Vol. 849 No. 1
6. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources to set out the final revenues raised by the sale of Bord Gáis Energy; the way the resources generated by the sale will be used by Government; the spend on consultants and other expertise during and on completion of the sale; and if he will make a statement on the matter. [31426/14]
Will the Minister for Communications, Energy and Natural Resources set out the final revenues raised by the sale of Bord Gáis Energy, the way the resources generated by the sale will be used by Government, the spend on consultants and other expertise during and on completion of the sale, and make a statement on the matter?
On 30 June last, the sale of Bord Gáis Energy was completed. In line with the share purchase agreement entered into by Ervia, formally Bord Gáis Éireann, the total enterprise value, inclusive of debt, for the sale is €1.1 billion, including a small element of contingent consideration.
On 7 July, a special dividend of €150 million was received from Ervia representing the first instalment of proceeds from the sale of Bord Gáis Energy. Further special dividends will accrue from that sale. Under EUROSTAT rules, there are limits to the amount of such dividends that can benefit the general Government balance in any one year. Potential future dividends to be achieved in the coming years will be subject to two criteria. The restructuring of the company will involve the establishment of the proposed new gas networks company in accordance with the Gas Regulation Act 2013, which is expected to be completed later this year. There will have to be full consideration of the appropriate gearing level in line with the company's growth plans as well as regulatory and policy objectives. The net proceeds of the sale, when combined with the planned re-gearing and the contingent consideration, are expected to deliver total dividends in the order of €1 billion for the Exchequer.
Deputy Moynihan asked about the revenue raised from the sale of Bord Gáis Energy. The Government's consistent position is that the funds released from asset disposals, to include the proceeds from the sale of Bord Gáis Energy, should be used, to the greatest extent possible, to support job creating initiatives in the economy.
I can confirm that the total fees to be paid to the Government's financial and legal advisers amount to €1.2 million, excluding VAT. The Ervia annual report has recently been published and Ervia has provided additional details on professional fees paid relating to the transaction amounting to €18 million. I am advised that the fees and transaction costs are within the normal range for this type of large and complex transaction.
We opposed the Bill as it was going through the House. The Minister has outlined what has been accrued from the sale. It is vital that the moneys from the sale are used to best possible effect for job creation. The Department should examine the shortfalls in the areas under its remit and what is needed within the Department. The previous question from Deputy Healy related to broadband. That is one of the major barriers to job creation in rural communities. It is vital that the moneys used have a tangible benefit and that they are not simply used to write down debt and so on. They should be used for job creation and to benefit the economy and the State for generations to come. Previous Governments set up Bord Gáis, the ESB and other semi-state bodies. It is vital that we consider that and ensure there is a tangible benefit to the State for generations to come.
It is worth repeating that the Government's consistent position has been that the funds released from asset disposals, including the proceeds from the sale under discussion, that is, the sale of Bord Gáis Energy, should be used to support job creating initiatives in the economy.
I agree with the general tenor of the Deputy's remarks to the extent that, where sale agreements like this are concluded and a certain value accrues to the State, there should be a dividend in the broad sense to the economy by the opportunity to invest in job creation.
7. Deputy Michael Colreavy asked the Minister for Communications, Energy and Natural Resources if his Department has an official definition of the hydraulic fracturing process; and if he will make a statement on the matter. [31642/14]
My question is whether the Department has a definition of the hydraulic fracturing process.
While the term "hydraulic fracturing" is not defined in legislation, it is a well understood term. I can point the Deputy to a clear definition of the term provided on the Environmental Protection Agency's website in the context of the call for proposals issued on 22 November 2013 seeking tenders to undertake further detailed research on the potential impacts on the environment and human health from unconventional gas exploration and extraction projects. Hydraulic fracturing is defined by the EPA as a process which involves the creation of, or the propagation of, a fracture in a rock layer, by means of a pressurised fluid in order to release petroleum, natural gas, coal-seam gas or other substances for extraction. The energy from the injection of a highly pressurised fluid, such as water, creates new channels in the rock which can increase the extraction rate and ultimately recovery of fossil fuels.
The EPA research programme will be significant and will include identification and a detailed examination of potential impacts on the environment and human health, as well as potential successful mitigation measures to counteract the impacts of such projects and operations that have come to the fore worldwide. Where appropriate, it is expected that findings will be accompanied by reference to experiences in other countries. The selection process, overseen by a steering group chaired by the EPA and which includes representatives from my Department and a number of other Departments and agencies, has been concluded. An announcement from the EPA on the award of the tender is expected shortly.
