Committee Reports::Report No. 07 - Bord Telecom Eireann::20 January, 1987::Report


TITHE AN OIREACHTAIS

JOINT COMMITTEE
on
COMMERCIAL STATE-SPONSORED BODIES
SEVENTH REPORT
BORD TELECOM ÉIREANN

MEMBERS OF JOINT COMMITTEE


 

Deputy

Frank Prendergast - Chairman

Deputy

Seamus Brennan - Vice Chairman

Michael Begley

Liam T. Cosgrave

Robert Molloy

Willie O’Brien

Albert Reynolds

Senator

Timmy Conway

Brian Fleming

Brian Hillery

Eoin Ryan

SEVENTH REPORT

BORD TELECOM ÉIREANN

FOREWORD

The reports of the Joint Committee to-date (with the exception of the Fifth Report*) have been based on an in-depth examination of the reports and accounts and overall operational results of the commercial State-sponsored bodies it has investigated. This procedure has involved -


(i)the taking of oral evidence from the body concerned and, in some instances, from Government Departments, organisations, and individuals, and


(ii)the examination and evaluation of the reports and accounts of each body covering a period of years.


Having completed the examination of a number of bodies on this basis it became clear to the Joint Committee that, given the lengthy duration of each investigation, it was unlikely that the opportunity would arise in its period of operation to examine all the bodies coming within its remit. With a view to examining as many bodies as possible the Joint Committee decided to conduct, concurrently with its in-depth examinations, a briefer style of examination of some bodies which would enable it to evaluate current performance on the basis of the information disclosed in the most recently published Report and Accounts of each body.


During 1986 the Joint Committee investigated Bord Telecom Éireann, Siúicre Éireann cpt and B+I Line on the basis of a briefer style examination and this report on Bord Telecom Éireann arises from the first such examination it has completed. While representatives of the company were examined on the company’s Report and Accounts for 1984/85, information made available in the Report and Accounts for 1985/86, which was published subsequent to the taking of oral evidence, has been incorporated in the report.


I BACKGROUND

1. On 8 July, 1978, the then Minister for Posts and Telegraphs set up a Review Group with the following terms of reference.


“(i)To examine and report on the feasibility of giving to the telecommunications service such form of autonomous organisation as is likely to be most effective in meeting current public demand and providing for future development and expansion; and to make specific proposals regarding the nature, powers, and functions of the organisation recommended.


(ii)To examine and report on the organisational arrangements necessary to secure the modernisation of the postal system so as to promote an efficient delivery system nationwide.”


The Review Group reported in May, 1979, and its basic recommendation was that both the telecommunications and postal services should be taken out of the civil service and be set up as two separate State-sponsored bodies.


2. Following the publication of a Green Paper and a White Paper the Postal and Telecommunications Services Bill, 1982, was enacted. The Bill implemented the White Paper and it provided for the establishment of two State-sponsored bodies - An Post and Bord Telecom Éireann - to manage the postal service and the telecommunications service, respectively.


3. An interim board, which included nominated staff representatives, was appointed by the Minister in October, 1982, in order to deal with the operational problems that could arise on the transfer of responsibility from the Department of Posts and Telegraphs to Bord Telecom Éireann. A similar interim board was set up to deal with the postal service.


4. Bord Telecom Éireann was incorporated on 15 December, 1983, and the company was vested on 1 January, 1984, under statutory order made by the Minister for Posts and Telegraphs. A new board of directors was appointed and the nominated staff directors on the interim board continued on the new board. Elections for the appointment of four employee directors, as required by the 1983 Act, were held in 1985.


5. The company took over responsibility for the operation of the national telecommunications service and it inherited the assets and assumed the liabilities of the service. The principal services provided are telephone, telex and data transmission and the principal objectives of the company are as follows:-


(a)to provide a national telecommunications service within the State and between the State and places outside the State, and


(b)to meet the industrial, commercial, social and household needs of the State for comprehensive and efficient telecommunications services and, so far as the company considers reasonably practicable, to satisfy all reasonable demands for such services throughout the State.


