asked the Minister for Industry, Trade, Commerce and Tourism if the Government have decided to invest a further £80 to £90 million in Irish Steel; if he will make a statement on its present and future viability; and if the EEC have agreed to the new programme of aid.
Ceisteanna—Questions. Oral Answers. - Irish Steel Investment.
8.
The Deputy will be aware that on 29 June 1983 the European Commission gave its decision on the application of the Government for approval to invest up to £89 million in Irish Steel Limited in 1984. That decision indicates that the proposed aid is not compatible with the orderly functioning of the common market and may not, therefore, be paid to the company unless the Commission is satisfied, on the basis of information supplied to it by 31 January 1984, that the company can return to financial viability by the end of 1985. Information to enable the Commission to decide whether in its opinion Irish Steel would be financially viable after the end of 1985 without any further State aid, given an investment in 1984 of £89 million, was forwarded to the Commission in January 1984. Discussions with the Commission arising from that information are continuing and it is not expected that the Commission will have decided on the viability question before mid-June 1984.
The financial viability of Irish Steel depends on the investment by the Government of up to £89 million in 1984 and on the ability of the company to continue to increase the volume of its sales, reduce production costs and obtain realistic prices for its products. It is expected that the Government will decide in the near future on the question of investing up to £89 million in the company.
I take it that the Government have not yet decided whether to invest £89 million. Are they satisfied that an injection of £89 million will make Irish Steel viable from 1985 onwards?
We had lengthy discussions with the Commission regarding the viability of Irish Steel. The most recent meeting was held between Deputy Collins and Commissioner Andriessan. As a result of that it was jointly decided to recommission the consultants to study the matter further and deal with outstanding matters of argument between the Government and the Commission about the viability of Irish Steel. I expect that the report will be furnished on 8 June to the Government and the Commission. A decision could then be taken. It is important that we have all available information on the company before making a decision of this kind which has major implications for us and for European steel policy, because many steel plants in Europe have been closed as a result of pressure from the Commission. It is against this background that we are seeking consent from the Commission to make a further injuction of funds into our steel plants.
The Minister did not answer my question. What is the present position in relation to Irish Steel? Are they meeting their market projections and reaching the sale prices envisaged for them? Is this the old trick of having another consultancy report in order to delay making a decision?
It is not.
Will the Minister be more forthcoming about the position?
The consultancy study is a serious exercise. It was initiated by the Commission but we are agreeable to it. My understanding is that Irish Steel are meeting their sale projections and exceeding them but the price realised is not as good as was projected by Sofresid. This is partly due to the state of the steel market and partly due to the commendable sales strategy of the company. They are quite successful at winning orders abroad but the question to be decided is whether these orders will realise enough money to assure us of viability.
What points need to be clarified by the consultants?
I have just sat down after indicating what I would consider to be a major point that needs to be examined.
What was that? Was it whether they can assure us of viability? No consultant will tell you that.
Of course they can.
How can they?
Consultants predict what is likely to happen in likely market circumstances. One would not need consultants to tell what had happened. We are obviously talking about the future and therefore the Government and the consultants have to exercise an informed judgment in this matter, which is what will be done in this case.
Is the Minister suggesting that consultants are going to change the advice, analysis and projections they have already given to the Minister and the EEC? I cannot understand how the Minister would go back and ask them if they are going to change their information and their advice. He knows what the position is; the EEC know what the position is, and the Minister is going back to the consultants to ask them to justify what they have already said. They are not going to change their advice. Market conditions have not changed one iota in the last 18 months.
The Deputy is not showing a great knowledge of the steel market when he says that. The fact is, and the Deputy may not be aware——
(Interruptions.)
——that this year, as a result of a Council decision, a system of minimum prices was introduced as part of the regime. The effect of that, in practice, is one matter which has to be assessed in view of the point I made in my second last reply, namely, can they not only achieve their volumes but also their levels of prices.
Is the Minister saying they have achieved their volumes already?