Dáil Éireann debate -
Thursday, 23 Apr 2009

Vol. 680 No. 4

Adjournment Debate.

Job Losses.

Deputy Thomas P. Broughan

I thank the Leas-Cheann Comhairle for the opportunity to raise this very important issue again in the House. Three weeks ago, on Friday, 3 April, 600 workers from approximately 1,200 were absolutely devastated upon losing their jobs at the world class SR Technics operation at Dublin Airport. What made it even more unbearable was the fact they left what they knew well was a very viable aviation engineering operation.

Last Friday, on 17 April, more than 100 disheartened and shattered workers were also let go. I was also shocked last week to learn that 26 senior SR Technics aviation engineering apprentices were being let go as well by the Zurich-based company. When I heard the news I described it as another savage breach of faith by the corporate affairs director of SR Technics, Stephanie Kennett, the chief executive officer, Bernd Kessler, and their Middle East master, Sheikh Mohammed al Maktoum.

More than six weeks ago, in a lengthy telephone conversation with Mr. Kessler, I asked him specifically to bring the apprentices to Zurich to finish their training and he said it would be under consideration. After meetings facilitated by the Labour spokesperson, Deputy Willie Penrose, myself and my colleagues, Deputies Roisín Shortall, Joe Costello and Joan Burton and Senators Dominic Hannigan and Brendan Ryan, it was believed that arrangements had been put in place to ensure that these young men and women made redundant last Friday would have been allowed to complete their college and practical training with FÁS, DIT Bolton Street and the remaining SR Technics operation at Dublin Airport. The 26 young apprentices are in their third year, or phase five, of the new apprentice FETAC system. They had hoped to be allowed to continue their academic education and work on the SR Technics line maintenance facility up to 31 August.

Last week I called on the director of FÁS, the CEOs of IDA Ireland and Enterprise Ireland to immediately provide facilities for all the SR Technics apprentices who have not been catered for to date. I reiterate that call now. I also asked the Taoiseach and the Tánaiste and Minister for Enterprise, Trade and Employment to urgently report to the Dáil on efforts to save the aviation engineering facility at Dublin Airport. I hope the Minister of State, Deputy Conor Lenihan, will provide a full report on the invigilation process relating to the various expressions of interest and management buy-out proposals for the Dublin SR Technics operation. Is the Minister of State in a position to indicate the number of proposals and expressions of interest that are currently deemed viable or worthy of progressing? Will he outline what is likely to be the timeframe for progressing these proposals? Will he indicate the current position regarding the leases for the SRT hangars at Dublin Airport? Is IDA Ireland confident that all the essential aviation engineering equipment has been protected for any viable successor business at the SRT facility?

Time is passing and I regret to say that the Tánaiste and Minister for Enterprise, Trade and Employment and her colleagues do not appear to be displaying the urgency necessary to protect jobs in this vital industry. The Labour Party has stated since the beginning of the crisis that everything possible must be done to ensure that the almost 1,200 jobs in aviation engineering at Dublin Airport will be saved.

I have, on the Labour Party's behalf, been in contact with the various players in this saga in Europe and the Middle East, including SRT corporate management in Zurich, the head of the Mubadala Development Company in Abu Dhabi and the ultimate beneficial owner of SR Technics, Sheikh Mohammed al Maktoum, Prime Minister of the United Arab Emirates and King of Dubai. I understand the Tánaiste and Minister for Enterprise, Trade and Employment visited Abu Dhabi recently. Will the Minister of State indicate if she received any assistance from Sheikh Mohammed Bin Zayed Al-Nahyan or Khaldoon Khalifa Al Mubarak, chief executive of Mubadala? I also understand that the chief executive of IDA Ireland visited Bernd Kessler in Zurich last week. What was the outcome of these meetings? What information can the Minister of State provide with regard to the future of this company?

The pension and redundancy arrangements for the two thirds of the workforce who have been let go are disgraceful. In that context, the Labour Court judgment in respect of this matter has not been upheld.

