Electricity (Supply) (Amendment) Bill, 1969: Second Stage.

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

Minister for Transport and Power (Mr. B. Lenihan)

The purposes of the Bill are—firstly to increase the limit of authorised capital expenditure by the ESB for general purposes and, secondly, to provide for certain amendments in the superannuation code of the ESB employees.

Under existing legislation the board are entitled to incur capital expenditure for general purposes, that is to say, for all purposes other than the electrification of rural areas, up to a limit of £225 million. While actual expenditure up to 31st March, 1970, amounted to about £187 million, the board, of course, must enter into commitments for substantial expenditure some years ahead. The House will appreciate that, in general, it takes five years from planning stage to commissioning stage for generating stations. Therefore, at any given time, the board are committed to expenditure on generating plant up to five years ahead. Capital for transmission and other expenditure does not have to be planned quite so far ahead. I propose in this Bill to increase the limit to £290 million.

The board's total installed generating capacity at present amounts to about 1,410 megawatts. They expect to commission 706 megawatts of additional capacity, half of which will be oil fired, to meet the demand up to 1974-75. This additional capacity includes a 40 megawatt extension to the milled peat fired station at Shannonbridge, County Offaly. This will absorb the production of the last major bog suitable for harvesting by Bord na Móna's advanced methods.

The additional capacity also includes the 280 megawatt pumped storage scheme at Turlough Hill, County Wicklow. A pumped storage project depends on the utilisation of relatively cheap electrical energy available from thermal generating stations to pump water during the night from a low level reservoir to a high level reservoir. This water is utilised the following day to produce peak load energy and in this way the station acts as a storage centre for electricity.

While the scheme has received a certain amount of publicity, the House may not be fully aware of the magnitude of the work being carried out. The scheme, which qualified for a loan of about £6 million from the World Bank, and which will cost over £12 million, was largely designed by the board's own engineers and is regarded as being unique in civil engineering projects in Ireland. Turlough Hill will be the sixth station of its kind in Europe and only two others in the world are technically more complex, in terms of the height and quantity of water used.

I think the board have perhaps tended to be unduly modest with regard to the Turlough Hill project. They have every reason to be very proud of this development. Senators should take the opportunity to see the scheme for themselves, as I did, and I have no doubt that the board would be delighted to show them around.

When the Turlough Hill area was first proposed as a location for the project, there was considerable disquiet about the dangers to the amenities of this beautiful part of the country. It is, therefore, necessary to point out that the board have so designed the scheme that virtually nothing will be visible from the road. On their own initiative, the ESB engaged a most eminent landscape architect to advise on the problems associated with the project and, despite a number of public statements to the contrary, they have closely followed the recommendations made and have every intention of doing so in the future, if at all practicable.

Controversy at present surrounds the proposed routes of the transmission lines from the scheme. I do not propose to add fuel to this controversy except to point out that the decisions in this case will be for the appropriate planning authorities, from whom the ESB have sought planning permission, and that interested parties can lodge any objections they may have with the appropriate planning authority.

Also included in the additional capacity being provided in the next few years—and another innovation as far as the ESB are concerned—are two 13 megawatt gas turbine units at Pigeon House. These small sets can be started independently of outside electricity supply and would reduce the time required to restore supply to the Dublin area in the event of the main Dublin stations being temporarily out of action. They can also be utilised for peak load, thus avoiding the necessity for installing large uneconomic units—"peak lopping" as it is called.

The question of erecting nuclear stations has been posed from time to time both in the Press and here in the House and I take this opportunity to explain the position. The competition posed by nuclear power generation for conventional thermal stations has led to rapid and substantial improvement in the technology of thermal generation in new, larger, higher temperature units, giving greater efficiency and hence lower cost. In our circumstances, it is necessary to bear in mind the size of station suitable to Irish conditions. The more competitive nuclear stations erected abroad have so far all been of very large capacity, approaching our total installed capacity. There is a problem in accommodating large generating units on the ESB system because of the base load running which they require, and the risk involved in overdependence on single units. However, the continuing growth in demand for electricity in Ireland is making it possible to use larger and larger units so that the time when nuclear generation may become viable is moving closer. In addition, producers of nuclear generators are now tending to give more consideration to the production of competitive medium and smaller sized units.

Apart from pure economics, we are becoming to a greater extent each year dependent on oil, and generation from native sources of energy, already practically fully developed, now represents an ever decreasing percentage of output. Diversion into nuclear generation would be a safeguard on security grounds. It is in the national interest to lessen our dependence on any one energy source.

The ESB have already arranged for the training of some of their engineers in nuclear technology and are continuing to study the overall situation. Ireland may well have its first nuclear power station before the end of the seventies.

The demand for electricity continues to grow at a remarkable rate. The rate of increase over the past four years was as follows:—

1966-67	8.6 per cent
1967-68	10.3 per cent
1968-69	11.8 per cent
1969-70	10.5 per cent

By way of comparison, the increase in demand in European member countries of OECD has averaged between 5 per cent and 6 per cent in recent years; further comparisons show that, in the five-year period ended March, 1968, the average annual increase in electricity consumption per inhabitant was 11 per cent in Ireland, 5.1 per cent in the UK, 6.1 per cent in France, and 7.6 per cent in Italy. The growth in demand here is, of course, a sign of economic strength and an indicator of the improving living standards of our people. Our economic growth is conversely to a great extent dependent on our continuing to invest increasing amounts of public capital in the provision of electricity to meet the increased demands.

The board had been estimating future demand for electricity on a 9 per cent compound growth basis but they are now raising this estimate to 10 per cent. Estimating increases in demand for electricity up to five years ahead is a hazardous and onerous job. There is the danger, on the one hand, of overestimation in which case the unused generating capacity would bring serious losses and, on the other hand, the danger of underestimation, resulting in load shedding because of inability to maintain supplies. Future demand is affected by the course of general economic progress in the country in the period concerned. The ESB, I might say, employ the most modern techniques of forecasting and they are aware of the latest developments internationally in the determination of more precise statistical standards for the peak load security level.

To meet the expected growth in the years after 1974-75, the board expect, during the next two years, to approve the construction of up to 500 megawatts of further generating capacity estimated to cost about £25m. A further £5m. expenditure in respect of generating capacity being provided up to 1974-75 will also arise during the next two years. Finally, improvements to the transmission and distribution networks and other works costing about £35m., are expected to arise for approval by mid-1972. These sums total £65 million which is the amount of increased capital expenditure being authorised by the Bill. Further amending legislation will then be required, giving the House another opportunity to debate, in a general way, the affairs of the board.

The enormous new investments now necessary to keep pace with the sustained and continuing growth in demand involve a serious financial problem. During the next seven or eight years the board will have to provide as much capacity again as has been provided up to now. Their capital expenditure is now running at over £20m. a year. Having regard to the amount of capital left available after meeting the other competing demands for capital in the Irish market, the board can no longer attract their full requirements by the traditional long term loans, as in the past. The board have, therefore, to resort to foreign borrowing and credit financing which involves high interest rates and repayment in a shorter term. This involves higher revenue charges and greater reliance on internal financing. To maintain their credit abroad, the board will have to continue to demonstrate to lenders that their revenues are buoyant and sufficient to meet loan repayments within the life period of the loans. As indicated in last year's ESB report, this is one factor leading to increased prices. As long as the present general financial position persists, I cannot rule out the likelihood that further price increases may be unavoidable.

I might say that the board's charges, taking into account the increase which came into effect in January, still compare favourably with most West European tariffs for domestic consumers. In regard to industrial consumers, there is, admittedly, cheaper power for big industrial users in Norway, Sweden and Switzerland where adequate supplies of cheap hydro-power are available. French, British and Dutch tariffs for big industries give about the same order of costs to the user as those of the ESB. I am sure the House will agree that it is a major challenge to the ESB to maintain electricity prices here at attractive levels.

I have pleasure in recommending the increase in the board's limit on capital expenditure to the House. It is a warranty, a clear evidence of progress being made and of confidence in our prospects for the future.

The second part of the Bill deals with certain improvements in the pension schemes for ESB employees. The first manual workers' pension scheme which came into operation in 1943 provided a maximum fixed pension of £3 a week and a retirement benefit of £200. Over the years the pension rates have been increased from time to time but it became obvious that a scheme based on fixed amounts was no longer appropriate. Substantial improvements in the pension entitlements of manual workers have recently been negotiated between the board, the workers, and the unions. The principal improvement is that a worker with full service can now get a pension of half his retiring pay, together with a retirement benefit equal to one year's wages. In the event of his death before reaching his seventieth birthday, then his dependants will continue to be paid his pension until the deceased's seventieth birthday. Alternately a worker may, before retirement, exercise an option to accept a reduced pension and thereby provide his wife or other dependant with a pension for life should she survive him. Death benefits payable under the scheme have also been improved. The worker's contribution rate under the new scheme is 5 per cent and there is an equal contribution by the ESB.

