Dáil Éireann - Volume 367 - 11 June, 1986
British & Irish Steam Packet Company Limited (Acquisition) (Amendment) Bill, 1986: Second Stage.
Minister of State at the Department of Communications (Mr. Nealon) Minister of State at the Department of Communications (Mr. Nealon)
Minister of State at the Department of Communications (Mr. Nealon): I move: “That the Bill be now read a Second Time.”
The purpose of this short Bill is to enable the Minister for Finance to provide up to £38 million in additional equity for the B & I Company.
The Bill also confers upon the Minister for Communications certain controls in relation to the remuneration and superannuation of the staff of the company, which he may exercise with the consent of the Minister for the Public Service.
As the House will be aware, the requirement for additional equity arises from the package of proposals from the B & I board for the restructuring of the company which the Government recently  decided to support with Exchequer funds. All but £100,000 of the existing authorised share capital of the company has already been taken up by the Minister for Finance.
In view of the substantial losses incurred by the B & I in recent years — between 1980 and 1984 these amounted to more than £43 million and necessitated provision by the Exchequer of more than £30 million in equity capital to enable the company to continue in operation — the Minister found it necessary to take action to ensure that this state of affairs would not continue. In May 1985 he appointed a new chairman and managing director to the company with the mandate “to take whatever steps are necessary, with the agreement of the Board of the B & I Company and subject to the approval of the Minister and taking account of the need to maintain Irish participation in cross-channel passenger and freight services, to restore the company to profitable operation by 31 December, 1986.”
In December last, the board submitted to the Minister their proposals to restore the company to viability. The board's proposals included: the development of the existing co-operation arrangements with Sealink through a new two-year agreement; the B & I Rosslare/Pembroke service would cease and a new joint car ferry service would operate between Rosslare and Fishguard under a new brand name using a Sealink jumbo vessel; upgrading of on-board services through a combination of capital investment in redesign of the sales area, introducing new skills in catering, retailing and passenger care facilities, either by way of contracting arrangements or direct recruitment; financial restructuring of the B & I involving shareholder investment of £43 million; substantial cost efficiencies to be achieved through reduced manning levels and changes in work practices in all areas of the company's business.
The board's proposals were considered by the Government who decided that, subject to the enactment of the necessary enabling legislation they would allocate over the next few years £38 million additional equity for the B & I Company, of  which £20 million will be provided in 1986. This falls short of what the board requested but it represents a very substantial level of investment in present financial circumstances. This major investment by the Government is contingent on a matching contribution by the board, management and workforce of the B & I towards the restoration of the company to viability.
The Government's decision to continue support for the B & I is an indication of their commitment to maintaining a strong Irish presence in shipping services to this country, which was the main reason why the State acquired the B & I in 1965. It is not necessary to remind the House that as an island nation our access transport services, particularly those between Ireland and Britain, are vital to trade, commerce and tourism and to our national economy generally. This major investment by the Government will ensure that a significant share of cross-channel traffic will remain in Irish hands. This is in accord with the Government's view that, while they welcome external participation in shipping services to and from Ireland, a significant level of Irish participation operating under equitable conditions is an essential ingredient in ensuring the efficiency and quality of cross-channel services.
As I have already mentioned, £20 million of the £38 million will be provided this year and the remaining £18 million will be phased over the three years 1987-89. The amount and phasing of the further equity injections will be closely related to the overall performance of the company against very challenging profit targets which the Minister has set for them. Throughout the period there will be detailed monitoring of the company's commercial performance by the Department of Communications.
In the absence of Government support and other remedial measures, the B & I would have been likely to incur unsustainable annual losses of the order of £10 million. On the basis of the package now approved, the company are expected to eliminate these losses and for  1987, the first full year of operation under the new arrangements, to return a profit. I am confident that this can be achieved and that the trading performance of the company will continue to improve in the years that follow.
What is now needed to ensure the companey's future is a sustained commitment on the part of the workforce to work with management towards the common goal of creating an efficient and commercially viable enterprise. Indeed the workforce must be commended for their realistic acceptance of the need for change. These measures will safeguard the 1,400 jobs which the B & I will continue to provide. The board and management of the B & I also deserve recognition for their resolute approach to the very difficult problems facing them.
Of the 1986 equity injection of £20 million, an amount of £7 million is being spent by the B & I on capital investment. The other £13 million is being used to being the process of restructuring the company's balance sheet by reducing the company's borrowings. The equity injections over the years 1987 to 1989 will also be used to reduce the company's burden of debt to an acceptable level.
The bulk of the £7 million capital investment to which I have referred is being spent on vessel refurbishment. The expenditure is in respect of substantial improvements in the overall standard of on-board facilities. The sales areas of the car ferries have been redesigned to make them more attractive to passengers, offering as they do far greater comfort and a wide range of passenger facilities, including greatly enlarged duty free facilities, shops, restaurants, bars, a cinema and various other attractions to make travelling across the Irish sea a far more enjoyable experience than in the past. In addition to the physical improvements to the vessels, a comprehensive programme of staff training is being undertaken to ensure that passengers receive the highest possible standard of service and attention.
The B & I's agreement with Sealink is a two year one but it can be renewed if  considered desirable. The new agreement will achieve a more efficient utilisation of vessels while providing a better overall service to the customer. In the past, intense competition on the Irish Sea has led to both companies suffering losses which in the case of the B & I had to be met by the Irish taxpayer. The battle for market share resulted in an undesirable lowering of standards and led to a situation where the reductions in fares were the only means of attracting additional passengers, leading in turn to greater losses. Clearly such a situation could not continue indefinitely. Inevitably fares had to rise to cover costs if the services were to continue.
On the southern corridor B & I and Sealink are operating a joint service under the banner of “Southern Seaways”. Pending acquisition by Sealink of a jumbo ferry, the service will utilise the Sealink vessel, the St. Brendan, year round and will be augmented during the May to September peak season by a second vessel operated by the B & I. This year the Innisfallen will be deployed for this purpose. This will provide some short term contract employment for many of the staff on the Rosslare route who are being made redundant.
Before I conclude, there is one point which I feel I must stress. It must be clearly recognised that the company's future cannot be assured by Government support alone. It is equally dependent on full co-operation by all concerned in the provision of continuous reliable and efficent service. I feel sure that this co-operation will be forthcoming.
The Government's objective for the B & I is to see an efficent and commercially viable enterprise which will provide a vastly improved service for their customers, ensure secure employment for their employees and contribute to the development of tourism and trade and general economic growth. I see no reason why this objective cannot be achieved. This Bill heralds a new era for the B & I which will lead in a relatively short time to the emergence of a revitalised self-sustaining enterprise worthy of comparison with the best carriers in this most competitive  sector of transport. The enactment of this Bill gives the B & I the opportunity to ensure their own long term future. I am confident the company will grasp that opportunity.
I commend the Bill to the House.
Mr. Wilson Mr. Wilson
Mr. Wilson: First, I should like to indicate the basic Fianna Fáil policy in regard to the B & I as published in the last public policy document, the National Economic Plan, 1983-1987. Paragraph 22 of that report states:
The B & I line has been encountering serious financial problems in the recent past. Some of the principal reasons for these problems are outside the company's direct control, for example, fuel prices, intensive price competition and stagnation in tourism. Other financial problems, such as the company's high financial charges, stem from the overambitious investment programme undertaken since 1978. A vigorous commercial approach is the only way for the company to ensure efficient and profitable services. To this end the company is now restructuring its operations. The performance of all the company's services is being monitored on a monthly basis and the scope for further economies is being examined. A radical retrenchment and rationalisation of B & I's operations is necessary. Timely and decisive action will be needed to ensure that all services will be operated on an economic basis and the company's cost overheads significantly reduced.
It is interesting to note what has changed since that plan was published. For example, all services were mentioned in that plan but since then the Cork-Pembroke service has been wiped out. I have no doubt that Members from Cork constituencies will deal with that matter when they get the opportunity. The Dublin-Holyhead and Dublin-Liverpool routes are still maintained. We said that all services will be operated but, in accordance with the plan mentioned by the Minister in regard to operations on the southern corridor, we do not have a ship. At the  moment the Innisfallen is filling in until the day comes, if it ever comes, when a foreign company will provide a jumbo ship to operate on that route.
In the course of our plan we mentioned fuel prices and as the House and the world knows the cost of fuel has dropped very considerably since. This week's issue of The Economist indicates on a year for year basis a drop in the standard crude oil price quoted at 50.3 per cent since this time last year. Therefore, an aggravating cause of the company's financial problems of 1982 has been removed not by any direct action of the Government, not by any direct action of an expensive consultancy, Zeus consultancy and not by any direct action of the new chairman/chief executive but by world economic factors.
