I move:
That a supplementary sum not exceeding £6,703,000 be granted to defray the charge which will come in course of payment during the year ending on the 31st day of December, 1977, for the salaries and expenses of the Office of the Minister for Industry, Commerce and Energy, including certain services administered by that Office, and for payment of certain subsidies, grants and sundry grants-in-aid.
This Supplementary Estimate is needed in order to provide additional funds for certain of the services operated by my Department and organisations for which I have responsibility and to effect adjustments in the provisions made for certain others of these services. The additional requirements include expenditure under a subhead which is now within the ambit of the Vote because of the recent transfer of the energy function to my Department from the former Department of Transport and Power. The need for these additional funds could not have been foreseen when the Estimates were prepared originally.
The additional £100,000 sought under subhead BI is due principally to an increase in travelling by the Department's inspectors on price control duties and on other inspections arising from the administration of subsidies on bread and flour. It reflects also the effect of increased subsistence and mileage allowances.
The additional grant of £84,000 which I am proposing for the Institute for Industrial Research and Standards is required to meet the extra cost of implementing the terms of the 1977 National Pay Agreement for the staff of the Institute.
This year's Estimate provided £4.3 million towards the Grant-in-Aid for Córas Tráchtála, who now require an additional £54,000.
This amount is needed almost entirely to meet part of the cost, £45,000, of implementing the 1977 National Wage Agreement and which had not been provided for in the original allocation for this body. The balance is needed to meet the cost of certain short-term borrowing requirements.
The estimate for the current financial year provided £322,000 towards the Grant-in-Aid for the Kilkenny Design Workshops Limited. An additional amount of £20,500 is required by the company to meet their needs in the financial year.
This additional amount is needed to cover the cost of implementing the 1977 National Wage Agreement and some minor adjustments in certain other costs. These are administration costs in relation to increased rates of social welfare contributions and costs related to the arrangements for the completion of the renovation of the company's property known as Butler House, which was acquired in 1972.
The original allocation to the Industrial Development Authority for administration and general expenses was £5,700,000. An additional £30,000 is required to meet part of salary increases as a result of the 1977 National Pay Agreement.
The original allocation for the capital grant-in-aid was £55,000,000. An extra £4 million was allocated in the January budget to assist job creation. This money is being spent on additional land acquisition and factory construction by the authority.
I propose to include a new provision of £220,000 for expenditure under the Vacant Rents subsidy. This is a technical adjustment necessitated by the decision to transfer to the Industrial Development Authority the responsibility held formerly by the National Building Agency for the provision and financing of industrial housing for new industry. It covers the amount of vacancy rents payable by the IDA to the NBA in respect of houses built by the NBA at the request of the IDA but which remained unsold for a period. As will be seen from the Supplementary Estimate there was a compensatory saving under another subhead of the Authority's expenditure, that was subhead I.3.
A supplementary grant-in-aid of £50,000 is necessary to finance essential activities of the Irish Productivity Centre until the end of the year 1977. The original allocation of £300,000 is inadequate due to cost increases and a shortfall in expected revenue from fees.
The amounts allocated already for the bread and household flour subsidies for the current year are £13,850,000 and £2,150,000 respectively, an aggregate of £16,000,000. While the aggregate cost of these subsidies remains unchanged at £16,000,000, there is likely to be an excess of £100,000 on the bread subhead offset by a saving of £100,000 on the flour subhead. The indications are that there has been a slight variation in the pattern of utilisation of the two commodities with a move away from the home baking—in which subsidised flour is used—to subsidised bakers' bread.
It has been arranged with a number of the consortia concerned that under the terms of their exclusive offshore petroleum exploration licences, they will contribute a total of £1.7 million during a five-year period to provide education, training and other facilities in the areas of petroleum and other natural resources. My Department, with the assistance of the National Science Council and its successor body, the National Board for Science and Technology, will administer suitable programmes which, in addition to education and training courses at home and abroad, will include studies, consultancy and technical assistance projects.
