That Seanad Éireann approves the following order in draft—
Limerick Gas Order, 1986 pursuant to section 10 of the 1920 Gas Regulation Act
Copies of which Order, in draft, were laid before the House on 17 December 1986.
Vol. 115 No. 10
That Seanad Éireann approves the following order in draft—
Limerick Gas Order, 1986 pursuant to section 10 of the 1920 Gas Regulation Act
Copies of which Order, in draft, were laid before the House on 17 December 1986.
The purpose of this order is to establish the new Limerick Gas Company as a gas undertaking with authority to maintain, continue and expand the existing Limerick city gas network and to distribute natural gas within the limits of supply as defined in the order — the greater Limerick city area.
Currently Limerick Corporation is the gas undertaking in the city and the order provides the vehicle by which the assets of the Limerick Corporation gas division are transferred to the new company.
The Gas Regulation Acts 1920 to 1982 provide for the making of regulations, orders etc., to oversee the gas industry. The 1920 Act in particular provides for special orders to be made to enable new gas utilities to be constituted. These orders must be laid in draft before both Houses and their approval given before they are made.
The new company will be owned jointly by Bord Gáis Éireann and Limerick Corporation with shares of 70 per cent and 30 per cent respectively. The establishment of the new Limerick Gas Company is the last stage of a process which I set in motion in October 1985 when I gave approval to BGE to construct a natural gas pipeline to the famous city of Limerick.
That project has been one of the major engineering works undertaken in this country in recent years and in gas pipeline terms ranks second only to the Cork-Dublin pipeline. The Limerick project involved the laying of approximately 90 kilometres of steel pipe during the late summer of this year from the main Cork-Dublin line into the city. En route, the dairy co-operatives at Mitchelstown, Rath Luirc and Mallow are also receiving a supply.
The total approved cost of the project was £15.6 million which is divided into three phases approximately as follows: Limerick cross-country pipeline — £13.3 million; Limerick city pipeline — £1.9 million; Limerick cross-city feeder — £0.4 million.
The major portion of this work is now almost complete and is both on time and within budget. During the construction phase it is estimated that up to 500 people have been employed. Considerable amounts of Irish goods and services are being used and represent as much as 70 per cent of the expenditure on the entire project.
I am pleased to announce that natural gas has now reached Limerick and is already being supplied to industry on the outskirts of the city. The approval of this order will clear the way for the more widespread distribution of natural gas to customers in the Limerick city area.
It is within the Limerick gas utility area that the long term benefits will occur. The refurbishment of the pipe network within the city is due to commence shortly and will cost approximately £10 million. Employment in the gas industry during this phase could be up to 70 people in addition to those employed in the gas company itself.
The advent of natural gas to Limerick will ensure the survival and the potential for growth of its gas industry, which could not otherwise survive.
Domestic, industrial and commercial gas users alike will have access to a high quality, clean, indigenous and versatile fuel at competitive prices. Consumer choice in a more competitive market will be assured.
I recommend this motion to the House and I thank the Members for facilitating the taking of the motion.
I have very little to say except that we are in favour of this motion. As one who comes from the Limerick area, I welcome natural gas to Limerick and places like Mitchelstown, Knocklong and other places, but we in Tipperary are a bit disappointed that so far Tipperary town has not been included. The pipeline at the nearest point to Tipperary town would not be further than 12 miles away. Knocklong is only 12 miles from Tipperary town. I urge the Minister to take Tipperary town into consideration because we have a very big creamery. It might not be as big as Mitchelstown but it is as good as Mitchelstown Creamery and other co-operatives. We also have a number of industries there. We are fortunate that we are one of the towns that has not been hit as much by the recession as other towns. We have a few good industries in Tipperary town and a natural gas supply would be a surer way of keeping those industries in the town. I would like if the Minister would take that into account. I welcome the order.
