Before calling on the Minister I want to make it clear to the House that we are now taking Second Stage of the Gas (Amendment) Bill, 1987, and that, for the purpose of debate, Second Stage is being taken with the Clonmel Gas Order, 1987.
Gas (Amendment) Bill, 1987: Second and Subsequent Stages.
We intend to take all Stages of item No. 2.
Question proposed: "That the Bill be now read a Second Time."
This is my first opportunity to address the new Seanad. I congratulate the Cathaoirleach and all the Senators on their election. I wish to join in the expressions of congratulations to Mr. Coughlan on his appointment as Clerk of the Seanad and to extend good wishes to Mr. Tobin on his retirement.
Senators will be aware of the concerns I have expressed that the takeover of the assets of Dublin Gas by BGE be completed as quickly as possible, and that the Dublin city utility come under the full control and management of BGE so that safety, efficiency, and progressive development would be the hall-marks of the future.
Broadly speaking there are three main proposals in this Bill. First, the Bill provides that the Minister for Energy can, by order, confer on BGE functions additional to those they have under the 1976 Act. These functions will, in effect, provide BGE with the powers and duties which Dublin Gas have at present as a gas distribution utility. The need for these additional functions for BGE arises from the fact that the 1976 Act saw BGE's role at that time as being essentially one of a gas wholesaler. BGE's role will now cover retail distribution of natural gas as well as wholesaling. BGE will be restricted by order, initially to retail distribution in the Dublin area. The types of functions being assigned to BGE for their future Dublin operations can, by subsequent order, be extended to other areas of the country.
Secondly, I am increasing BGE's borrowing limit for capital purposes by £90 million, from the present £80 million to £170 million. This is necessary because BGE's borrowings will rise by £66 million directly on account of the takeover due to the debts associated with the assets of Dublin Gas. Further future development of the north east pipeline project and essential capital expenditure in Dublin over the next number of years account for the balance of the increase in the borrowing limit.
The increased indebtedness of £66 million relating to Dublin Gas is inescapable because of the commitment made by the previous Government in a letter dated 22 April 1986 to the banks confirming the position that they had a prior charge on the assets of Dublin Gas and that the Government intended that all amounts due to the banks would be paid in full. I now expect that these loans will be rescheduled on more favourable terms than heretofore. The net effect is, therefore, that BGE's cash outlay will only amount to £4 million for stamp duty, payable to the State.
Contrary to previous practice I do not propose to increase the limit on guarantees by the Minister for Finance from its present level of £80 million.
Thirdly, I propose to increase the size of the board of BGE by two. This is necessary in order that BGE's board will reflect its expanded role as a gas retailer. A wider range of interests now needs to be represented at board level.
The discovery of natural gas in 1971 represented a major development in Irish energy. Natural gas was originally supplied solely to NET for ammonia manufacture and to ESB for electricity generation and indeed, the Kinsale field could not have been developed without these two major offtakes. Natural gas, however, is now widely available in all sectors of the economy and in many regions of the country.
Dublin is by far the largest premium market for natural gas. Dublin Gas have approximately 130,000 consumers and in 1986, 83 million therms of gas were sold compared with 34 million therms in 1983. The target is to get this to at least 124 million therms within the next few years. A number of marketing studies which have been undertaken in the past few years have indicated that this level of sales should be possible, though of course it will not be easy. It will be a primary function of BGE and their management to ensure that this is achieved.
The unfortunate events of the last six months or so have not helped. Much work remains to be done to bring gas distribution in Dublin up to modern technical and commercial standards. I am satisfied however, that, under the care of BGE, all the necessary steps will continue to be taken to ensure the integrity of the gas network and the safety of the public. A great deal of the pipe network in Dublin was laid at a time when attention to safety was not as important as today and when it was impossible to foresee the volume of weight of traffic which now uses the streets of the city. BGE have already appointed a member of their staff to oversee operations in Dublin Gas and the task of determining a policy for repair and replacement of mains which may be at risk has been started. Remedial work will not have to wait the outcome of that study however. Significant repairs and renewals have been underway all year and the Cremer and Warner reports on the Raglan and Dolphin House explosions have identified the categories most in need of attention.
