asked the Minister for Tourism and Transport the present position regarding the B & I Shipping Company; if the £8 million allocated in May, 1987 will be sufficient to enable it continue operations through the tourist season; if not, if further Government funds will be made available; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - B & I Shipping Company.
15.
The position is that the Government have decided to make available to the B & I additional equity of up to £8 million in the period to end October 1987. I have directed the B & I board to submit to me as soon as possible a plan of action, for implementation in the autumn, to restore the company to viability. I understand that discussions are in progress between management and unions in that regard.
I am satisfied that the B & I will have sufficient resources to continue operations through the tourist season. The question of further Exchequer assistance does not, therefore, arise.
The tourist season would seem to be defined as up to the end of October. What happens after the end of October? Have the Government any further proposals to provide moneys?
The Deputy will be aware of what I said in my reply, namely, that when the £8 million was made available by me on Government decision for the B & I, we asked for a plan of action. I had a meeting with the board of management and with the trade unions and I was very heartened by that meeting, at their commitment to come to an arrangement which would result in the B & I becoming a viable company. That process is in the course of operation at present. I know that the negotiations, meetings and discussions are going on between management and unions as of now and it is my earnest hope that the result will be proposals for a viable company which will deserve well of and benefit this country.
In simple language, is the Minister saying that he told the company: "You have £8 million to keep going until the end of October and if your plan of action is not self-financing after that, then you can paddle your own canoe"?
The Deputy is almost right when he spoke about my plan of action. What I told the House and I repeat now is that the Government made available £8 million to the company and have asked management and unions to come up with proposals by October to have a viable B&I ferry company in place. I want to repeat that that is the process which is under way as of now. I am sure that the Deputy and the House would wish that that process will succeed.
What are the overall losses for B & I for the current year, including the £8 million?
The losses forecast originally, as given in my reply to the House, were £6.8 million for 1986. The losses for 1987 were forecast as much larger than that. My memory is that they were close on £13 million to £14 million.
Does that include the £8 million?
The £8 million is equity. It is an investment in the company.
I should like to know if the £8 million is in addition to the £13 million or £14 million or is it included in the latter figures?
The Deputy asked about losses but the equity is a different matter, as the Deputy will understand. Equity is an investment by the Government in the company.
So the Government subvention for 1987 is at least £21 million or £22 million as of now?
No, I did not say that.
But the losses would be approximately £13 million or £14 million and the Government are putting in another £8 million.
The Government have put in an investment in equity of £8 million. This is £6 million by way of advance payment of next years allocation from the previous Government and an additional £2 million, as the House knows.
16.
asked the Minister for Tourism and Transport the management fee paid to Zeus consultants in respect of the B & I Line; the date of the commencement of the operation; and the planned expiry date.
The fee payable to Zeus Management Limited in respect of the consultancy services provided to the B & I Line plc. amounts to £250,000 plus VAT (at 25 per cent) in respect of the three-year period from 6 May 1985 to 5 May 1988.
In the light of the Minister's answer and in the present circumstances surrounding the B & I operation, does the Minister consider that the Government have saved themselves considerably more money by the level of this type of investment in Zeus Consultants to run the company, as it would appear at this stage that their objective has not been achieved? What are the options facing the company? Does the Minister intend that this agreement will see its way through to 5 May 1988?
The overall cost that I gave is less what the chief executive and chairman of the company would have been paid anyway in the normal course of events which is, I suppose, to be deduced from that. It is a substantial expenditure, an amount fixed by my predecessor to try to deal with the very difficult circumstances that arose in the B & I. It is a difficult thing to assess whether this has been successful or not. Again, as we mentioned with regard to the funding of Aer Lingus, there are many variables and it would be beyond the wit of man to determine whether there has been a financial improvement as a result of this, or whether there has not. In the absence of the Zeus operation, we have no way of knowing whether it would be better or worse. That is what the Deputy is trying to get at. I am afraid that I would not be able to answer that query straight out. It is a very substantial investment in the management of the company.
The Minister would seem to have certain reservations with regard to how the operation has gone up to the present. In the light of the further investment of £8 million into the company, would the Minister not consider, in the best interests of all concerned, seriously looking at the option of trying to privatise the company, in that it would be the best possible deal for the taxpayers and the Irish people who have pumped an enormous amount of money into this company? Quite clearly it has not worked up to date. Other options must be looked at. Is it now the Minister's intention that, come the end of the tourist season, these hard facts will be put to the company and to the people involved and a decision taken possibly to privatise it?
The Deputy is now extending the scope of his question.
The fact is that the hard facts, as the Deputy calls them, have already been put by me to both management and unions. I reiterate what I have said already, namely, that both management and unions expressed themselves committed to a policy of reorganising B & I in such a way that they would come up with a proposition to make the company viable and by viable in my simple language I mean a profit-making company.