I welcome the Limerick Gas Order. I am particularly pleased to welcome the order because I was mayor of Limerick last year and on the perhaps historic occasion in December 1985 I officially signed on behalf of Limerick Corporation the natural gas contract between Limerick Corporation, the county borough corporation involved in the town gas industry for almost 150 years, and Bord Gáis Éireann, the State gas development agency which was set up by the Government in 1976 and whose function it is to buy, sell, transmit and distribute natural gas in Ireland. I would like to take this opportunity to congratulate all concerned and associated with the successful outcome of the negotiations to bring natural gas to Limerick and its environs. I would like to pay tribute to successive members of Limerick City Council who have sent numerous delegations to various Ministers for Energy. I would like to congratulate the Limerick gas committee, particularly the late city manager, Tomás Mac Diarmada and the present city manager, Thomas Rice as well as officials of Limerick Corporation and Limerick Gas Company, for the great dedication and commitment they have shown over the years to the development and successful conclusion of this project.
I also express my thanks to the officials of BGE and the Department of Energy for their concern over the years. I would like to take the opportunity to congratulate the Tánaiste, Deputy Dick Spring, Minister for Energy for the special interest which he has taken in this project. We feel in Limerick that he is one of our own. I would like to congratulate him for his outstanding effort and work in this regard. I would also like to congratulate the former Minister of State at the Department of Energy, Deputy Eddie Collins, for the interest he took in the project.
It is interesting to recall that it was in 1978 at a chamber of commerce function in Limerick that I pointed out to the then Taoiseach Mr. Jack Lynch the importance of piping natural gas to areas such as Limerick as part of a national policy of providing this country with a national grid on lines similar to those in other European countries. On 23 January 1985 I raised the question of piping natural gas to Limerick and the mid-west region and I urged the Minister to give the green light to the provision of natural gas for Limerick and to authorise BGE to proceed with the extension of the transmission pipeline to Limerick. The Minister in reply on that occasion, assured the Seanad that work would be underway in 1985 and I am glad he has kept to the precise terms of his word on that occasion. I congratulate him on his work. The contract was signed in December 1985. I would like also to take the opportunity to congratulate BGE and the pipeline contractors for their expeditious and excellent handling of the project since the contract was signed. I would like to congratulate everybody associated with that. They are doing excellent, clean work and they are a credit to BGE and to the contractors involved.
This contract provides for the incorporation of a new company to be named the Limerick Gas Company Limited, 70 per cent of the equity shareholding being held by BGE and 30 per cent by Limerick Corporation. This represents a unique partnership and co-operation between a county borough corporation and a semi-State body, for its share in the equity of the new company Limerick Corporation will transfer the goodwill and assets of its gas division to the new company and this transfer would be subject to the payment to Limerick Corporation of £2.6 million as consideration to be used to clear the accumulated debts. It is important to stress here, as a result of this partnership that all categories of staff, pension payments and so on will be protected.
I think the culmination of all this work can be seen from the fact that over the past ten years in the period for instance between 1973 and 1983 the purchase price of naphtha which was the basic feed stock used by Limerick Gas Company in the manufacture of its gas rose by from £14 per tonne in 1973 to £320 per tonne in 1983. This represented an astonishing, unparalleled increase of 2,200 per cent in a short period of ten years. Indeed it is true to say that on many occasions Limerick Gas Company and Limerick Corporation were faced with the dreadful prospect of the imminent closure of the gasworks, but we persevered and I am glad that the Department of Energy and successive Ministers for Energy also perserved. We commissioned an independent study on the feasibility of supplying Limerick with natural gas and the gas consultants made a clear recommendation that the most appropriate vehicle for the transmission and provision of natural gas to Limerick was the setting up of a separate independent company free from the constraints of the local authority system. I see, therefore, in the making of this order today as the culmination of this great work. I join with the Tánaiste, Deputy Dick Spring, in wishing the new company every success in its endeavours and congratulate all associated with the project. Go raibh maith agat.
