Deputy John Bruton was in possession. Members may have been disadvantaged by the speedy passage of the previous legislation, the Abattoirs Bill. Therefore, I am in the hands of Members of the House as to whether we should proceed to deal with Item No. 13 or whether in the circumstances we should suspend the sitting for a few minutes to alert Members who have an interest in this Bill.
Electricity (Supply) (Amendment) Bill, 1987: Second Stage (Resumed).
Question again proposed: "That the Bill be now read a Second Time."
I would ask you, a Cheann Comhairle, to consider adjourning the House for a few minutes as I am aware that Deputy Bruton is anxious to complete his contribution. I understand he thought that we might have taken somewhat longer to deal with the previous Bill.
How does the Minister of State feel about that?
As we are constrained for time we are anxious to complete this business but I would like to facilitate the House as much as possible as I realise Deputies may have anticipated a longer debate on the Abattoirs Bill. Perhaps therefore, we might adjourn for five minutes.
How many minutes shall we adjourn for?
I do not think that when Deputy Bruton adjourned the debate last night he was aware that he was going to start this morning. It is a matter between the Whips and Deputies. What do you intend doing, a Cheann Comhairle?
If the Deputy is indicating that that is the position and that he wishes to intervene I think we should proceed with the business on that basis. Is Deputy Carey indicating his interest in speaking?
I am. I welcome this Bill in so far as it proposes changes in the legislation in regard to the ESB. The changes will have effect at both local and national level. Previous speakers have indicated that the technical changes will result in this national body being more accountable for their actions and in a more defined system in regard to the payment of rates. Previous Governments encountered various difficulties with the board of management of the ESB, especially when the premier body in the ESB decided they would not honour these demands. In any case the most contentious aspect of this Bill is in relation to the proposal to allow the ESB to expand the utility at Moneypoint. Other speakers have referred to the extensive berthing facilities which have been developed at Moneypoint with the use of enormous sums of taxpayers' money. I believe the Minister for Energy is correct in giving the ESB latitude to make greater commercial use of this wharf.
Indeed, as far as my constituency is concerned and as far as the Shannon Estuary, which covers the counties of Kerry, Limerick and Clare, is concerned any major development proposed by the ESB, even the trans-shipment of coal, is to be welcomed because the natural advantages of the Shannon Estuary will be utilised. I believe what is being proposed by the ESB will lead to the eventual expansion of the Shannon Estuary. I welcome this move. I have been surprised by the contention of other speakers, that entry of the ESB into this commercial area will put limitations on the competitors in the economy. If the ESB are in a position to import coal more cheaply for wholesale use, surely it is to be welcomed?
Many of the speakers dealt with pollution from the coal being imported. My understanding is that the criticism is not totally valid because the ESB in importing American coal have reduced their forward contracts in that area. In any case, pollution from the stacks at Moneypoint has been fully controlled in the planning permission granted by Clare County Council and monitoring stations have been put in place in various scenic areas, in the Burren and even in areas as far east as Wicklow.
If there was a greater industrial use of coal surely new industries would use new boiler systems and the quality of the coal and its use would be controlled in planning permissions granted by local authorities in the areas in which new companies were being established. The positive effect of the coal industry has not been stressed enough in the House. Earlier on, Deputy Richard Bruton instanced the excessive charges on the consumer for domestic coal. Anything that would help to keep down the price of coal must surely be welcome. I agree with the Deputy that the new company should not have any particular relief from loan guarantees or because letters of comfort are made available from the parent body of the ESB. On Committee Stage I hope the Minister will copperfasten this idea. This matter affects my constituency but I would not like a system of unfair trade to be established.
I support the call of Deputy John Bruton for guidelines to be drawn up by the Restrictive Practices Commission to deal with the coal trade. As far as the ESB are concerned in the utilisation of the Moneypoint wharf, the arrival of new up-to-date modern trans-shipment systems would indeed help even the other ports in the Shannon Estuary. It would be possible for the ESB to set up a system whereby national coal demands could be trans-shipped from Moneypoint across the river to Foynes and then railed from Foynes throughout the country. This would help to make better use of CIE rolling stock in the freight area. It would also enhance the southern side of the river to have a rail spur from Limerick out as far as Foynes. That would be of great benefit to the port of Foynes. I see major room for expansion in that area. We have out of Limerick an assortment of rail spurs that could easily take this coal south to Cork, east to Dublin or north to Galway. The proposal is progressive and the ESB companies should be given a chance to utilise the pier and bring it fully into operation.
This proposal would also draw more attention from the marine people who have been slow to invest in the Shannon estuary. Those in Clare and in north Kerry have a particular interest in this development. If we look at other ports like Rotterdam or Le Havre we see that there has been heavy investment and while other speakers have pointed out that the value there has been recognised because of closeness to major population areas, the fact that huge ships can be docked in Shannon and trans-shipment areas utilised, would be an advance in modern techniques. As well as that, high hopes have already been expressed by the Minister for Energy of an oil find in the Porcupine Basin just west of the Shannon Estuary. If this find is developed quickly, the ESB have shown the way. An oil refinery on the north or south bank of the River Shannon can be easily put in place because of the infrastructure already in place.
The long-term problem which the ESB will face if this coal proposal becomes successful, is to see how it can be expanded into other areas. Berths like Moneypoint are rare in this country. When the members of the Committee of Public Accounts visited the Moneypoint project they were very impressed by the modern facilities there.
The other area in which I have a particular interest relates to fish development, particularly salmon and the growth and development of the salmon industry at Parteen Hatcheries and in other areas. I compliment the officers of the ESB for their work in this area and for the way in which they are assisting public and private development of the salmon industry. Salmon fishing, particularly rod salmon fishing has a national as well as an international attraction. While on other occasions I have complained in this House about the abuses of fishermen at sea vis-à-vis salmon, I must say that the ESB have properly conducted research in this area and I compliment them for that. There is a great opportunity now for the ESB to get involved in salmon breeding, an area which other countries have properly exploited. They could probably become involved in joint ventures and the expertise and knowledge they have about fish disease could be fully utilised by the State.
I was puzzled by claims made yesterday in this House about the possibility of totally privatising the ESB and the various methods of generating electricity. Some Deputies seemed to think it was possible to put oil fired generators in competition with coal fired generators or, in the case of other forms of power, by use of water or wind. That was simplistic. I believe it would not be possible to diversify or privatise the ESB and still keep them economical. They have systems of generation in place which would be of great use in an emergency. I am referring to turf and water. Over-utilisation of turf is to be deplored. However, in regard to water, Ardnacrusha generating station has proved most effective and it is still working well.
An aspect I regret is that the ESB did not take advantage of the extensive funds made available by the EC after the oil crisis when they wanted to promote alternative sources of energy to oil. It is difficult to understand why, for instance, more wind generating stations were not built on the west coast. After all, the west coast is more susceptible to high wind than the southern coast of the Mediterranean. The Bill contains proposals for the establishment of ten or 12 new generating stations. In some periodical I read an article about the use of sea wave power for the generation of electricity. We may have great resources in this area that we are not utilising.
I welcome this Bill in so far as it affects my constituency. I think the proposals will be well handled. The ESB have put together a package and have researched it fully. I understand the fears of their competitors, that they will be the subject of the easy subsidy. Therefore, I appeal to the Minister that on Committee Stage he should make provision to put this new company at arms' length so that there will be fair competition.
The Labour Party have no difficulty with this Bill on Second Stage. However, proposals will be put forward to make some amendments to sections 3 and 4 of the Bill. Section 3 (1) and (2) stand in isolation from each other. They affect the whole question of the distribution of coal, and previous speakers have adverted to the definition and meaning of the word "initially". Section 3 (2) provides:
Where, for the purposes of such distribution or sale within the State, transportation of any such substance or product from the Board's property at Moneypoint, in the County of Clare, is required, the substance or product shall initially be transported there from by ship to a port or harbour in the State.
However, section 3 (1) which precedes that stands in isolation from it; it appears to give general regulations and powers. Equally, in section 4 the combined effect of subsections (1) and (2) would appear to me in terms of draftsmanship to have some problems. On Committee Stage it would be well worthwhile to look for a reformulation of those two sections to answer the problems that have been referred to.
What I have to say in this regard is to some degree to undo some of the impression that has been made by some of the speakers here who were talking about privatising the ESB or the ESB being some kind of State-sponsored monster that is in danger of gobbling up or devouring private enterprise. I am putting forward ideas about sections 3 and 4 because we are in an atmosphere of high unemployment. There is traditional employment involved in relation to use of the docks and if the different harbours were to lose the revenues they are getting from current distribution mechanism arrangements we would be losing jobs we could not easily replace. We can take that up on Committee Stage.
Let me say something about the ESB in general. I ought to confess that many years ago — 26 to be exact — I was an employee of the ESB. Probably it was in both our interests that we parted our ways. I am sure it improved the generating capacity of the ESB and it did nothing too bad for my prospects either. Nevertheless, it gave me an opportunity of having some familiarity with the ESB's inner workings. I am like what those generals used to refer to each other as, I am a Grade VIII clerk, retired.
