Seanad Éireann - Volume 100 - 24 March, 1983

Irish Telecommunications Investments Limited (Amendment) Bill, 1983 [ Certified Money Bill ]: Second and Subsequent Stages.

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

Minister of State at the Department of Posts and Telegraphs (Mr. Donnellan): The sole purpose of this short Bill is to increase the approved limit on the borrowings and leasing arrangements of Irish Telecommunications Investments Limited which the Minister for Finance may guarantee from £350 million to £600 million. The increase is needed to enable Irish Telecommunications Investments Limited, ITI for short, to arrange, through new borrowings and leasing arrangements, for the major proportion of the national telecommunications development programme for 1983. The present guarantee limit of £350 million, which was fixed by section 6 of the Irish Telecommunications Investments Limited Act, 1981, is now nearly used up and, since ITI are scheduled to raise nearly £200 million for telephone development this year, early enactment of the Bill to increase the limit is essential.

ITI Limited are a wholly-owned State company who were set up by the Minister for Posts and Telegraphs on 1 April 1981 to obtain funds from the private sector, either by borrowing or leasing, to help finance the telecommunications development programme. Their activities reflect the policy of stimulating and encouraging private participation in investment in infrastructural services.

Statutory control of the company is [478] provided for by the Irish Telecommunications Investments Limited Act, 1981, which is broadly on the same lines as legislation governing other State-owned companies. In particular, the prior consent of the Minister for Posts and Telegraphs, given with the approval of the Minister for Finance, is required for all borrowing and leasing arrangements by the company.

Capital expenditure on telecommunications development was roughly £220 million in each of the years 1981 and 1982. The amounts raised by ITI were £92 million and £141 million in 1981 and 1982 respectively. Of the projected capital programme of £226 million for 1983, £194 million will be raised by ITI.

The limit of £350 million on ministerial guarantees under the 1981 Act was determined on the basis that it would be adequate to meet likely needs to 1982. The intention had been that, by then, the Postal and Telecommunications Services Bill, 1982 would have been enacted. Under that Bill, as Senators will be aware, two new State-sponsored bodies would have been set up to take over the operation of the postal and telecommunications services from the Minister for Posts and Telegraphs. ITI would become a subsidiary of the telecommunications body, Bord Telecom Éireann, which would be wholly responsible for arranging for the financing of telecommunications development. In the event, the Postal and Telecommunications Services Bill, 1982 had only passed Second Stage in the Dáil at the termination of the last Dáil. I should say, however, that the Government are committed to pressing ahead with the reorganisation of the Department into State-sponsored bodies and the Minister for Posts and Telegraphs proposes to put a motion to the Dáil shortly after the Recess for the restoration of the Bill to the Dáil Order Paper for its Committee Stage.

The future role of ITI in the financing of telecommunications development will be a matter for Bord Telecom Éireann when it is established because, as I mentioned earlier, the company will become a subsidiary of the new State-sponsored body. However, the provisions of the [479] Postal and Telecommunications Services Bill, 1982 would apply to any subsidiaries of Bord Telecom Éireann as well as to the company and borrowing and guarantee limits would apply for the board and its subsidiaries as a group. Accordingly, the financial activities of ITI will be subject to statutory control whether it is retained as a subsidiary of Bord Telecom Éireann or is wound up.

Until Bord Telecom Éireann is set up, however, it is necessary to ensure that ITI will be in a position to make their contribution towards the funding of telecommunications development and that is the object of the present Bill. The increase in the guarantee limit to £600 million provided for in the Bill would meet requirements for at least another year or so. As Senators will be aware, the basic target of the current development programme which covers the five-year period 1980 to 1984 is to raise the standard of our services to that of our EEC partners. I should say, a point which previous Ministers for Posts and Telegraphs also stressed, that this would be a considerable achievement. It was never to be expected that the service would be transformed quickly but progress has nevertheless been steady and we are broadly on target to meet the programme objectives by the end of next year. The first essential has been to build up the infrastructure of the service itself in terms of buildings, exchanges, trunk systems and main cabling. This has necessarily taken time and has involved very heavy financial investment but it is paying off and will yield increasing returns in service improvements as time goes on.

The three major aims of the current programme are to improve greatly the quality of the internal trunk service, to give all subscribers an automatic service and extend the areas to which calls can be dialled, and to eliminate delays in connecting new telephones, telexes and data lines. In all of these, substantial progress is being made. I will give a few examples.

