Dáil Éireann debate -
Wednesday, 6 Jul 1983

Vol. 344 No. 8

Turf Development Bill, 1983: Second Stage.

Minister of State at the Department of Industry and Energy (Mr. E. Collins)

I move: "That the Bill be now read a Second Time."

The primary purpose of the Bill is to raise from £100 million to £180 million the limitation on the borrowing powers of Bord na Móna for the performance of its functions under the Turf Development Acts.

The opportunity is also being taken to formalise the control of expenditure by Bord na Móna and to up-date certain aspects of the Turf Development Acts to bring them into line with more modern legislation of a similar type.

Bord na Móna is currently in the process of implementing its third development programme. This is a major development programme which was formulated in response to the 1973 fuel crisis. Deputies will remember that this was a time when the high cost of imported energy caused a rise in domestic prices and in the balance of payments deficit. The programme which commenced in 1974 was aimed at expanding peat production for electricity generation and for industrial and domestic use. This programme was subsequently extended and now covers 78,000 acres, most of which is under development.

The main development area is located west of the Shannon but operations involved in the programme extend over Counties Tipperary, Laois, Offaly, Kildare, Meath, Westmeath, Galway, Roscommon, Longford and Mayo.

The programme when fully implemented is expected to produce annually 2.2 million tonnes of milled peat, 80,000 tonnes of sod peat and 1.6 million cubic metres of moss peat in addition to existing production.

Some of the additional milled peat production was intended by Bord na Móna to be used in two new briquette factories. One of the factories at Littleton, County Tipperary, came into production in September 1981 and is designed to produce 130,000 tonnes of briquettes annually. The second factory was proposed for Ballyforan, County Roscommon, and some site work has already been carried out there. I should add, however, that because of the high level of borrowings and the need for effective use of capital to ensure a better return to the community, the Minister has initiated a review of all capital investment projects within his area of responsibility, including the Ballyforan briquette factory, to determine whether the projects can be justified on acceptable norms. The review of the Ballyforan project which was indeed projected in the revised Public Capital Programme for 1983 published by the Government is now at an advanced stage and the Minister hopes to be in a position to put the outcome of the review to the Government within the next few weeks.

The balance of the production of milled peat under the third development programme will be used to increase the output and to extend the life of the existing electricity generating station at Bellacorick. A 45 megawatt extension to the ESB milled peat station at Shannonbridge, County Offaly, was recently commissioned and a similar extension at Lanesboro, County Longford, will be commissioned next year. Additional sod peat under the programme will be used to offset to some extent the reduction in output from existing sod peat bogs as they become cut out. The programme also provides for a major increase in horticultural peat production. Export sales of horticultural peat of the order of £12 million made a useful contribution to the revenue of Bord na Móna and to our balance of payments last year.

Bord na Móna is a major industry employing 6,234 on average throughout the year. It is particularly valuable in providing employment in many areas which do not have strong potential for attracting other types of industry. Apart from providing employment directly, the programme also generates spin-off employment in engineering construction and allied industries. The consequent effect of this on the economy in the catchment areas of all the board's enterprises has been substantial.

Bog development requires considerable expenditure during the development period during which there is no financial return. The necessarily slow process of land acquisition, drainage and other development work means that new bogs do not contribute anything towards the servicing of advances and loans during the development stages. Investment must, therefore, take account that up to seven years will elapse from the initiation of a scheme before a bog will be capable of producing peat and yielding revenue. Capital servicing at high interest rates impacts heavily on the board's revenue throughout this period.

Low prices in the past resulted in the board's not being able to make any significant contribution from its own resources and the servicing of its borrowing places a heavy burden on the board's financial position. In order to alleviate this problem, a four-phased price increase was approved last year which, when fully implemented, will bring prices for the board's products up to marketrelated level and should ease considerably the strain on the board's cash flow.

In the early years of the third programme the Exchequer funded by way of repayable advances the bulk of Bord na Móna's capital requirements. Since 1978, however, the board has had to meet expenditure on its development programme and related capital charges mainly by borrowing.

The necessity for this Bill arises because the board has almost reached the limit of its statutory borrowing powers. Under the Turf Development Acts the board may not borrow more than £100 million. The total borrowing to date is approximately £98 million, but commitments to further expenditure will shortly arise and it is necessary, therefore, to increase the statutory limitation to allow the board to undertake further borrowing. I am satisfied that borrowings by the board in excess of the current statutory limitation are unavoidable and that the proposed new limit will enable the board to continue its work until 1985 when the statutory limit on the board's borrowings will be reviewed again.

Since the mid-seventies the board has spent £78 million on its expansion and has proposals to spend a further £82 million, at present values, to complete the programme in four years time. This is a major investment in native energy. It will reduce our dependence on imported energy significantly, and will have a very beneficial effect, particularly in the areas in which the bog development works are located.

At the same time, a prudent attitude is called for, not least by the Government, who have ultimate responsibility in the matter, where very large capital expenditure is involved. Under existing administrative arrangements Bord na Móna's major capital expenditure is subject to ministerial approval. While this has worked reasonably well in the past, Deputies will appreciate that in the current difficult economic climate more stringent control of such expenditure is desirable. The provision in section 2 of the Bill now before the House will allow for formal statutory control of the board's expenditure. It is based on similar provisions in more modern legislation, such as the Gas Act, 1976, in relation to An Bord Gáis.

Not all bogs, however, are suitable for large-scale mechanised development by Bord na Móna. There are many small tracts of land which can be economically exploited by private developers. While the board will continue to be the dominant force in bog development and peat fuel production, there is a welcome revival of interest in private turf production. This revival has been stimulated by two events. The Turf Development Act, 1981, and the advent of small turf cutting machines. The Turf Development Act, 1981, provides for capital grants for private turf production, up to 60 per cent of the cost for co-ops and groups and 45 per cent for individuals and private companies.

The administration of this scheme has been entrusted to Bord na Móna because of its unique expertise. To date grants totalling £1.9 million have helped some 4,000 people in carrying out drainage to their bogs, the construction of roads and the purchase of machines. A number of small enterprising companies are now marketing popular turf cutting and harvesting machinery and taking the drudgery out of the traditional hand-won methods. This development, the grants scheme and the good weather last summer resulted in a very substantial increase in turf production in 1982.

Bord na Móna has over the years built up a fund of information resulting from its experiments and research into bog development. Much of this information could be of considerable value to private developers. While the Turf Development Act, 1946, provides at present for the dissemination of such information, as the board thinks fit, the provision in section 3 of this Bill will ensure that the information will be more freely available to private developers. I would like at this point to put on record my deep appreciation of the help and advice that Bord na Móna has given voluntarily to private bog developers in the past. Section 3 simply formalises this practice by ensuring that the private developers will have access to the findings of the board's researches and experiments as a right. However, I believe that the board should be allowed to exercise some measure of discretion in cases where the giving of information could prove a threat to its own commercial interests and the Bill so provides.

I strongly recommend this Bill to the House. It will make an important contribution to our energy objectives, as I have explained earlier. It will be a vote of confidence in the board which has always enjoyed the strong support of the community for the progress it has made down through the years. The board has earned a high reputation for technical expertise and development and it holds an important place in the fabric of rural life. I am confident that the House will join with me in commending the board for its efforts.

I recommend the Bill to the House.

Mr. O'Malley

We have not any objection to this Bill in relation to what it sets out to do but there are matters which have arisen in the speech of the Minister of State and have also arisen in recent weeks that we would like to draw attention to and to express our apprehension in relation to them. If one reads the annual reports of Bord na Móna over the last few years one will find a continuous litany of complaints about the refusal of successive Ministers to allow them price increases, the consequences of that and their inability to develop bogs and production facilities which they would be able to do if they were allowed these price increases.

Bord na Móna made the case very strongly and got it accepted by the Department of Finance that peat here should be charged for at what they call a market-related price, which in practice is an energy-related price, which in practice again means an oil-related price. I have referred to that before and one could debate it at great length. I do not agree with that concept. However, the Government in 1982 decided on this course. We were told that all would now be well for Bord na Móna because at long last they had got themselves into this situation and the amount of development we could expect from them would increase greatly, there would not be any strain on the Exchequer and so on.

As the Minister of State said, in 1982 a four-phase price increase was approved which when fully implemented will bring prices for the board's products up to the market-related level and which should ease considerably the strain on the board's cash flow. Perhaps the full significance of what the Minister of State said may not be fully realised. My recollection is that of the four phased price increase two of them have come into operation and two further price increases are due to come into operation soon. They will be not less than the substantial increases in the price of Bord na Móna's products which have taken place over the past 12 months.

We have seen the public statements from the chief executive of the ESB on what he considers to be the appallingly high price that the ESB, as the main customers of Bord na Móna, will have to pay now. That is nothing to what they will be expected to pay when the remaining phases of this increase are implemented. It was all justified by Bord na Móna, the Department of Finance and the Department of Energy at that time on the basis that once this was implemented we need have no further worries about projects like Ballyforan and the development of bogs in the west.

In the speech that refers to the substantial four-phase increase we see acknowledged in the House for the first time, though not acknowledged by a Member of the House for the first time, that the proposal for Ballyforan and the development of the Derryfadda group of bogs is being deferred. "Deferred" is a polite word for saying that it will be scrapped. It is interesting that in the Minister of State's script he refers to the fact that a second factory was proposed for Ballyforan, County Roscommon, and that some site work was already carried out. The Minister of State goes on to say that the Minister has initiated a review which will be before the Government in the next few weeks. That is different from what the Minister for Finance was reported in the newspapers in Roscommon as having said in the last ten days.

