both companies.²² In view of the fact that both companies will be operating into Rosslare Harbour in 1980, the Joint Committee considers that the proposal should be decided upon as quickly as possible.

(d) Co-ordination of Transport Policy

38. It is clear that the B + I, as a State-sponsored body, has a broad corporate objective (see paragraph 10). Such an objective, like the objectives of other State-sponsored bodies, underlies the corporate plans and investment programmes which are submitted to the Department of Tourism and Transport. The Joint Committee believes that there is need for very effective co-ordination and integration of policies relating to investment intentions in the State sector embracing transport. In planning transport investment over the next decade, cognisance will have to be taken of the competing demands for capital by the State-sponsored bodies. The Joint Committee believes that only through an overall unified approach to capital requirements can investment decisions be taken on a rational basis.

39. A co-ordinated approach to investment requirements is especially important for the B + l, given the need to plan for the replacement of its first generation of car ferries. The replacement of the existing car ferries will have to take place over the next decade. This has a relevance for the Irish shipbuilding industry, which can be regarded as synonymous with Verolme Cork Dockyard Ltd., in which the State through Foir Teoranta has a 47% shareholding. By developing an overall programme for new investment, it might be possible to cater for the requirements of both the B+I and the Verolme Dockyard. In this connection the Joint Committee notes the statement in paragraph 8 of the Seventh Report of the Joint Committee on the Secondary Legislation of the European Communities (Prl. 7123) that the maintenance of full employment in Verolme Dockyards into the 1980’s is necessarily problematic.

VII CONCLUSION

40. On 13 February, 1979, members of the Joint Committee paid a visit to B+I Ferryport and Freight Complex to see the terminal installations used in the B+I’s containership and car ferry operations and to inspect the loading operations of the M.V. Wicklow. The Joint Committee was glad to have had first-hand experience of conditions at the Ferryport. The Joint Committee wishes to acknowledge the considerable assistance it received from the Board, management and staff of the B+I in the course of this inquiry, and to express its appreciation of the efficient manner in which the Company is being operated.

41. The Joint Committee wishes to express its thanks to its full-time consultant, Mr. Thomas P. Ferris, for the valuable advice and assistance which he gave at all stages of the inquiry.

(Signed) EOIN RYAN

Chairman of the Joint Committee

21 March, 1979

1. Dáil Debates, Vol. 214 Col. 954

2. Under this Act the number of directors of a designated body may be altered to provide that the number of such directors appointed under the Act shall constitute not less than one third of the Board.

3. Appendix 2 gives background information on the different types of freight traffic.

4. See Evidence (Question 1).

*The passenger figures include passengers accompanying cars and foot passengers.

5. See Evidence (final reply to Question 26).

6. See Evidence (Question 22).

7. See Evidence (Question 93).

8 See Evidence (Question 54).