The objective is to build up in the private sector a body of native expertise with a view to grasping the many opportunities arising from off-shore developments. It is intended also to provide the Government Departments and agencies concerned with these developments with the necessary competence and expertise to perform effectively.
The State and oil companies have a degree of common interest in this matter. The offshore operators are required to use Irish bases, goods and services and to employ Irish personnel where suitable and available. They recognise that, if commercial discoveries are made, this raises very substantially the demand for Irish personnel and services and it is in their interest that suitably qualified and trained people be available here. It is important also, from their point of view, that the Irish Government agencies concerned with offshore operations should have adequate facilities, including appropriately qualified staff, to administer the many aspects of offshore activities.
It is my intention to proceed initially by way of a two-year programme, at the end of which I shall review the position in the light of experience gained and of the position in the petroleum industry at that stage.
In the present financial year only a provision of £50,000 will be needed to cover anticipated expenditure. the appropriations-in-aid show receipts this year under this arrangement.
The original provision in the Estimates for 1977 in respect of town gas subsidy—£1.8 million—was made in the Vote for Transport and Power. As I mentioned earlier, energy is now a function assigned to my Department and the extra money needed is, there-fore, included as a subhead in this Department's Vote.
This subsidy was first introduced with effect from 1st July, 1975 and is at the rate of 12½ per cent of the cost of town gas at that date. It has been continued on this basis since then despite further increases in the price of town gas.
The National Prices Commission, in May, 1977, recommended two increases in the price of town gas in Dublin, the combined effect of which would have been to increase the price of gas by about 37 per cent to Dublin consumers. To ease the family budget and to maintain fully the Dublin town gas system pending the possible availability of cheap natural gas the then Government decided to pay an additional subsidy to the Dublin Gas Company with effect from 25th May, 1977 to offset the increases in prices recommended by the National Prices Commission. It was decided subsequently in August, 1977, to extend the subsidy at the rate payable in Dublin to provincial town gas undertakings with effect also from 25th May, 1977.
The extra cost of the additional subsidy in 1977 is estimated at £3 million and this supplementary provision is to meet this expenditure.
The main reason for the steep increase in recent years in the cost of production town gas is the huge increase in the price of naphtha which is used by most of the gas undertakings for gas manufacture. This raises the question of the feasibility of using an alternative fuel which would reduce the cost of gas production and possibly eliminate the need for subsidy. The only other fuel which offers prospects of long-term production at a reasonable cost seems to be natural gas.
So far as the provision of natural gas for Dublin is concerned, the only economically-exploitable deposit of natural gas discovered so far in Irish waters is the Kinsale Head find. As Deputies are aware the allocation of this find was decided by the then Government in 1974. The allocations made were—40 per cent for the production of ammonia and urea for the fertiliser industry in a new plant to be built by Nítrigin Éireann Teoranta and 60 per cent to the ESB for use in a new power station at Aghada, and in an extension to the existing station at Marina, Cork. Subsequently it was agreed with the ESB that a small quantity of their allocation would be made available to the Cork Gas Company to meet their requirements.
The question of allocating a supply of Kinsale Head gas for distribution in Dublin has been raised by the Dublin Gas Company. I referred this matter to an inter-departmental committee to be examined in the context of the decision already mentioned to use a large part of the Kinsale Head gas for electricity generation. The committee have concluded their examination of the matter and their report will be available to me very shortly.
The total amount of the increased expenditure is £7,708,500 but there is an offset of £695,500 in savings mainly made up of £250,000 on subhead D— Geological Survey—as a result of the deferment of a proposed aeromagnetic survey of the country; £245,000 on subhead 1.3—Industrial Development Authority—Grants for Industrial Housing; £100,000 on subhead S.2—Flour and Wheatenmeal Subsidy and a surplus of £310,000 in Appropriations-in-Aid chiefly in respect of payments made by holders of exclusive offshore petroleum licences to which I have referred earlier.
I have explained in the case of each subhead the reason for the increased expenditure but if Deputies consider it necessary or desirable I shall deal with any points that may be raised in relation to them.
I recommend this Supplementary Estimate to the House.