If there is now a decision, as appears to be the case, not to go ahead with that project, and since these substantial price increases beginning from 1982 were allowed only for that purpose, will these price increases now be reversed? The Government of the day would not have agreed to those substantial price increases if they thought that Bord na Móna would utilise them for their own benefit and not carry out the development works for which they needed the price increase. It should be borne in mind that if the decision to build a briquette factory with an annual output of 300,000 tonnes is not proceeded with, it necessarily follows that the development of the group of bogs in east Galway and south Roscommon, known as the Derryfadda group, cannot be proceeded with. Substantial work has been done already in the drainage of these bogs for the purpose of supplying this factory. That will all go to naught because the milled peat which is being produced cannot be transported for use in any of the board's other factories and cannot be transported for use in ESB power stations on the other side of the Shannon. If that milled peat is ever to be used it will have to be used either in a briquette factory or in a power station situated in the Derryfadda group of bogs in east Galway or south Roscommon. We are facing not just the closure of the Ballyforan factory but the closure of the development of a large area of hitherto undeveloped bog in the west, indeed perhaps the largest group of bogs for development west of the Shannon. It will be a great tragedy for areas with so little opportunity for industrial development and, because of the nature of the land, so little opportunity for agricultural development if this long awaited development, approved by me as Minister for Energy in 1979 and subsequently by my successors, Deputies Colley and Reynolds and formally started, as long ago as last November is not gone ahead with.

In the revised capital programme issued after the budget this year the Department of Finance said that when the Ballyforan factory commences production in 1985 it will have an output worth £6.2 million per annum at 1983 prices and that so far £1.2 million had been spent on that factory, which would ultimately cost £25.5 million at 1983 prices. They also refer to Bord na Móna's financial position having been aggravated by low prices and below target sales and they celebrated the introduction of market-related pricing for their products. We have a situation where £1.2 million was up to February, on the admission of the Department of Finance, spent on the factory. Many millions of pounds were spent on the development of the bogs, which will be equally wasted if the project is not proceeded with. Even in the revised Estimate this year, after been heavily cut, provision was made for the factory alone of £5.2 million as against an outturn of £0.6 million last year. If the project is now ceasing will all that money go down the drain? That is an unsatisfactory situation. It is a failure to use available natural resources and it is a major setback for east Galway and County Roscommon where the people were given every reason to believe that the project would go ahead.

This is one of the very few kinds of projects that can be developed in an area of that kind. We, when returned to Government, are prepared to do as we decided in 1979 and as we reiterated in 1980 and 1982. We are prepared to go ahead with this project of building a briquette factory in this area. It was interesting to note that at the end of last year the Department of Energy in preparing notes in respect of the expenditure in this area for 1983 said that the Ballyforan-Derryfadda scheme would provide 210 jobs between the factory and the bog in 1983 and that, in addition, outside contractors on the scheme would provide 75 jobs in 1983, a total of 285 jobs. I understand that those jobs are there now. If this deferral, as it is politely described, goes ahead those jobs will be gone this year, not to speak of the substantially larger numbers that will not materialise in the future.

This year, 1983, will be celebrated for among other things the introduction of taxation for the first time ever on a turf with 5 per cent VAT. I do not know what view Bord na Móna will take about that. A further price increase on top of the various ones that I have referred to as having taken place or pending is imposed but Bord na Móna will not get any benefit from it. I did not expect to see the day when VAT would be imposed on a principal Irish indigenous form of energy.

This Bill makes reference to co-operation with private interests in the development of bogs here. It is very heartening to be able to record that the Turf Development Act, 1981, which introduced a system of grants for that purpose and was introduced here by Deputy Colley, has proved extremely successful. There are many applications and considerable production of turf by private operators last year which would not otherwise have taken place. The contribution to savings on our balance of payments amounts to as much as £17 million from that source alone. It has been suggested, and may well be borne out by section 3 here, that Bord na Móna have been less than anxious at times to co-operate with some of the private interests. At least two instances have been drawn to my attention. One was in County Westmeath, and Deputy Reynolds may speak about it later because he would know more about it in detail than I do. A certain private project required the purchase of 200 acres of undeveloped bog and when they went to purchase for industrial purposes and the creation of employment a CPO was slapped on them by Bord na Móna who resent anybody getting into business if they can prevent them. Another instance has been drawn to my attention by Deputy D. Gallagher of the old Min Fhéir bogland near Bangor Erris in County Mayo. Several years ago when we were looking at the question of whether Min Fhéir Teoranta should be continued in operation, while I was anxious to close the company I was not anxious to leave the area bereft of any kind of development and I suggested to Bord na Móna that they might take it over since it was essentially all bogland. They would not take it for nothing; they would not take it as a present. I understand now that since Min Fhéir Teoranta went into liquidation and the liquidator offered their assets — this bogland comprising a couple of thousand acres — for sale and since a private concern in Mayo expressed and interest and made a bid to the liquidator, Bord na Móna have made a succession of bids in order to prevent any private interests buying the land. Their latest bid stands at £400,000 for something they would not take for nothing three or four years ago when I asked them to do so.

That is a pity and for that reason I welcome section 3 of this Bill. Even though it relates only to information, research and so on, I would like to think that the co-operation with private interests would extend more broadly than simply technical information as a result of research, that it would extend to practical co-operation with private interests trying to develop boglands at all levels. Not so many years ago no private concerns at all had the slightest interest in any Irish bogs or their developments. We should all welcome the fact that quite a number of people now are prepared to show their interest and make fairly substantial investments, by their standards at least, and we should not let a statutory board stand in the way of that sort of interest and progress. They have no right to do so.

As the amount of bog in the Midlands will decline and as Bord na Móna appear less anxious or perhaps less in a position than they were a year or two ago to develop the bogs west of the Shannon, they should consider the question of the use of cutaway bogs. They have done research on that. Many of these cutaways have proved suitable for different purposes and there has been something of a debate with agricultural interests as to what should be done with the cutaway bogs as more of them become available. Bord na Móna have taken the view that because of the drainage problems and so on it may be better not to split them up into small, individual, private holdings but that some form of common usage must be arrived at; whether by way of short-leasing or usage by Bord na Móna themselves remains undecided.

Experiments in horticulture in this cutaway bog have for the most part proved very successful. The lack of a food processing industry is lamented frequently on all sides of this House and outside. One of the principal reasons that we lack a food processing industry as far as vegetables are concerned is that we have no supplies and a processor cannot come in here unless he is in a position to import large quantities of supplies because he cannot get regular supplies from Irish farmers. It is worth nothing that the Irish Sugar Company, with all their trials and tribulations, have the greatest difficulty in obtaining regular supplies, and irregular supplies are of no use to a food processor. If Bord na Móna were prepared to diversify their operations by going into vegetable production on a fairly big scale on the basis of contracts with food processing factories to be set up which would have guaranteed production from Bord na Móna cutaway bogs, we could take some important steps towards achieving the level of vegetable processing that we want. It has not proved successful, let us face the fact whether it is popular to say so or not. It has not proved profitable to sign contracts with many Irish farmers for particular products because if a market is very strong they will tend to follow that market and if the market is very weak they will tend to want their contracts honoured. If processors were dealing with a State body who could guarantee supplies they would be in a much better situation. Of course, that assumes that Bord na Móna would be free to operate without restrictive practices in a way that would enable them to meet the requirements of processing factories at a reasonable price level.

There are quite a number of speakers to this debate and for that reason I do not want to go on at any greater length, although if I had time I would like to go into other aspects of this Bill. I reiterate our regret at the attitude that has been taken by the Government to the development in east Galway and Roscommon. It will be recalled by the House that this is the second review that has been carried out on the Ballyforan-Derryfadda proposal which I started in 1979. The last one was carried out by another Coalition Government in 1981 and the position was restored in 1982 when Deputy Reynolds was Minister for Industry and Energy. Let us hope we do not have to wait until there is another Fianna Fáil Government following the next general election to have the situation restored once again.

Mr. Naughten

It is my pleasure to welcome this Bill and to welcome the substantial increase in the borrowing requirement for Bord na Móna. The board have done a tremendous amount of work throughout the midlands and west and have helped the economy considerably by reducing our dependence on imported fuels. Every encouragement should be given to Bord ma Móna to continue the development of bogs and to ensure as far as possible that bogs are used to the maximum.

It is extremely important having regard to the vast acreage of bog which the board control that they should consider the use of those bogs when it is no longer possible to produce peat from them. We should be careful that our boglands do not become wastelands. The board could do much more with cutaway bogs which are now down to the last 2 feet of peat. They should be used for horticultural or agricultural production and this would protect employment.

Every assistance should be given to private individuals or groups who are developing boglands. They have not always received the greatest encouragement from Bord na Móna. A typical example has been in regard to Erris where a private company were trying to develop the bogs. I regret that they did not get the facilities and co-operation from Bord na Móna to which they were entitled. It should be impressed upon the directors of the board that they should give every assistance in the drainage and development of boglands.

For some reason Bord na Móna are slightly afraid of competition from smaller groups but competition is a healthy aspect of any democracy. It is the life of trade and the Minister should encourage it. Very often there are small tracts of bog which it would not be feasible for Bord an Móna to develop but which would be suitable for development by private individuals or groups.