Many ESB workers serve in a temporary capacity for some years before they are appointed to permanent and pensionable posts with the board and admitted to membership of the pension scheme. The purpose of section 3 of the Bill is to enable such workers to reckon for pension purposes one half of any such service.

The manual workers who are in the board's service on 1st April, 1943 get only their previous service free. Those who were not over 40 years of age on the date the 1942 Act was passed got a special award which is enshrined in section 7 of the 1942 Act. These employees got this special award for the obvious reason that they were then too old to earn a normal pension and because of their long service to the board during a period when there was no provision for superannuation. The under forties age group at that time have been seeking a similar concession and in section 5 of the Bill a special scheme is provided for them on the general lines of that far the over forties age group but on the condition that they make a small contribution towards purchase of prior service before retirement. Section 4 will give a similar concession to the manual employees recruited since 1943, that is, they will be enabled, in return for a limited contribution to be paid before retirement, to get an award from the board sufficient to make good full benefit for their total years service to the board. This preserves the principle of mutual financing of the superannuation scheme while at the same time requiring only the absolute minimum contribution from the worker.

The new benefits represent a considerable advance on those which applied formerly and the new scheme which was initiated by the board, is, in my opinion, a practical demonstration of their concern for their staff. I am confident that the new scheme will provide a valuable contribution towards the growing improvement in staff relations which the board are so anxious to foster.

The amendments proposed in the Bill are in line with improvements in pension benefits elsewhere in the public service and I am therefore recommending the amendments to the House.

Mr. Russell

First of all, I should like to assure the Minister that, as far as Fine Gael are concerned, we will give him every co-operation in getting this Bill through the House. As the Minister has said, the ESB must raise their target for capital expenditure to a figure of £290 million. This is an indication of the expansion of the economy and the general rise in the standard of living in the country. It is also a great tribute to the ESB and, in particular, to the engineering staffs that the board have succeeded in maintaining a service that is in line with the expanding economy.

The main purpose of the Bill, as the Minister has pointed out, is to increase the limit of capital expenditure to a total of £290 million and to make certain improvements in the pension schemes for the board's employees. As the Minister has rightly said, it is obviously necessary that the ESB should be aware that they must have adequate capital to finance projects as long as five years in advance. Even to those of us who are non-technical laymen it is understandable that, in planning a project such as that being carried out at Turlough Hill, a period of at least five years would be necessary between the date of planning and the date on which the new station goes into operation.

In these times of difficult credit situations it is wise to ensure that the board have ample opportunity for planning in so far as adequate capital is made available. The present generating capacity is in the region of 1,410 megawatts and the board propose to commission 706 megawatts of additional capacity, half of which will be oil-fired, to meet the demand up to 1974-75. As the Minister has said, these plans include the Turlough Hill project which will provide an additional 280 megawatts while there are two 13 megawatt gas units at the Pigeon House. The additional capacity, we are told, includes a 40 megawatt extension to the milled peat fired station at Shannonbridge, County Offaly.

It is interesting to note that this project at Shannonbridge will absorb the last major bog area suitable for harvesting by Bord na Móna's advanced techniques. In many ways, this is a milestone in the history of the ESB. We should not let the occasion pass without referring to the magnificent work that has been done by the two co-operating bodies, the ESB and Bord na Móna, in developing our peat resources to the maximum. It will mean, of course, that the proportion of power generated from native resources will continue to decrease. In fact, I notice from the ESB's most recent available report that native resources now contribute only about 50 per cent of the total generated.

I was glad to hear the Minister refer, as I am sure other Members of the House were also, to the consideration shown by the ESB in landscaping the Turlough Hill project. This has been done without any disfigurement to the area. I would suggest that the ESB might turn their aesthetic consideration to other and perhaps more mundane matters, such as the type of poles which they erect, particularly in the urban areas. Generally speaking, they are ugly affairs which disfigure large and small urban areas. I would like to suggest to the Minister, and through him to the Electricity Supply Board, that some consideration should be given to providing wherever practicable, in conjunction with the local authorities, underground cables as an alternative to those ugly overhead cables which, as I said, disfigure most of our towns and cities.

The Minister in his address touched on the various sources of energy, some of which are now coming to an end while new ones are opening up. I should like to ask him, and I would be grateful if he would advert to it in his reply, what the opportunities are of harnessing any further generation from water sources, and in particular has any consideration been given to harnessing tidal waters to provide sources of power? I know this has been done on the Continent and elsewhere and I believe it was considered by the ESB board some years ago. I do not know what the outcome of their consideration was but I imagine that, with the advance in technical engineering skills, this project should be looked at once again as a practical means of generating additional power from native sources.

Oil now occupies a very substantial proportion of the sources from which electricity is generated. Here I find a possible danger in the stoppage or disruption of supplies of oil to this country. There is a further consideration, that very few ports in this country are capable of taking the very large tankers now in operation, being built or planned in the years ahead. In fact, there is only one port in the country which can take the type of vessels which are now becoming more common in the carrying of oil across the world. I refer, of course, to the Shannon Estuary. It is becoming very obvious as time goes on that more consideration will have to be given by the Government to the development of the Shannon Estuary as a location for heavy bulk cargoes, including oil.

It is regrettable over the years that, while we have had various platforms and assemblies talking about the lack of co-ordinating regional planning, particularly in the west and south-west of Ireland, very little has been done to put this type of planning into effect. I suggest to the Minister and to the Government that before any further expansion of the generating capacity of the ESB with oil as its basis is considered, a regional examination of the Shannon area should be carried out to ensure that this area, with one of the finest waterways in Europe, will be developed to the full and utilised as a major centre for a large industrial complex including undertakings such as a further oil refinery—not by any means an impossibility in the years ahead— an ore smelter, a steel works, chemical works and similar major industrial undertakings. In a few years time when some of those major undertakings are located in different areas we will regret the fact that some basic planning was not carried out to ensure that they were located in a centre where industrial development on a major scale is urgently needed. I should like the Minister and the Government generally to consider the absolute disregard of major industrial development on a giant scale contiguous to the one great waterway we have in these islands.

It is opportune, as we talk about the various sources from which power can be generated, to mark the fact that this year Ardnacrusha, the first generating station, is 43 or 44 years in existence. I am sure everybody in this House will agree, irrespective of political or other considerations, that it is in a very real sense a living monument to two men of outstanding ability and foresight, Paddy McGilligan and Tommy McLoughlin. I believe I am correct in saying that it is today far and away the cheapest generator of electricity in the country. If proper planning for the future is to include the development of the Shannon Estuary area the generating station at Ardnacrusha could if necessary be taken out of the national grid and employed to provide the cheapest current to some major projects in the Shannon area.

The Minister mentioned in the Dáil the fact that the turf generating stations in the strict financial sense are now uneconomic and that the question, if it has not already arisen, will surely arise in the near future as to whether we should go on literally subsidising these turf generating stations notwithstanding the fact that they are adding to the cost of producing electricity. Unless there are very severe reasons for closing down any of those turf generating stations, the factors in their favour, such as giving good employment in rural areas and the saving of imports of oil with a consequent benefit to our very shaky balance of payments situation, should be taken into consideration before any question of closing them down or restricting them should arise.

I do not pretend to know what the position of the turf burning station will be when we enter the European Economic Community. I am sure this is a matter which is under study by the ESB at the present time. Indeed, the whole question of the impact of the Common Market on the production of electricity in this country must arise. One of the essential requisites to efficient and low-cost production is power, particularly electrical power, and I am sure the ESB board are very conscious of the fact that, if our major industries are to be competitive in this large market of 200 million people, they will obviously have to get their power at the lowest possible cost in competition with the giant industries on the Continent. I wonder if in these circumstances we will be in a position to compete on no less favourable terms.

The Minister touched on the question of nuclear power, and offered the opinion that it is likely before the end of this decade that the first nuclear power station would be installed in this country. This is very good and encouraging news, but I hope that instead of looking ahead to the end of the 1970s the board are looking much closer at this matter, because it would be not only, as the Minister said, for strategic reasons but also on the ground of economy and from the point of view of reducing imports of oil as a means of generating electricity—if for no other reason than that I think that the early installation of a nuclear power unit would be of tremendous benefit to this country.

