Seanad Éireann - Volume 98 - 09 June, 1982

British & Irish Steam Packet Company Limited (Acquisition) (Amendment) Bill, 1982 [ Certified Money Bill ]: Second Stage.

Question proposed: “That the Bill be now read a Second Time”.

Minister of State at the Department of Transport (Mr. Leyden): The present authorised share capital of the B & I Company is £35 million, which is held in its entirety by the Minister for Finance. The main purpose of the Bill is to increase the company's authorised share capital by £25 million and to enable the Minister for Finance to take up this amount in additional shares in the company. The Bill also provides for an increase of £25 million in the maximum amount of the company's borrowings which can be guaranteed by the Minister for Finance.

As Senators will no doubt be aware, the B & I Company is encountering severe financial difficulties. The company recorded losses of £1.1 million in 1979 and £2.8 million in 1980 and, notwithstanding an increase in turnover from £66 million in 1980 to £73 million in 1981, the loss in 1981 jumped to £7.54 million.

The trading conditions in which the B & I has had to operate in recent years have been very difficult, given the depressed environment for tourism, the general economic recession and serious [196] cost inflation. The B & I's difficulties have been aggravated by a significant increase in borrowings and lease obligations resulting from an expansion of capacity from 1978 onwards. Severe competition on the Irish Sea, which has forced the B & I to hold down fares, has also seriously undermined the company's financial position. Industrial disputes both here and in the UK have cost the company a total of £5.9 million in the years 1979 to 1981, inclusive. In 1981 alone disruptions of one kind or another, many of which were completely outside the company's control, cost the B & I in terms of net loss £2.6 million.

The Government's reason for purchasing the B & I from private UK interests in 1965 was basically the strategic one of having an Irish presence on the Irish Sea which would at the same time operate on a strictly commercial basis. Following the take-over the company began an investment programme to replace old ships, introduce multi-purpose car ferries and to mechanise cargo handling facilities and since then the B & I has made a major contribution to the development of modern and efficient transport services between this country and the UK.

In 1977, the B & I decided on a large-scale investment programme. This programme was designed to meet the requirements of the company in the light of technological changes and expected growth in trade and tourism. The total cost to the company of the investment programme, which has since been completed, was approximately £72 million. The main investments were: the replacement of two older car ferries; the introduction of the Jetfoil on the Liverpool route; the termination of the Dublin/Liverpool Load on/Load off service, which was being scaled down since 1975, and the introduction of a Roll on/Roll off service to Fleetwood; and the introduction of a new short-sea service on the Rosslare/Pembroke route.

The new car ferries, m.v. Connacht and m.v. Leinster were built in Verolme Cork Dockyard at a cost of IR£40 million. The orders for these vessels enabled employment to be maintained at Verolme during a period of very severe [197] world-wide difficulties in the shipbuilding industry from 1971 to 1981, and brought the volume of business given by the B & I to Verolme since 1967 to almost IR£60 million. It was recognised at the time that, because of subsidies and incentives available to other shipyards, these ships could have been built abroad at significantly lower cost. The Government, therefore, provided additional share capital to the company, £20 million in all, partially to finance the construction cost of the ships involved.

A further part of the B & I investment programme was concerned with the development of a short-sea route strategy. This had been a long-standing ambition of the company because of the inherent advantages associated with more intensive asset utilisation and lower unit costs — a factor which had become even more important with the increase in oil prices in the seventies.

The introduction in 1980 of the company's short sea route, Rosslare/ Pembroke, involved the B & I in capital development commitments for the construction of a ferry terminal at Pembroke in south Wales. The introduction of its other short-sea route, Dublin/Holyhead, earlier this year did not involve additional capital expenditure due to a change in Sealink policy regarding the use of its port facilities at Holyhead by other operators.

The current problems of the B & I are due in large measure to the fact that the increased traffic and revenue budgeted for under the 1977 plan failed to materialise. In this situation the servicing of new debt has become a burden beyond the company's capacity to carry unaided. The company's financial charges increased from £2.6 million in 1979 to £7.6 million in 1981. At the end of 1981, the company had term loans of the order of £27 million as well as obligations relating to leased assets. The share capital of £35 million has been eroded by accumulated losses of over £12 million. Furthermore, the company's cash flow position has deteriorated to the extent that an injection of equity working capital is now urgently required.

