Dáil Éireann debate -
Wednesday, 3 Dec 1997

Vol. 484 No. 1

Turf Development Bill, 1997: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Mr. Dukes

I am pleased to see this Bill coming before the House not least because some little time ago, as Minister for Transport, Energy and Communications, I was in charge of much of the preparation of the Bill. I was particularly pleased that it was possible to make provision for the winding down of the company's debt by direct Exchequer injection in such a way as to facilitate the simple company structure that is provided for in this Bill rather than a more complex two-stage operation which seemed to be required at the outset.

The Bill gives the company a structure that is in keeping with the commercial environment in which it has to operate, a structure far more in keeping with that environment than the one currently in place. The company is operating in a market that has changed very much in nature, and in some respects in scale, since it was founded, a market that has changed a great deal even in the past decade.

The key to reforming the company in the way it has now been reformed was the decision of the last Government to provide the funding necessary to get the company out of the hobble in which it found itself as a result of debts built up during times of energy crisis when the company had to incur major investment expenditures to expand without any direct assistance from the Government, thereby incurring costs that told very heavily against it when energy prices dropped. It is fair to recall that the package which made the presentation of the Bill possible needed the agreement of the European Commission authorities. That agreement was forthcoming and the Commission proved very understanding of the issues and challenges facing the company.

The company is now in a better position to deal with the kind of markets in which it operates, the foreseeable changes in these markets and competition. Its balance sheet has been cleaned up and is healthy. The company can engage in the full range of commercial practices and options which should be open to a company in a competitive marketplace. Specifically, it can consider joint ventures or equity partnerships in a way that was not possible before.

In this context, the provision in section 16(3) which states that the Minister for Finance shall not reduce his shareholding to less than 50 per cent unless authorised to do so by a resolution of Dáil Éireann is unusual and is clearly included for political reasons only. It has not been explained by the Minister and we have not been given any detailed reason 50 per cent should be the figure, why it is provided for and why it needs a resolution of Dáil Éireann rather than the agreement of the Government or some other form of agreement. Will the Minister give us some more detail on why it was thought necessary to include this very unusual provision? I do not imagine that there is a great deal of pressure for a provision of this kind from the bargain basement Progressive Democrats bit of the Government and I wonder where it came from and why.

Section 41 provides that more than 50 per cent of the aggregate value of the subsidiaries taken as a whole cannot be disposed of without the approval of the Dáil. This is an unusual provision which seems to have been included for political reasons only. While I do not have any great love for this provision, logic leads me to ask why it is framed this way. Why does it relate to 50 per cent of the aggregate value of the subsidiaries taken as a whole? Why does it not refer to 50 per cent of the value of any one of the subsidiaries taken individually? Is there a reason for this? We are entitled to know why matters of this kind should be brought before the Dáil in the context of a Bill which is designed at the very beginning to give the company a commercial mandate, the leeway to operate in a commercial market without the kind of interference we so often hear claimed, sometimes rightly, as the source of many of the ills suffered over many years by semi-State companies.

The commercial freedom of the company being set up by the Bill is circumscribed to an extent by these two provisions. It may be said that these provisions in themselves will not constitute a substantial obstacle to the company in its operations in the foreseeable future but the time could come when they might prove to be so. The time could also well come when the company adopts a strategy which necessitates a new form of equity partnership that requires more than 50 per cent of the aggregate value of the subsidiaries to be sold to another person as part of that deal. The company could find itself "upscuttled" in that because a majority in the House did not provide for it.

Equally, the company might find itself in a position — this is something we might hope would happen — where it expanded to the point that it needed a large injection of new capital and new equity partners which might want more than 50 per cent of the equity in the company. Although it might have a good financial proposition to make, it would have to come back to the House to get agreement for that. It could face the prospect of having that arrangement "upscuttled" if it was not possible to get a majority in the Dáil for the Minister for Finance to dispose of more than 50 per cent of the shares in the company. If that happened the people behind these two curious provisions might find they had outsmarted not only themselves but the workers in the company and the people who depend on the company for a living.

The Government must make up its mind on this matter. The Minister for Public Enterprise must make a decision. Will we take the commercial route? Will we make this company part of a competitive, rapidly changing energy market? Will we make it a valid player in that market? The Lord knows what the future holds for companies in the energy market. The company and people who speak on its behalf will increasingly make the point in the future that the fuel it produces is more environmentally friendly than some of the fuels it would replace, and that may be the case, but people will have to be convinced of that. It could happen that the company would market not only unmixed peat fuels but fuels or other products that are a mixture of peat and other materials, requiring the participation of other actors. I fear these provisions will prove to be obstacles to such development of the company.

There is a specific problem in the company with which the new structure will help it to deal. The peat products division of the company is the most difficult part to deal with in the sense of its placing in the market, its profitability and the prospect for its development. That is not helped by ignorant remarks made by high personages elsewhere about a product that is quite inoffensive and has a number of enormous advantages. I hope that under the new structure of the company with its subsidiaries it will be easier to deal with the problem in that part of the company. I hope the 50 per cent provision will not get in the way of dealing in real terms with that problem.

I make that comment, having freely admitted to having a particular interest, as has my colleague Deputy Power, in the future of the operation at Kilberry in Kildare South. It has been part of the economic fabric of that part of Kildare for many years and all of us would like to see that continue. If that requires new forms of association, co-operation or venture partnership with other companies, that should be done because we need to maintain that part of the economic base as long as that can be done on a viable basis.

The Bill is in many ways only one part of the outcome of a process that has gone on for a long time. It would be unreal to debate the Bill without reflecting on the history of the company. For a period it had to engage in heavy investment from its own meagre resources and as a result incurred substantial debts. It has undergone major rationalisation in the past ten years. The staff and management has gone through one of the most fundamental restructuring operations which has ever taken place in a branch of Irish industry. At one time a large proportion of the population of counties Kildare and Offaly, in particular, and counties Westmeath and Longford were employees of Bord na Móna, but only a small proportion of them are currently directly employed by it. However, a number of them perform various operations on contract for the company.

I wish to refer to a matter which has informed the approach of successive Governments to the company and to the introduction of this legislation. For many years Bord na Móna and the ESB have had a social and economic influence on the midlands which is inadequately understood. Even though the population of the midlands is not sparse, it is very dispersed because of the location of work with Bord na Móna and the ESB. As I stated, Bord na Móna has undergone enormous structural change and the ESB is going through similar change, but the people still live where they lived when the organisation of those companies was different. Many of them provide services on contract for Bord na Móna, some have retired and others have been made redundant. While the economic circumstances of a large number of people in north and west Kildare and counties Offaly, Longford and Westmeath have changed fundamentally in recent years, and they have little prospect of ever again being employed by their previous employers, little is being done to provide alternative employment in the region. I am not insisting that this newly constituted commercial company should be given a particular role, but when implementing this necessary legislation it would be wrong to overlook the consequences which have made it necessary to make changes in the company. Some Members on this side of the House have been calling for some time for a fresh look to be taken at the development requirements of the midlands which are easy to overlook because of the imperfect understanding of economic changes in that area in recent years.

Although it may not be popular to say this, we owe a substantial debt of gratitude to the board and senior officials of Bord na Móna. They have brought the company through difficult days and allowed us introduce this forward-looking legislation. Section 26 provides for the appointment, and terms and conditions of appointment, of the managing director of the new company and the following sections relate to staff. According to what I read in the newspapers in recent days, the Government does not intend to proceed with the Buckley proposals which, among other things, would give us an opportunity to consider the remuneration of chief executives of semi-State companies. That is a great mistake.

While it would not be appropriate to recount the history of a well known case which arises in this connection, it is obvious that the rules we apply to a number of semi-State companies in fixing remuneration for their chief executives are utterly unsuited to their positions. The more our semi-State companies enter the competitive market, which is what we are rightly imposing on them by liberalising legislation, whether from our inspiration or that of the European Union, the more we are pushing them into competition with private sector companies. Yet, we are also imposing on them a number of restrictions which in some cases prevent them from getting the expertise and staff input they need to operate in that market. The ideal outcome would be to give these companies the freedom to head-hunt in the market for the type of people they need, but as the Buckley proposals have been published, it is outrageous that the Government should close its eyes and hope the problem will go away. That is not satisfactory. I would be delighted if, as a result of this debate, the Minister adopted a new approach.

Members of the boards of semi-State companies are often criticised and held up to ridicule, their motives are often suspect and they sometimes achieve notoriety in their own right. From time to time they are among the popular whipping boys. They get paid a pittance for the services they give to the State. A great many of them do not do much more than they are required — they cannot be blamed for that — but a number of them make a contribution to their companies that is far above the level of recognition they receive by way of directors' fees. We are fortunate that some members and chairpersons of such boards are willing to do that. Now that more of our semi-State companies are moving into the competitive market it is time to reconsider how members of their boards are treated. If the Government wishes, I am also willing to consider the appointment of members to such boards. Board members usually have to wait until they retire and write a book to get the appreciation they deserve.

