I move:
That Dáil Éireann, in the light of similar decisions in the past year by other semi-State bodies, notes with deep concern the recent decision by Nítrigin Éireann Teoranta, with the apparent approval of the Government, to allow a major contract to go outside this country when the work could have been carried out by Irish firms with consequential benefit to the Irish economy.
It is a pity we have to go through this rather painful process in order to arrive at the situation that would have been arrived at if the Parliamentary Secretary had not acted in such a childish fashion.
In the light of events over the past year or so in relation to contracts by semi-state bodies it is a matter of some surprise and concern that it should be necessary once again to have a motion of this type dealing more specifically on this occasion with the recent decision by NET, with the apparent approval of the Government, to allow the mechanical part of the contract for the erection of the new NET plant at Marino Point in Cork to go to a foreign firm. I am not to be taken as suggesting that it is wrong for a contract to go to a foreign firm, but going under circumstances which give rise to considerable apprehension as to the handling of this affair by NET, a handling which appears to have the approval of the Minister for Industry and Commerce. I will be dealing with that aspect of the matter shortly.
The worrying aspect of this—one might almost say the sinister aspect of it—is the fact that this part of the overall contract is being carried out by Kellog International Limited, design consultants, without the mechanical sub-contract having been put out to tender, as was done in the case of the various other aspects of the construction of this plant. No Irish firm, or any other firm of any nationality, was allowed that opportunity. This matter gives rise not just to considerable misgivings and apprehension in this party, in the construction industry and their unions, but right throughout the country.
The first thing I want to establish is the fact that the Minister for Industry and Commerce has taken a close personal interest in the various contracts and sub-contracts that have been awarded by NET. It is only right that he should do so, because this whole complex, which is being erected by NET at Marino Point in Cork Harbour, is one of primary importance to this country. This is the first major construction of plant arising directly out of the very fortunate finding of natural gas off our shores. For the first time, we have the opportunity to construct major plant directly arising out of the finding of natural gas which is such a boon to this country.
On Thursday, 11th December, 1975, I raised in this House in the debate on the Industrial Development (No. 2) Bill, 1975, a question which at the time I considered important, as it was and is, and that was the decision by NET to award the structural steel sub-contract to a British firm called Farmers, even though it was conceded that an Irish firm, Joseph Murphy Structural Engineering, Limited, Dublin, submitted the lowest tender. I spoke at some length on the Second Reading of that Bill about what I regarded as the unfortunate decision of NET to award this contract to Farmers, even though they appeared to have been a higher contract and it was demonstrated pretty conclusively that the Irish firm were capable of carrying out the work. Up to that time I had no direct proof—even though I suspected it—that the Minister himself approved in advance of the giving out of these contracts and sub-contracts in relation to this very important project.
The Minister at column 1474, Volume 286 of the Official Report for 11th December last said:
The decision in regard to NET was a difficult one. I went into the matter thoroughly and I should like to state emphatically that I take full responsibility for the matter.
The Minister could not have been more specific, that he took full responsibility for the awarding of the structural steel sub-contract which was worth approximately £500,000. We are talking here about the mechanical part of the contract. It is not quite clear what its value is. It is conceded that it is worth not less than £10 million. It may be worth a good bit more. That being so, this contract is 20 times more important than the structural steel contract. In view of the fact that the Minister went into the matter thoroughly in relation to the structural steel contract and stated emphatically that he took full responsibility for the matter, I have not the slightest doubt that the Minister went equally thoroughly into this whole question and takes equal responsibility in spite of his prefacing his reply to a number of questions from Deputy Fitzgerald and myself to the effect that this was a matter for NET and not for the Minister. This was at a time when the heat had come on somewhat in relation to the Minister's intemperate outburst in relation to this matter in Cork some weeks ago. We have, therefore, established to the satisfaction of any reasonable person that the Minister personally vetted and gave his approval to what was done in relation to the mechanical contract part of this whole project done by NET.
To get the matter in perspective it is now necessary to look at what NET did. NET gave a contract for the design and overall construction of this plant about 12 months ago to Kellog International after there had been tenders from three international firms of which they were one. This is a pattern which is repeated fairly frequently throughout the world in the construction of plants of this nature. There is no question that Messrs Kellog International Ltd are an experienced and reputable firm and are among the best in their field of designing plant of this kind and they are so recognised throughout the world. What I question is the fact that as well as being given the contract for the design, which is a normal thing, they were also given the overall contract for the construction.