The ESB are a success story. They are one of those public bodies owned by the people, largely funded and facilitated by different legislative mechanisms that have come in, but let us be very clear about the 1927 Act which is being amended by the Electricity (Supply) (Amendment) Bill, 1987. The Act was passed on the last day of the Fourth Dáil, on 20 May 1927. The idea of having an ESB at all was introduced by Patrick McGilligan, Minister for Industry and Commerce, but there was comprehensive opposition to it all the way. For example, one of the leading people who objected to it was the leader of the farmers' party of the day who said:
People of this country are very conservative with regard to new ideas. They do not take to them as people in other countries.
I quote from the ICTU document published in September 1986 entitled Public Enterprise Everybody's Business page 17.
Who was the Deputy in question?
Deputy Michael Heffernan. I can supply many more quotations as well.
They sound like remarks Deputy Michael Higgins would make.
Not at all. I was never an antiquitarian. They live in your section there.
I have heard the Deputy condemn conservatism——
If the Deputy needs more, several other Deputies in the House, as we went through the debate, suggested that electricity would never catch on at all. But there were other opponents of the scheme going ahead. There was, for example, the number of people involved in supplying electricity privately. They said, and I quote from the same page of the same publication already referred to:
The Bill is a rich phantasmagoria of fatuities so impracticable that one hopes even the Free State Dáil will pause before casting its electricity supply industry into such a hopeless morass.
This was at the birth of a company that provides 12,500 employees with work today, that is, to take up the point made by Deputy Bruton last night, of benefit not only to the employees but of considerable benefit to the Irish banking system which is doing very well out of the undercapitalised State companies.
In 1986, for example, the ESB paid £125,629,000 in bank interest charges. Equally, Bord na Móna paid £17,460,000 in bank interest charges. There is another figure which I will keep quoting until it eventually makes its way into some newspaper. If one took the semi-State bodies last year and the health boards and the county councils and added them together, the Irish banking system made £541 million in interest from lending to local authorities, health boards and semi-State bodies sums of money, without risk, State guaranteed, and all having to be repaid in 12 months. That is the entrepreneurial risk-taking Irish banking sector, and I have to come in here week after week listening to people talking about creating an environment for the investor to stir in Ireland. Those people remind me of talking about an ailing cow that refuses to get up on its feet and everybody gives it little kicks with the taxpayers' money to see if it would stir itself to produce a dribble of milk.
Last year £1,254 million was paid to the private sector to produce jobs. The year before £996 million was paid, and where are the jobs? Deputy Bruton has gone off wherever he has gone to but the fact of the matter is that he will not tell one a figure like this.
We had a period of growth before the first two oil crises. In the period 1971 to 1983, out of 90,000 jobs created in Ireland, 83,000 jobs that lasted were created in the public sector. Imagine a situation where the Irish Government had made a different choice from what they had made consistently through the sixties and seventies, that if, instead of taking the taxpayers' money — and remember that four-fifths of the time it was from the PAYE workers — and spraying it with a pepper canister across the Irish private sector, they had provided proper capitalisation for the semi-State and State sector and reduced the borrowing requirement of those companies. They would have reduced the income of the banks and they would have created thousands more jobs. They chose not to do that and that is — and this is not sufficiently said in this House by those of us on the Left — the ideological, ignorant, backward, hopeless, conservative cause of economic decay and emigration in this country. It all comes from these benches over here and from some of those benches over there.
They want the banks to go on benefiting. They got £541 million in interest alone last year. One per cent of a reduction would have avoided the cuts in education; 2 per cent would have avoided all the cuts, whether in education, in health or in the other areas of investment where we have cut back. But if that had been suggested they would all have been up on their hind legs and Deputy Kelly who wanders in now and again to give us a view from the Stone Age would be up on his feet saying that such a suggestion would shake the confidence in the Irish banking sector. It did not shake the confidence in the Irish banking sector when the banks turned around and looked for the taxpayer to bail them out when they had invested in racehorses with three legs and football teams that could not play soccer and in other daft schemes. It is this outrageous, ignorant conceit that informs these benches here all the time.
The ESB, founded in the last days of the Fourth Dáil in 1927, is a public sector success with 12,500 employees, a good record, and I ask any Deputy who will come in here to speak in this debate to stand up and answer this: would we even have an electric light bulb in this country today if it had not been for the fact that we had State-led investment?
But the scandal is that ideological prejudice against the role of the State, consistently whipped up to a near fascist level in the thirties with all its attendant consequences, that refused a health service in the early fifties, that infected the public service itself, that scared the life out of most politicians in this country, this consistent, anti-State prejudice, was responsible for the fact that we left under capitalised our State and semi-State companies that could have provided the jobs for the people who might have remained in this country and made them such good clients for the Irish banking system. The reply always from the banks is that it is only the ordinary people who are putting their few pounds into the banks, and they are getting a few pennies back and that it is all wonderful. A natural law of usury is what it was, and little else.
It is so difficult to point the finger at the Irish banking system given the present arrangements in both Irish politics and the Irish media. After all they advertise so heavily in the Irish newspapers that it is difficult ever to have published by them a good thumping speech about how much they make out of the Irish citizen.
The ESB Shannon scheme was opposed from day one. There were other people who opposed it as well. The Irish Times of 6 April 1927 had a most interesting headline —“Confiscation and Robbery”. The editorial of that day spoke about socialism and claimed that the Bill was confiscatory. It made a comparison with Russia. It said that that great seedbed of entrepreneurial investment and decision-making, the Dublin Chamber of Commerce, got in on the act and that its President, Mr. J.C.M. Eason issued several statements. Alfie Byrne, knowing that the old anti-State thing was in fact gathering momentum decided to get in on the act as well and he, the shaking hands of Dublin himself, was against the ESB. After that the Electricity Suppliers Association sought a meeting with McGilligan. What does this tell us about the establishment of the ESB? The Electricity Suppliers Association, because they had a little monopoly going, supplying electricity, were so against the idea of State investment that would help modernise this country that they issued all of these statements.
But is it not from the same stable that we are getting the statements we have listened to over several weeks? Who now wants to privatise the ESB? Let us think of the logic. Efforts were made at the point of its inception to stop the thing coming into existence. The company employ 12,500 people and have assets of a couple of billon pounds. Deputy John Bruton has a problem about calculating and his conservative figures are about £1.5 billion. It is now proposed by some of the speakers I have listened to here that little bits of this company that were founded in an atmosphere of hostility, that were developed out of the public purse, should be handed back to the private sector if there is a possibility of profit.
It is very interesting that in 1927The Irish Times had a headline, “Confiscation or Robbery”, when it was referring to the State being able to compete with the private sector. What else is it but robbery from the public when people speak about privatising sections of the ESB and privatising the other State companies — giving the Irish private entrepreneurs dole of £1.2 billion a year and creating no jobs. Having taken the taxpayers' money and not created the jobs they now want their bit of the State sector as well. What arrogant cheek; what neck; what a justification of gutless, spineless robbery from the Irish public by people who are not able to create anything but just whinge at the birth of State and semi-State companies and attack them all through their existence. They send their grey shadowy figures on to their boards and put every obstacle in the way of their competing commercially.
That is what happened with the Sugar Company and that matter was raised in this House. A man making galvanised buckets objected to the sugar company being allowed to make agricultural machinery because it would disturb the private sector, the native Irish entrepreneur. When I read these things I sometimes wonder what kind of country I am living in. It certainly has a romantic quality, the romantic ideological excessive right, cowardly antipathy to the State that we are hearing about day in and day out. The State is attacking our lives. There are 12,500 working in the ESB who would not be working there if we were relying on the private hucksters who opposed the establishment of the ESB. That has to be said in order to redress some of this codswallop that we hear from people who talk about State monopoly, the dangers of the State and so on.
A number of very thoughtful points have been made by people who have contributed to this debate. Having justified State investment in the area of energy and in the area of production of electricity and so on, I do not justify uncritically many of the procedures of the ESB. For example, it is clear to me that over 20 years ago it had two effective lines of management — one based on accountancy principles and the other based on engineering — and that it needed a radical internal reorganisation if it was to be an effectively managed company. That is a personal view. Having defended the ESB and spoken about their right to expand and to move into other areas, I think improvements can be made. The ESB suffered an external burden — at times they appeared to carry the burden of a social purpose for their activities. For example, Deputies who did not know what they were talking about referred last night to the reason for the turf burning stations. They were initially established for mainly social purposes, to bring employment to areas where there was very little other prospect of employment. It is clear that the large scale use of turf burning is impractical not only in an economic sense but also in its ecological consequences.
There may be, as Deputy Carey has said, a case for retaining this capacity in a secondary role. Most importantly if you want to speak about the impact of an economic decision you have to look at how realistic it is and ensure that you will be able to bring other jobs into existence in areas such as Rosmuck or areas in the hinterland of the Screeb turf burning station. What is the evidence of alternative employment there? Maybe the native entrepreneurs have got lost there. I know what native entrepreneurs are in that area but I will not upset the House by saying what I think they are involved in. The fact is that alternative job creation possibilities, not only in that station but in several others, are very slim and that is a consideration that has to be borne in mind.