I join with the other Senators in welcoming the establishment of the Limerick Gas Company Limited and the culmination of the project which was speedily implemented under the control of this Government and under the control of the Tánaiste and Minister for Energy, Deputy Spring. I would like to congratulate all those who are associated with this venture.
It is only fair to say, however, that the congratulations with regard to the manner of its presentation and the timing of its presentation, cannot be quite as fulsome. It seems extraordinary that this House should at the last minute be confronted with what in reality is a very substantial piece of legislation and asked to express a view on it, which view can only be inadequately formed and inadequately researched. I remember in the past bringing to the attention of the Tánaiste the complicated provisions which it was proposed would be entered into relative to Dublin Gas. We had great faith that the Tánaiste would ensure that these provisions were in fact in accordance with the common good. Nothing has happened since then to convince me that we should have done anything other than what we did relative to Dublin Gas. It is fair to say that the circumstances of our approval of certain guarantees have given rise to some public controversy and that public controversy has been heightened by the fact that Members of the Oireachtas may have felt inadequately prepared and not committed completely because of the late notification they received with regard to those matters. I rise therefore on this special order not because I disagree with what the Tánaiste is seeking to implement but to appeal to the Tánaiste and to anybody else who might hold that office in future and to this Government and any of its successors of whatever hue, not to continue to treat Parliament in such a way that special orders are laid before the House in matters of great importance like this with inadequate time available to the Members to examine the merits or demerits of the proposal.
As I have mentioned time and time again to Ministers, and not particularly to the Tánaiste, I know that Ministers examine these things very carefully, I know they satisfy themselves that everything is in order and I know that there is within his Department and indeed within other Departments a continual stream of proposals and counter proposals which ultimately result in proposals to the Houses of the Oireachtas. I have no doubt that the Tánaiste is satisfied that this is in order, but that is not sufficient. We must go one step further than that, and the Houses of the Oireachtas must also be satisfied. If it takes the Minister's Department some months to arrive at their own policy on a matter, and if it takes it some months to get the exact formula right with regard to how to implement their policy, if it takes them some months to consult every other Department with regard to those matters and if there are amendments and counter amendments and if these matters are discussed by memoranda to the Cabinet and various amendments made that process is merely recognising the fact that the first draft of anything is not likely to be as good as the last one and that improvements are made and adjustments are made as it goes along. Members of the Oireachtas are no better or no worse than Ministers, they are certainly no worse and we do not have the power to make up our minds any more quickly than Ministers. We need a bit of breathing space as well, and that is all. It is reasonable for Members of the Oireachtas to get that breathing space. I realise that the Houses are breaking up for the Christmas recess and that there might be a greater incentive to put it through the other House, because it might not come back for some time, but I appeal to the Minister not to place us in this embarrassing position again. I am not going to put the matter any further than that.
I have a number of individual questions to ask the Minister and I must say the questions I will ask will be pathetically inadequate because I have not had time to examine the matter. I am aware of the basis of the Minister's Order — it is the Gas Regulation(s) Act, 1920 and it was passed by another parliament and section 10 of it empowers the Board of Trade to do almost everything. I have no doubt that the Minister is the successor of the Board of Trade. I have no problems with that.
There are no guarantees that the Supreme Court will acknowledge that.
Of course not, nor indeed can we ever guarantee that, but one of the purposes of our exercise should be at least to limit the freedom of action of the Supreme Court, to narrow their possible areas of interpretation. I would like to ask the Minister a number of questions. One relates to section 7 which states:
Nothing in this Order shall release, discharge or suspend any action, suit, or other proceedings in a court of law which was pending by the Corporation...
