Ceisteanna—Questions. Oral Answers. - CIE Hotels.

1.

asked the Minister for Labour the names, conditions of service and qualifications of the members of the board appointed to run the former CIE hotels; the policy which they have to implement; the financial restructuring, if any, which is being undertaken; and if he will make a statement on the matter.

On 9 March 1984 I appointed a new board for Ostlanna Iompair Éireann, consisting of a chairman and eight directors. The names, length of appointment and qualifications of the chairman and directors are set out in a tabular statement which I propose to circulate in the Official Report.

The policy of the new board is to operate the hotels on a commercial basis. Funds are being made available by the Government to enable the new board to achieve commercial viability by necessary rationalisation and restructuring. The Exchequer allocation will provide for the financial restructuring of the company and relates to the clearance of some debts, redundancy costs and refurbishment works.

Following is the statement:

Name

Occupation

Date of Appointment

Period of Appointment

Chairman:

Ms. E. O'Mara Walsh

Travel Agent

9 March 1984

5 years

Directors:

Mr. K. Cronin

Accountant

9 March 1984

5 years

Mr. B. O'Rourke

Businessman

9 March 1984

5 years

Mr. B. Loughney

Publican

9 March 1984

5 years

Mr. D. Pierce

Chartered Surveyor

9 March 1984

5 years

Mr. B. Pettit

Hotelier and member of Council of CERT

9 March 1984

5 years

Mr. D. McCaughey

Hotelier and member of Council of CERT

9 March 1984

5 years

Mr. P. Donegan

Trade Unionist

9 March 1984

1 year

Mr. T. Callaghan

Trade Unionist

9 March 1984

1 year

Firstly, I put down this question to the Minister for Communications, but it has been transferred to the Minister for Labour. I should like to know the reason.

Fortunately or otherwise, the Chair does not have any say or control as to who answers the questions.

Perhaps the Minister would like to comment on that matter? Was there an original announcement that the hotels were being put in the care of CERT?

If I may take together the Deputy's two supplementary questions, he will be aware that these hotels were previously in the ownership of CIE under the subsidiary OIE and, consequently, were the ministerial responsibility of the Minister now for Communications. A Government decision was taken back in the autumn of 1983 to transfer ownership of the hotels from CIE, to transfer OIE from the parent company to the ownership of CERT. I was given the responsibility of appointing a board to run the new—restructured, if you like—OIE, which is what I have done.

Could the Minister let the House know what is the relationship between CERT and the board? Are the board agents of CERT or independent of that body?

The question is quite a complex one and I should like to be as helpful as I can to the Deputy. As I understand it, the shares are owned by CERT. The board of directors were appointed by me. The board and the chairman of CERT were involved in that process.

When the Minister says that the shares are owned by CERT, does that mean that the funding of the board came from the funds available to the Department of Labour and voted by this House?

The Deputy will be aware that the urgency which the Government had in relation to this matter was to restructure the OIE hotels in the advent of the current tourist season. The final details in relation to the financing will come before this House.

I call Deputy Brennan.

I put down this question, which is very important.

It is absolutely important. It should be the subject of a debate in the House.

That is what I was going to suggest, as it is too wideranging a subject for Question Time.

But we have a long way to go yet in getting something done.

There is a vagueness with regard to the funding in the Minister's reply.

Am I to understand that the £7 million or £8 million — and I am talking in terms of 1982 — perhaps as much as £10 million—

£11 million.

——which the OIE company owed has been funded and that those debts have been paid from funds available to the Minister for Labour, or are those debts still being carried? If so, are CERT carrying them, or the new board, or the Department of Labour?

All I can say at this stage is that the additional funds required to restructure OIE, as indicated by me in my first reply, are being made available by the Government.

May I take it then, that this will be from voted moneys, or will there be any funding from the European Social Fund, or what is the source of the funding?

It will come out of general Exchequer funds. In that regard, it will be accountable fully to this House. Secondly, as to whether the existing allocation for CERT will in some way or other be directly affected, the answer is no. The allocation for CERT will be independent of whatever financial structuring is necessary to put OIE back on a sound basis.

A final supplementary, on the funding would the Minister state as of now have the accumulated debts been paid off?

I am not in a position to give the Deputy a definitive answer in relation to that. The debts which were accumulated in relation to various aspects of these companies are in the process of being paid. It is the intention that they will be paid. I have not the information to give a precise indication as to whether all have been paid as of now.

Does that mean that there will not be any call on the funds of any other Department? Are the Department of Labour accepting responsibility for these debts?

I am trying to be as helpful to the Deputy as I can. We shall come back to this House on this matter and I shall be happy to do so, but all I can say now is that the Government are making provision for the financial restructuring of OIE. As a consequence, naturally any of the moneys which the Government make available are, and will be, directly accountable to this House.