The devastating events at SR Technics were closely followed by the crisis at Lufthansa Technik Automotive Ireland in Rathcoole on the Naas Road, where 465 staff were put on protective notice. This will come into force from 27 April. I understand that, following the rejection of the Labour Court recommendations, unions at the Lufthansa facility have appealed directly to the Tánaiste and Minister for Enterprise, Trade and Employment to intervene in respect of this serious matter and to draw up new proposals or a rescue package. The Lufthansa facility is located close to the Minister of State's constituency. Will he indicate the actions that are being taken to resolve the crisis at Lufthansa Technik and outline the contact the Tánaiste and Minister for Enterprise, Trade and Employment has had with management at the plant in respect of this matter?

One media commentator observed yesterday that, following events at SR Technics, the loss of Lufthansa would sound the death knell for the heavy aviation engineering and maintenance sectors in Ireland. This industry was painstakingly developed over 75 or 80 years and it is now going to be wiped out.

Many families on the northside of Dublin have suffered greatly and a threat hangs over families in the area the Minister of State represents. Will he outline the developments that have taken place in respect of these two important plants?

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Conor Lenihan)

I thank the Deputy for raising this matter on the Adjournment.

On 12 February SR Technics announced that it would close its operation at Dublin Airport and enter into consultation with the trade unions representing the 1,135 employees at the facility. The company cited the recent loss of major contracts from primary load customers in Dublin, current business and economic forecasts, as well as the high cost base of the operations, as the primary causes in this regard. It also indicated its view that it would not be possible to fill the resulting capacity gaps with sustainable business in the medium term.

In the interim, IDA Ireland and the Tánaiste and Minister for Enterprise, Trade and Employment have had numerous meetings with the company to express the Government's concern regarding the impact the closure will have on the economy of north Dublin and the effect the loss of 1,135 highly skilled jobs will have on the Irish aviation sector. IDA Ireland and Enterprise Ireland established a team to market the operation internationally through their overseas office network and have held discussions with more than 15 companies to encourage them to put forward investment proposals to take over all or part of the operation. Following receipt of proposals, a full evaluation will take place and each proposal will be considered on its merits and long-term viability.

The company has indicated that it has received up to 30 expressions of interest in parts of the operation and has stated that any approach or proposal would be considered in detail and evaluated in full on its merits and potential long-term benefit. At this stage, SR Technics has received five bids from interested parties for parts of the business and is currently assessing these. Following the assessment process, SR Technics will select a successful bidder. In tandem with this process, the agencies are in discussions with the interested parties on an ongoing basis to assess the viability of the bids so as to be in a position to offer appropriate support to the successful bidders to maximize the level of sustainable employment in the resulting operations.

Lufthansa Airmotive currently employs some 460 workers at its Rathcoole facility and has been planning to introduce a new engine facility, which would both secure the future and lead to an increase in employment at the plant. As part of this process, the company has been seeking agreement with the workforce regarding the introduction of flexible working arrangements and work practice reforms. Following failure to agree, the Tánaiste and Minister for Enterprise, Trade and Employment discussed the situation with both management and unions and the full services of the Labour Relations Commission and the Labour Court have been provided to assist in finding a way forward. Following six LRC hearings and a full Labour Court hearing, I understand staff at the plant yesterday voted against the proposals drawn up by the Labour Court by a margin of 17 votes out of a total of 279 cast. In a statement last night, the company said it had now halted the planned investment in the new engine line and has also issued protective notice to all workers.

The Tánaiste and Minister for Enterprise, Trade and Employment remains seriously concerned for the future of the company and activities relating to it in Ireland. As a further and perhaps final opportunity to try to resolve the problem, the national implementation body, which consists of Government, employer and union representatives, is also meeting to try to provide assistance. There is no doubt that if the current impasse in Lufthansa Technik Airmotive Ireland is not resolved swiftly, these highly skilled jobs will be lost. The Tánaiste and Minister for Enterprise, Trade and Employment is also of the view that this will have a disastrous impact on other parts of the aviation sector in Ireland which depend on business from the company. She urges the parties to re-engage immediately in order that a solution to the current impasse might be found.