The Minister for Posts and Telegraphs opened a major new digital trunk exchange in Dublin last week which will [480] provide greatly increased capacity for switching trunk calls in Dublin exchanges and will enable many more trunk circuits to be provided to centres throughout the country which are still suffering congestion. About 92 per cent of subscribers have automatic service at present and well over 100 of the remaining 400 manual exchanges are scheduled for conversion this year. It is possible since late last year for subscribers to dial calls to all areas in Northern Ireland and, from the end of this month, it will be possible for subscribers on Dublin exchanges and in Cork to dial calls to all parts of Britain. This facility will be extended to the rest of the country over the next few months. Up to 70 per cent of our subscribers can now dial their international calls to some 70 other countries. Progress is also being made, though unevenly in different parts of the country, in getting to a position where new facilities can be provided promptly. By the end of this year we expect that in virtually the entire Cork, Limerick, Waterford and Portlaoise districts — four of the eight engineering districts — waiting lists will have been cleared and all applications for telephones will be capable of being met promptly. By the end of next year the remaining four districts should be in the same position.

I want, however, firmly to dispel any notion that the programme targets will be attained easily. We still have some significant current problems. Senators from Dublin in particular will be aware of the problems in regard to underground cable repairs and the delays in getting telephones. There is clearly much work still to be done and it will require an allout effort to meet the objectives of the programme. Clearly, one essential requirement is that the necessary finance should be provided and that is the purpose of the Bill.

As the Bill is concerned with investment, I think I should conclude by making the point that the substantial investment which is being made in the infrastructure of the service will largely meet requirements for a number of years ahead. The cost of servicing the investment has weighed heavily on the service [481] and, largely because of it, there have had to be substantial increases in charges in recent years. It is expected that the service should move into modest surplus this year and make some contribution towards past deficits. Furthermore, in the years ahead, when the current programme has been completed, it will be possible to add many more subscribers to the system and to handle a greatly increased volume of traffic with relatively small additional increases in resources. The financial performance of the service should therefore improve steadily and it should be possible to contain increases in charges well below the rate of inflation. It goes without saying that investment in telecommunications is essential for the economic and social well-being of the country. I am happy to say that I am confident it will also yield a positive and significant financial return.

I ask for the co-operation of Senators in ensuring a speedy passage for this short Bill, which I commend to the House.

Mr. Cassidy: I take this opportunity to congratulate Deputy Donnellan on becoming Minister of State at the Department of Posts and Telegraphs and wish him every luck in his post. We assure him that we will give him all the help that is needed. He is following in the footsteps of his fellow countyman, Senator Mark Killilea, who did so much in his time for the Department of Posts and Telegraphs. I also wish Senator Browne luck in his responsibility in this area and I hope that both he and I will, at all times, speak to the point and be of great assistance in any of our contributions in the Seanad.

We in Fianna Fáil support this Bill because we were responsible for setting up the original company to finance the advanced telecommunications system. We realise that, with the passing of time and the need for further financing, it is essential to increase the amount from £350 million to £600 million for this company.

In our document The Way Forward we envisage the need for further finance for the telecommunications services and until 1981 all the capital requirements for development of the telephone services [482] were advanced by the Exchequer. In that year Irish Telecommunications Investment Limited were established to finance telephone investment and they have been raising sums of money in the open market for that purpose since. In 1981, for example, they raised over £90 million and they will raise a further £160 million in the current year. Next year the amount is expected to be somewhere in the region of £190-£200 million.

A good telecommunications service is essential infrastructure for business people and industrialists if they are not to be placed at a disadvantage in a competitive market. We are determined that this should not happen. I hope the Government will continue the programme that we initiated.

Mr. Browne: Ba mhaith liomsa freisin comhgháirdeas a ghabháil leat as ucht na honóra a bhronnadh ort nuair a toghadh mar Leas-Chathaoirleach thú agus freisin comhgháirdeas a dhéanamh leis an Aire agus fáilte a chur roimhe go dtí an Teach seo ar an chéad uair seo. Tá súil agam go mbeidh sé ag teacht arais go minic mar Aire sna blianta atá romhainn. Tá mé buíoch don Seanadóir ar an dtaobh eile as ucht an chomhgháirdis a rinne sé liom féin. Tá súil agam go mbeidh freagra aige nó agam nuair a bheidh an tAire anseo i dtrioblóid.

At this late hour of the night and having faced my first twelve-hour session of any form of discussion, I am as tired as other Senators. I will try not to repeat many of the things that have been said and that maybe I had planned to say. It is important that we have money to go on with our telecommunications programme. Elections have advantages and disadvantages. It is obvious that this Bill was held up and I am glad that the Minister is now telling us that he will be reintroducing the other legislation after Easter.