The Minister has rightly said that up to quite recently the question of installing a nuclear power unit in this country was obviously out of the question, due not so much to the cost of the unit but to the fact that they were far too big for our relatively modest requirements, but expansion in the industrial and domestic demands for electricity has now brought this nuclear power unit well within the limits of possibility, and if we are going to increase our usage at the estimated rate of 10 per cent per year this is obviously going to be a practical proposition, I would say, within the next few years. It might be very desirable if the commissioning of our first nuclear power station were to coincide with the entry of this country into the European Economic Community.

I do not know whether it comes within the compass of the ESB's responsibilities, but no reference that I could see was made in either the Minister's address or in any of the addresses by the various Deputies who spoke on the matter in the Dáil to the questions of natural gas. What effect would a substantial find of natural gas off the shores of this country have on the future plans of the ESB and generally in regard to the question of supplies of motive power in this country? This is a matter that obviously must have been entertained by the board of the ESB and I would like—and I am sure that the House would be interested—to learn what effects, if any, this would be likely to have on the future plans for expansion by the Electricity Supply Board.

The Minister has pointed out—and, again, it is indicative of the expansion of the economy and the rising standard of living in this country—the increasing demands over the past four years. It is really striking, to say the least of it, that we in this small country have recorded over the past ten years something like a 10 per cent increase annually in the demand, as against a figure for the OECD countries of approximately half that rate of demand. This is a great tribute to all concerned for the advancing economic conditions in the country and an indication, as I have said already, of the rising standard of living of our people. The fact that the board are optimistic enough to predict a continuance of this rate of demand of 10 per cent annually should give us all encouragement for the future.

One important aspect which the Minister has dealt with, and in fact with which this Bill is largely concerned, is the question of finance. It is interesting to note that over the past decade the ceiling of capital expenditure by the board has increased more than threefold that is, from £100 million in 1960 to very nearly £300 million which is proposed in this Bill before the House—again a remarkable tribute to the expansion of the ESB activities. I should like to question whether the increase to £290 million is sufficient. I am a great believer that both Houses of the Oireachtas should continue to be watch dogs in regard to massive capital expenditure by public utilities and public services, but we have no reason to regret over the past years the actions of the ESB on their capital commitments.

Having regard to the fact that the cost of living index is rising, or has been for the past couple of years rising, at approximately the same rate as the demand for electricity, and inflation is continuing, I am sorry to say, at an ever higher rate, will the increased figure of £65 million which the board estimate be sufficient to cover their capital requirements over the next five years? I very much question whether it is. Now is the time for the Minister and the Government to have another look at this question of the provision of capital to the ESB, because it is so important for our whole future economic progress, and to cavil at giving at this stage an extra £10 million, £15 million or £20 million would be a retrograde step.

I do not know when these estimates were prepared. It may have been in the last few months, or it may have been 12 months ago. There is a reference in the accounts to the 31st March, 1969, but that is now over 12 months ago, and in the past 12 months the cost of everything to do with steel or engineering or building construction advanced, as we are only too well aware, very significantly. I should like the Minister to reassure the House that the higher costs engendered by the inflation going on—I must admit not only here but all over the world— have not put the ESB estimates now very much out of line, because if they have the Minister can be assured that this House and, I am certain, the Dáil, would be fully co-operative in increasing that £290 million if necessary by a substantial amount.

In the Minister's speech and in the ESB report they mentioned that the capital expenditure is now running at the rate of £20 million per annum, which is a huge figure and a figure for which this country has got very excellent value.

The Minister touched on the sources of finance open to the ESB. Here I think is cause for very grave concern. The last report of the ESB highlights the fact that the board are finding it ever more difficult to secure their financial requirements from home sources, and the Minister has been frank enough to admit that the ESB must compete with other major services for the supply of capital available on the Irish market. Finally, of course, we have the amount of capital which will be required by the private sector and which I hope will not be reduced to any further significant extent by the Government's plans. Foreign capital, of course, can be secured, but it is both dearer and shorter in terms of borrowing, and, as the Minister has said and as the chairman of the ESB emphasised in his report, dearer and shorter term borrowing must be reflected in higher costs of electricity.

It seems to me that in this context of ESB financial requirements, the time is opportune for the Government to have another close look at priorities in regard to capital requirements in this country in the years ahead. I do not want to be taken as suggesting that there should be any curtailment of the subsidies, grants or inducements available to industrialists both inside or outside the country, but it may well be, at this time of dear money—and it is likely to persist for a few years to come—that the question of which comes first, basic public utilities such as the ESB or manufacturers, requires careful consideration in the matter of encouragements and inducements. If most of us were asked to decide whether the ESB or some industrialist should get encouragement we would all plump for the ESB because electricity at competitive prices is one of the major inducements to any industrialist proposing to set up in any country.

We must ensure that in the years ahead we will have adequate supplies of power available at competitive prices. The question of estimating their financial requirements in the years ahead poses a major problem for the ESB, as any businessman who has had experience of the employment of capital will appreciate. If they underestimate they will be short of power and they will have to go in for load shedding and other unpleasant activities which could lead to disruption of industry and consequently of employment; if they overestimate they will be left with large capital projects to be paid for at high interest rates. Obviously, therefore, they have a very difficult financial as well as technical problem on their hands. Up to now they have handled these problems with the greatest expertise.

I should like the Minister when replying to make some reference, however limited, to the possibilities of cross-Border co-operation in the future expansion of electricity. It appears to me one obvious field for the acquisition of the proposed nuclear unit. I do not know the economics of acquiring a nuclear unit but I suggest that the larger the nuclear unit one can get the more economic it will be. Therefore, if we can combine with the Government in the North of Ireland to purchase a larger unit than the one that would be normally required to meet our needs in this part of the country, not only might it be good economic policy for both Governments but it could also be a major contribution to better goodwill and co-operation between the two Governments. Wherever the opportunity arises for co-operation on economic and other grounds, we should be prepared to take the initiative in bringing it about.

I do not propose to say very much on the pensions scheme. The changes which the Minister proposes are both reasonable and timely. I was glad to note from reading the debates in the Dáil that the Minister accepted an amendment to delete the two-year waiting period in regard to qualification for payment of pension. I should like him to clarify the section of his statement in which he referred to an employee getting half his retiring pay. Is it half his pay in the year in which he retires or is it half of the aggregated pay over the years preceding his retirement?

One disturbing factor, not in the Minister's speech but in the report of the ESB chairman, is the reference to the disruption caused by industrial strife in that year. The ESB now have an outstanding opportunity to lead the way not only in respect of the State services but also set an example to private industry and business in their relations with their employees; and recent developments in the ESB at board level have been an indication that the board are very much alive to this necessary development in this day and age. We talk a lot about industrial democracy and worker participation, but a practical gesture by the ESB and other State companies would do far more to ensure peace among the workers in various State industries than all the speeches made by Ministers, Deputies and Senators in years.

Mr. B. Lenihan

The Senator is right.

Mr. Russell

It is an encouraging development. The other State companies could have a new look at the policy which activates the ESB.

That is all I wish to say, at this stage at any rate. Again I should like to convey my assurance to the Minister that Fine Gael will give him full co-operation in getting the Bill through the House. I shall be grateful if he considers the points I have made. I am sure this House joins with speakers in the Dáil in paying tribute to the ESB, right down the line from board members to the humblest workers— I believe there are 10,000 of them— for the magnificent job they have been doing down the years under different Governments.

Mr. Honan

Like the last speaker, I was very impressed by the statement made by the Minister on the history of what the ESB have been doing and on their projects for the future. One was inclined to be carried to the stratosphere in hearing talk of hundreds of millions of pounds involved in so many projected schemes. Having listened to those figures it is difficult to get back to ordinary mundane matters. While all this serious planning is going on for the future, plus the difficulties of raising capital, plus the other matters which have been explained in detail, I have been trying to consider the smaller problems that affect the ESB. Senator Russell suggested that the ESB might be able to make known to intending industrialists the necessity to have cheap electricity. We must attract industrialists to the country if we want to give effect to the hopes everybody here has for increased industrial activity and the creation of more jobs and goods for export.