There are many points in the Minister's speech with which I agree but I do not understand his failure to refer to the Electricity Supply Board's general possibilities in the area of electronics. I welcomed the Minister's reference to the ability of the ESB to sell consultancy services abroad. The ESB have an impressive record in that regard, beginning during a period when negotiations were going on between the ESB and the World Bank for a loan of £14.5 million to help finance the Turlough Hill project. At that stage the bank was impressed with the ESB's competence and technical expertise and invited them to take part in another project. They have carried out projects in Bahrain, Egypt, India, Iran, Lesotho, Sudan, Saudi Arabia, Nigeria, Malawi, Tanzania, Switzerland and so on.
A good question to ask in relation to our industrial policy is what would be the job creation effect of properly financing semi-State companies and allowing, for example, the ESB to go into the electronics area, given the ESB's record? The only alternative would be to consider a general indiscriminate industrial policy of grants for either foreign multinationals locating here or for native people who wish to get involved in electronics, and the relative job outturns from those two users of the taxpayers' money.
I have no hesitation in saying that the capitalisation of the semi-State sector would have a far greater, faster, more secure job creation outturn than the present insdustrial policy. Yet, why does that not happen? It does not happen — and I will repeat it — because of ideological prejudice of the Right against the proper capitalisation of the State. Just in case somebody might be able to make a penny in the private sector we must not fund State investment. It is time the State sector hit back. We should look at the facts as to where the State's money has been spent and what results it has got.
I wish to make some brief points in relation to the sensitivity of the ESB. From time to time there is danger in an organisation in which the technical expertise has insisted on the hegemonic control of management. They will make decisions without always taking political and social considerations into mind. Certainly the controversy into which the ESB have plunged themselves by taking a contract without looking at the social and political implications in the Philippines during the Marcos regime is an external example. Internally, there has very often been the failure to respond sufficiently to some genuine ecological suggestions that have been made, although I note with great pleasure, from some of their publications, the efforts that the board have been making in recent times in contributing to knowledge about the flora and fauna of Ireland and so on.
It would benefit the ESB and the other companies in the energy area if we had a clear articulation of Government policy on energy generally, domestic and industrial and that which projects the future availability of resources. It is very important not to make the same mistakes that the Thatcher government are now making — for example, squandering the North Sea oil resources that the people of Britain imagined were theirs but which are now to be used to give tax breaks to millionaires. That is the kind of progressive conservatism that prevails in Britain at present. I would not like to see us going down that road. I would like to see an energy policy in which the board could establish their future in relation to other energy companies and so on. An interesting paper has been published in this regard.
The last point I shall make about this is that in relation to environmental impact, the ESB at least could be accused of considerable insensitivity. There have been whole villages, towns and so on that have made extraordinary efforts to make themselves attractive. Yet, the greatest despoliation, let us say, of places like Roundstone — when one looks at photographs — are occasioned by these great cables traversing streets and so on.
I worked in the ESB in 1960-61. I grew to like a lot of the atmosphere and, to use a phrase of people on the Right, its ethos. The rural electrification scheme was coming to an end, being displayed in the more peripheral areas only. In different parts of those areas there would be switch-on celebrations when the electricity arrived but the great engineering challenge of the time was in bringing this energy source all over the country. After that time the new considerations that now prevail are that it is possible to do all of this in an engineering, competent way without, at the same time, having such an impact on the environment with ugly poles, cables and stations. Even in city areas in relation to the ESB's small installations, they make little effort to locate them properly or in a way that will ensure they are not a hazard to children, sometimes dangerous and certainly unattractive. Very often they are placed in new housing estates on traditional rights-of-way blocking passage and so on. Equally, and I shall finish with this point, the ESB must develop that linkage with other companies, with the other social and economic impacts of some of their activities.
I know the point has been raised very often, I think by Deputy Richard Bruton, of whether the ESB are adequately accepting responsibility in relation to safety. My memory tells me that it was Deputy Richard Bruton who asked the Minister for the Environment whether he was satisfied with the present arrangements for safety in relation to the installation of electricity in houses. With respect to the Minister of State present, I must say that his colleague, the Minister for the Environment, fudged the issue.
The fact is that the ESB insist on a certificate being signed by somebody but they will not require that that person be qualified. They will not require a register, as has been suggested by the association. When this was discussed in the House the Minister's response was something on the lines that the industry itself should establish a voluntary register. However, that leaves the issue of public safety in houses entirely in a limbo. It seems to me there is a great case, in terms of the avoidance of fire risk, of loss of life and so on, for using the opportunity of changing the basic Act in order to insert some section which would allow for the proper establishment of procedures and qualifications in everybody's interests. There is a very different atmosphere prevailing now. When one thinks of the people who owned the electricity generating capacities in 1927 they were saying one thing whereas the people involved in the electrical trade who were seeking the establishment of a register and safe procedures were interested in safety. Obviously this would have a job creation effect but in the very correct area of ensuring safety.
In principle the Labour Party will not be opposing this Bill on Second Stage but we are worried principally about sections 2 and 3 and the impact of the rather loose language of those sections in terms of the danger it could represent to some employment, particularly traditional employment not easily replaced.
I noticed that Deputy Carey was having an each-way bet in some ways. On the one hand he wanted to protect some jobs in the existing coal industry in County Clare but he was recommending the establishment of spurs with road and rail transport arteries everywhere from County Clare. That would solve the problems of County Clare but there is a bigger problem. For example, there is a problem on the east coast in a number of ports and their is a problem in some of the ports in Limerick and Galway. We must approach the overall problem. I believe we can do so if we decide to address ourselves on Committee Stage to the problems posed by sections 2 and 3.
Listening to this debate over the past 24 hours it has struck me that the potential interpretation of what the provisions of this Bill purport to do is very wide-ranging. I begin to question whether there are few meanings in what we are supposed to be examining and discussing. Last evening Deputy John Bruton raised the point that this Bill allowed the ESB to be almost the National Development Corporation, mark II, in terms of some of its provisions, particularly those contained in section 2.
When discussing a major semi-State body such as the ESB it is only right that many questions be raised but it appears to me that there are more questions raised than answers given. My initial examination of the provisions of the Bill led to a rather narrow interpretation. I will quote from what the Minister had to say in his introductory remarks as follows:
The main purpose of the Bill is to statutorily empower the ESB to promote, form, take part in, or acquire companies and to engage in the wholesale coal trade from Moneypoint and to regularise matters in relation to rates.
Initially it was my view that the provisions of the Bill dealt specifically with that matter.
It is wrong that the ESB should attempt to monopolise the whole of our coal industry market because its effects will be far-reaching in many areas, particularly that of employment. Surely the Minister realises that one of the greatest areas of potential remaining in bulk cargo transportation worldwide today is to be found in the coal industry. Equally, he must realise that many of our ports' main sources of activity in the bulk cargo field arise through the shipment of coal. If, as the provisions of this Bill purport to do, all of the coal imported here is to come through one dock area — Moneypoint — that will spell the death knell for the remainder of our ports. I do not accept for one moment that, once coal has arrived at Moneypoint, it will be trans-shipped around the country to other ports. That will not happen. It is more likely that coal suppliers will transport it by truck to various parts of the country when, ultimately, the whole system will begin to collapse.
If what the Minister is endeavouring to do is to establish some kind of spot market at Moneypoint to compete with the port of, say, Rotterdam, certainly he will be unable to do so on the back of the coal industry only. However, if he is serious in that attempt, why not pursue the full range of possibilities at Moneypoint? Why concentrate on the coal industry only if there is to be a serious element of competition? I am sure the Minister is well aware that there is no conceivable way Moneypoint could compete with any of the major ports — Rotterdam being the one that springs to mind immediately — in relation to one product, coal. I cannot understand why he should stop short at the whole range of options open to him.
I know what are and have been the problems encountered in the port of Waterford in my constituency over the past seven years where there has been an appalling, soul-destroying dispute. That port is now close to getting back to work in the near future, the latest agreement having been reached with the unions, dockers and all involved. The shipment of coal to that port would be a tremendous boost for the whole area because Waterford was and can be a major port. It is my opinion that the one product that would help to re-establish the viability of that port is coal. How then can we, in the circumstances of the provisions of this Bill, give a total monopoly to the ESB in terms of being the sole supplier of coal in this country? I am opposed to monopolies whether in the private sector or in the public sector. If the ESB are the sole suppliers of energy and a strike is called, as has often happened in regard to the supply of electricity, will the supply of energy to the domestic market, which is mainly in the coal business, although the oil end of the business will probably be the next area the ESB will move into, be affected? I am opposed to the monopolisation of the coal market and to Moneypoint developing in that area. Such development would put us at the mercy of the company in terms of energy generally.
Unlike what Deputy Higgins may interpret, I have no hang-ups about public sector companies getting involved in private sector enterprises if they see fit. In fact I would encourage that. If moneys and companies are available to them I do not think there is any reason they should not do this on a rolling basis but what I am opposed to is, that having done that and having made a success of it, the assets and the whole business have to remain forever in public sector hands instead of the State adopting an attitude of investing on a rolling basis in certain industries and realising a substantial sum of money from the sale of them. They could reinvest in other projects. They could be thinking in those terms in the case of a company the size of the ESB. If they are serious with regard to Moneypoint they should look at the question of shipping as it is today on a worldwide basis. With the advent particularly of 1992 and the Single European Market there may be some serious possibilities for a port which has the deepsea capacity that Moneypoint has. If that is what they want to do I would encourage them to do so. They should look at that whole question and not simply confine themselves to what I believe is a simple way of getting total control of the coal market to the detriment of everybody else and so that they can charge what they like on the domestic and industrial markets. That is wrong but they could look at the other question.