How does that cover suits and actions pending against the corporation relative to the supply of gas? I know it must be read in context with the vesting of the property but almost everywhere there seems to be talk about protecting the rights of the gas company to take over what was previously the right of the corporation. Where in the order does it protect the right of the individual? For example, if I have an action for negligence against the corporation, arising out of some defective work done in the gas area, is it intended that the new company would take over that? If so, would the Minister like to tell me where that is provided for? What is being done is that they are being given the benefit of all the actions which the council have but are not being expected to take any risk. I am not talking about the ordinary trade debtors and creditors they have. I am not concerned about that because I realise they are subject to a separate and distinct agreement. Would the Minister tell us whether the £2.6 million is adequate to meet all the liabilities of the corporation and if there will be a surplus left for the corporation in that regard?
In the definition section, reference is made to the Limerick Corporation Gas Acts and Orders, 1878 to 1950. I could not see anywhere in the legal definitions anything which could be construed as being the Limerick Corporation Gas Acts and Orders, 1878 to 1950. What are they? If you look up the Statutes, you do not see a Limerick Corporation Gas Act. If you look up the most up to date list of the grouping together of Acts, it is not listed there. I realise that they may have been private Acts. I do not see, for instance, in 1950 anything which could be a Limerick Corporation Gas Act. There is some kind of a local government Act which relates to Limerick but it is not a Limerick Corporation Gas Act. This is important because in this order Article 16 repeals the Limerick Gas Act, and orders, 1878 to 1950, in so far as they relate to the corporation's responsibility to supply gas. I have been unable to find out what they are. The Minister might advise us in that regard. I wish the new company prosperity. I hope they continue to supply indigenous fuel for many years to come.
I would like very briefly to be associated with the expressions of welcome for this order and to congratulate the Minister on the very definite initiative taken and shown positively here in bringing gas to Limerick. There are a few points I would like to refer to.
As I perceive it from reading the Minister's speech, there are a number of particular co-operative societies mentioned — Golden Vale, Charleville, Ballyclough Co-operative Society and Mitchelstown Co-operative Society — as the main potential users of this gas. Perhaps the Minister would clarify what provisions would exist for the enlargement of use of the gas to other operations in the industrial sphere. I know there would be certain technical problems in that. There are indications in the map as to the region involved. The Minister for Energy and all persons associated with the bringing of gas to Limerick and with the establishment of the Limerick Gas Company are to be highly congratulated. Since gas is such an efficient form of energy, it should be as widely available as possible. Perhaps the Minister will give clarification as to how the expanded use of the gas might be possible in the time ahead.
Senator Ryan mentioned the question of natural gas for Tipperary, a question which has been raised with me by Senator Ferris on many occasions. The main difficulty in relation to the extension of the grid to any further towns is the question of whether there is the existence of gas mains, and which, unfortunately, in the case of Tipperary does not exist, because that obviously reduces the capital cost. I would say as a matter of policy generally, because this has been touched on by a number of Senators, that the question of the extension of the gas grid which we are constantly updating and trying to expand, is really a question of examining the economic feasibility of the possible demands for gas in any area. In this situation Limerick was an obvious place for gas, having the old Limerick Gas Company and the gas mains in situ. What we have done in the case of Limerick is to provide a ten inch gas main connecting Limerick with the mains. This has a capacity to deal with further expansion, if that is necessary, from Limerick. It is probably premature as yet to say that we will be getting natural gas in Kerry shortly but who knows? There is an interest in the Shannon region and in the Shannon Estuary generally and it is a question of looking at the capital cost of the extension of the gas pipeline and the usage and demand for gas by the industrialists or the prime markets.
Senator Kennedy referred to the participants and the various bodies who were involved in the negotiations and discussions. I would reiterate his congratulations in that regard. Much difficult and technical work had to be done and some hard bargaining had to take place, obviously slow by its nature, but the whole proceedings were approached with a willingness to get work done and to bring gas to Limerick.