I welcome the extension to Shannonbridge and Lanesboro power stations which will give badly needed employment in those areas. The Minister should encourage this type of development at every opportunity. Very often employment opportunities in such places are very limited and we should encourage the maximum utilisation of natural resources so that people can benefit from the bogs, which were the curse of those areas for many years but which now have become excellent money spinners due to the high cost of other fuels.

The Minister outlined the expense of developing bog. While I fully accept the point, it is vital to recognise that this investment is well worthwhile and must be continued. From Shannonbridge to Glenamaddy much development has taken place on the Derryfadda bogs. We must ensure that development continues and that the produce is processed locally and not transported elsewhere. The implications of not having the peat processed locally would have to be very carefully examined.

With regard to the remarks of the previous speaker, I would point out that the Minister for Finance did not say that the building of the briquette factory in Ballyforan was deferred. The Minister said that the whole capital exenditure programme was being examined. In view of the massive implications of any delay in the building of this factory in that area of Roscommon and east Galway, I appeal to the Government to examine the project carefully, having due regard to its social implications for that area of high unemployment. Peat is the only natural resource available to help the Government to provide employment. The people are looking forward to the commencement of the building of the briquette factory and they have been doing so since those bogs were developed. Some of those bogs were sold for very small sums, very often because the farmers believed that at a later stage they would provide secure employment for their families.

As I have said, the building of that factory in Ballyforan is vital to the economy of south Roscommon and east Galway and I renew my appeal to the Minister to build the factory and save the jobs of more than 300 people who have been employed in bog development since 1976; on road and railway building, some of which cost vast sums of money, including £1.5 million to develop new roads and a site. There are stagnation and total frustration in that area because of the delay. That peat cannot be utilised in any other way except in a briquette factory. It is not feasible to transport it to other areas and it would be economic madness to attempt to do so.

I welcome many other aspects of the Bill, particularly the facility extended to manufacturers of turf-cutting machines. This is one matter that should be examined usefully so that the best type of machine will be grant-aided and so that the bogs will thus be utilised to the maximum. Two machines are manufactured in my area and the board should examine them with a view to giving grant-aid. Every ton of peat we produce means the importation of less oil and coal. Therefore, we should utilise our bogs to the fullest and accordingly reduce our balance of payments deficit and ensure badly needed employment.

Mr. Leyden

I welcome the Bill and am glad we will be able to get it through before the summer recess. The matter that causes concern is the reference in the Minister's speech as follows:

The second factory was proposed for Ballyforan.

The word "was" in that context causes concern. I initiated that scheme and at a meeting of the Fianna Fáil parliamentary party there was reference to a successful development which had got under way. I hope the Minister's use of that phrase is an error because the word "was" would indicate some rethinking. I hope that is not the case. The people in my constituency are concerned about a statement by the Minister for Finance at Roscommon, reported in a recent issue of the Roscommon Herald. The Minister was on a morale boosting trip and he announced that a review was taking place in regard to the briquette factory. People regarded it as a warning, and this resulted in a well attended meeting in Ballyforan on 4 July. The meeting expressed great concern about the statement made by the Minister for Finance, but the statement here today by the Minister of State does not allay the fears expressed at the speech of the Minister for Finance because again today the Minister spoke of the matter being reviewed.

It is essential that a final decision will be made by the Government. In 1979 Deputies O'Malley, Colley and Reynolds reaffirmed that the work on that project would be recommenced. The last Coalition Government reviewed the matter and then the work had to be recommenced by Fianna Fáil. I stated categorically that we were 100 per cent committed to the recommencement of that project and that was reiterated today by Deputy O'Malley who said that if the Government had any intention or proposal to defer the project Fianna Fáil, when they return to power, would recommence the work which we had started.

In 1981 the last Coalition Government reviewed the project. The Minister of State now present gave a categoric assurance at the time that the Government were fully behind the development at Ballyforan. I hope he will prove that in his concluding remarks on this Bill by confirming that this project will continue as scheduled.

There are at present 195 people employed in the Derryfadda bogs who are preparing, developing and draining those bogs and harvesting milled peat there. In 1982 a total of 65,000 tonnes was produced and it is anticipated that this year between 70,000 and 80,000 tonnes of milled peat will be produced and made available to be stockpiled in the event of the commencement of our briquette factory in 1985. All the work and investment to date has been geared towards the erection of the briquette factory. Therefore this Government cannot under any circumstances decide to delay or defer this project. All of the investment of approximately £12 million to date has been put into the development of the Derryfadda bogs for the eventual use of the milled peat in the production of much-needed briquettes. There is a major shortage of briquettes at present. It is a most attractive fuel for which there is no difficulty in obtaining a market within the State. Even if that market did not exist there would still be a great export potential for those briquettes. Certainly we shall have sufficient customers at home to take up the supply of briquettes.

I had the honour last year, on behalf of the then Minister for Industry and Energy, of opening the Littleton briquette factory in County Tipperary. I was deputising for the Minister on that occasion. I anticipated at that stage — and said so in my speech — that the next briquette factory would be opened in my constituency and in the adjoining constituency of east Galway near Ballyforan. I hope the Minister will confirm those plans in order to avoid this type of stop/start situation which is demoralising for the staff, for Bord na Móna themselves, with the Department interfering with the management and running of this project.

The work taking place at present is on the development of 10,000 acres at Derryfadda. A workshop was provided at a cost of £500,000, a modern, well equipped, engineering workshop located near the site of the briquette factory. The site for the briquette factory was acquired at a cost of £130,000 for 60 acres of land. Bord na Móna paid a sum of £150,000 to Galway County Council for the well developed service road to the factory site. There has been an amount of £400,000 spent since November 1982 on site works for the briquette factory. Tenders have been submitted to Bord na Móna. A contractor has been recommended for the main engineering contract which will entail a sum of between £5 million and £5,500,000. I understand also that a boiler has been ordered for the briquette factory at a cost of £1 million. The development to date indicates clearly the necessity for the erection of a briquette factory. If they did not continue with this project the present Government would be accused of gross irresponsibility and total negligence in their running of the country. We in Roscommon and in the adjoining constituency of east Galway demand that this project proceed, as planned by Fianna Fáil and which had commenced during our term of office. The area is in need of this type of development.

In 1977, on my election to this House, I pointed out, along with the Ballyforan Development Association and colleagues from my constituency, the need for a project of this type in that area. The first scheme was a proposal to build a 40 megawatts power station in Ballyforan to utilise the turf resources there. After review, on the initiative of the then Minister for Trade, Commerce and Tourism, Deputy O'Malley, it was decided at my request, and raised at a meeting of the Fianna Fáil Parliamentary Party, that a briquette factory would be the ideal type of development for that area. I believe briquettes utilise a native resource in a much more economic way than does the production of electricity. Therefore it constitutes a well-researched project.

In 1977, when we were working on this project, the then public representative for the area, now Minister of State at the Department of Agriculture, Deputy Connaughton, made a most depressing type of comment. I am quoting from The Connacht Tribune of Friday, November 11, 1977 and from an article entitled “O'Malley Gives ‘Thumbs Down’ To Ballyforan”, which said:

The question of the briquette factory for the Roscommon area was described by Senator Connaughton as a red herring and he described the "half mentioned half promised" development as nothing short of sending the deputation home happy but by now nobody is very enthused in the Ballyforan area about the possibility of the briquette factory, Senator Connaughton said.

That was the type of attitude expressed by a present Minister of State of this Government. I regret that he has never retracted those comments made in reference to a deputation I led to the then Minister, now Deputy O'Malley. That was in 1977 after we had met the Minister of the day and he had agreed to consider the possibility of providing a briquette factory at Ballyforan. At that time the then Senator Connaughton stated that it was a red herring. That is the type of attitude for which he is well known and which would be confirmed by my colleagues, Deputy Kitt and Deputy N. Treacy. That was the type of negative approach, demonstrated for political reasons at the time by the then Senator for that constituency. I sincerely hope he has changed his views since then.

We initiated that project. On 31 May 1979 the then Fianna Fáil Government took a decision to build a briquette factory at Derryfadda, Ballyforan. That constituted a continuity of the representations I made at that time and have continued to make to date. When the first sod was turned there in November 1979 I felt that was the commencement of this great project, the end of any further controversy, reviews or considerations of this project. I can state categorically that we in Fianna Fáil would have proceeded in the manner in which we had planned to erect this factory. I want also to pay tribute to my colleague, Deputy Reynolds, who after the review initiated by the last Coalition Government decided that the project would proceed on target. At that time he met a deputation, went to Ballyforan to meet the people of the area and confirmed to them, in July 1982, that the project would be on target. Indeed, he gave the date on which it would be commenced — October or November 1982. That commitment was honoured by that Minister and the Fianna Fáil Government. I am now asking this Government not to play politics with the lives of the people in my constituency, to proceed with this project forthwith.

The House is being asked to provide the capital required to permit Board na Móna to proceed with its capital works. We are supporting it on the basis that there will be adequate funds in the £180 million for the erection of a briquette factory at Derryfadda, Ballyforan, at a cost of approximately £25 million. The village of Ballyforan is being built up and on the Roscommon side we have provided a water supply at a cost of £250,000 and a guaranteed 10,000 gallons of water to Bord na Móna for the factory. Through the rural housing organisation we have provided £500,000 roughly for investment in housing in the village and we have also supplied sewerage works. With the help of Bord na Móna and the county council Ballyforan will be a model town, but the development depends on the erection of the briquette factory.