The context in which I asked the question is the planning application process in the Six Counties, specifically in Antrim by Rathlin Energy Limited. It is disturbing because the company is using different words as part of the application process. The company talks about production scale shale gas, conventional versus unconventional exploration, low volume versus high volume and rock or shale stimulation. It says it is not fracturing because proppants such as quartz sand will not be added to the fracking fluid. The company is trying to change the definition and we need to keep an eye on the planning application process. The worrying thing is that the Department of the Environment in the North is beginning to use the same language.
I share the Deputy's concerns. We have heard conflicting reports on the fracking process. North Dakota comes to mind. As part of the research, which has not yet been awarded, dual emphasis must be placed on the environment and human health. The Minister shares my concerns and the Department shares these two parameters as twofold concerns. The more detailed research programme will be conducted over a period of two years and will not be published until 2016. We have two years to learn and there are examples in the Six Counties from which we must learn. Let us learn from there, from the United States and from other countries. We must look at the twofold important parameters of human health and the environment.
I welcome the fact that the Minister has put on record his concern about this and his awareness of the risks. If I had my way, we would not consider fracking on a small island. We must learn but we must also be conscious that companies will say and write anything in order to get investors and planning applications for fracking. Once the gas is gone in 15 years' time, they will not care as their investors will have the money and we will be left with the mess.
Let us learn from experiences and let us be on the ball. We have a two-year period so we should use all aspects of the mechanics within the democratic House, such as the Joint Committee on Communications and Transport. The community must also be involved in the research over the two years. We must be open with people, learn from experiences and ensure every t is crossed and every i is dotted in ensuring that health and the environment are protected during this detailed research programme.
9. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources when the Environmental Protection Agency will complete its review of hydraulic fracturing; his position on hydraulic fracturing; and if he will make a statement on the matter. [31427/14]
The question is on the same theme as the previous question. When will the Environmental Protection Agency complete its review of hydraulic fracking? What is the position of the Minister of State on hydraulic fracking?
We will be going over the same ground, if Members will forgive the pun. In November 2013, the Environmental Protection Agency, EPA, issued a call for tenders to engage the relevant expertise to conduct detailed research into the potential impacts of hydraulic fracturing technology. The selection process, overseen by a steering group that includes representatives from my Department and a number of other Departments and agencies, has concluded. An announcement from the EPA on the award of the tender is expected shortly. The research programme envisaged will be very significant and will include identification and a detailed examination of potential impacts on the environment and human health, as well as potential successful mitigation measures to counteract the impacts of such projects and operations that have come to the fore worldwide. Where appropriate, it is expected that findings will be accompanied by reference to experiences in other countries. The research programme will take in the region of two years to complete.
Large corporations, who are likely to engage in the fracking process if they are allowed, have a wonderful capacity to buy the research and influence how the media covers the matter. In America, fracking has been lauded as a wonderful form of cheap energy and a great help to the state, while others are trying to highlight the fact that the water table has been seriously damaged. The short-term financial gains could be damaging in the long term for the health of individuals who live in the area as well as the environment. It is important that we do not accept lock stock and barrel everything the large companies tell us because they have a poor history in the area.
Vigilance is key and there will be vigilance in the House. In framing public policy, we must review how we work with our communities and the community representation structures. Lessons must be learned from some of the bigger issues, such as pylons and the question of underground versus overground lines, and about how public policy must include the community. It must be part of this and, within the two-year period, I will be vigilant and adamant that community has a voice about its concerns from the human and environmental points of view.
10. Deputy Michael Moynihan asked the Minister for Communications, Energy and Natural Resources to outline his priorities for his Department for the coming 12 months and the key goals he is setting for the coming two years; and if he will make a statement on the matter. [31425/14]
I would like the Minister to set out his priorities for the next 12 months and his key goals for the coming two years.
The Government's statement of priorities for the period between 2014 and 2016 sets out clear and ambitious targets, which will build on the achievements of the last three years, broaden and deepen the economic and social recovery and improve the living standards of our citizens. Energy and broadband connectivity, which are among the most strategic sectors of the economy, are clearly reflected in the strategy for economic and social recovery set out in the statement. It identifies the promotion of investment in indigenous energy production, the reduction of emissions, the improvement of security of supply and the creation of jobs as overriding objectives. We need to be cognisant of energy cost competitiveness while anchoring Irish energy policy in the three pillars of EU energy policy. In the area of broadband, the national broadband plan aims to ensure high-speed broadband is available to all citizens and businesses irrespective of location. Significant commercial investment is under way and will be complemented by State investment aimed at addressing areas where there is no commercial case for investment. An online trading voucher scheme, which is targeting support to over 2,000 small and medium-sized enterprises over a two-year period, has been launched to help create jobs and growth in such enterprises.