This is not normal and from my inquiries I can refer to one or two other plants that are currently under construction. It is not normal to give Kellogs the contract for the full construction work. Nonetheless they got it, possibly on the basis that they would sub-contract out each part of it and put each sub-contract up for tender. This has been done up to now. Irish firms have tendered very competitively for and have got most of the sub-contracts that have been put up for tender up to have tendered very competitively for and have got most of the sub-contracts that have been put up for tender up to now with the exception of the structural steel one and I think one other which was a great deal smaller than this. To the surprise of everyone it was decided by NET in consultation with Kellogs, and undoubtedly with the approval of the Minister, that in this case the mechanical aspect of the contract would not be put out for tender but would be retained by Kellogs themselves who would hire direct labour in order to carry out the job and would be paid apparently on the basis of whatever it cost. It is quite conceivable, and in the absence of tenders one cannot say for certain, that if this job which I will show was within the competence of Irish mechanical contractors had been put out for tender the possibility is that the cost to NET and accordingly to the Irish taxpayer would have been, perhaps, several million pounds less than what it will, in fact, turn out to be.
I will summarise the reasons for this given by the Minister in the House on the 18th May last. The Minister said that no Irish mechanical contracting firm had done precisely this work before and that the job was complex and very important and that the Minister wished to avoid delay or possibility of error and, accordingly, Kellogs got the go-ahead to do the job themselves by direct labour. The situation is that this job, I would suggest, and it has been suggested by people who are in a better position than I to evaluate the complexity of it, and so on, is no more complex than a whole series of jobs which were carried out very successfully by Irish mechanical contracting firms in recent years. The Mechanical Contractors' Association refer in one of their statements to a very extensive list of jobs done by Irish firms.
I will mention a few as an indication of the considerable difficulty of those jobs, which I would suggest, are no more difficult or complex than this NET plant at Marino Point, which were very successfully done by Irish firms within time. Perhaps the best example is Merck, Sharp and Dohme which is a pharmaceutical complex at Clonmel where the difficulties were enormous. The job was successfully carried out within time by a prominent Irish firm, H. A. O'Neill Ltd. which is a subsidiary of the Jones Group which is an Irish public company. There are a large number of others such as the Asahi project at Ballina, Courtalls huge factory at Letterkenny, the Turlough Hill pump storage scheme for the ESB. I would also like to refer to the Ferenka factory at Limerick which is the largest factory ever built in this country. There was never a factory of its kind in this country before. The technology or the processes involved had never been seen in this country before but Irish firms successfully carried out within time the building of this factory in Limerick, although it is enormous and it was particularly complicated at the mechanical end of it. There was never a pump storage electricity station in this country before. Turlough Hill is a major and elaborate one. No Irish firm had done that kind of work before but Irish mechanical firms carried it out very successfully. The same would go for the other firms mentioned, Merck, Sharp and Dohme, Asahi, Syntex in Clarecastle, Tarbert and Poolbeg generation stations for the ESB and a long list of others. They were all new in the sense that no Irish firm individually had done that sort of work before. Irish firms tendered for those jobs in competition with foreign firms and tendered successfully and, having obtained the contracts, carried them out successfully to the satisfaction of everyone concerned.
You will notice, Sir, that of the various firms and projects I have been referring to, a great many of them such as Ferenka and Asahi, for example, and Merck, Sharp and Dohme, are not semi-State companies. They are privately owned firms and, in most cases, foreign privately owned firms. They had not in any sense the same sort of obligation to the Irish economy or to Irish firms as I would suggest NET as a wholly owned by the taxpayers semi-State body, through the Minister for Industry and Commerce or the Minister for Finance, have to the Irish economy to see that Irish firms, if they do not get the contracts, at least get the opportunity to tender for them, an opportunity they have been deprived of quite cavalierly on this occasion.
These are foreign private firms who were very happy to put out to tender work of great complexity involving great expense and considerable difficulties. They were happy to award the contracts to Irish firms as a result of competitive tenders by Irish firms against one another and against foreign firms. Here we have the situation that a semi-State body are not alone not prepared to give the work to an Irish firm but are not even prepared to allow an Irish firm to tender for the work. They have no way at all of estimating—and we as public representatives have no way of estimating-what the cost of that work would have been, how much less it would have been. It could be many millions of pounds less if it were put out to competitive tender at a time when Irish contracting firms of this kind are literally screaming for work and when, unfortunately, they are letting men go virtually every week.
Because I believe efforts have been made to try to confuse the issue on the whole question of design and construction, I want to make it clear that I have no objection whatever to Kellog International Limited competitively obtaining the contract for the design of this plant. It is acknowledged that they are one of the best in the world at that, and there is no firm in Ireland so far as I am aware which could have designed the plant in question. Kellogs have got contracts to design similar plants in other parts of the world. I understand at least two are going on at the moment, one at Huelva in southern Spain and the other in China. I have less information about what is happening in China because that is not so easily come by.