Without being critical of the telephone system, there is room for improvement in it. If I could be a little bit parochial, some of the telephones in the Seanad room I occupy are a little bit sick at times and an antibiotic would not go to waste on them. When this money is provided it [483] is hoped that something will happen there.

It is very important, now that we want money to come from Europe, that our businessmen should be able to contact people as easily as people on the Continent can contact one another. It is important that our own business people can make contact quickly and get their business done efficiently. We have a five-year programme and good progress seems to have been made. I hope that the five-year programme will come to fruition because with this money it represents a big investment.

I am glad the Minister has outlined all the advances that are to be made on direct dialling. A friend of mine in Carlow dialled his own county before Christmas and he got on to Manchester exchange by a complete freak that nobody in the Post Office would believe. Perhaps direct dialling was in our part of the country long before the Post Office had got to us.

I appreciate very much that direct dialling is being introduced because it will ease the problems of bills. I am also glad that the Post Office are providing a meter service because confusion about bills is leading to a certain amount of ill-feeling between telephone users and the Department. Some bills are very dubious. There are places in Dublin where the installation of telephones is very much held up. There are exchanges in the rural areas that were built years ago and are no longer capable of taking the extra lines. I am glad that Portlaoise is one area that seems to be coming into the limelight in the next year.

I am glad that this money is being provided because a third of it will go on staff, which is very important. Sixty per cent of the hardware used in the business will be Irish made. That is a double benefit because the money will stay in Ireland and give employment.

In any slight criticism I would make I would be very careful not to criticise the staff in the Post Office because, like politicians, they are very often the butt of unfounded criticism. I do not mind criticising the telephone system itself or [484] the recording apparatus, but I would not like under any circumstances to affect the morale of the staff in the Post Office. Without good morale there, our service cannot be what we would want it to be. I appeal to everybody to be careful in their criticism of the staff who are working so well and trying to provide a service that will be fitting for this country. Tá an-áthas orm tacaoícht a tabhairt don Bhille seo.

Mr. Kiely: I should like to make a brief contribution. First, I would like to congratulate Deputy Donnellan on his appointment as Minister of State at the Department of Posts and Telegraphs and reiterate what my colleague, Senator Cassidy, said and wish him well. I welcome this Bill because it is providing extra money to develop the telephone service inside Irish Telecommunications. It needs development because the service is poor, very poor as far as my experience goes, being dependent on a manual exchange, where you have to dial your local post office if there is undue delay. Actually, I had an experience here an hour ago when I wanted to telephone home to tell my wife, because, as Senator B. Ryan said, of the unpredictable system of arranging business here, that we would be sitting late. I found out that I could not get through. I was trying to get through and the division bells rang and I had to go back again to get through. That is one big fault I have to find with it. I do not know what is the cause of the delay in the system.

As Senator Browne said, I do not like to be critical of the staff. Whether the exchanges are undermanned or not, the delays can be most embarrassing and frustrating at times.

I would also like to refer to a paragraph in the Minister's speech in page 3:

The three major aims of the current programme are to improve greatly the quality of internal trunk service and to give all subscribers an automatic service.

When he is replying he might say when will all subscribers get this automatic service, because in my part of the country, [485] and I am sure there are many Senators in the same position, we are not automatic and it should be one of the priorities. The improvement of the quality of the internal trunk service is a priority, but to give all subscribers an automatic service is most essential. I welcome the Bill and wish the Minister every success. I will be very happy with him if he will have an automatic service in my area fairly soon.

Mrs. Robinson: Like the other contributors in this debate I shall be brief and also begin by welcoming the Minister of State into the House and wishing him well in his office. I have two questions arising from the Bill because, like other Senators, I support the need for the development of our telecommunications services. The Minister in his speech refers to the fact that the Government are committed to pressing ahead with reorganisation of the Department into State-sponsored bodies. I am not happy with the original model in the Posts and Telecommunications Bill, which was circulated, of two State companies. I support the approach of having State corporations rather than State companies. Would the Minister clarify which particular format it is intended to proceed with when the main Bill comes before the House? If he is in a position to do that it would be very helpful and interesting.

The second question I would like to ask the Minister relates to this company itself — the Irish Telecommunications Investments Limited Company. I read recently, and I hope I am accurate, that this particular company has entered into very expensive and expansive leasing arrangements for itself and has incurred a considerable amount of expenditure on that front which may appear, particularly in these rather stringent times, to be unnecessary. It has been compared unfavourably with some other State companies. So perhaps the Minister could clarify it. I may be mistaken in that but I would be grateful if the Minister could put on record this evening what expenditures this company has incurred in establishing itself and in the leasing arrangements that it has entered into. What [486] moneys have been expended apart from moneys spent in development of the telecommunications service, which we are all in favour of.

