asked the Minister for Finance if he will give details of the final plans for privatisation of part of the Investment Plan, 1981, as prepared in January; the amount of money raised; and the projects covered.
Ceisteanna—Questions. Oral Answers. - Investment Plan, 1981.
7.
I am not yet in a position to give the detailed information requested. As the Deputy appreciates, there is a range of legal and administrative problems to be resolved before privatisation arrangements are finalised.
Could the Minister give an outline at this stage of how much money, in total, he expects to be obtained through the move towards privatisation, without going into any details, as he has referred to the difficulties of going into details?
As the Deputy will be aware, the previous Government, in their budget of 1981, indicated that they expected to get something in the region of £200 million from this source. My information is that a realistic estimate now would be that the amount of money likely to be available in 1981 is closer to £100 million.
Could the Minister indicate if up to £100 million is available from private sector investment for development in the Department of Posts and Telegraphs?
I understand that approximately £90 million is available for the privatisation assets in the telecommunications industry from the private sector. That constitutes the bulk of the £100 million to which I have referred.
What has happened to the other projects which were in a very advanced stage, covering substantially more than the difference between £90 million and £100 million?
There have been a number of legal difficulties which were not, perhaps, foreseen when the project was launched. Many of these concern the legal situation in regard to the authority to borrow, which it was anticipated certain State agencies would have. It was discovered that legislation was necessary to confer that authority on them. The failure to foresee this problem has led to some difficulties.
Also, there have been difficulties in relation to the provision of sites where those sites do not actually belong to the State itself, but to subsidiary bodies such as health boards and local authorities. It was necessary to take legal advice on the proper course to follow to enable the transfers in question to be made. The programme will proceed with all due speed.
Are we to take it from what the Minister has just said that he is prepared to accept that in the region of £100 million, which might have been available from the private sector, is now not going to be sought by him because of the legal difficulties which he has outlined? Would it not be more realistic for the Minister to approach the matter on the basis of finding a solution to the legal problems — which certainly are not insuperable — rather than, apparently, so easily allowing £100 million to slip from his grasp?
There is no question of allowing the money to slip out of my grasp. My information is that certain difficulties which perhaps quite legitimately were not foreseen at the time of the conception of the programme have had to be overcome. It is not possible to get the full £100 million this year but we will endeavour to get the balance next year.
In fairness to the House can the Minister detail where these newly-found legal and technical difficulties have arisen? What is this excuse in aid of?
Significant progress had been made towards reaching the target of £100 million this year. This has been achieved after much detailed negotiation and in addition much effort has gone into the additional new demands in terms of their effect on balance of payments financing. Our ability to effect the full take-up is dependent on the satisfactory resolution of some matters. These include the problem of the authority to borrow of the private company established by the previous Government, namely, Irish Telecommunications Investments Limited. It was discovered that that company being non-statutory and private were not authorised to borrow against the guarantee of the Minister for Finance. Consequently it was necessary to make arrangements for a statutory provision for that body so as to give them the requisite power. Similar situations issued in regard to the vocational education committees and the health boards. The agreement of these bodies to any financial arrangement had to be obtained in each individual case but it is the judgment of the Department of Finance that for this reason at least it is unlikely that the proposals can be implemented in this financial year. The probability of a shortfall of this size was conceded during a review of the budgetary position by the Department of Finance some time in September.
Is the Minister aware that the same legal arguments and difficulties to which he refers raised their heads as far back as April last but that solutions to them were found? Is he aware also that there are many precedents for this borrowing? For instance, there is the precedent of the Irish Steel Board, of the National Oil Corporation and many others. The excuse being given concerning a situation of the type that has existed for many years is very simplistic. Is the Minister, aware, too, that in this House last week the Minister for Posts and Telegraphs said that almost £100 million was available for the Irish Telecommunications Investments programme? Would the Minister like to comment on the fact that no private sector investment is being sought for the decentralisation programme referred to in the last question?
I have indicated that £90 million would be available for the Irish Telecommunications Investments programme. That is close enough to £100 million and it is consistent with the statement made by the Minister for Posts and Telegraphs. I do not believe in proceeding to borrow money without having the necessary and statutory authority to do so. The Deputy has cited precedents but I am not sure that precedents of that sort are entirely apt. It is important that if money is being borrowed against the guarantee of the Minister for Finance and, consequently, the Irish people, all due care is taken to ensure that the borrowing is carried out on a proper, statutory and legal basis.
The Minister does not appear to understand the problem he is outlining. Am I right in thinking that he has referred on the one hand to borrowing and on the other to the question of guaranteeing the borrowing? Does he not understand that these are two separate items and that the precedent referred to by Deputy Reynolds in the cases in which borrowing has taken place related to borrowing that was not guaranteed by the State and that in the cases to which he refers the borrowing would be possible without a guarantee from the State? His concern in regard to the guarantee is really for those lending the money rather than for the State.
I am sure the House will agree that money which is borrowed under guarantee may be repaid by a body other than the State, if that body works successfully but that in the event of it not working successfully, the repayment falls to the State. It is my conviction that every possible precaution must be taken in respect of the giving of guarantees by the State because the taxpayer is the one who will have to find the money if the body other than the State collapses.
In response to an earlier supplementary the Minister referred to legal and political problems in connection with the policy of privatisation. He has dealt satisfactorily with the legal difficulties but can he tell us what the legal problems were?
As I have stated, these related to the position of the various local authorities, the vocational education committees and the health boards whose consent must be obtained in each case for the disposal, for the purpose of privatisation, of sites owned by them.