6. Legislation also provides that it shall be the company’s general duty to conduct its affairs so as to ensure that -


(a)charges for services are kept at the minimum rates consistent with meeting approved financial targets, and


(b)the company’s revenues are not less than sufficient to meet all charges properly chargeable to revenue account (taking one year with another), to generate a reasonable proportion of capital needs, and to remunerate capital and repay borrowings.


7. The financial targets to be achieved by the company may be stipulated by Government and the company advises Government of its operational and financial targets by means of a rolling 5-year Corporate Plan which is submitted annually.


8. For reasons specified in legislation, the company has an exclusive privilege for telecommunications services within the State up to and including a connection point in subscribers’ premises. The provision of duly type-approved terminal equipment is licensed by the Minister for Communications and the company is licensed accordingly. The company is also licensed to provide and operate the State’s international telecommunications links.


9. Bord Telecom Éireann is a private limited company operating in the public sector. Its accounts comply with the requirements of the Companies Acts 1963 to 1986. The authorised share capital is IR£500m divided into ordinary shares of IR£1 each, of which IR£335.315m was fully paid and issued to the Minister for Communications in exchange for fixed assets transferred to the company. One ordinary share is held by the Minister for Finance.


II FINANCE

10. On the establishment of the company the Board adopted three basic strategies to improve its business performance and it decided to concentrate its efforts on activities designed to


-boost business growth,


-reduce operating costs,


-contain the burden of capital charges.


(a) Turnover

11. The company’s turnover for the fifteen month period from 1 January, 1984 to 4 April, 1985, was IR£493.3m and turnover for the financial years 1984/1985 and 1985/1986 was IR£389m and IR£467m, respectively. A breakdown of the turnover is as follows:


 

1985/86

1984/85

 

IR£m

IR£m

Telephone connection fees

9

10

Telephone rentals

104

87

Telephone calls

317

259

Telex

21

20

Miscellaneous

16

13

Total

467

389

12. The company informed the Joint Committee that the telephone rental is slightly higher than in many European countries and that the tendency was to have a lower rental charge in order to encourage a greater demand for telephones and obtain the main revenue from call charges.* The company proposes to reduce rental rates as part of a programme to become more internationally competitive in telecommunications.


13. The profitable utilisation of expensive fixed assets is dependent upon the volume of sales they can generate and the company is conscious of the need to increase its turnover. It admits that attitudes must change in the company and that it must become a more customer-orientated organisation. The Joint Committee welcomes this development.


14. Annual turnover per employee on an annualised basis increased from IR£22,510 in 1984/85 to IR£29,480 in 1985/86. This result was achieved by way of increased turnover and by a reduction in the number of employees.


(b) Pricing

15. According to the company the historical way the Government had of solving its historical Telecom problem was by hoisting price increases on an already over-priced service to the public and the business community and that this was rapidly resulting in a market turn-off. Since its establishment the company’s objective has been to at least contain price increases within the rate of inflation. In April, 1984, the requirement to pay a year’s rental in advance was abolished and the basis of payment of the connection charge of £180 was changed from payment in full on signature for service to payment in two moieties.


16. When telecommunications charges were increased by an average 7.5% on 1 April, 1985, it was the first increase for two years - a period during which the rate of inflation was 16%. The charges were increased further by an average 3.5% in April, 1986, although the connection charge for a new telephone was reduced from £180 to £120 and international call charges to the United States, Canada, the E.E.C. and some other countries were reduced by 10%. The charge for a local call from a public telephone was increased from 15p to 20p. According to the company the level of the increase in this instance was necessitated by the coin structure*. It informed the Joint Committee that it has undertaken that there will be no further increase in this charge for at least two years.


17. The general international trend indicates that long distance charges are being reduced while the charges for local calls could increase. Local call charges are for an unlimited duration but the company proposes to implement some form of metering to ensure that lines are not tied up for lengthy periods.