[198] The B & I has been pursuing a policy of retrenchment in an effort to reduce costs and improve its trading position. The company's strategy for 1982 is based, inter alia, on a rationalisation of services and is designed to reduce permanently B & I cost structures, maximise the use of operating assets and realise saleable assets to alleviate cash difficulties. The main features are: the commencement of a daily short-sea service between Dublin/Holyhead in conjunction with a Dublin/Liverpool nightly service; the operation of a forked service from Pembroke, servicing Cork and Rosslare with one ship; the cessation of groupage services in Cork and the sale of surplus assets involved; the termination of the Jetfoil service; the sale of one car ferry, the Munster; the overall reduction of B & I personnel by approximately 200 people; the negotiation of a three months' pay pause; the raising of base revenue for tourism and freight to more economic levels; and the implementation of a cost reduction programme to cover all aspects of B & I's operations. This rationalisation plan is now being put into action and very good progress is being made.

The company has terminated the Jetfoil service and is investigating the possibility of a sale or long-term charter. The Jetfoil operation was conceived as a fast and comfortable passenger operation, linking as it did two major conurbations, Dublin and Liverpool. It was unfortunate that the introduction of the service coincided with a contraction in passenger demand on the Irish Sea and that the viability of the service could not have been tested in more favourable circumstances. The company has also rationalised its services on the southern corridor and has been servicing the Cork/ Pembroke and the Rosslare/Pembroke routes with one instead of two vessels for some time now. This move will help the company's finances to the extent that the surplus vessel is available for disposal and that there will be greater utilisation of the vessel on the combined route.

As regards the reduction in staff, I understand that this has been effected by voluntary retirement and severance [199] schemes. It is unfortunate that the level of jobs has had to be cut back but the measure is crucial to the overall viability of the company.

I am very concerned about the deterioration in the B & I's financial performance and I am glad to note, therefore, the steps which the company is taking to rationalise its operations with a view to achieving economies and improving productivity. I am in full agreement with the B & I board on the need for these economy measures, which should help to improve the B & I's trading results and create a more stable employment environment for the company's employees.

The Minister recently discussed with the chairman of the B & I the progress which has been made to date towards the implementation of the company's cost reduction measures and the need for further measures. The chairman advised him that while there has been broad acceptance among employees of the action which is being taken, there are still some difficulties to be surmounted. It is essential that these difficulties be overcome quickly in the longer-term interests of job security.

I should mention that a detailed examination of the affairs of the B & I is being carried out under the aegis of my Department. The examination has revealed that the company cannot continue to operate without immediate assistance from the Exchequer. In the circumstances, the Government have agreed that the Minister for Finance should take up additional equity in the B & I, not exceeding £8.7 million, during 1982. This should help to relieve somewhat the heavy burden of financial charges which represent a substantial proportion of the company's overall loss.

While it will be necessary to disburse a portion of these funds as soon as the legislation has been passed to enable the company to meet its immediate obligations arising from the seasonal downturn in its cash flow, I expect the company to demonstrate to me that satisfactory progress has been made in the rationalisation of its operations before I shall agree to [200] recommend any further disbursements from the Exchequer.

In recommending this Bill to the House, I am concious of the representations made both to myself and my predecessor by representatives of B & I workers setting out the company's record of good industrial relations and highlighting their participation in the affairs of the company over the years. I feel sure that the general body of workers in the B & I are as committed as the board of the B & I to restoring the company to profitability as soon as possible. I expect the company to make substantial strides towards this end in the current year.

I am very pleased that the unofficial dispute which had led to the suspension of all B & I services has ended. Industrial disputes of any kind are not in the long-term interests of either the B & I or its workers, and this latest disturbance was singularly ill-timed both by reference to the company's financial straits and the holiday season on which it is so dependent. I am glad that saner counsels have prevailed and that management and unions were able to arrange a speedy settlement.

Because of the Government's general concern about the deterioration in the B & I's position, I have arranged that the company's performance will be continuously monitored by my Department during the remainder of 1982 so as to ensure that the Government will be kept fully informed of the progress of the company towards the elimination of losses and a return to profitability.

I accordingly recommend the Bill to the House.

Mr. Cregan: While I agree with the Bill because of the situation within the B & I, I do not fully agree with what the Minister of State said. It was unfortunate that we had a situation early last week, which was created by the management of B & I, when there were no services from the country. I accept the marine officers created a situation in which there were stoppages on particular routes, but I fail to understand why the whole company had to close. I do not accept that this had to happen.

