Dáil Éireann debate -
Wednesday, 18 Dec 1985

Vol. 362 No. 14

Ceisteanna—Questions. Oral Answers. - Shipping Industry.

11.

Mr. Briscoe

asked the Minister for Communications in view of the fact that in the recent Green Paper it was pointed out correctly that the world shipping industry experienced its worst depression for 50 years and that many countries have tried to safeguard their shipping industry and in some cases have actually increased their fleet as in the case of the German, Dutch and Belgians and that incentives have been in the form of:— (a) a depreciation allowance of up to 40 per cent; (b) carry forward losses up to five years offset against tax; (c) low interest rates Government backed, and extended periods on loans; (d) a grant of 12½ per cent for ships built in Germany; and that the Green Paper points out that no special low taxation rates are in operation for shipping activities here, the reason restrictions were imposed in the Finance Act, 1984, on the availability of tax allowances for leasing arrangements for vessels thus affecting the shipping industry; and the reason the Government have never seriously looked at ways of correcting the imbalance under which Irish V/L's have had to trade.

16.

Mr. Wilson

asked the Minister for Communications his proposals for the development of an Irish deep-sea fleet.

Mr. J. Mitchell

I propose to take Questions Nos. 11 and 16 together.

The Committee on Strategic Shipping Requirements was established by me in connection with the preparation of the Green Paper on Transport Policy to report on current and future strategic shipping needs and how these should be met. The committee have recently submitted their report to me and their conclusions and recommendations are summarised in chapter 7 of the Green Paper, together with various incentives for the shipping industry which were suggested to the committee by the Irish Chamber of Shipping. The committee's report is at present being considered by the Government.

I should point out that the loan and grant related incentives available in other countries are, in the main, designed to support the shipbuilding rather than the shipping industry.

I am aware of the competitive pressures affecting the Irish shipping industry and recently I approved a significant modification of existing statutory trading limits and manning requirements. Furthermore, my Department, in consultation with the Irish Chamber of Shipping, are currently carrying out a comprehensive examination of the standards applied by our European trading partners in relation to trading limits and manning requirements with a view to putting the Irish fleet on the most competitive footing consistent with safe operation.

That part of the questions which relates to the provisions of the Finance Act, 1984, should be addressed to the Minister for Finance as the responsible Minister.

Mr. Wilson

Is it a fact that the report said that handy sized ships rather than larger ships have been indicated by the advisory committee with regard to a deep sea fleet?

Mr. J. Mitchell

The Committee on Strategic Shipping Requirements point out the overall gross tonnage they feel is required on strategic grounds. They feel it would be better to supply this gross tonnage by way of a greater number of smaller ships because if one has a small number of large ships making up the gross tonnage and one ship is knocked out, it has a much greater impact in an emergency and one would lose a much greater percentage of tonnage very quickly. There is greater safety in a larger number of small ships.

Mr. Wilson

Did they also recommend a lower overall gross tonnage than we have been talking about?

Mr. J. Mitchell

They recommended a slightly lower gross tonnage than they previously recommended. That is not surprising given the developments in technology where ships are much faster and where we now have aviation for some of our cargo to an extent we did not have in the forties and even in the sixties. I expected that that would be one of the outcomes of the examination.

Mr. Wilson

In view of the fact that we are developing a very heavy industry at Moneypoint and that only a larger ship would be economical on the run from the eastern coast of the US or from the Caribbean, would it not be foolish in developing a new deep sea fleet to ignore that point and would it not be a loss to the Exchequer if foreign ships have to do that business?

Mr. J. Mitchell

There would be a loss to the Exchequer if the Exchequer became liable for the running costs of a ship or a shipping line, so losses to the Exchequer do not really arise. In relation to the question of supplies to Moneypoint that will be resolved only when the source of supplies of coal becomes known. Only then will we know what form of ship will be required. If, for instance, the coal is to come from North America, larger ships would do the job, whereas if we were to come from Poland smaller ships would be required. From my latest information, the ESB have not yet settled from where they will get their supplies and therefore the question of the shipping requirement for those supplies cannot be settled.

Mr. Wilson

Does the Minister regard it as important that a deep sea fleet, when developed, should be Irish owned and, if so, has he any predilection for private or public ownership?

Mr. J. Mitchell

The answer to the first part of the Deputy's question is yes and to the second part the answer is no.

An Ceann Comhairle

Question No. 12.

Mr. Wilson

I have just two more supplementary questions, because my priority question is involved here.

An Ceann Comhairle

I have taken that into consideration.

Mr. Wilson

When the Minister says that the whole policy is being decided as of now, would he take into consideration an important factor: that at present in the shipping market good ships are available for purchase at rates much lower than they were some years ago? Would he think that now would be a good time to purchase?

Mr. J. Mitchell

It is really very much a subjective judgment. It is true that the price of ships has fallen dramatically. For the same reason lots of shipping companies are being liquidated, including Irish Shipping Limited, but very large ones like Sanko in Japan and many others have also been liquidated. That is because there is a gross over-supply of ships throughout the world. It appears that this situation will persist for many years to come because there is still quite considerable shipbuilding going on around the world — it does not seem to make sense but it is going on anyway. It appears to me that there will continue to be an over-supply of ships for the foreseeable future. Therefore, there is no reason to rush in and buy ships, even if one needed them just now, because I think the price will remain low — it may even get lower given the additional supplies coming on to the market. But I can assure the Deputy that we are not unconscious of the point he is making and we are keeping the matter under review.

Mr. Wilson

In view of the reply "yes/no" the Minister has just given and in relation to the "yes" part, would the Minister regard it as important that the Irish/Euro shipping link should belong to Ireland or Irish people?

Mr. J. Mitchell

There are three dimensions to the strategic requirements of this country. One is the connection with the United Kingdom, who still remain one of our leading trading partners. The other is the direct link to the Continent of Europe and the third is the deep-sea capacity of the fleet. Given the fact that we are an island, it is important that we have capacity in each of these three dimensions. When I say "we" I mean that it would remain under the control of Irish people. We have to be sensitive to the fact that we are in the EC and are constrained in what we can do. We cannot discriminate against our compatriots in the other 11 countries of the EC from 1 January next. Even though we may wish for certain things it may not always be possible to achieve them. But it is something we should like to see and will take steps to achieve in due course.

Mr. Wilson

In view of the fact that an advertisement appeared in yesterday's daily papers — for sale, Irish Continental Line, naming the ships; apply to Investment Bank of Ireland, Allied Irish Investment Bank for information — would the Minister see to it that his Department apply for the details of sale to those two banks?

Mr. J. Mitchell

I cannot give the commitment that the Deputy seeks but he can rest assured that the Government will consider the matter in due course and take a decision on it.