Seamus Brennan
Question:4 Mr. S. Brennan asked the Minister for Transport, Energy and Communications when he expects the ESB re-organisation plan to be finalised; and if he will make a statement on the matter. [17422/95]
Ceisteanna — Questions Oral Answers - ESB Restructuring Plan.
Michael McDowell
Question:18 Mr. M. McDowell asked the Minister for Transport, Energy and Communications whether he has indicated approval for the level of redundancy payments being offered to ESB staff under the Cost and Competitiveness Review; if these figures will set a precedent for other employees of State Bodies under his jurisdiction; and if he will make a statement on the matter. [17432/95]
Tom Kitt
Question:26 Mr. T. Kitt asked the Minister for Transport, Energy and Communications if he will report on the ESB's restructuring talks; and the implications, if any, for the company's employees. [17257/95]
Mary Harney
Question:36 Miss Harney asked the Minister for Transport, Energy and Communications if it is still the objective of the ESB's Cost and Competitiveness Review to achieve annual savings of £100 million; and the current position in view of the failure to meet the CCR deadline of 31 October 1995. [17424/95]
I propose to take Questions Nos. 4, 18, 26 and 36 together. I am glad to be able to inform Deputies that ESB management and unions, following the personal intervention of Mr. Peter Cassells, have succeeded in reaching agreement on the bulk of the outstanding issues, including new work practices, revised grading structures, flexibilities and questions of reward. Unions and management, along with officials from my Department, will now meet to draft the text of the overall tripartite CCR Agreement. The outcome, in so far as it affects ESB staff, will be put to ballot by the unions in due course.
The agreement provides for 2,000 redundancies in the ESB and for changes in work practices to reflect best practice in the electricity industry worldwide. The annual savings expected to arise from this level of re-structuring is estimated by the ESB to be of the order of £80 million.
The voluntary severance scheme for staff who elect to leave the ESB was approved by the Government in May last. The terms on offer, while specific to the ESB, are roughly in line with those on offer in other State bodies, including Aer Lingus and Telecom Éireann.
I take the opportunity to commend management and unions in the ESB for the effort put into achieving this historic agreement, which is essential if the ESB is to face the competitive challenges which lie ahead. As the House knows I was anxious at all stages that my Department facilitate a partnerships approach to addressing necessary change. The emergence of this agreement has confirmed the wisdom of a consensus approach, even though there were times when success seemed to be in doubt.
Is it true the Government plans to sanction in the next few weeks an ESB price increase of more than five times the rate of inflation?
That is a distinct and separate question.
That is a matter to be considered by the Government. I have not yet received a formal request for a price increase although I anticipate I will shortly. While the level of savings that will emerge as a result of the CCR process is estimated in the region of £80 million per annum, the company faces significant additional costs. Significant investment in our electricity network is essential to improve the quality and reliability of supply, particularly in rural areas. The Government is committed to providing a high quality electricity service throughout Ireland to promote industrial competitiveness and provide a high standard of living. I am conscious that consumers will want to ensure that if there is to be a price increase it will be the lowest possible.
The steering committee which is meeting at present will put together a formal document which will be presented to Government. As soon as the financial implications are assessed, particularly the savings involved in the restructuring plan, we will be in a position to carry out in an informed way an evaluation of the requirement for a price increase. I am not in a position to state if and when a price increase should be granted but it is the subject of discussion at present.
I understand the Minister will consider an application of about 10 per cent, which would amount to the highest increase in electricity charges in the history of the ESB. What is the Government's reaction to that? The Minister said he received no application, but I understand he received one some time ago for 5 per cent. How many jobs does the Minister envisage will be lost from the ESB as a result of reorganisation of the company?
I deny the suggestion that I am considering or will consider an application for a price increase of 10 per cent. Deputy Brennan is scare-mongering. He knows that no Minister would consider a price increase of such enormity. I have clearly spelled out the Government's position on a price increase. When a formal request is made it will be assessed. Such assessment will be conducted in light of the savings that have been made and the necessary investment required by the ESB. I do not envisage an increase of the magnitude suggested. Any application made will receive careful consideration by my Department. I will then bring the necessary proposals to Government and a decision will be communicated to the consumers.
In respect of the jobs issue, I have not yet received a formal presentation on the outcome of the CCR process. The CCR embodies the type of response identified in the Culliton and Moriarty reports which focuses on the importance of minimising costs within the company to support industrial growth and job creation. Cost savings in energy utilities such as the ESB should generate increased employment in other sectors. For example, firms in the tradable sector will take advantage of improved competitiveness to increase output and employment, and the consequent growth in GNP will eventually benefit consumers as a whole. One of the outcomes of the CCR process is a reduction in the jobs complement in the ESB. That is a very sensitive issue and complex questions have been addressed in that regard. Agreements have been made and I look forward to receiving a formal presentation at the conclusion of the CCR process. The outcome of the deliberations of the steering committee, which is in session at present, will be presented formally to me.
How much time remains for priority questions?
I was about to say that if Priority Question No. 5 in the name of Deputy Molloy is to be disposed of it must be replied to now.