I considered it better to refer to the position the Minister found when he took office late in 1982 because an attempt has been made in the House, and outside, to indicate that the Coalition were the first to be concerned about the economic position of the B & I. That is not so and anybody can check the paragraph I quoted to learn what the Government's policy was when the plan was prepared. Also mentioned at that time as a factor contributing to the economic difficulties of the B & I was competition. I know that “competition” is a big word in all areas of transport, air, sea and land. It is a very hot issue but I cannot say that the arrangement made by the chairman and board of B & I in this instance is the ideal one in regard to competition.
As the House knows, there is a cosy arrangement between B & I and Sealink. Instead of competition we have what is tantamount to a cartel, and this is worrying many people in the transport business, passenger and freight. We have a 50-50 share of the profits on the Southern Corridor, without a ship. That is part of a plan. They have the Innisfallen pending the building of the “jumbo”. There is no competition on the Dublin-Holyhead or the Dún Laoghaire-Holyhead routes. The customer is not likely to benefit from  this cosy arrangement. Certain consumer interests have brought the matter to the attention of the EC, the sector involved in the competition theory.
Those two major sectors in the 1982 Fianna Fáil policy document have been removed in diverse ways in so far as the customer is concerned. Interest rates have fallen considerably since then and, if we are to believe most recent reports, the tendency will be for them to fall further.
Those three factors must be taken into consideration when discussing the request by the Government to provide £38 million for B & I. A plus factor is the present position of the company at the port of Dublin. The port has been through a period of strikes and disruptions. In the first six months of the pre-Government chairmanship of the B & I board, the then board were directly on target, but this was interrupted and put out of joint totally by conditions in the port, by strikes and disruptions. That climate has improved, and that is a wind blowing in favour of the company.
I will refer later to the Minister's short speech in which he made some points which need to be taken up. I will deal now with the Bill. There are two major sections in it. The first proposes to raise the ordinary shares of £1 from 58 million to 96 million. That is the essence of the Bill. In his speech the Minister said the required amount would be £38 million, but the board had requested £43 million. The Minister did not make any attempt today to justify the £38 million, nor did he say the extra £5 million petitioned by the board is not available. I cannot see why the remainder of the amount the board requested for the running of a viable company will not be forthcoming.
Section 2 of the Bill is the most extraordinary provision to come before the House — I will return to this later. It proposes to arrogate powers to the Minister which he should not have the effrontery to arrogate to himself. I will be moving for the deletion of that section.
The next point, referred to in the media yesterday, is that we have not got the 1984 Annual Report from B & I, not to  speak of 1985. I should like to know what the position is with regard to those two reports. Before coming to a conclusion as to whether we should make available £38 million of the taxpayers' money to the company we should have those reports before us. There were rumoured losses in 1984, and in 1985 the rumoured losses were £6 million. There is talk of a loss in 1986, despite the Minister's indication in his speech as follows:
... to take whatever steps are necessary, with the agreement of the Board of the B & I Company and subject to the approval of the Minister and taking account of the need to maintain Irish participation in cross-channel passenger and freight services, to restore the company to profitable operation by 31 December 1986.
If the Minister was referring to the whole of 1986, that is disheartening information. As I said, if the annual reports of the company were available we would know whether there is substance in those rumours. The profit forecast for 1987 is very insubstantial indeed.
I put it to the House why it is being asked for this amount of money before all the beating of drums and the bualan sciath but not before a very expensive consultant company had been employed to advise on this plan. I should like to know why it was wrong at that time to invest £38 million when there was a chance of maintaining certain extra services not now available and employment which has been cut, but it is right now, even though the company are not making a profit yet. Apropos the consultant firm, I understand the Department will be paying their fees. Consequently, the House is entitled to know what that firm have done or are doing for the taxpayers' money which they will be getting. There is a grey area but, with due respect to the Chair, a rule will be quoted telling us that the Minister has no responsibility in this, that or the other regard. Despite the fact that the House is providing the funds and the equity, there is no way we can get information in certain areas. We should be entitled to know the value we are  getting for the money we are spending on Zeus investments since it is not the board who are paying but the Department.
I will proceed now to an examination and criticism of the arrangements that are being put in place with the aid of the £38 million we are asked to provide. It is important that we get replies here to our questions. Otherwise I despair of getting any answers. Now on Second Stage of this Bill I have the opportunity to get replies from the Minister and I shall pursue him until I get answers to various questions that, I regret to say, have been rejected as being outside the Minister's responsibility in regard to this semi-State body. I would also add that I get the same response in regard to other semi-State bodies.
I should like to know what are the economics of the Dublin-Liverpool run. It is the longest run in which B & I are involved. Is it making a profit? It was argued it is important for us to have the short sea route because nowadays customers are opting for the short sea route rather than the long run. The House is entitled to know what it is subsidising and we are entitled to know the economics of the Dublin-Liverpool run.
In the plans as announced, various decisions have been made with regard to the Dublin-Holyhead run. Has the decision been made to move from Dublin to Holyhead so that both B & I and Sealink would operate out of Holyhead? With regard to Holyhead itself, I understand that the fine provisions at Holyhead have been totally provided by this State during the years. Am I correct in saying that the facilities available to B & I at Holyhead are not to the same high standard as the facilities provided at Dún Laoghaire? I have heard criticisms of the marshalling space and the vehicle parking space available at Holyhead. If we are entering into a cosy arrangement with Sealink, now owned by an American, we should be sure that we know all the facts. This American is a hard, tough businessman, and more power to him. He is in the business to make profits and I am quite sure he will ruthlessly cut services on the Irish Sea if he is not making a profit. That  is his philosophy, but my contention is that we have to watch out carefully in that situation. There should be an insistence by us, either at Government level or at company level, for reciprocal facilities at Holyhead.
With regard to the financial arrangements, are we talking about a 50/50 split or does that hold only on the southern corridor? Two ships are operating now to Fishguard and the jumbo is to come into operation. Has a 50/50 split been agreed on the Dublin-Holyhead and Dún Laoghaire-Holyhead services or will B & I keep the profits they make on the Dublin-Holyhead run and Sealink keep the profits they make on the Dún Laoghaire-Holyhead run?
On a previous occasion I tried unsuccessfully to get a reply to a question regarding the train link to the B & I service. Again, that is a Government matter, not merely a company matter. It will require governmental clout to deal with that problem. I think the trains are geared specially to the Sealink services rather than to the B & I services. It is not possible to get to London as early on the B & I morning service — the Dublin-Holyhead-London route — as it is on the Dún Laoghaire-Holyhead-London run. That area will be vital in marketing and it is very important. Marketing will be the top priority in selling the routes and in selling internally on the ships in future. This is an area where we have been weak in the past and we must improve if we want to have a profitable operation.
What is there by way of consumer protection with regard to the Dublin-Holyhead and Dún Laoghaire-Holyhead routes and also in the reverse direction? Is there anything to protect the consumer? At the end of his speech the Minister mentioned that an increase in prices was necessary to sustain the service. There are severe complaints about the perecentage increase that was added recently. The argument was used that because of the cut-throat competition fares had fallen very low and, as a result, the service got shabby and things had gone wrong. It was said this was the  reason for an increase that would be three or four times the inflation rate for 1986. I should like the Minister's views on that. The Minister's speech was very pared down; it was not full of information for the House and for the taxpayer. I should like to know also if the B & I operation from Dublin to Holyhead is profitable. Of course, that is linked to the answer to the question whether the profits are pooled, as is done sometimes in the case of airlines even though one or other of the parties may carry more passengers.
I wish to deal now with the Rosslare area, which I visited yesterday. To my mind it has potential for great development in association with B & I if we keep Irish interests up front. When it starts operating the Channel tunnel will change the graph with regard to transport to the end of the century. The B & I preferably with their own boat — arrangements do not make any provision for a B & I boat on that run — will be in line for increased traffic to the Channel tunnel and from there to various parts of Europe.
The criticisms of the present arrangement are many and varied and it is important they should be put on record. There is an even more punishing cartel from the customers' point of view here because we will end up with one ship belonging to an American, admittedly employing some Irish people. If for sound, capitalist, economic principles he decides to close it down — as has happened with subsidiaries of companies in manufacturing industry and for reasons which sometimes have damn all to do with the circumstances existing in this country — and sell the ship, no Irish ship will be plying the route from Ireland to Fishguard. If we have invested a good deal of capital in the development of Rosslare by that time, we will be the laughing stock of the transport world with a developed port, it may be a free port, but no ship leaving from it.
Is the jumbo on or off? There are rumours in the Rosslare area that that part of the plan is being scrapped, that the proprietors of Sealink are not anxious to have a jumbo sized — I do not have a definition of that yet — ship built and  put on that route. We have no place unfortunately in which to have this ship built since Verolme Cork Dockyard closed. Belfast, hopefully, might be able to build the ship, although it is likely that they will be too busy to do so from the reports we read in the newspapers.