Mr. Power

Having been born and reared on the edge of the Bog of Allen, I welcome the opportunity to speak on the Bill. It is strange how our attitude to bogs can change over time. Going to secondary school in CBS Naas, the townies often referred to us as bogmen from Caragh. We were ashamed of such a title then but we are proud of it today.

This is a straightforward Bill which received widespread support when introduced by Deputy O'Rourke. However, Deputy Dukes indicated a number of concerns. The purpose of the Bill is to give Bord na Móna a modern company configuration under the Companies Act. This is essential given the changing business climate.

It is important to look at the history of Irish bogs. I came across a book called The Bogs of Ireland by John Feehan and Grace O'Donovan which examines the history of our bogs and the part they played in Irish life. It is a great read which offers an insight to how people survived in rural Ireland. Many people think that turf and bogs are to be found only in Ireland. However, The Bogs of Ireland shows that we are only one of many countries lucky enough to have bogs.

Concern has recently been expressed by conservationists that we are destroying our bogs. It is important to strike a balance between the continued extraction of turf and the preservation of something which is beautiful. I am reasonably happy that every effort is being made to ensure that this happens.

Deputy Dukes mentioned the debt of gratitude we owe to members of Bord na Móna. Eddie O'Connor was one such member who was vilified in no uncertain terms. He set about tackling a serious problem in the company. The necessary programme of reorganisation which he implemented created much unemployment in the midlands, particularly in County Kildare. However, this was a necessary evil and I pay tribute to him for his work and the manner in which he dealt with the problems in Bord na Móna. The company is much stronger as a result.

Deputy O'Rourke stated that Bord na Móna brought tremendous benefits to an area in which it established operations. However, this was not a one way street. Many families and communities gave much to Bord na Móna. It was a two way process which worked extremely well. Employment was created in areas to which it was virtually impossible to attract other industries. It is important to look to the future in deciding how best to use our bogs.

One of the major plans is for the construction of a 120 megawatt, peat fired power station. Its location will be decided by the company which successfully tenders for its construction but it appears that it will be on the Kildare-Offaly border. This will bring enormous benefits to an area which has suffered due to the changes in Bord na Móna. Such areas depend on activities in the bogs and the reduction of Bord na Moná's activities caused great problems.

The new station is vital for the future of Bord na Móna and the midlands, particularly the Kildare-Offaly area. During the past few years concerns have been expressed that this development might not go ahead leading to the withdrawal of the promised £21 million in Structural Funds. The Government and its predecessor have made every effort to ensure that this money is drawn down and I am certain that this will happen. It is important that we avail of the £21 million and ensure that it is put to the best use.

The ESB owns all the power stations in Ireland. However, under EU law the new station will be subject to competition. We hope that it will be commissioned quickly. Preparing bogs for peat extraction requires much work. Bord na Móna assures us that this process will support 250 full time workers and 250 part time workers. The construction phase will employ 450 workers. The direct income impact of the construction phase will amount to a little less than £20 million. When the station is operational, the income will be £8 million. This highlights the importance of the station and I wish all concerned well. Our turf deposits will keep the station running for 30 years. In addition to the raw material, we also have a workforce with the necessary knowledge and experience to operate the station. In many cases their families have given their lives to the bogs.

We have seen considerable employment difficulties in villages which were dependent on bogs. Many young people on leaving school 20 to 30 years ago took up apprenticeships in Bord na Móna. There were no difficulties in obtaining places to learn their trades. Major changes have taken place in this scheme recently, and although there have been developments in the past couple of years, the same opportunities are not available to young people. Figures from the past ten years give an idea of the difficulties created by the restructuring of Bord na Móna.

A voluntary redundancy scheme was launched by Bord na Móna in May 1988 following negotiations with the trade unions. On 31 March 1989 there were 5,116 people employed by the board, including seasonal workers. On 31 March 1997, 2,525 people were working in Bord na Móna, a reduction of 2,500 people. I know a number of these people have had great difficulty acquiring alternative employment, and they will welcome the building of a new peat station.

Deputy Dukes referred to the debt carried by Bord na Móna. I pay tribute to the previous Government for its handling of that problem, and this work is being continued by the present administration. Bord na Móna found it difficult to make progress while this strangling debt was hanging over its head. The Government paid £40 million on that debt last year and £51 million this year. That removed the difficulty the board faced and allowed it to concentrate on its work and plan for the future.

There are four business activities in Bord na Móna: the peat energy division, the solid fuel division, the horticulture division and the environmental products division. Deputy Smith, the current Minister for Defence, awarded Bord na Móna a grant some years ago for the Peat Research Centre. Arising from that, the centre has devised a new mechanism of puraflow, which treats sewage. It is one of the most successful developments in rural Ireland. Anyone involved in building houses or looking for planning permission can have difficulty in regard to septic tanks. The puraflow method devised by Bord na Móna treats this problem, and local authorities accept it, in many cases attaching it as a condition to planning permissions.

The puraflow peat-based treatment system is one of the most successful systems on the market for the treatment of septic tank effluent. The product is supplied in modular form for single house applications. Experimental units set up in Kildare and Tipperary in the late 1980s continue to perform very well. Local authorities have assisted in promoting this product, and this gives an idea of what can be achieved. People may view the bogs as having little or no future, but if we spend enough on research and development we could surprise ourselves with the opportunities the bogs can present.

Sir John Purser Griffith is mentioned in The Bogs of Ireland, and tribute should be paid to him. We often pay attention to members of boards merely to criticise them, but this man was chairman of the Irish Peat Committee which was asked to investigate the peat resources of Ireland. Having put considerable work into this, the committee presented its recommendations. However, the British Government and then the Free State Government failed to act on those recommendations. Sir John decided to take the bull by the horns and he purchased two bogs at Ticknevin and Turraun. He set up the Leinster Carbonising Company in 1924, investing over £70,000 of his own money. In many ways he gave a lead to the country because he showed he was not happy to merely draw up recommendations. He was prepared to put his money into doing something himself. Page 107 of this book details the advertising for Griffith's company as a new Irish industry:

For generations in Ireland, peat or turf has been dug by hand, making generally a soft, variable and bulky fuel, so costly to transport that its common use is limited to the district in which it is dug. By the introduction of the latest mechanical methods, the Turraun Peat Works have established a new industry which foreshadows developments of far-reaching importance in the domestic and industrial future of Ireland.

Sir John Purser Griffith was willing to invest his money and give us a lead. We should be grateful that the inspiration he gave us is not lost.

In 1933 Seán Lemass asked Tod Andrews to join the Department of Industry and Commerce in order to take in hand the development of the bogs. Major changes took place after that, with a number of bog improvement schemes being undertaken. Local co-operative turf societies were promoted and over 180 such organisations were established. The Turf Development Board was set up in 1934 and brought significant benefits to my area of Newbridge. Hostels were set up for people based there, as over 200 people came from Donegal to work in the area. Recently they celebrated the 50th anniversary of their arrival. Many old stories were told and secrets were revealed.

Europeat is very important to the area. In 1996 the Minister for Transport, Energy and Communications announced the appointment of an international consortium as independent experts to design and run the competition for the new peat-fired station. Following a meeting with the European Commissioner for Regional Policy it was confirmed that the Euro peat project will remain part of the Operational Programme. I appeal to the Minister to ensure every effort is made to have this station up and running as quickly as possible. It will bring enormous benefits to an area that has to a large extent been neglected and where families have given much to Bord na Móna.

Recently I was reading about some of the coal villages throughout Europe where the pits are now closed. At European level a scheme was put in place to revitalise those areas. I see no reason a similar scheme cannot be put in operation for the areas here which have depended on the bogs in the past and where there has been much redundancy. I appeal to the Minister to address this important matter. The bogs and Bord na Móna have provided jobs where few other industries would come and should not be neglected when peat resources are becoming scarce.

Mr. Kenny

I wish to share my time with Deputy Ring.

An Ceann Comhairle

Is that agreed? Agreed.

Mr. Kenny

The Turf Development Bill, 1997, is important. I was a member of the Government which approved the proposal to reduce the debt substantially on Bord na Móna. This company has a long and proud history and experienced the same problems as many other semi-State companies in the 1960s. It was antiquated and inefficient and vision and leadership were required to transform that company to its present state.

This Bill is about the generation of electricity.