I should like to give an example of an important factory which was built recently in Clonmel. Last September an application was made to the ESB to provide power for this factory. First of all the board said they would not supply electricity to the factory but later, after pressure had been put on them, they relented and said electricity could be supplied in six months time. The owners of the factory were then informed that as they wanted electricity for industrial purposes they would be required to make a down payment of £8,000 before the board could contemplate supplying electricity, and once this down payment was made a further six months would elapse before the power was provided. They wrote to the owners of the factory telling them that their most eminent engineers were struggling with the problem of how to provide electricity for this comparatively small factory in Clonmel. Subsequently I read that the ESB have sent some of their engineers abroad in order to bring them up to date in nuclear power stations. I think they must be trying to stretch everyone's imagination.

I should like to know what part the ESB are playing and what part they intend to play in the future because the express desire of all our economists is that we must set up industries in places where farming opportunities will decline. How can any industrialist think of setting up a factory in a declining area when the ESB will tell them that there is no power in the area and they have no intention of bringing power into the area unless an enormous down payment is made. This policy is acting as a deterrent to those who want to see industries set up in the west which will provide employment for those who may eventually become unemployed on the land. There does not appear to be any liaison between the ESB and those who are interested in setting up new industries.

While I admire what the ESB have done in the past, it must be remembered that the past is behind us; there are new challenges ahead and the ESB must be prepared to play their part in these new developments. The ESB are more concerned with providing millions of pounds to build up big industrial complexes than with providing electricity in outlying districts. In the Clonmel case one would think this factory was the only factory in the town but in fact there are a considerable number of important industries there. This new factory has been completed and it is the nearest thing I can imagine to the old song, "The Pub with no Beer".

Professor Dooge

I think all the Members of the House welcome this Bill which allows the ESB firstly to expand their power of capital expenditure and secondly to make some long overdue amendments to the superannuation code. In regard to capital investment decisions the record of the board has been a good one. Mention has already been made of the problem involved in such decisions: both the danger of overcapitalising, with consequent unnecessary costs or costs coming unnecessarily early, and, on the other hand, of under capitalising and running the risk of not being able to meet the demand. In spite of a couple of frights the board's longterm planning over the past 40 years has been borne out. It is heartening to know that the board are now able to finance their investments through the World Bank and other external lending agencies whose scrutiny of such projects is sometimes quite severe.

The board's record is a good one and accordingly I do not think any of us would hesitate in approving their latest request. When looking back over the 40 years which the board has been in existence, we see tremendous developments. In his opening speech the Minister spoke of the way which the board see their system developing in the next five to ten years.

We have for the first time in this country the development of a pumped-storage plant; we have very heavy investment in gas turbine plants; we have the building up by the ESB of a power supply structure which has a flexibility and a range far beyond what the board has had in the past. As the conventional hydro-plant fades out of the picture it is being replaced by the pumped-storage plant; as the last of the peat plants is developed we move over to the gas turbine and we begin to think in terms of nuclear power.

The ESB have during the past 40 years kept pace with technological development. When we look at the requests being made by the ESB for capital we realise that the board have had few difficulties in this respect.

I should like to return to a question which I have mentioned before in this House not only in regard to the ESB but in regard to other items of capital development. When looking at capital investment decisions I think it is very foolish not to separate the true economic costs and the social costs which are involved because of community policy in relation to certain matters. The position is that the ESB finances and the ESB costings of some of their plants are distorted from the true economic picture by community policy in regard to certain matters.

The position is that the peat-fired stations are not as economic as the other thermal stations. Nevertheless, they are planned and costed in the same way. It is a perfectly correct decision to develop a certain proportion of peat-fired stations because we have in this the development of a native resource. In this case we have decided to invest heavily in peat-fired stations in order to develop native resources rather than look at the alternative of developing thermal stations based on oil in conjunction with intense agricultural development of our peat-lands. It may be that because there is this use of peat, which is of benefit in saving on our balance of payments, that we have not looked at all the investment options open to us.

In regard to the large bogs which have been developed in the form of milled peat in latter days for power purposes, the job has been done and has been done extremely well. As we come to the end of this particular development, we should give credit for a job extremely well done. It is perhaps not realised that in the development of milled peat for power purposes it is not just a matter of the minor adaptation of the type of plant which would be used for the burning of coal in order to design plant for peat. Many of the problems of designing peat-fired stations involved a great deal of development work which was carried out most efficiently and most successfully by the engineers of the ESB. In this they were very much on their own because the only similar development in regard to this was done in the Soviet Union and the results of that work were not too readily available. The engineers of the ESB have done a splendid job in developing power from peat.

I want to come back to the point that we should try to quantify as far as possible, and to be as clear as we can in our minds when we start a development of this type as to when we are dealing with clear economic costs and when we are meeting social purposes. I have talked of the peat-fired stations of the midlands. We have another example in the ESB system. We have the 4 mw power stations which were built along the west coast. They were built purely as a social investment.

Here was something which, on an economic analysis, would certainly not be tolerated. There was an extremely good case for the erection of these stations. We tend to blur our vision by the way the job was tackled. It is worth recalling our actions in this regard because as we go into the European Economic Community, or if we remain out of it in a trading world which is dominated by the ideas of the EEC, we must know the true costs of our heavy capital investment, and unless we do we may come a "cropper". We made a serious mistake in the way in which the whole decision about the 4 mw stations was presented and made. The position is that these stations appear as part of the ESB's ordinary costing and accounts. It would be far better if, in fact, the deficit on these stations, in comparison with the alternative stations which would have been used by the ESB, was shown. The amount of this deficit should be carried as a vote which is clearly marked as a social charge. Perhaps the ESB should be given a subvention by the Department of the Gaeltacht, or given a subvention which is clearly labelled as being a subvention to the ESB for the erection and maintenance of uneconomic stations using hand won turf which the board would not ordinarily have contemplated erecting or running.

In regard to the future activities of the board and to the capital investment of other types, we would be well advised, when making decisions for social purposes, to make this distinction clear. Senator Honan mentioned the point in this debate already. The Senator has suggested that the ESB must accept the community decision and provide electricity if it is the policy of the Government and of the community to place an industry in a remote area in which electricity is not available.

Are the ESB to do this without cost? Are the ESB to run out power-lines to every remote area to supply a factory which, on the basis of straight economic analysis, is wrongly located? If the community consider it necessary to have a factory in such an area there is an additional charge which has nothing to do with the ESB's job of the production and distribution of electricity. If the State consider there should be factories in remote areas which should be supplied with electricity I suggest that the right way of solving this particular problem is for the State, which wants the industry to be located in such a place, to pay to that industry as part of an industrial grant the amount which the ESB feel obliged to charge because of the special expenditure which must be undertaken in order to bring power to this particular spot.

Some may feel that it would be simpler for the ESB not to charge. In fact, there are two considerations arising here. One is if the ESB are asked to remit these charges which they make to new industries then these charges are being imposed as a tax on all ESB consumers. These consumers are being asked to pay for this particular incentive towards the development of an industry in a particular place, rather than asking the taxpayers as a group to meet this particular charge. At the same time, the cost structures of the ESB are being distorted and also the cost structures of the particular industries. We will suffer grievously in our trading in the decade ahead unless we are quite clear as to the true costings of our various operations and of our various capital investment decisions. Unless we know the true costings we will be unable to make the correct decisions which will enable us to get our share of the market in an enlarged community or our share of European trade.

In regard to technical developments, I have mentioned that the ESB record is a proud one. Indeed, I am proud to have spent 12 years of my professional life with the organisation. We can look with confidence in the future to the ESB in regard to matters such as the new type of thermal station now being developed, in regard to producing a system of greater flexibility and in regard to the operation of that system. However, I wonder if the ESB can look with equal confidence to us, to the Oireachtas, in regard to this.

What are the lines of development? The lines of development in regard to thermal stations are that in order to increase the efficiency of the conventional thermal station, the size of thermal stations is increasing. In regard to nuclear power the threshold size of a feasible or an economic nuclear power plant is quite high. We are moving into an area in which the economic development of electrical power which, of course, is part of the cost structure of every one of our industries, is dependent on the development of large size units.

Senator Russell mentioned the question of nuclear power and development in tidal power. In both cases large units will be needed. In so far as nuclear power is concerned there is no doubt that the best way of providing nuclear power in this island is by producing one single nuclear plant rather than for Northern Ireland to go their own way in this and for us to go our way. For many years discussions in regard to the development of nuclear power in this country were in terms of one single nuclear power plant but in more recent times the indications are that Northern Ireland will go ahead to develop their own nuclear plant.