As far as train links are concerned, dissatisfaction has been expressed about scheduling in such a way as to get maximum benefit from the train service. Yesterday I got information in the Rosslare area that there was a big improvement in that service and I hope that is correct. The Innishfallen is operating there together with the Sealink vessel. It is not an old ship. Many people are knocking it but it is a 4,849 tonne vessel that was built in 1969. It is rumoured that the Innishfallen and the St. Brendan will continue to ply that route, and that the idea of the jumbo is scrapped. If that arrangement is continued, well and good. If not, I presume the Innishfallen will be put up for sale and will be a realised asset for the company in the near future. Not that the shipping market and the sale of the 72,000 tonne Panamax, the Irish Spruce, for £3.6 million, gives us any encouragement that B & I will have a great deal of funds if they put the Innishfallen on the market and sell it in the near future.
Freight was in the news yesterday. We were told that the B & I freight service was losing money, but I will come back to that point later. I have had complaints from individual Irish hauliers, and consequently competitors of B & I, that they did not get equal treatment so far as bookings and priorities in return journeys were concerned. This is a very serious charge. We are considering voting £38 million to that company and all they are entitled to as a company are the same rights of access to bookings, rates and so on as apply to other hauliers using the service. I have documentation on this subject. Naturally there is a serious temptation for B & I to give their own freight priorty but there is no justification for their doing so. In fact, the reverse is true. If we are voting money in this House for B & I that money should never be  used to put them at a competitive advantage over other citizens who have invested their money in the haulage business. I have had similar type complaints — they are usually denied by the company — with regard to CIE. A haulier in my constituency said he was sure the State subsidy was being used to give CIE an unfair advantage. I am using that as a parallel illustration.
Now I come to the services on board B & I ships. A decision has been taken to give the franchise to a British company, which admittedly had been operating gift and perfume shops hitherto. I am sure they are a reputable firm, but we were told initially that Campbell Catering of County Dublin were to get this franchise. I do not know what happened in the meantime, but I should have thought it was an important consideration that an Irish company of proven efficiency should have been given preferential treatment in the award of this franchise. I have a special reason for emphasising that.
As I mentioned in the debate on shipping in this House earlier this year I carried out a personal survey of what was available on board a Sealink vessel between Dún Laoghaire and Holyhead. B & I are taking in a British company to provide these services. On the Sealink vessel not one single Irish product was advertised on the walls outside the shops. There was no marketing drive with regard to Irish products. Irish drinks were available in the duty free shop but on the walls six types of spirits were advertised and not one was an Irish product.
When Sealink was owned by the British Government one could see the logic of that because they were entitled to plug their own products, and one could admire them for that. Now, though, we have this cosy arrangement business. We are practically the same company as far as profits are concerned and now the owner of Sealink is not a British citizen. In those circumstances a new ball game has arisen. The House should direct the attention of the chairman and managing director and the board to this area, particularly in view of the fact that, as the Minister said in his speech, a good deal of money has been  spent on refurbishing those areas of the ships that are plying.
I examined the gift shops and the jewellery section on board that same ship. Anybody who has any awareness at all will know that over the past ten or 15 years there has been a tremendous advance in silversmithery, goldsmithery, making of souvenirs and making of world class textile products. A very short walk from this House to the Kilkenny Design Workshops will indicate the range of goods of superior quality available that are manufactured in this country and of a high design. Not one single piece of jewellery on that ship at that time was made in Ireland. Most of it was from a Birmingham company that was mentioned. Again we are in this House considering a £38 million investment and we should be asking questions and stiffening the back of people who are involved in this area to see to it that there is a strong Irish products presence on board the ships. Our young artists have earned a great place. Anybody who mooches around all the little shops in this city, not to talk of Galway or Cork, will know how many bright young people are involved in this business particularly. Our medallists have won international recognition. There has been some talk of Ogham Crafts and the Aer Lingus commemorative medal having obtained international awards recently. Examples of the good work of our wood carvers, our potters and our people involved in textiles can be seen in Kilkenny Design Workshops by anybody who has a few minutes to spare or skips his lunch today. I do not want to labour that further, but we have made concessions to Sealink with regard to profits etc. and we should demand a quid pro quo across the board. We have taken job losses in this new arrangement with Sealink and we should concentrate our minds on making up for those job losses by giving work in other areas to other of our citizens.
When we produced our economic plan to the end of 1987, a paragraph of which I read out, Cork was being provided with one of the services of B & I. I mention  this only en passant because I am sure the Cork Members will have something to say about this in their contributions to the debate. However, Munster tourism has been very upset by the fact that a sea link to Britain is no longer provided by any company now. Again I am sure that most economists would presume to be able to tell us exactly, even if there were a loss on the shipping, what the consequent gain would be in the tourism area. I mean that I cannot believe it is beyond the capabilities of an economist to tell us how much we would have to get on the roundabouts of tourism to make up for the loss on the swings of transport by boat to the country. Can that be quantified? I will not stress that further because, as I say, I expect that Deputy Michael Ahern and others will contribute with regard to Cork.
The Pembroke facility has been discontinued. There is to be no longer a presence, a trade to Pembroke. Nevertheless — I think I am right and I am asking the Minister to say whether I am right or wrong — there will be a payment to be made on a regular basis to Pembroke for facilities which we will be no longer using. With regard to Pembroke itself, those who have been using it for both freight and passengers have always indicated that the people in Pembroke are delighted to have as customers the B & I company. It has been remarked time and time again that they made distinct and strong efforts to please and satisfy the customers on that run. Before the decisions were taken a number of people from Pembroke were in touch with me, and I am sure with the Minister, and they wanted to make every effort possible to retain the service there. I can see how a decision might be taken to discontinue the service and how Pembroke would want to retain it — naturally, they are good business people — but I cannot see how we will be happy to continue to pay money for services at Pembroke and making no use of the facilities provided. I do not know whether private shipping companies could be encouraged to make use of the facilities or whether they would get preference in the use of Pembroke,  but I must say that the people who came over here and who gave me copies of letters which they sent to Mr. Spain, Chairman and Managing Director of B & I, were very anxious to indicate that a profit making run from Rosslare to Pembroke was very much a possibility, and they complained that on occasion the difference between making a profit and making a loss was that space was not available for people who wanted to do bookings when that run was on between Rosslare and Pembroke. I quote from a copy of a letter to Mr. Spain which was sent to me by the Pembrokeshire District Council:
... we emphasised the grounds for our belief that the Pembroke/Rosslare route would show a profit turn round of £5.3 million if operated with an available suitable vessel and that this sum was considerably in excess of the £4 million profitability turn round claimed for rationalisation with Sealink on all three sea corridors.
Needless to say, they were making the strongest possible case for themselves, but I do not think that their submission got the consideration it should have got. I think that minds were already made up, were closed, and, consequently the kind of care and attention that the proposition deserved was not given.
As I said, I used the ferry to Pembroke — admittedly there were 50 of our own workers there — and I found them to be efficient and courteous and anxious to provide a service which is not always the case in regard to our own ships or has not been as far as Sealink were concerned in the past. Perhaps the Minister will indicate how much money will be provided for Pembroke and as the B & I operation to Pembroke is over, if there is any way in which Irish interests could make use of the facilities so that we would get something back for the money we are bound to keep on paying for some years ahead. I should like the Minister to indicate how many years that will be.
We lost 50 jobs at Pembroke and it is a recipe for despair to think that the House is now debating a proposal from  the Minister to provide a sum of £38 million in equity for the B & I in a job cutting exercise rather than in increasing employment especially when unemployment is very high and emigration is getting heavily under way again. Young people who are studying marine engineering and marine sciences in general in the RTC in Cork and other places are entitled to some positive optimism on the part of the Government with regard to the future of our shipping.
There were supposed to be 59 job losses if the ferry was transferred from Dublin to Dun Laoghaire. What is the position in that regard? The 260 other people who lost their jobs ashore and afloat in the whole exercise cannot be catered for unless developments take place as a result of this investment by the Government in the B & I. Are there any British redundancies in Sealink? We have these cosy operations to Holyhead and Fishguard and I should like to know if it was only the Irish company which suffered redundancies.
The Minister referred to the new investment in his speech and gave specific examples. I know a big refurbishment job has been done with a view to improving services. I have notes here regarding damage to the Wicklow and the Tipperary which happened some time ago. I should like the Minister to indicate how much of that damage, which is supposed to amount to a substantial figure, is recoverable from insurance and what insurance company provided cover for the B & I at that time. The 1987 project objective seems to be to make a small profit of £0.5 million. A contingency fund of £3.5 million was also mentioned. I hope that means a profit of £4 million rather than the £0.5 million mentioned in various reports and speeches.