I am not sure that the speeches in the House will generate publicity today. We should put down a marker, despite the fact that the Minister for Finance, later today, will lash out £500 million wherever the Government wishes, a day will come when the Celtic tiger will not have the same clout and image. In that sense it is important to look to the future.

Bord na Móna's remit was to develop the bogs, because of a scarcity of provisions resulting from the war, and to develop an indigenous fuel. That has been done to a large extent. It involved looking at drainage and machinery techniques in Scandinavia, Russia and other countries which have a high rainfall and peat bogs.

Recently, with the advent of competition, Bord na Móna began to look at the competitive elements arising from membership with the European Union, such as the Valoren programme, under which assistance was made available to competitors to get into the electricity generation business either by hydro experimentation, wind or peat. For example, the development of a competitive enterprise in the Geesala area of County Mayo by peat power was promoted by a former Member, Myles Staunton. Elements in Bord na Móna did not encourage this competitive instinct and did not go out of their way to lend a hand to a competitor in the fields of milled peat and peat briquette production. The techniques investigated in Scandinavia, in particular the use of light machinery, new drainage techniques and new methods of milling peat which Bord na Móna took on board brought about a radical transformation in the company. That company was underfinanced and has since been taken over by a multinational, Norsk Hydro.

I was interested to read the Minister's speech. The political structure has changed and the Minister for Public Enterprise, rightly, referred to her own area in some detail. She mentioned the stations at Lullymore, Portarlington, Allenwood, Rhode, Ferbane, Croghan and Derrinlough but not Bellacorrick in which I have an interest. In his famous Four Farrellys, Percy French referred to "the bogs below Belmullet in the County of Mayo". I am happy to be one of the representatives from that county. The Minister's speech did not refer to the Bellacorick peat burning stating which has an economic and social value to the region in the Barony of Erris, which geographically is as big as County Louth.

Yesterday I tabled a question to the Minister. I am not sure who wrote the reply or whether they think I suffer from imbecilic tendencies as the answer does not refer to the question I asked which was:

To ask the Minister for Public Enterprise if she will indicate the future for the peat burning station at Bellacorick, County Mayo, in view of her recent announcement regarding the development of a new peat burning station in the midlands; and if she will make a statement on the matter.

The reply stated that the Bellacorick peat fired power station was commissioned by the ESB in 1962-3 — I did not have to ask a question to find that out — that its future is a matter for the ESB in the first instance. I asked the Minister to indicate the future of this station. She said she had received no proposals from the ESB regarding the future of this generating station. Did anybody in the Department inquire from the ESB about the future of the station? Did anybody in the Department carry out an analysis of the lifespan of the bogs owned by Bord na Móna in the Bellacorick region and district? The Minister said:

The new station will give rise to a temporary increase in emissions of CO2 from peat stations but there will be a progressive reduction in CO2 emissions from peat in the years ahead as some of the existing older peat stations come to the end of their operational lives.

The Minister is aware some of the stations are approaching the end of their operational lives. Surely in the interests of public enterprise and efficiency, Bord na Móna will have carried out studies on the finite life of the bogs in the Bellacorick power station region. That is the reason I tabled the question, to which I have received a nonsensical reply. When replying to Second Stage will the Minister deal with this matter?

If the 120 megawatt station proposed for the midlands — which I support on behalf of the board, the economy of the midlands and the workers — were to be built in the Barony of Erris there would be legitimate calls from these benches concerning the future of the peat burning stations in the midlands. People would certainly ask these questions as I am entitled to do as a public representative. In the Barony of Erris there is not a single household that does not have relatives in Cleveland, Boston, the US, Britain and in other countries who have helped sustain the fabric of the area. The station, commissioned by the ESB in 1962-3, is a landmark in the region. As one goes over the hill at Boughadoon on the road west one can see its stack rising in the distance, a symbol of economic progress.

What is the projected commercial lifespan of the bog owned by Bord na Móna at Bellacorick and what does the future hold for the station? Is there scope for co-operation between Bord na Móna and Norsk Hydro and for further economic development particularly as there is a wind farm located adjacent to the station and an application has been lodged for permission to construct a similar facility at Doohoma which is backed by a former senior member of Bord na Móna with expertise and experience in this area?

Like its predecessor, the Government has stated clearly that it intends to take measures to help disadvantaged areas. I would like to think that the station will not be closed prematurely as it may be deemed to be inefficient when compared to the 120 megawatt station where modern standards will apply. Is there a possibility that other bogs in the area could be acquired by Bord na Móna which I am sure has conducted the necessary studies to determine the depth of peat? Is there a possibility that a deep sea port will be developed on the north Mayo coast through which a fuel additive could be imported to be used in conjunction with milled peat in the production of energy? Timber production in the north west is on the increase and will prove commercially viable in the next ten to 15 years. It will not be necessary to transport it to Waterford and other locations in the south.

I ask the Minister to respond to my call. The station has been in operation for 30 years and it should be possible to project the commercial lifespan of the bog to which I have referred. In the seventies the late George Colley, when Minister for Industry and Commerce, introduced a peat development Bill to provide for the construction of roads and bridges to facilitate access to smaller bogs. It was a small but good Bill. In the SACs for which the Minister of State, Deputy Ó Cúiv, is responsible one will no longer be allowed to cut turf by machine in a great range of bogs. The implications of this should be looked at in this Bill.

I am disappointed the Minister did not mention Bellacorick. She did not provide the information I was seeking in reply to my question. What is the projected commercial lifespan of the bog to which I have referred? What is the cost per unit therm of heat generated? Can the station be operated efficiently until the supply of peat is exhausted? Is there scope for co-operation between Bord na Móna and Norsk Hydro? Is there a possibility that other bogs in the area could be acquired? Is there a possibility that fuel additives could be imported? I seek answers to these questions on behalf of the people of the area which is beginning to prosper following the development of the Céide Fields and a national park, the provision of tourism amenities as well as sea and commercial angling facilities.

Mr. Ring

I thank Deputy Kenny for sharing his time with me. I welcome the Bill the purpose of which is to place the operations of Bord na Móna on a commercial basis. It can no longer be asked to engage in activities which are not feasible or profitable.

I take the opportunity to compliment Myles Staunton whom Deputy Kenny knows. He did not receive any assistance from the State in respect of his project which has been taken over by the Norwegian company, Norsk Hydro. I wish it well and was delighted the previous Government was in a position to assist it through Údarás. I hope Bord na Móna which has received millions of pounds of taxpayers' money in subsidies will play ball with it. It placed every conceivable obstacle in the way of Myles Staunton to whom I say: well done. He is one of the few people who have tried hard to create employment in north Mayo. I believe the Norwegian company will be successful and will employ many people in this disadvantaged area, in Erris, Belmullet and so on.

Like Deputy Kenny, I have tabled many questions about Bellacorick. I ask the Ceann Comhairle, through the Committee on Procedure and Privileges, to speak to the Taoiseach and Ministers about the way they answer questions. I could have given Deputy Kenny the answer to his question. I have received the same answer. Last week I received a reply from the Minister of State's Department in Irish. I have no objection to receiving replies in Irish and English. It still insists however on replying through Irish. I ask the Ceann Comhairle to protect my rights. I have the right to receive replies in Irish and English. When I contacted the Minister of State's Department this morning by telephone I was informed that it was very busy. I am also very busy. In future I would like to receive replies in Irish and English. When the Minister of State issues replies to Údarás——

An Ceann Comhairle

The Deputy is drifting widely from the subject matter under discussion.

Mr. Kenny

Get back to base.

Mr. Ring

I ask you, a Cheann Comhairle, to protect my rights.

An Ceann Comhairle

The Chair has no control over Ministers' replies. That is not a matter for the Chair.

Mr. Ring

I am referring to Bellacorick——

An Ceann Comhairle

No, we are dealing with the Turf Development Bill.

Mr. Ring

Bellacorick is a major peat station about which we do not know the Government's intentions. That is what I am talking about and shall continue to talk about because the people of north Mayo do not know what will be their position or future prospects after the year 2004. Just before the general election I attended a public meeting in Crossmolina convened by Mickie Loftus with a view to saving the peat industry in Bellacorick. It reminds me somewhat of the controversy surrounding television deflectors, all orchestrated by the Fianna Fáil organisation. I have not noticed a meeting called by Mickie Loftus in Crossmolina since this Government came to power. Of course, Mickie Loftus was an appointee of the Government to the RTE Authority.

An Ceann Comhairle

The Deputy should not refer to persons outside the House.