We had a Bill before us some weeks [201] ago dealing with Irish Shipping. They are having a ship built in Verolme Dockyard. Compare the two companies: one is going back to shipping and making money out of it and the other is not. The B & I cannot compete with other companies on the Irish Sea. The Jetfoil is now lying idle in one of our ports. Is it possible that it could be used on particular routes during the summer months? I understand there is a car ship for sale. Can the B & I tell us how much they are getting for it or is there anybody interested in it or in the Jetfoil?

B & I are now saying there will be a fork service between Rosslare, Pembroke and Cork. Some years ago we were asked by B & I to provide facilities for them in the lower harbour of Cork. Five million pounds was made available by the Government of the day for B & I and £9 million was given by the EEC. The lower harbour in Cork is now 99 per cent idle. It was opened last Saturday week but unfortunately a French flagship was the first to come in — there was no sign of the B & I. They say they need fast services yet some years ago they pulled out of Swansea and went to Pembroke. When they were going to Swansea there was an all year round service. It was always a busy one. They now go to Pembroke. They said it would be a shorter journey. A sum of £14 million was put into the lower harbour and now they do not want to use it. That is a fact. They refuse to go in there. Now the management of the B & I are looking for extra money.

We all know that the management of B & I are not capable of managing shipping. Between 1979 and 1981 they went from a deficit situation of £2.8 million to £7.5 million. That is a lot of money. I readily admit that there were times when trade was bad. Let us compare ourselves with foreign shipping companies. I fail to understand how the B & I can ask for money. Last week, coming up to one of our busiest periods, we had a situation where we were trying to get people to come to this country — a few weeks beforehand we said we did not want them and started talking about a place 8,000 miles away but then we tried to get them [202] back. Suddenly, the management said they would close the whole of B & I because there was a problem in one particular area. That is bad management. How can they ask for an extra £25 million and look for more at the end of the year?

The B & I will not go into the lower harbour in Cork. As a Cork Senator I know that we spent £14 million providing facilities in the lower harbour of Cork specially for B & I and they will not use it. Do people realise we spent £14 million on a massive complex and now B & I are not going to use it? The French use it once a week. We are the laughing stock of Europe. Yet B & I are seeking an extra £25 million. I do not see how they can get away with it and the Minister knows that they should not be allowed to do so. Between 1971 and 1981, £40 million was spent on building ferryboats in the Cork area. I do not deny that. I thank the Government for it. We were not in a recession in 1971, 1973, 1977 or 1979 and yet the B & I lost money. There is very bad management in the company. It is very unfair. Why has this situation come about? In the Cork area, the busiest part of the B & I business now is the duty-free shops. Is it not a fact that only for the duty-free shops on the boats the B & I would be losing more money? We have a situation where another State company, CIE, use foreign transport to bring people from this country to cities in Great Britain. Why can the B & I not carry CIE buses? Why do we use foreign shipping? I fail to understand it. Is it possible that we cannot do a deal with CIE? It is a moral crime to say that a State company uses a foreign company and we do nothing about it. Yet, we will give B & I £25 million, no problem. I do not say that we should not have our own shipping company. However, we should compare Irish Shipping and the B & I.

Relations between management and workers in B & I are quite good but had we not a situation where the management — I put the total blame on management — of B & I last week could have lost millions of pounds? We know that tourism is our second biggest industry and is very important to us. The B & I say they are not prepared to use the lower harbour [203] and are cutting back on services in the south-west area, which is very unfair. Yet they look for £25 million extra. How can we justify this? How can I say to hotel owners and to people in the south-west area who depend on tourism that the B & I will come to Cork three times a week and perhaps once a week during the winter? Ten years ago when they were not losing money we had a nightly service. B & I management are not fit to be there. This must be looked into.

Professor Murphy: I take it from the Minister's statement that the need to establish an Irish presence in the Irish Sea is still valid. The need to continue the Irish presence in the Irish Sea underlies this regrettably necessary Bill. I will confine myself to one point which I hope the Cathaoirleach will agree is relevant.

Mention was made of various factors which have contributed to the difficulties in B & I, among them the general recession and the depressed tourist environment. In that latter connection, it has been widely suggested that a recent factor in the fall in tourism in 1982 is what is alleged to be a universal climate of anti-British feeling in this country. I dissociate myself from that view. There are various factors which explain the recession in tourism — the general economic situation and the fact that we are not only an expensive country but an extremely scruffy one. I hope to elaborate on that in the context of the Second Stage of the Litter Bill.