A decision to defer the project would be detrimental to the development work that is taking place in the village. A delay will cost more money. The peat available is of excellent quality. The milled peat being stock piled has only one outlet, through a briquette factory. The Minister will realise that milled peat is bulky and expensive to transport. It would not be practicable to think of any other outlet except a briquette factory on the site being developed. I wonder why the Government have decided to delay or refuse this project. I accuse them of playing politics with the project because they know that Fianna Fáil are committed to this to such an extent that we have given an assurance that on our return to Government the project will proceed. I cannot see any justifiable reason why there should be a second review of the project.

I should like to remind the Minister that on 10 March 1983 Deputies Kitt, Noel Treacy and myself tabled a question to the Minister in regard to this project. We were assured by Deputy Boland, who was deputising for Deputy John Bruton, that the contract was out for tender and the normal processes would occur after which a contract will be awarded without any inordinate delay. He said it was expected that later this year, or early next year, the mechanical contract will go to tender, followed by the delivery of certain pieces of equipment in the early part of 1984 and further work leading to the factory being commissioned in January 1985. He said the estimated cost at current rates was £24.1 million for the factory and £24 million for the bog development. The number of jobs provided by contractors on the construction of the factory at present is 24. Construction employment will peak at about 180 and long term employment on the bog and in the factory is estimated to be about 110 and 300 respectively. In my view in the region of 400 people will be employed in the briquette factory and on the bog.

At that stage the review was still under way and I should like to know why it has not been completed four months later. In reply to supplementary questions on 10 March I was informed that the project would go ahead. I do not see any reason why the Government should backtrack on their commitment to my constituents. On 25 September 1982 Deputy Reynolds, who was then Minister for Industry and Energy, informed me by letter that the work would be commissioned in January 1985. Indeed, the sod turning ceremony took place on 5 November 1982. When Deputy Reynolds sent that letter to me there was no possibility of a general election. The sod turning ceremony took place during the general election campaign but the arrangements had been made long before the general election was called. People may make cynical remarks about the fact that the sod turning ceremony took place during the general election campaign. That was not our approach when in Government. The ceremony was scheduled well in advance of the unfortunate circumstances which led to the general election. That move was unfortunate for my constituency because Fianna Fáil would have honoured the dates mentioned in the former Minister's letter. That letter is available for any Member who wishes to challenge me on it.

I appeal to the Minister, on behalf of Roscommon and East Galway, to announce this evening that the contract will be accepted and that work will proceed on schedule. There is no joy in Roscommon with the uncertainty about that factory. I hope the Minister, or his Minister of State, will meet a deputation from the Ballyforan Development Association in the next seven days to discuss the project. That association, chaired by Michael Donoghue and with Fonsie Tully as secretary, has done tremendous work. The members of that body, who are deeply committed to that project, are anxious to meet the Minister. The Minister should consider travelling to the area, as his predecessor did. I hope when the Minister meets the deputation he will be in a position to announce that the project will go ahead.

The Bill is welcome because Bord na Móna who are providing a lot of employment deserve every encouragement in their development work. In relation to private development in Roscommon we are proud that the very effective turf cutting machine which can be attached to a tractor was developed by the Finan Brothers in Ballintubber. Castlerea. I should like to congratulate the managing director of the firm concerned, Gerry Hunt and his fellow directors, the Finan brothers, who designed this revolutionary machine which is being used extensively. It has given small farmers an opportunity to develop their bogs. Many of the bogs now being used were regarded as uneconomic before the machine was invented. The machine has had a great impact.

The Bill introduced in this House by my colleague, Deputy Colley, in relation to development of bogs and the provision of grants for machinery has been a tremendous boost to the area. In relation to general development of bogs, the smaller bogs have considerable potential. It is essential that every assistance be given by Bord na Mona to small developers to enable development to take place.

I should like on behalf of my constituents to place on record my appreciation of the Irish Sugar Company for providing machinery for turf development. They have provided excellent facilities in the development of smaller bogs. Bord na Móna have carried out their work effectively during the years and they have provided more than 6,000 permanent jobs. I hope we will have our share of jobs in my area and that in the near future I will see undertaken a project which is near to my heart and one I am delighted to have been associated with since I was elected to this House. I have been interested in this project during the years, whether in Government or in Opposition. I continue in the same vein in making this appeal to the Minister to proceed with the project. If he does this we will be very grateful to him and the Government.

Mr. Kenny

Turf is part of what we are, as the cliche has it. Indeed, the famous song-writer, Percy French, referred to the bogs below Belmullet in County Mayo. Many people from western Ireland were labelled with the stigma of coming from the bogs and no matter where they went they were recognised as coming from areas where bogs were predominant. However, that kind of stigma has changed drastically following the oil crisis and difficulties with regard to fuel costs. Turf is now the new black gold and industry and Government have turned their hand to harvest this vast natural resource.

Man is probably the greatest desroyer of his environment and during the years his efforts have resulted in a completely changed landscape in many counties. The same has happened in the area of bog and peat development. Bord na Móna must be complimented for the work they have done during the years. I hope the third development programme will prove successful.

The Ballyforan peat briquette station has been referred to in detail by other Deputies. Deputy Leyden referred to the turning of the sod. I do not know if politics were involved at that point but I am led to believe some public representatives were not invited on that occasion.

The Minister has stated he has initiated a review of all capital investment projects within his area of responsibility, including the Ballyforan briquette factory, to determine if the projects can be justified on acceptable norms. I think that is reasonable in view of the fact that he recently called in the semi-State bodies and asked them for a quarterly financial report in addition to a five-year projection in relation to their plans. In view of the vast amount of money that has been spent by semi-State companies during the years, some of which was ill-spent and mismanaged, in fairness to the Minister he is entitled to ask for a review of expenditure. I have not doubt in my mind that he will see this development through.

In his speech the Minister said that at the moment borrowing is approximately £98 million but that the board will be undertaking various expenditures in the future that will require further borrowing. They have proposals to spend a further £82 million at present values. I assume that will include the Ballyforan briquette station. The Minister said that the report will come before the Government for a review of costings but I have no doubt that the statement from that meeting will be favourable towards continuation of this development.

The development of bogs under the scheme operated by Bord na Móna where they provide grant assistance has gone ahead in many areas on a successful scale. I must pay tribute to the inspectors of Bord na Móna who have been prompt, courteous and attentive to the applications put before them by private individuals, co-operatives or groups of interested people. The development of roads into many of the smaller bogs that would not be suitable for the larger Bord na Móna machinery must be looked at. Many of the roads are only used during the summer when it is necessary to take out the turf. Consideration should be given to having further consultations with the Land Commission, with the local authorities concerned and the Department of Agriculture. The various Departments seem to be at cross-purposes in respect of some aspects of this development.

I am not in agreement with the Minister when he said that investment must take account of the fact that, from the initiation of a scheme up to seven years will elapse before a bog is capable of producing peat and yielding revenue. I do not think that is true. It may be so on raised bogs but the bogs in the west are different and have different climate and geographic conditions. Development on a phased basis and carried out properly on a new bog will yield results before seven years. The Minister's speech under-estimates the quick drainage capacity of a bog. It is possible to drain bogs in such a way that they will reduce their physical level to a stage and to a state where work can start on harvesting the peat in less than seven years.

During the years many of the smaller bogs have been destroyed because cutting has not been carried out on a phased basis. In the old days many private developers using a spade or some other implement cut the bogs in such a way that all the levels were different. In many cases substantial amounts of peat were left that cannot be cut or harvested. Bord na Móna and the Department should look at the amount of bogland that is left, whether it be held in commonage or in private ownership.

On many occasions I put down questions to the relevant Minister about a briquette station in the Erris region. I was always given the stock answer that there was not sufficient bog in the area and that it was not sufficient deapth. I can accept that it was not of sufficient depth in many cases but the extent of the bogland is enormous. There is a complete peninsula which is practically all bog except for a small area. Much of this is still held in commonage. An attempt has been made by the authorities to acquire it for forestry; some of it has been bought by speculators and by private individuals, but there is still a considerable amount of bogland to be developed.

The various Departments involved are at cross-purposes with regard to this matter. The forestry section seem to go out of their way to acquire land where they can but the financial constraints imposed on them at the moment only allow them to acquire land that is adjacent to existing State forests. Bord na Móna, on the other hand, would have the potential to give grants to private developers for smaller bogs if they were acquired. The division of commonage legislation, which was raised in the House recently under the auspices of the Minister for Agriculture, needs to be looked at in this context because there is potential development with subdivision and agreement. Experiments that have been carried out by An Foras Talúntais on deep bog show that it is not economic to have to fertilise these deep bog areas in the hope that they will produce grassland to an acceptable protein content and level. That has not worked and such bogs need to be cut down to a certain level before being used for that purpose. The best use must be made out of what is left of these areas where turf cutting may take place. The scheme of giving grants to various co-operatives and private individuals for machinery is welcome and there are half a dozen or more different kinds of machines operating on bog cutting at present.

