asked the Minister for Energy if he will make a statement on the Government's plans for the expansion and development of Bord na Móna; and if he will make a statement on the matter.
24.
Ceisteanna — Questions. Oral Answers. - Bord na Móna.
15.
asked the Minister for Energy whether he has appointed the consultants who will conduct a study of the operations of Bord na Móna; and if he will include in this study the wider economic implications of changes in this industry for the midlands region.
27.
asked the Minister for Energy if, in view of the comments made by the Chairman of Bord na Móna in the annual report for 1986-87, which referred to the particular problems faced by the board as a result of their level of borrowing and the interest payments they must make, he has any measures to assist the board to overcome these problems; and if he will make a statement on the matter.
I propose taking Questions Nos. 15, 24 and 27 together.
I will shortly be announcing the name of the consultancy firm which I will be commissioning to undertake an in-depth study of Bord na Móna's entire activities. It is hoped that this study will identify the measures necessary to restore the viability of Bord na Móna and to secure its future. In carrying out the assignment the onus will be on the consultants to propose such changes as may be necessary in management, financing, organisation, planning, research, production and marketing to achieve optimum results from the exploitation of the board's remaining peat resources.
It is expected that the consultancy will be completed by the end of this year. The economic implications for the midlands can then be examined in the light of the findings of the study.
Under the Valoren Programme, assistance amounting to almost £13 million over five years from 1987 has been secured for bog development involving expenditure of £24 million on 8,600 hectares of additional boglands which are situated mainly in the midlands. A total of £5 million has been spent to date. It is estimated that over 500 jobs have been created or maintained as a result.
The question refers to the Government's plan for the expansion and development of Bord na Móna. Is the Minister aware that considerable research has already been carried out by Bord na Móna and An Foras Talúntais into possible alternative uses and the great possibilities for conventional forestry and grassland amenities? Will the Minister say specifically what is envisaged for the future of Bord na Móna? He spoke very quickly in giving the reply and I certainly did not get the message. What future role will Bord na Móna have?
I am sorry for speaking too quickly. I believe the future of Bord na Móna is guaranteed. The board, together with the new chief executive and the management, have been doing a good job in reviewing prospects and laying out a path for the future. The Government felt this was an opportune time to look at the overall picture from outside. In 1985-86 Bord na Móna made a loss of £17.6 million; in 1986-87 they made a loss of £15.8 million and it is estimated that in the year 1987-88 they will incur a loss of £3 million. Their total overall debt stands at £165 million. It is time to look at the potential of Bord na Móna by bringing in a firm of outside consultants.
Their terms of reference are to review the existing operations of Bord na Móna and to recommend such changes as may be necessary to achieve maximum efficiency in accordance with modern business criteria in each of their activities; to examine the relationship between the ESB and Bord na Móna and to identify the medium and long-term changes which will be necessary to take account of the realities of presentday electricity production economics with a view to producing cheaper electricity for the consumer; to examine the effectiveness of the organisation, management and research and development activities within the company and the relevance of the present R and D programme; and to identify new products or services which can be delivered on a profitable basis. There is a tremendous future for the employees of Bord na Móna but that can only be secured if it is a viable company. This is what we are trying to ensure.
Does the Minister consider that it would be beneficial to establish Bord na Móna as a commercial corporate entity; in other words, to change its structure to that of other State commercial bodies such an An Post or Telecom Éireann? It would be better able to undertake the business it has to do.
I believe the structure of the company is OK at the moment.
In connection with the Minister's reply to Question No. 27, would he agree that Bord na Móna have had a trading profit in the three years to which he referred and that the problem is caused by the borrowings? No matter what rate of efficiency is reached, they will not be able to overcome their high level of borrowings. Is the Minister taking any measures to assist them in the problems caused by the huge repayments on these borrowings? Can the debt be written off or taken over?
All options are to be examined. When we get the consultants' report at the end of the year, together with the results of the internal management re-examination, we will be in a position to review the situation. We will be able to see exactly what is the future of Bord na Móna. They have done a very successful job in extracting our peat resources but it is time to stand back and have a look at where they are going. This will be of benefit to the board, the employees and the State generally.