Deputy Dinny McGinley

Gabhaim buíochas leis an Cheann Comhairle deis a thabhairt dom an t-ábhar tábhachtach seo a thógáil ar an athló tráthnóna — an fógra a thug Largo Foods i nGaeltacht Dhún na nGall, i bparóiste Ghaoth Dobhair, i bpáirc ghnó Ghaoth Dobhair, go mbeidh sé ag ligint 170 oibrí chun bealaigh go luath an mhí seo chugainn.

Is mór an buille é sin do cheantar Gaeltachta cosúil le Gaoth Dobhair go bhfuil 170 duine ag cailleadh a gcuid post. Tá an tionscal seo lonnaithe i nGaoth Dobhair le beaganch 30 bliain. Tá fostaíocht iontach curtha ar fáil aige i rith an ama sin ag déanamh táirgí bia ar nós sceallóga crisps agus mar sin de. Tá taithí ag na hoibrithe ar an tionscal sin agus bhí rudaí ag dul ar aghaidh go maith.

Anois, áfach, tá athstructúrú á dhéanamh ar an gcomhlacht seo agus dá bharr sin, tá 170 duine á ligint chun bealaigh. Daoine iad seo atá ina gcinn teaghlaigh, an t-aon duine b'fhéidir atá ag obair sa teach agus bíonn freagrachtaí móra orthu, morgáistí agus mar sin, cionn is go bhfuil a gclann ag dul le hoideachas.

Mar sin féin is buille seo don eastát freisin. Seo an tionscal is mó agus is faide lonnaithe ar an eastát ansin sa pháirc ghnó i nGaoth Dobhair. Tuigim nach bhfuil an tAire féin anseo ach ba mhaith liom go gcuirfeadh an tAire Stáit in iúl don Aire, agus go gcuirfeadh seisean in iúl d'Údarás na Gaeltachta go mbeadh sé iontach tábhachtach go ndéanfaí gach iarracht cuid de na poist seo a choinneáil agus a chosaint. I gceantar beag Gaeltachta tá 170 post cosúil le 2,000 anseo i mBaile Átha Cliath nó sna bailte móra eile. Mar sin, is buille mór é seo don tionscal agus don eacnamaíocht sa cheantar. Cuirfidh sé isteach ar na siopaí, ar na tábhairní, ar na tithe ósta agus ar sheirbhísí de gach cineál. Mar sin, tá mé ag fiafraí den Aire agus den údarás gach dícheall a dhéanamh oiread agus is féidir chun na poist seo a chaomhnú.

In one form or another, Largo Foods has been operating in Gaoth Dobhair for over 30 years. During the difficult times, between 2000 and 2005, when 900 jobs were lost on the Gaoth Dobhair industrial estate, Largo Foods — or, more correctly, its predecessor, Smailc Bhia — provided alternative employment for many of those who were made redundant. One could say that it was the anchor employer on the estate.

For the 170 people being made redundant now, many of whom are their families' sole bread winners and who have financial responsibilities and commitments, there is, unfortunately, no such alternative employment available. The company maintains that the redundancies are necessary as a result of the need to restructure the industry. When the restructuring is complete, I hope the company will adopt a forward-looking and constructive plan for the plant in Gaoth Dobhair. The facilities there are first class, the workers are highly motivated and skilled, there is a demand for the product and there is no economic reason why the facility in Gaoth Dobhair should not have a viable future.

I ask the Minister to urge the relevant agencies, particularly Údarás na Gaeltachta, to ensure that the current level of employment — that is, post redundancy — will be maintained and that every effort will be made to increase the level of employment when the restructuring is completed. There will be no future for those who will be made redundant, particularly in light of the current economic crisis that obtains in Ireland. The only alternatives for them are the dole queue or emigration. However, these alternatives are unacceptable.

Deputy Conor Lenihan

The Minister would like to thank Deputy McGinley for raising this important issue today. He would like to emphasise that the loss of any jobs in any Gaeltacht industry is a cause of concern for him and for Údarás na Gaeltachta, and that he can understand the Deputy's concern.