To my mind, this is an economic as well as a national tragedy. As I see it, it is an indication that we who are engaged in public life may not have played our part in regard to the development of electricity. There is no doubt whatever that in this respect, and in many others, our failure to follow up developments in regard to relationships and co-operation with Northern Ireland has led to a most unsatisfactory situation from the point of view of an economic activity such as the development of electrical power.

There was agreement initially in regard to the Erne scheme. In the immediate post-war years there was excellent co-operation from a technical viewpoint as well as from a civil service and Government viewpoint in regard to the development of that scheme. At that time, there was also a proposal that the power from the Erne, the works of which traverse the Border, should be fed into the Northern Ireland grid. Agreement was reached in regard to the works themselves but in the following years various proposals for the interchange of power across the Border came to nothing. More recently agreement has been reached but what was discussed at official level in 1946 and 1948 only came to fruition some 20 years later. We now have a cross-Border link between Maynooth and the Northern Ireland grid. This enables power to be interchanged between the two parts of the island. We are thankful for that. This is something which is a good pointer towards co-operation for the future but, at the same time, it should not have taken 20 years for final agreement to be reached on this point.

We have not taken sufficient initiative or thought deeply enough about these problems. This is typical of our failure to carry through and to take action on problems of practical co-operation with Northern Ireland—co-operation that we all accept as being desirable in principle.

In regard to the other developments of the future, Senator Russell mentioned the question of tidal power. Tidal power may well be developed although I think we might wait and learn from the mistakes of other countries before we go ahead. When we do, it is quite possible that the most likely site for the development of such a station would be Carlingford Lough. In this regard too, we would require the co-operation of Northern Ireland. The ESB will certainly be ready when the day comes for the undertaking of such a project. They already have the technical answers in so far as tidal power is concerned but I ask if the Government and the Oireachtas are ready with the political answers to the problems of the development of tidal power at Carlingford Lough. These are matters which we must think about and not merely express our satisfaction when the Board come to us with a request for money which we are satisfied will be well spent.

In regard to many of these lines of development there are these political problems to be faced. The problem of sufficient co-operation will have to be solved. We do not know when these developments will come about. During the past 20 years predictions have been made that nuclear power in medium sized stations was only around the corner. The technical and economic break-throughs were always ahead of us but yet we still find ourselves in the position in which nuclear power does not yet appear to be competitive compared with the more conventional thermal stations.

In this regard, it would be extremely dangerous for us if we accepted the view that medium sized stations will be feasible and economic propositions during the next five or ten years rather than to accept the viewpoint that a larger station which could serve the whole of the island would be a more feasible and economic proposition. From the point of view of the future of electrical development we need schemes like Turlough Hill, schemes like the gas turbine units which will take the peak power but if pumped-storage at Turlough Hill and elsewhere is to be economic we must have cheap base load in order to supply it and if we are to supply this by nuclear power then, indeed, the cost of nuclear power will be very important in regard to our generation system.

However, as I say, it is not for the ESB to solve these problems. They are ready to solve the problems which are theirs but I would put it to the Minister that it is for him and for his Department to ensure that there are no road blocks or no impediments in the way which, for political reasons, would impede what is acknowledged as being the best technical solution.

Now, in handing over this money to be spent by the ESB, the Members of this House will express confidence that it will be well spent. I certainly would express greater confidence that its expenditure will be well managed than I might have before the recent changes in the ESB. The changes in regard to the management structure and some of the changes in regard to the question of breaking down the barriers of misunderstanding and ill-feeling between management and staff give some hope for the future.

As Senator Russell said in regard to the restructuring of the ESB, this is not only important for the ESB but indeed might well serve as a headline for many other State authorities. There are a number of significant aspects about the restructuring of the ESB. There is, firstly, the decision that the ESB will now run on a two board system, that there will be a policy board and that there will be an executive board. This is a very important decision and in our context it is almost a pilot experiment. Nevertheless, if we look to other countries, in particular if we look to the organisation of a large industry in Germany, this is the system which has proved itself during Germany's period of rapid economic expansion.

There are other significant features about the reorganisation of the ESB. Let us say that first there does not seem any reason for delaying long before introducing into other semi-State bodies the same idea of the policy board and the executive board. There has also been in the constitution of the executive board of the ESB a further breakthrough. In fact if we look at the constitution of the executive board we see the high membership of technical officers among the executive board of the ESB. This is something which was perhaps easier in the ESB than in any other body.

We might think this is something which would apply only to the ESB but in fact this is something which is a commonplace in the industries of the Continent, a commonplace in the industries of the United States. In fact normally a majority of the members of the board are those who know the industries from the technological viewpoint, who know the hardware aspects of the industry from the inside.

It is a matter of gratification to the engineering profession in Ireland that the chief executive of the ESB under the reconstruction was a technical officer. It is also a source of gratification to the engineering profession that of the four other directors two of them were technical officers. It is not just a matter of gratification to me as an engineer that this has happened. It is also a source of gratification that at last an important Irish body have fallen into line in something which, as I said before, is commonplace in other countries.

It was perhaps easy for the ESB to do this, the high technical content of the ESB work, the fact that in prior years, before they were peremptorily dismissed, there were two technical directors in the ESB, one of whom, Tommy McLoughlin, to whom tribute has already been paid and the other, the late Jimmy Fay, to whom equal credit is due, for the fact that during the formative and middle years of the ESB when the ESB name was a synonym for efficiency, the ESB were a happy organisation to work in. I can say as one who worked there that the contribution towards that state of affairs by Tommy McLoughlin and Jimmy Fay was very great indeed. So, perhaps, it was easy for the ESB to make this change but this is a change which will have to be made in many of our industries.

This is a change which indeed our Civil Service will have to face. This has been brought out in the Devlin Report—the idea that we can in a technological age treat our technical officers as people, in the words which are used of them sometimes by administrative officers, who should always be on tap but never be on top. This attitude would be disastrous as we attempt to enter an international league in the matter of free trade in an age when production is based on technology. This problem must be faced not only in our industries and in our semi-State bodies but in the Civil Service itself.

The other changes that have been made in the ESB are those in regard to industrial relations. I wonder are those to be welcomed; I wonder if in fact what has been done now in regard to the ESB is not so half-hearted as to make the last situation worse than the first. I wonder if there does not appear to be an idea in regard to the ESB that the deep rooted industrial problems which we all know exist there can be cured by a workers' council type of approach. I am not against workers' councils and I think they can have a part to play, but only a part to play. Here was a glorious opportunity to make the ESB the pilot experiment of the future industrial organisation, the future industrial democracy of this country. If what has been done is the first step along that road then it is to be welcomed. If it is intended as a final step along the road then it is very definitely to be deplored.

I want to say the opportunity should be taken as soon as possible to emphasise the difference between what is meant by the industrial democracy of the type which exists in Socialist Yugoslavia and Capitalist Germany but is not so different when you go from one to the other and what has been done in the ESB. We want here a real participation by the workers and, with all due respect to the eminent trade unionist present who is my colleague in this House, I do not believe the workers in an enterprise like the ESB will be satisfied that they are being given participation in the broad policy planning of their organisation merely because a trade union official is a member of the board.

Something far more than this will be necessary in order to give us proper participation. I hesitate to use the word "participation" which has virtually become a cliché but I cannot find another in the course of my speech. I do not believe the workers in the ESB will necessarily feel they are being represented on the policy board of the ESB unless they are represented by one of their own. This indeed is one of the early mistakes made in the German effort at industrial democracy. It may well be that it will be necessary for certain steps to be taken by the board, by the trade unions, to train members of the staff to take their place on the board.

It may be that they will have to take people from the Board's staff who will receive training of one type or another so that they can really contribute to the board's work at the same time as representing their colleagues. To say that there are trade unionists on the board, to say that workers' councils are to be formed is very far short of what will be required in order to make the ESB a healthy place to work in.

I am glad that in the course of this Bill the Minister has removed some grievances with regard to the superannuation code. There was a time during my time in the board when I was chairman of one superannuation committee and I knew the code backwards. I find it hard to read the Bill and the Act to find exactly what has been done. I can understand well enough most of the things the Minister has done but there are some cases, particularly in regard to pre-1942 service, about which there have been grievances for a very long time. I raised this several times in this House on previous Bills but I failed, and I am extremely glad that it has been done now though I am sorry that it was not done long ago when many people retired from the board's service without being given this particular right. I ask the Minister if in fact he has in this Bill met fully the requests which were made on behalf of the ESB staff in regard to service in the years before the introduction of the scheme in 1942, and are there any outstanding cases with regard to this? Do the provisions of the present Bill cover both manual and general workers?