I call Deputy Brennan.

Is this through the Department of Labour? Do I understand——

I am anxious to put a question and have been trying to do so for a while.

In answer to Deputy Wilson's question, at the present moment, yes.

May I put a composite question to the Minister which perhaps he would answer? Am I correct in assuming that CERT actually own the shares, that a new board have been appointed to run the hotels and that that new board do not report to CERT but directly to the Minister? Further, am I correct in assuming that the amount of the debts of the hotels of over £12 million at date of transfer, or a figure of that order, has recently been provided by the Minister's Department to clear the debts? Would I be correct in saying that the shares have been transferred to CERT at no value? Would the Minister be prepared to say that, in effect, all he has done is replace the existing board of OIE by a new board of OIE with the added requirement that it be on a commercial footing, as if that were the only requirement? Would the Minister comment as to whether those general assumptions are accurate or not?

In reply to the Deputy's composite question, broadly speaking his description is reasonably accurate. The desire of the Government in their decision was that the OIE hotels should be retained in public ownership, that they should be rationalised and restructured on a sound financial basis and provided with adequate funds to ensure financial viability. The new board have been appointed by me to that task. They have commenced their work accordingly.

Why do they not report to CERT?

The position is that we have had detailed discussions with CERT in relation to this. The arrangement I have described, and to which the Deputy has referred, is one that was arrived at in full consultation with the board of CERT, with the chairman of CERT and their chief executive.

Does the Minister not think it very cumbersome?

The Minister told me that the money was not paid. He has now indicated, in answer to a question from Deputy S. Brennan, that £11 million has been paid. Has the money been paid or has it not been paid?

It does not appear that this is suitable for further teasing out at Question Time.

It is a simple answer.

It is a simple question; it is not a simple answer. I am at pains to ensure that whatever answer I give the Deputy is accurate because I am aware of his previous responsibility in this regard when those hotels experienced difficulty.

I want to know about the £11 million.

As I have said, it is in the process of being paid, provision has been made for payment, but I cannot and will not attempt to give a snap answer to this House saying that it has all been cleared. I do not have that information available to me but, if the Deputy wants it, I will make it available to him. I am quite open in relation to this, in relation to the question that Deputy S. Brennan put——

I asked about the financial restructuring in my question.

Yes, it is in the Deputy's question, but I cannot give a precise statement as to whether all of it has happened as of now.

I have two very fast supplementary questions to ask. Would the Minister explain to the House clearly and in detail — he has said that CERT holds the shareholding; he has appointed a political board, a political board appointed by himself——

A question, please, Deputy.

CERT, for the most part, is a body nominated by the interests concerned. Will the Minister explain to the House, first of all, why the necessity for this type of politically appointed board between CERT who hold the shareholding and the hotels themselves and where does the responsibility of CERT now lie with regard to the operation of these hotels? My second question is: would the Minister now give an undertaking to the House regarding the former OIE employees, as they probably now are, in Killarney, Galway and elsewhere, that they will be retained in employment and that their jobs will not be placed in jeopardy as a result of this new board politically appointed by him?

The structure I have described to the House is one that arose following discussions with CERT, the Government and my Department. It was considered by all of the participants that it was the best and most effective structure to be devised, one of the reasons being that CERT consists of a representative council and is a very successful training organisation. What was required in this instance, and perhaps what was sadly missing in the past, was a commercial State enterprise with a commercially-orientated board. That is not the function of CERT and CERT were at pains to make that clear in their opening position. Therefore, following discussions with CERT, with the Government and the various Departments directly involved, it was not — as both Deputies will readily agree since they have had some experience of this matter — a simple or non-complex issue. The structure I have described, in reply to an earlier question, was considered by all of the parties involved to be a satisfactory one.

Including the trade unions?

The trade unions have two representatives on the board of CERT.

A Cheann Comhairle, will the Minister——

If the Minister had finished the answer to that question I am going on.

He has not. I asked about the employees.

I am quite happy to answer that too. That is a matter that is to be negotiated between the board, the management of CERT and the trade unions involved.

The board of CERT? The board of CERT do not have anything to do with employees.

The Deputy is correct. I am sorry, the board of OIE, the management of OIE the workers involved and their trade unions.

The old board of OIE?

No, I think the Deputy knows exactly what I am trying to say.

Even the Minister himself is confused about this.

Question No. 2.

We all know that it was a board of political expediency but we want to get the Minister to explain the position.

Deputy Gene Fitzgerald will resume his seat. The Minister will answer Question No. 2, please.

(Interruptions.)

There is no point in arguing. Would the Minister answer Question No. 2, please.

Well, if I may——

You may not, Minister, I am sorry. I have to keep control of Question Time and I am going to do so.

A Cheann Comhairle—

I am sorry, I will allow the Deputy a supplementary on the next question.