Both the Minister and Údarás na Gaeltachta very much regret the decision taken by Largo Foods Exports Limited to lay off a total of 123 full-time equivalent jobs in its subsidiary companies on the Gaoth Dobhair Business Park. The company has had to take this decision due to increased competition in the market, the unfavourable euro-sterling exchange rate and high production costs. Certain production activities carried out by the Largo Foods subsidiary companies on the Gaoth Dobhair Business Park will be transferred to its automated production plant in Ashbourne, County Meath. Údarás na Gaeltachta understands that this decision is necessary to secure the business into the future.

The Minister welcomes the decision by Largo Foods Exports Limited to continue its development and production of high value-added products on the Gaoth Dobhair Business Park. This will leave 129 full-time equivalent jobs in Largo Foods or its subsidiaries in Gaoth Dobhair, which the Minister believes shows the commitment that the company has in this Gaeltacht area. Údarás na Gaeltachta will work with the company on a continuous basis in its efforts to develop and sustain its business. Arrangements will be made with employees who are to lose their jobs to register with Údarás na Gaeltachta if they are interested in receiving information on employment opportunities or improving their skills.

While these job losses have been a great blow to the area, an t-údarás will continue its efforts to attract new investment to the area, and the Minister is confident that it will do so. A lot of investment is being made into Gaoth Dobhair Business Park, including Áislann Ghaoth Dobhair, which includes a multi-use cultural and community centre at a cost of more than €8 million.

The Minister would like to assure the House that his Department is working with Údarás na Gaeltachta in its ongoing work to generate and sustain employment in the Gaeltacht. In this context, his Department has provided €35 million to Údarás na Gaeltachta for its works programme in 2009. The Minister is confident that through the full co-operation between himself, the Tánaiste and Minister for Enterprise, Trade and Employment, Údarás na Gaeltachta, the IDA and Enterprise Ireland, that these great efforts will be rewarded with the provision of worthwhile, sustainable employment for the people of the Donegal Gaeltacht.

Digital Television.

Deputy Simon Coveney

I am seriously concerned about the Government's plans to roll out digital terrestrial television. At the start of the week, the company that was due to roll out the commercial element of the DTT programme, Boxer, pulled out of the deal.

Last summer the Broadcasting Commission of Ireland went through a long process of selecting a preferred tender and then granted a 12 year contract to Boxer to provide DTT across the country. It offered three multiplexes which would have been able to provide 30 channels on a digital platform. The other multiplex is controlled by RTE but RTE is rolling out the masts and infrastructure required to allow digital terrestrial television to work. It must roll it out anyway to provide free to air digital services by the end of the year. In reality, RTE can only afford to do this on the back of the revenue it was to receive from the commercial operator that was going to use the same infrastructure. That commercial revenue is now gone. The public service broadcaster, having spent €40 million rolling out infrastructure to facility the roll out of DTT, still needs to spend €60 million to complete the job because we are switching off analogue television services in 2012 so we must have a DTT to fill the gap. A revenue stream that would help to finance the roll-out of the infrastructure has now gone.

No one in their right mind will want to switch to free to air digital terrestrial television. Why would they bother switching from an analogue service to a digital service if it is going to cost them money in terms of purchasing a set top box if they are only getting the same or fewer channels? Why would someone switch from a Sky or cable subscription if he will only receive five channels? The DTT programme is now a shambles. RTE is being exposed to enormous costs to continue the roll-out but it does not have the money needed.

The Broadcasting Commission of Ireland and the Minister have responded by saying there were three companies interested in rolling out commercial DTT in Ireland so we will go to the second preferred tender, One Vision, a joint venture involving TV3, Setanta and Eircom. It does not take a genius to work out these three companies face financial difficulties at present and are not in a position to spend the kind of money needed to roll out a DTT service across the State. The structure that has been put in place is not the Minister's fault but the Minister must get involved and recognise that the structure is broken. The public service broadcaster has been left holding the baby and the State must concede that a new tendering process is required. The Minister must sit down with the BCI to figure out a new way to deliver digital television to Irish people on a free to air basis, as well as on a commercial basis. The current plan is broken and we must recognise that and fix it. Time is of the essence if we are to reach the deadline of switching off analogue television by 2012. We cannot do that unless we find a way forward, and quickly, for the three multiplexes and their management for commercial DTT.