The ESB, as has been said here, are involved in the consultancy business both in this country and on a worldwide basis. That is to be welcomed. If they are the experts in the development of businesses specifically related to the electricity business, which is their core business, the business in which they have the expertise, there is absolutely nothing wrong with their making money out of that end of the business on a worldwide basis. What I do not understand, and this was mentioned by the Minister in his speech, is that in 1986 the consultancy activities brought in some £7.5 million and that this was barely better than a break-even on this kind of return. I should like to ask the Minister why they are only barely able to break even on that kind of activity? I suspect, and I may be wrong in this, that there is cross-subsidisation from the core business of the ESB in what they are charging for electricity in that they are subsidising that other end of the business. I should like to hear an answer to that question because if that is the case, there is something fundamentally wrong. It is not that they are wrong to be in the consultancy business but I question on what basis they are in it and what the return to the company is in that regard.
There are huge opportunities for a company like the ESB to be involved in the consultancy business on an international basis but I believe their future lies in consultancy in their core business. I do not see why they should be expanding into other areas which are not directly concerned with their own business. The Minister in his speech mentioned, with regard to the Customs House Docks development, that the ESB were involved in project management as well as in management servicing contracts. I am not sure what the Minister meant by that. Am I to take it that the ESB are involved in the funding or overall construction of that development in some way other than directly related to the technical electrical end of what is needed to set that venture in motion? I wonder what specifically is going on there.
If one looks at all the international and multinational businesses around the world, one finds that all of them are shedding businesses that are not related to their core business. They have found that it is wrong and unmanageable and that not alone are the businesses which are not directly inter-related suffering but that their core businesses are suffering as a result of those activities. That situation should be looked at extremely carefully by the ESB when other companies such as Waterford Crystal are cutting back and cutting away from businesses which are not directly related to what they call their "table top" business. Why should the ESB all of a sudden start to diversify all over the place? The Bill potentially gives them the opportunity to do that. The Bill is very wide ranging. I should not like it to be as wide ranging as it is without some specific guidelines as to where the company should be going and what the management strategy should be in this area. I should like to restate that I would give them every encouragement in relation to their core business and to investment.
I should like to refer to the provision in the Bill whereby the ESB can lend money for the setting up of companies. The big question to be asked — and this was pointed out here yesterday — is at what sort of interest rates these companies will be able to borrow money from the ESB, money which by the way is State guaranteed. If I had an idea for a company and the ESB were interested in it, I would be delighted to go to them and, hopefully, at the end of the day get a better rate of interest than I could from any of the commercial bodies. Deputy John Bruton asked where the profits will go but I should like to know what would happen if a number of these companies started to lose money. I do not believe that the guy in the private sector should get that kind of assistance from the State, with a State guarantee, to try ventures which may be totally unrelated to the ESB's business. An essential question which has been generated by this Bill is what direction, definitions and management strategies are being evolved for the future development of the ESB, or for the private sector companies or other companies they may set up. I want to know from the Minister if there is a five-year or ten-year strategy plan in mind and, if not, will this proceed on an ad hoc basis? If it does, the consequences do not have to be spelt out by me, but serious mistakes will be made. I am not questioning the ESB just because they are a public sector company. I would say the same thing about any private company if that is the way they operated. Many of them are littered with examples of mistakes that were made in that area.
A question which must be dealt with is the high cost of industrial electricity here. The Minister referred to this briefly in his speech when he said:
The high cost of industrial electricity prices here has often been cited as a reason for the uncompetitiveness of Irish industry. Deputies will be aware of the most recent 5 per cent reduction in electricity prices announced in the budget speech of 27 January. While there was in the budget an imposition of a 5 per cent VAT rate on electricity the reduction which I have mentioned means that there will not be any change in the price paid by domestic customers, but it will result in a real reduction of 5 per cent for industrial and most commercial customers who can reclaim their VAT payments.
This reduction has brought Irish industrial prices much more into line with the European average and will greatly assist industry in its cost containment efforts.
I want to question if this is the main reference in this Bill to what is the ESB's core business. Any Minister with any responsibility for the industrial sector, commerce or agriculture will know that one of the crippling factors that continually raises its head is the price of electricity here today. Over the past number of years that has had a ferocious impact on the end cost of goods out of this country. Should the ESB not deal with that aspect rather than expand in all sorts of other directions which will not have the real effect of lowering the cost of electricity and could well have the effect of electricity prices subsidising some of these ventures?
What are we talking about here? The Minister seems to think that even to get near the EC average is some kind of achievement. We are an island off Europe and our costs are always going to be far higher than average. It is in our interests that not alone do ESB electricity and energy prices in general come down to EC average, but that they go much below it. This is to give us a competitive edge on the European, and indeed world markets. That is what we should be discussing with the ESB. That is what the core business of the ESB is. That is the one area above all others in which they must be on a secure footing and going in a positive direction. I have not seen evidence in real terms that that will continue over the next five years, but if it were to happen it would be possible then for the ESB in their present format to look at alternative areas.
References have been made here this morning and last night to privatising aspects of the ESB business, to selling generating stations to the private sector and having a feedback into the grid which would be controlled by the ESB. I question that simplistic view. I cannot see, with the overcapacity available in generating stations and with control of the grid left in the hands of the ESB, how the private sector would be interested in buying any of these items because they would be totally at the mercy of the ESB. Because of overcapacity in the generating stations, the price would, of course be kept down. They would all have to compete and the ESB literally, would have a fierce grab on any company within the private sector.
There has been privatisation of electricity in other countries, not just with reference to generating stations. They have gone into the whole question of how the electricity is going to be supplied into the grid. It would be far more realistic to look at the whole area rather than piecemeal, involving aspects of the business. There may be potential in this area and there may not. I want to see a company that will continue to be run well and give the cheapest possible electricity and if that can be achieved in the public sector, I have no aversion to its remaining in the public sector. If that cannot be done in the public sector but it can be shown that it could be done in other ways, that must be considered. The expertise within the company may well be able to achieve that. The parameters must be set down.
Another area the ESB have constantly been in is the supply of appliances in their own shops. We know only too well that in this whole area there have been losses consistently over a long number of years. I do not understand why the ESB still feel the need to maintain their interest in this area. The only conceivable answer that could be given is that they see this as their only direct marketing forum to the public and are prepared to run this end of the business at a loss simply to keep the public in tune with using electricity as opposed to gas and so forth. There may be some certain logic in that approach. However, the ESB should not be involved in this end of the business because it has become an extremely competitive business and there are out in the market-place businesses quite capable of supplying the demand. On balance, the aspect of the direct marketing forum would not have weight.
The ESB should cut their losses in the area of the sale of appliances. This happens continually in the private sector. Why can it not be done in the public sector? This is where I fundamentally disagree with Deputy M. Higgins. He, together with very many people, seems to think that you can never shed yourself of anything in the public sector, even if it is a huge loss-maker in an area where other approaches would be preferable. I do not subscribe to that view; I have an open mind. If the public sector can make a profit, good luck to it and it should be encouraged to do so. If the sector is losing money in a specific area well covered by other businesses, why should it be in that business at all?
As we head into the last year of the eighties and into the nineties there is a great opportunity for building a strong public sector, but it must be done in the light of the scarce Government resources available to it. We are not advocating a ranting, ideology of privatisation of everything for the sake of privatisation. There is room for balance. There must come forth from the public sector a much more realistic approach and there must not be this ideological fear of things being radically changed in businesses such as CIE and B & I. Things can be improved and it is time we started to look at that aspect. Interestingly, this Bill is saying the same thing. We can potentially interpret it along those lines, of giving the ESB the opportunity seriously to go into private enterprise. I am not opposed to that, but I want to know how and by whom it will be funded and guaranteed, although the State seem to be guaranteeing it. I want to know the type of businesses the ESB are going into. Those questions must be answered.
The ESB can produce many by-products. If there is a market demand for any by-product they should be able to form a company and sell such by-products and they should be encouraged to do that.
This is true of any by-product and agriculture is an obvious example of not getting the best out of the products of that industry. We are shipping out too many items on the hoof and not getting the added value.
What I dislike about the Bill is that it is very unclear as to what we are going to allow the ESB to do. The one thing that is absolutely clear is that we are proposing to give the ESB a monopoly for the importation of coal. I am totally opposed to that. I do not want to see that happen in any circumstances because of the detrimental effects it would have on many other ports around the country and because there would also be huge job losses.
The Progressive Democrats are opposed to the Bill because the Minister's intentions are not clear. I should like a different kind of debate which would include an overall discussion and in-depth analysis of where the ESB should go from here. Those questions have not been answered, there is a very unclear direction, but that will keep for another day. We are opposed to coal importation at Moneypoint, and indeed to the Bill.
I will be very brief and will confine my remarks to one point, while noting the caveats and reservations which have been expressed here by my colleagues.
