Dáil Éireann debate -
Wednesday, 24 May 1995

Vol. 453 No. 4

Written Answers. - State Loans-Investments.

Michael McDowell

Question:

118 Mr. M. McDowell asked the Minister for Enterprise and Employment the total amount of money, if any, his Department proposes to lend or to invest in semi-State companies for capital purposes in 1995; if he will list each proposed investment or loan; and if he will make a statement on the rate of return anticipated for each such loan or investment. [9428/95]

Minister for Enterprise and Employment (Mr. R. Bruton)

Following acceptance of the Irish Steel restructuring plan in September 1994, the company submitted a three year viability plan. Under this plan, the company sought a capital injection of £50 million over a three year period made up of a £40 million equity and £10 million Government guaranteed loans. As any decision in relation to the provision of finance to Irish Steel is subject to the approval of the European Commission and the unanimous approval of the Council, the matter was referred to the European Commission for examination in the first instance. The Commission is still examining the application and has not taken a position on it. When the Commission has concluded its examination, the matter will be referred to the Council and is unlikely to be decided before the next Council of Industry Ministers meeting in November.

The Government has simultaneously decided to pursue the sale of shares in and control of Irish Steel, as it is recognised by the company and the Government that this is important to secure the long term future of the company. The process is currently being pursued and in the event that a successful sale is agreed the level of State investment currently being sought by the company will be reviewed.

Given the current uncertainty in relation to the level of State investment required and the future ownership of the company it is too early to make any statement on the rate of return anticipated from any loan or equity investment. In addition, the rate of return on any equity injection is dependent on conditions in the steel industry and the performance of the company.

Michael McDowell

Question:

119 Mr. M. McDowell asked the Minister for Agriculture, Food and Forestry the total amount of money, if any, his Department proposes to lend or to invest in semi-State companies for capital purposes in 1995; if he will list each proposed investment or loan; and if he will make a statement on the rate of return anticipated for each such loan or investment. [9428/95]

Minister for Agriculture, Food and Forestry (Mr. Yates)

My Department has included provisions in the 1995 Estimates of sums to cover capital expenditure for two semi-State bodies viz. Teagasc and Bord Bia.

1. Teagasc

An Exchequer grant of £500,000 has been provided in the 1995 Estimates for capital works to enable Teagasc to draw down EU Structural Funds. The details of the range of research activities to be co-financed by the EU have yet to be clarified with the EU Commission.

2. Bord Bia

An Exchequer grant of £150,000 is provided in the 1995 Estimates for office furniture and equipment. Bord Bia will decide on the distribution of this allocation.

The 1995 Estimates provide for the payment of grant-in-aid of £6.7 million to the Irish Horseracing Authority and £3 million to Bord na gCon for the development of their respective industries. It is a matter for these bodies to decide on the allocation of these funds though it is likely that some of these funds will be used for capital purposes.

The shares in the Irish National Stud Company Ltd. are held by the Minister for Finance. It is anticipated that a further £500,000 worth of shares will be purchased before the end of the year as a capital injection for the acquisition of stallions. In the medium term it is expected that this investment will help to return the stud to profitability.

The grant-in-aid for general expenses out of the Department's Vote to An Bord Glas for 1995 is £1,575,000. No provision has been made for capital expenditure.

No provision has been made in 1995 for the granting of loans to semi-State bodies coming under my control.

The details of both capital and current expenditure by semi-State bodies under the aegis of my Department are kept under close review by my Department to ensure that expenditure is deployed in a prudent and effective way. However, given the range of expenditure which impacts on the operations of the semi-State bodies, it is not possible to quantify a return as requested by the Deputy.