The real damage to the native British tourist market as distinct from the ethnic British-Irish market was done last year when there was an orchestrated campaign of hate against Britain and the British tourist. Rather than moaning about anti-British feelings which are not widespread, we should look to consoling factors such as the return to Ireland of a group of anglers who were put off, and with good reason, last year by the bullyboy actions of the supporters of the Provisional IRA. I do not think we can seriously talk about a widespread anti-British feeling as a reason for the drop off in the number of British tourists. There are, of [204] course, isolated voices. There are what I might call atavistic tribal voices. One of them unfortunately is the Minister for Defence, and I am sorry that he is not here to take this Bill instead of the last one. However, by and large, they are factors outside our control. There is a virulent reservoir of anti-Irish feeling in Britain in certain quarters and it is whipped up from time to time. I do not see what we can do about that except to reflect that, in the nature of things, these waves of feeling come and go. It would be far more relevant to turn our minds to matters like prices and hygiene as a reason for the decline in the British tourist market than to talk about an imaginary anti-British feeling.

I take it that the Bill is necessary. I should like to know more about where the money is going. I would hate to think that because B & I need this money we would draw the moral that because it is a State company it is doomed to fail or to have problems. The salutary contrast is there. We have companies like Irish Shipping which are a great success story. Despite the extensive ministerial statement, it is not altogether clear how that extra money will be used. I am glad that, at the end of the statement, the Minister said that a vigilant eye will be kept on the B & I position, because it is a matter of great public concern.

Mícheál Cranitch: It is fitting that I should be third in the Cork triumvirate in view of the fact that one of the important links in the B & I chain is the city and, indeed, the port of Cork.

When this company was taken over in 1965 from the private company which owned it, everybody was delighted, particularly those living in the southern region. We looked forward to great things in the future because as far as Cork people are concerned the old Inisfallen was something of an institution. Week after week, day after day during the summer season thousands of British visitors came into the port of Cork and travelled from there all over Munster to see all our famous beauty spots. As matters progressed new boats were purchased, at a tremendous cost, and the money that [205] could have been saved by giving the contracts to foreign firms was rather ploughed into our economy by reason of the fact that the new ships were built at Verolme dockyard. Everybody was very glad that the money was being kept at home. From a financial point of view it has to be seen as an investment for the B & I.

Looking at the years 1979, 1980 and 1981, the loss figures were absolutely frightening, ranging from £1.1 million to £2.8 million to £7.54 million. These loss figures are totally unacceptable. B & I should be a money-making concern. If Irish Shipping Ltd. can do it why cannot the B & I? Various reasons have been advanced by the Minister for this sad state of affairs, such as the depressed environment for tourism, cost inflation, industrial disputes, the general economic recession and so on. To what extent could two other reasons have been advanced, firstly, bad management, secondly, unproductive work practices or a combination of these two? There does not seem to be any reason — and I repeat this — that the B & I should not be a healthy money-making concern. Their operations prosper from year to year. The passenger traffic is there, the need is there and I believe it will always exist. I dismiss any suggestion that there is antagonism towards British visitors in any part of this country. There is a hearty “céad míle fáilte,' for visitors from any part of the world. No exception is made in the case of British visitors because British tourists are people of goodwill — I have always found them to be very nice people — and we should not confuse the kindly visitor we get from Britain and elsewhere with people who are, shall we say, anti-Irish at heart in certain areas in western Europe.

Three names have been uppermost in my mind while I listened to the debate. Those are Jetfoil, Ringaskiddy and Pembroke. I wonder on whose advice did the board of management of the B & I introduce the Jetfoil service; was sufficient research done into it; did they look ahead and ascertain whether this was a suitable place in which to introduce such a [206] service? Did they ascertain whether it was the right time to introduce such a service? It was a dismal failure and at this stage I think we must write it off. There was then the Ringaskiddy terminal referred to at some length by Senator Cregan. I agree with everything he said about it. It was extraordinary that, despite the fact that the terminal there was erected to accommodate the B & I, at its opening B & I were noticeable by their absence. I believe that Brittany Ferries are delighted with that terminal and will continue to use it. It was a splendid job. The terminal holds its arms open wide, so to speak, to welcome boats from any part of the world. I cannot see any reason why the B & I would not use it and make up their minds to do so.

