I have given Deputy Haughey permission to raise on the Adjournment the subject matter of Question No. 13 on today's Order Paper. The Deputy has eight minutes.
Adjournment Debate. - Construction of Bulk Coal Carrier.
I must confess that had I known I had only eight minutes I doubt if I would have proceeded to raise this matter on the Adjournment. However, I am grateful to you for granting me the opportunity of referring very briefly to the subject matter of Question No. 13 on today's Order Paper. I would like to direct the attention of the House to the words I used in that question and I suggested that the matter was of importance as a major opportunity for North-South economic co-operation. For that reason I addressed the question to the Taoiseach. The Taoiseach obviously did not think that North-South economic co-operation was of sufficient importance to engage his attention and he passed it to the Minister for Industry and Energy. The Minister for Industry and Energy apparently had some commitment elsewhere and he did not regard it as of any great importance either, so he passed it to his Minister of State. Now I understand that the Minister of State who dealt with the question in the House today has taken himself off somewhere and we are left with none other than the Minister for the Public Service, an admirable Minister in many ways but not one who I would imagine is familiar with this matter.
Apart from the Kinsale gas delivery to Northern Ireland the negotiations with Harland and Wolff over the possible order of a bulk carrier for the ESB's coal trade for the new generating station at Moneypoint represent, in my view, one of the biggest co-operative ventures between North and South that has ever been discussed.
The matter arose originally out of a study by the National Board for Science and Technology into the coal shipping trade which would be created by the new ESB coal-fired power station at Moneypoint. That study was concerned with maximising the benefit to the Irish economy of this lucrative trade, in particular by the use of Irish-manned and Irish-built ships. The National Board for Science and Technology's Coal Shipping study foresaw the need for a very large carrier of around 120,000 tonnes for the long-distance trade from North and South possibly get Irish Shipping, the ESB —
In Belfast, Harland and Wolff are capable of building large 130,000 tonne bulk carriers that will be needed in 1986 and 1988. The Belfast yard specialises in very large vessels and they hope to win new orders for the large bulk carriers that will be needed for the forming international coal trade.
The study pointed out, however, that both Verolme and Harland required very heavy subsidies from their respective national exchequers in order to compete. The study continued:
We believe, however, that the possibility for arranging through inter-Government negotiations appropriate financial packages for the building of a large bulk carrier in Belfast should be taken into account.
This study was done by our National Board for Science and Technology attached to the Department of the Taoiseach. Now the trade union leaders in the Belfast shipyard were made aware of the contents and even before I had returned to office on 9 March 1982 I was informed that they wished to see me.
Deputies will be aware that the shipyard of Harland and Wolff have been in difficulties for some time, that they are in receipt of substantial subsidies from the British Government and even then found it almost impossible to get orders. I need not remind this House that Harland and Wolff is a famous shipyard, symbolising for over 100 years the industrial prowess of the north-east of Ireland. The agreed communiqué which was issued after my meeting with the trade unionists from Harland and Wolff on 5 April 1982 stated:
The Taoiséach expressed the view that the Harland and Wolff shipyard should be regarded as an asset with potential value for Ireland as a whole and looked forward to closer and more continuous contact in the future. In view of the fact that Ireland was developing rapidly from the industrial point of view and demand for heavy engineering work steadily growing, it was agreed that Harland and Wolff could play an important part in the future development of the Irish economy and the Irish Government have consistently encouraged such a development.
I mention those facts at the outset as a background to what subsequently happened. Very briefly, the view of my Government was that this was an important economic project and that, if at all possible, we should try to have it contained within this country if we could possibly get Irish Shipping, the ESB — and the Irish Government, of course — and the Harland and Wolff shipyard all involved to come together to try to get the maximum benefit for this country out of this coal trade for Moneypoint. We brought the negotiations along as much as we could. First of all, unfortunately Irish Shipping, because of their particular situation, could not become involved and then we sought other means of having a bulk carrier built in Belfast which would be used by the ESB to carry this coal to Moneypoint.
There was much complicated negotiation going on, but all the while the ESB, with that particular outlook that they demonstrate from time to time, were really only concerned with their own narrow viewpoint and getting——
Deputy Haughey has two minutes left.