Mr. Ring

That was a public meeting before the last general election in relation to Bellacorick to which Deputy Kenny, I and all public representatives were summoned to ascertain what could be done to save its peat industry. When the Minister is replying, we want to know the precise position in relation to Bellacorick. The assertion that the ESB has not submitted a plan to Government is not sufficient. I want to know the Government's view. Does it want Bellacorick to remain viable after the year 2004, as I and the people of north Mayo do? As Deputy Kenny has said, there are many young people working in that company trying to decide whether they should mortgage their properties, wondering whether their jobs will be retained after the year 2004 or precisely what will happen. It must be borne in mind that it is a disadvantaged area.

I disagree with Deputy Kenny on one matter. The previous Government spoke in terms of positive discrimination in favour of the west which this Government indicated it would continue. Yet, on assuming office, the Taoiseach, Deputy Ahern, transferred responsibility for western development from his Department to the Department of Agriculture and Food. That did not bode well for a commitment to the west.

When replying I want the Minister for Public Enterprise to inform the House precisely what will happen in Bellacorick. I ask her to instruct the ESB to submit a plan in respect of which she will provide any funding necessary for its upgrading and continued commission after the year 2004. It is vital to the economy of north Mayo and jobs there. I hope she will be able to respond positively.

I wish Norsk Hydro the best of luck and hope the State will play its part in assisting that major international company to increase the number of its employees. I compliment Mr. Myles Staunton, one of the few businessmen who tried to do something to create employment in north Mayo. While he may not have been very successful, had he not begun this project Norsk Hydro would not now be in existence with an abundance of funding available to it——

An Ceann Comhairle

The Deputy must now conclude.

Mr. Ring

I hope the State will assist this company and that you, a Cheann Comhairle, will assist me on parliamentary questions I have tabled on the matter.

Éamon Ó Cuív

The Deputy will receive replies.

Mr. B. Lenihan

I listened to Deputy Ring speak a few moments ago about the orchestration in which this side of the House specialises in political matters. I hope he has the grace to acknowledge our orchestration of Bord na Móna whose work over many years has led to its being a tremendous development corporation in the midlands and west. In a debate such as this it is only appropriate to pay tribute to men like the late Dr. C. S. Andrews and Aogáin O'Rahilly who did so much for the company over very many years. In our age it is hard to believe that those men were motivated by the ideal of pure public service. I am sure Deputy Penrose and others on my left would be most interested to learn that Dr. Andrews, in particular, took the view that it was improper to make profit in life, that it was more proper to serve in a public organisation, like Bord na Móna, in that manner placing one's abilities and services at the disposal of the people. There always was a strong Marxist strain in our political thinking——

Mr. Kenny

A job on the railways.

Mr. B. Lenihan

——which I am sure will continue to be applicable in the evolution of Bord na Móna.

I should like to take up a point made by Deputy Kenny earlier when he said that, of course, it was never intended that Bord na Móna would evolve into a body which was not commercial in the full sense of the word. From its inception, the idea obtained that Bord na Móna would be developed along commercial lines. Indeed, looking through the original debate on the Turf Development Bill 1945, the then Minister for Industry and Commerce, Mr. Seán Lemass, said that it was his intention to place an obligation on the turf development board to find a market for the total quantity it produced on its merits as a fuel and on the basis of the price at which it could be made available wherever it could be most conveniently found. He used the term "economic basis", meaning a price which would make it cheap to use in relation to the price of coal. Therefore, from its very inception the idea was that Bord na Móna would be run on sound commercial lines.

Of course, the funding of Bord na Móna's three development programmes rested on Exchequer advances. The first and second development programmes adopted by the company after the war were funded by means of repayable Exchequer advances to the board, the earlier phase of its third programme having been funded in the same manner. Since 1978 Bord na Móna has carried out its development work on the basis of bank borrowing. While grants were paid to the board for the experimental station at Newbridge, and the provision of housing for its employees — which we Dubliners often see on visits to the midlands — it was originally a dream of the United Irishmen that the turf resources of the midlands would be harvested for the benefit of the capital city. Therefore, the idea of turf development went right back in our national history to the United Irishmen, to their idea that this was a valuable native resource which should be developed for the benefit of the Irish people.

Bord na Móna's various development programmes since 1978 have had to be funded by bank borrowing, when the company experienced difficult years, as a consequence of which waivers of interest and postponement of repayments of capital on Exchequer advances were allowed. But it is clear that Government policy, as enunciated in Second Stage contributions of relevant Ministers introducing the original and amending legislation, has been that, from the very beginning, Bord na Móna would operate on commercial lines. It never had a social function of simply providing jobs though, of course, that was a very desirable result of its operations. However, no State funding was ever provided for that purpose.

As Members on all sides of the House have acknowledged, the function of the board is to develop indigenous resources which would provide import substitutes for oil and coal and sell those at an economic price in the marketplace. The generation of jobs, of enormous social importance especially in the midlands, has been acknowledged by successive Ministers. However, nobody has ever suggested that Bord na Móna should provide jobs other than as a consequence of viable, commercial activity, the primary objective being to develop indigenous energy.

Since Bord na Móna's fate is dependent on economic performance, Exchequer advances having ceased and additional guarantees on bank loans no longer available, its further expansion has to be provided for out of profits. The whole purpose in introducing this Bill is to provide Bord na Móna with a legal structure that will allow its business to develop along normal, modern commercial lines.

The 1946 Act, the founding charter of Bord na Móna, reflected the thinking of its time and the type of development mandate given the board in the form of a public corporation, in common with other bodies founded in that era — the ESB to name but one which springs to mind.

In spite of huge changes in the legal and business framework since 1946, the board has not reoriented legally to those changes. It is important that this Bill should reorient the board to operating under a largely commercial mandate and its structure should be adapted for that purpose. This Bill will provide Bord na Móna with a constitution which is governed and regulated by modern company law. In turn, that will enable the board to deal with its bankers and traders in a manner which will provide some certainty on the market, which had been missing heretofore, since different rules of interpretation applied to company law than to those regulating, say, a statutory public corporation. This means the company has been placed on a level playing pitch, a phrase so beloved of modern commercial commentators.

This Bill goes somewhat further. For the first time, it provides the board with a proper capital structure which makes the application of modern accounting procedures and practices very difficult in regard to Bord na Móna in that there is a degree of artificiality in their application. Heretofore there had been no structure within which equity could be invested in the company whereas this Bill will enable the Government or others to obtain shares in return for investment; while I mentioned "others", I know that is not the primary intention of this Bill. Nonetheless, the new structure does enable Bord na Móna to take advantage of borrowing opportunities in its own right and will also allow the necessary flexibility to the different businesses in the company's divisions to develop autonomously in accordance with their needs. The existing legislation would allow the formation of a company but would not allow the transfer of assets or the devolution of statutory functions to subsidiary companies. It is important that the diversification of Bord na Móna is reflected in legal form through the establishment of subsidiaries. This is one of the central provisions of the Bill.

An obvious example of the need for these new structures arises in the context of the proposed Euro peat power station, the owner or operator of which will have to be satisfied that the supplier of peat upon which the station will depend has its own sound structures, balance sheet and resources to protect it from adverse circumstances which might arise in other divisions.

The fuels division, which has developed with the takeover by Bord na Móna of one of the largest coal distribution companies in the State, requires limited liability status to deal with its competitors, suppliers and customers because it operates in the wider home heating market, not just in a peat market.

The horticultural division, one of the great success stories of Bord na Móna, largely works in the export market and requires a definite legal structure to deal with its external customers and competitors. It also requires constant investment and the overseas markets need flexibility to form partnerships with local investors in other states which may be interested in forming alliances. This necessary flexibility is provided through the establishment of a subsidiary arrangement.

State investment already provided to Bord na Móna is effectively being turned into a retained debt. This enables a lowering in the price charged to the ESB for milled peat. This equity investment does not make money available for investment — it is an accounting exercise — but the legislation is designed to ensure that, in a cost efficient manner, within a reasonable period of time and without disruption to any of the businesses, proper subsidiaries can be established within Bord na Móna for the acceptance of equity. At the same time, Bord na Móna ensures a degree of co-ordination in the overall operation.

The legal position of the limited company will mean each subsidiary will be free to carry out its business in the most appropriate manner, provided it does so in accordance with the companies legislation and the memoranda and articles regulating that particular subsidiary company. There is also a provision for vesting the assets of the board, by ministerial order, in a subsidiary company and for changes in the superannuation provisions of the Turf Development Acts to bring them in line with modern commercial pension practice and to comply with the Pensions Act, 1990, to protect employees transferring to the new company. The board will be able to obtain normal commercial funding while the board's businesses will have the flexibility to enter arrangements with other entities.

The Bill ensures Bord na Móna can operate in a far more flexible manner in the modern market place, like other companies. It is a tremendous achievement that Bord na Móna has reached this stage and I welcome the Bill.