I come now to Pembroke. Who advised the B & I or why did they change and continue to change? First they used Fishguard, then they changed to Swansea, then to Pembroke, which constituted the last straw that broke the camel's back. I remember as a youngster travelling to and from Britain on the old Innisfallen using Fishguard, which was very convenient. When one arrived at Fishguard one just walked across a platform into the train and was taken to London or wherever one wished to go. The B & I then changed to Swansea, the stated reason being to make the overland journey shorter. It did make one's overland journey that much shorter. But one was put to the inconvenience of getting off the boat in Swansea, travelling by taxi or bus to the railway station and boarding the train there. Finally, they went to Pembroke, a small place practically impossible to get out of with any speed because the roads are very narrow and twisty. That was a major blunder. I do not know how much money was invested in the Pembroke venture but it was a bad mistake. Is it already too late to revert to Swansea or better still, to Fishguard?

I make those few points. I commend the Minister for his exhortation when referring to the unofficial dispute in the course of his remarks. These disputes are becoming so common that one could be pardoned for wondering are we losing all sense of reality. When avoidable a dispute [207] is a stupid performance and I have not the slightest doubt that most if not all of them could be avoided. There are three possible causes — bad management, restrictive work practices or, what is even worse, a combination of these two. The Minister says that industrial disputes of any kind are not in the long-term interests of either the B & I or its workers. This latest disturbance was singularly ill-timed by reference to the company's financial straits and the holiday season on which they are so dependent. It is a lamentable fact that many of our industrial disputes as far as transport is concerned occur in the peak season, holding holidaymakers up to ransom in a deplorable way. The Minister said he was glad that saner counsels had prevailed and that management and unions were able to arrange a speedy settlement; buiochas mór le Dia. I hope that, as was the fashion with the Skibbereen Eagle on Russia, the Department will keep a very watchful eye on the B & I. I hope also that the day will come when we shall have not a series of losses to report but that we shall have something left over and above which would repay us in some way for the extra money we are about to vote for the B & I now.

Mr. Harte: I welcome the Bill. I agree with the Minister that B & I cannot carry the burden unaided. I also accept that their losses have been steadily growing since 1974 and that there are reasons for them. On the other hand, the State and semi-State bodies — of public concern —should have all of our support in any endeavour to render them more economical, reliable and efficient. Having regard to some remarks I shall make later I doubt whether such desire exists in Irish society or indeed on the part of the managerial staff we select from time to time to run our public bodies. All of us in this House would like to see the B & I become more efficient and successful. We would also like to see the need for such extensive borrowing reduced substantially. But it is as well to remember that part of the problems of the non-profitability of the B & I and other bodies is occasioned by the high rates of bank interest. For [208] example in 1974 the B & I had a loss of £452,000. They paid the bank £430,000 in interest. In my simple logic that trading loss amounted to £22,000 in that period and the interest constituted the other loss.

Public bodies are established and militating against their profitability are crucifying interest rates engendered by our banking system. For example, we are talking now about a £25 million loan to the B & I. That alone will cost £4.9 million to service. Again, when the profit and loss accounts appear no regard whatever will be had to the heavy interest rates acting as an enormous deterrent to people entering into the viable profitable areas.

I agree with other Senators that the increased traffic failed to materialise. I agree further about the whole question of the tourist situation as has been mentioned. I believe also that when the Jetfoil was being introduced that had a little bit more homework been done on the question of its viability from the point of view of attracting passengers its technical ability to cope with the Irish Sea and so on, we might not now be experiencing that kind of loss. While we in these Houses support the B & I in their operations there is running alongside that a kind of benevolent indifference on our part. This benevolent indifference means that we can at times be speaking with forked tongues whether it be with regard to the B & I, ESB, or CIE because we are here dealing with the public sector. If the B & I get into a position — such as exists in Bord na Móna — in which they can really become competitive and start putting forward suggestions to expand and so on then I respectfully submit — and I do this from my experience looking back at some of the situations that developed in other State-sponsored bodies — that they will experience the same pressure as did CIE and some others from the private sector. In support of that contention I should make this point: in 1974 Mr. Rhatigan, who was then Managing Director of Bord na Móna, which made about £1,200,000 profit in that year, said he wanted to enter into the area of minerals and offshore oil. Arising out of that statement of his a [209] propaganda campaign was launched against the board. At a press confernce early in 1975, sponsored by the Irish Petroleum Group, a Mr. John Lowe of Trinity Bank launched an attack on the ESB and Bord na Móna, all because Mr. Rhatigan, he felt, had the temerity to want to enter into more profitable areas. Mr. Liam St. John Devlin of CIE, on a “Here and Now” programme in 1975, said that as far as he was concerned CIE should run the buses and the trains but, when it came to the question of road haulage he felt that there was a potentially good private sector that could perform the task in this area and that CIE should play the role of complementing this task rather than become a monopoly. What that gentleman was doing was asking CIE and their employees to commit hara-kiri. He was saying: “You cannot make a profit on the rails, keep them; you can make a profit on road haulage but do not touch it”. This is the type of mentality throughout the public sector in the minds of a lot of people who are entrusted by various Governments to take charge of that sector.