The Dublin Gas Company project was financed broadly 50:50 by a consortium of Irish and other banks and institutions, and by BGE. The bank loans were to be repaid by 1991 and BGE's thereafter. From 1985 onwards the company encountered serious marketing and costs difficulties which it was not able to rectify. It seemed unable to get its costs and management structures under control. Mounting debts in the company and failure to pay outstanding sums of many millions of pounds due to BGE for gas, forced BGE to put in a receiver in April, 1986.
Major improvements in the costs and operations of Dublin Gas have been achieved during the receivership, but further improvements on the marketing and operations fronts remain necessary if its future is to be assured. Apart from the fact that the receiver cannot remain in place indefinitely, these improvements are unlikely to be fully achieved while uncertainty about the future remains. That uncertainty affects the customers and the staff of the company as well as the general public.
In March 1987 following Government decisions designed to safeguard the Dublin Gas Company's customers and employees, BGE submitted a bid for the assets of Dublin Gas, and this has been successful.
Here I would wish to make a few points very clear. I remain convinced that the decision of my predecessors to bring natural gas to Dublin city was the correct one, despite the various upsets that have been encountered. The chosen vehicle, Dublin Gas Company, did not achieve success for a variety of reasons, and in consequence, there was probably no option but to put in a receiver. The alternatives of liquidation or an uncertain future under a bank receivership were hardly palatable. The consumers of Dublin Gas would also be put to major expense for other cooking and heating systems, the employees of Dublin Gas would have been hit severely, and a large number of small contractors and subcontractors would have been ruined. On top of all that, a valuable outlet for the sale of our gas would have been lost and BGE's large investment in the infrastructure of Dublin Gas would have gone for nought.
In its passage through the Dáil a very full and open debate took place on this Bill. Here I would like to compliment Deputies, whose contributions were both constructive and useful.
A major, and understandable, concern of Deputies was in regard to the question of public safety. This was only to be expected and I fully appreciate the concerns expressed.
While I was unable to accept all amendments proposed on this point I assured the Dáil, just as I am now assuring the Seanad, that their concerns for safety are already covered in the Bill or will be dealt with in an order to be made under the Bill or in the context of the 1976 Act. I undertook in the Dáil, and I repeat this undertaking here, that matters such as safety monitoring and audits and subsequent reporting arrangements will be dealt with in the order. Let me stress yet again that the question of safety is paramount among my priorities for Dublin Gas and the Seanad may be assured that the very wide powers which this measure proposes to confer will be used to bring about a radically changed safety regime in that enterprise.
The question of transparency of accounts relating to BGE's operations in Dublin arose in the Dáil debate and I accepted an amendment to provide for the necessary transparency which is now part of the Bill.
As has been agreed by the House it is the intention to include in the debate the Clonmel Gas Order, 1987.
The Gas Regulation Act, 1920 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 the orders are made.
The purpose of this order is to establish the new Clonmel Gas Company as a gas undertaking. Currently, Clonmel Corporation is the gas undertaker in the town under the Clonmel Corporation Act of 1895. It has 1,800 customers and sells about 170,000 therms of gas per year.
The new company, Clonmel Gas Company Limited, have already been incorporated and their Memorandum and Articles of Association will be confirmed by me under the Gas Regulation Act of 1982 as soon as this order is made. The company are to be owned jointly by Bord Gáis, with 90 per cent of the equity, and by the corporation with the remaining 10 per cent.
Construction of the four kilometres of four inch diameter pipeline from the main Cork-Dublin pipeline at Ballyveelish to Clonmel commenced on 12 May and is now well advanced. It is expected that this work will be complete, in a few weeks. The cost of the construction project for BGE will be approximately £860,000 and the conversion of the Clonmel gas system to use natural gas will cost about £840,000. Considerable amounts of Irish goods and services are being used on this project and will represent up to 80 per cent of the expenditure on it. Employment during the construction phase has been provided for 20 people and there will be about 50 additional jobs during the conversion programme.
