I move:
That Seanad Éireann approves the following Order in draft:
State Guarantee Act, 1954 (Amendment of Schedule) Order, 1985,
a copy of which Order in draft has been laid before the House.
State Guarantee Act, 1954 (Amendment of Schedule) Order, 1985: Motion.
This resolution arises as a part of a series of measures needed for the financial restructuring of the Dublin Port and Docks Board which is now virtually complete and which is part of the rescue package for the board decided on by the Government earlier this year. In presenting this proposal to the House I feel it would be useful to look briefly at some of the events which gave rise to the need for the action by the Government in relation to the port of Dublin.
Dublin port has been adversely affected by a number of factors over the past few years such as the common plague of the recession and the drop in the demand for oil due largely to increased usage of natural gas. These factors alone would have led to significant deterioration in the financial performance of the Port and Docks Board. On top of that, as we all know the board has had to contend with the fruits of the board's decision to become directly involved in stevedoring through the establishment of Dublin Cargo Handling Limited. The result of this decision so fundamentally affected the financial wellbeing of the Port and Docks Board as to call into question the board's future viability. The disputes which followed the establishment of Dublin Cargo Handling Limited, including the blockading of the port by one section of the work force, represented a sad chapter indeed in the long and distinguished history of Dublin port. Happily, that chapter is now coming to an end, thanks to the persistent efforts of those truly concerned with the welfare of the port.
As I have said on a number of occasions in the past, a viable successful Dublin port can only be achieved if everybody plays a part. The Government have consistently shown willingness to play their part and continue to do so. In order to assist the Port and Docks Board the Government approved a package of measures designed to restore the port to financial viability last March. The board later informed us of difficulties they had encountered in implementing the measures. Following a review of the position the Government agreed in May on a revised financial package for the board. The package comprised: (1) Exchequer grant assistance of £3 million in each of the years 1985, 1986 and 1987; (2) a State guarantee of borrowing by the Port and Docks Board of up to £7 million; (3) a requirement that the board would take necessary steps to solve its financial problems by cutting costs, increasing revenue and disposal of assets. In addition, there were some local loans fund provisions which I will refer to later. The State assistance was contingent on the conclusion of negotiations between Dublin Cargo Handling Limited and the dock labour force.
I am pleased to report that the major elements of the rescue package are now falling into place. Negotiations have been successfully concluded with the dock labour force and the 1985 State grant of £3 million has been paid in full. The board are taking steps to rectify their financial situation by disposing of assets and increasing revenue. These are all essential components to the restoration of viability at Dublin port. The onus is on those who oppose increased charges to show how their approach would improve the prospects of viability.
In the context of the Government rescue package I recently withheld my consent to a proposal from the board for the sale and lease-back of the port centre building because I did not regard the terms as being satisfactory from the board's point of view. Non-implementation of the board's proposal has had implications for the board insofar as the level of bank borrowings is concerned. In view of this I have, following consultation with the Minister for Finance, agreed to make available to the board a Local Loans Fund loan of £3 million. This is in addition to another Local Loans Fund loan of £2.5 million which was given earlier this year. Taking into account direct grants, loan guarantees and direct loans the Government have either provided or committed financial assistance in the amount of £21.5 million to the board over the past 12 months. I am glad to note that the banks have also carried out their role in a responsible manner by making funds available and continuing to support the board. Now that normal activity at the port has resumed it is up to those directly involved, both management and workers, to show that they have the skill and determination to make it work.
The resolution which is now before the House, if approved, will provide a State guarantee of up to £7 million of the board's borrowings and will complete the Government rescue package for the board. The guarantee necessitates an appropriate amendment to the Schedule of the State Guarantees Act, 1954, and it is specifically in this context that the resolution arises. Approval of this amendment by the House and by the Dáil is necessary in order to complete legal formalities in respect of the guarantee.
I should point out that a revised borrowing package has recently been agreed between the Port and Docks Board and their bankers. The new borrowing arrangements are conditional on the State guarantee being in place no later than the end of this year. There is, therefore, an obvious urgency about the matter. Therefore, I recommend the resolution to the House.
I regret we did not get a copy of the Minister's speech.
There are copies available.
Having listened to what the Minister has stated I feel it is a measure we should adopt in this House. We are concerend about the future of Dublin port and we will support any efforts to make it viable and successful. The Minister stated that the Government have prepared a package which will help to restore the port as a viable enterprise and we hope it is successful. A total package of £21.5 million in the past 12 months seems to be a fairly large sum, but when we take into consideration the problems that Dublin port faced over the last number of years I feel that the sum is not large enough.
The Minister said that there is a responsibility on the board to ensure that they operate as successfully as possible, and all of us agree with that. We discussed Irish Shipping here last week and it caused some concern. Perhaps the Minister could clarify something in relation to that. He said that Members of the House had not done their sums properly and were possibly ill-informed. In an article in the Evening Press on 8 November we read that a former PRO with the company said that any primary cert students who look at the figures would clarify that the Minister supplied the wrong figures.
An Leas-Chathaoirleach
I have to bring it to the Senator's notice that he cannot debate Irish Shipping now because that was debated last Thursday.
I know but the Minister might clarify the position if it would be £30 million more than he stated at that time.