Two of the provisions in the Bill should contribute substantially to the profitability of the ESB, namely, enabling the ESB to promote, form, to take part in or to acquire companies and to sell and to distribute by sea any product or substance, including coal. I strongly feel that any such profits accruing to the ESB as a result of the passage of this legislation should be invested immediately in applying the best available technology to the emission stacks at Moneypoint. To date, for various reasons, the ESB — and indeed successive Governments — have claimed that the financial resources were not there to apply the best available technology in terms of the most up-to-date scrubbers needed in the emission stacks at Moneypoint. They have cried that they have provided the best practical means under given circumstances. This point and the fact that Moneypoint has the potential, notwithstanding the ongoing monitoring by different bodies, to cause serious environmental pollution has meant that we have been unable over the years to ratify the relevant EC directive on the control of such emissions.
I plead with the Minister to give an assurance to this House, in replying to Second Stage, that any profits which will accrue to the ESB, particularly in regard to Moneypoint, will be reinvested directly in bringing us up to date with the requirements of the necessary technology in relation to the emission stacks at Moneypoint. I recognise the important contribution that Moneypoint makes to the economic, industrial, commercial and domestic life of the country in the provision of much needed energy but this whole aspect of allowing the ESB to provide less than satisfactory emission procedures for Moneypoint should now be rectified. Perhaps this Bill, through the profits that should accrue to the ESB as a result of its passage, will rectify that difficulty.
I await, with interest, the Minister's response and his guarantees that in return for support of this Bill he will direct the ESB to invest any such profits in resolving the potential environmental difficulties that may occur as a result of the operations at Moneypoint.
I should like to confine my remarks to two aspects of the Bill, the provision to allow the ESB to set up a company for the development of commercial fisheries and the provision for the distribution and sale of coal and other products from Moneypoint.
The company concerned with the development of commercial fisheries will be known as Solmara which is now a going concern having taken over existing ESB commercial fisheries. Its functions will include the development of ESB hatcheries for the production of salmon smolts for ESB farms and for sale to private farms. They will also set up new fish farms along the western seaboard as joint ventures with local, private and co-operative interests. They will also be involved in various other aspects of ESB commercial fisheries programmes such as salmon processing for export, eel fishing and various other fish marketing projects.
I welcome this provision as the ESB have a very fine record in restocking rivers and lakes. I am sure their expertise will be a major boost to the fishing industry. We can learn from successful efforts and developments along the western coastal regions of Scotland and get examples of how successful they have been in promoting mariculture and fish farming in different forms. The west could benefit enormously through an extra input from the ESB and I welcome the assignment of a role to them in the future. I have total confidence in their expertise to further boost our fishing industry.
The main provision in the Bill is the extension of the role of Moneypoint to the wholesale coal business. I welcome any activity that will generate further interest in the Shannon region. I am sure that if there is increased shipping activity into Moneypoint it will give rise to further interest in the natural assets of the region as a whole. It could also lead to further industries coming into the area.
The Shannon Estuary has been forgotten by successive Governments and indeed by the IDA. I should like to briefly refer to the proposal to sell 500 acres of prime industrial location land on the Ballylongford side of the estuary. This means abandoning the area. However, the provision to allow Moneypoint to import coal for wholesale purposes must be welcomed because it could bring further interests to the area.
The Shannon Estuary is a natural and a national asset and it has the capacity to allow ships of up to 400,000 tonnes to come in if a small dredging operation was carried out. A study commissioned by the Limerick Harbour Commissioners a few years ago pointed out that if £4 million was spent in dredging the mouth of the estuary, ships of up to 400,000 tonnes could pass through it. The Livence report made those recommendations.
Moneypoint has the facilities to cater for very big ships but at present it is not being utilised to the full. This Bill will rectify that. The wording of subsection (2) of section 3 has given rise to some concern. It has been discussed here previously by another speaker so I will not dwell on it for too long. The word "initially" seems to imply that the ESB will import coal initially for trans-shipment but they could decide to use the roads to take coal and extend into the retail business. The word "initially" was probably unfortunate but the people in Foynes Harbour Commission and in Fenit are very worried about what it really means.
The word "ship" has also given rise to some confusion and I think that should be redefined as "cargo ship". I would ask the Minister — and perhaps it has been suggested already — to amend subsection (2) of section 3 as follows: "Where for the purposes of such distribution or sale within the State, the transportation of any such substance or product from the board's property at Moneypoint, in the county of Clare, is required, the substance or product shall"— and instead of "initially"—"at all times be transported therefrom by a cargo ship"— instead of the word "ship"—"to an existing port or harbour in the State". That would do much to allay the fears of the people in Foynes and Fenit. They are concerned that this Bill would have the effect of taking business away from their own ports. The only business which Fenit have coming through their port is coal and oil. There are only two operators involved and they are concerned that their business will be wiped out entirely, especially in relation to coal. If they were confident that coal would only be trans-shipped from Moneypoint in the future, then I am sure it could be trans-shipped very easily from Moneypoint to Fenit and it would probably benefit them in the future because coal would probably be brought in cheaper.
In relation to Moneypoint, the jetty there is one of the finest in Europe. The jetty is the only Irish facility capable of handling Panamax vessels of 60,000-80,000 tonnes and Cape size vessels of 110,000-160,000 tonnes and it has all the modern unloading facilities of any port in Europe. It is ranked among the three top ports in Europe.
The coal unloading facility at the jetty is capable of handling volumes in excess of the present requirements of the power station. Its under-utilisation at present is not desirable in view of the £40 million which was spent on the jetty originally. Further utilisation of the port in the nation's interest must be welcomed. The three sets at Moneypoint are now in full production and they have the capacity for the use of some two million tonnes of coal per annum. This factor gives the ESB a considerable coal market presence and purchasing muscle. Now they can go out on the world market and bargain and they will be recognised as a very big customer and thereby will be in a better bargaining position to get cheaper coal. They should lead to benefits for the consumer and eventually for industry.
I disagree with the view expressed by Deputy Doyle that any extra profit created should go to installing scrubbers in Moneypoint. I think that the profits created should benefit the consumer and industry and should ensure that energy is produced at a cheaper rate. That is the purpose of the Bill.
In relation to installing scrubbers at Moneypoint, I was in the Seanad when the Air Pollution Bill was going through and I said that scrubbers should be installed. The pollution effect of Moneypoint should be continuously monitored and if it was shown that it was a big polluter, then consideration should be given to the installation of scrubbers. Not only should the taxpayers in this country be involved but provision should be made for some form of EC grant towards the installation of scrubbers if they have ever to be installed in the future. The main advantage from this would be cheaper fuel for the consumer and cheaper energy costs which at present are crippling industry in Ireland.
I would like to point out that the quality of coal used in Moneypoint is inferior and it is a low grade coal. For consumer purposes I suggest that the ESB would consider importing anthracite which is a clean fuel and which burns very well in enclosed boilers. Because of the low grade fuel used it is expected that it will be a polluter. Moneypoint has not been commissioned for long enough to assess the full pollution effects but the coal used there at present could add to the problem in the future. I suggest that we look at the quality of coal being used at Moneypoint. At present the ESB and Moneypoint import most of their coal from Colombia, the USA and Australia but it is recognised that Polish coal is the best for domestic use. The market is tied up by existing operators and the ESB will have to break into that market to get a better quality coal.
The Moneypoint location has potential for use as a trans-shipment centre for coal supply to European consumers. That has been mentioned in the explanatory memorandum to the Bill. Moneypoint could be used to transfer coal, or other bulk commodities, from large bulk carriers to smaller vessels for trans-shipment not only to Irish destinations but also to European destinations. The Shannon estuary was considered on a number of occasions for trans-shipment and this is an opportunity for the estuary to get into this field.
If coal can be trans-shipped from Moneypoint, and from the Shannon estuary, I cannot see why other products will not follow. It is important that Moneypoint should import a better quality coal. Fears have been expressed by people of neighbouring ports that a monopoly will be created which will affect their business. If the ESB monopolise the importation of coal into Ireland, in the event of industrial action would both the consumer and industry suffer as a result? Perhaps the Minister would refer to that.
I am in favour of this Bill and it is welcome. Any extra utilisation of Moneypoint must be welcomed. The interest which will be created in the Shannon estuary should lead to the development of further industries in the area. I welcome also the further extension of the ESB brief regarding fishing. It is very important that we carry out an immediate restocking policy in the major fishing rivers in Ireland. I know there is a concerted move to curb pollution from farms and industry. This is not enough. The fishing season so far has been a disaster because the rivers have not been restocked to the required extent during the past few years. This is an area where the ESB could play a major role.
It is generally accepted by the IDA, the Irish Goods Council and various other bodies involved in the promotion and setting up of industry that companies which have a proven track record in established markets are in the ideal position to set up new companies or subsidiaries. These have a better chance of success than a small unknown entity starting off from scratch. I welcome the proposal to give these extended powers to the ESB.
The ESB have been in an unenviable position in having a monopoly on the provision of electricity. A monopoly is always inclined to give a one-sided view or impression of the health of a particular company simply because the consumer has to carry the burden of responsibility by way of charges. We have considerably higher electricity charges here than in most other European countries. This puts our domestic consumer at something of a disadvantage but there is a great need to recognise the fact that high energy costs contribute very significantly to placing Irish manufacturers at a disadvantage. I am not blaming the ESB for this situation but it is worth pointing out that it has existed and will continue.