Minister of State at the Department of Education and Science (Deputy Seán Haughey)

The Broadcasting (Amendment) Act 2007 puts in place a flexible framework for the licensing of digital terrestrial television, DTT, into the future. The Act provides for the establishment of a free to air DTT service to replace the existing analogue terrestrial services offered by RTE, TG4 and TV3. The Act also provides for the development of commercial DTT services, which are anticipated to provide further choice to those who wish to avail of additional channels to the Irish free to air channels. The current model proposes that RTE operate a single public service multiplex which provides access to the free to air Irish TV channels and that the Broadcasting Commission of Ireland, BCI, will offer licences for three commercial multiplexes.

Under the Act, RTE, BCI and the Commission for Communications Regulation, ComReg, have obligations to provide for the roll-out of DTT and to assist in the development of a plan for analogue switch off. The public service multiplex, being provided by RTE, will carry the existing RTE One, RTE Two, TV3 and TG4 channels and will have the potential to carry a further four public service television channels. RTE has already significantly progressed the roll-out of the public service multiplex and has indicated that services can be launched on a phased basis starting in autumn this year. It is expected that the first phase of DTT services will provide coverage of about 85% of the country.

On 7 March 2008, the BCI issued a call for applications for the award of a contract or contracts in respect of the operation of three national commercial DTT multiplexes and received applications from the following three consortia: Boxer DTT Limited, a consortium comprising a Swedish company, Boxer, Communicorp and BT Ireland; One Vision — a consortium comprising Eircom, TV3, Setanta and Arqiva; Easy TV — a consortium comprising RTE and UPC's parent company, Liberty Global. On 21 July 2008 the BCI announced its intention to enter into contract negotiations with Boxer DTT Limited for the award of the three national commercial DTT multiplexes.

On 20 April 2009, the BCI announced that Boxer DTT Limited had withdrawn from contract negotiations. Boxer cited prevailing and anticipated economic circumstances, in addition to challenges in agreeing the terms of a contract with RTE Networks Limited, to the satisfaction of both parties, for the provision of transmission services by RTE Networks Limited. The BCI has now approached the One Vision consortium with a view to entering into contract negotiations for the award of the three national commercial DTT multiplexes.

The BCI has confirmed that it is committed to pursuing the development of DTT services in Ireland and will continue its work in that regard. The Minister has no plans, at this time, to re-evaluate the process by which a commercial DTT licence is granted and expects RTE to deliver on its public service obligations. The switch off of the national analogue broadcasting system is planned to take place by 2012 and will bring major benefits by the reallocation of valuable wireless spectrum for other use. In this regard the Minister is closely monitoring the progress made by RTE, ComReg and the BCI in relation to the development of Irish DTT services.

A working group has been established — comprising representatives from the Department of Communications, Energy and Natural Resources, RTE, BCI and ComReg — to begin work on planning the steps necessary to achieve analogue switch-off. The Minister is cognisant of the fact that most European countries expect to switch off analogue services by 2012 and he remains committed to meeting this deadline so that Ireland can continue to compete at an international level in the broadcasting and broader communications markets. Both RTE and the BCI are also aware of the importance of meeting this deadline.

Schools Building Projects.

Deputy Frank Feighan

I welcome the Minister of State. A new school was constructed in Croghan, County Roscommon. Croghan is a small village between Boyle, Carrick-on-Shannon and Elphin. The population in the area is growing rapidly and the new school was a big attraction, with an increased number of pupils enrolling. A fourth teacher will join the staff in September. What was originally a two-teacher school is now a four-teacher school.