Over the coming months, I will engage with my Department in the preparation of a new statement of strategy which will set out the key objectives, outputs and related strategies for the Department over the next three years. While I would not attempt to anticipate the full scope of the statement or list all the priority areas for action at this stage, I expect it will include a legislative programme that will include new broadcasting, minerals and fisheries legislation. An energy White Paper that takes account of energy and climate change objectives and targets over the medium and long terms, specific obligations relating to renewable energy deployment and energy efficiency for the period up to 2020 and the need to ensure security of supply and competitiveness in our energy system will be developed. The statement will also provide for the further development of the national broadband plan, the continued roll-out of the national digital strategy; the provision of support to a diverse and financially stable broadcasting sector; the roll-out of the national postcode project; and the overseeing of the 2015 offshore oil and gas licensing round.
I would see a number of issues as priorities in the highly unlikely event that I would ever sit in the Minister's seat. The priority on the communications side has to be broadband. We have a two-tier society in relation to broadband. People in some places can get broadband but people in other places cannot. The new broadcasting charge is a huge issue for the independent radio networks, which will celebrate 25 years in existence this year and have done exceptional work. It is high time for us to look at their funding in the context of the funding of the State broadcaster, with which I would have many issues. As I said during our discussion on a previous question, it is high time we changed the memorandum of understanding in relation to the post office network. The cost of energy to consumers and business users also has to be prioritised. On natural resources, the fracking issue has to be dealt with because there are huge fears among people in this regard. It is time we made our inland fisheries a priority because they are a huge resource that is totally under-utilised. A large part of our tourism industry could be built on it. These matters should be priorities
We do not know what the destination of anyone in this House will be. We do not know which side of the House we will be on, or which positions we might occupy, in the future. On the basis of the manner in which the Deputy has outlined his priorities, I could see every possibility that he will have an opportunity to take up a position in the future. I agree with his survey of the main issues. He is right in respect of broadband. I have already spoken about the importance I attach to that issue. I do not disagree with the Deputy at all in this regard. Broadcasting is a hugely important area. We must ensure the public and private sectors in broadcasting are strong and vibrant. We must ensure support for both. We have had a vibrant and dynamic independent sector since it was set up on a statutory basis in the late 1980s. Various stations were legalised when the legislation came through in 1988 or 1989. I support this sector and want to see it going from strength to strength. Equally, we must ensure we have a strong public broadcaster. The approach I will be taking is that the two sectors should complement each other.
The Deputy is right to raise issues like the post office network, which we have already debated, the cost of energy and inland fisheries. I am not just observing the niceties of the last day of this parliamentary session when I say I am looking forward to working with Deputies across the House and hearing their views. For example, I would like to have a further discussion with Deputy Moynihan on his views on the post office memorandum he mentioned to understand better what he has in mind. Equally, I am very interested to hear what Deputies Colreavy, Wallace, Healy and Ó Cuív have to say.
The independent networks, which are 25 years old this year, have provided a fantastic service throughout the land. Value for money is an issue within the State broadcaster. We cannot continue to ignore the huge issues in relation to the State broadcaster. It is vitally important for us to look at them. The other issue I raised was the complete under-utilisation of our inland fisheries as a natural resource. We need to bring that to the fore as well. Those issues will have to be adjudicated on in this House over the next while. When we ask questions approximately once a month on the issues involving this Department that are affecting the public, we will seek to make sure action is being taken on them.
I repeat that I am willing to work with the Deputies on these issues. I know the Minister of State, Deputy McHugh, who is responsible for natural resources, has the same view. We can try to address what the Deputy referred to as the "under-utilisation of our inland fisheries" and seek to bring forward ideas in that regard. We can return to the question of broadcasting on a future occasion. I hope it does not always come down to a zero-sum debate between public and private broadcasting. It is a little unfortunate that in these debates, people sometimes press for an advantage for one sector which they think will put the other sector at a disadvantage. We should try to support both and ensure the balance is right.