It should be noted in the context of this legislation that the new companies which may be set up could involve the ESB with one or more loss-making enterprises. In such cases the ESB might be compelled to pass on increased charges to their domestic and industrial consumers in order to preserve the health of the overall company. I hope that will not be the case and that as a result of this Bill the cutting edge of the ESB will be sharpened considerably and that they will broaden their horizons and their marketing techniques. They must realise that our customers at home are most important when it comes to the competitiveness of Irish industry. I do not refer solely to the electricity industry itself but to the downstream industries which are served by electricity.
Some reservations have been expressed by coal importers regarding the ESB's proposed importation and distribution of coal. I fully recognise that a difficulty could arise due to the fact that the ESB are a powerful and successful enterprise. They will have considerable clout within the market-place which might be to the disadvantage of those already in the business. The purpose of this Bill is not to give the ESB a further monopoly but to improve the efficiency of the distribution service to the domestic and industrial consumer. Such consumers form a very large portion of the base for our industrial exports. If it is found that other companies are being placed at a disadvantage, the Minister will have to take appropriate action.
I compliment the ESB on their work in relation to the preservation of the environment and the conservation and improvement of fish stocks. They have already become involved in improving fish stocks in the main rivers but their involvement does not extend to tributary rivers. Obviously there is considerable scope for restocking and improving these rivers. I will not be parochial but I can think of a number of such rivers in my own constituency where this would be of great benefit to the general recreational facilities of the community at large and to the tourism industry.
The closure of a number of ESB turf-burning generating stations has been mooted. Some are to close in the near future and others within the next ten years. Allenwood has been mentioned on a number of occasions and there have been various scares over the past few years about its possible closure. There is a moral responsibility on the ESB, in conjunction with the IDA and other job-promoting agencies, to involve themselves seriously in determining what replacement industries will follow after the closure of some of these turf-burning generating stations. In the case of Allenwood not only will the jobs in the station be lost to the community but also the downstream jobs with Bord na Móna and the private turf producers will be lost. This will have a seriously detrimental effect on the local economy. All these points have been made to various Ministers over the past ten years. It is not a problem which has appeared on the horizon within the past few weeks or months. Very little has been done to rectify the situation, despite the fact that we all know we will reach the juncture at which those stations will have to close.
Remarkably little has been done in laying the groundwork for an alternative industry. The ESB are uniquely qualified to lay that groundwork now so as to ensure that the people in that area will be provided for after the life of the turf-burning generating stations has expired. It is particularly relevant in the context of this Bill that they should do so. When considering the other areas into which they can diversify under the headings of this Bill, I would ask them to pay serious attention to the needs of the people in areas where generating stations are to close. They should be in a position to put in place the necessary arrangements for the setting up of an alternative industry. Under this Bill they will be uniquely qualified for that role.
I have to say that the Allenwood catchment area has had a very high employment level over the past number of years. The people of that community were unique in the sense that they were completely independent and self-sufficient. They never sought any help or assistance from the State and they are always willing and anxious to help themselves and look after their own interests. They were a self-sufficient community. For that reason I ask that particular note be taken of their situation and that we also recognise that other interests have closed down or have reduced dramatically their involvement in the area over the past five or six years. As a result there is now an urgent need for replacements and I implore the Minister to use his influence with the ESB to ensure that that alternative is brought forward with a clearly set out schedule so that people will know exactly what we are doing.
I compliment the ESB for the consultancy work they are doing in the Middle East and elsewhere. Obviously that is to the benefit of the economy but we should not forget our own domestic and commercial users either, from whom the ESB generated the revenue which has made them a healthy company and from whom they draw their strength. I hope that has been taken account of.
I would like to refer briefly to the section in the Bill which removes any doubts concerning the amounts payable by the ESB in lieu of rates. Here I have to sound a word of warning. At budget time Ministers for Finance are inclined to look around at various areas where revenue can be raised and I would not like to see a Minister for Finance suddenly deciding because of the health of a particular company, in this case the ESB, that that company was capable of bearing an increased burden which would have the result of the rates burden getting greater and greater. Obviously somebody will have to pay for this and, again, this will be the consumer. Ultimately, those higher costs will be passed on to the consumer in one form or another.
While I accept rates are payable I would point out that there should not be a never-ending cycle of increases which could prove detrimental as far as the finances of the ESB are concerned. The local authorities in the areas concerned have a real need for some of these finances also. It should be recognised that ESB generating stations and other industrial outlets generate extra traffic and, as a result, extra pressure will be placed on the local roads network. Greater recognition should be given to that fact while keeping in mind the proposal to remove any doubts concerning the amounts payable by the ESB. While doubts may be removed, they may also be created in other areas and they may not be to the benefit of the economy.
Everybody recognises that the ESB have made a major contribution to the economy over a long number of years and recognition should be given to that fact. Equally, it should also be recognised that they are probably in one of the best positions to spearhead the formation of new companies either in distribution or manufacturing. They have established worldwide contacts and they should be able to utilise those contacts to their own best advantage but more particularly to the best advantage of this economy. If that is the way matters proceed, then this Bill will have proved to have been both constructive and useful.
I will be very brief and to the point because I am aware the House is anxious to conclude Second Stage of this Bill. Furthermore, I am aware that the implications of this Bill have been well aired in the House. One of the characteristic features of this debate has been the marked divergence of views expressed, particularly from this side of the House, in regard to the advisability or otherwise of proceeding with this measure. Some people are vehemently opposed to this measure and the greatly widened powers it proposes to give to the ESB. Others have been markedly supportive while there are others, like myself, who would give questioning support to this measure. The geographical location of some of the Deputies influenced the views they expressed in the House.
I am very supportive of the thesis that the ESB have done a magnificent job. As one of the enterprises in the semi-State sector it has been one of the proudest flag bearers of the semi-State concept. I concur with the tributes which have been paid to the ESB for the marvellous work they have done in supplying domestic and commercial electricity. It is only on very rare occasions in times of dispute when we find ourselves in zones A,B or C that we realise the full extent of our dependency on the ESB. Again, I want to fully identify with the words of praise for the ESB for diversifying into areas which up to now have not been catered for, such as development of the salmon industry, and for the entrepreneurial spirit they have shown in going abroad to sell their high tech expertise which has given this nation an elite status in the field of high tech industrial development in other countries. We are very proud of the ESB and I have no objection to the ESB going down the road of further diversification if it is in areas which are not already catered for.
The name of the company is not the Coal Distribution and Supply Board but rather the Electricity Supply Board. I share some of the concerns expressed by Deputy Enright in relation to the developmental role proposed for the ESB in this Bill in areas which are already well catered for in this country. We have an excellent private coal importing and distribution system which now has to be conscious of pollution control. We have kept tabs on and monitored the degree of scientific advance in this area and we welcome the moves which have been made by coal distributors to fulfil their social and economic obligations in regard to pollution control by using new technology in the control of emissions or in the removal of sulphur from the atmosphere. We know that given time and a enough scope eventually they will bring the pollution cloud that hangs over this city in particular under control and minimise the level of acid rain.
While it is another step in the area of diversification by the ESB there is no doubt that in terms of overall benefit to the economy it is difficult to see any real results. What we are talking about is in fact a transfer of jobs from one company to another or from one end of the country to another. I have not yet been treated to facts and figures showing that there will be any increase in job numbers in the coal industry as a result of this proposal. I share the general consensus, in view of the fact that the ESB are a semi-State organisation that they are in a privileged position when dealing with competition from the private sector. It is a bad day for the taxpayer if the money paid by them is to be used to give the ESB an unfair advantage in the coal industry. Seeing that the consensus in this House is in favour of widening the powers of the ESB, there should be some commitment to the House that the money would be used to reduce the level of electricity costs to the consumer and towards controlling the level of pollution from the Moneypoint plant.
The Minister of State was a member of the Joint Committee on the Secondary Legislation of the European Communities which three or four years visited the Moneypoint plant. We were unanimous in our recognition of the marvellous facility which we saw. We lauded the ESB in achieving such a high level of technical competence, but the whole genesis of this measure is that the Moneypoint plant is being under-utilised at present and that the docking and berthing facilities are way beyond the present level of utilisation. In order to take up the slack facilities in Moneypoint, the ESB have now decided to go into the importation and distribution of coal. The point has been validly made that when profits accrue from this, they should be used towards controlling the level of emissions from the Moneypoint plant. On our visit we were shown compelling statistics to indicate that at national level there would not be any fall-out in terms of acid rain and that the monitoring stations were keeping an eye on the situation. However, it is generally accepted that what goes up must come down. In the case of Moneypoint, because of the high altitude of the chimney stacks and the prevailing winds, we are exporting our soot and sulphur rain to other countries. It is widely accepted that when Moneypoint is at full capacity, the likely victim from our emissions will be Scandinavia. I fully agree with the point made by Deputy Doyle in this House that any profits from this development should be used to put in scrubbers into the chimney stacks in Moneypoint so that we comply with the directive from the EC which demands that any new development in this area must have the necessary pollution controls.
The oil crisis in the seventies brought us to our senses and made us realise that carbon fuels were not inexhaustible. I am not talking about nuclear energy, but despite the oil crisis I am always amazed that the ESB with all their expertise do not have a long hard look at developing alternative energy forms. I am talking about wave and wind power. Given the potential of wave and wind power, especially along the Atlantic coast, it should not be outside the scope of the ESB to pioneer work in this area.