It is interesting to speculate on the possibility of the Innisfallen being sold and that depends on when delivery is taken of the new jumbo, if that ever happens. I understand there is a new departure in the freight area. Earlier on I mentioned specific complaints about treatment by hauliers of the freight drivers who are not employed by B & I. The last  report I got said that the freight service had a turnover of £60 million and assets of £20 million but that it was supposed to be losing money. What is the position in regard to 1984? I do not know because the last annual report we got is for 1983. It is not good enough that we do not have a report for 1984 and 1985. How much money was lost in 1984 in freight? How much, if any, was lost in 1985? Perhaps we made a profit but the House would like to know the exact position. We are buying a pig in a poke in that we do not have annual reports for 1984 and 1985. At one time, as part of the reorganisation of the B & I, it was mentioned that all their trucking operations were to have outside contractors for maintenance which would be a cost reducing factor. Could the Minister give us information in that regard?
What is the position in regard to the Euro container service in the B & I? There was a proposal in this cosy agreement, of which we are so rightly critical, that the Sealink ro-ro was to be provided with facilities in Dublin ferry port. Has that happened? What is the quid pro quo? If we are giving something, are we getting something back? I mentioned the excellent businessman who now owns Sealink. He appreciated hard bargaining, is a hard bargainer himself and he would appreciate us, as Irish people interested in our own affairs and profits, being just as hard headed and tough as he is.
I wish to refer again to individual hauliers standing by in the middle of the night at B & I terminals at Fishguard, Holyhead or Liverpool who feel they have no status. The B & I effort is an open sesame. They are fellow drivers but one driver said he was standing around after midnight not knowing whether he would get on the boat. That is not a proper way to run a business and I should like the Minister to bring that to the attention of the chairman and the board of B & I.
There were rumours circulating in Rosslare yesterday that the B & I intended to purchase the Irish Continental Line this weekend. I know there are difficulties in regard to the sale of ICL  and I outlined our party's policy in that regard. We want ICL maintained in Irish hands, public, private or public cum private. We are not particularly worried about the combination but this profit making company should be retained in Irish hands. Is any of the money which we are voting here earmarked for the purchase of ICL?
The figures, when added, are very tight. It seems that there is no money in this Vote, in this £38 million that we are being asked for. I would like to know if there is. Perhaps it is hidden. If we are prepared to sell the Irish Spruce, a 72,000 tonne dead weight ship, for £3.6 million — and that is national sabotage or a national scandal — perhaps we might be able to facilitate the purchase of the Irish Continental Line for a reasonable figure to guarantee that it will remain in Irish hands. These questions are being asked all the time in transport or shipping by people who have vital interests in that sector. I am not accusing the Minister of telling an untruth in the House but I am not 100 per cent sure that I got a full answer when I asked him if he had consultants' advice about the purchase of the Irish Continental Line by the B & I. I wonder if I got the whole truth. Did Zeus consultants advise the Minister as to whether B & I should purchase the Irish Continental Line or not? As I indicated earlier, as far as I know Zeus consultants are paid by the Department. Consequently, we cannot hide behind the excuse that the Minister has no responsibility and that it is the responsibility of the B & I board. If Zeus consultants are being paid directly by the Minister then we are entitled to know what advice they are giving. Were there any other consultants asked by the B & I or the Government to advise on the purchase by the B & I of the Irish Continental Line. We are entitled to the information. Has the Minister any advice with regard to whether the B & I should purchase the Irish Continental Line or not? It is an important question, it is a fair question and it is a question to which I am entitled to an answer from the Minister.
I come now to the section I said I would  come back to, namely section 2, a section which we, as the main Opposition party are opposing rigiditus, absolutely. We are voting against it because I cannot understand how it is in the Bill at all. I will read it:
In determining the remuneration or allowances for expenses to be paid to its officers or servants or the terms or conditions subject to which such officers or servants hold or are to hold their employment, the Company shall have regard either to Government or nationally agreed guidelines which are for the time being extant, or to Government policy concerning remuneration and conditions of employment which is so extant, and, in addition to the foregoing,
—This is not just the sting in the tail but a kind of a torpedo—
the Company shall comply with any directives with regard to such remuneration, allowances, terms or conditions which the Minister for Communications may give from time to time to the Company with the consent of the Minister for the Public Service.
That is simply shocking. I do not understand it. I do not understand what it is doing in this Bill. Did the Minister not appoint a very expensive chairman and chief executive aided by a very expensive consultancy firm, and has he not got a board as well as a chief executive and other senior executives in the company to deal with this peculiarly and appropriately company matter? Why is the Minister usurping the functions of the board and the management of the company? Is there more expertise in the Department of Communications on industrial relations than is available to the chairman, chief executive, board of management or, for that matter, the Department of Labour?
It is one of the most ridiculous sections I have ever seen in a Bill in this House. Is the Minister satisfied, for example, that he is not in some way in conflict with company law on the matter? Surely the members of the board, the chairman and  chief executive must feel uneasy with regard to their obligations. Surely they must feel uneasy as to what kind of responsibility can be pinned on them by this House or by the employees of the company if this power is being taken as it purports to be taken in this section of the Bill. I am asking the Minister to withdraw the section altogether. The appointment of the chairman and chief executive plus Zeus consultants by the Minister was, it is generally believed, a way of getting around the Devlin provisons with regard to salaries for chief executives. Obviously, if this section is put on the Statute Book, no such device will be available to the board or to the employees because the words do not need interpretation but are clear: “The company shall comply with any directives with regard to such remuneration, allowances, terms or conditions which the Minister for Communications may give from time to time to the company.” So I am asking that section 2 should be deleted from the Bill. It is an arrogation of power which is fraught with danger for industrial relations and for the status and standing of boards of directors of companies. It has been a tendency in recent times to put a section to this effect into Bills. It is a graft that will not take; it is a graft that anyway will not produce a great deal of fruit in the field of industrial relations.
I would like to say a word with regard to B & I marketing. I have mentioned this in the House already. Special training should be given to the people who have direct personal contact with the public on board Irish-owned ships. Courtesy should be the theme of intensive courses. I say this because I am conscious that it is not the thing that is uppermost in one's mind when one uses any of the services of B & I, Sealink or ICL. It is linked into marketing. Emphasis will have to be placed on customer satisfaction and customer comfort. I have already mentioned my criticism of the lack of protection for consumer interests due to what is, in effect, a cartel on the Irish Sea. This is another area that management should concentrate on. I know of one instance  where a young summer recruit, when a German passenger asked for some information, was told by a member of the staff not to spend too much time explaining, that the less they were told the less he would be persecuted. That is not an attitude which will develop business for us here; nor will it give us a good reputation internationally for services rendered.
Aer Lingus concentrated very heavily on the idea of the friendly airline. That is a good marketing ploy. They have made an effort to see to it that their staff live up to that guideline. They may not always do so, but it is important to have such an objective. It is important to instil the belief into potential customers that that is the sort of service which is available.
As far as B & I are concerned, it is important that special courses be given to people who have direct contact with the customers. They should be properly supervised with customers, to see that that kind of service is available. Another area to which we should pay some attention is the Eurodimension of B & I, which I mentioned earlier in relation to the challel tunnel. If B & I purchase ICL it becomes even more important. I am pleased with what has been stated about the strengthening of B & I management. Nothing but good can come of competent management in a strong position, and I do not mean a fascist or dictatorial position. They need strong management with objectives, who know where they are going and why.
Is there any talk of B & I acquiring a controlling interest in the Belfast ferries? These could be linked with the ICL deal, if such a decision is taken. From reports which I have received with regard to expenditure on the B & I boats, which expenditure is being covered by a section of the money being allocated here, I understand that a reasonably good job has been done. However, with reference to the Seafort Welding Company who got that job — and there were complaints that it did not go to a new and smaller  reorganisation in Verolme Cork Dockyard — there are disturbing rumours that Seafort would not release the refurbished Leinster until the Government paid on the nail, which is an indication of the damage done in shipping circles by what happened in the case of Irish Shipping Limited. It is a repercussion and captains of ships and sailors say it can still be felt in shipping circles, whereas hitherto the flag and the name connected with any Irish shipping company commanded respect and were more than creditworthy
An aspect of the Bill to which one must advert since B & I are carrying so much freight — and I await some information from the reports of 1984 and 1985 and/or from the Minister as to how exactly they are doing in terms of cash at present — is that Bell's, a substantial freight company, have now been purchased by a Dutch concern. Again I am pointing out that we must be cautious to make sure that we maintain an Irish shipping influence. CMB of Belgium I gather are now operating, as far as freight is concerned, from Cork. I am mentioning these matters to point out potential development for Irish companies at this time.