The making of this order clears the way for the new company to begin operations, and I recommend this motion to the House.
I would like to return briefly to the Dublin Gas takeover. I believe that with the proper care and attention, with hard work and concerted effort, BGE can run a successful and profitable gas undertaking in Dublin. I am also confident that this new venture will have the full, loyal support of the workforce of BGE and Dublin Gas and I have no doubt that it will merit the support of the citizens and business community in Dublin.
I commend the Bill and the Draft Order on Clonmel to the House.
First let me welcome the Minister to the House as it is his first time to speak here as Minister for Energy.
Natural gas both from the commercial viewpoint and the safety angle in particular has become the focus of great public concern in the past few months. Accordingly, Fine Gael support fully any sensible measures which are designed to help to clear up the present problems. The Gas (Amendment) Bill before us today is worthy, therefore, of serious consideration and, I believe, after some constructive criticism will deserve our full support.
The whole question of supply and distribution of natural gas throughout the country has changed dramatically since the forerunner of this Bill which was the Gas Act, 1976, which at the time established BGE as basically a wholesaler of natural gas. Since then the question of supply and demand for natural gas has been the cause of much discussion as energy prices, particularly oil prices, soared and our own long term natural gas supply from the Kinsale Head field became a major attraction for Irish industrial and domestic consumers. As towns throughout the country, so many of them far removed at the time from the original gas pipeline, sought at that stage and are still seeking an extension of the gas grid to their own localities, it is only proper that new legislation be enacted to deal with the new situation and the problems which may inevitably occur.
Undoubtedly, the question of safety of gas supplies must be addressed, as the Minister has said. The events of the past year, particularly in the Dublin area where not just the Raglan House tragedy but many minor scares and house evacuations etc. caused upset and worry, render it imperative to ensure that these problems will not recur. The responsibility for safety in the Dublin Gas Company rested with the suppliers themselves and, while we all recognise that they did not disregard the problem, a major question must be raised as to the emphasis which they placed on the safety aspect. The problems of a commercial body in a difficult commercial environment are often so great that I consider it unlikely that their supervising of a safety problem would get the maximum priority which it deserves, and, indeed demands. Therefore, I consider it vital to the safety of the natural gas consumers that an outside body or person with no direct links whatsoever with the Gas Company would have the power to oversee the safety aspects of gas supplies and have the power to act as he sees or they see fit to ensure maximum safety. While the Bill continues to allow the board of the new company to be their own safety assessors, a position I am not happy about, I am glad that the Minister has indicated in the other House his willingness to order periodic safety checks and other actions that would allow safety accountability to be brought to light. Also, it is important to the public, although it may be a case of disquiet, to be aware by public record of any minor gas leaks, unsuitable work practices or faulty materials found from time to time. The safety aspect must be an ongoing question. It is not a case of solved today and solve tomorrow. That is why I say that only an outside person or body responsible to the Minister, not the company, is the surest guarantee of safety.
The Bill before us primarily aims to end the long running and often unhappy saga of Dublin Gas by allowing for the final takeover of the private Dublin Gas Company by BGE. The political ideologists among us may get a certain degree of satisfaction from the fact that a private company seem to have failed and that the State has been called upon to save the day. Undoubtedly, the money invested by the State into the former Dublin Gas Company has turned out to be a costly investment, but it must be said that it was done in good faith with the agreement of most experts at the time. Indeed, I welcome the Minister's remarks that he believed that the original decision to supply the Dublin market was a correct one, and he admitted that it was done in good faith. The venture failed because of a variety of unforeseen circumstances, not just mismanagement. Now we must hope that the new amalgamation will be more successful in ensuring a long term supply of gas to the consumer particularly in the main domestic market, the Dublin area, at a competitive rate and in the long term at no further cost to the State.