I want to refer to one area in my own county and the interest of the former Minister, Deputy Reynolds, at the time. The fact that Bord na Móna have total control over bogs is dangerous from the point of view that if a private individual or concern wish to develop the area it is up against a State monopoly with a board that has been in existence for a number of years. It limits the extent to which private development can take place. There is a project still on the books in the Erris region of County Mayo. There was an industry there under the auspices of An Foras Talúntais which was apparently known as Min Fhéir Teoranta, where deep bog was fertilised in order to grow grass which was then dried, made into grass nuts and treated with various other protein to bring up the level of the vitamin content and so on. This project was discontinued some time ago which caused some redundancies and a liquidator was appointed.

A private developer with expertise brought in people from Finland and other Scandinavian countries who were experts in bog development and their impression was that much of Bord na Mona's equipment was antique, that their projections were not correct in respect of the area to be developed and that, if at all possible, having regard to the professional surveys which they carried out, private enterprise should be approved by the Government. The private individual concerned wished to acquire the bogland which used to be fertilised under the original scheme, to harvest that by conversion of the turbines in the Min Fhéir Teoranta plant and to use it to produce milled peat and briquettes or peat pellets.

There are three Government Departments involved: the Department of the Gaeltacht — because Udarás na Gaeltachta have given the private individual their backing; the Department of Industry and Energy, who are concerned with it in terms of future development; and the Department of Finance who, naturally, have to be involved when liquidators have been appointed. The matter has dragged on for a long time. The portion of ground concerned, which is approximately 1,000 acres, was offered to Bord na Móna previously to be acquired as part of their land bank for further development but they refused it. Subsequently, when the word got round that there was a private developer interested in this area, Bord na Móna made a substantially increased offer. They were also offered land in the Glenamoy area. But this was not suitable either, even though they have developed boglands in other areas which are similar to that offered in the Glenamoy area.

I know the former Minister, Deputy Reynolds, was willing to see the private developer concerned given an opportunity to complete successfully on a relatively small area of bog which would have provided summer employment for a substantial number of local people on a contractual basis. This matter is still not finalised and I should like the Minister to refer to any progress made in this area. His speech referred to the fact that the fourth programme will take cognisance of various contractual obligations which the board have in terms of supplying the ESB at the Bellacorick power plant. I should like further information on the long-term contractual obligations of the board in supplying this station. It is very close to the area concerned and I can see the point of increasing the output and an extension of the life of the Bellacorick power plant but I should like clarification as to what the contractual obligations of the board are in terms of supplying the ESB.

Biomass was planted in the area some years ago but so far there are no results. Also in that area there is a very large Don Quixote modern-type windmill, probably erected at great cost, which apparently blew down. It was re-erected and I should like the Minister to tell us the purpose of that structure and if it has anything to do with Bord na Móna.

I welcome the overall content of the Bill but I am not satisfied with various aspects of the work of Bord na Móna in terms of not allowing private developers who have carried out professional surveys to go ahead using their own dedication together with whatever EEC or Government assistance might be available to them. I do not accept that it would be seven years before a bog yields results. With more modern technology and equipment, smaller bogs development could take place which would be viable within a much shorter period.

An Ceann Comhairle

All stages of the Bill must conclude at 8.30 p.m. Is there any arrangement to allow the Minister to conclude?

Mr. Reynolds

Deputy O'Malley will be back shortly and I am sure he will have that information.

Mr. Kitt

I join with other Deputies in welcoming this Bill. Bog areas are usually associated with very poor roads and lack of infrastructure and, for that reason, we welcome development by Bord na Móna. I should like to deal mainly with the development that I hoped would take place in my constituency. We had hoped that there would be a briquette factory built at Derryfadda near Ballyforan. I raised the matter a fortnight ago with the Minister for Industry and Energy on the Estimate for his Department and I was amazed when he told me that this project was being reviewed. He said the review was necessary to see if State investment was warranted and that the ability of Bord na Móna to make repayments on the loans was also being questioned.

The answer to these two questions is readily available. First, in an area where there is bog, a natural resource, and an area associated with poverty, State investment is surely warranted. Deputy O'Malley gave the answer to the question of Bord na Móna's financial position. Deputy Reynolds as Minister for Industry and Energy gave a price increase. If Bord na Móna are not going to develop their capital programme why should the Government allow a price increase to be sanctioned?

I am very disappointed that the Minister, after mentioning the four-phase price increase, did not tell us the project would be going ahead. It was sanctioned on 31 May 1979 and we were very hopeful that work would start in 1981. Instead we had the first review. Now, two years later we have a second review. Why is a second review necessary in such a short time? The project should be commencing, not being reviewed. In 1982 £5.2 million was made available in the Public Capital Programme and the first sod was turned for the factory in November last year. The civil engineering contract was to be awarded early this year. A firm was recommended for the work. Now we are told bluntly by the Minister for Finance on his so-called goodwill tour of the west that the project is being deferred. I have to question the commitment of this Coalition Government.

Mr. E. Collins

Could I have the reference in regard to the Minister for Finance?

Mr. Kitt

Deputy Leyden quoted the reference from the Roscommon Herald of last week.

Mr. E. Collins

On a point of order, I heard what Deputy Leyden quoted and the word he used was "review". We must have accuracy here.

Mr. Kitt

The Minister will have an opportunity of letting us know what the real position is.

Mr. E. Collins

I would like more accuracy.

Mr. Kitt

I am talking about a second review.

An Ceann Comhairle

When a statement is quoted the reference should be given.

Mr. E. Collins

The Deputy referred to what Deputy Leyden quoted. Deputy Leyden quoted the word "review". The words he used was "review".

Mr. Kitt

I made the point clearly that this is the second review in two years. Perhaps the Minister when he comes to reply will tell us why a second review is necessary. Our commitment was very clear. Cold water has now been thrown on the project by certain people in the Fine Gael Party. Cold water was thrown on it when the project was first announced and this was referred to by Deputy Leyden. One Senator referred to it as a red herring. When Deputy Reynolds was Minister he was brought in here on an adjournment debate and he explained to the House the project was to be built in two stages. It had been alleged by a Deputy that we were getting only half a factory. This so-called half factory was to provide 110 jobs with an output of 140,000 tons. It was to be completed in 1985. We had a public meeting in Ballyforan last Monday night and we were not able to tell the people the project was going ahead. We are hoping in this debate the Minister will make a clear statement on the future of the project.

There have been a number of myths about the delay in starting the project. One Government speaker said in Ballyforan that Bord na Móna had not applied for planning permission. That is absolutely untrue. The county manager of Galway signed the planning permission on 12 January last. Another speaker said a contribution of £300,000 planning charges had not been paid. I do not see how that could hold up the project because it was simply a case of a transfer of resources from one Department to another, to say nothing of its being a very small sum in a £1 million project.

The county council have made a road into the site. The other problems in relation to planning can be resolved. All we need is the go-ahead to Bord na Móna to borrow the money. We have now two projects in my constituency of east Galway which are being reviewed: one is this briquette factory and the other is the sugar factory 30 miles away. Is there, I wonder, any other constituency which has two major projects under review? In the last three years unemployment in County Galway has increased by 300 per cent. I have not got the figures for Roscommon but the unemployment situation is also serious in that county.

Why this discrimination against one particular constituency? This anti-western bias will have to be brought to an end if we are to create jobs in that area, especially jobs born out of a natural resource such as acres of bog waiting to be developed. I deeply regret the attitude of the Government in having a further review of the project now. I am glad Deputy O'Malley has given a commitment on behalf of our party to proceed with this project when we return to office. We turned the sod once and we may have to turn the sod a second time but, let there be no doubt about it, we shall get the project under way.

With regard to the development of Derryfadda over the years, there are 200 people working there at present. That figure includes many young people, apprentices who are learning their skills. There is a great deal of expertise in the area. Drainage works are going on there continually. Three bridges have been built at strategic points to bring the peat into the factory. The factory site has been cleared and fenced off. That work was done by a local contractor. All is ready for the main contract to be awarded. At the moment there are several thousand tons of peat in stock and that stock will increase until there is a decision as to the future of the factory. I am informed by the people in the workshop that the charge for storage is £65,000 this year.

What will be the end result? The bog is being developed and there is nowhere to transport the peat. Peat is bulky and is expensive to transport. It has to be used in a briquette factory or a power station in the area. I would remind the Minister that in 1977 a power station for this area was rejected and we were told then that the peat would be transported to Shannonbridge. It would be impractical to transport peat from this vast area of bog. The obvious thing is to let the project proceed. I appeal to the Minister to make a positive statement about this and not continually have reviews on one particular project. This is probably the most important project in my constituency.

I want to refer briefly to the funds made available under the Turf Development Act, 1981, by the then Minister, Deputy George Colley when grant assistance was given for the development of privately owned bogs. I mentioned this briefly during the debate on the Estimate for the Department of Industry and Energy. I welcomed this scheme and said I hoped more money would be made available for it. It is important to point out now that the other scheme we used to have for access roads to bogs, the local improvements scheme, is being curtailed in relation to the money for drainage and bog roads because there is a priority for farm roads. Only one-fifth of the money we get in County Galway can be spent on bog roads now so it is important to get an extra allocation of money to enable us to have access roads and bog drainage work done under the Bord na Móna scheme.

I join with the Minister in complimenting Bord na Móna and thanking them for the great assistance they have given to individuals and groups who have applied for the 60 per cent grant for development of bogs. I hope this can be improved and more money can be given. I believe that in 1982 grants approved under that scheme totalled £1.267 million. That is a very important scheme. It is important, when you have a lot of privately owned bog, that every encouragement is given to people to use it.