I wish to raise some technical issues. The definition of subsidiary in section 2 seems confusing as there are separate definitions of "subsidiary" and "the subsidiaries". This is a curious provision as the Bill authorises the establishment of subsidiaries and I fail to see why there should be two separate definitions.

Section 21 is the crucial provision, providing for a further injection of £10 million by the Minister for Finance at his discretion and I know the employees are anxious that this takes place as soon as possible. Sections 47 and 48 contain provisions relating to the vesting of property by Bord na Móna in the subsidiaries. One aspect of this is curious because, while section 47 provides an automatic vesting of all property in a subsidiary, land is specifically exempted. The board will retain ownership of all lands, even those with which a subsidiary may be dealing. I do not know whether it is intended to specifically vest the land by way of deed of conveyance from the board to subsidiaries or whether the subsidiaries are intended to own land. Section 48 provides that the company, meaning the board, can authorise by licence the use by subsidiaries of land held by the company. It is not clear where the subsidiary companies stand in terms of acquiring land. Does it mean that existing land within the ownership of the board can never be vested in a subsidiary? If that is the case, it seems a rather inflexible provision and the Minister should examine whether these provisions can be made as flexible as possible in relation to the operation of the subsidiaries so that they can acquire and deal in land in the same way as their parent company.

Section 56 provides that the board and the subsidiaries "shall ensure that its activities are so conducted as to afford appropriate protection for the environment and the archaeological heritage". This type of provision seems unexceptionable as a matter of theory and principle and I very much welcome recognition of the importance of protecting our peatland environment. I have a particular interest in the preservation of a representative sample of raised bogs in the midlands as it is important that some should be preserved for posterity. However, I am not sure whether section 56 of the Bill is appropriate if the purpose of the measure is to put the board and its subsidiaries on a modern commercial basis. Other companies dealing in different markets do not have a general obligation in their founding charters to ensure their activities are conducted to afford appropriate protection for the environment and archaeological heritage. I am not saying these are unworthy objectives or that we should not provide for them in every possible manner in this House, but is it appropriate to include such a section in legislation governing a company which we want to operate in the market like other companies? We do not impose such an obligation on any other company. It should be noted that the terms of the section apply to subsidiaries as well as the board. This means, for example, that a company established under the legislation to deal with the circulation of domestic fuel such as peat and coal will have to conduct its activities in such a manner as to afford appropriate protection for the environment and the archaeological heritage. This seems a curious provision for such a company. While the theoretical basis of the section as a matter of principle seems sensible, I wonder whether it is appropriate to include such a section in a measure designed to put these companies on a level playing field. The inclusion of this section means the playing field is not level because it places obligations on them which are not imposed on other companies.

I do not want to appear hostile to the appropriate preservation of peatlands. The operations of the board should be conducted as far as is practicable in a manner that respects the environment and protects a very important part of our history and geographical experience. However, section 56 seems a curious provision. I thought the Environmental Protection Agency regulated commercial operations in peatlands and that necessary licences had to be sought and impact assessments prepared. I do not see why the board or its subsidiaries should be put in a different position from everybody else and I will be interested to hear the Minister's comments on this matter.

I welcome this important Bill which provides the necessary commercial flexibility to allow Bord na Móna and its envisaged subsidiaries to operate on commercial lines in a modern market place.

Mr. Penrose

I wish to share my time with Deputy Wall. I welcome the opportunity to contribute to this debate on the Bill. I come from the heart of the midlands and I know the importance of Bord na Móna in the economic and social activities of the midlands. Deputy Lenihan should not deprecate his midlands connection which is long and honourable; his late father and many others played a role in the development of Bord na Móna in Westmeath and in Lanesborough in County Longford and into Roscommon.

The Bill will result in the constitution of Bord na Móna as a PLC and of its four divisions as limited companies. When it was set up in 1946 with a largely developmental mandate, it was appropriate for Bord na Móna to have the structure of a statutory corporation. In the intervening years, it has successfully carried out the mandate given to it by successive Governments. That mandate was strenuous on occasions and many social obligations were imposed, but Governments were often less than forthcoming with the necessary financial support. Nevertheless, Bord na Móna carried out its mandate given to it by successive Governments in a series of turf development Acts and it has now been set up on a fully commercial structure. I will make some points later on aspects of the Bill with which I have problems. I hope the Minister will look favourably on a number of amendments from this side of the House on Committee Stage.

The change from statutory corporation to limited company status will have the general effect of causing Bord na Móna to adopt and operate on the financial, management and legal structures in general use in all commercial entities. The main effects of the change will be that Bord na Móna will become a holding company and all its operations and business will be carried out by one or other of the new subsidiary companies.

Although the Turf Development Act, 1990 gave Bord na Móna the power to form subsidiary companies, that Act did not allow it to delegate any of its statutory functions to such subsidiaries and, more particularly, did not provide the mechanism for the transfer of assets and liabilities to subsidiaries.

Bord na Móna comprises a group centre and four divisions — peat energy, horticulture, fuels and environment. In addition, a number of small scale enterprises have been established in the consultancy, tourism, engineering and bogwood sculpture. The Celtic Roots phenomenon is very popular in the midlands and we often utilise the bogwood sculpture there to make presentations. We are proud of that sculpture in the midlands and visitors from the United States and Europe are very interested in it. I pay tribute to Michael Casey and those involved in that area.

The economic importance of the board to the midlands cannot be over emphasised. In the midlands Bord na Móna employs approximately 1,800 permanent and 580 seasonal workers. The breakdown of employment on a divisional basis is as follows: peat energy — 963 permanent and 500 seasonal employees; fuels — 400 permanent and 20 seasonal employees; horticulture — 312 permanent and seasonal employees in addition to 75 employees in France. There are approximately 70 permanent employees in the environmental area.

I frequently make reference in the House to the pain suffered by people in the midlands during the l980s when more than 2,000 people lost their jobs in Bord na Móna. That is a significant fact which many people, both inside and outside this House, have forgotten. Those families made a major contribution to the development of Bord na Móna from its establishment in the late l940s. The trade union movement in particular played a significant role, which should never be underestimated, together with the workforce in ensuring that Bord na Móna turned the corner in regard to its difficulties. Nevertheless, we must acknowledge the pain experienced in the midlands when many families were devastated by job losses.

Bord na Móna employees and the unions, together with the management, embraced change with the advent of the autonomous units. I salute all the people involved for their efforts in that regard which was appreciated by both the management and the Government of the day. However, one should never underestimate the degree of pain suffered by people in that regard. I pay tribute to the former chief executive, Eddie O'Connor, whom I knew well and who played a vital role in turning around the fortunes of the company. He was an innovator with many ideas and he was anxious that the company would develop new product lines. I pay tribute and wish every success to the current chief executive, Paddy Hughes, who brings a new dimension to that role. He has been involved with Bord na Móna for more than 20 years and, coming from the midlands, he realises the importance of the company to the area.

I take this opportunity to pay tribute to a colleague of mine, Councillor Mark Nugent, who has given 37 years' service to Bord na Móna and who is currently vice-chairman of the board. He was the person who came up with the idea of the Europeat station which is now coming to fruition. On many occasions I heard him advocating that idea at council meetings, and not everyone looked favourably upon it. This was a person who started at the bottom in Bord na Móna, became a worker-director and is now vice-chairman of the board. He could see the company's potential but he also saw the pain and he never wanted to see such pain inflicted on families in areas from Rochfortbridge, Tyrrellspass, Kilbeggan, Kinnegad, into Mullingar, Lanesborough and across into Rattin. He was part of the engine that brought the peat fired station to fruition. He knew that was critical to the future of Bord na Móna. That station will secure the future of families living in places like Derrygreenagh and across the bogs into Tyrrellspass and Kinnegad for the next 30 years. Nobody should underestimate the importance of the Europeat-fired station.

It grieves me to hear certain economists and people who live in ivory towers talk about cost benefit analyses in relation to peat fired stations, and that Structural Funds would be better spent elsewhere. I have a message for those erstwhile people who try to evaluate life in the midlands. Not everything can be evaluated by way of a grandiose cost benefit analysis. If that were the case, all funds would be allocated to areas with the best infrastructure, the large urban areas, and rural Ireland would be forgotten. Is that what they want? I want to send out a clear signal that that is not what we want in Westmeath or in the midlands. We want to be treated equally. This is a vitally important project for the midlands which will have a major impact on employment in Bord na Móna because the necessary work on the preparation of the bogs and the peat extraction will provide approximately 300 full-time and 250 part-time jobs over the lifetime of the station. In its construction stage, the project will provide 450 to 500 jobs and the infrastructure exists to allow it develop. The rail network has been laid painstakingly by Bord na Móna workers and they should not be denied the right to obtain Structural Funds to ensure this station goes ahead.