Senator O'Leary — as is his right, if not his wont — expressed some doubts and perhaps some regrets that the Parliament is not being given adequate notice. There is always the question of balancing priorities. In this case I am quite satisfied that despite the shortness of the notice, it is in the interest of the public good and the common good and particularly of the consumers in Limerick that this order be approved by both Houses before we rise for Christmas. I say this because we are now putting the company on a statutory basis. Development can now take place. The order is ready. The gas has arrived in Limerick but it cannot be distributed until the order is made.
Perhaps the Ministers' efforts to have more consultation with both Houses would give us a reciprocal arrangement whereby people in both Houses would confine themselves to short contributions. That is not directed at any person here. In many debates, particularly in the other House if not here, we have unlimited contributions whereas a half an hour would be adequate for any contribution from any Member of either House. With some reciprocation we could meet half way the Senator's requests. On a general basis, I agree with the Senator's comments that it is very necessary that elected representatives have time to tease out the issues involved. There is much drafting, discussions and improving of documents before they reach the floors of either House. The Senator is entitled to his view as to more discussion.
The Senator expressed the public concern in relation to the Dublin Gas situation. It is regrettable and one of the unfortunate things was that the Dublin Gas Company were not taken into public ownership many years ago because of the large investment required by the State. That should have been done from day one when the natural gas programme was being approved. I can allay any fears people have in relation to the question of whether there are letters of comfort or State guarantees in relation to the bank loans to the Dublin Gas Company. I can state emphatically that there are no letters of comfort or State guarantees in relation to the consortia of banks and the loans from them to the Dublin Gas Company. If the Dublin Gas company were to stop tomorrow morning and go into liquidation, the banks would be taking their chances like everybody else. The Government would not be backing up or putting the banks in a privileged position. That is the view that is accepted by the banks from my discussions with them.
In relation to the gas Acts generally, these are long overdue to be included in a consolidating Act because there are numerous gas Acts — we have the Limerick Corporation Gas Act, 1878, 41 and 42 Victoria — which Senator O'Leary can read over Christmas, the Limerick Gas Order, 1950, Statutory Instrument No. 58 of 1950, another order in 1923 in relation to gas charges, Statutory Instrument No. 24 of 1923. I would be in favour of a consolidation of all of the gas Acts given the developments that have taken place since the 1976 Act establishing Bord Gáis Éireann. It is well nigh time that we had a consolidating Act updating the gas laws generally and perhaps coping with the future development of natural gas because there will be an increasing development particularly in relation to the north eastern pipeline in years to come. We are extremely fortunate to have the Kinsale Head gas field and I am quite confident that there will be further gas developments taking place off our coasts from shows to date in the exploration activity. We are going to have natural gas as part of our fuel basket for many years to come.
In relation to section 7 — actions not to abate — mentioned by Senator O'Leary, my reading of the section is that, while actions against the corporation are not explicitly mentioned, I am quite satisfied we can take it that they would also be included. Any actions against the corporation which are outstanding or which are pending, like actions or suits by the corporation, would not be abated by the making of this Order. Senator O'Leary mentioned the figure of £2.6 million and asked whether that would cover the liability. I am satisfied that is the appropriate and correct sum as negotiated betwen Bord Gáis Éireann, my Department and Limerick Corporation. It is an equitable bargain to be struck in relation to the taking over of 70 per cent of the assets by Bord Gáis Éireann.
All we have to do now, as Senator O'Leary said, is to wish the new company well. It is very important that the company is successful. We should make no bones about that. It is a public utility company. It has a responsibility not just to the citizens of Limerick but to the taxpayers generally to be successful. There will be a public responsibility on the Minister for Energy of the day, Bord Gáis Éireann and Limerick Corporation to ensure that this gas company, as a public utility, is run to the highest commercial standards possible in delivering gas to the consumers, both domestic and industrial, in the Limerick city area. I am confident that the company will take on the task they are now given by the State because it is an important task and it carries much responsibility in the spirit in which it is being given to them — to be a successful, well managed commercial company, to deliver natural gas in the city of Limerick and to do so in the best interests of both the Limerick residents and the rest of the taxpayers in the country.