I must pay tribute to the staff of B & I who earlier invested £300,000 in the company when the company needed such investment. The Minister for Finance introduced some provisions in this year's budget with regard to workers having shares in their company. This decision by the B & I workers in the past was an indication of their commitment to their company and is something which we should and could encourage for the future.
I think I have drawn attention to the fact that the original charter, so to speak, given by the Minister in May of 1985 was that the operation should become profitable by December 1986. I hope we have not postponed that for a further year. The co-operation arrangements I have dealt with in fair detail. Regarding the two year agreement, does this refer to 1986 to 1987 or 1985 to 1986? I think it is the former, but I should like confirmation on that. We should watch the new Sealink Company quite carefully. I am  not in any way denigrating that company, their owner, their activities or their objectives, but self-interest demands that we should watch carefully what is going on. We should not walk ourselves into a two year agreement which could be used against us by a threat of termination at the end of the two years. We should keep an open mind, in our own interests.
I have already referred to the fact that the board's proposal originally was for £43 million. I presume they had justification for the other £5 million. What was the board's justification? What were the Minister's reasons for reducing the amount? Was it the reduction in fuel costs, or interest rates, or what? Would he let the House know this?
I am glad of the commitment in the Minister's speech to maintaining a strong Irish presence in shipping services to this country. Apart from the patriotic ones, there are the practical reasons also. He said: “The amount and phasing of the further equity injections will be closely related to the overall performance of the company against very challenging profit targets which the Minister has set for them.”
I am wondering if there are profit targets set by the Minister which he did not mention. Would he be able to indicate when replying what the target is for 1987, for 1988 and so on? If he is going to pay out the money over the years 1987 to 1989 and has targets, then the House will be pleased to hear what those targets are, so that the House can keep an eye on the progress of the company with regard to achieving those targets. He said: “The other £13 million is being used to begin the process of restructuring the company's balance sheet by reducing the company's borrowings.” Can the Minister tell us what the company's borrowings are at present? In the absence of the 1984-85 annual reports we can only make a guess based on what is in the 1983 report which may not be a true reflection of the company's borrowings.
The Minister devoted a considerable part of his speech to the sales area of car ferries. I have dealt with that from a different aspect. I would like the Minister  to commnt on that and to indicate whether he thinks it is worth while to bring it to the notice of the chairman and the board of directors with regard to their future plans and ambitions for the company.
In the Minister's speech he said that the battle for market share resulted in an undesirable lowering of standards and led to a situation where reductions in fares were the only means of attracting additional passengers, leading in turn to greater losses. Clearly such a situation could not continue indefinitely. Inevitably fares had to rise to cover costs if the services were to continue. There are people who claim that the rate per mile on the Dún Laoghaire-Holyhead route is too high in comparison with rates for similar journeys in Europe. If so, we should aim to have competitive rates. When I say competitive rates I mean competitive in contrast to similar journeys to other countries. We have no competition. This is the danger signal as far as the present arrangement is concerned. I would like the Minister to analyse a little more what he means by “to cover costs.” How much of the increase will cover costs? I think it is 12½ per cent. How much is a make-up for what the Minister states have been losses due to uneconomic cost-cutting in the past?
In conclusion, I support the Bill with the exception of the section which I intend to oppose, and I have indicated to the House that I will oppose and divide the House on it. I hope the company will become commercially viable, that it will make a profit in the not too distant future. I do not know whether or not 1986 is included. I do not think it is. I do not know whether the delphic statement “by 31 December 1986” means that we are supposed to have a profit in 1986. I hope the company will insist upon high standards of sales and services on board with a strong eye on Irish interest. I hope there will be an attempt to give courteous service and that there will be an attempt made to condition the people working in B & I to providing whatever service the customer wants. There should be an emphasis on that in the future. People  who have referred the new arrangements to the competition area in the EC should be listened to. In financial terms we do not want elaborately structured arrangements to be struck out by the European Commission because of competition. With the exception of the section, and that is a very serious exception, we will support the voting of the moneys for the B & I.
Mr. Allen Mr. Allen
Mr. Allen: I look with a suspicious eye at this Bill which allocates £38 million to the B & I, £20 million of it this year. As the previous speaker, Deputy Wilson, said we are not in possession of the facts in that we do not have the reports of the last two years, 1984 and 1985. Therefore, we have to take the Minister's word that this money will be well spent. It is taxpayers' money and should be put to positive use. As individuals we are not in a position to make a valid judgment because of the absence of annual reports.
As a Cork Deputy I look upon the allocation of £38 million to B & I with an envious eye. When B & I abandoned Cork some years ago we were told the reason was that they wanted to return to profitability and to save the company. A number of years on we now see that the company are as dependent on Government funding as they were some years ago. I wonder if there was a need to get out of Cork at that time. It was a move which has had serious effects on the economy of the whole south western region. The tourist industry went through a traumatic time. If it were not for the weakening of the dollar in recent years which attracted trans-Atlantic tourists, the tourist industry in the south west would have collapsed.
There is a complete absence of British tourists in the south west at present. That is related to the decision made by B & I to get out of Cork some years ago. That decision came about partly because of the earlier decision to transfer the service to Pembroke. I am understating the case when I say that was a most stupid decision. I am glad that B & I are now accepting the stupidity of that decision.
 Pembroke is an area which has no proper road infrastructure. It is miles off the beaten track and is a most unattractive port for any sea-going tourist. The journey from Britain to Cork has been made all the more difficult because the Rosslare-Cork roads are very bad as far as Waterford. However, that is all in the past.
I question the level of accountability that exists in State companies when decisions affecting a whole region can be made. The company can walk away from that decision many years later and the State is left holding the financial baby. The region is left in a serious condition because of the absence of a ferry link between Cork and Britain, a ferry link which was severed three or four years ago and left Cork without a ferry link to Britain for the first time in over a century. I am glad B & I have admitted that was a mistake.
I have many questions to ask. If you want to go to Cork now you have to travel by air. If we look at the Cork-London and Dublin-London air prices, for an equal distance one pays £24 extra out of or into Cork. There is unfair competition there by way of another operator. I regret that local efforts to date in Cork for an alternative ferry run by private enterprise have been unsuccessful but we live in hope. I am glad the Government have shown a sign of confidence in private enterprise by guaranteeing a certain level of subvention for the ferry in its initial years. I hope that guarantee will continue into next year and that the people involved will be more successful in 1987 in getting a ferry for the Cork region.
We have a sinn féin policy in Cork where if the State will not do it for us, we will do it ourselves. I hope that despite differences of opinion in Cork between individuals we will be successful in getting a ferry for the 1987 tourist season. This is vital for the whole south-west region, not only for tourism but also for industry because the haulage industry at present are also experiencing difficulties due to the absence of a ferry out of Cork. The only word of caution and warning I would put out today is that if we are successful  in Cork, and I am sure we will be, in getting and running a ferry as a private enterprise we will not be subjected to unfair competition from a company such as B & I who are State subvented and who can offer attractive temporary offers to squeeze out other opposition. I will be watching closely when we do get our ferry that taxpayers' money will not be used to squeeze out in an unfair way private enterprise.
The Bill mentions the refurbishment of the B & I vessels. I hope there will be a role for a new, lean and fit Verolme Dockyard in B & I's plans and that any refurbishing that will be carried out in future years will be carried out at Verolme. I am confident that Verolme will be there again and will be fit, competitive and eager to get business. I hope that the B & I will make a point of looking with a favourable eye on Verolme. In the past that was not the case.
I share the concern expressed by Deputy Wilson of the possibility of the administration and control of the duty free and catering areas going to a foreign company. Travelling back on an Aer Lingus flight recently I was very disturbed to see being presented Irish cheese that had been packaged in Britain. I re-echo the sentiments expressed by Deputy Wilson that we should use Irish goods at all times, where possible. It is disgraceful that a company such as Aer Lingus, a semi-State company, should be using Irish cheese that is packaged abroad. This is not a healthy sign and should be questioned.
In relation to the duty free areas on ships and aeroplanes coming into the country, I want to express serious doubts about the value the public are getting in these shops. They are getting a reduction in price but they are not getting the full benefits of the elimination of duty. This should be looked at by the Office of Consumer Affairs because not only are people not getting the value they should be getting but the unfair competition on the part of semi-State bodies such as Aer Rianta, through Aer Lingus, and the B & I in advertising duty free facilities is doing serious damage to business people,  not alone in Cork but also in Dublin, I am sure. Serious damage is being done to business in our cities because of this unfair competition. I question it seriously.
Mr. Skelly Mr. Skelly
Mr. Skelly: It is being subsidised by the taxpayer.
Mr. Allen Mr. Allen
Mr. Allen: As Deputy Skelly has said, it is a level of competition that is being subsidised by the taxpayer.