This project is critically important to the local economy and to the wider economy of the midlands. It will be worth approximately £20 million to the area in its construction phase and £8 million to £10 million when in operation. That money will accrue to the various shops across the midlands, particularly in my own area of Westmeath. Indeed, the houses at Derrygreenagh in Rochfortbridge were built on Bord na Móna land. Approximately 120 families live there and they have all given service to Bord na Móna. The sons and daughters of those families are now giving their services to Bord na Móna. That is approximately 600 or 700 people and we should never underestimate the importance of that service. What would be the result if anything happened to Bord na Móna in such an area? If Bord na Móna was threatened it would destroy the social and economic fabric of such an area. That is why the new peat fired station, which will be subject to planning and environmental requirements, is critical to the survival of Bord na Móna in the midlands. We should ensure there are no further obstacles to its development and that it will be built as quickly as possible.

I come from Westmeath and I know of other areas that are also critically important. There is a decline in the population in Coolnagun in north Westmeath which is in need of reinvigoration, revitalisation and regeneration. The recent census reveals that some townlands in that area which supported families in the past have been denuded of their populations. This is a time of plenty and there is much talk about the Celtic tiger, but people wonder what it is all about when many are not benefiting. That is why the Coolnagun plant was critical. It employed 72 people from the Coolnagun area when it was set up in the late 1940s and commenced production of sod turf in the 1953 season. It produced 49,000 tonnes at maximum production in 1975, but it was closed in February 1988. However, thankfully, the works have diversified production and production figures have increased steadily. It now produces some 7,000 cubic metres of peat nuggets for environmental and horticultural use. That represents an increase of 190 per cent in four years. It is currently producing between 3,500 and 4,000 bags of peat walling blocks per year. The works at Coolnagun have shown adaptability to the marketplace and must be congratulated on the innovative way it has retained substantial economic activity in the area.

In the mid-1980s my colleague Councillor Mark Nugent talked about a peat fired generating station as an important aspect to feed into the electricity generation network. Like him, I suggest that if we adopt the Finnish model there is no reason we cannot give life back to an area like Coolnagun by establishing a ten, 15 or 20 megawatt peat fired generating station in that area. I ask the Minister, who is innovative and practical, to take note of this. There is 30 years' supply of peat in that area. Why not utilise it? Its use is critical to the survival to towns across north Westmeath including Castlepollard, Finea, Coole and Multyfarnham. It is a single flicker of hope to the people of those areas and should be considered. The hatches should not be battened down. We should be receptive to ideas such as this to give hope to the people. It serves an important role in relation to the electricity generation network. It is being done in Finland and we should examine that case study. That was the case study used for the 120 megawatts peat fired station. We should come down the scale, consider areas like Coolnagun and give hope to families.

I am concerned about one aspect of the Bill which empowers the Minister to sell off 49 per cent of the holding company and all or any one of the subsidiaries in so far as the value of that subsidiary does not exceed 50 per cent of the total. That means the Minister could take two or three of the subsidiaries together in a block and sell them off if they constitute only 49 per cent of the total. Section 41 should provide that the Minister cannot sell off each subsidiary unless she returns to the Dáil for its approval. I am concerned that section could be used as a blueprint for the sale of all but the company's core activity of producing turf. There are also horticulture and environmental areas and I am concerned that they might be sold off without any reporting back to the Dáil. I know the Minister will carefully examine section 41 and I appeal to her to reconsider the provision. I am giving the Minister of State adequate warning that section 41 will be considered very carefully by the Labour Party and we will table an amendment to it. My colleague, Deputy Wall, will comment on this in his contribution, nevertheless I welcome the thrust of the Bill which, at least, recognises the importance of Bord na Móna and peat production for the midlands.

Mr. Wall

I welcome the Bill which brings Bord na Móna, a vital industry in south Kildare, into the public arena which affords us the opportunity of a full debate on it. When I became a public representative I was briefed on Bord na Móna by Eddie O'Connor, one of its former chief executives. I understand it was at his initiative the headquarters of Bord na Móna were moved to Newbridge in County Kildare. That has resulted in putting in place there a vital sector of the business community not alone from the point of view of presentation in terms of the magnificent work done on the offices in the main street, but also in terms of bringing life to Newbridge. It has benefited the Newbridge area because of the number of employees, etc., in its head office. I also thank Paddy Hughes who was more than forthcoming on any occasion I had to seek information from Bord na Móna. Kevin McMahon of SIPTU went far beyond his duty on occasions to ensure a positive attitude from the workforce in Bord na Móna. As my colleague, Deputy Penrose, stated he stood up and was counted in the 1980s and sought to ensure that the workers of Bord na Mó na played their part in its development to ensure a future for Kildare and west Offaly.

The company is made up of four sections and I would be gravely concerned if under section 41 any of them were sold off. Each of them in their own right plays a major part in the development of Kildare. Unfortunately, west Kildare has suffered a great loss of jobs over the years. It was with interest that I read in a local hostelry a small advertisement cut from a local paper in the late 1940s or early 1950s which sought to recruit 1,000 employees for Bord na Móna. That advertisement was displayed with pride because in that area 1,000 employees were needed to ensure the progress of Bord na Móna.

In reply to a recent parliamentary question the Minister stated that the new peat burning station would commence in 1999 and, week in week out, the people from west Kildare approach me asking whether that date will be met. I ask the Minister and her Department to ensure that for the future success and hope of west Kildare area that date is met and that the station will be completed by the set date of 2001. I also ask that every effort be made to refurbish Kilberry plant which is a vital ingredient in the development of south Kildare and has been since it was first initiated. Bord na Móna is a vital sector of employment in Kildare. I hope the Minister will ensure that the energy, peat and horticulture sections and the environmental section, which is vital and its initial stages of development, will be allowed to continue under the auspices of Bord na Móna and that it will remain within the remit of this House to ensure its future progress.

Mr. McCormack

May I share my time with Deputy Ulick Burke?

Acting Chairman (Ms McManus)

Is that agreed? Agreed.

Mr. McCormack

While I give a general welcome to the Bill, why is it necessary at this stage? I am aware the Bill provides for the conversion of Bord na Móna from a statutory corporation to a public limited company under the Companies Act and that, as a result, the Minister will have shares in the company equal to the value of its net assets. Why is that necessary at this stage of the development of Bord na Móna, which has been operating for the past 50 years? I would like clarification from the Minister.

When introducing the Bill, the Minister dealt with the history and effect of Bord na Móna in the Westmeath area, the acquiring of vast acres of raised bog in the midlands, the development of machinery and technology to drain those bogs and the part Bord na Móna played in that regard. It played a part in the development technology being used in other countries.

I am familiar with the development of Bord na Móna in the midlands from where I come. I remember a day in the 1950s when two officials from Bord na Mó na arrived at our house. Without prior knowledge or consultation, except for rumour in the area, they negotiated with my father to acquire 200 acres of his raised bog for a princely sum of £1 per acre. I saw the machinery arrive and the adapted plough machines which were used to drain this vast bog stretching for more than ten miles from Kenagh to Lanesborough to Ballymahon and the surrounding areas. It was extraordinary to see machinery move onto a vast area of bog covered with heather which was being turned into a mill peat area.

I acknowledge the great work Bord na Móna did by providing much needed employment in the midlands. Many part-time farmers, their sons and families were able to get work with Bord na Móna. In the 1950s and 1960s, it revitalised the area by providing employment. The social role Bord na Móna played benefited the area to which I refer. Many people who would have otherwise emigrated were able to obtain reasonable employment in their area and maintain their families. It had a tremendous effect on the social fabric of the area.

The small rural parish from which I came was able to keep its young people at home and this resulted in better activities and GAA pitches. Although it was the smallest parish in the county, we were able to win through to a county championship. Most of the players were employees of Bord na Móna. I recognise the beneficial effect Bord na Móna had on the social fabric of the area.

There is an old Irish proverb which states that: is féidir leat an fear a thógáil as an bportach ach ní féidir leat an portach a bhaint as an bhfear but the opposite was the case with Bord na Móna. It did not take the man out of the bog but took the bog out of the man from the point of view of training, developing and operating sophisticated machinery for the drainage and development of bogs. At first Bord na Móna adapted drainage ploughs and ditching machines which ditched material from the drains across the heather. Har-row and harvesting machines were also used.

When Bord na Móna moved into this area, it was covered by vast areas of raised bog covered by heather measuring ten by five miles in some cases. The bogs were rarely transgressed by people, except at the edges where traditional turf cutting took place. The area was transformed when Bord na Móna drained the bogs and harvested the peat. Within a few years, vast areas covered by heather were covered with mill peat without any remaining vegetation. All wildlife disappeared from the bogs.