I will conclude on the point I made at the start, that there is a great cloud of uncertainty over a very important project at Derryfadda. I hope to hear the Minister talk about the commencement of this project, which will provide extra jobs in the area. The position now seems to be that not only are we concerned about extra jobs but we are very much concerned about the jobs of people who are presently working in Derryfadda bog.

Mr. Enright

I believe this Bill is absolutely essential and I welcome it. I hope there will be no difficulty in relation to the passing of the Bill through both Houses of the Oireachtas. The Bill represents a vote of confidence in Bord na Móna by the Government in relation to the work they have done in the past, the work they are doing now and the work they will do in the future. People throughout the country will be very pleased with this Bill especially the people employed by Bord na Móna.

I believe that people realise that borrowing by Bord na Móna at the moment is very close to the upper limit. Now that it has almost reached the £100 million borrowing limits the Minister is proposing in this Bill that they should be allowed to extend their borrowing powers to £180 million. This is proof that the Government are pleased with the work the board and their staff are doing.

Bord na Móna have had a great impact on the whole of the country but especially the midlands. A person who travelled through Offaly before Bord na Móna was established saw farmers trying to eke out an existence on land quite close to bogs. Most of them were unable to make a living. Thousands and thousands of acres on this land could not be used. A large area of bog in the midlands was idle. Bord na Móna met the challenge that faced them and we have seen the splendid results achieved by them and successive Governments in this respect.

We were very badly hit by emigration from the midlands because there was no opportunity for anybody to obtain employment except in textile industries and agriculture. The advent of Bord na Móna changed that. The Minister of State told us that Bord na Móna employ over 6,200 people each year. This is a very successful story. In County Offaly over 2,500 people are employed by Bord na Móna. When Bord na Móna and the ESB came to County Offaly the men and women employed by both concerns developed a great pride in themselves, their work and their county. The success of Offaly in the hurling and football fields can mainly be attributed to the people getting jobs from Bord na Móna and the ESB in their own area. It means a lot to the people in Offaly and to the people in the Midlands. Bord na Móna have continued to expand and that is why they are so successful. We must continue that expansion.

I understand that the managing director of Bord na Móna, Mr. Louis Ratigan, will retire this year and I pay tribute to him for his magnificent work which will be looked back at for many years to come. I wish Mr. Ratigan well in his last months in Bord na Móna and every happiness on his retirement.

There have been talks about new factories at Littleton and Ballyforan but I would ask the Minister positively to consider the improvement of some of the existing briquette factories. I visit these factories on a reasonably regular basis and many of them need considerable expenditure to maintain them in reasonable order. The buildings of the briquette factories in my constituency are drastically in need of overhauling and the staff ought to have their working conditions improved.

In relation to our overall energy policy, it must be noted that the first oil crisis in 1973-74 caught us unawares. Before that crisis overtook us, at various meetings I had advocated the use of turf for energy at a time when motions were being put forward for us to change over to oil. I opposed those motions and I was probably regarded as being parochial and unable to adapt to modern technology. Now there has been a change back to turf. We were complacent about our energy and had allowed ourselves to be lulled into a false security. I want the Minister to ensure that the Government will actively pursue a long-term policy with regard to energy so that we will not be left without a balance in energy policy. Lately there has been an abundance of coal and other forms of energy and there is a danger that we may again be lulled into a false sense of security.

I discussed this matter with a number of people and I will give examples of how other countries provided for their energy requirements. For years Sweden was not involved in any type of turf production but they are now investing hundreds of millions of pounds on turf development and production. They are ensuring that in the event of a further oil shortage they will have native energy upon which to draw. Canada is actively involved in developing their peat resources even though they have problems with the climate. Norway are also involved in peat production. This development in other countries shows the correctness of our decisions in regard to peat production. I understand that Finland produces the same quantity of milled peat and turf as we do. We could look with benefit at what Finland are doing. They have a well developed technique in relation to a local district heating system. Bord na Móna should be forerunners here of district heating systems. The way they work it is that they have a boiler house in an area from which pipes circulate around the houses. This is a reasonably priced heating system and appears to be very successful. The peat is used as a base for it. We should try to develop that system here. Bord na Móna could provide a large boiler house in some large town and this would be used to circulate heat around the villages and towns. Perhaps there could be a pilot scheme. I recommend that Bord na Móna try to develop some of these pilot schemes in, say, three towns. I understand that the capital expenditure involved would not be excessive and the benefits to be derived would be enormous. We would be using native fuel and cutting down on imports. I understand that the ESB have been talking about a similar scheme in Ringsend, Dublin. Finland have been operating such a scheme which has proved worthwhile and rewarding. I ask the Minister in consultation with Bord na Móna to try to implement such district heating systems. Finland also utilise peat for process heating in industry. This provides vast amounts of hot water which is used in boilers and so on. Such a system represents a reasonably priced, sufficient and clean supply of energy for industry here.

The Minister spoke about engineering construction and allied industries. For about 50 years Bord na Móna have been producing machinery at their factory at Derrinlough. They produce loaders and various types of machines which are used for harrowing, milling and harvesting. While a number of our native firms might be able to produce some of these machines, many of them are imported. I understand that the machinery produced by Bord na Móna is entirely for their own use except for a very occasional job for the ESB. Bord na Móna are experimenting with different types of machines and try to convert old type machines into hydraulics etc. The main material used in this machinery is sheet metal and Bord na Móna process it into the finished product. The work is carried out by the staff of Bord na Móna at their Derrinlough engineering works and in this the company show initiative, enterprise and skill. I hope the Minister will ensure that every effort is made to expand the work that is taking place there.

The Minister in conjunction with Bord na Móna, the IDA and CTT should investigate to find out what type of machinery, if any, is being imported which, could be produced by Bord na Móna, and so cut down on imports of machinery. Millions of pounds are spent here annually on importation of machinery. If necessary, existing legislation regarding Bord na Móna should be changed to empower them to manufacture the type of machinery that at present is being imported. This is somewhat different from the original idea of Bord na Móna as a turf-producing company, but since they have shown enterprise and initiative in manufacturing their own machinery they should be given the green light by the Government to increase that production.

In conclusion, I wish the Minister and Bord na Móna continued success in the future.

An Leas-Cheann Comhairle

I remind the House that all Stages of the Bill have to be completed by 8.30 p.m.

Mr. N. Treacy

I welcome this Bill which is to provide extra capital for Bord na Móna. At the outset I would like to place the history of the Irish turf industry in perspective. In the early part of the 19th century there was much discussion and there were many divergent opinions about how the boglands of Ireland could best be utilised. The occupying British Government set up two commissions to inquire into bog utilisation, in 1809 and in 1917. They made various recommendations which were never implemented. No real progress was made until 1933 when the Fianna Fáil Government through the Department of Industry and Commerce set up a special section to promote the production and sale of hand-won turf through the co-operative society system. In 1934 the Fianna Fáil Government set up the Turf Development Board who were constituted as a private limited company and financed by means of grants-in-aid from the Department of Industry and Commerce. This Turf Development Board made a major contribution to the nation during the war years and they were responsible for the production and distribution of hand-won turf on a large scale basis when imports of fuel products were restricted.

In 1946 the Turf Development Board were dissolved by the then Fianna Fáil Government who set up in their place a State-sponsored body to be known as Bord na Móna. I know at first hand the contribution made by Bord na Móna over the years because I live close to a major Bord na Móna development at Attymon in the heart of County Galway and I am proud of the great work being done there by the manager, staff and workers on that bog. I would like to take this opportunity to pay tribute and wish many happy years of retirement to the planning engineer who planned and developed that bog and retired from the head office staff of Bord na Móna last week, Mr. Dermot Power.

Bord na Móna's contribution has been immense through the years. Over 6,000 people are employed in their activities with a pay-roll in 1983 in excess of £50 million. Their contribution to the nation through PAYE and PRSI payments is very important to the national Exchequer. Bord na Móna now own over a quarter of a million acres of bogland. They produce peat, fuel for use in the ESB's peat-burning stations, which represents a major saving of millions of pounds to our Exchequer and a huge saving of imports of crude oil and coal. They produce machine turf and briquettes for the domestic market and for general industrial projects. Here again the saving to the nation is outstanding. The production of moss peat for the domestic market has also been a success and has made a major contribution to our balance of payments over the years.

I am alarmed and shocked at the Minister's statement this evening. He stated:

The second factory was proposed for Ballyforan, County Roscommon, and some site work has already been carried out there. I should add, however, that because of the high level of borrowings and the need for effective use of capital to ensure a better return to the community, the Minister has initiated a review of all capital investment projects within his area of responsibility, including the Ballyforan briquette factory, to determine whether the projects can be justified on acceptable norms.

My party initiated and nurtured the idea of a briquette factory at Ballyforan as far back as the mid-seventies. It was scoffed at by the then Coalition Government, particularly by some of the western representatives. In 1979 the then Minister, Deputy O'Malley, sanctioned the project and this was reviewed by the last Coalition Government and put on the long finger until Fianna Fáil came back to Government in February 1982. Our Government, through the then Minister, Deputy Albert Reynolds, gave the go ahead for the second time to the construction of the briquette factory at Ballyforan, acknowledging once again the indigenous resource which our bogs are, the necessity to offset our crude oil and coal imports, the necessity to provide jobs at a low cost and the social problems in the western region.

