(Dublin West): I thank the Deputies who shared their time with me.
I am amazed that the Minister of State at the Department of Public Enterprise, Deputy Jacob, did not explain more fully the background to the scandalous handling of the huge debt of Nítrigin Éireann Teoranta and the management of that debt, not by officials but by successive Governments over the years. This is so serious that a senior Minister, the Minister for Public Enterprise, Deputy O'Rourke, should have come into the House to explain the situation. The Tánaiste and Minister for Enterprise, Trade and Employment in reply to written parliamentary Question No. 100 of 8 June 2000, stated:
In 1987, when Irish Fertilizer Industries limited was formed from a joint venture between NET and Imperial Chemical Industries plc, . . . NET retained approximately £164 million of its historically-accumulated State-guaranteed debt.
The reply's last sentence, which I thought was devastating, is:
From 1987 to the end of NET's financial year in September 1999, NET has paid £188 million in interest on its debt.
Therefore a debt of £164 million was taken over by a semi-State company in 1987 and in 12 years a staggering £188 million in interest alone was paid on that debt. Questions must be asked and answers must be given in that regard. The debt currently stands at £187.2 million as of 30 September 2000.
The Minister of State, Deputy Jacob, stated in his opening speech that by the 1980s it was clearly recognised that because of the construction cost overruns and operating losses in the early years of the Marino Point plant, the substantial part of the NET debt was a sunk cost which could not be expected to be recovered. I am not acquainted fully with what went on before 1987 or the history of that time, but one sees immediately in this shades of the CIE signalling overrun costs and the shambles which that has turned out to be under the remit of the Minister for Public Enterprise.
The Minister of State, Deputy Jacob, went on to say that NET's primary activity has been the management of its debt portfolio as well as managing a gas contract and monitoring IFI but as a result of the shortfall in the income of NET, the shortfall in interest payments by NET to the banks had to be converted into new State guaranteed borrowings with the result that overall borrowings have continued to grow and have now reached £187.2 million. In other words, only £40 million was paid off the principal since 1987 and another £23 million has been added to the debt accumulated in 1987. That £23 million is to pay the interest on the original debt. Therefore the State has now borrowed money hand over fist to pay interest on the interest. That is an incredible position. I want to put the following question: did nobody cry "halt" at any stage?
The banks and the financial institutions have made an incredible bonanza from this semi-State company. All of the big banks are involved here. AIB Bank or its subsidiaries were responsible for £60 million of the debt and the Bank of Ireland for £118 million accumulated at various times since 1987-88. That must mean, if one looks at the interest payments, that the likes of AIB Bank, say on its first tranche of loans of £30 million extended in 1988, must have received about £30 million in interest alone and the bulk of the principal still stands as a debt on the taxpayers. This defies belief. I was amazed that Fine Gael glossed over this and did not examine it in any detail. I want to see what that party has to say about it and I am sure Deputy Rabbitte will have something to say about it also.
Is it any wonder the banks treated the State with contempt in the course of the 1980s and early 1990s with the losses to the taxpayer from bogus non-resident accounts running into hundreds of millions of pounds? Is it any wonder the Ansbacher account holders felt they were above the law when the banks were allowed by the State to rip-off a semi-State company and make an absolute fortune. Unfortunately this is characteristic of the way the semi-State companies have been used. The borrowings of the ESB, for example, total some £554 million and it pays in the region of £45 million in interest each year. This situation should be addressed and should be halted. It is a source of scandal which must be examined.
This is happening at a time when the Government wants to hand a State-owned bank over to private enterprise instead of bringing more of the banking sector under the democratic control of the State and the consumers in order that this sort of blind robbery of the semi-State sector would not occur and bloat the already massive profits of the banks.
The usual strategy of the Government is provided for in this Bill also. Privatisation is the answer to everything, as far as the Government is concerned, but what of the 600 workers left in IFI. Arklow has already suffered due to the chaos and anarchy of the marketplace in the 1980s. I do not want to see a single worker lose out but if the company is privatised, there is a serious danger that that may happen. No doubt responsibility for the environment dictates the need for a change from using chemical fertilisers but if the Government was pro-active and imaginative, it could be already making plans and conducting research and development well in advance for the likes of IFI in order to move over to natural fertiliser products. There is a landfill crisis and there is virtually no composting policy in Ireland. Areas like that could be developed by such a semi-State company in order that when the time comes and the wolf is at the door, the workers will not be just thrown on the scrap heap because the market has changed or because they are no longer useful to a particular sector of the economy.
The Minister must take these questions seriously. For me, this is a source of major scandal. The reasons such a situation was allowed to develop should be explained carefully to the taxpayers.