asked the Minister for Energy if he will make a full disclosure to the House of all the facts relating to the financial arrangements concerning the Dublin Gas Company and, in particular, the amount of losses to be borne by the taxpayer; if the commercial banks are bearing any share of the losses; if loan guarantees or letters of comfort have been issued to the banks; and the cost of receivership to date.
Ceisteanna—Questions. Oral Answers. - Dublin Gas Company.
26.
The original financial package for Dublin Gas Company which received full publicity at the time comprised bank loans of £60 million; loan stocks of £10 million and suppliers credit of £10 million. State support consisted of a £17 million loan plus £6 million stand by facility, with £41 million in 1981 values, in conversion and development rebates and a conversion loan of up to £11.6 million. The actual position showing the variance with the base case, up to the appointment of the receiver, is set out in the sources and application of funds table and notes which I propose to circulate to Deputies.
As regards the losses on this project it will not be possible to give final figures until decisions are taken on write offs of assets and claims and until revised accounting concepts are adopted appropriate to the then state of the business.
I am not quite clear what the Deputy has in mind by the expression, "the cost of receivership". The receivership is intended to have a net benefit rather than a net cost and the Government would not have embarked upon it otherwise. The results already achieved in improving the efficiency of the company and giving them the prospect of a viable future demonstrate that the Government's view on this subject was well founded. We expect, with the co-operation of the management and workforce, to achieve our aims of maintaining gas supplies to the gas consumers of Dublin, preserving jobs at Dublin Gas Company, and putting that company back on the rails again. No loan guarantees or letters of comfort have been issued to the banks. I issued a letter to the banks setting out the Government's intentions relating to Dublin Gas including its early nationalisation.
I must point out that supplementaries on this question are confined to Deputy Reynolds.
In view of the Minister's reply today I should like to ask him if he recalls telling the House that all legitimate creditors would be paid in full. Is he playing around with words when he says that the banks will not get their money and that they are not guaranteed their money?
I am not playing around with words.
Is the Minister saying that the banks will not get their money?
On at least four occasions in the House I gave the Deputy the factual position. The Deputy's question relates to loan guarantees or letters of comfort and I have answered that question.
In view of the fact that the Minister is continuing to play with words I should like to ask if he accepts that legitimate creditors in a company include the banks. When this matter was raised at Question Time before the recess the Minister made a statement which flatly contradicts what he has said today. The Minister is trying to get out of this. Everybody knows that the banks are not going to lose any money on this deal. Will the Minister come clean and admit to the public that the banks' money is safe and sound?
I reject the insinuation in the Deputy's remarks about coming clean, that I may not have come clean before on this issue in the House. I have given the facts. The banks are in a commercial situation with the gas company. Their loans are outstanding by the company and there are no loan guarantees or letters of comfort, as I said on a number of occasions. I am at a loss to understand why the Deputy persists with this line of questioning.
Does the Minister recall that the banks withdrew their funding of Dublin Gas in August last year? Does the Minister recall that I brought him into the House on many occasions to tell us when funding would be resumed to Dublin Gas? I had to bring him in many times to find out when creditors, old age pensioners and others would be paid.
I come to the House of my own volition.
Does the Minister recall the instances I referred to?
Not on that basis.
Will the Minister tell the House the manner or mechanism, and the contents of the letters, that got the banks to fund Dublin Gas again. The Minister is trying to convince us that the banks, out of the goodness of their hearts, decided to fund a company they had stopped funding for many months without knowing what was happening. In doing that he is not doing a good job for democracy.
I am participating in a democracy and in the democratic institutions of the country and my role has been one of importance.
Will the banks be getting that money or not?
I did not interrupt the Deputy. I have answered the question put to me. The Deputy is well aware, as I am, of the difficulties in relation to the banks on the appointment of the receiver by BGE. Negotiations and discussions took place with the banks over a considerable period and agreements were reached in relation to the re-funding of the Dublin Gas Company. The Deputy's question related to the content of the letters and I am satisfied to stand over the statement I made at that time — it has been repeated on numerous occasions since — that the letters issued to the banks were not loan guarantees or letters of comfort. The Deputy will be aware that in years past guarantees or letters of comfort were given by the State guaranteeing repayment of loans irrespective of whether the project continued or otherwise. That is not the position in regard to the Dublin Gas Company.
Was the original letter sent by the Minister to the banks to try to get them to resume funding of Dublin Gas returned to the Department?
I do not recollect what letters were accepted or received by the banks. The important point at issue is whether the letter was issued. I am aware that negotiations and discussions at that time lasted about two weeks. They concerned the future financing of the project and its viability. At the time my concern was to ensure that the Dublin Gas Company would continue to operate, that gas consumers in Dublin would continue to receive a supply of gas and that as many jobs as possible were preserved. That is what I set out to do and I am well on the way to achieving that.
It is amazing that I had to ask the Minister about the contents of this letter on two occasions. Will the Minister place the correspondence he had with the banks in regard to this project in the Library so that we can inspect it and reach our own conclusions on its contents?
I will consider that.
Is the Minister in a position to give an estimate of the losses to the taxpayer arising out of the Dublin Gas project?
No. It will not be possible to give final figures until decisions are taken on write-offs of assets and claims and until revised accounting concepts are adopted appropriate to the then state of the business. As soon as those figures are available I will have no hesitation in putting them before the House.
Will the Minister agree the receiver has made not one but two reports to him? This was made public in the newspapers and he estimates the losses at £90 million. The receiver has published a report estimating losses of £90 million at this stage in Dublin Gas and the Minister is trying to make a speech to the House and the taxpayers telling them they are not going to lose. This is very important because we are dealing with millions of pounds of taxpayers' money. Is the Minister reaffirming to this House today, as announced by his colleague, Deputy Bruton——
And Deputy Reynolds, some time previously.
I have copies of all the announcements that were made and I was not given the honour of being part of this deal. It was a completely new deal. Deputy Bruton said then that if the company goes down the banks stand to lose substantial sums. Is the Minister reaffirming that position today?
I have made the position quite clear in relation to the banks. I have said that there are no State guarantees, no letters of comfort. If tomorrow morning the Dublin Gas Company went out of business the banks would lose their money.
Will the Minister answer the other question? Does he deny that there is in existence a report from the receiver estimating losses of £90 million as of today?
I have reports available from the receiver and there are estimates in those reports. The receiver is continuing his work, as the Deputy and the public are well aware. The receiver has made public quite a lot of information about the implementation of the policy he is taking in relation to Dublin Gas. As soon as I have the concrete figures I will have no hesitation whatever in coming before this House and presenting the figures.