(c) Profit and Loss Account

18. The company discloses in its first Report and Accounts that, as best as can be determined, the telecommunications service last made a profit in 1969/70. The financial results on an annualised basis for the last two years shows that a deficit of IR£65m in 1984/85 was reduced to IR£24m in 1985/86. These deficits should be viewed in the context of estimated annual losses in excess of IR£100m prior to vesting day.


19. The reduction in the company’s deficit is attributable to an improvement in the operating contribution i.e. turnover less operating costs. This is reflected in the fact that operating costs as a percentage of turnover were reduced from 75% in 1984/85 to 69% in 1985/86. This is in line with the company’s cost containment policy.


20. The Joint Committee believes that this has been a very creditable performance and it is particularly encouraged by the statement in the Report and Accounts for 1985/86 that the company’s main objective now is to achieve breakeven in the current year, a year earlier than expected. The deficit has been reduced from a level of 16.7% of turnover in 1984/85 to 5.1% in 1985/86 and on the basis of its 1985/86 turnover a 5% net profit would yield approximately IR£23m.


21. In the company’s summary of its Corporate Plan 1987/88 - 1991/92 a profit of at least 3% on sales is projected for 1987/88 and rising annually thereafter. The Plan also proposes the elimination of accumulated losses (which amounted to IR£107m at 3 April, 1986) in the financial year 1989/90 and the payment of a dividend to the Exchequer in 1990/91.


22. Telecommunications business grew by 8% in 1984/85 and by 10% in 1985/86, reflecting a reduction in unit costs. Adjustments for foreign currency movements resulted in a loss of £9.417m in 1984/85 and gains of £17.345m in 1985/86. These movements were dealt with through the profit and loss account.


23. With regard to the financing of losses the Chairman of the company makes the following statement in his Review and Report to Shareholders (1985/86 Annual Report):


“The Board does not plan to look for subsidies from Government either now or in the future. We intend to balance our losses by making reasonable profits in future years.”


(d) Borrowings

24. On vesting day the company inherited loans and other debts totalling £757m. After the first fifteen months of trading loans and other debts had increased to £967m (of which £247 were Exchequer borrowings) and they had increased further to Ir£1,069m at 3 April, 1986. At the same date Exchequer debt had decreased to £188m, reflecting special payments of IR£54.4m to the Exchequer in December, 1985, and ordinary payments of IR£4.45m. The additional borrowings had the effect of increasing the debt/net equity ratio from 3.83 in April, 1985, to 4.68 in April, 1986. In other words for every pound invested in the company 79p was provided by way of borrowings.


25. In respect of the Exchequer debt the company and the Government, under the terms of an agreement dated 5 November, 1985, arranged accelerated special payments in the following amounts and on the following dates:


 

1/12/84

IR£50,000,000

1/12/85

IR£54,426,000

1/12/86

IR£53,175,000

1/12/87

IR£50,527,767

These payments are based on the repayment with interest of Exchequer debt capital taken over by the company at vesting. While repayments to date have been made in accordance with the agreement, the company has found it necessary to increase its borrowings to do so. This had had the effect of increasing its financing costs.


26. The company’s concern about the cost burden of its borrowings and their impact on profitability is clear from the following statement in the Report and Accounts for 1985/86 in reference to the debt/equity ratio of 4.7 -.


“Such a financial structure is clearly unhealthy and points to the need for the company to attain self-financing of new investment as quickly as possible.”


27. Of the total borrowings of IR£1,069m, 35.4% is in foreign currencies, which are subject to exchange rate movements, and two thirds of total debts are at floating interest rates. The company is, therefore, significantly exposed to interest and exchange rate movements. Of the total borrowings, 11.8% is repayable within one year, 36.5% between two and five years and 51.7% after five years. It is understood that the company may not be in a position to meet its loan repayment obligations when due and will have to resort to “rolling over” all or part of them. At 3 April, 1986, loans guaranteed by the Minister for Finance amounted to Ir£824m.