I make those points not in the context of any ideology or anything like that. I make them in the context that we talk about the B & I not being able to carry their burden unaided and about the type of mentality running alongside while there are people who want to see public concerns remain the non-profit making areas of no value to this House, the country or anything else. Such attitude will be of no value in rendering them more economical, efficient or reliable, which is our whole purpose. In the broad sense, success can be achieved only if we apply the right mentality to such matters.

Again in the context of borrowing, bank loans cause me a lot of worry, not in the personal sense — somehow one manages to cope with that aspect — but in the sense that profitability enters into it. CIE hotels were making a profit and the only reason they had to close was that they could not withstand or pay the bank interest. Here we have a private sector bank operating under a private system that is crippling the public sector providing [210] anything up to 64,000 jobs in one sense and 10,000 in another sense. It is a sad state of affairs that we rely on the public sector to create jobs, to generate employment, we rely on bodies like AnCO, the Industrial Credit Company, Fóir Teoranta and so on to subsidise and assist these private people. Then we rely on CIE, the B & I and so on to issue contracts to these private people out of their grant moneys. Yet the mentality runs alongside: do not start; you are going too far into the profit area, that is sacrosanct to the private sector, do not go in too deep in the competition stakes. This is very worrying. The banking system and interest rates present a problem. For example, in 1974 the situation in CIE was that they had outstanding loans of almost £42 million. Their losses for that year was £11.6 million and interest amounted to £3½ million.

I want to support the Bill. I want to see not alone this Bill but others dealing with the public sector supported and encouraged. I want all State-sponsored bodies to be more successful, reliable and so on. But our banking system acts as a deterrent to such public bodies entering the profitability areas because of its extremely high interest charges. I would remind many people who indulge in attacking the public sector of the very profitable and many good bodies that exist. I appeal for an understanding that before anyone rushes into print he take a look at the whole State situation and carry out a long overdue analysis. In so doing they will discover that there is a great contribution to be made not only by people like the B & I and so on, but by many other public bodies that suffer considerable harassment without having had a full in-depth study from the public point of view. I do not regard some reports as in-depth studies because many are weighted heavily in favour of the public sector. I am not suggesting that the private sector is the be-all and end-all; I believe it is necessary that the two work together. Certainly there is no reason why the private sector should have any more right to enter into the profitability or efficiency stakes than the State-sponsored sector.

[211] Mr. P. Reynolds: I should like to congratulate the Minister of State at the Department of Transport on his appointment and wish him well in his office.

This is a rather peculiar Bill. Over the years we in this House learned a good deal about the B & I Company. They were taken over in 1965 because they were not a paying proposition. They were experiencing some difficulties at that stage, not too serious. During the period 1965 to 1969, dealt with here, what was happening the B & I? Were they continually losing money? Some people seem to be of the opinion that during that four-year period they were making money. I hope the Minister in replying will be able to give us some information on that.

According to the Minister, for the period from 1979 to 1981 there was a total loss of slightly over £10 million. Approximately half of that money was lost on account of industrial disputes. I am not the best mathematician in the country but that is the figure I arrived at. It is a desperate situation if half of the money lost by the company for that period was occasioned by industrial disputes. This seems to be a general phenomenon.