When I grew up red grouse nested and fed on the heather and wild geese migrated to feed on the bogs in winter. Each day one would see them coming in droves. All such wildlife disappeared when Bord na Móna took over the bogs. I am sure wildlife and environmental interests would not allow that to happen today. I will let somebody else judge whether that would be good or bad. It would have been bad for rural society in the area. I do not know what effect it had on other species besides grouse, wild geese, snipe, curlews, woodcock, etc., which have all disappeared from the bog area.

I represent West Galway, areas of which are covered by blanket bog which is different from raised bog. Practically all of Conemara is preserved under the special areas of conservation. Perhaps the Minister of State at the Department of Agriculture and Food, Deputy Ned O'Keeffe, will extend the SAC to the raised bogs of the midlands because we must preserve some of these bogs despite the benefits provided by Bord na Móna. Half the raised bogs in the world, about 19,000 hectares, are located here. Much of the area has been developed and I do know what steps the Minister and the Department are taking to preserve some of these areas. I am aware of the efforts of the Irish Peatlands Conservation Council to preserve some of the raised bogs in the midlands. Recently, approximately 40 acres was acquired near Mullingar. What is the policy of Bord na Móna, the Minister and the Department in preserving some of these bogs?

Before the arrival of Bord na Móna only the edges of the bogs were utilised. This preserved the bog because only the top two feet were turned over each year thus preserving the lower bank on which heather grew. The natural state of the bog was preserved. The development of peat moss was a different concept. I visited this area recently and noticed that since I left 30 years ago, the level of the bog has dropped 30 to 50 feet in some cases because of drainage and the milling of peat. Vast areas of bog were drained into rivers which flowed into the River Shannon and they are now at a lower level than when drained. A pump is required to take out the last few feet of peat.

What will happen to those bogs when Bord na Móna pulls out and when the mill peat is finished? I remember my father asking the officials if the bogs would revert to his sons, their sons or families after being cut out. I was a small child at the time but I remember he got a vague promise from the officials that the bogs would revert to the bog owners, who practically gave away their bogs for £1 per acre because they thought, perhaps through ignorance, they had no other option. That is why, like Deputy Penrose, I am concerned about section 41 as I do not know what rights it confers for the disposing of assets when they are finished with. I would like them to remain with the local people. The great work which was done should be recognised and I hope it can be sustained in the area by the provision of briquette factories which will utilise and develop the remaining bog, although I do not know what life is left in it.

We must examine the long-term implications for the area. What will happen to the people and their families who have lived near those bogs and worked in them for the past 40 years? What will their employment prospects be when the bogs in the midlands run out? Those questions must be examined and this Bill is the opportunity to do that. It is 40 or 50 years since the last Bill was introduced in the Dáil. I will deal with the issues in more detail on Committee Stage. I intend to pin down the Minister on the long-term plans of Bord na Móna and the plans for disposing of or utilising the vast areas which are left. If the peat is to be extracted down to the gravel as I observed in some cases, what will be the value of what is left? Will it be a swamp, as it was thousands of years ago?

Mr. U. Burke

I thank Deputy McCormack for sharing his time with me. I welcome the Bill and the opportunity to speak on it. I once spoke with a retired Bord na Móna worker who was one of the first to work locally with the company. He told me of the two things he feared most in his fragile employment contract. The first was obvious for the time: a wet summer. The second I would not have guessed: general elections. I asked him why he, a Bord na Móna worker, feared them. He said that, with the proliferation of promises politicians made at election time regarding the development of boglands in Ireland and the closing and opening of power stations, he never knew where he was going to be employed, if he continued to be. That is the opinion of most workers of the many promises made by politicians and respective Governments down the years.

In east Galway, we have a failed monument to such promises and it is no more than a lighthouse in a bog. It is a concrete slab which still remains in Derrynafada in north east Galway on the border with south Roscommon. It was the result of demands made prior to elections and was established to a fanfare of delight and tape cutting. It remains unoccupied and undeveloped, but I hope Bord na Móna will be able to utilise and develop it within the next decade and fulfil the promises made in the 1980s.

It is timely we are debating this Bill as Bord na Móna was set up more than 50 years ago and will now be established as a public limited company under the Companies Acts and will be subject to all the legal obligations and responsibilities of other commercial companies. Bord na Móna has been a traditional company supplying energy, peat moss and sod turf to generating stations over the years. Many speakers praised its work, its management, its workers and its engineers. I wholeheartedly endorse those remarks because, through the company's insight and development work, it has provided employment in areas which would have found it very difficult to attract industry. Seasonal though much of the work may have been, it at least supplemented the incomes of many people and kept generations of people in areas where it would have been impossible to stem the tide of emigration.

Today we face rural decline for other reasons. The development of Bord na Móna, the work it has done and has provided for many generations, especially in the midlands, has been worthwhile, and should be looked upon as a part of a rural renewal initiative of a bygone age. It might be an example for us to follow today. If Bord na Móna is rationalised as threatened, it should be well thought out and should not be a case of closing one power station after another, offering the workers redundancy packages and leaving one shining jewel in the company. We should progress very slowly and carefully because of the traditional role Bord na Móna has played in renewing and sustaining rural Ireland, especially areas in great difficulty.

Bord na Móna has expanded and diversified over the years into the production of commodities such as the branded Shamrock peat moss, exports in horticulture and delving into the area of tourism. There is a very important tourism development in County Offaly related to Bord na Móna — the bog train — which has caught on as a concept. I pay tribute to Bord na Móna as an indigenous company which has shared its experience with the people, especially young people in school. It has gone to the trouble to encourage young people to learn about peat bogs, be they the blanket bogs of the west or the raised bogs of the Central Plain. It has supplied very important education packs and resources, made them readily available to schools with the accompanying details and information sheets and has granted very generous access to its plants. The company has provided this down the years and allowed schoolchildren see how electricity and energy is used which assists in the area of conservation.

However, I must complain about the serious silting and pollution Bord na Móna is causing in the Shannon, especially around Portumna on Lough Derg. It seems no effort has been made by the company to restrict and retain the silt which has been allowed to flow freely without filtration into the water courses and networks of the Shannon. Lough Derg is today lined in some places with several metres of silt, especially in the small inlets and bays. I refer particularly to Portumna, County Galway, where a swimming pool is being destroyed and Bord na Móna must take responsibility for it.

Mr. McGrath

I congratulate the Acting Chairman, Deputy McManus, on her first session in the Chair. It is an onerous responsibility and she joins an elite group, which includes myself, and one which is very distinguished.

Mr. Jacob

And modest also.

Mr. McGrath

I welcome the opportunity to speak on the Bill and its provisions. I listened with interest to the Minister's speech as she reminisced about the time she spent working in bogs. I also spent many schooldays working in bogs but they were different from those of the Minister. Perhaps this is due to gender as I recall many tough days catching turf. If one dropped a sod on top of the "sleánsman" one did not have a pleasant day and could have had a reddened ear by the end of it. People say they were great days but it was a tough time. Perhaps as the Minister is of a different gender she had an easier time.

Bord na Móna was established in 1946 through the foresight of the then Government to develop a great natural resource. It entered uncharted waters because no one was sure how the company would turn out. Tremendous development work across the countryside was required. While the company was seen as developing an indigenous fuel source, it also contributed significantly to social development.

There is extensive bogland in my county, Westmeath, particularly around Rochfortbridge. A community grew up in Derrygreenagh where 100 houses were specifically built by Bord na Móna for its workers 40 years ago. It was a far sighted development which was nicely laid out with a huge park in the middle and the houses were well kept and have been preserved. Derrygreenagh and its associated bog contributes substantially to the economy of the area in towns such as Rochfortbridge, Tyrrellspass, Kilbeggan and also Mullingar to which many of the employees travel.

Twenty years ago approximately 500 people were employed at the bog along with 200 seasonal workers. Times have changed dramatically with only 220 people employed now along with 80 seasonal workers. People took redundancy, some still work in the area, others retired and are enjoying it, while a small proportion never managed to find other employment. Nonetheless the area still thrives and the recent proposals on Europeat are welcome and have given the area a great lift.

Bord na Móna employees were decent, high calibre, hard working folk. They were associated with the communities built by the company but the workforce was also drawn from the hinterland, including farmers who were prepared to take up seasonal work to augment their meagre incomes. Thriving schools were associated with them also. For example, there is a very progressive secondary school in Rochfortbridge with 800 pupils who achieve remarkable standards in State examinations. The children of Bord na Móna employees are to be found in high office throughout the country and should be commended.