28. While the task of rectifying the adverse equity position of the company, particularly in the short term, is a difficult one, it seems to the Joint Committee that in the longer term the problem will be reduced to more acceptable levels when the company begins to achieve financial surpluses. Losses to-date which, in effect, have increased borrowings, are carried forward and will be offset by future surpluses. Additions to loan capital during 1985/86 amounted to Ir£356m, overdrafts decreased by IR£51m and loan repayments amounted to IR£123.3m.


(e) Capital Expenditure

29. In the first fifteen months of operation the company incurred expenditure on capital investments totalling IR£220m and in the course of the financial year 1985/86 a total of IR£129m was spent on capital investments, most of which had to be borrowed. However, as the company’s finances improve there will be less reliance on external borrowings to finance capital investment. In the Report and Accounts for 1985/86 the Chairman of the company states that the company expects that only about half of its capital programme of IR£127m will have to be borrowed in 1986/87.


30. The capital expenditure of the company breaks down as follows:-


 

 

1985-86 IR£m

1984/85 IR£m

 

Switching

43

56

 

Transmission

15

29

 

Local Network

50

73

 

Miscellaneous

21

15

 

Total

129

173

31. The company’s Corporate Plan provides for investment of about IR£640m at 1986 prices over the period 1987/88 to 1991/92. It will be spent mainly on further modernising and expanding the main telephone network (trunk switching and transmission) and on the development of the local network. There will also be substantial investment on international services and computer services.


(f) Balance Sheet

32. The Group Balance Sheet at 3 April, 1986, shows total assets (i.e. fixed plus current) of £1,440,352 (Appendix I). This figure is used by the company in calculating its percentage return on capital. The total group assets at 3 April, 1986, represented a 25% increase on the assets transferred to the company on vesting day.


33. The company’s adverse working capital position is apparent from its net current liabilities position of IR£111.176m at 3 April, 1986, with current assets representing only 57% of current liabilities. However, there was an improvement compared to the previous financial year when current assets were 48% of current liabilities. In this connection the following statement made by the Chairman of Irish Telecommunications Investments Ltd. in the company’s Report and Accounts for 1985/86 is relevant:


“Towards the end of the financial year 1985/86 we increased the amount of funds obtained on a short term basis, primarily with a view to taking advantage of favourable refinancing opportunities. This created a short term excess of current liabilities over current assets at the balance sheet date.”


34. The assets of the company are funded by way of loans and debts of £943.5m or 80% of the total capital employed. The debt/equity ratio reflects the weakness of the balance sheet but the company is optimistic that this can be rectified in future years when the burden of debts will be reduced to a more reasonable level.


35. As mentioned in paragraph 23, the company does not plan to look for Government subsidies and the Chairman of the company, when commenting on the Balance Sheet position, indicated to the Committee that it would be rectified very quickly. He also expressed confidence that the company would be one of the major contributors to the State’s funds within a five year period.


(g) Report and Accounts

36. The Joint Committee compliments the company on the amount of information given in its annual report and accounts. It includes extremely valuable analyses as well as a summary of the company’s Corporate Plan, incorporating the main quantitative objectives and targets in the critical key results areas. The Corporate Plan is based on the development of a commercial outlook with emphasis on a marketing approach. As far as the Joint Committee is aware this is the first time that any commercial State-sponsored body has made available in its annual report such detailed information in relation to its Corporate Plan.


37. The Joint Committee is pleased to note that the company endeavours to facilitate customers who wish to transact business through the medium of Irish.


III OPERATIONS

38. The services provided by the company relate to telephone and telex operations and other non-voice communication services.


(a) Telephone

39. There were approximately 723,000 telephone exchange lines in the network in 1986. Net demand for new telephones in 1985/86 was 62,250, almost 72,000 telephones were connected, and the company passed a significant landmark in that the household penetration rate exceeded 50% for the first time.