Senator Harte is inclined to blame bank interest rates, which is a fair enough comment because in recent years they have risen enormously, particularly on money borrowed at a fluctuating interest rate. For example, people who borrowed money some five years ago at a fixed rate did so at approximately 14 per cent. At that time the variable rate was in the region of 11½ per cent, and that was a short five years ago. The variable rate has now moved to approximately 21, 22 or 23 per cent. The present average bank interest rate — which I am sure is what would be applicable to the B & I — would be in the region of 20 or 21 per cent. It is difficult for such a company to meet their commitments. But I say to Senator Harte —in all sincerity — that people in the private sector suffer the very same hardship; it cuts both ways.

Listening to the radio yesterday evening it is even more surprising to hear that United Kingdom interest rates are [212] now down to 12¼ per cent while ours are practically double. Surely there is an answer somewhere. Somebody is getting away with murder in this country. But that is not the Minister's problem. It is one for the Department of Finance. Somebody must examine this matter at some stage.

The Minister spoke about rationalisation of the B & I's services and outlined them, one of which was the commencement of the daily short-sea service between Dublin/Holyhead in conjunction with a Dublin/Liverpool nightly service. In replying, perhaps he would give us a breakdown. For example, if they are going to increase the profit on the first mentioned service, how much will it be increased by or what effort is being put into it? With regard to the operation of a forked service from Pembroke, servicing Cork and Rosslare with one ship, will the Minister say whether there will be a saving and, if so, how much. Perhaps he would say also how much money will be involved in the termination of the Jetfoil service. Perhaps he would tell us what will be the amount of saving involved in the negotiation of a three-months' pay pause.

The Minister mentioned the raising of base revenue for tourism and freight to more economic levels. By how much will that base be raised and how much money will it yield for the B & I? We would be interested in a breakdown of all the services mentioned by the Minister.

The Minister went on to say:

The company has also rationalised its services on the southern corridor and has been servicing the Cork/Pembroke and the Rosslare/ Pembroke routes with one instead of two vessels for some time now.

Does that mean that there were two vessels operating on that route when there was one only needed, or has the number of passengers dropped? I do not think they have — it is not long since I used that service — but according to those remarks it appears there were two boats operating that service when one would have sufficed and that there was work for [213] only one. If that is the situation I should like to hear the Minister's views. Indeed, if that is the situation it is no wonder they are now looking for more money.

The Minister also said:

While it will be necessary to disburse a portion of these funds as soon as the legislation has been passed to enable the company to meet its immediate obligations arising from the seasonal downturn in its cash flow, I will be expecting the company to demonstrate to me that satisfactory progress has been made in the rationalisation of its operations before I shall agree to recommend any durther disbursements from the Exchequer.

Does that statement mean that the officials in the Minister's Department have told him that still more money has to go into B & I? Are we going to have this thing again next year? If we are we should know it now. There has been a substantial amount of money put into this company and one wonders how much further can this go on.

Minister of State at the Department of Transport (Mr. Leyden): I wish to express my appreciation to the Senators who have contributed to this very important debate and indeed for the many constructive points which they made in the course of the debate. I want to clarify as many points as I can in relation to matters raised by the Senators who spoke.

Senator Cregan mentioned the transfer situation to Ringaskiddy in the port of Cork from the existing point at Tivoli. I had the pleasure of inspecting Ringaskiddy landing point on Sunday in the company of Mr. Liam French, the chief executive and Mr. Bryan Foley, the Chairman of the Cork Harbour Commissioners. I was very impressed by the facilities which the port of Cork is presently offering right throughout its services. I wish to compliment them on their fine work in the southern region.

In relation to the transfer to Ringaskiddy, no decision has yet been taken by B & I. They are still discussing conditions with Cork Harbour Commissioners regarding the rates and who will carry out [214] the stevedoring, and dock working in relation to this area. The arrangements are of considerable financial significance to the B & I. The performance of all the company's servicing will be subject to an overall review at the end of the season. A decision by the company on the transfer is being postponed until this review has been completed and the question of manning the terminal and agreement on rates has been negotiated. I can add no further to this statement at present.

I want to say at this stage that the B & I have a very good service in Cork area with three sailings per week all year round. Prior to 1982 there were six sailings per week for the peak three summer months but this was reduced to three as an economy measure. That is the journey from Tivoli docks to Pembroke, which lasts seven and three quarter hours. I appreciate the interest and concern of Senators and Deputies from the Cork region. I know the Minister and the Government are considering this matter. It is a matter for the board for further discussion.