11. Deputy Éamon Ó Cuív asked the Minister for Communications, Energy and Natural Resources the policy focus and the discussions he has had in relation to the provision of enhanced services from the post office network; and if he will make a statement on the matter. [31296/14]
I suppose there is no issue that is more debated in Ireland than the future of our post offices. This question goes to the kernel of the dilemma we face as we try to make our minds up on this issue. Some people see State companies as ordinary companies that happen to be in State ownership. Other people see them as a way of providing the community with vital services that would not otherwise be provided by the public sector. What is the Minister's view of where we should go with the post offices? How will he develop them as public service offices?
It is Government policy that An Post should remain a strong and viable company that is in a position to provide a high-quality, nationwide postal service and maintain a nationwide customer-focused network of post offices in the community. Proposals for a whole-of-Government review of the scope for providing additional public services through local post offices were presented to the Cabinet committee on social policy at its meeting on 28 April last. In its initial consideration, the committee agreed to the proposal for a review of the scope of additional public services in the post offices. This process is under way. My Department is examining the initial responses received with a view to engaging in further discussions with Departments as necessary, and with the overall aim of presenting a final report to the Cabinet committee this September.
I see a strong future for the network if it uses its existing strengths to remain a significant player in the provision of Government, financial and other services. Securing the future viability of the post office network in the longer term will entail the network continuing to modernise, as it is doing, to provide the services its customers require. Of course any such developments will need to be subject to competition and public procurement requirements as appropriate. I do not doubt that we will return to this issue in the House, particularly on foot of the work being carried out in the Cabinet committee on social policy.
I thank the Minister for his reply. First, we will not be able to do justice to this issue this morning but has the Minister had even preliminary discussions with his colleague, the Minister for Social Protection, to ensure that the social welfare contract will remain with post offices? That is the anchor, and it can be done by demanding that whoever provides that particular social welfare service has an office on offshore islands and in every rural community. I do not see Tesco or Aldi making that bid.
Second, does the Minister envisage new public services being provided through post offices during the remainder of his term? For example, there was talk of making licences available and so on. Does he see that happening?
Third, the Minister mentioned An Post but post is a declining business. Fewer people use the postal service because of e-mail. Does the Minister see these as post offices with adjunct services or the nearest local delivery point of a range of public services into the future, with the postal service being only a small part of a big package of services?
I have had only the most preliminary discussion on this issue with the Tánaiste and Minister for Social Protection but I have no doubt I will have an opportunity to discuss this matter further with her in the period ahead.
I do see opportunities in respect of the post office network but like any other sector, those opportunities must be sought, developed and brought forward. That is what An Post needs to do and, I am sure, that is what it will do.
The Deputy mentioned the Department of Social Protection cash contract. He will be aware that in June 2012, An Post was selected as a supplier for over the counter cash services for social welfare payments as phase 1 of that payment strategy. On foot of the AIB decision to close a number of branches, an extended range of AIB services is now available through post offices in the locality of those closures. An Post and Aviva have completed an arrangement whereby An Post has taken over Aviva's retail business. In respect of local property tax, An Post was selected by the Revenue as one of three approved payment service providers.
There are opportunities, therefore, for business development. For example, in 2013, Government revenue earned by An Post amounted to €175 million as between social protection - €58 million; the National Treasury Management Agency - €54 million; mails income - €49 million; election referendum - €2 million; TV and dog licences - €11 million; and other - €0.8 million. There are opportunities.
Does the Minister see the post office network as just another competing bidder for contracts or as the State provider of a range of local services into the future? The figures the Minister gave are interesting in that the postal part of An Post is no longer the main income source. Philosophically, where is the Government on this? Does the Minister agree with me that An Post should be the nearest point of contact with as many State services as possible or should it be one of a range of bidders that might win State contracts and might provide those services? That is a fundamental question, and I am very interested to know which side of the fence the Minister stands on regarding it.
I have encountered a number of fences in my first few days as Minister so I do not propose to jump on either side of any fence for the moment regarding these matters other than to agree with the Deputy that there is a tension, although describing it as a tension is a bit strong. Historically, there is the public service remit that we all understand, and then the commercial world and public procurement context in which we all must live. An Post, no different from any other organisation, lives in that world where there are these different imperatives.
I have outlined the many opportunities with regard to Government revenue but An Post cannot rely solely on Government business. Given the challenges facing An Post its key focus will be to secure new revenue sources based on services and products across the board that offer higher value in local communities. Those are issues we are looking at and which the Cabinet Committee on Social Policy examined, and I look forward to returning to them in this House in terms of debate.
We lost some time at the start of Question Time but we have time for one more question. Question No. 12 is in the name of Deputy Seamus Healy.