I was going to raise on the Order of Business, but I think this is a proper vehicle by which to do so, the question of the unfair competition on the part of semi-State bodies and the misleading information which is being given out by them. I will not detain the House too long. I have received a letter from a constituent of mine who was travelling Aer Lingus to Bristol on business and who visited the duty free shop in Dublin.
An Leas-Cheann Comhairle John J. Ryan
An Leas-Cheann Comhairle: We are dealing with ships, not aeroplanes.
Mr. Allen Mr. Allen
Mr. Allen: It can happen on ships or aeroplanes. I will give an idea of it. He bought a watch duty free——
An Leas-Cheann Comhairle John J. Ryan
An Leas-Cheann Comhairle: A passing reference.
Mr. Allen Mr. Allen
Mr. Allen: ——for £77.95. He was stopped by the Customs coming back into Ireland and had to pay VAT at 25 per cent on his purchase. As a legislator, I am supposed to know the rules of the game, but I did not know that if I bought a watch costing over £68 in a duty free shop or on either an aeroplane or ship coming into Ireland I would have to pay VAT on it. In Cara magazine a Raymond Veil watch is advertised as costing £99 with the note; “save £60 on down town Irish prices”. This is totally misleading information because they omit to show that that watch is liable to VAT of 25 per cent. Therefore, there is no great saving. It is unfair competition, it is misleading information and it is a matter that the Office of Consumer Affairs should take up. It is disgraceful that a semi-State  body should indulge in such a misleading campaign and unfair competition which is doing serious damage to, for instance, the jewellery trade in Cork and in Dublin. As I said earlier, the consumer is not getting the value he should be getting. He is getting a reduction on spirits and cigarettes but the level of reduction is not being fully passed on to him. It is appropriate to bring this up in the House.
In relation to section 2, like Deputy Wilson, I would ask the Minister to reconsider his position. It is to say the least an unhealthy situation where external interference can be brought to bear on a company, even though it is a semi-State company, by the Department of Communications. I am sure there are very capable people in the Department but at the same time the executives of a company are in the best position to judge what is best for the company. I may not have agreed totally in the past in relation to B & I in this regard, but with an improvement and a strengthening of the management the company would be best served if total control is left with them. Too often in the past in B & I, other forces and groups have dictated terms within the company. I hope that is one of the things which has been eliminated. Therefore, I would ask the Minister to reconsider his position in relation to section 2.
I welcome the Bill with reservations. I accept that it is required to assure the future of B & I but I do have the reservations I have already mentioned. These are in relation to section 2, which I hope the Minister will reconsider and also the role of B & I, especially their role in the past. Deputy Wilson called on the B & I to look at other ventures. If the B & I have an expansionist policy, they will have to look at Cork again. I often meet people who have suffered the journey from Cork to Rosslare, a trip of over 100 miles, then from there on, continuing their journey on bad roads on the other side. The people of the south-west deserve a better service. If B & I are going to spend taxpayers' money on new ventures, they will have to reconsider  their position in relation to Cork. With a proper marketing policy which was not there in the past Cork can be viable. If private enterprise can do so, provided they are given a fair crack of the whip and not subjected to too much unfair competition, then the B & I, in a revamped organisation with a commitment to Cork, could make a ferry service out of Cork viable.
An Leas-Cheann Comhairle John J. Ryan
An Leas-Cheann Comhairle: Deputy Michael Ahern.
Deputy O'Malley rose.
An Leas-Cheann Comhairle John J. Ryan
An Leas-Cheann Comhairle: Deputy Skelly and then Deputy O'Malley in that order.
Mr. O'Malley Mr. O'Malley
Mr. O'Malley: I have been here since 10.30 a.m. trying to get in on this Bill.
Mr. M. Ahern Mr. M. Ahern
Mr. M. Ahern: As the Minister said, the purpose of this Bill is to enable the Minister for Finance to provide up to £38 million in additional equity for the B & I company. We have noted the substantial losses incurred by the B & I in recent years which amounted to more than £43 million, placing the company in a very dangerous position. I suppose it was necessary for the Government to intervene in order to ensure that there be some link between this country and the outside world. No doubt the Minister will explain later why £38 million only is being granted and not the full £43 million. Hopefully, the company will be able to make up that £5 million shortfall in the future by way of profit.
As Deputy Wilson said earlier, section 2 is a new type of provision, or will be, on our Statute Book, casting doubts on the new management and chief executive of the company. I believe it does not augur well for the future of semi-State bodies and casts a reflection on their executives. This section should not be included and, as Deputy Wilson stated earlier, we will be opposing it. Perhaps  the Minister would have a rethink on this matter before the question is put.
With regard to the granting of the £38 million, it is very difficult for anybody to reach a valid judgment on whether it should be granted because we have not the requisite information available to us to reach such a conclusion. For example, we have not got to hand either the 1984 or 1985 annual reports, nor have we detailed projections of what will be the future position regarding profits in ensuing years. Therefore it is guesswork as to whether this is a good or bad investment. It is important that such investment be made to ensure that we have a passenger and freight shipping service between this country and Britain. From an economic point of view we cannot make a valid judgment on figures not available to us with regard to projections. There is no reason to believe that a profit will be made in the future. For many years past projections were made with regard to the B & I and many other companies that did not materialise. It is important that we be given more information on the background and future projections of the company.
With regard to the fees paid by the Minister to the consultancy firm, it is important that taxpayers be informed in detail on what this money is being expended, because ultimately it is the taxpayer who will foot the bill and he has a right and entitlement to know.
There have been many complaints over the years about the facilities provided for people using the B & I services, not alone between Dublin and Holyhead but also between Rosslare and Fishguard in comparison with the facilities provided for Sealink. There have been many complaints to the effect that the train services are more convenient for those passengers using Sealink and that the freight and other facilities provided in the freight area for people using Sealink are better than those for people using B & I. Such complaints are a cause of concern. It is important to ensure that the people using the B & I services get equal treatment with those utilising the other services. It is important also that the consumer be  protected with regard to prices. The Minister has said that it has been found necessary to increase prices to maintain services, but there has been complaints to the effect that the increases have been greater than needed. One might pose the question: are the increased prices necessary to maintain the service, to make up for the losses sustained in the past or in order to maintain the day-to-day services? I should like to know whether the present day operations of the B & I are profitable. I believe there is to be a 12½ per cent increase in prices. It should be remembered that oil prices have fallen by 51 per cent in the past year. Both those factors should ensure that the B & I operation will be profitable.
In Private Members' time last week there was mention of the new Channel tunnel which should result in greatly increased traffic through the Rosslare area. There has been talk of one ship to operate the Sealink service between Rosslare and Fishguard under the control of a private company operating for profit. However, if a commercial decision was taken to close down that service we would then be in a very invidious position, with no link between the southern part of this country and Britain. If that were to happen the Minister should ensure that the B & I would be in a position to provide that facility between Rosslare and Fishguard. The question of the provision of a jumbo ferry is causing some concern. The port of Fishguard is unsuitable at present for the docking of such a large ship and it would be necessary that the harbour be dredged. Perhaps the Minister would let us know when that port is likely to be ready or suitable for the docking of such a jumbo ferry.
As I mentioned there is much dissatisfaction with train links. The Innisfallen which is plying in the southern corridor, is likely to be put up for sale. Perhaps the Minister and B & I would be willing to make it available to the group in Cork who are trying to provide a facility between Cork and Britain. This is vitally important. The Irish Spruce was sold for a ridiculously low price and it has now  left this nation. I hope the same fate will not befall the Innisfallen.
I have received many complaints from hauliers who travel on the Rosslare route. They said they do not get equal treatment with regard to booking and so on. They say B & I give priority to their own business over private firms. This should not be the case. B & I are a semi-State company. They receive money from the State to keep them going and they should not be allowed to use their position to the detriment of private firms.
Mr. Skelly Mr. Skelly
Mr. Skelly: Hear, hear.
Mr. M. Ahern Mr. M. Ahern
Mr. M. Ahern: An arrangement has been made to give a franchise to British firms to operate duty free and catering services. Why has this happened? Why was an Irish company not given the catering contract? No suitable answers have been given to explain these decisions. It is necessary that answers be given to allay fears that Irish companies are being done down unfairly. I am sure many Irish firms could provide comparable services at a reasonable price.
Busloads of people who have travelled from France to Rosslare pass through Midleton each week. They complain that there are very few Irish products on sale in the Sealink vessel. They ask why the Government do not impress on the owners of the vessel that this is not good enough. It is important that we protest if Irish products are not advertised or given equal treatment with other products on this vessel.