I hope the Minister will be in a position to assure the House that the profits from this measure will be used for pollution control, particularly in Moneypoint. We in this country are very quick to adjust our haloes when it comes to Chernobyl or Sellafield. The fact that up to now this country has not had any fall-out from Moneypoint does not mean that when the other stack comes into operation or when the Scandinavians begin to monitor the increase in acid rain there, that there is no obligation on this country.
I give a cautious welcome to the Bill.
I thank the Deputies for their detailed and interesting contributions. As is often the case in this House, the contributions ranged over a very wide field, and contained fairly diverse views, and we had opposite considerations not only between parties but within parties. It will not be possible to deal with all of the points raised but I assure that the House that every consideration will be given to the matters raised between now and Committee Stage of this Bill.
As mentioned earlier, each State-sponsored body has been asked under the Programme for National Recovery for practical proposals to create jobs. Based on experience and success in recent times a threefold expansion of turnover in overseas consultancies by State agencies within five years has been targeted. Since the mid-seventies, the ESB have been very successful in securing consultancy contracts abroad and a low risk, low investment approach was adopted. Traditionally the ESB concentrated their efforts in the Middle East but markets have contracted there and competition is intense. For strategic business reasons and if they are to meet the targets set for themselves under the Programme for National Recovery the ESB must look elsewhere for work. They are now promoting their services not only in Africa and the Far East, but in Europe and the United States as well. I am told and I accept that the ability to form subsidiary companies and to enter joint ventures abroad by participation in companies formed for that purpose will be of significant benefit to the ESB. That is why they have been provided with these powers. Deputies will share my concern that the export of services, and goods to go with them where possible, can be a source of badly needed employment. We need to follow and develop every potential source of such employment and exports. Every company and every State enterprise should see this as a desirable role, The ESB have been valuable pioneers in the export of services and I want to give them added assistance. If the ESB are to be successful in breaking into new markets they must enjoy similar commercial freedom to private companies. This Bill gives them the necessary freedom while limiting the liability of the electricity consumer.
Sections 3 and 4 of the Bill have provoked comment and I will reiterate the reasons why the ESB are being allowed to enter the coal business at this time. No one has anything to fear from this proposal. Import cost reduction is the aim. At Moneypoint we have one of the finest ports in Europe and facilities costing tens of millions of pounds. We must exploit this facility to the full. Each year the ESB import approximately 2 million tons of coal. This coal is purchased on the world market at a very competitive price and it can be brought into Moneypoint in cargo lots five times or more larger than to anywhere else on our coasts. The vast bulk of this coal is in the form of slack but there is a large volume of singles or small lumps in this grade and use of this for the solid fuel market has clear economic benefit. Not only will this pass on to the consumer the benefits of the ESB's ability to import large consignments of coal at competitive prices, but it will also serve to reduce processing costs. I am aware coal imports represent a considerable amount of the business of other Irish ports and, in order that ESB involvement in coal trading will not affect these ports adversely, the Bill provides for the distribution of coal by sea only from Moneypoint. The intention is that any coal, whether it be moved by the ESB themselves or by a purchaser of coal, must be moved from Moneypoint by sea. In that way the concerns of other ports have been met in the Bill.
This development will augment and diversify our energy supply, assist the balance of payments and reduce consumer costs. Overall, in addition to the coal provision, I see the Bill sending a renewed message to companies and State bodies to explore any worthwhile development ideas. In this Bill the Government show a willingness to facilitate them.
I come now to deal with some of the points raised by Deputies in the debate. I have to remind them that we were told that the ESB were in a monopoly situation, they should be fully commercial, they should reduce energy costs and, at the same time, they should maintain uneconomic activity operations, they should be confined to their core business and should be precluded from becoming involved in extraneous business areas. Therefore, I have some difficulty in endeavouring to deal with the queries raised and in particular to find a consensus from which we can go forward. Clearly, there is majority support for the measures introduced in this Bill and I will do my best to remove the doubts held by other Deputies with regard to particular provisions.
Deputy Richard Bruton raised a question on fiscal and financial points. I say to him that the question of VAT and excise duty has been elaborated on in the budget debate. The Government have a clear policy on the reduction of electricity tariffs and, in all, a 19 per cent reduction has been achieved in the past two years. The consumer has benefited to that extent, and there will be a further 5 per cent reduction for industrial electricity.
The recommendations in the Jakobsen report, particularly on cost cutting and increased productivity, continue to be pressed forward and the Minister for Energy expects that further economies should be possible on these and other fronts. Against this scenario is a proposal for a 16 per cent increase for energy costs in a neighbouring country, so it is clear we are making substantial progress on this front. I recognise that the cost of energy in this country has been for long a major problem in relation to industrial expansion, but I think nobody can doubt that very significant progress has been made in dealing with that matter in recent times.
As to the potential for domestic coal price reduction — this is central to this debate — I can assure Deputy Bruton and Deputy O'Malley that the potential exists. House coal import prices to this country have been largely unaffected by changes in world coal prices. The Irish house coal import prices have not fallen in recent times despite a drop in dollar terms of between 30 and 35 per cent in the past two or three years. Therefore, it is clear that house coal imports have not shown a corresponding fall during the same period. It should be clear to Deputies that introducing further competition into this area should bring about a significant reduction and bring prices of imported coal into line with what is happening on the world scene. The scope indicated by Deputy Bruton is largely correct. There is up to 62 per cent at the moment between the cost of importation and cost to the consumer.
Deputy O'Malley need have no fears about the prices in ESB contracts. I am assured they are very effective and enough flexibility exists to cater for spot coal price reduction. However, Deputy O'Malley and others concentrated for a considerable time on this aspect of ESB operations. It is not one in which this House can become deeply involved. It is in the commercial range of activity for the ESB, but I want to deal with some of the accusations made and levelled against the ESB in the context of their contracts for the importation of coal.
The present ESB requirement in this area is about two million tonnes per annum. This is purchased in two ways. First, long-term contracts are entered into for guaranteed delivery of a basic quantity of coal. These contracts contain renegotiation clauses and are up for constant review depending on price fluctuations. Already the ESB have renegotiated these contracts, the last of which took place a few months ago. These contracts are effective and necessary and give a security of supply. Secondly, the ESB buy on the spot market which enables the board to source considerable parts of their requirements at absolutely rock bottom prices. Anyone who suggests it is possible to have a guaranteed supply of huge amounts of coal without combining these two systems of purchasing arrangements just is not facing reality.
Deputy O'Malley referred to his worries on the environment side. I am assured there is and will continue to be the greatest of vigilance in this area. In no way can or will we accept an unacceptable sulphur content. I assure the House and Deputy Spring that the ESB will continue to monitor this situation and pledge that they will give this matter their fullest consideration. However, on a more philosophic concept, I cannot agree that the opportunities for the ESB to become involved in the use of Moneypoint in the way that has been suggested in this Bill should be foregone. The jetty had to be built to take 150,000 to 300,000 tonnes of cargoes with maximum freight and contract prices that go with this, and the issue now is the further economic use of this facility with major benefits for the economy.
Deputy Spring and Deputy O'Malley raised the matter of electricity installation safety. I am aware of the work of the ETCI, a sub-branch of EOLAS, to provide for standards in this area. However, the ESB do not have a statutory duty to police wiring and installations but they do so on a voluntary basis to a very large extent. It is a matter for the electrical contractor to ensure that the highest standards prevail when these installations are made. However, if any evidence is available which would indicate that there should be ministerial intervention or further diagnosis of problems of this kind, the Minister for Energy will, no doubt, be prepared to study that matter.
Deputy Spring raised the question of cheaper tariffs for industries in the west. The ESB Acts prohibit discriminatory rating of the ESB to customers anywhere in the country and, since the ESB are statutorily debarred from doing this, obviously that type of proposal is unacceptable. In any event the IDA and the Shannon Free Airport Development Company, provide a more appropriate means of helping industries in the west.
Deputy McCartan asked whether Irish registered ships could be used and said that this should be an absolute requirement in the Bill. It would not be possible under EC requirements to make a provision like this, but since small coastal ships will be used, much of the traffic involved should be Irish or Irish crewed.
Deputy Fitzpatrick raised the question of city smog and pressed for smokeless fuel. The Minister for the Environment is fully conscious of this problem and the EC has prescribed norms by regulation. Minister Flynn is embarking on a pilot scheme in an area here in Dublin. Electricity and gas use and the use of smokeless fuels and low sulphur dioxide fuels such as peat are part of the solution. Obviously more efficient coal combustion is another. There is, however, no necessary contradiction between cheaper coal imports and smog reduction measures. It may be said that more coal would be used but no one would suggest that price should be used as a weapon. In London, for instance, there are compulsory smokeless zones and it is likely that we will have developments like that here.
Deputy Enright wondered about the impact of the provisions in this Bill on Bord na Móna operations. Bord na Móna have to contend with the importation of oil and natural gas as other energy products. Peat is a low-sulphur dioxide product and it will be up to Bord na Móna to try to promote the value of that product against other competing considerations. Obviously avoiding lower cost imports is not a justifiable method.
