asked the Minister for Energy if he will make a statement indicating the action he has taken, or proposes to take, to alleviate the immediate problems of the Limerick Gas Company; and whether it is proposed to connect Limerick with the Kinsale gas head.
Ceisteanna—Questions. Oral Answers - Limerick Gas Company.
33.
An official press statement was issued on 21 January 1981 announcing that the Government had approved a package of measures to alleviate the serious financial difficulties of the Limerick Gas Company. The following are the relevant details.
The package will relieve the company's debt servicing burden by transferring certain of their borrowings to the Local Loans Fund and by a takeover by the State of the servicing of other borrowings. A component of this package is the approval by the Government of an increase of 25p per therm in the price of town gas in Limerick. This increase is necessary to help to eliminate the company's financial deficits. The remaining elements of the package provide for an annual subvention to the company by Limerick Corporation and a guarantee by Limerick Corporation that there will be no future significant increase in the company's deficits. The company have been making losses since 1978. Limerick Gas are also to seek naphtha feedstock at more stable prices from the Irish National Petroleum Corporation.
In approving the package of measures, the Government were conscious that the closure of Limerick Gas would result in an irreversible deterioration of the gas distribution system in Limerick which would obviate any prospects of supplying the Limerick region with Kinsale gas, should circumstances in the future be favourable towards such a project. Bearing this in mind, in discussions with Limerick Corporation officials last July I indicated that if the package of measures was approved by the Government I would require Limerick Corporation not only to ensure no further increase in deficits but also to have an independent consultancy study carried out to see what economies were achievable within the Limerick Gas operation, to assess the-likely market prospects over the longer term and to establish the viability, on the basis of the study, of a lay-on of natural gas.
The necessary measures are being taken to implement the package as a matter of urgency.
I would like to emphasise certain points. Very serious problems beset Limerick Gas and there is no easy solution to them. The measures which the Government propose to take and the other elements of the package are intended to give the company time to see if they can operate on a viable basis. The feasibility of piping Kinsale gas to Limerick has yet to be evaluated. This is contingent upon the outcome of the studies of the Cork-Dublin gas pipeline, as well as on developments in Limerick Gas. In the meantime, the onus is on Limerick Gas and Limerick Corporation, of which the gas company is a department, to take whatever other measures may be necessary to keep the company operating efficiently. It is particularly important that further significant losses should not arise in Limerick Gas and the company are being pressed to put the independent consultancy in train as a matter of urgency.
I thank the Minister for a comprehensive reply and, while acknowledging the aid that has been given to the Limerick Gas Company, as announced in the past week, I ask is the Minister fully aware of the fact that this recently announced package is merely a short-term solution to the problem? Could I have the assurance from the Minister looked for by the industrial, domestic and other consumers in the Limerick and mid-west region that the question of the piping of natural gas or Kinsale gas to Limerick would be actively considered? There is no other long-term solution to the need for a gas supply for Limerick and the very important industrialised mid-west region.
I am fully aware, and indicated in my reply to the question, that the package of measures announced by the Government constitutes a short-term approach to the problem. Certainly we never suggested that it constitutes anything else. I have made it clear that there are certain steps which must be taken by Limerick Gas Company and Limerick Corporation in the short-term to try to increase the economic operation and the viability of Limerick Gas.
As regards the supply of natural gas, I have indicated that this is dependent on, firstly, the pipeline from Cork to Dublin and the studies being carried out in connection with that and, secondly, on a further evaluation of the economics of supplying natural gas to Limerick. I cannot anticipate the result of these but I can say that certainly the question of supplying natural gas to Limerick will be viewed sympathetically.
Perhaps I misunderstood the gist of the Minister's answer. In view of the time factor which is critical, would it not be preferable to do a parallel evaluation of the pipeline both from Cork to Dublin and with a branch-off to Limerick, rather than doing the Dublin-Cork one first and then looking at the question of the connection to Limerick?
I do not think that it would be very helpful to do that because if the Cork-Dublin one is not economic, nothing else will be economic.
The remaining questions will appear on tomorrow's Order Paper.