A few years ago B & I cut their link with Cork. Since then Cork has not had any sea link with Britain. This has been a tremendous loss as far as tourism is concerned. In the past few years there has been much talk about the provision of a boat at least in the summer months to go from Cork to Britain. B & I were asked for help with such a project but they did not give any. They felt they would lose trade from Rosslare and Dublin but this is not good enough. The southern region should have a link by sea with Britain. One of the reasons why B  & I moved out of Cork was that they incurred great losses there. They undercut their competitors in order to drive them out of Cork and in doing so they ran up great losses themselves. This was bad management and has been recognised as such. Under-cutting to such an extent that one cuts one's own throat does not make for successful business. It is important that B & I rethink the position in Cork and enable a facility to be provided there next year. It is too late to provide a boat this year.
The B & I now recognise that it was a bad decision to go into Pembroke. Brittany Ferries ply successfully between France and Cork. The traffic between Britain and Cork would be much greater than it is to France. It is difficult to understand why B & I could not make a success of that when Brittany Ferries can make a success of their run. A side effect of the B & I closure in Cork has been that there are no freight facilities and the costs incurred by hauliers in the southern region have been greatly increased. Many of the roads between Cork, Kerry and Rosslare are disastrous and were never intended to take juggernauts. The distance that must be travelled has increased as has the cost of repairs. The amount of time lost in travelling has also increased. In these harsh, tough economic times, these extra costs cause extreme hardship to people who are fighting for survival. If there was a sea link between Cork and Britain those people would be able to stay in business.
There is great anger in my constituency because the B & I decided to have their ships refurbished in Liverpool. We are all aware that thousands have emigrated from our region and that many skilled workers in Cobh, Cork city and surrounding areas are idle. Those workers are capable of carrying out any alterations to ships. If the Government were concerned about the extent of the unemployment position in that area they should have directed the B & I to carry out the work on those ships in the Verolme dockyards. The B & I executive took a commercial decision to send the work to Liverpool  but the cost has to be borne by the Minister for Communications. I understand that work on one of the ships in Liverpool was stopped until the Minister issued a guarantee to pay for it. The failure by the Government to direct that work to Cobh will be remembered by the voters in the constituency at the next election. People in Cork are anxious to know if the B & I have completely written off Cork. Have they included the southern region in their future plans?
I understand that the profitable concern, Irish Continental Line, is to be sold off. It is important that that concern is retained under Irish control. Will the Minister direct the B & I to purchase ICL in the event of another Irish concern not being interested? It would be a shame if that profitable concern, a major link with the Continent, went out of Irish ownership. We are all aware that in times of crisis private firms, particularly if they are not Irish, do not consider the wellbeing of the country as a priority. It is ridiculous to think of selling a profitable company to foreigners.
In the course of his speech the Minister mentioned a two year agreement and I should like to know if it is his intention to enter into another agreement with B & I after that. When will that agreement commence? We must know if in two years time we will not have any say in what will happen on the Rosslare-Fishguard route. I hope the Minister deals with that matter in the course of his reply.
The Minister told us it is not proposed to give £38 million in 1986 but to give it in the period between 1987 and 1989. He said that the amount and phasing of the further equity injections will be closely related to the overall performance of the company against very challenging profit targets. The latter phrase sounds very like Civil Service or consultancy language. Facts are not disclosed but nice English is used to make something look good. I prefer to deal in facts and figures and I hope the Minister can give us the exact details rather than relying on general statements.
In the absence of reports for 1984 and 1985 is the Minister in a position to give  us some idea of borrowings by the company? It is important that we should be told that the £38 million we are giving to the company will not have any effect on the company's borrowings. The Minister should insist on the company having any repair work to their ships carried out in Cork where excellent work has been done. It is worth noting that the recent ship built for the Naval Service at Cork is in great demand thoughout the world. It is a pity the skilled workforce there are not put to work repairing and refurbishing Irish ships. I must protest at the decision to send repair work to Liverpool. The Government had the power to direct the company to have that work carried out in Cork where, I have no doubt, it could have been done at an economic rate.
I welcome the provisions of the Bill with the exception of section 2. It is essential that we should have a ferry service between here and the British mainland and I trust the new arrangements will ensure that the B & I will be profitable in the future and will give people using their ships the service they deserve.
Mr. O'Malley Mr. O'Malley
Mr. O'Malley: I thank Deputy Skelly for facilitating me and allowing me an opportunity at this stage to speak on the Bill. The reality is that it is a loss funding Bill for B & I. It constitutes simply the putting of money by the taxpayer into meeting the losses which have accrued in B & I over the years. I must say at the outset that the speech of the Minister of State this morning was most inadequate and unsatisfactory, and well he should know it. Almost no details were given, figures were not given, though it was essential that they should have been given in view of the fact that this company have failed to publish any accounts for 1984 or 1985. Notwithstanding that, the Minister gave us very little information in his very short, skimpy and inadequate speech which glossed over the reality of the position and tried to put a face on something that is pretty frightening.
It is no harm for the House to remind itself that only a few months before the  final collapse of Irish Shipping Limited a Bill almost exactly similar was brought before the House. It was supposed to be the salvation of Irish Shipping, and a substantial amount of money was voted. All that money was lost, plus a huge additional amount. I wonder are we seeing the same thing here now. Nobody can be certain that we are not seeing it and it is regrettable, in these circumstances, after an appalling performance by this company over the years, that such an inadequate speech was made by the Minister of State.
In his speech we were given the assurance that throughout the period there will be detailed monitoring of the company's commercial performance by the Department of Communications. That is great reassurrance for the taxpayers, because one has only got to look at the track record of the Department of Communications in monitoring the commercial performance of a State owned shipping company. When one looks at this, one is not just entitled but bound to ask what value, therefore, is there in that assurance.
I am not blaming the individuals in the Department. Their training and background do not enable them to monitor the commercial performance of any company. So far as I am aware there is not a single chartered accountant in the Department of Communications and, on the basis of what has happened in regard to Irish Shipping, this assurance might well have been omitted from the speech.
As I have said, there is little or no hard information in the speech, but one of the few bits of information we can glean is on page two of the speech. The Minister said that among the board's proposals for the future of this company is the development of the existing co-operation arrangements with Sealink through a new two-year agreement. That is an ominous development. I was aware of the existing cartel arrangement but I was not aware that it is proposed to enter into a further one. If it is, the least we should be given are details of that new two-year cartel  arrangement. I was glad to hear some concern expressed here today about the existence of this cartel. I referred to it in a speech to the Dublin Chamber of Commerce on 2 May last, and I should like to quote what I said then because I think it is even more relevant now when we know that a further such agreement is being entered into for a further two years. I said then:
I am amazed that the policy of promoting a cartel between Sealink and the B & I Line has merited so little reaction from the tourist trade or from industry and commerce. We know very well, from our experience of the operation of cartels in the air, that having one among sea carriers is a recipe for high fares and inefficiency. Consumer interests estimate that in 1986 sea fares between Britain and Ireland are almost 30 per cent higher than before the cartel was formed two years ago. This is unacceptable when inflation is running at 3 per cent for this year. Fares between Britain and Ireland are now 60 per cent higher than on sea routes of similar distance between England and France.
I am writing to the Office of Fair Trading in London to draw their attention to the existence of this cartel between B & I and Sealink in the hope that they will exercise the same powers which they exercised last year in bringing to an end similar arrangements between English and French sea carriers on the English Channel. I think that the Chambers of Commerce should be vigilant in this matter also.
Protectionism in transport is of no more value to this country than protectionism in industry would be if it still existed. Those involved in our transport policy and in our transport companies should learn from the slow and painful lessons gleaned in industry by those who thought that they could stop the clock. In Irish industry those who were averse to competition and  thought that they could prolong protectionism and inefficiency have long since perished. Those who sought to become efficient and competitive have survived and prospered. The lesson is clear for all to read.
It is very disturbing to find that this arrangement, which already has had the serious consequences I outlined there, in huge fare increases, no competition, inordinately high fares on the Irish Sea, will be continued and perhaps even intensified. We do not know. All we are told is that there will be a new two-year agreement following the previous one of two years. We now have the most unhappy position that so far as transport on the Irish Sea is concerned there is a cartel in operation both in the air and on the sea. Consequently, we have inordinately high fares both in the air and on the sea. This is extremely damaging to tourism and to industry and employment here.
In the arrangement that has been described there will be no B & I ship operating from Rosslare, no Irish ship. It does not matter, because the revenues will be pooled anyway. I cannot imagine anything more calculated to produce inefficiency than the sort of tragic situation we have had from a similar cartel arrangement in the air. Instead of encouraging this kind of arrangement, the Government should be stepping in to put a stop to it. It is their duty to do so because it cannot be other than seriously damaging to allow this to develop and to be continued. Indeed, the Minister of State in his speech envisages the possibility of this arrangement being extended again at the end of the two year period if, as he said, it is considered desirable.