40. Of the 194 manual telephone exchanges remaining, 78 were converted to automatic working during 1985/86. The automatisation programme is due to be completed by end March, 1987.


41. Significant progress has been made by the company since January, 1984, in reducing the waiting list for telephone service. The waiting list at 31 March, 1986, was 30,000, most of which were in the course of provision, and the corresponding figures for 1985 and 1984 were 40,000 and 57,000 respectively. The Joint Committee understands that in many areas service can be provided at present within eight weeks of application and that the company’s target is to improve upon this over a progressively increasing area of the country.


42. The numbers of prospective customers awaiting telephone service are relatively highest in the West and North Western areas serviced by the company’s Galway and Sligo districts. These are also the main areas where the automatisation programme remains to be completed. The company has made special efforts, including the diversion of resources from other districts, to redress this position.


43. There has been a continuing improvement in the standard of telephone service in 1985/86, although the company acknowledges that much remains to be achieved in raising the quality of repair service in the Dublin area. The company informed the Joint Committee that the main factors were -


(i)the average of faults per telephone station at 0.62 per annum was well within the target of one fault per station per annum;


(ii)the local call service was highly reliable, the success rate being very close to the 98% target level;


(iii)considerable resources continued to be devoted to the improvement of the STD service with significant results. The success rate was estimated at about 93% as compared with the 96% target;


(iv)while there was an overall improvement in the repair service, the standard of fault clearance in the Dublin area was still well below the target level of 85% cleared within 2 days. The phased introduction of a computerised repair service should contribute to significant improvement.


44. In 1985/86 there were 4,300 public telephones in service - 2,700 in concrete structures, 600 aluminium kiosks and the remainder in semi-protected locations e.g. Post Offices, Airports, Shopping Centres, etc. Call revenue from public telephones was IR£13 million approximately. However, the vandalism problem is costing the company over IR£1 million a year, apart from the service interruptions caused.


45. The company’s policy is to provide public payphones


(a)where they will pay their way;


(b)under guarantee by Local Authorities;


(c)on a temporary basis at special events; and


(d)in exceptional circumstances for social reasons, e.g. Black Valley, Co. Kerry.


46. The company concedes that because of the difficulties of maintaining service due to the high level of vandalism, the public perception of the public telephone service has been justifiably poor. The improvement of the service is regarded as a priority and a detailed action plan is being implemented. The main features of that plan are


-to improve the service availability of public telephones by speedier maintenance, better cash collection procedures and by discouraging vandalism,


-as far as possible, to provide public payphones in semi-protected areas,


-to upgrade the attractiveness of kiosks,


-to provide a stronger and more versatile public payphone,


-to launch an educational campaign against vandalism.


47. The company acknowledges that telephone billing has attracted a degree of public criticism in recent years. However, this problem must be viewed in the context of an operation involving the processing of over 2.5 million telephone bills totalling over IR£400m. The company has informed the Joint Committee that it is satisfied that the telephone billing system is highly reliable in both its technical and its administrative phases. It states that technical equipment and administrative procedures in use are the same as those in use in most European countries and that they have a proven record of reliability and dependability.


48. According to the company the introduction of a freefone enquiry service for provincial customers has improved the standard of response to billing enquiries. About 84% of callers using this service are satisfied on initial contact, mainly by way of explanation of the billing system to the customer. Since September, 1985, freepost envelopes are issued with all bills in order to facilitate telephone customers, expedite payments and reduce costs.


49. The Joint Committee understands that the board of the company regularly reviews the trend of the complaints, the majority of which are received through the Ombudsman. It is pleased to note that a satisfactory arrangement has been arrived at in the company’s relationship with the Ombudsman, despite some earlier difficulties, and that in cases where the Ombudsman makes a recommendation the company is strongly disposed to accept. The company expects that the volume of complaints will increase when payment of telephone accounts on time is demanded.


