That is noted, and paragraph 26 is noted. Is that agreed? Agreed.
Paragraph 27 of the Report of the Comptroller and Auditor General reads:
Forestry Failures due to Shell-Marl Soil and Related Conditions.
Under the various forestry schemes, the Department operated an advisory service whereby at application stage the site to be planted was examined by the Department's inspectors who advised on the suitability of the site and the prescribed and most suitable species. Based on this report an approval letter issued allowing the applicant to proceed with the plantation. The second instalment becomes payable following a further inspection of the plantation, usually within four years.
Since 1992, certain afforestation plantations which were planted in the late 1980s and early 1990s were discovered, mainly at second instalment stage, not to have thrived. Following soil testing, it was established that these plantations would not produce a commercial crop and in fact the trees would die due to the presence of shell-marl in the soil. The geological condition had been known to exist since the 1950s on certain lands purchased by the State as it had been found that such lands planted in the 1950s and 1960s had proved unsuitable for forestry.
During audit the following was noted. First, many of the inspecting staff who carried out field assessments at pre-planting approval stage were not aware of shell-marl condition.
Second, in order to identify and prevent the planting of shell-marl sites at approval stage, soil testing in general was introduced in 1994.
Third, a number of sites had been planted when Coillte, the State body, acted as agents for the Department on advisory/inspection work but there was no formal written contract covering Coillte's responsibilities and role in regard to the inspections and advice.
Fourth, following advice from the Chief State's Solicitors Office, Department of Finance sanction was sought in 1997 for the payment of second instalment grants under the afforestation grant schemes in cases affected by shell-marl conditions and not to recoup the first instalments already paid as it was understood from discussion with the EU Commission that it would not seek recoupment of its contribution towards the cost of the first instalment. The Department of Finance was also informed that the Department had come to an agreement whereby Coillte would undertake a soil survey of the sites concerned - at Coillte's expense - and, where appropriate, return the land to agricultural use - again at Coillte's expense. The survey would show whether certain of the sites concerned could produce commercial crops of broadleaved species and those sites deemed unproductive would be returned to agricultural use and the owners would be encouraged to enter the FEOGA scheme of REPS grants. Department of Finance sanction was given in June 1997 on the following conditions: the write off of first instalment grants already paid was limited to a total of £67,000; payments of second instalment grants were also limited to a cumulative total of £67,000; and these arrangements were to be in full and final settlement of 36 cases involved.
By May 1999, I noted that the number of shell-marl cases had risen to 58 involving 373.5 hectares. The conversion cost of returning these lands back to agricultural use is estimated at £740 per hectare. I requested information as to the extent of this problem and its possible financial effect on the Exchequer. I also inquired whether any further cases had come to light of crop failure on sites planted since the new procedures were introduced in 1994 and whether the revised soil testing procedures had proved effective.
The Accounting Officer informed me the following. First, grant and premia amounts paid/payable in respect of the 58 cases totalled £575,182.
Second, a further four cases covering 11.3 hectares were awaiting confirmation of existence of shell-marl. Amounts paid/payable in these cases total £17,761.
Third, compensation claims totalling £154,806 in respect of 12 cases covering 85.1 hectares were being dealt with. Compensation totalling £8,328 in respect of three cases covering 27.5 hectares had already been paid.
Fourth, no legal proceedings for compensation were pending.
Fifth, the Department of Finance has been advised of the additional cases which have come to light since 1997. It is now estimated that the necessary write off/payment of first and second instalment grants respectively will be approximately £90,000 each, instead of £67,000 each as previously approved. The necessary additional sanction is being sought.
Sixth, Coillte's survey of the sites was on-going and discussions were under way between the Department and Coillte regarding its responsibility in the matter.
Seventh, only one further case - 5.6 hectares - of crop failure had come to light for trees planted since the revised procedures were introduced in 1994 out of a total of 10,000 files processed. The revised testing appeared to be working effectively.