It appears on the Minister's own admission that the Government are reviewing the position vis-à-vis the commencement of the briquette factory. It is only right to inform the House that Bord na Móna have acquired over 11,000 acres of bog in the Derryfadda-Ballyforan area at a nominal cost. They have further acquired in the region of 100 acres of arable land adjacent to the bog along the banks of the River Suck for the factory site and ancillary facilities.

In 1982 under our Minister for Energy the contract for site preparation was awarded and it is now completed. Bord na Móna have also invested in electrical and telephonic equipment. Galway County Council have made major improvements to the roads in the area and brought them up to the standards required to cater for the heavy volume of traffic which will be coming to this factory and the county council will continue to develop other roads to the factory as the need arises. In December 1982 the orders for the boiler and the turbo-alternator were placed. The then Minister had planned that the civil engineering contract would go to tender early in 1983. Bord na Móna, confident of their plans and targets, arranged the sod turning ceremony in November 1982 and this was performed by the former Minister for Justice. Deputy Seán Doherty, a representative of the Roscommon constituency.

What has happened in the meantime? There was a change of Government and another Coalition reviewed the operations of Bord na Móna, one of the most successful enterprises in the history of the State which has given nigh on 40 years of outstanding service to the nation. Can the Minister confirm that the consulting engineers for the Ballyforan project recommended during the past month a certain construction firm in the heart of the country for this contract and that Bord na Móna were almost ready to accept this until somebody interfered? I would ask the Minister to confirm or deny this.

Why has the Ballyforan briquette factory to be the victim of another review? It was initiated by the then Minister, Deputy O'Malley, in 1979 and reviewed by the Coalition Government in 1981, confirmed by Deputy Reynolds as Minister in 1982 and launched officially by our Government that year. Are the Minister and the Government aware of the national shortage of peat briquettes? Are they aware of the high cost of peat briquettes and of our trading imbalance with the North? Are they further aware of the vast potential demand for peat briquettes in the North? Are they aware of the serious shortage of turbary plots throughout the country for the harvesting of domestic peat and that the Land Commission cannot accommodate the many people who want to rent turbary plots annually? The potential of peat briquettes as domestic fuel is enormous. This is due to their quality and size which makes them so easy to handle, transport, store and dispose of. The large scale availability of briquettes would alleviate the necessity to import alternative energy such as crude oil and coal.

It is ironic that we are debating the future of another western project this evening. A week ago it was the Tuam sugar factory, and we all know the Government's attitude to that. Are the Minister and the Government aware that over 10,000 people are unemployed in County Galway and that over 30,000 are unemployed in the west generally? Do they want to add to this already growing number? Do they want to add further misery to this deprived region? Is the west not entitled to the same investment from any Government as the east and the south? What about the cost of electrification of the Howth-Bray railway line, said to be about £110 million? What about the Government subventions to NET, Irish Steel, Verolme dockyard and many others? We do not object to this funding or any other funding for the security of the nation or the protection of employment but we expect comparable investment in the western region and we are entitled to it. We consistently got such investment from Fianna Fáil Governments over the years and it looks now as if it will take the next Fianna Fáil Government to complete the briquette factory at Derryfadda-Ballyforan.

Where tonight is the Minister of State at the Department of Agriculture, Deputy Connaughton? When a Senator he ridiculed our decision to go ahead with the project and he does not now seem interested in it. On behalf of the people of east Galway and Roscommon, the Bord na Móna workers at Ballyforan and the unemployed in the area, I want a categoric assurance that the factory will go ahead as planned. I want to know when construction will start and when the factory will commence production. If the Minister cannot give this information, then he and the Government are not committed to this project.

I welcome the Bill and congratulate the management, staff and workers of Bord na Móna on their substantial contribution to the economic and social life of the country during the past 40 years. My final appeal is for the black gold of Derryfadda to be used for peat briquette production quam celerimme.

Minister of State at the Department of Trade, Commerce and Tourism (Mr. M. Moynihan)

I welcome the Bill, especially in regard to the additional borrowing permissible by Bord na Móna. Bord na Móna must surely rank among the most successful of our semi-State bodies. We must look at their operations which have been continually expanding over the years. During that time Ireland had not the same energy problems and costs that it has today and turf production was not capable of making the same contribution to the national economy. It is all the more welcome, therefore. I say to the Minister that in some areas there are bogs which have been developed since 1946 and which are on the brink of being run out, and it must be the objective and the policy of Bord na Móna to seek other bogs and to put to use on them the expertise and the craft of their employees so that the new bogs can play their part in the national economy.

On a parochial basis, in my constituency there is one Bord na Móna development earmarked to be run down at the end of 1984 because the existing productive bog has come to an end. However, I would point out that there are about 1,000 acres of undeveloped bog in the immediate vicinity, a substantial portion of which could be acquired for public development. I hope the knowledge and expertise and staff of Bord na Móna will be utilised to begin development there before the beginning of the 1985 turf cutting season.

The new development for private and group use of bogs is to be welcomed. The two major problems in regard to virgin bog development are drainage and roads. It is useless to expect any group today to face development of virgin bogs without very substantial grant aid, because the magnitude of such a task is daunting otherwise. Lack of development in this area has been due to lack of incentive because of the high cost of drainage and roadmaking. Therefore, I am glad that in this legislation such groups and individuals will have technical advice and expertise put at their disposal. That will be of tremendous help because the engineering services of Bord na Móna during the years have gathered wonderful information about roadmaking and this should be put at the disposal of co-operative groups and individuals immediately so that bogs will be developed which can make such a great contribution not only to family incomes but to fuel conservation.

At the beginning of the State, road development and drainage of bogs were a priority of the Land Commission, the OPW and the local authorities through the special improvement scheme. This type of initiative is required again because private individuals will not embark on the provision of supplies of household turf because they cannot afford to embark on it due to the high cost of development. The Government would be doing a good day's work for the nation if they made bogs properly accessible for private people.

Another area of development which the Department of Energy should move into is that of bogs which have been acquired for planting by the Department of Forestry. This has been a disadvantage to people who would be disposed to develop bogs. I hope that in the future the remaining acreage of virgin bog will be retained for fuel requirements and that further undeveloped bogs will not be acquired for afforestation. That type of land should never have been planted because such development has denied our people a substantial area of fuel.

I should like to refer to cutaway bogs. Deputy O'Malley made a useful contribution when he suggested they should be retained by Bord na Móna for horticultural and agricultural development. The nature of the soil in those bogs has proved to be ideal for vegetable production. Bord na Móna have had success in this type of development and they would be an ideal body to move into this area.

I welcome the Bill and I hope Bord na Móna will continue their tremendous contribution to the Irish economy, that they will continue to expand and develop and that they will contribute also to the development of remaining undeveloped bogs. Some of the cutaway bogs which are not suitable for vegetable growing could then be used for planting.

Mr. Reynolds

I welcome the Bill but, like Deputy O'Malley, I must express grave reservations about what the money from the additional Bord na Móna borrowings will be used for. We are all proud of the initiative of Bord na Móna and the great contributions they have made in rural areas and to our national economic development through the development of sources of energy on the one hand and the provision of employment on the other.

However, I am concerned about a project which has given rise to much criticism here today. I am surprised and concerned about the attitude of the Government, having put this on the shelf again as they did when they were in office previously. I should like to be told what kind of review the Government say they are to carry out in regard to the Ballyforan briquette factory. Will they tell us clearly what they intend to do? Is it not their intention to defer the project, not to go ahead with it? Have they decided that the project is not worthwhile? This book I have here suggests they are considering the commercial criteria, and the Minister for Industry and Energy has told us that it will have to conform to an acceptable norm. Who is the person behind this? Is it the Minister for Finance who went to Roscommon the other night and gave us the first ministerial indication? I know what "commercial criteria" means. Was he speaking with true conviction in Roscommon?

When one talks about an acceptable norm, then one must ask: what level of political pressure will be exerted? Will it be the same as in the case of the Tuam Sugar Factory when they got a lease of life for 12 months? Incidentally rumour has it strongly around the House — because of political pressure and the unacceptability to certain Ministers of State and western deputies — that it is going to get another lease of life for 12 months. All I would say to the Minister in the few remaining moments I have left is that that is a project that will conform to any criteria of any Government, or any Minister for Industry and Energy interested in job creation and national economic development. If they want to apply commercial criteria alone to that project then they are reneging on their responsibility to national development.

It must be remembered that turf is an indigenous fuel and, as has been pointed out already, there is a market for briquettes that cannot be met. In Deputy O'Malley's time as Minister he had to stop allocations being taken up by Border county merchants who were exporting to the North because they were leaving the market down here extremely under-supplied. The Minister knows as well as I do that there is a growing market for the product not alone here but in the North as well. Are the Minister and the Government going to deprive this part of the country of that much needed development, of a product readily saleable both at home and for export in an area needing that development on which there has already been spent probably £3 million or £4 million? Yet, seven months after assuming office, they cannot seem to make up their minds whether or not they should go ahead with it. Is it not true that the contract for the building of the factory went out to tender, that those tenders had been received before Christmas? If I am not mistaken it is a contractor in the Leas-Cheann Comhairle's constituency who should be extremely worried about whether this project will go ahead. I do not know what effect it will have on that contractor. If it is not proceeded with that will also create more indirect unemployment.