The unwillingness to compete and having an artifical cosy arrangement of this kind should not be tolerated, and the Government's and the Department's attitude is entirely wrong. It is perfectly clear that this kind of cartel arrangement which apparently B & I are being encouraged to enter into is in flagrant breach of Article 85 of the Treaty of Rome.
We are in the happy situation that the  present Competitions Commissioner, Mr. Sutherland, is someone who is strongly of the view that these sorts of practices should be swept aside and that normal competition rules under article 85 and the other relevant articles should be enforced fully. He might well direct his attention to the arrangement now being entered into. It is not just potentially damaging: it has already been proved how damaging it is by the absolutely inordinate fare increases over the past two years. They were entirely without justification, except to pay for the inefficiencies and losses that were built up by the company in question.
There is plenty of evidence that the Commission are moving strongly against these sort of practices. Within the past month or so enormous fines, totalling 57.8 million ECUs, were imposed on a number of European firms for engaging in precisely the kind of practice that is now getting official encouragement here. It was said at the time that the high level of fines reflected the Commission's view that market sharing and price fixing were particularly serious violations of EC treaties regarding competition rules. What have we here but precisely that — market sharing, price fixing and an agreement not to compete. This House is asked to give its blessing to activities that are clearly disallowed by the Treaty of Rome, and for good reason.
It seems to me extraordinary, in a speech introducing a Bill of this kind and providing for another £38 million of taxpayers' money to meet the accumulated losses of the B & I, that no mention has been made of Irish Shipping, and in particular of Irish Continental Lines and their future. The story going the rounds is that B & I are about to take over Irish Continental Lines. I have mixed feelings about that. I suppose it is a good thing if nobody else is prepared to take them over that somebody should and that it should be an Irish company. However, I hope Irish Continental Lines will not acquire the practices that have apparently been endemic in the B & I for quite a number of years.
The only light one sees in all of this is  the attitude of the new Managing Director of B & I, Mr. Spain, in trying to come to grips with the appalling problems he inherited when he took on the job. I should like to congratulate him for his resolute and determined approach, but the fact that it has been necessary for him and his colleagues to do the kind of things they have had to do in the past year is an indictment of what was going on in the company before that time. Some of the practices within B & I that came to public attention were almost incredible and it is difficult to understand how the previous management could have allowed that situation to develop and continue for quite a number of years. I wonder what monitoring was carried out with regard to that development over those years? Why was an effort not made to put a stop to what was happening? In effect, the B & I were being run by people other than the management who seemed to have washed their hands of responsibility in the matter. The consequences were enormous losses which the taxpayer is being called upon in this Bill to fund.
The situation now existing in B & I raises all kinds of questions about the whole matter of accountability in the public service and in State companies. This appalling state of affairs was allowed to arise but that does not seem to matter. The only real consequence is that a Bill is introduced here and all kinds of flowery assurances are given about the future, in almost the same kind of words that were used when discussing the future of Irish Shipping when a similar Bill was introduced in 1984. Quite gaily, we vote large amounts of public money to fund losses that accrue because of extraordinary ineptitude over a period of years. If this were to happen elsewhere the consequences would be very different but it seems to be almost taken for granted that some of our publicly owned companies can be run in this way and that it does not matter because ultimately we can have recourse to the taxpayer for large amounts of money to bail out the company concerned.
I cannot see any alternative to what  has been put before the House. I do not see any point in closing down the company and having a repetition of the disastrous situation of Irish Shipping. I see some hope at least in the attitude of Mr. Spain and in the efforts he and his colleagues are making. I only wish there had been somebody like Mr. Spain in the company several years earlier when the dreadful state of affairs now existing could have been averted.
It is incumbent on the Minister to tell us the exact position with regard to Irish Continental Lines. That should have been done in his opening speech. It is quite unsatisfactory for the House to have to speculate about the whole matter — indeed, it is unsatisfactory for us to have to speculate about so much. We are entitled to an explanation from the Minister and from the company for the non-appearance of any accounts for two years, while at the same time they come along looking for substantial amounts of money with not even the most basic form of accountability for their stewardship in 1984 and 1985.
The most important factor involved is what services will be available on the Irish Sea and at what cost to the consumer. Unfortunately, what is happening is that the services are being reduced. B and I are pulling out of Rosslare and are allowing the route to be operated by Sealink. They are reducing the capacity they offer for passengers and freight and, at the same time, they are entering into a cartel arrangement that is in complete breach of the Treaty of Rome. They are reducing capacity, increasing fares, pooling revenue and failing to complete. The net result for people who have to use these services is that an even worse service becomes available with less frequency and as much higher prices. That cannot but be damaging to the Irish economy, particularly to tourism and no less so to industry and commerce generally. That is regrettable, These are the sort of points that should be dealt with in the Minister's reply. They should have been covered in his opening speech, but the type of speech he made was not good enough. It was chillingly similar to a speech made in this  House in relation to Irish Shipping only a few months before the final total collapse with astronomical losses, of that State owned shipping company.
Mr. Skelly Mr. Skelly
Mr. Skelly: I thought this debate would not be very constructive but I am glad it has taken the turn it has. This reminds me of the debate on the Air Transport Bill when we had more or less the same line up. At that time I spoke after Deputy O'Malley and followed some of the lines he took, although he was much more trenchant and perspicacious than I was.
This is a very short Bill with serious implications. In my notes for my contribution to this debate I have points like trade, Sealink plus B & I equals BA plus Aer Lingus and comment on consultancy. I ask now, as I have done in most of my contributions lately, that attention be drawn to the points I am making so that the Minister will give me a reply. Usually my call is ignored but I would like my comments to be addressed today. I would like my comments to be considered even if in the long run they are cast aside, as usually happens in this House when the numbers game is played. For those who are interested, the numbers game means that the side with the majority wins all the time and the Minister does not have to be too concerned about the form of legislation which is being brought in because he knows it will be carried, regardless of what points are raised in the debate.
Since I came into this House a few short years ago I noticed that we are famous for passing colossal amounts of money on the nod. We have now reduced our Estimates debates to about two and a half hours. Taking away the Minister's contribution and the Opposition spokesman's contribution, we are left with about 30 minutes to discuss an Estimate. Last week an estimate for £272 million for the Department of Defence was passed but many of us did not get an opportunity to contribute. We also had to nod through the House £80 million for the North Atlantic route.
The first point I want to make is that this is taxpayers' money, as Deputy  Allen, Deputy Ahern and probably Deputy Wilson mentioned — I did not hear all of Deputy Wilson's speech. In the last few weeks a Bill was brought in here liberalising the haulage business, opening it to all licensees. The Minister thought this would be wonderful for business, trade and the consumer because the businesses would be more competitive and only the fittest would survive.
We should bear in mind that £29 million was given over the past three or four years to prop up this company and we are now asked for a further £38 million. This company are killing the haulage business. Other haulage companies cannot compete because the B & I are selling below cost. I am glad the Government will be bringing in a Bill very shortly to outlaw below cost selling in supermarkets because approximately 5,000 small businesses have closed throughout the country. One of the most hard working groups in our community are the hauliers, many of whom go into debt, risk their homes and their futures and work every hour God gives them to try to make a profit. A haulier might invest in a tractor for, say, £50,000 and hope he will not be involved in a crash, or that it will not be vandalised and that he will get enough business to keep him going over the next four, five or six years to pay off this debt. He will repair the tractor himself and he will try to find some place near his home to park it so that it will not be damaged. Then he must compete in the market place, but with whom? He must compete with B & I, and they take the skids from under him.
B & I cannot compete with these people on equal terms. For the last number of years they have made a mess of their business. They have lost colossal amounts of money. They are grossly inefficient and the most complimentary thing one could say about the service they provide to their unfortunate passengers is that they provide the nearest thing to steerage class accommodation, the kind of service Irish people availed of when they crossed the Atlantic in the days of the coffin ships, with puke all over the  decks, filthy and appalling cafeteria facilities, inefficiency and so on, but they provide the wonderful facility of gaming and gambling machines on their ships so that seven year olds can play them with their holiday pocket money when crossing the Irish Sea. A member of the Oireachtas smashed a couple of these machines in a rage over the past year or two because five, six and seven year olds were not prevented from using them.
This company operate unfair competition and I hope before Committee Stage the Minister will give careful consideration to the points I have made. What do the B & I charge for container traffic to Britain and back as opposed to other haulage businesses? If it is proved that they are charging well below what the hauliers can charge, then in order to justify giving taxpayers' money to this company, they should be told to desist from this practice in the future, in the same way it is proposed to forbid below cost selling in super markets.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
Dáil Éireann 367 British & Irish Steam Packet Company Limited (Acquisition) (Amendment) Bill, 1986: Second Stage.