They will not be charged. The Government has approved of the sale of industrial alcohol to petrol importers and refineries at a price of 3/- per gallon. That figure has been based on the assumption that certain items will be capitalised; that is to say, interest on the fixed capital invested in the undertaking in respect of the first year's working when production was very much below what it would be in a normal year; the excess of the production costs in the first year's working over the estimated normal production costs and the royalties payable to Messrs. Noury and van der Lande on the output of distilleries, which charge is spread over four years. The total amount of these items is £156,000. Apart from the three items which I mentioned, the total liability incurred on the undertaking, for which the new company will assume liability, amounts to £266,000, made up as follows: In respect of land, buildings, roads, etc., £156,000; in respect of plant and equipment, including royalty payable on the Melle process working in the distilleries, £97,000; rolling stock, lorries, etc., £9,000; miscellaneous equipment, £4,000. In addition to this, an estimated capital expenditure of £4,000 will be incurred during the next few months. Allowing a sum of £30,000 for working capital and contingencies, it will be seen that the immediate capital required by the company will amount to £356,000. It has, however, been thought advisable to fix the nominal capital at £500,000. The Bill provides that, with the consent of the Minister for Finance, after consultation with the Minister for Industry and Commerce, the company may issue debentures, but the amount raised by debentures must not at any time exceed the paid-up share capital of the company.
The Minister for Finance is further empowered to guarantee the principal and interest in respect of such debentures. The Bill also provides that while the Minister for Finance continues to hold not less than one-tenth of the issued shares, while any debentures guaranteed by him are outstanding, a majority of the directors, including the chairman, shall be nominated by him, and the company's auditors shall be appointed with his approval. Power is also given in the Bill to the Minister to authorise, subject to such conditions as he thinks fit, the payment of subsidies to the company out of moneys provided by the Oireachtas. That clause is in the nature of a safeguard to cover abnormal circumstances, such as a shortage of raw materials in a particular period, resulting in excessive working costs.
Part III sets out the special powers of the company in relation to the laying down and maintenance of pipe lines, and the compulsory acquisition of land, and the construction, maintenance and operation of transport works. This clause follows the provisions recently enacted by the Dáil in the Cement Act of this year, the Liffey Reservoir Act, 1936; the Air Navigation Transport Act, 1936, and also the provisions of the Industrial Alcohol Act, 1934, as amended somewhat in the light of experience gained in the operation of the Cement Act, 1933.
Part IV provides for the transfer to the company of assets and liabilities of the State in respect of the undertaking. Part V provides for the compulsory purchase of industrial alcohol from the company by petrol distributors at a price to be fixed from time to time by the Minister for Industry and Commerce with the concurrence of the Minister for Finance. It also provides for use by distributors of the industrial alcohol so purchased. In addition to re-enacting Part IV of the 1934 Act, with certain amendments for simplification, this part of the Bill provides a new arrangement, and compels purchasers of alcohol to use it solely for blending with petrol, except with the permission of the Minister. Part VI deals with restriction on the manufacture of industrial alcohol. The Bill repeals the Industrial Alcohol Act, 1934, as on and from the appointed day. That, I think is a general review of its main outline. There are, of course, a number of detailed matters which it will be more satisfactory to discuss in Committee.
I think the House will approve generally of the transfer of the control of this undertaking from the Department of Industry and Commerce to such a public company as the Bill contemplates. During the initial stages of an undertaking, which is definitely of an experimental nature, it was, perhaps, best to have its control directly under the Department of Industry and Commerce, but, it has now reached the stage when that arrangement is by no means satisfactory, because the Department of Industry and Commerce is not suitable for the running of a commercial enterprise of this character. The company which it is proposed to set up will have the same relations with the State as other public companies, such as the Sugar Company, which was established mainly as a result of State enterprise. It is, perhaps, even yet too early to say what the outcome of industrial alcohol will be. Certain experiments upon which it was inaugurated have proved to be less satisfactory than was originally thought. Others have proved to be more satisfactory. The efficiency of the plant that has been established is beyond question. It is, in fact, of much greater efficiency than was guaranteed. On the other hand, it has been found, in order to procure adequate supplies of potatoes, that we had to pay a higher price than was originally anticipated. Of course the price of potatoes has the most direct and the largest influence on the price at which the spirit can be sold. Other costs have also been increased. I think it is recognised that the circumstances under which this enterprise was first decided upon do not now exist. At the same time it is well worth while continuing. It does provide a substantial additional market for potatoes in areas where such markets may be of real value. If the Dáil were to decide that the element of agricultural assistance should be taken out of the scheme then, of course, a much lower price for the alcohol could be secured by making it from potatoes altogether. But, in so far as the factories were established mainly for that purpose, we thought it desirable to continue to work upon potatoes and to give the advantage of that market to the farmers in the factory areas.
The position is, therefore, that we have got very efficient distilleries, as efficient as any industrial alcohol distilleries in the world. Probably they are the most efficient because they are of the most recent origin, and equipped by a firm with a high reputation for work of that kind. These distilleries have been working satisfactorily. The only circumstances that can affect the output of the distilleries is the price of the products and the availability of the companies to the raw material. Subject to the raw material being there at a reasonable price, the alcohol can be produced and made available at a cost as low as is paid in any other country. If we were concerned only with the cost of the alcohol and not concerned with utilisation of native materials, of course, a lower price would be secured but that, I think, would be bad national policy in the present circumstances. Of course, circumstances may change in the future and it will be open to the board of this company to adopt a changed policy with the consent of the Government. I do not think there is anything else I wish to say at this time except to recommend the Bill to the Dáil.