That was stated by me last week.
I would like to welcome this motion. The order is being brought to this House and the other House in very exceptional circumstances. As Members of the House are aware, Dublin port has been in extreme financial difficulty over the last few years and this order, along with the other aspects of the financial package that have been negotiated with the Port and Docks Board, are all in an effort to restore viability to the port, recognising the important economic role that the port of Dublin plays in this country. The package, which includes this £7 million guaranteed arrangement to the Port and Docks by way of loan, is short lived and should, of course, be short lived. We are aware that the intention is to provide assistance to the board with reducing commitment from 1 January 1987 and that this arrangement will be eliminated within two years following that. The proposal is included with the grant assistance of £3 million each year until 1987 and it is very good news to hear from the Minister that that particular provision this year has already been discharged. All of this, together with the rationalisation of the work force in the port and a more determined effort all round by those involved in running the port, whether by way of management or the work force itself, should bring the port into a viable and commercially successful state again. That should be achieved as urgently as possible.
In relation to the recent announcement of the establishment of a statutory authority to deal with the development of the Port and Docks Board site, I presume that the benefits of that, combined with the value of the redevelopment of a large 27 acre site in the centre of Dublin along the Liffey side, will also be a measure— one not mentioned by the Minister—to bring back normality to the finances of the Port and Docks Board. I have great pleasure in welcoming this order and hope that the Minister, when replying, will make some comment on that area.
I would like to thank the House for facilitating the speedy passage of this order. I would like to comment on points made by Senators Lynch and FitzGerald. May I say in passing that the figures I gave to the House in relation to Irish Shipping are the correct figures. I am surprised that Senator Lynch would in any way question the veracity of the figures I gave the House. He can rest assured that all those other figures that have been bandied about are inaccurate, distortion, double counting or not comparing like with like.
I am glad to hear that. It was a newspaper report.
The point I made in last week's debate was that so many figures have been bandied about in newspapers that I had better put on the record accurate figures. The actual cost of the liquidation will be, as I said last week, of the order of just under £50 million compared to a revised estimate for keeping going of £220 million. I think the gentlemen of the press in the last few days were also adding in the cost to the Exchequer anyway, whether Irish Shipping had closed down or not, of the subsidy on the Irish Spruce. That did not fall on Irish Shipping. That was £30 million. That would have fallen to be paid whether or not Irish Shipping went into liquidation, so that should not be included.
In relation to the points made by Senator FitzGerald, there has been a long saga about the Custom House dock site. As I said in the other House last night during a motion on Dublin port, there has been a lot of comment, controversy and indeed criticism of the then Government for deciding to intervene on the 27 acre dock site. I do not dispute the wisdom of the decision of the then Government in saying "This is a very important site for the city of Dublin. This cannot be allowed to go out of public ownership without considering how its development can be maximised to the advantage of the city of Dublin, especially the heart of Dublin." I am not at all critical of the decision of the then Government under Deputy Haughey to intervene politically in that case. I want to put that on record. There has been a lot of criticism of the so-called Gregory deal. People took exception to the idea that one Deputy in the House could extract this sort of commitment from the Government. I know that the then Government did not make that commitment with a glad heart or would not do it in normal circumstances. The site in question is very important for Dublin city centre. I hope the decisions taken by this Government and announced by the Taoiseach in the Dáil on 23 October, after very detailed consideration by an inter-departmental working committee under the chairmanship of the Minister of State at the Department of the Environment, will permit and encourage the best development of that site to the advantage of Dublin city.
The rescue package which I announced to the Seanad in my opening speech includes grants of £9 million, £3 million already paid, a further £3 million next year and £3 million in 1987. The Government in giving those grants—it is the first time grants have been paid to Dublin port—decided that they would be taken into account in the final reconciliation between the State and the Dublin Port and Docks Board when that site comes to be valued. Those questions will be addressed in the Bill which the Minister for the Environment will bring before both Houses of the Oireachtas in the next few months to give effect to the new authority to develop the Port and Docks site.
The port of Dublin has suffered a very severe decline since 1979. Yes, recession has played its part; yes, the changing consumption patterns of petroleum products have played a big part, because of natural gas in particular. These were two aspects outside the control of the Port and Docks Board and their work force. But there was a third and probably most serious cause — the whole area of industrial relations, which in the deep sea section have been extremely bad for too long and have really strangled the port.
We have been through the hoops on this in the past 18 months. We have had visits to the Labour Court, agreements signed by both sides, dock review groups and then failure by one side to implement that agreement. At the eleventh hour agreement was finally reached and, I am glad to say, is now being implemented since the past month or so. First reports about the implementation of that agreement are encouraging. I say to those people who work in the port, management and workforce alike, and also to the board, that it is vital to the future viability of the port, to the survival of the port and to the prosperity of the port that there be a continuation of this full, comprehensive and glad co-operation between all in the port. I believe that the port because of its natural assets can prosper and win back the trade it has lost. Its location and its facilities are major advantages for it. It has to keep its charges competitive and, above all, it has to keep its service to the customer competitive and good. After very painful months I believe we have now reached the stage where there is room for hope and encouragement. I hope that persists in the future.
Question put and agreed to.