In the general area of pollution control and Deputies' fears in relation to problems of this kind I want to state that Ireland's total contribution to sulphur dioxide emissions is below 2 per cent of Europe's total; we are playing our full part in the EC environmental measures and this has been acknowledged both at home and abroad. I would also like to say that in regard to the types of coal imported, and to deal with some of the accusations levelled against the ESB in the context of poor-quality coal and coal that would probably cause greater environmental problems than would otherwise be the case, here again Deputies are straying away from the facts because the coal which is purchased by the ESB from Colombia, for instance, contains 0.7 per cent sulphur by weight; coal from Australia contains 0.8 per cent and coal from Poland contains 0.6 per cent which is considerably below the EC requirement in this regard. Clearly with an eye to the environmental and pollution requirements of the future and with the public awareness and the desirability of this development for the future, the ESB will continue——
What is the sulphur content for American coal?
I cannot give the Deputy that percentage now but I will give it to him after the debate.
Deputy Kavanagh inquired about the reference in the Minister's speech with regard to a 20 per cent reduction in the price of domestic coal. That is the Minister's estimate of the potential effect of the ESB's activity on domestic coal prices as sold to the householder arising from this potential development at Moneypoint.
A number of Deputies were worried about the use of the word "initially" in section 3(2). The reason for the use of this word in the first instance was to try to ensure that where haulage was necessary away from sea points there would be freedom to do that. However, having listened to the views put forward by Members and having had discussions with the parliamentary draftsman on these sections, I can tell the House that a redraft of this section will be made before Committee Stage and that we will ensure that all coal will always have to be trans-shipped from Moneypoint. The word "initially" will be dropped.
Deputy John Bruton said that the ESB's assets were over-valued. The gross asset value of the ESB is about £1.5 billion. These are just book values. The replacement value of the assets of the ESB is probably closer to £3 billion or £4 billion. However, I wonder about the point Deputy Bruton made in that context because he seemed to be suggesting that the ESB would dispose of some of their assets. For a generally commercially-minded Deputy to, at the same time, suggest that the assets of the ESB are over-valued, is not a commercial way to approach that. It would be very rare for somebody who intends to dispose of something to say that it was over-valued.
I think what the Deputy said was that if the ESB wanted to dispose of assets they would not get the price that is in the books for them, which is a different point from the one the Minister is making.
One could make that argument in a lot of areas, and if one were to carry it to its logical conclusion——
One could certainly make it about the Pigeon House. Who would buy that?
——with the exception of the Deputy's own constituency and possibly Deputy O'Malley's, there are many areas around the length and breadth of this country that would have no electricity at all.
Pardon?
What I mean to say is that when one talks about asset value and the network the ESB have, there are many areas of low density of population where electricity has been provided at a fairly substantial cost to the company but where this is very necessary so far as the public at large are concerned.
Deputy John Bruton and other Deputies referred to the fact that the ESB are engaged in businesses which are nonprofitable and particular reference was made to the area of appliances. Here again I have a little news for Deputies in that the ESB will, for the first time, be showing a clear profit in this area this very year. So this would not be the time to decide to pull out of that line of business.
Why not? I do not follow that logic.
The ESB have improved their operations in that area, but I do not mind telling Deputies that a few years ago when it was proposed to disengage from this business there was opposition from the trade itself, which seems to put a slightly different complexion on that whole matter.
Does the fact that it is showing a profit for this year take into account the cross-subsidisation which takes place from the electricity account into the appliance trading account?
Perhaps not. I could not say for certain.
While I know the questions are very helpful and civilised, it is not normal to interrupt the Minister when he is concluding Second Stage.
I want to be as helpful as I can. The fact still remains that Deputies put on the record of this House that this is an area from which the ESB should disengage because they are losing money but the opposite is the case and we should at least acknowledge improvement where it is made. That does not belie the fact that mistakes were made in the past or that loose arrangements may have been made. If they have been tidied up and if the ESB are now profitable that is a new situation and we should acknowledge it.
Deputy Avril Doyle wants the Minister for Energy to give an assurance that the profits which will arise from new developments at Moneypoint will be used exclusively for new technology to prevent emissions from Moneypoint. Like all Deputies in this House, I share Deputy Doyle's concern for environmental matters generally but I do not think it would be right to commit profits which have yet to be made for a purpose which has not been proven. The Minister for Energy's predecessor gave an assurance that there will be independent monitoring of the emissions from Moneypoint. This is being done and will continue to be done in the future. The best advice available to us is that it is not a problem at present but obviously the emissions have to be constantly monitored. As I have said, to commit unearned profits, under this Bill, for the use of new technology where the requirement has not been proven would be unwise.
Deputy Avril Doyle also stated that this Government were prevented from signing a draft directive because of the problem of emissions from Moneypoint or because of other atmospheric pollution problems in the country. That is not true. There is a draft directive before the Council of Environment Ministers in the EC and several countries have objections to the provisions in that directive because they consider that they are too onerous. It is somewhat less than fair to choose the situation at Moneypoint to highlight the fact that this Government have not yet signed that directive. We, like many other countries, are afraid that the provisions in that directive are too onerous. Our contribution to pollution in a European context is absolutely minimal. We are not in the same league as the Germans and other countries. That is not to say that because we have a relatively free environment in this context we should be negligent. I want to put that in context. There is no way this Government are precluded from signing that directive because of Moneypoint or other problems. It is a wider issue altogether.
I want to conclude with a few general points in relation to Moneypoint because that seems to be the one area where Deputies had doubts as far as the provisions of this Bill are concerned. There was fairly widespread support for the ESB having the freedom and the flexibility to engage in consultancy services in any part of the world and for the removal of the difficulties the ESB have had up to now in gaining contracts. The main area for contention was in relation to opening up the possibility to the ESB for the importation of coal to Moneypoint for uses other than ESB generation.
Moneypoint belongs to the nation. It has a considerable unused capacity and if it can be used to import cheaper coal into this country — it is clear that it can — by all means let us facilitate this necessary development. It is clear from the experience gained by the ESB already that it will be possible to achieve this aim. The argument has been made in the debate that the ESB have entered into unfavourable contracts for coal importation. I think I have demonstrated on a general basis that this is not true. Even if we were to accept that contention, then the ESB's involvement in this new enterprise in Moneypoint is not a threat to anybody. If you are supporting the notion that other people involved——
What about the electricity consumer?
——in the coal importing business are being affected by this non-commercial organisation that has made all these mistakes, you should have no worries. I do not think you can argue that the ESB will have an unfair advantage over other coal importers if, at the same time, you are charging that organisation of having paid too much for the product in the first place.
To prove that point a little more, individual coal importers have beaten a path to the ESB seeking preferential treatment and looking for exclusive arrangements. Why are they doing that? Obviously, they see that the ESB will have a facility for importing coal at a lower price than is the case at present and they want preferential treatment. The ESB will give preferential treatment to no one. They will not be engaged in the retail business; they will merely be importing the coal at rock bottom prices and the people engaged in the retail and distribution ends of that business are free to buy from the ESB. The ESB will not be engaged in disposing of the coal directly.
The country is entitled to free trade in coal and not to have it cornered by one particular group. The ESB will not be getting into the distribution of coal and have no interest in retailing it. Deputies, in some cases, fail to realise that the aim here is to effectively reduce the cost of importing coal and to transfer this benefit to the consumer. The present system allows for an excessive write up in the coal market by the industry and it will certainly be no harm to bring a more competitive edge into the market. However, there is a wider aspect to sections 3 and 4 of this Bill. By comparison with the capacity of Moneypoint, the total Irish market for coal has small potential.
I regret that Deputies in the debate on this Bill confined themselves to the sort of narrow margins that would exist for Moneypoint development if it is confined to domestic trade. The aim is to try to open up this facility as a highly developed, international trans-shipment port. I am glad to tell the House that there has been fairly widespread international interest in this facility and one significant proposal put to the ESB for its use — a long way from this country with an eye to the European market.
I want to allay Deputies' fears in relation to this matter and to confirm that we are talking about a wider front than that presented on the domestic scene. We have an international developed port with facilities to be found in very few places around Europe. We are opening up the possibility of its usage, at the same time helping to reduce the cost of importation of coal, with a consequent beneficial effect for the consumer while being fair to existing importers, confining the operation to Moneypoint and the product being moved by sea from there.
It is my belief that Deputies' doubts in relation to the introduction of these measures are without foundation. I want to ask them to reconsider their position, to give the measures full support, aimed not only at improving our domestic position and reducing costs at home but also at opening up the possibilities for international activities on a wide scale at Moneypoint.
Is the motion agreed?
It is not agreed.
Does the Deputy require me to put the question?
Yes.
The question is: "That the Bill be now read a Second Time." On that question a division has been challenged. Will the Members who are claiming a division please rise?
Deputies Clohessy, Cullen, Harney, Kennedy, D. O'Malley, P. O'Malley, Quill and Wyse rose.
As fewer than ten Members have risen, I declare the question carried.
Question declared carried.
The names of the Deputies dissenting will be recorded in the Journal of Proceedings of the Dáil. When is it proposed to take Committee Stage?
Next Tuesday, subject to agreement between the Whips.
Committee Stage ordered for Tuesday, 22 March 1988.