Mr. B. Lenihan

Yes.

Professor Dooge

Does it cover all service prior to 1942?

Mr. B. Lenihan

Yes.

Professor Dooge

I am very glad. I will resist the temptation of saying "about time" and will just say "thank you". This is something for which the ESB staff as a whole, whether they benefit or not, will be very grateful.

I think we can say that this Bill is a good Bill and a welcome Bill. We can say that the ESB are a good organisation. They have done their job efficiently, but the great blot has been their extremely bad staff relations over the past decade, and this is a problem which must be solved. As I said in the course of my speech, I think that it would be a very great danger indeed if anybody in the ESB or anybody outside were to think of the steps that have been taken so far as being sufficient to remedy that very bad situation. Let us hope that they are only the beginning, and that in fact the ESB, which showed such enterprise in the technical field, can also show enterprise and success in the field of industrial relations. If our industries, whether service industries like the ESB or manufacturing industries, are to play their real part and our people to hold their own in the Europe of the future, then industrial relations are just as important as technical productivity, and if we do not solve this problem it is worthless that in fact we have people of high technical skill. Unless we have management skills, and unless all of us here in this House as well as middle managers and supervisors dealing with the problem in the ESB can produce the conditions in which a place like the ESB is a decent place to work in and that people will be glad to work in, then it just is not enough to solve the technical problems.

Dr. Belton

I will detain the House only a few minutes—three or four at the most. I cannot aspire to bringing to this debate either the economic expertise of Senators Russell and Dooge or the technical expertise of Senator Dooge. I will be much shorter and much more mundane in my approach to this. I welcome this Bill. I think, as Senator Dooge has said, that it is overdue. The amount of money involved in this, hundreds of millions of money involved in this—have we not come a long way from that white elephant? When I say "white elephant" I do not think I have to tell this House the source of that quotation.

During the debate on the Second Reading of the Health Bill I mentioned a circular that was sent around from the Department of Health asking us just after our estimates had been prepared in the various health authorities —this came to the Dublin Health Authority and this is how I got to know of it—to prune our estimates. It was in many ways an insulting circular, but however we decided we could, by asking the Department to allow us to put in convertible burners, that is, burners that could be used for oil and could be used for solid fuel. We would have saved £60,000. It would have reduced our estimates by £60,000. The Department of Health refused.

I brought this out on the Second Reading of the Health Bill. Yet we have here a statement from the Minister in the second sentence of his third paragraph on the first page "they expect to commission 706 megawatts of additional capacity, half of which will be oil-fired, to meet the demand up to 1974-75". The inconsistency of the various Departments of Government fails me.

They would not allow the health authority to use convertible burners, yet they are quite willing to use them themselves. I brought this up in the health authority. I had two main arguments. One of them was that we could save £60,000 if we were allowed to use oil burners. We got one into St. Mary's Hospital in the Park and saved £10,000 in that year.

The other point I made in the Dublin Health Authority was that our resources of peat fuel are limited to ten to 15 years at the outside. That was denied by the Department of Health, probably, it may be, at the instigation of the Department of Industry and Commerce, but I am not quite sure; but if one goes here into the last sentence in the Minister's speech on page 1 one finds: "This will absorb the production of the last major bog suitable for harvesting by Bord na Móna's advanced methods". In other words, this bears out the point I made. He states that there is a limit to our resources of peat fuel. What is left of peat after this station he talks about is installed can be harvested only by a man with a sleán or something like that, because machinery cannot get into it and there are no resources sufficient for the use of machinery after this.

My point in rising here today is to point out the inconsistency between various Government Departments. When a Government Department themselves want to save money—God knows it is time they did—they are prepared to use oil, but they will not permit health authorities to use it.

I know the Minister wants to get the Bill through. I want to welcome it generally but I thought it necessary to point out the inconsistencies in Departments. I am not an expert in engineering nor for that matter am I any good at economics and previous speakers on this side have elucidated points on those matters. I agreed with them when they said they welcome the Bill: I think all of us on this side support it.

Mr. Dunne

I do not intend to detain the House for very long. I welcome the Bill for the developments which are forecast because of increased capital intensity. I also welcome the Bill for the very desirable change it proposes in the superannuation code, on which the Minister is to be congratulated. Changes were long overdue.

My obvious and primary interest in the ESB is in the field of industrial relations. Normally I would hope to speak at great length on this question because for too many years industrial relations have been deplorable. At the moment, however, they are in a state of transition and recent changes in the structure of the board seem to indicate a desire to effect a change for the better in that direction. For that reason I thought it best not to say too much on this aspect. It may be said that the recent changes in the board have met the recommendations of the Irish Congress of Trade Unions to the extent that they involve the concept of giving both a supervisory board and an executive board in the ESB, but I suggest to the Minister that to the extent that he is responsible there should be no great delay in seeing that the community is even better and more obviously represented on the supervisory board than is the case at present.

I do not wish to speak too long on the concept known and very often sneered at as industrial democracy but I want to take this opportunity in this House, as I have tried to do in other places, to warn all concerned in this important matter of industrial relations that there is a strict obligation, a very serious obligation, on all of us to realise that in our country, with faults on both sides, we have great and indeed grave unrest in our national industrial relations; and that we should always be intelligent enough to accept that the evidence is there already that things are far from right in that most important sphere; and that for that reason if for no other there is an obligation on us to examine our existing system, our existing structure, to see which changes are necessary to effect much needed improvement in our national industrial relations.

It is for that reason that I, with others, have attached myself to the question of industrial democracy obtaining in this country. I believe there evolves a particular responsibility on the Minister now in the House because of his interest in the very wide range of publicly owned industries we have in this country. One must be fair to private employers, however hard I might find it at times: it must be accepted they have their own priorities and that social experimentation, for obvious and understandable reasons, is not very high on that list of priorities. This should not be so with publicly owned industries, and it is in this field, relatively large in our country, that we have the opportunity, while we have time, to carry out such experimentation as we may consider helpful in this field of industrial relations.

It is for these and related reasons that I do not want to go into the matter of industrial relations in the ESB in too great depth. I would hope, as was said earlier in the debate by the present occupant of the Chair, that the recent steps taken in the ESB are not the end but rather the beginning and are the signal for a very strong and sincere attempt to affect that one but very important sphere in which the ESB have failed. We all have given credit to their technological initiative, but in the field of industrial relations they have failed signally.

That is why I hope we will see steps taken quickly in this field: that is why we have got to remind ourselves and, with respect, the Minister, that the committee of inquiry on industrial relations in the ESB were not established by the ESB or the trade unions but by the Government in the name of the Minister for Labour. For this reason there is a heavy onus on the Government and on the Minister for Transport and Power to keep under constant revision the implementation of that committee's report in relation to the ESB. One of the last recommendations of that committee was that the workers, by process of democratic election, should be placed on the board. It is true there is a form of trade union representation on the board, and I mean no disrespect to my colleague and friend who was a member of that board when I say that this is not the expression of worker representation that gives the greatest hope to people working not alone in the ESB but in Irish industry as a whole.

My final point in this debate—in other debates I will refer to it—is to urge as strongly as I can from my experience that there is in Irish industry, both private and public, not much time to make the experiments which are now available to us. There is the choice that we may content ourselves with allowing things to go on as they are. This will lead to chaos and there is already evidence on that point. Consequently, while we have time, particularly in publicly-owned industries, we should not be averse to a degree of courageous experimentation which will give the workers the peace in industry which they want, and the country the rightful progress which we all want to see in industry, not the least of which is the ESB.

Mr. McElgunn

Maraon le Seanadóirí eile, cúirím fáilte roimh an mBille. I just want to make two points, the first of which I am sure the Minister is well aware of because it was raised in the Dáil and it concerns the original generating station which is in the Minister's own constituency.

The Minister mentioned in his statement that he proposes to increase the amount of money to £290 million. We in our part of the country would like some part of that money to be devoted either to increasing the capacity and extending the plant of the Arigna generating station or to the erection of a new plant. The coal mining industry at Arigna is the only source of employment apart from farming and as the board take social as well as economic factors into account I should like this fact to be taken into account. Other Government Departments are prepared to subsidise new industries but here is a readily available source of employment in the area and I should like it to be borne in mind.

I would not go all the way with Senator Belton in opposing the idea of using native fuel in our institutions. Some of the institutions in Roscommon and Leitrim use either Arigna coal or sod peat. I think the mistake which Senator Belton made arises because he equated sod peat with milled peat. My understanding of the Minister is that this will absorb production of the last major bog suitable for harvesting by Bord na Móna's advanced methods.