50. Accounts not paid on time give rise to problems for the company. While most telephone customers settle their accounts within the period permitted it is necessary to issue a final notice in one out of every three cases. The company considers the present three month billing cycle too long and it intends to phase in over a period of time a planned reduction of the billing cycle.


51. In general, local calls are a very small proportion of average bills. All calls are billed in metered units and, therefore, it is not possible to distinguish between local call utilisation and long distance calls. The company states that it is committed to providing customers with as much information as possible on individual call charges and for this purpose a call logging/detailed billing project costing Ir£20m was commenced in 1985/86 which, inter alia, will enable the provision of details to customers of dialled calls outside the local area.


(b) Telex

52. The telex service is based on computer-controlled electronic exchanges and is considered to be among the best and most modern in the world. There are 7,300 telex customers and telex penetration in Ireland is high by international standards.


53. In most places throughout the country telex is available on demand and during 1985/86 510 telex connections were made and there were 530 cessations. The number awaiting service at the end of 1985/86 was 220 compared with 300 at the end of 1984/85.


54. Telex income amounted to IR£21m in 1985/86. The telex customer equipment market was liberalised by the Minister for Communications from 1 April, 1986, and existing customers renting telex equipment were offered the opportunity of buying out their equipment.


55. Domestic and cross channel telex call charges were increased by 5% from 1 April, 1986, while the £190 telex connection charge was abolished. Other international telex call charges were also revised.


(c) Data Service

56. Because of the expansion of data networks in the financing, public service and computer sectors, the demand for data circuits has continued to grow. At the end of 1985/86 there were 4,200 circuits in operation and the number of circuits projected for 1990 is 8,500.


(d) Eirpac

57. Eirpac is a special Packet Switch Network for data transmission which was launched on 1 April, 1985. There were nearly 500 Eirpac customers at the end of 1985/86 and growth to over 3,000 customers is expected by 1990. Eirpac is used as a carrier for the Eirmail service and the introduction on the network of other services such as Videotex, Telex access and Credit Card Validation is planned.


(e) Eirmail

58. This is an electronic mail box service which was launched in October, 1985, as a value added service on Eirpac. It offers customers a range of facilities from electronic messaging and electronic filing to computer file transfer. The service had 180 mailbox customers in May, 1986, and the number is expected to grow substantially. The service is available under a licensing arrangement with ITT Dialcom.


(f) Eircell

59. The company’s mobile telephone service Eircell was launched in December, 1985, and it had 350 customers in May, 1986. Based on cellular radio technology the service was initially limited to the Dublin area but the company has plans to extend the service to Cork, Limerick and Dundalk.


(g) Directories

60. The re-design of directories in order to expand the range of information and provide for a more attractive presentation commenced in 1985 with the Part One Directory and continued with the Part Two Volume issued in June, 1985. In the current financial year the company proposes to sub-divide the Part Two Directory and to combine it with the Classified Directories on a regional basis.


61. Telephone directories cost approximately £4 per copy and approximately one million copies are produced.


IV SUBSIDIARY AND ASSOCIATED COMPANIES

(a) Irish Telecommunications Investments Limited (ITI)

62. ITI was established in 1981 by the Government for the purpose of securing funds from the private sector to assist in the financing of the accelarated telecommunications development programme. With the vesting of Telecom Éireann in January, 1984, ITI became a wholly owned subsidiary of Telecom. It operates as the financing arm of the group charged with funding the annual capital programme. Funds raised on the domestic and foreign markets are used to purchase telecommunication assets which ITI leases to Telecom. Telecom Éireann is charged a rental which reflects the total cost to ITI of servicing the funds raised including interest, depreciation, currency gains/losses as they arise, and administration. Since its inception ITI has been a major provider of funds for telecommunications development. It financed 42% of the programme in 1981, 64% in 1982, 83% in 1983 and up to 100% since then.