The takeover of Dublin Gas by BGE necessitates an increase in BGE's borrowing power from £80 million to £170 million. While I accept that this will allow the implementation of the necessary capital programme of investment in the gas network, I hope that it will not be a case of becoming out of control in terms of expenditure and loss limits. It is vital that stringent limits be imposed on the amount of acceptable losses in the early years of the operation and that remedial action be taken if necessary if things are not going according to plan. The fact that losses at Dublin Gas ran out of control should be a lesson, not an excuse for someone else to do the same thing.
I am pleased that the Minister has taken on the suggestion made, I believe, by the Fine Gael spokesman in the Dáil, to have separate audited accounts for the Dublin Gas area within the new company's accounts each year. This should help to ensure that past mistakes will not be repeated and, more important, it will show BGE's shareholders, the taxpayer, that his money is being used and, it is to be hoped, bringing about improvements to the area.
I would like to mention the section dealing with the pension fund, section 4, allowing BGE to take over the administration of the existing Dublin Gas pension fund. I welcome this important clause. It is important for the workers and their families and I hope that any disquiet which some of the workers may have felt at being taken over by a new company, will be alleviated by that section.
Section 3 deals with the construction of new pipelines and the export of natural gas and it is important that both of these be dealt with properly. They are very relevant at present. As I have mentioned, there is a growing demand from all parts of the country for an extension to the gas grid. Without being parochial, let me say that I can see in Mallow town adjacent to me the positive benefits which have accrued from the supplying of natural gas to the Ballyclough Co-operative Creamery who are a major employer in that area. Such benefit has been seen by other similar companies throughout the country, and I presume there will be the knock-on effect of many companies in towns which do not have a supply of natural gas seeking that the grid be extended to those areas.
I suppose that the increasing demand for natural gas in the next few years will create some problems of its own. The Kinsale gas field will not be a never-ending supply and, unfortunately, the fact that the Irish market is adequately supplied means that it is unlikely there will be any further exploration of gas fields under the present terms. This is due to the fact that there is no advantage whatsoever for people to carry out further exploration work for the Irish market because there is a fairly low fixed price for gas on the domestic market and there are no provisions at the moment to allow for the exportation of gas to foreign markets. Therefore, in order to ensure that a replacement supply will come on stream before the Kinsale field is exhausted, I hope intensive exploration will take place. Unfortunately, this will only happen if over the next few years conditions change which will allow it to become an economic reality.
Section 3 of the Bill allows for the exportation of natural gas only with the permission of the Minister for Industry and Commerce. While there is nothing wrong with allowing it to happen only at the behest of the Minister, it would be appropriate if it was clarified whether gas will be exported if it becomes available in this country above and beyond the level of demand on the Irish market. This would help somewhat in making gas exploration more attractive to the people in that field.
While on the subject of gas exportation, I will refer briefly to the long drawn-out saga of a gas interconnector with the UK. Perhaps it is not directly relevant to the Bill in that it is not mentioned in it but, however, it is covered in the section which states the Minister's permission is necessary for the exportation of gas. I hope that as soon as possible the Minister will make a final decision on this matter, particularly with regard to the supply of natural gas to Northern Ireland. This seems to have been under discussion for quite a long time: from time to time various reasons were given but nothing was done about the matter. It is understandable that the economic angle was considered but it is particularly worrying when we hear about the danger of terrorist activity and the fact that we were more or less being ordered by the bullyboys of the subversive organisations as to what we could and could not do. I would like to hear the Minister's long term plans regarding the supply of natural gas to Northern Ireland. If the people in Northern Ireland are willing to take the supply from us, I would like to hear how he will deal with the problems that may arise as a result.
Section 6 of the Bill allows for the increase in numbers of the board of management from six to eight. As the number of functions and responsibilities of the new board increase there is no harm whatsoever in increasing the numbers on the board. I certainly would have no objection to it. However, I hope the interests of the consumers, both domestic and industrial, will be represented on the board. I must admit I do not know the present set-up of the board but I hope these groups will have representation on it once it is set up.
