asked the Minister for Energy if, in view of the extent of the financial support given by the Exchequer to the Dublin Gas Company, the Government will consider taking the company into public ownership.
Ceisteanna—Questions. Oral Answers. - Dublin Gas Company.
17.
Not in present circumstances. Negotiations were far advanced on the essential features of the scheme before the present Government assumed office and it was learned that an attempt to depart radically from them could have involved the State in legal proceedings, possibly at great cost to the taxpayer. Nevertheless, the Government were able to bring about significant improvements which are designed to provide a much better return to the State for the funds invested. Furthermore, the provisions relating to price control have been altered and it may be taken for granted that with the mechanisms now in place, no speculator profits will be allowed to be paid out of this enterprise.
The Minister is saying that the State has to pour in all the money and have no control over how it is utilised. With regard to his reply to the preceding question could the Minister explain why it is now too late to take decisions in regard to the ownership and control of the company? The agreement is in relation to a package of funding, receipt of natural gas and so on. The agreement has not necessarily been completed yet in relation to the structures and functioning of the company when they finally receive the gas and the funding from the State.
In deciding, in the case of Dublin Gas, not to pursue public ownership of Dublin Gas Company, the Government had to consider a number of matters: namely, we had to consider legal advice, the fact that because of contractual commitments existing shareholders would not only have to be compensated for the company's assets but also for any potential earnings from natural gas over the next 17 years; also the possibility of costly project delays arising from litigation by dissenting shareholders, the outstanding bank debt of Dublin Gas of £15 million, which would have to be taken on by the State, the increased exposure to risk involved if the State were to fund the conversion, marketing and development programme in its entirety. Obviously the State was at all times concerned that the amount of return that the State would get from the project would be adequate.
The Minister's predecessor, Deputy J. Bruton, has already said that the State will take 65 per cent of the profits, that that is the return the State is to get. I am sure the Minister will agree that the likelihood of profits is very remote, if it exists at all. Could the Minister explain how he intends to protect the interests of the taxpayer, with the enormous sums of money put into this company? How will the Minister protect their interests within the structures of the new company?
I feel that the interests of the taxpayer will be well protected by the appointment of the four State directors and by the interest which the State has taken up in Dublin Gas Company.
But the State has no equity in the company.
The State has 29.9 per cent of voting rights in the company, 56 per cent of all distributable profits will go to the State and 50 per cent of excess profits will go to the State by way of an increase in Bord Gáis Éireann's gas price to Dublin Gas. The appointment of a senior management official by the Minister for Energy to oversee the conversion and development projects will go fully to protecting the interests of the taxpayer which the Deputy has raised.
Could the Minister tell the House whether he considers that an additional 6 per cent of the profits is an adequate return for an additional investment of approximately £27 million by the Government in Dublin Gas Company?
That does not arise on this question.
In the Minister's reply he was giving Deputy Mac Giolla the adequate return. If we are talking about an additional investment of £27 million does the Minister consider that an additional 6 per cent of the profits is an adequate return on that investment?
I would say that the main improvements in the position of the State in the Dublin Gas deal concluded by this Government was far better than the deal completed on 14 December 1982. I would like to point them all out to the Deputy, who is well aware——
Tongue in cheek. Would the Minister spell them out?
The State's voting rights improved from 25.01 per cent to 29.9 per cent, a new excess profits arrangement providing the State with 50 per cent of all profits in excess of 7 per cent return on capital, implied by way of an increase in Bord Gáis Éireann's price of gas to the companies — which would not be passed on to consumers — the Minister's right to nominate up to one-third of the Dublin Gas Company board, to nominate their chairman for two years, the appointment of a senior management official of Dublin Gas Company to oversee the conversion and development project and the company's health generally.
The Minister omitted part of the deal when it did not suit him to tell us why on £10 million coming in the £5 million was given at 30 per cent return, the excess profits charge was giving a real return in investment that has never been given to anybody in this country, that the banks have been given letters to decide by how much gas will be allowed to increase.
The remaining questions will appear on tomorrow's Order Paper.
(Interruptions.)
You said tomorrow's Order Paper.
Deputy Mac Giolla put down the question and I have great respect for leaders of parties.
Will the Minister answer the question as to how he can accept the need for public ownership of Limerick Gas but not of Dublin Gas?
The deal in the situation of Dublin Gas has been completed. The agreements have been signed. I have said that the review is taking place under my auspices in relation to the further development of natural gas throughout the country.
The remaining questions will appear on the Order Paper for Wednesday, 2 May 1984.
Before we go ahead, can we have clarification as to whether matters for the Adjournment can be raised now or later?
You would want to raise it immediately.
I want to raise on the Adjournment the demolition two days ago by the British Army of the wall leading to the St. Oliver Plunkett GAA Park at Crossmaglen and the continuous occupation of the Crossmaglen GAA grounds by the British Army.
The Chair will communicate with Deputy Treacy.