Through a tax back scheme and church donations the board of management has received €50,000. The local church fund has loaned the school another €50,000. An outstanding amount of between €200,000 and €250,000 is required from the Department of Education and Science. The school building has been completed and the staff are ready to move in. However, the builder will not hand over the school until he receives payment. If the new school is not operational, the school will have to rent another prefab. There are two in place already. The old school is for sale but due to the economic downturn, it cannot be sold. It has a prime site of 0.75 acres on the main road.

The proceeds from the sale of the school will be given to the Department of Education and Science, and a letter has been sent by the board of management to the Minister stating that. The parents, staff and board of management have done everything possible to satisfy the Department's guidelines. I commend them on their initiatives and co-operation with the Department. I ask the Minister to release the funds necessary to enable the school children and their teachers to move into the new school.

Deputy Seán Haughey

I am replying to this Adjournment matter on behalf of my colleague, Deputy Batt O'Keeffe, Minister for Education and Science. I thank the Deputy for raising the matter as it gives me an opportunity to outline to the House the Department's position regarding the allocation of funding for Croghan national school, County Roscommon.

This school was approved for funding under the 2006 small schools scheme. A grant of €820,000, including VAT and fees, was sanctioned to enable the school to provide a new three-teacher school building. Due to the condition of the old school the board of management decided to provide a complete new building on a new site. The Department moved towards a model of devolving funding, responsibility and authority as appropriate for smaller building projects-refurbishments directly to school management authorities in 2003 with the introduction on a pilot basis of the devolved small schools and permanent accommodation schemes. Due to the positive feedback from schools the schemes were extended to include additional schools in subsequent years.

The small schools scheme allows boards of management to address their accommodation and building priorities with a guaranteed amount of funding and gives boards of management control of the building project. The intention of the scheme is to provide funding to schools to enable them to undertake wanted building projects. The scheme is not intended to leave schools with significant fund-raising needs but for the school to tailor the scope of capital works commissioned to the available funding.

A central tenet of the scheme is that the schools, granted discretion and funding, must equally accept responsibility for prioritisation, adherence to statutory regulations, control of costs and ensuring value for money. The decision on whether to continue participating in the scheme or to drop out, if the scope of build is more than the funding envelope permits, is a matter for each school authority. The authorities of the Croghan school accepted the grant offer and returned a form of undertaking in March 2007 agreeing to comply with the requirements of the scheme.

A letter and project cost details were received in May 2008 indicating that the total cost of the school's building proposals, for a three classroom school building with a large general purpose room, resource room, staff room and principal's office, would amount to €1.4672 million, an excess of €647,214 over the €820,000 grant on offer to the school. The school submitted an appeal in October 2007 for increased funding of €333,347 from the Department and indicated that it would sell the old school building and site and come up with alternative sources of funding to cover the balance of the cost. Following detailed consideration of the appeal the Department approved an additional grant of €330,000 bringing the total approved grant to €1.15 million. A total of 70% of the grant issued to the school in February 2008 following confirmation that the builder had commenced work on the project. During the course of the construction an additional classroom was added to the new school building to cater for increasing enrolments. Additional funding of €120,000 was approved by the Department in respect of the extra classroom. The final cost of the project is in the region of €1.65 million. The Department had approved funding of €1.273 million.

The school appealed for additional funding to cover the shortfall as the downturn in the economy resulted in no demand for the old school building. However, in line with the original intention of the small schools scheme, it was considered that the school should be encouraged to complete the project within the funding envelope provided and, accordingly, the application for additional grant aid was not granted. It was considered that in the current economic climate and with considerable demands on the capital budget of the Department, it is not possible to entertain such significant increases in the amounts grant aided to the school, especially as it had already two increases in grant aid. It is the responsibility of the school authorities to manage the resources allocated to them to ensure maximum value for money and to control costs. A further appeal has been received from the board of management for additional funding and the Department will process it and a decision will be conveyed to the board in due course.

I thank the Deputy again for giving me the opportunity of outlining the current position to the House.

The Dáil adjourned at 5.20 p.m.until 2.30 p.m. on Tuesday, 28 April 2009.