I have made inquiries from people who have visited an ammonia and urea plant which is under construction at the moment in Huelva in southern Spain. I am basing my information on what has been given to me by somebody who has actually been there to look at what is happening. This plant at Huelva was designed by Kellogs but the Spaniards only bought the design from Kellogs. They employed Kellogs as planning consultants for the design, but they did not employ them as contractors or project managers. A Spanish firm called Union Explosivos Rio Tinto were appointed by the Spanish Government to act as consultants and project managers. At the moment in Huelva in Spain there is just one man from Kellogs who is seconded there as a liaison officer and an interpreter of detail in the drawings.
Another Spanish firm called Tecnicas Reunidas, are carrying out all the general construction work and are sub-contracting to various firms the technical sub-contracts such as the one we are talking about here, the structural steel and the various other ones which arise. As a result, numerous Spanish firms have got experience which would not otherwise have been possible. Unfortunately we have passed this over. We have failed to avail of a very valuable opportunity for us to increase our knowledge of a technology which we hope will be of great importance to us in the years ahead as, we hope, more and more gas fields of this kind are found around our coasts.
It is not just a question of being annoyed, although one is entitled to be annoyed, at an Irish firm not even being given the opportunity to tender for this work. From the long-term point of view, the real loss to our economy is the fact that here we are dealing with natural gas, a God-given gift to us. It is our first opportunity to gain experience in a major construction plant arising out of the discovery of natural gas. We are passing up that opportunity simply because some large foreign firm did precisely this type of work before and Irish firms did not.
I should like to point out to the House and to the Minister, although he does not seem to accept this point, that the long list of major mechanical projects and contracts which I gave already were all new. No Irish firm has done precisely that work. There is no major innovation by any manner or means in the mechanical contract so far as Marino Point is concerned. It is not easy but it is no more difficult than Merck, Sharp and Dohme, or Asahi, or any of the others I have mentioned.
Kellog International Limited are down in Cork trying to recruit staff to carry out this work. They are recruiting the staff from existing Irish firms who trained them and built up a skilled manpower force on their pay rolls. Presumably this job will be finished in two years' time, or so. Kellog International Limited will then depart from the Irish scene and, unless they come back at some future date in relation to some of our gas finds, we will probably never see them again. The Irish firms who spent thousands of pounds in training personnel for mechanical projects and who, over a long number of years, have also paid out an annual training levy for the training of staff and operatives, will be left high and dry. We hope they may still be with us but it is quite conceivable that they will not be with us, because the kind of work for which they have trained their staff is being given to a firm who have no obligation to the staff, no obligation to take on apprentices and train them as these Irish firms have been doing down the years, and who are interested in this once off job which will probably not arise again for them.
If there are further gas finds off our coast, as we all very fervently hope there will be, surely it is only right that Irish firms should now get the opportunity to prepare for further work and further contracts which will become available if and when these further finds are made. One of the most disturbing aspects of this rather disturbing affair is the fact that when there was criticism by the various bodies of NET's decision to allow this very important contract to go without being put out for tender and to allow the design consultants to carry it out by direct labour on a cost or time and material basis, there was no response from the Minister or NET. There was some from NET but none from the Minister for a week or so, but suddenly, while in Cork for the opening of a different plant—the the Japanese plant, Mitsui—he availed of the opportunity to call a Press conference to talk about the NET decision and the criticisms that were made of that decision which, clearly, he approved of.
At the Press conference he used the most extraordinary and intemperate language in relation to his critics. There was no question of his being provoked. There was nobody from the Construction Industry Federation heckling him. He was not in Dáil Éireann where sometimes he uses intemperate language when, perhaps, I or somebody else might provoke him. He was speaking at a Press conference which had been called by himself. During the course of the conference he described those who criticised the decision as speaking wild nonsense and monstrous trash and he continued to use various other phrases to that effect. He said that those who criticised the decision to allow Kellog to take over the mechanical sub-contract were talking nonsense, that their argument was irresponsible and a silly non-argument. For the most part his criticism was directed personally at Mr. Thomas Reynolds, director of the Construction Industry Federation. The Press conference was reported in each of the national dailies of May 11th, 1976. In response the federation issued what, in all the circumstances, was a remarkably moderate statement because if ever there was a slur on Irish firms and, in particular, on Irish workers, the Minister had cast such a slur. He had stated that the Irish construction industry was good at building houses, the implication being, therefore, that the industry was not any good in the field of work of a sophisticated nature in relation to plant of this kind. This slur and denigration of Irish firms and workers would be very serious in itself but it is particularly serious at this time when those firms, because of lack of work in this country—a situation which is due to the constant running down of the construction industry generally by the Government—in order to endeavour to survive and keep workers in employment, are turning increasingly abroad for contracts and are competing against foreign firms in this very type of field of which we are talking.
One can well imagine the position these firms are placed in when the Minister for Industry and Commerce in their own country engages in denigrating them, sneering at them and running them down generally in the fashion he employed in Cork on 10th May. The firms and the workers concerned are entitled to be extremely annoyed at what was said about them by the Minister, the man, more than anyone else, who should be pushing them and lauding their abilities and their virtues in order that they might get more work abroad at a time when it is becoming increasingly difficult for them to find work at home.