In relation to Córas Iompair Éireann and the use of vessels for transportation, we have no direct control over the operation of CIE. CIE are a semi-State body and naturally they will use the vessels which will give the best possible rates and at times may have to use certain services to their advantage. I appreciate that B & I are working closely with CIE. I would certainly encourage closer connection between both organisations. I have no doubt that, where possible, CIE use the services of B & I.

In relation to the recent strike this is a matter for the board and the management of the company and it would not have been appropriate for the Minister to intervene. The company had no option but to cease all services when the officers went on strike. The Minister and I are glad that this matter was settled so quickly.

Senator Murphy mentioned the question of anti-British feeling. I think that Senator Cranitch has, quite rightly, pointed out that no anti-British feeling exists in this country. I would like to contradict any type of innuendo in reference [215] to my colleague, the Minister for Defence, who in no circumstances has expressed any anti-British feelings at any time.

I believe that this so-called anti-British feeling is being conjured up by some of the British media and, fortunately, as far as I know and from my contacts in Britain, this is not working. I had discussions recently with people in Britain and people in business, in transport and other fields, and they have got no indication whatsoever of any anti-Irish feeling in Britain, which also is important. As Senator Cranitch stated, we have always given a céad míle fáilte to all our British tourists, who are very welcome. I must say that we are delighted with the numbers coming to our shores at all times, and I know the good services and attention they get from our people.

In relation to the possible sale or leasing of the jetfoil I would like to say that it has come in for severe criticism. As the Minister stated in the Dáil, he used the facility on some occasions. I went on the jetfoil service from the Dublin docks to Liverpool and I must say that I found it an extremely efficient and comfortable service. Unfortunately circumstances have not allowed this service to continue. I regret this because I thought it had great potential at the time. I know the board made that decision in the best interests of transport. Unfortunately it did not work, but if it had worked I am sure that we would be all complimenting the board of B & I at this stage. As Senators are aware, the possibility of leasing or chartering this ship is at present under discussion. In relation to the Munster the estimated cost is in the region of £3 million. The vessel is now on charter until October to a Norwegian firm. Contrary to any point being made by any Senator, it is being utilised at this stage.

Senator Murphy mentioned the equity of £8.7 million being made available to the board used as working capital. The combination of working capital and the economies being introduced with the company, as stated, should improve the financial performance and should enable it to break even by 1985.

[216] Senator Cranitch mentioned the question of the change of terminals. My brief in relation to this is that the company had to change terminals from Fishguard to Swansea and finally to Pembroke. Agreemnt to use Fishguard terminated in 1969 and was not renewed. The company moved to Swansea for a period of ten years and the move to Pembroke was decided on because of the tidal conditions at Swansea. This reduced the travelling time as well and, as a result, there was a saving of fuel. That is the reason why any changes were made. There were operating difficulties at Swansea regarding narrow docks and time restrictions.

It should be noted that most shipping companies have suffered in the present recession. B & I had also to contend with other factors in relation to the Northern crisis over the years. It certainly has had a very depressing effect on tourism. This has affected the projections by the company. To compare the B & I with Irish Shipping is not a fair comparison, because we must bear in mind that Irish Shipping are engaged on a different type of project in relation to deep sea and the B & I are generally working in the Irish Sea. This is something which should be borne in mind. I wish to thank Senator Reynolds for the welcome he extended to me to the Seanad. This is my first time to speak in the Seanad and I am delighted to have had the opportunity. I look forward to having another opportunity at another time to speak in the Seanad.

Senator Reynolds mentioned the overall years of losses. There was, going back to the start of 1965, a net loss of £88,000. In 1966 there was a net profit of £83,000 and then there were losses in 1967 and 1968 of £398,000 and £54,000. Then, in 1969, 1970 and 1971 there was a profit situation going from £9,000 to £159,000 and £386,000. In 1972 and 1973 the company were in a loss making situation of £614,000 and £1,180,000. Then, for the years 1974, 1975, 1976, 1977 and 1978 there were profits ranging from £281,000 in 1974 to £1,353,000 in 1978. As Senators are well aware in 1979 there was a loss of £1.148 million, 1980, £2.807 million and 1981, £7.54 million. The industrial disputes in relation to losses under [217] this heading over the years predominantly we can attribute to the port of Liverpool.

I hope I have covered the majority of points raised by the Senators in relation to this debate.

Question put and agreed to.

Agreed to take remaining Stages today.