63. Loans (of which IR£729m were outstanding at 3 April, 1986) were raised by the company during the last five years (Appendix II) and 48% of all loans drawn down were denominated in Irish pounds. These loans were utilised to finance investment in fixed assets for the telecommunications service. In the financial year 1986/87 ITI will be seeking to raise funds in excess of IR£100m. In line with the company’s policy to ensure minimum exchange risk on borrowings it will seek facilities denominated mainly in Irish pounds. ITI publishes separately its annual Report and Accounts.


Telecom Éireann Information Systems (TEIS)

64. The provision of customer premises equipment involves major capital expenditure and Telecom considered it inappropriate that this should be financed through the public capital programme rather than by way of outright purchase by, or leasing to, customers. Accordingly, a wholly-owned subsidiary, TEIS, was established in August, 1985, a terminal equipment provider. The product range currently offered by TEIS includes PABXs, teleprinters, data communications equipment and mobile telephone sets. Single telephone sets for use on individual exchange lines are supplied on a rental basis by Telecom Éireann.


65. All terminal equipment, with the exception of telephone sets on individual exchange lines, is fully liberalised and TEIS competes in the market. TEIS bears all its own costs and where Telecom Éireann provides services, these are fully charged to TEIS. Preliminary results for TEIS’s first accounting period show a small surplus.


66. The Joint Committee was informed that TEIS operates on a fair basis with private companies and that it has a code of conduct for its staff to ensure that there is no favouritism implied that the main company will supply something because they are buying from TEIS*. The Joint Committee would welcome the publication of a code of conduct which would allay any fears that competitors in the private sector may have about the supply of terminal equipment in competition with TEIS in view of its close relationship with Telecom.


(c) Golden Pages Ltd.

67. In October, 1984, Telecom Éireann acquired a major shareholding in ITT World Directories (Ireland) Ltd. the publishers of Golden Pages. Telecom has licensed a new company - Golden Pages Ltd - to produce the classified directory. This company was also commissioned to manage the production of the alphabetical directories. Telecom has a 49% interest in Golden Pages Ltd.


V PERSONNEL

68. At 1 January, 1984, the number employed totalled 18,270. The numbers employed at 4 April, 1985, and 3 April, 1986, were 17,260 and 15,850, respectively, and these break down as follows:-


 

 

4 April, 1985

3 April, 1986

Managerial

890

880

Clerical

1900

1760

Technical

9850

9020

Operator Service

4310

3650

Other

310

540

Total

17,260

15,850

69. During 1985/86 approximately 1,200 people opted for early retirement or voluntary severance. The company does not operate a compulsory redundancy programme and staff redundancies are achieved through a combination of natural wastage, curbs on recruitment, voluntary severance or early retirement.


70. The company’s objective is to reduce the overall staff numbers to 13,200 by March, 1990. The company is hopeful that with the introduction of new services the level of new jobs which are already being created will be substantially increased.


71. During 1985/86 provincial District structures were further developed with emphasis on the strengthening of the commercial and financial functions in line with the company’s policy of devolution and decentralisation. A major development was the conclusion of negotiations with the unions representing the staff for a company-wide productivity/bonus scheme effective from 1 January, 1986. The scheme provides for wide ranging flexibility and productivity measures and the sharing of financial benefits accruing with the staff on a continuing basis.


VI CONCLUSION

72. The Joint Committee is encouraged by the significant progress made by the company in its relatively short period of existence. It believes that the performance of the company to-date gives grounds for optimism that its financial performance and the quality and reliability of the service it provides to the public will continue to improve.


73. The Joint Committee wishes to express its appreciation of the help given to it by its consultant, Mr. Michael A. Kehoe, in the course of this enquiry.


20 January, 1987

(Signed) FRANK PRENDERGAST

 

Chairman of the

 

Joint Committee.

* Analysis of Financial Position of Commercial State-sponsored Bodies based on Latest Published Accounts


* Evidence (Question 18)


* Evidence (Question 2)


* Evidence (Question 30)