It is worth looking at this situation in the context of the unemployment position generally and, particularly, in the construction industry in respect of which the number of people unemployed is way above the national average, showing an increase of 13,000 unemployed since 1974. If this figure were reflected in the national average rate of unemployment there would be 200,000 people registered as unemployed instead of 114,800 who are registered currently. The rate of acceleration of unemployment in the construction industry has been huge and, perhaps, has run at more than twice the rate in other sectors. Therefore, if there was any one sector which the Government should be going out of their way to assist, I suggest it should be the construction industry. That industry, above all others, is the one which the Government should not be denigrating in the eyes of the world.
The House will recall that towards the end of last year another semi-State body, the Irish Life Assurance Company, awarded a contract to a British firm in respect of the manufacture of furniture valued at £200,000 for their new offices in Dublin. They acted in this way on the grounds that the type of furniture involved had not up to then been made in Ireland. Their action aroused an outcry and there followed a sort of semi-public argument between the Minister for Finance and the board of Irish Life in which the Minister said he had been misled by the board, an allegation which the board denied. In any event, after much public criticism in this House and elsewhere the board of Irish Life relented and made some changes in the contract, although this entailed a loss to them, whereby the furniture would be manufactured in Ireland. The contract we are talking of here is not a contract of £200,000 but is in excess of £10 million. I do not know how much in excess of that figure it is but let us assume the lowest possible figure of £10 million. This leaves it at least 50 times greater than the Irish Life contract which caused so much of a furore. I am expressing the value of the contract in terms of money but this plant which is to be used for the utilisation of natural gases is worth more to the country than was the £200,000 contract for furniture for Irish Life. It is not only in terms of money or of comparative money values that one reaches this decision but in terms of the opportunity to come to grips with a new technology, the first chance that Irish firms have had in this regard. It is not that it is that much more difficult or more different from the sort of work they have been doing up to now but it involves a type of technology which we hope will be repeated many times in the future. We have lost the opportunity to teach this new technology to many of our people, to enable them to become more familiar with it. There is no point in saying that 90 per cent of the workers which Kellog will employ will be Irish. They will not be a team but will be workers recruited from Irish mechanical, engineering and contracting firms, brought together for one job which, when completed, will mean the dissipation of the workers and a huge proportion of the knowledge they would have acquired is lost. The real value of acquiring knowledge in that technology lies in firms acquiring that knowledge and maintaining it as a team so that they can apply it in future, not only in their own work but in the instruction of other Irish people. The real tragedy lies in the fact that, with the discovery of this great natural resource we now have a great opportunity to train our own people from the outset but we are not doing it. It is incredible that we are refusing to do it with the clear approval and support of the Minister for Industry and Commerce. I am not suggesting that he should give Irish firms jobs which they are not entitled to, but he approves of a situation in which they are not even allowed to tender for one of our most important, if not the most important, sub-contracts. I have been accused of being chauvinistic in endeavouring to get as much work as possible done by Irish firms in relation to offshore gas and oil.
We are told that we are living in a free trade ear. For goodness' sake, this contract was not thrown open to anybody. NET agree that the consultants should themselves do the work by direct labour. No Irish firm was even asked to tender in spite of the fact that millions of pounds of the Irish taxpayers' money is being pumped into this project by the IDA. The IDA have strict rules about construction contracts having to go to tender in order that the taxpayers' money would not be abused in any way. What guarantee have we that millions of pounds more than is necessary is not being utilised in this particular job?
I do not hear the British or the Norwegians being accused of chauvinism or ultra-nationalism although virtually every platform in respect of oil and gas that has been erected, or is in the course of erection, in the North Sea was manufactured either in Britain or in Norway because their Governments insisted on that. At present we have two platforms under construction for the Kinsale Head gas field and neither of them is being constructed here. Even if we had to build more platforms in the next year or two, it seems unlikely that they would be built in this country. It is perfectly all right for the British and Norwegians to insist that the spin-off benefits of their good fortune in the North Sea should go to their own people but one is accused of chauvinism if one suggests that the Irish people are entitled to some benefit from the God-given gift of natural gas. I make no apology, Sir, for saying that Irish firms and workers are at least entitled to a fair crack of the whip. I am not asking that they be given preference. Their very abilities, which are undoubted and which are recognised all over the world, are denigrated by the Minister for Industry and Commerce in a way that will make it more difficult for them to get the work they need so badly abroad. A second very disturbing aspect of this matter is that we have no way of knowing what the mechanical sub-contract for the NET project at Marino Point will be because it was not put out to contract and no firm, either Irish or foreign, got the opportunity of tendering for it.