Where is the philosophy of the present Minister for Industry and Energy in relation to development and job creation? We had a song and dance about the establishment of a national development corporation, that it was to be the answer to all our problems. If there is any single project that falls into that category of national development surely the Ballyforan project stands out a mile ahead of anything else about which one could dream. I do not believe the Government have any other single project in view that would fit into that category, that should be developed — native industry, indigenous raw materials which can be used to supply a market badly in need of them. There are more jobs to be created directly and indirectly through that project. The Minister for Industry and Energy — whether he is at present in South Korea, Japan, the Far East or wherever — and the Minister of State present have had to make many trips prospecting for jobs, and we welcome all the jobs they can bring back. But we know how little success they have had. There were 40 jobs announced from Japan which we all know were there before he left. Apart from foreign travel if they sat down at home, did their job, got that project under way, they would create more jobs than they would from all the foreign trips. I am not blaming the Minister personally for that because the international climate is so difficult.

That is why it is important that the Government take some action in relation to the home ground, take decisions that have been sadly lacking since they assumed office. There is a specific example of their ineptitude: they were in Government before for seven months and had an opportunity to examine that project, but they did not do so. We came back into government and I was given that responsibility. We went ahead with the project. I had to take the unpopular decision of rectifying the bad financial position of Bord na Móna that successive Ministers and Governments had allowed happen. Bord na Móna were not then in a position to service their borrowings. The European Investment Bank were not prepared to finance any more projects for them because they were unable to service their borrowings. I took that unpopular decision. As Deputy O'Malley rightly said, it was phased over four stages of price increases spread over a period to bring them back into the position in which they would be able to service their capital development.

As the House will recall it was back in 1978 that the then Government decided there would be no more State equity or capital grants allocated to Bord na Móna, that they would have to stand on their own feet. How can one expect a semi-State body to stand on their own feet if one is not prepared to give them their due entitlement, the market price for their product? I hold no brief for the ESB trying to buy turf cheaply from Bord na Móna. They should pay the going rate, whatever may be the value of that turf to them, be it milled peat or whatever. The ESB should not be crying out in the public arena seeking sympathy, contending that Bord na Móna are charging them, this, that or the other amount for turf. They should pay the equivalent per unit cost of producing electricity. To my knowledge they are paying no more or less than they should. Indeed the investigation into electricity costs will bear out that contention quite clearly. Bord na Móna should not be the Saint Vincent de Paul semi-State body for anybody else. They have a job to do by way of national development. This Bill will afford them that extra borrowing capacity. But we are deeply concerned that that project will be shelved yet again. I do not know the length of time it takes to review a project. I do not know whether it is being reviewed in the Department of Industry and Energy or in the Department of Finance. I suspect it is in the Department of Finance because most of the talk about it seems to emanate from there.

Another point I want to make has to do with the attitude of people in the Department of Finance to development. This concerns the other part of the Minister's remarks about private bog development. That scheme was initiated in 1981 by the then Minister for Energy, Deputy George Colley. It was a very successful scheme, whose outturn last year yielded something like 300,000 tonnes of turf for private consumption and sale, gave employment to over 2,200 people over a five to six months period and saved the National Exchequer £17 million in imports. That is the type of scheme this country needs, and many more of them.

When one looks at the budget for 1983, one sees that the provision under the subhead for private bog development was £1 million only this year. When one recalls that the Estimates were prepared with the Department of Finance back in October last when the agreed figure was £1,400,000 for private bog development, I might well put on the record of this House — seeing that a change has been effected — that the attitude in the Department of Finance to that scheme at that time was to scrap it, get rid of it, finish with it. If that type of philosophy is allowed to take hold at this stage in our national development, then I contend we are in for a rough time. A sum of £1,400,000 was the decision taken by the then Minister for Finance, Deputy MacSharry, in my presence and also that of the officials of my Department and those of the Department of Finance. This Government succumbed to the pressure to take £400,000 from a scheme that provided employment, that provided turf for the country at large and saved the national Exchequer £17 million in imports. What sort of Ministers are there in this Government who will bend the knee and allow that sort of retrograde action to be taken in relation to national development? Is it any wonder that the situation gradually worsens day after day, week after week and month after month if that is the sort of thinking obtaining within the corridors of power at present? If it is allowed to obtain much longer, then the figure of 250,000 people unemployed will arrive much sooner than a lot of people seem to think.

I wanted to make those few points and a couple of others rather quickly. One has to do with the possible reason for the insertion of section 3 of this Bill, that is the attitude of people in the higher echelons of Bord na Móna to private enterprise development. I believe probably that is the reason for section 3 of the Bill. I had experience in that Department — it was referred to already by Deputy O'Malley — in relation to a private enterprise development in my constituency based at Rathowen, County Westmeath, the name of the company being Midland Peat, where Bord na Móna despised it in spite of the fact that I, as Minister for Industry and Energy, and the chief executive of the IDA had given an undertaking in the course of an industrial promotion trip to Germany that the project would be established. I gave an undertaking that those promoters would get 200 acres of bogland. We are all aware of the attitude of Bord na Móna to that development. They strenuously objected to the transfer and subdivision by the Land Commission, something they failed to do while I was Minister, but within ten days of my leaving office they served a CPO in the public arena to take back the 200 acres of bogland that had been purchased by the two German brothers who had a captive market for their product in Germany. Bord na Móna tried the heavy hand to put them out of business. I tried to raise that matter on many occasions in the House.

I should like to thank the Minister for Industry and Energy for informing me that, as a result of my interventions and the meeting I set up between those people and the IDA, the matter had been resolved. They have agreed to exchange 200 acres of bogland with Bord na Móna and the project will now go ahead. If the Minister does not get an opportunity to reply to me tonight I would be obliged if he would write to me stating how far the development plans for Bord na Móna have progressed in the area around the Ballygarvey bogs and Rathowen bearing in mind that they wanted that 200 acres so badly. When are we likely to see development? With the amount of money they will be allowed to borrow I hope that project will be high on their priority list, although it was not very high when they tried to stop the two German brothers developing.

Deputies O'Malley and Kenny referred to Min Fhéir Teoranta. Here again the attitude of Bord na Móna to a private developer could not be applauded. When Deputy O'Malley was Minister he offered them the entire bogland area of Min Fhéir Teoranta for development but they did not take it. When I was Minister I again made the offer because, like Deputy O'Malley, I was concerned to see that the jobs of people in that part of Mayo where jobs are scarce would be preserved. They got the opportunity of getting thousands of acres of bogland for nothing on condition that they would employ the 20 people who were about to lose their jobs. However, they declined the invitation, although we know that they are now trying to outbid private developers to the tune of £400,000. They are willing to pay that amount of money for bogland they could have got for nothing on two occasions. If that is the use the money we are voting on tonight is to be put to I urge the Minister to keep a close eye on the activities of the board. We need private and public development and one should not interfere with the other. If a public company is not interested in going ahead and a private company is willing, as happened in the private bog development scheme, it is the Minister's responsibility to see to it that that private company is not interfered with. It will be interesting to hear the justification for a bid of £400,000 of public money to put private developers out of work.

The project in Ballyforan is, and will remain, a monument to the inactivity of the Government in regard to development and job creation. Many jobs can be created at home if we develop what we have rather than spending many months abroad looking for the few jobs that are available on the international market.

Mr. J. O'Leary

In most counties there is a great problem because of the difficulty of gaining access to our bogs to save turf. In the south west there are many good bogs but because the roads to them were not maintained when turf was not in great demand they are in a bad state of repair. The Minister should arrange for the transfer of some grants from his Department to county councils to enable them carry out improvement works on those bog roads. It appears that the only way they can be repaired is under local improvement schemes but it has been the policy of county councils to spend that money on the repair and improvement of accommodation roads to agricultural holdings and on minor drainage schemes. The amount allocated under the scheme by the Department is not sufficient to enable councils to carry out repair work on bog roads. More money should be allocated by the Department for this work. Extensive schemes are not necessary and the majority of road users only require that the roads be made passable for tractors, trailers and trucks.

Many people are reluctant to cut turf because they cannot bring machinery to the bog and if they cut the turf by hand it is difficult to get it out of the bog by tractor and trailer. County councils are properly organised to carry out repair work on those roads because they have experienced manpower and the proper machinery. I agree with the suggestion by other Members that the forestry division of the Department of Fisheries and Forestry should not be permitted to buy up tracts of bogland for planting. A survey should be carried out of all bogland and every effort made to ensure it is not planted.

The area of Raecaol in south Kerry is well known in the turf development section of the Department. A co-op was formed there more than a year ago to develop a major portion of that bog and I am surprised that negotiations have not yet been finalised between the co-op and the Department. The negotiations should be completed as soon as possible. It is in the interest of the community and of the campaign to reduce the amount of oil imported that the bog be transferred to the local co-operative in Raecaol. I implore the Minister to allocate money to the county councils for the repair and improvement of bog roads. No other organisation has the capacity to carry out that work.

Mr. N. Treacy

May I put a simple question to the Minister of State? Will he give us an assurance that the Ballyforan factory will be constructed immediately?

An Leas-Cheann Comhairle

It is a simple question and my response to it is simple: an order was made today that this business be concluded at 8.30. It is now 8.30 and I am putting the question: "That the Bill be now read a Second Time."

Question put and agreed to.