Obviously I am far from an expert on the Clonmel gas situation. I mentioned earlier that there was a great increase in the demand for a natural gas supply in many towns throughout the country and the Minister's order will regularise the position regarding Clonmel gas. Obviously I support that and I hope, over the next few years, he will do the same for many other towns so that we can fully utilise this natural resource.
The Bill is not very far-reaching but it certainly will help to solve the problems which exist at the moment. Perhaps on Committee Stage we will tease out a few more specific problems with the Minister regarding safety factors, etc. and I am sure he will be more than willing to listen to us. I fully support the Bill and I join with the Minister in commending it to the House.
First, I wish to join with the other Senators in welcoming the Minister to the House. This is a subject in which the House is very interested and we are all very much aware of the development potential of natural gas. We are fortunate to have an energetic Minister who is very capable of handling this very important matter. We welcome the takeover of Dublin Gas by Bord Gáis Éireann. It is a natural development in so far as nobody can quantify the expense at the end of the day with all the repairs and the redevelopment of the pipe network in the city of Dublin. I am sure the Minister will not settle for the very narrow line boundaries. I understand the Minister has major plans for development of the horticultural industry in north County Dublin. This is right and proper and the Minister would be very unwise not to think on those lines because we have prime land to be developed and this is one of the areas that must stand to benefit from the full development of natural gas in the Dublin area.
I do not think any other company could take over Dublin Gas and administer the delivery and the service of gas in a pipe network that is old and unsuitable. Those of us who are not from the city sympathise with the problems the city authorities have with the network, the many holes, the number of contractors and all the serious developments and major costs attached to those developments. Even those of us who do not have gas and who may not in the long term have the full benefit of this very important energy realise it is important to the city. We think that Bord Gáis Éireann are the proper people to handle the affairs of Dublin Gas. If there is loss-making and if there are development charges which are not to the fore at the moment — and that is possible — then there is nobody better than those who supply gas to meet those unforeseen costs and development charges. We welcome this development. It is right and proper and it has the broad support of all the Irish people. For some time before this proposal was made there were fears about the future of the gas network in Dublin. This Bill goes a long way to allay those fears and to help to indicate fully that this very important energy is going to be of benefit to Dublin.
At the same time a question arises which I hope the Minister will not mind me asking, that is, in regard to the new major commitments by Bord Gáis Éireann, who are now involved in the takeover of the gas network in Dublin. I am certain the Minister will reassess the capability of Bord Gáis Éireann to further develop the pipelines. This is important, especially to someone who comes from my neck of the woods. I could not allow this occasion to pass without commenting on this and asking the Minister to reply.
Like the previous speaker I, too, would like to see the gas network extended to Drogheda, Dundalk, Newry and Belfast. I hope that is the ultimate plan and that we can achieve it despite all the difficulties, threats, lack of political co-operation and lack of willingness on the part of the British Government at the last minute to make a contribution sufficient to bring the pipeline to Belfast. I hope the Minister and his colleagues in Government will persuade the authorities in Belfast, those administering on behalf of the British Government, to cooperate and ensure that the ultimate outcome will be that we will have a gas pipeline that will benefit major centres of the population in Northern Ireland. I am less optimistic about the potential for gas to come from Dundalk to Monaghan, Cavan, Sligo and, ultimately, to Donegal.
In the past when applications for funds were made to the European Regional Development Fund proposals were put forward and maps showed the areas where ultimately this service would be provided. Having looked at the commitments that have to be undertaken, especially the development involved in the completion of the network in Dublin, I wonder is this feasible in the short term. In the long term, we have to state with some degree of clarity to those people living in Counties Monaghan, Cavan, Sligo, Leitrim and Donegal exactly what is involved. I am aware that the European Regional Development Fund is forward committed, and if the fund could help in any way, this is one of the areas where a major contribution would be expected.
