Nationalisation & Retrenchment

Nationalisation of CIE

The Transport Act, 1950 nationalised CIE. It saw the government buying out the debenture stockholders at par by giving them three percent transport stock for the holdings. CIE would be liable in interest on the new transport stock and could borrow from the government if funds were inadequate.

The ordinary shares were converted on the basis of the £80 of 3% stock for each £100 held.  The government obtained direct control of all CIE stock and could appoint the board.

CIE was released from all statutory controls over the fares and rates on the basis of the CIE board being appointed by the government. A transport tribunal was established which was to be involved in the stations concerning the closure of branch lines.

Duties & Financial Position

Under the 1950 act, it was the general duty of the board to exercise its power to secure and provide economic, efficient, convenient and properly integrated public transport for passengers and merchandise by rail, road and water which due regards to safety of operations encouragement of national economic development and the maintenance of reasonable conditions for employment.

It is the duty of the Board to conduct its undertaking so that, year on  year, the revenue would not be less than sufficient to make the charges properly chargeable to revenue.  New investment following the 1950 act amounted to £3.4million, half the total authorised by the legislation.  There had been 25 years of neglect in terms of planned equipment and facilities.

Throughout the 1950s CIE continued to lose significant sum, even greater than those which had been the intermediate cause of nationalisation. Under the authority of the legislation transport stock was issued to fund investment including that for diesel traction.

The rest of the  1950s  involved an almost complete conversion to diesel from steam, cross-border cooperation to continuously support GNR, many  branch line closures, development of road services and absorption of the Grand Canal. Applications were made to the transport tribunal in relation to the closure of branch lines. Numerous branch lines were closed in the late 1950s.

Great Northern Railway

The financial position of the Great Northern Railway, which was the main transport operator east of the line from Dublin to Sligo, deteriorated.  The Great Northern Railway had existed since 1876. Its engineering works at Dundalk employed 1300 people. It operated road and rail services in the Free State with rail operations are only in Northern Ireland.

In 1951, Great Northern Railways gave notice  of discontinuance of its railways, which led to the joint acquisition of Great Northern Railways by the governments of the Republic of Ireland and Northern Ireland who put the purchased the company compulsorily.

A GNR board was established by the two government in 1952 and its interest in the County Donegal railways passed to them. Parallel legislation was passed in 1953 north and south to establish The Great Northern Railways Board, five appointed by each government  with one senior member on each side.

Operating losses were incurred 60/40 between the northern and southern governments.  Monies for  the  Dublin, Dundalk engineering works are provided by the southern government .  Monies for development were provided by the respective jurisdictions and rolling stock was acquired 50-50.

The Act followed the traditional optimistic language of an obligation to break even on an ongoing basis.  It also required the board to pay interest on the £4,500,000 purchase price.

Railway lines which provided cross border services, ran on the  basis that the board could propose and Ministers could agree or disagree provided that if one government  objected to the closure, it would have to fund loss making aspects of the line concerned if it did do.

The GNR was loss making from the outset.  The Ulster Transport Authority carried the Northern Ireland share of losses.  This was the public authority which was successor to the Northern Ireland Road Transport Board established in 1935.

Cross-Border Closures

It is fair to  say that  there was less attachment to the preservation of railways in the northern administration than in the southern administration.   In 1955, the Northern Ireland government proposed the closure of three secondary lines Portadown-Armagh-Tynan, Omagh-Enniskillen-Newtownbutler and Bundoran Junction-Beleek was proposed.

It was also indicated that there was no long-term future for the Portadown Derry line (the Derry Road).The Derry branch had passed the Ulster Transport Authority in 1948 and was closed in 1954.

The matters were referred to the transport tribunals north and south.  The southern tribunal opposed the closures and the northern tribunal supported the closures.  The southern government was not prepared to foot the bill for lines running losses which were almost entirely within Northern Ireland.  In the year 1957, all train services on the above lines were terminated.

The closures had an immediate effect on connecting lines in the Republic of Ireland, namely, the Clones, Castleblayney, Dundalk line, Glaslough,Monaghan Cavan and the  Belturbet and Carrickmacross branches.   GNR decided to terminate all rail passenger services and operate freight only.  The Southern Transport Tribunal assented. The Sligo, Leitrim Railway Company which received subsidies from both government found that after the closure of the GNR lines, it would have to cease operations.

The GNR engineering works in Dundalk were adversely affected with the axing of the entire rail hinterland to the west. An agreement was reached between the Dublin and Belfast governments that the railway engineering works would be separated into a new company.  The Dundalk Engineering Company would provide services to the dwindling GNR system.

The railways were nationalised in Britain in 1948 and the London and Midland LMS stake in the County Donegal Railways passed to British Railways. The British Transport Commission replaced the railway executive in 1953 . In 1959, the Donegal joint railways committees applied to and was permitted to abandon its rail service. The Londonderry and Lough Swilly Railway Company had ceased running trains in 1953.

Beddy Report

The chairman of the transport authority Dr. Beddy was appointed to conduct a committee of inquiry into internal transport, as it affected public transport undertakings and report to the Minister for Industry and Commerce by the end of 1956.The report contained substantial analysis of traffic, trends and data on public and private transport.  It raised the vexed question of public service and profitability and the question of the viability of the railway service entirely.

The Beddy Report found that CIE’s use of track locomotive coaches was low by international comparison. Employment had declined by 10 percent due to the dieselisation, although more were employed in construction than before. These locomotives were single manned instead of double manned and surplus staff were redeployed. Employee-employer relationships were difficult.

It noted that a series of government guaranteed stock had issued since 1945.   CIE had been unable to pay the interest on the debentures and the sums accumulated as owed back by CIE to the government.  The report acknowledged that the possibility of repayment of the sums was remote.  The report criticised the failure of the 1950 Act to reconstruct CIE’s capitals.  It recommended writing off a total of £11 million off the balance sheet and relieving CIE of its liability to pay interest on transport stock and charge depreciation on certain written down assets.

It recommended that beyond a general obligation to provide reasonable public transport requirement in a fair and satisfactory manner and fix maximum rates and fares, s CIE should be free from special restrictions to which it was then subject.  It suggested redundancy costs be  paid from a special fund financed by a levy on road vehicle licences. It did prescribe a way for CIE to become solvent and self supporting.

Closures 1957-1959

The Beddy report rejected CIE’s proposals to restrict private operators of commercial vehicles to divert sufficient traffic to the railways.  It concluded that that restriction of freedom was unjustified. It also rejects subsidisation and force feeding of traffic on railways. It recommended that railways operated under realistic conditions which meant accepting the reality of low-density transport needs and the emergence of road traffic as a more suitable alternative in many cases.

Although the report seemed to argue in favour of the abandonment of the railways, it  ultimately came down in favour of radical changes and retention of key lines.  It concluded that if the length of lines and number of stations were more closely related to the volume of suitable traffic, it might have been possible to demonstrate it could operate economically in providing safe, speedy organised and disciplined methods of transport.  Railways had retained a significant  share of goods freight and this assisted help their retention.

The report was published in May 1957 and recommended closing one thousand miles of lines at 150 railway stations. The map of railway lineage it proposed of approx. 850 kilometres largely resembles the present mainline railway connections between Dublin to Wexford, Waterford, Cork, Tralee Limerick, Galway, Westport Ballina  and Sligo.

It recommended closure of the  second line to Limerick via Nenagh, but it was retained,  It  recommended examination of the Limerick to Sligo line between Tuam and Claremorris. This was retained in part and partly reopened in the 2000s.