Bord na Móna is to be applauded for recruiting apprentices. Many young people took up apprenticeships there. They received a great grounding in engineering and electrical work which stood to them over time and many of them subsequently set up their own businesses. However, many good things come to an end and the bubble burst for Bord na Móna towards the end of the 1980s. During the oil crisis it was told to develop because Ireland needed an alternative indigenous source of power. It developed bogs to produce the raw material to fuel power stations. Thankfully the oil crisis ended and prices reverted to a more reasonable level.

However, regretfully, it caused havoc in Bord na Móna and many employees who had been taken on to carry out development work were no longer needed. The company accumulated huge debts of approximately £200 million whereas its turnover was £120 million. It was insolvent for a number of years and had its creditors decided to move it would have been embarrassing as the company had undertaken substantial borrowings which were guaranteed by the State. This sum could have been added to the national debt.

Over the years Bord na Móna had to have a radical rethink and examine where it was going.

It is fair to commend the board and staff who went through the difficult process of rationalisation to achieve what was needed and in particular, tribute should be paid to the then chief executive, Mr. Eddie O'Connor, for his work. He took the company from a position where it employed 5,000 people to one where it has 2,400 employees. In that period, no days were lost through industrial action as everything was negotiated and agreed with unions and workers. The output per worker changed dramatically from 2,000 tonnes per annum at the end of the 1980s to 5,000 tonnes per annum at present. That involved changes in work practices, development of new machinery, etc. Eddie O'Connor got a raw deal when the chips were down. He was treated shabbily by the previous Government and a man who had done so much for a semi-State company should not have been treated in that way. If only we could turn back the clock.

The reduction in staff dramatically changed the face of many Bord na Móna villages. Twenty years ago 500 staff were employed in the Derrygreenagh area and about 200 seasonal workers. Today there are 220 staff and about 80 seasonal workers. At the other end of the county the Coolnagun development was going quite well with about 70 workers. However, in February 1989 the doors closed and all that remained was a skeleton staff. That was a tremendous blow to the economic viability of that area and to the population there. North Westmeath has suffered dramatic losses of population over the past 20 years and it was a sad day for Coolnagun when the Bord na Móna development closed leaving only a skeleton staff. Thankfully, the skeleton staff that remained there have been dynamic. They introduced new work practices and developed new products. There is now a thriving industry involving quite a number of enterprise groups and workers. The new peat walling block which is used in horticulture was developed at Coolnagun, is now being exported and is extremely successful. Peat nuggets were also developed there. This station provides valuable employment in that area which is very welcome.

This Bill will set up Bord na Móna as an ordinary company which will be able to operate under the same type of financial management and legal structures as any other commercial company. The injection of £100 million by the State was right and proper because the borrowings of Bord na Móna were underwritten by the State and it was at the behest of the State that many of the development costs incurred were spent.

I am delighted progress continues to be made on the Europeat project which is to be centred in the midlands. Successive Governments have put their shoulders to the wheel to ensure this happens. I understand it is now at the tendering process and that the successful company will be announced early in the new year. When that happens the Minister must ensure that the company moves ahead as quickly as possible to develop the project. It will make a tremendous difference to the midlands and County Westmeath, the county the Minister and I represent. It will create important employment opportunities — it is expected that when the Europeat project goes ahead about 250 full-time additional jobs and a substantial number of seasonal jobs will be created in the Derrygreenagh area. Infrastructural work has already commenced with the upgrading of railway lines to serve that power station when it comes on stream, and it is expected that by the time the station opens 1.5 million tonnes of milled peat will already have been stockpiled.

In considering tenders for the new peat fired station and in negotiating with the successful company the Minister should look seriously at the proposals made by the workers at Rhode power station. They have put forward plausible reasons for upgrading the Rhode station to be the new peat fired station. I appreciate that the new company will call the tune as to where the new station will be sited. Nevertheless, we should look carefully at what is happening at Rhode, how it could be adapted and the possibilities for saving taxpayers' money and ensuring the employability of the workers there.

Some developmental work has been undertaken by Bord no Móna, particularly horticultural and environmental product development. One example which was mentioned in the House is the Puraflo treatment system for septic tanks attached to domestic houses and larger developments. That was developed by Bord na Móna. It has been tried and tested and has been found to be successful. The Government could undertake a promotion of that produce to encourage its use around the country. Not only would it have a beneficial effect on the environment and improve the outflow from septic tanks, it would create additional employment opportunities within Bord na Móna.

There is a facility in the Bill in relation to superannuation payments, but it does not say clearly how future pensioners from Bord na Móna will be accommodated. I expect and hope they will be accommodated, but will they remain as pensioners of the holding company of Bord na Móna or will they be apportioned between the four subsidiaries that are being established? It is important to clarify that and I would like to hear what the Minister says about it. It is crucial from the point of view of the pensioners that their pensions are secure but, in terms of future performance of the subsidiaries, it is important to clarify how this will be done.

The Government's commitment to supporting indigenous fuels for power is important, but what will happen to the peat stations in County Westmeath over the next few years? Are they likely to be refurbished so that they can continue in use? What are the Minister's views on these power stations which are important for employment within that large catchment area? It is important for the Minister to talk to the ESB and Bord na Móna to ensure that those stations are revamped so that their employment potential will remain.

There is no mention in the Bill of cutaway bogs, which are contentious in parts of Westmeath. Some of the cutaway bogs have been successfully turned into grassland and sold off to adjoining landowners. Should some of those bogs not be allowed to revert to wetlands? We need to formulate policy in relation to that. Does the Minister envisage a role in the horticultural area for private operators who are in competition with Bord na Móna and who have not received any subsidies? Is she open to discussing with them how they can continue to develop their enterprises?

Minister for Public Enterprise (Mrs. O'Rourke)

I am open to talking to anyone about anything at any time. I will be glad to take up the matter raised by Deputy McGrath.

We have had a very interesting and full debate on the Bill. While it is open to all Deputies to contribute, the debate was legitimately dominated by those Deputies who represent constituencies where there are Bord na Móna stations. I was present for the contributions by the Opposition spokespersons and listened on the monitor to many of the other contributions, and I found all of them very interesting.

Deputy Stagg asked me to withdraw the Bill but I have no intention of doing so. It is very important from the point of view of the future development of Bord na Móna and has been welcomed by the management and workers. I have spoken with the chairman and will meet the unions tomorrow. I thank Deputy Dukes for the work he put into the Bill when he was Minister. He was ably assisted at that time by Deputy Stagg. It is, therefore, bemusing that Deputy Stagg wishes me to withdraw a Bill he supported in Government. His party leader was also enthusiastic about it.

The proposal to establish four operating divisions was approved by the previous Government. The then Minister for Social Welfare, Deputy De Rossa, put forward the proposal, which I am glad to follow through, that more than 50 per cent of the aggregate value of the four subsidiaries cannot be disposed of without the approval of the Dáil.

I am very enthusiastic about the Bill as I represent a constituency where Bord na Móna plays a major role. I want to give the company a future and the Bill provides for an equity injection of £100 million and the payment of the £10 million overhang. Deputies referred to employees' concerns about pensions. The provisions dealing with pensions are comprehensive and cover both past and future employees. Existing staff will retain their rights.

Most Deputies referred to the new peat fired station. When I met the EU Commissioner last week she stressed the importance of ensuring this station comes to fruition within the specified time. I have instituted a practice whereby I am given a report every Monday on the progress in the station. While the matter is moving along slowly, it is within schedule. An international consortium is handling the tendering procedure and I know nothing about it. After the consortium give me the details of the successful tenderer it will be a case of all hands on deck to ensure the station is completed within the specified time. Proposals have been put forward on various locations but this will depend on the tenderer. Clonbullogue is one of the possible locations.

Deputy Dukes criticised the Government for the non-implementation of the Buckley report as it affects chief executives. The previous Government adopted the report but, like St. Augustine, it said "not yet, dear Lord". This Government has also adopted the report but has not yet implemented it. The report involves more than chief executives, for example, semi-State companies and other groups.

Mr. Stagg

There was not much in it for us.

Mrs. O'Rourke

The chief executives are making some noises about it. The Government will implement the report in time. Like the Minister for Finance, Deputy McCreevy, my lips are sealed on these matters, but it may not be as soon as they think.

Fears about the future of the Bellacorick station are premature. Most of us live in communities affected by the rationalisation measures taken by Bord na Móna. However, we managed to live through that time. The company is now on the right track and is focused on what must be done. The division of the company into four operating divisions will ensure it concentrates on making each division viable.

On the points raised by Deputy Stagg, I checked the record and we have adhered to the recommendations made by the Cabinet. I was glad to follow through on the proposals made by Deputy De Rossa and do not intend to withdraw the Bill. One cannot accommodate all views in legislation, but this is a fine developmental Bill. I look forward to the Committee Stage debate and the consideration of amendments.

Question put and declared carried.