12. Deputy Seamus Healy asked the Minister for Communications, Energy and Natural Resources the position regarding the roll out of high speed broadband to rural areas of County Tipperary; and if he will make a statement on the matter. [31290/14]
The question of the availability of quality, high speed broadband, particularly in areas outside the major urban centres, is crucial for job creation and job retention. I ask the Minister the position on the provision of those services in County Tipperary.
The Government’s statement of priorities for the period 2014 to 2016 reaffirms our commitment to delivering a State-led broadband intervention in rural areas. The Government’s national broadband plan aims to radically change the broadband landscape in Ireland by ensuring that high speed broadband is available to all citizens and businesses.
Since publication of the plan, investments by the commercial sector have accelerated with commercial operators investing, or committing to invest, approximately €2.5 billion in networks and services. I understand that at least one network operator has published a programme to roll out 43 fibre-based broadband networks in County Tipperary by July 2016. In addition, the recent announcement of a joint venture between ESB and Vodafone includes a proposal to provide high speed broadband in Clonmel, County Tipperary.
The Government has committed to an ambitious plan which involves ensuring the delivery of broadband services to those parts of rural Ireland that will not be served by the commercial sector. Services will be delivered over a network, with fibre at its foundation, which is sustainable and guarantees a quality service to rural consumers into the future. This will be the key element of an intervention strategy that will ensure that all citizens and businesses can access high speed broadband services regardless of location.
Under EU state aid guidelines, member states cannot intervene where commercial investors have plans to roll out services. A comprehensive mapping exercise is under way in my Department to identify those areas that require a State intervention. An initial list has already been identified and I can tell the Deputy it includes 79 areas in County Tipperary.
A stakeholder consultation on the implementation of the State-led intervention has recently been launched and will feed into the mapping exercise, which I expect to conclude in the autumn. It is my intention to conduct a full public consultation on the outcome of the mapping process and the proposed intervention strategy, and we will need EU state aid clearance also regarding those matters. This will flow into a detailed procurement process with a view to commencing the roll out of high speed broadband services as quickly as possible. I repeat that I regard that very much as a priority.
Additional information not given on the floor of the House
I believe that it will address current connectivity challenges in a sustainable and meaningful way and will ensure that rural Ireland can enjoy comparable levels of quality and service as those experienced in urban areas.
I welcome the statement from the Minister on the various initiatives he mentioned. These are vital for County Tipperary because we have significant levels of unemployment, with more than 1,500 people unemployed in the county. That figure has increased in the past two consecutive months. The IDA announced 100 investments in the past 18 months, not one of which was in County Tipperary. The creation of 8,000 jobs was announced, but not one in County Tipperary. This Government, and successive Governments, have favoured the east coast and major urban centres for job creation and investment, therefore, the provision of broadband is crucial for Tipperary to create and maintain jobs. I hope the details the Minister has given will happen in the very near future.
I repeat that this is a priority. The mapping exercise is under way to identify locations. I have given the Deputy and the House indicative information relating to County Tipperary. There is a need in that county but there is an identified need across the country, particularly in rural areas and in areas where there is no real prospect of commercial involvement.
In many areas of public policy, particularly in the economic field, it is the role of the State to intervene where the market fails. That is what we intend to do in this vital area of public infrastructure.
I welcome direct State intervention. However, because of EU rules, the State is not allowed to get involved in areas that have been marked out by the private sector and the Minister states that the role of the State is to get involved where the private sector does not deliver.
The private sector is earmarked to bring high-speed broadband to my area, around Wellingtonbridge and Bannow in Wexford, but cannot do it for a few years. That is not delivery. Does the Minister agree that the State should be allowed to intervene with the provision of broadband where the private sector is not able to bring it on stream quickly enough and that, if this is an EU rule, irrespective of the number of years that they have to wait, surely it is something that should be challenged?
We want to ensure that the entire country gets the service and to the extent that there is commercial involvement in areas of the country where that occurs, that should be allowed to occur. I agree with Deputy Wallace that it is always best that any project, whether it is in the public or private sector, should be expedited, but all State resources are scarce. Decisions must be made about priorities in relation to any State resource, not only in this area but right across the board.
Deputy Ó Cuív asked me a question about my philosophical approach. The most important, although not the only, objective for the State in terms of public economic infrastructure is to ensure that areas where the commercial interests will not go do not lose out. That arises in the area of public transport and in all sorts of other areas. It seems that would be the key objective, to ensure that somebody living in a particular area or wanting to business in a particular remote part of the country does not lose out simply because there is not a commercial reason for an operator to come in and provide broadband.