At meetings of local authorities, local and regional development organisations and organisations of many kinds, the question is asked: what of the future? All too often people are unaware of major development costs. Maybe they are difficult to forecast, but in fairness to the people who live in those areas, an indication would be helpful. The Minister is honest and frank and is well able to state the exact situation. This would be more than helpful to the people in the northwest and would have a consequential benefit so far as the European Regional Development Fund, which is so important to the west and Donegal, is concerned. In other words, the contribution that might come to Donegal for a number of years will not be part of a development fund which intended to bring gas to the west, including Donegal. Maybe I am going around in circles trying to get the point across, but this is an important issue that has been raised constantly and I am using this opportunity to raise it when the Minister is in the Seanad. I have no doubt that he is well able to answer these points because he is totally involved, committed and aware of the ultimate development possibilities in this area.
I hope the Minister is very successful. He represents a good area in the north of Dublin. I hope the benefit I previously mentioned will be a great asset to those who are earning their livelihood from the horticulture industry, and I am sure the Minister is also committed to that development. It is important that the nation is kept well informed about what exactly we are doing. Everybody should know these matters are discussed very often and I ask the Minister to make this information available to all. I appreciate the opportunity to make this contribution.
I, too, welcome the Minister, particularly as he has so speedily put into legislative effect the decisions of his predecessor, the then Tánaiste and Minister for Energy, Deputy Spring, who, in this legislation and in the Clonmel Gas Order, had developed the process to the stage where the Minister is now in a position to give it legislative effect.
I have a few words to say about Clonmel Gas but first I will comment on Dublin Gas. The way the private owners were handling what was a natural resource was a matter of grave concern to all — suppliers, users, the State as a whole and the people of Dublin. The fact that they seemed to be unable to meet their responsibilities by providing the natural gas grid into the city was a matter of concern to all.
It was a matter of amazement to some people when suddenly Bord Gáis Éireann had to put the company into receivership. It was unfortunate that shortly after that, some of the tragedies occurred in Dublin and became the responsibility of the receiver, through no fault of his own. Many of us had a lot of sympathy for him because he was appointed by the courts to a responsible position and had to answer to the media and the public generally for some of the anomalies which had arisen in the distribution of natural gas which led to tragedies in Raglan House and other places. I am glad the Minister has, with this legislation, put the responsibility back into the hands of the State through Bord Gáis Éireann. I support the Minister's measures and the Bill. We look forward to the orderly development and programme of repairs that are currently going ahead in the city to bring all the gas pipelines up to the standard the Minister requires.
I listened to the Minister stating publicly that he wants the distribution grid to be top class. As he said, a great deal of the network in Dublin was laid at a time when attention to safety was not as important as it is today. That was the tragedy. Many gas-lines were laid in the city without proper safety standards being observed or perhaps ageing or some sort of damage had taken place. With the advent of a new natural supply into the pipes, it was obvious that anomalies arose within the distribution network which led to some of the crisis in the city. I am glad the work is now continuing apace. The public can be assured that a public utility like Bord Gáis Éireann, not for commercial reasons but for safety reasons, will ensure that whatever capital investment is necessary, will be provided. In that sense, public utility or public ownership of a natural asset like this is paramount because the safety of users is as important as the commercial enterprise or the profit making that might arise in the long term. I welcome the fact that the Minister has seen fit to continue down that road. It is not an ideological hangup, it is just reality as the Minister found and as the previous Government also recognised.
I particularly welcome the Clonmel Gas Order because I have been involved with that project over a number of years. Clonmel Corporation, because of an anomaly in the distribution network which led to a tragedy in the town with the loss of life, had the foresight, under their county manager, to replace the entire network in Clonmel at a time when funds were scarce. They had a commitment to public ownership because Clonmel Corporation were running it but they also had a commitment to public safety. As a result, they invested a lot of money in the infrastructural development of Clonmel Gas under the aegis of Clonmel Corporation. Because Cork Gas — I refer to it as Cork Gas and not Dublin Gas — was so close to the town of Clonmel it was inevitable that a demand would arise for its extension into Clonmel to service domestic and industrial users.
