Similarly we, in this party, are very unconvinced by the Minister's introductory remarks. Indeed, we go somewhat further; we feel obliged to oppose the Bill and to give a clear reason for so doing.
While this proposal appears superficial to some extent, in the sense that what it is doing is changing, or allowing to be changed, the liability the Minister can incur on behalf of this company, it affords us a useful opportunity to discuss more fundamental issues. Those basic principles would lead us to redress and reassess fundamentally the role and involvement of the State in underpinning NET any longer. From its very foundation this company has been, is now and without any shadow of doubt will continue to be a very substantial drain on very scarce taxpayers' money without any clear idea from anyone — in fact all the indications are to the contrary — that, at some point, it will become profitable in its own right and ultimately get off the backs of taxpayers. That is not what is being presented to us today. There is no suggestion that that will happen.
Accordingly, we must ask ourselves some basic questions: what precisely is the role of the State in relation to NET in 1987? For example, I wonder whether or not the basic premise, which is, that a factory of this nature producing, for strategic purposes, an essential requirement of the agricultural sector of our economy, is as relevant any longer as it was when it was the well-intentioned design of those who drafted the first proposal. The world has changed substantially since then. I have no doubt whatever that if we were starting from a green field base — if the House will pardon the very bad pun — any Minister coming in here today suggesting that a company be funded to the extent of £180 million worth of State guarantees would be thrown out by this House unceremoniously. Unfortunately, what has happened is that the longer this has continued the stickier it has become. I regret to have to say that the overriding characteristic of this company, of the various debates which have attended its fluctuating financial fortunes, has been that every undertaking, promise, indicator, every restructuring, every suggestion that tomorrow would be a better day has simply not come true.
We are now in the position perhaps of throwing good money after bad. That may be a bit harsh because I am aware that the joint venture proposal, the endeavours of genuine employees in the workforce, of management, all those who want to see things go right are well intentioned, that they are all working towards an ultimate outcome which would be successful. But, we must ask ourselves the basic question: will it be successful? We have grave doubts. We do not think that the problem is any longer one of supply. We do not think the essential requirement should be for the State to ensure that it has within its shores the capacity to supply the marketplace. Basically the problem is demand. In a world economy, bearing in mind the small role we play in that, it is simply not essentially economic for a State or economy of this size to have its production capacity in this respect with the kind of economic drain it makes on our resources. Whatever way one wants to gild the lily, the essence of this request today is to provide another £30 million of scarce resources to continue to prop up a company which, unfortunately, regrettably and very sadly has, since its foundation, managed to under-achieve in terms of every target it set itself. I know there are reasons for some of that, excuses which are entertainable, but that is the bottom line. Yet, day after day, Deputies come into this House seeking the allocation of scarce resources to very needy areas or problems. We are told the money is not there. We know the money is not there. If I had a spare £30 million and I had to take the decision as to where that money would go I have not the slightest doubt that I and everybody else in this House would find many higher priorities than allocating that sum of money in this manner today. That is what is at the bottom of it.
I honestly believe that someone in this House has to say that by any reasonable standard time has run out for NET, that they have been encouraged, wheedled, invested in and restructured by successive Administrations representing various sides of this House and that it has not worked.
A brief look at the history of the company will testify to that. It was with some slight sense of bemusement I reverted to the Official Report of 23 January 1963 when the Nítrigin Éireann Teoranta Bill, 1962 was being introduced in this House by the then Minister for Industry and Commerce, latterly Taoiseach, Deputy Jack Lynch. He said, at column 215:
I consider it desirable to stress the fact that all moneys advanced to the company will be repayable with interest, on the lines of advances made to the Electricity Supply Board and Bord na Móna. There will be no grant or subsidy assistance for this industry and there will be no tariff or quota protection in any shape or form.
He said a lot of other things too but what it boiled down to — all those years ago — was that the State was underpinning for a short period of time by means of loans which would be repayable. Not merely have they not been repaid but subsequently the disastrous Marino Point project, which was the subject of a comprehensive report from the Joint Committee on State-Sponsored Bodies, their 13th Report produced on 16 December 1980, unfortunately painted a most depressing picture. Here I might quote from page 59 of that report, paragraph 102:
The continuing decline in the Company's situation is of serious concern to the Committee. It is clear that under its present structure the Company's activities are totally uneconomic and it is incapable of meeting its loan commitments. Expected cash losses, loan repayments and working capital requirements cannot be met without further injections of cash either by way of permanent capital or increased borrowings. The Committee is of the opinion that further borrowings should not be resorted to since they serve only to aggravate the situation further through increased interest charges and foreign exchange risk which the Company does not have the capacity to service.
Paragraph 103 of the same report reads:
The Company maintains that continued support by the Government can be justified on purely economic grounds and has submitted to the Committee its strategy for survival, the successful implementation of which, the Company argues, would enable NET to break even in 1984-85...
And the elements of that are listed. The House can judge for itself whether those elements have been implemented. They include the shut-down of uneconomic activities, a programme of productivity improvement, an increase in sales prices, where possible, an injection of £80 million equity by the Government and so on. We had that tortured debate all during that period.
In the debate in 1981, similar in nature to this one, when it was proposed that the guarantees available from the Government would be increased the House was told by various speakers including Deputy Des O'Malley, then Minister, who introduced the Bill — and here I quote from column 2631 of the Official Report of 12 May 1981:
NET's accumulated losses at the end of 1979 amounted to £24 million and the loss for 1980 is expected to be £56 million. The total amount of NET's medium and short-term borrowings at the end of 1980 was over £200 million, with associated annual financing charges of £30 million.
Later in the same column, Deputy O'Malley had this to say:
The Government have concluded that the immediate financial difficulties facing NET must be tackled now and the specific purpose of the present Bill is to enable the £80 million bridging loan to be repaid by 29 May 1981 and to provide formal guarantees for the existing unguaranteed medium-term loans of £50 million. Failure to tackle these problems at this juncture would, in my opinion, inevitably precipitate the immediate closure of the company.
Therefore, under threat of possible closure of the company, the House agreed. Later the then Minister indicated the kind of restructuring then required. We can judge for ourselves whether or not that happened. On that occasion Deputy O'Toole said — and I quote from column 2634 of the Official Report of 12 May 1981:
This company have had problems from the very beginning and one cannot but look back at the question of their building, their construction, the contracts handed out at the time, the information on which the board at that time worked which was given to them by their advisers.....
Deputy O'Toole was talking then about the disastrous and incredible Marino Point project for which unquestionably heads, if not any other part of the anatomy, should have rolled.
But as is the way with public expenditure on gas, nobody pays the price except the suffering and silent taxpayer.
Deputy Barry Desmond said in the same debate as reported at column 2638:
It has been estimated that NET will lose about £31 million this year. We are in the fifth month and this figure has not been denied. Last year they lost £50 million. If NET had been paying the normal commercial rate for their feedstock last year..... the loss would have been £80 million,.....
And so on. I will not quote other Deputies who spoke then but a whole succession of Deputies told NET that we wanted to do right by them, we wanted to give them a chance and not to be begrudging; we wanted to encourage employment in the area. For example, Deputy Deasy said at column 2661, and I understand his plea:
Could the money we are being asked to agree to here today be spent better in the building of hospitals or in the provision of employment or by way of grant-aid for industry and for farmers? We must ask ourselves whether this money might be put to more productive use. We must also ask whether the gas might be used in a more productive manner.
Deputy Peter Barry said at the time as reported at column 2659:
What happened in the past so far as this plant is concerned is both regrettable and appalling. The report of the Joint Committee was alarming.