Dáil Éireann debate -
Wednesday, 7 Feb 1996

Vol. 461 No. 2

Written Answers. - Verolme (Cork) Dockyard.

Micheál Martin

Question:

74 Mr. Martin asked the Minister for Finance if he has satisfied himself that the agreement regarding the disposal of Verolme Dockyard, Cobh, County Cork, entered into by the State with Damen Shipbuilding Company has been adhered to in all respects, particularly in relation to the retention of shipbuilding capacity at the yard, job creation and financial arrangements; and if he will make a statement on the matter. [2715/96]

Micheál Martin

Question:

75 Mr. Martin asked the Minister for Finance whether ongoing monitoring of the operation of the contract regarding the disposal of Verolme Dockyard, Cobh, County Cork, to Damen Shipbuilding Company took place; the evaluation, if any, of the deal that has been undertaken; and if he will make a statement on the matter. [2716/96]

Minister for Finance (Mr. Quinn)

I propose to take Questions Nos. 74 and 75 together.

The Verolme Cork Dockyard was sold by Foir Teoranta to Cork Dockyard Holdings Ltd., a wholly owned subsidiary of a Dutch company, Damen Shipyards, for £1 million in 1991. When Foir Teoranta was dissolved its responsibilities in this matter were transferred to ICC Bank.

While the purchase 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 could be revived at the yard. While I can appreciate the disappointment that these hopes did not come to fruition, we must acknowledge that following Damen's acquisition of the yard, the European shipping industry went into a cyclical downturn. Furthermore, following the political changes in Eastern Europe, that region's large shipbuilding and repair industry has aggressively pursued western business with very low labour costs, combined with newly introduced western management. This has given them a major competitive advantage. These market changes, which could not have been anticipated when Damen purchased the Cork yard, effectively precluded the development of the yard on the scale originally expected. It must also be said that their effects are likely to be long-term and that there is now no realistic prospect of a conventional shipbuilding operation being carried out at the yard.

IDA/Forbairt has been working closely with the company in attempts to attract tenants for the yard for the purpose of developing it for all types of engineering work. These attempts have yielded results and I understand that about 90 people are currently employed by various businesses on the site. It is hoped that employment can increase significantly as further projects come on stream.

The Deputy will appreciate that because the sale was a private agreement between two parties, I am unable to disclose all the 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 disposal of major items of equipment for a period of five years from the date of sale. In this regard, I am informed that any assets sold have been disposed of in accordance with the agreed procedure.