I welcome the fact that all the terms in the Bill are those negotiated with Clonmel Corporation, the Minister for Energy at the time, Deputy Spring, his Department and Bord Gáis Éireann. There was a sense of goodwill among the three bodies to try to bring a solution to the problem of the distribution of natural gas in a town which had been using the old system under Clonmel Corporation. All the terms set down in the Bill are those which we agreed after years of haggling among ourselves to try to come up with the best possible deal for the taxpayers, consumers and Clonmel Corporation who were then faced with the dilemma of having a massive bill which they were unable to meet from the normal rating procedures and which left them with debts they could not recoup from the Department of the Environment. Giving legislative effect to that agreement is welcomed by everybody in my constituency. I welcome the fact that when the Bill is passed here today it will be part of our law and that all the work put into this legislation by the Minister and others will benefit everybody in Clonmel and the constituency of South Tipperary.
I would welcome its extension to other towns such as Tipperary and to the North as it should not be restricted to the main cities or adjacent towns. We should try to facilitate as many people as possible; It is vitally important to industry and, in particular, to co-operatives. I welcome the legislation.
Like other Senators, I welcome the Minister to the House as it is his first visit. I do not intend to delay the passing of this Bill but I would like to make a few comments on it. I am pleased that the Clonmel Gas Order, 1987, will be passed. I would like to ask the Minister what the arrangements are to have the gas find extended to Kilkenny, which was mentioned earlier as one of the places which had an old gas company which dealt very efficiently with the gas needs of the housing estates in Kilkenny. From surveys carried out, a large number of users of gas are prepared to take the natural gas. Many industries will find that this energy source is relatively cheap and that the heat conversion rate is very high and efficient. Certain industries will have an opportunity to have a fuel source in which they will not have to invest a large amount of money in stocks. They can buy them as they use them.
There has been much controversy over the supply of natural gas, particularly in the Dublin region, over the past number of months. I am pleased the Minister has guaranteed that the work will now be organised in a more efficient manner than in the past as the situation seemed to be chaotic. The number of potential dangers from the number of holes dug in Dublin is enormous. Many people are very worried because of unfortunate accidents which took place in the gas grid. However, if one looks at the number of incidents in which gas was the main cause one finds that many problems were associated with other forms of fuel or energy conversion.
It is important that natural gas is used to its maximum. The sooner the Dublin Company, under the aegis of BGE, get into full control of their own destiny, the better. I sincerely hope that in the future we do not find ourselves in the situation this Government found themselves in relation to the inescapable commitments made by the previous Government in a letter dated 22 April to the banks which virtually gave them every penny of their indebtedness. I hope the Minister will be able to come to some arrangements with the banks so that the moneys which have been guaranteed in that letter of indebtedness will be paid over a long period of time and the current problems in relation to finance will not be increased because of having to pay off this money in the short term.
Dublin is by far the greatest user and the biggest potential user of natural gas. I am pleased the Minister is making arrangements for the extension of the gas grid northwards. The main gas pipeline comes from Cork through the midlands and Kilkenny, Waterford and the south east should be able to avail of the gas; 7.58 per cent of disposable income is spent on piped gas in the eastern region, 1.12 per cent in the south east, 8.2 per cent in the south west, 1.37 per cent in the north east, but nothing in the mid west, west, Donegal and north west or the midlands. In every one of those regions an average of about 35 per cent of disposable income is spent on electricity and an average of 30 per cent on coal and coke. The importation of coal and coke is a burden which could be done away with if we had more efficient development of natural gas.
There has been more money made out of the Leinster coalfields over the last ten years without any coal having been extracted than there has been out of any other of our natural energy reserves. Money has been made shifting paper between the stock markets in Canada, America and Great Britain which has not been to the benefit of our people. Indeed it has created much disquiet in that area. I know this has nothing to do with the Bill before us but I am glad to note that the Minister has granted licences to people who are genuinely involved in the extraction of coal. This should lead to a spin off benefit supplementing the gas already existent.