In that case, it is hopeless. I cannot really develop my argument. I must therefore, conclude by making this simple point. I blame, first of all, the Taoiseach and the Tánaiste for not pursuing the negotiations which we had commenced to a successful conclusion, for not pursuing this important North-South economic project. In fact, as far as I can see, they dismissed it as unimportant and reneged on their duty as national leaders in that regard.
I also want to criticise the ESB because, as far as one can gather, they unilaterally made no attempt to get this project brought to a successful conclusion. Instead as an Irish monopoly State company, they placed an order for this trade with a Japanese shipping company — an order worth about 22 or 23 million US dollars. They placed that order with a Japanese shipping company, securing no return benefit whatever for this country. I believe that this is typical of the attitude of the ESB in many regards. We all have to buy our electricity from the ESB. We have no alternative, they have a monopoly.
The Deputy must now conclude.
The ESB make no attempt whatever to secure their requirements in this country when they should do so. This episode is an example of a great opportunity lost for fruitful economic North-South co-operation. Finally — one final minute.
Not a minute.
One final second, then. I want to say to those fine Belfast trade unionists who came to see me about this matter that I apologise for the neglect of my successors——
I must call on the Minister to conclude.
——and I hope that it will not be too long before I am back in office and able to meet the commitment which I gave to those trade unionists when I was in office.
Deputies
Hear hear.
The complaint about the time made by the Leader of the Opposition bears more heavily upon me than it did upon him. That is the fault of neither of us. The kernel of this matter is that at the time when the present Government came into office there was really only one live project on the table and that project was not among the ESB's short list of tenders for the coal-carrying project. It was a tenderer who had, of his own initiative, come back into the picture offering terms for coal-carrying and terms for building ships. It was difficult to assess the validity of the shipbuilding terms. There were significant points still remaining for negotiation and on the coal-carrying contract a clear penalty of some 6 million US dollars over four years, minimum, would have obtained. The ESB would have been obliged to make that payment. There were also other conditions relating to all subsequent coal-carrying contracts for a period of ten years. There was no certainty as to whether the one remaining live project might have come to fruition. It would have taken, indeed, some six months of most detailed negotiations. I mention that in the context of the fact that the ESB had, at the request of the then Government, deferred their decision on the placing of this contract, on at least four occasions over a period from last summer.
The situation is that they initially were not restricted or qualified in their going to tender to the world shipping companies for the carrying of the remaining volume of coal other than those carried by Irish Shipping, when this matter was initially being pursued by the Department of the Taoiseach. Had the matter been handled in the normal departmental and interdepartmental manner, following the meeting with the Belfast delegation in April of 1982 it might well have been possible to arrange that the ESB would go to tender on two alternative bases, one without and one with the Belfast building option. In the event, by the time the matter came before the present Minister for Industry and Energy the expiry of the fourth extension of the tender procedure was at hand, as I have just mentioned. In discussion in February of this year, the ESB indicated that if they were to pursue the Belfast option——
The Minister will have to conclude.
——any further, they would have to close their tender procedure and initiate a fresh tender based on documentation incorporating the Belfast option. This was because of tendering ethics which the board must observe as a regular and major purchaser and it was the only way to get terms——
Irrelevant rubbish.
——over which shipping firms would stand. The ESB indicated that such a fresh procedure could take some months and stressed that further exposure to the risk of a substantial financial cost could arise if freight rates hardened. The simple facts are that for a protracted period in the spring and early summer of 1982 very little developed on this matter which was being handled in the Department of the Taoiseach. There was no restriction placed on the ESB in the tendering process in which it engaged at that time. Consequently, when the present Minister for Industry and Energy was asked to take over this matter, on his establishing an interdepartmental grouping that grouping recommended that the one live project on hand would require further substantial investigation. The ESB indicated, having being deferred on a number of occasions, that they were totally opposed to the Belfast proposal as they claimed that it would make no economic sense.
The Minister must conclude, I am sorry.
We have heard enough from the ESB letter. It is totally irrelevant, with all respect.
Order, please.
(Interruptions.)
We have heard all this before.
The Leader of the Opposition will appreciate that the time made available to him and to me in relation to this adjournment debate was totally unsatisfactory.
We will resume the debate on another occasion.
In fairness——
I hope that the Chair is not being blamed for that.
In fairness, may I point out that the present Taoiseach delegated this matter to the Minister for Industry——
The Minister must conclude.
We knew that eight years ago.