I understood that to refer to milled peat but in actual fact sod peat is used in the institutions I have referred to. There are many smaller bogs all over the west which are suitable for developing for sod peat, and I think Bord na Móna can still devote attention to this.

I want to congratulate the ESB on the marvellous achievements they have made with rural electrification. Here again social rather than economic questions were the main consideration. I should like to see a policy adopted to clear up outstanding areas.

An Leas-Chathaoirleach

The Bill refers to money for purposes other than rural electrification. The Chair has no objection to the Senator making a passing reference to rural electrification but it would remind the Senator not to dwell on the point.

Mr. McElgunn

Mention has been made of rural electrification in Northern Ireland and this is one area where we in the south contrast very favourably with the north. When the owner of a smallholding or a farm wants electricity he has to foot the whole bill whereas it is a different matter here in the south.

Mr. McDonald

I should like to join with other Senators and welcome this Bill. I wish to congratulate the management and staff of the board for the dynamic progress they have made. I had to smile when I heard Senator Belton talk about native fuel because two years ago the Department of Education did not consider the product of the ESB as being of native fuel.

I should like to congratulate the engineers who have developed the new thermal system of central heating. As a person involved in vocational education I have found this type of central heating to be the most effective and certainly the cheapest. I think the air filter and the air circulating arrangements make classrooms very fresh even at a temperature of 65 degrees or 70 degrees. I do not think the ESB have been given sufficient recognition for this.

The ESB have been thought of as a monopoly industry but in spite of this they have not remained complacent; they have been improving the system all the time. The repair and breakdown service provided by the ESB is something that very few companies, either State companies or private enterprise, can compete with. This is a credit to the workers who go out at all times of the day and night irrespective of the weather conditions.

Electrical appliances are continually being brought more up to date but I feel the board do not give sufficient warning about the dangers of tampering with such appliances The board are always very quick to replace or repair faulty wires but I think the public should be warned through promotional advertising programmes of the dangers of tampering with electrical appliances. In my own county only last week a sad accident occurred. A man was electrocuted while flying a kite. Most people would not regard flying a kite as dangerous. The board have an obligation to remind people to respect electrical power and to treat it with great care.

I should like to ask the Minister if it would be possible to ensure that the areas throughout the country which suffered a voltage drop over the last year will be attended to. Anyone with a television set notices a voltage drop when the set goes dim. It shows up the weak spots of the network. The board have an obligation when selling appliances to ensure that existing consumers are getting reasonable value for their money.

The staff of the board are very efficient and try to improve the situation. Nevertheless there are voltage drops throughout the country. Senator McElgunn's point about rural electrification got a short airing. Perhaps the Minister might give the extra £1 million necessary to connect up the small percentage of rural consumers who happen to be in uneconomic areas for the purposes of their electricity supply.

Senator Dooge suggested that the IDA should look at the special services charge levied by the ESB on rural consumers for grant purposes. This is a valid point and I should like to support it. Even the small industries need four-phase current. This is not available in every village and town. It would be reasonable if the IDA were to consider including this as a capital cost and to have the provision of electricity considered for grant purposes.

I welcome the Bill and I congratulate the board on the excellent services they have given over the years.

Mr. Lyons

There is little more to be said on this subject after the excellent contributions made by various speakers on both sides of the House. The Minister knows rural areas well. The Minister knows that it has been found uneconomic to connect certain small areas to the country's electrical supply. There is an immediate necessity to deal with this situation. I do not recommend running a long line for one single house. That may happen in the future but there are various areas where small pockets are without electricity. Farmers in isolated areas now need electricity for their milking machines. Group water supply schemes are the "in" thing. The Government are not able to provide the money for extensions to ordinary water schemes. The people have been remedying these defects themselves. They are in great difficulty if they have not got electricity. A survey should be made of all the outlying areas. The difficulties with regard to electricity should be solved once and for all.

I was intrigued by Senator Honan's point about a factory being erected in a particular place at a cost of £100,000 and then finding there was no electricity. Surely, there must be consultation in the future between all the parties concerned. There must be consultation between the Department of Industry and Commerce, the ESB and the Department of Local Government. If there is not discussion between the various bodies concerned in a particular project in an area there is bound to be great waste as happened at Clonmel. Surely this type of consultation is possible. It would be desirable to have dialogue between all parties concerned on every aspect of development. The country would benefit from such consultation. We cannot go along saying: "I have done my job today and I will notify somebody in a month's time about the job" and then it will be found necessary to duplicate some of the work already carried out. The time has come when every project concerning group water schemes or factories to be erected should be discussed.

In formulating new schemes of advancement for transmission lines the ESB should consider that priority must be given to areas where it is proposed to establish industries. I should like to congratulate the ESB on the work done. The staff are courteous and efficient. They go out in all weathers to remedy faults even in the middle of the night. They deserve great praise.

I was interested in Senator Dooge's points about turf-fired stations. The Senator is right in saying that the costs of the four-megaton stations should be taken out of the general picture. They were found to be a social necessity. They serve a social purpose. For that reason the normal body of consumers should not have to bear the cost that the uneconomic running of these stations entails. Other Departments should give grants to the ESB for the particular purpose of running these stations. In doing so they would decrease the cost to the ordinary consumers.

Mr. E. Ryan

I should like to say a few words about the question of industrial relations and in particular about the points raised by Senator Dunne in relation to industrial democracy. We have heard much about industrial democracy during the past few years. It seems to me now that in saying "industrial democracy" one does not always have any clear-cut idea of what is involved in those words. Industrial democracy has almost as many meanings and definitions as socialism. For every individual socialism means what that particular individual wants it to mean.

I have personal experience of a fairly large firm to whom a trade union wrote asking for the introduction of the principle of industrial democracy. The firm wrote back to the union saying they had no objection in principle to industrial democracy and inviting the union to submit detailed proposals as to how industrial democracy should be implemented in relation to that firm. That was the end of the matter. The union concerned never replied to the invitation. The unions, or at least the union dealing with that case, do not seem to have any clear-cut idea of what is involved. If industrial democracy will help to improve industrial relations—at the present time anything that would improve industrial relations would be very welcome—then the unions in particular must draw a detailed blueprint of what are the longterm and the short-term implications of industrial democracy. They should make this public because until such time as this is done the words "industrial democracy" continue to be a phrase that is thrown about by many people who are for and against such democracy while, it will not be possible to implement it because nobody is quite clear as to what is involved.

Mr. B. Lenihan

There was a lot of commonsense in the last remarks of Senator Ryan. All of us would subscribe to the view that the most imperative need in Ireland today for the guaranteeing of future harmonious economic development is a very rapid improvement in industrial relations. However, the problem is in finding a method of achieving harmonious industrial relations. Industrial democracy as such is a phrase that is bandied about quite a lot by people who do not realise its real meaning.

I would regard some form of responsibility on the part of people at all levels in any organisation as an important step in the management of that organisation. If that is what is involved in regard to workers' democracy I am in favour of such democracy. I am in favour of greater responsibility at every level, from board and management down to the factory floor. However, I should like a more precise spelling out of what exactly is involved in this phrase—a phrase that is bandied about rather loosely. This is an aspect to which the new management—labour group should apply their minds. I am confident that they will do so. There is no point in introducing a theoretical or woolly blueprint as to what can be done. People at every level in a factory or organisation should be given a sense of belonging to that factory or organisation at whichever level they may be.

I wish to assure the Senators who raised the question as to whether the recent restructuring of the ESB was a final or a first step, that to my mind it is a first step towards the achievement of the most excellent industrial relations that we can achieve within this organisation. It is my objective to make the ESB a model in relation to harmonious industrial relations but we must put first things first. This is a matter which I emphasised when I discussed these questions with the board before September last. What had to be done first was to work out proper organisation structure for the board. Subsequently, the board engaged the McKinsey Group who are among the leading consultants in the world. There is no point in talking about industrial democracy in any organisation unless the board and management structure is right. I discussed this approach with a number of leaders in the trade union movement and they agreed fully with me.

Prior to the recommendations of the McKinsey Report being made known there was little division in the ESB between the supervisory or board structure and the management and executive structure. The situation existed in which the chairman of the board was chief executive and chairman and where the two strata that should be separated—the policy and executive strata—were meshed together. The result of that was insufficient delegation of authority and insufficient delegation of responsibility right down the line from the top.

