Dáil Éireann debate -
Thursday, 14 Apr 1994

Vol. 441 No. 3

Written Answers - Verolme (Cork) Dockyard.

John Mulvihill

Question:

118 Mr. Mulvihill asked the Minister for Finance the claw-back clause that was written into the contract on the sale of the Verolme Cork dockyard to Damen Shipping Limited in view of the fact that it does not appear that the company will deliver on the 450 jobs promised at the time of sale; if he will publish the contract that was agreed between both parties; and if he will make a statement on the matter.

Minister for Finance (Mr. B. Ahern)

The Verolme Cork Dockyard (in receivership) was sold by the receiver to Cork Dockyard Holdings Ltd., a wholly owned subsidiary of a Dutch company, Damen Shipyards, in 1991.

Although the sale agreement contained no reference to the achievement of specified job targets, it was hoped that up to 450 jobs could be realised within five years if shipbuilding were to be developed at the yard, in addition to ship repairs. While I share the sense of disappointment that these hopes have not been fulfilled, it must be said that following Damen's acquisition of the Yard, the European shipping industry underwent one of its cyclical downturns. Furthermore, following the recent political changes in Eastern Europe, that region's large ship building and repair industry has, for the first time, been aggressively pursuing Western business. These yards have gained business because very low labour costs, combined with newly introduced Western management, have given them a major competitive advantage. These market changes, which could not have been anticipated when Damen purchased the Cork yard, have precluded the development of the yard as originally envisaged. It may be that the effect of these changes will be felt in the long term.

It will be appreciated that as the sale was a private one, I am not in a position to publish details of the contract. I can, however, say that the contract contains an anti asset-stripping clause designed to inhibit the sale of the yard or the sale of major items of equipment for a period of five years from the date of sale.