Mr. Ferris: I also would like to welcome the Minister of State. I have had tremendous co-operation from him personally since he took over his office. I am anxious, in supporting the Bill, to ensure that this infrastructural build-up we have been promised in terms of this Bill will be proceeded with. There is no doubt in parts of the country, in my own county, between the 062 and 052 codes the actual number of times that you cannot get through is nearly as often as Senator Kiely's problem in getting through from Dublin to the country, which is impossible. To use the telephone in this House you get England as often as you get Tipperary — I do — which is ludicrous, considering that it registers up some place and somebody has to pay for it. The wrong numbers you get through the Dublin system are amazing. The operators in this House admit that the system is chaotic. The city is so overloaded that there is obviously tremendous need for overhauling the structure. Between 062 and 052, which are 15 miles apart but in two different exchanges, you cannot get through satisfactorily and they are between hospitals and between administrative headquarters in Tipperary, and certainly I am not satisfied with the progress that is being made. I feel that the instrumentation installed there originally when it went automatic needs urgent reconstruction.

The local exchanges which are manual are staffed by operators on a call digit. They are tremendously helpful especially when the system is not working. You ring either 10 or the local code to get the operator to assist you. There is now some agreement about the scaling down of that service. I feel that the day we lose that little human touch at that level the whole system will fold up because it will be impossible to get out any telephone call from some of these exchanges in the country. It is that bad, and I would like to see the new Minister of State rejuvenate this system of telephonic communication, [487] with which we have tried to ape other countries. In the past not sufficient capital has been put into ensuring that the right kind of facilities are there to be able to take up the tremendous demand. More people do their business by telephone. It is pretty ludicrous that Dublin is so bad that nine times out of ten you will get another country while you are trying to dial some place within the country. This is unfair on the taxpayer, to say the least.

Minister of State at the Department of Posts and Telegraphs (Mr. Donnellan): I would like to thank all Senators who made contributions to the Bill. I would like to thank them for the welcome they extended to me on my first visit to the Seanad. I will try to deal with all the points that were raised. First of all, there was a certain amount of criticism of the service in the Dublin area. There is no doubt at all about it, that is certainly justified, along with criticisms of service in other areas. I suppose it is a good job that all Senators from all parts of the country are not here for the simple reason that they would all in their own way complain about the service in their particular area.

I am aware as much as anybody else that the service is not as good as we would wish it to be, but then again it would be fair to say that the service will never be as good as the customers would want it to be. We have particular problems in the Dublin area and we are trying to remedy these. I can give an assurance to the Senators here present that a lot of the capital being raised that we are looking for will be spent in the Dublin area.

Some Senators complained about telephone bills. Some time ago we invited a certain number of Dublin journalists to have a look at the manner in which we compute the bills in the Dublin area. We have extended that to quite a number of other regions in the country. We issued an invitiation to all subscribers to come in to look at the system whereby their bills were computed and to say to them as clearly as could be that the Department are not trying to take some money [488] from people that is not due to the Department. At the same time it would be fair to say that there is a very small percentage of mistakes, as low as 1 per cent. Approximately 92 per cent of subscribers have an automatic service at present. The projection is that by the end of 1984 the entire country will be automatic. We would hope that that projection can be achieved.

Senator Robinson raised two points, one in relation to buildings leased or owned by ITI. No buildings have been leased by ITI. In fact they work from one room at present.

Mrs. Robinson: I must be mistaken. It must be some other company.

Mr. Donnellan: It is not ITI. The Government have decided to adhere to the previous provisions of the Bill as drafted for the establishment of two companies wholly owned by the State. However, in order to underline the fact that the new bodies will remain firmly within the public sector, they have also decided to move an amendment to the Bill to provide that the Minister cannot dispose of any of his shares within the company to other interests without separate amending legislation.

Approximately £220 million per year is spent on developing the telecommunication system in this country. We are largely on target with our projections. A number of Ministers have contributed to this. When recently speaking to some people from the Philatelic Advisory Service they said they have dealt with the 11 Ministers or Ministers of State since 1973 and hoped that there would not be as many changes in future. Some Ministers made promises in relation to the Philatelic Advisory Service but many of them were not long enough in power to carry them out. I thank everybody who contributed.

Question put and agreed to.

Agreed to take remaining Stages today.

Bill put through Committee, reported [489] without recommendation, received for final consideration and ordered to be returned to the Dáil.