This was the main theme of the McKinsey Report. There is now an entirely different structure at the top within the organisation. There is a supervisory policy-making board to which I shall be making additions in the very near future, they will be solely concerned with policy. There is then a management structure consisting of the chief executive and the various departmental managers. The policy of having a degree of responsibility at every level is being pursued in detail I am very glad that the implementation of the recommendations of the Report has been welcomed by staff at every level within the organisation as it has also been welcomed by the public in general and by the trade unions. I am grateful to everybody concerned for that approbation.

Another important matter which was mentioned by both Senators Russell and Dooge was the question of co-operation with the Six Counties in regard to matters of electrical power. I agree that there is tremendous scope in this line for further co-operation. We have already made considerable progress but perhaps we have not emphasised sufficiently the progress that has been made in relation to the interconnection that has taken place, the first phase connection which is already in operation between Maynooth and Northern Ireland. By about this time twelve months we hope to have implemented the final phase connection. There will then be full utilisation of power plants in both north and south.

The fact is that this will be of substantial advantage to the electricity authorities on both sides of the Border. The economies will be phased in during the next few years and we hope to reach maximum advantage from this co-operation between the years 1975-76 and 1977-78. During the next eight years in terms of capital expenditure on generating plant here, the saving to the ESB will be in the region of about £10 million. There will be a saving of a similar nature—I do not know the exact amount—to the Northern Ireland electricity authorities. I might mention that one of the difficulties in so far as co-operation with the northern authorities is concerned is that they have three authorities whereas we have only one.

The obvious field for further co-operation is, as suggested by Professor Dooge, in relation to nuclear energy. On this aspect both the Government and the ESB are keeping an open mind, and provided the deal is right we will be willing to negotiate any co-operation in the field of nuclear energy and power between both parts of the country.

I would hope to see a nuclear power station being built before the end of the decade—by 1977 or 1978, if not sooner. The first step in this direction would be taken in the form of legislation which I hope to introduce to the Oireachtas before the end of this year. This legislation will deal with the establishment of a new nuclear energy board.

Senator Dooge rightly said that the board have shown an overall picture of a properly diversified and organised power structure in the country. This is true. We would not wish to have a situation where we would be over reliant on any one particular form of energy. This from every national point of view one can consider as commonsense.

We want again to keep our options open here, to rely on our own native fuel resources to some degree, to rely on oil, which in the strict terms of economic is the most financially economical of all, and to rely on nuclear energy as well. In this way you have a balanced distribution of energy resources and it means you are not over-dependent on any single form of energy.

This makes good sense and even though in strict narrow economic terms one would be totally for oil, in balancing out the various other national and social considerations it makes very good sense to have a fundamental matter like energy not confined to one particular source. It makes very good sense to have one's energy resources spread and diversified so that in no sense is the nation reliant on any particular source of energy and thereby over-dependent on a particular group or grouping of suppliers or owners of any particular type of energy.

Senator Dooge rather over-stated the matter of the four small to five MW stations we have in the west. This is a very marginal factor, as the stations between them produce less than 1 per cent of the total output of electric power in the country I do not think it is worth while itemising them for their social context. We have done this in regard to the rail service of CIE. We have them separately itemised in the accounts and the community know precisely what they are paying to keep the rail services going, but they are a major part of the activities of CIE. This particular case of the four small sod peat stations is a very minor matter. They were erected in days gone by for very good social reasons at the time and they are becoming decreasingly a part of the activities of the ESB and represent a very marginal matter. I doubt if there is much point in itemising their costs because the whole thing is infinitesimal.

The question of the utilisation of other sources of power was rightly raised. I am glad the Seanad took the point and devoted some time to this question of diversifying as much as possible. Tidal power was mentioned in this context. I want to say that tidal power has been harnessed successfully in France but it depends on a particular type of estuary topography involving a very big rise and fall of water. The ESB have done a very detailed survey on this and know as much as anybody in the world about this type of power and its potentialities, which are excellent from the economics point of view if one can get the appropriate type of tidal race. So far there is no such inlet or estuary within our jurisdiction to suit the purpose.

Senator Dooge mentioned Carlingford Lough as being a possibility. This is a matter which I will certainly bring to the attention of the ESB although I am certain they have already investigated it and possibly have had discussions about it with the electricity authority on the other side of the Border. I will certainly take it up with the ESB because it is another conceivable form of cross-Border co-operation in this field.

The main new revolutionary development has been in the Turlough Hill project where we have this hydro electric storage capacity organised on the basis of building an artificial reservoir at the top of a mountain and pumping water in off peak periods from a base lake at the bottom up to this artificial reservoir from where it is available for peak period generation.

The World Bank gave £6 million and the ESB also gave £6 million for it. The World Bank have shown tremendous confidence in the ESB in this project, which is one of the most complex and one of the most highly organised in the world. The ESB see some scope for this type of development in other areas and are at the moment examining it. Again, as in the case of the tidal situation, this depends on a particular grouping together of natural features. You must have a mountain of a certain slope, you must have a lake at the bottom of that mountain, you must be able to bore through the mountain to build up your pumping capacity and you must have a proper type of topography at the top of the mountain to have an artificial lake. You must have all those features. They must all be feasible from a technical point of view.

I understand there are two other centres in Ireland where at the moment this is technically feasible and where sometime in the future we could hope to have a repetition of the Turlough Hill project. One of them is in the Comeragh Mountains in Waterford and another one is being examined at the present point of time. There are therefore three on the mat, one at Turlough Hill, which is well on the way, and two more where we could have this type of hydro-electric project for use during certain periods to assist in having maximum load efficiency.

Points were raised about superannuation. The proposals in the Bill meet the full case that was made by people who agreed, both on the manual side and the clerical side within the ESB, that all points that were outstanding in this field, particularly those concerning the pre-1943 employees, have been met in the superannuation provisions. I regard proper humane superannuation provisions as being the best form of industrial relations. Security is a very important aspect of human behaviour and if within any organisation the superannuation aspect is properly organised in a humane sort of way you are taking a very big step when you get that aspect of it organised properly. That is one of the important aspects of the Bill.

The main purpose of the Bill is to increase the authority of the ESB to raise money up to the limit of £290 million. As it stands at the moment, the limit is £225 million. It is indicative of the growth of the ESB and of power generation in this country that the rise has been from in the region of £100 million as the expenditure limit in 1960 to practically £300 million in 1970. Over a ten year period there has been a three-fold rise in the capital requirements of the ESB. That in itself is a barometer of the sort of progress that has been made by this organisation. That sort of progress will be accelerated in the future.

That is why it is all important to have this fundamental organisation on a proper board management basis and on a proper labour relations basis. I should like to see this done in the very near future. We have taken the first steps in this direction. Once we have that organised there is no doubt about the technical capacity of the ESB. That was one of the matters referred to by the World Bank when after a very brief investigation they came forward with £6 million, half the cost of the Turlough Hill project, on the basis that they were completely satisfied with the technical excellence of the personnel and the resources available to the ESB in this country. The ESB never had any trouble in raising money either here or abroad and for that reason we can all look forward with confidence to their future.

I want to assure the House again that no effort will be lost in ensuring we have as wide a spread of energy resources as possible and as cheap as possible. The whole hydro-electric field including tidal and storage possibilities and all other aspects of cheap electric power generation, will be fully investigated. Above all else, we must ensure that as far as we are concerned in the future we are as self contained as possible in regard to our power resources, as diversified as possible with regard to them, and that we have as the agency for the generation of our power resources an organisation harmonious in their labour relations and excellent in regard to board and management organisation.

Mr. Russell

Would the Minister care to refer to one point I raised during the debate in regard to the possible use of natural gas by the ESB?

Mr. B. Lenihan

I am sorry that I forgot to mention natural gas when I was replying to the debate. This can be a help as well. Senators will be aware of the investigation going on at present into the possibility of natural gas resources in locations off our seaboard. I am informed that the economics of natural gas power generation vary enormously, depending on proximity to the coast, and depending on the volume available, but there is no doubt about it that if we find a substantial quantity of natural gas in a favourable location off the coast this would be a tremendous help in adding to the power resources available to the ESB. But I am told that the nature of natural gas facilities varies enormously, and consequently so does the question of whether it is economic. If it is available in the right place at the right distance and can be got out in the right volume there is no question of the contribution that that could be to our resources.

Question put and agreed to.

Seanad Éireann debate - Wednesday, 20 May 1970

Electricity (Supply) (Amendment) Bill, 1969: Second Stage.

An Leas-Chathaoirleach

Seanad Éireann debate -
Wednesday, 20 May 1970