The Minister is welcome. I congratulate him on his appointment. I fully endorse most of what he has done up to date. I am somewhat worried about what he will do with regard to offshore exploration. However, we will deal with those issues when they arise. I do not disagree with what has been done about Dublin Gas but there are issues of economic energy and, to a certain extent, social policy tied up in this decision that need to be teased out.
The first thing that needs to be identified is a phrase the Minister used in the course of his introductory remarks. I should stress that there is nothing significant or sinister about my interpretation of this remark. The Minister elaborated on why borrowing limits of Bord Gáis Éireann for capital purposes has been raised from the present £80 million to £170 million. He said that this is necessary because Bord Gáis's borrowing will rise by £66 million directly on account of the takeover due to the debts associated with the assets of Dublin Gas. Therein lies a sorry tale. I would not be quite as laudatory as the previous Labour Party speaker about the performance on this issue of his party Leader and of that party in Government. There is a feeling among socialists that nationalising something means one has done something very good. Unfortunately in this country the tendency has been to nationalise things when nobody else will take them on or operate them and there is no other hope. We saw recently the extraordinary cycle when the B & I were nationalised because they had lost money. Now because, in spite of the efforts of management and staff it is losing more money, the Progressive Democrats are proposing, as a solution, that the company should be privatised. I have a feeling that if, despite all their efforts — and I know Bord Gáis will do a good job — Dublin Gas still continue to be unsuccessful we will have about five years silence from the same apostles of private enterprise. Then when Bord Gáis Éireann do not manage to make a success of it we will have the call for private enterprise to take it over, of course at that stage the State will have conveniently absorbed all the debts, will have paid off and accepted all the debts. Presumably then if one were so disposed one could sell off Dublin Gas at a premium to people who would be quite prepared to take on the job of selling gas on a network when the State had paid all the money.
It has been said correctly that the Minister for Energy, the predecessor of Deputy Spring, paid out £124 million for a company worth £2.5 million. That was done in the name of private enterprise. Contrary to expectations I do not have a strong view on whether the State should or should not own everything. At this late stage in the 20th century the State has so many instruments of policy by way of legislation, regulation and control that effectively it can regulate and control any industry whether in the productive or services sector to an extent of which a 19th century socialist could never have dreamed. No more is needed to take ownership of various areas of the economy in order to control them. For instance the banks, however unsatisfactorily regulated, could easily be fully regulated to satisfy my political objective without any fundamental change in legislation.
In terms of what happened Dublin Gas there has been a remarkable failure of analysis. The country was entertained — in some ways not entirely amused by the entertainment — by the battle by various entrepreneurs to take over Dublin Gas not so many years ago. These entrepreneurs were featured on the front covers of a variety of magazines as models of the hard, tough market-orientated business people we needed to get involved in our utilities. There were implicit contrasts between these tough consumer market-orientated, profit-orientated people who were going to revitalise and transform Dublin Gas and the allegedly lethargic State sector epitomised in most of these people's eyes by the Electricity Supply Board. It is extraordinary how this huge infusion of enterprise of risk-takers and of the entire expertise of the banking sector and a large part of the financial services sector resulted in such a glorious débacle. Once the glorious débacle which Deputy Frank Cluskey quite accurately anticipated became a reality what everybody discovered was that it was all the fault of the workers of Dublin Gas because of all the privileges and perquisites they had had and all the work practices in which they had engaged.
It needs to be said everywhere in this country that the reason people in management, in any enterprise or organisation, are paid twice or three times as much as the people they manage is that they carry the responsibility of management. Ultimately if a company are managed inefficiently or in a wasteful manner it is the responsibility of management. One can balk for ever about who is at fault but those responsible are the people who manage the enterprise or company. Those who managed Dublin Gas or Cork Gas when it was a private concern were a disgrace to themselves, to the whole of management in this country, indeed to the whole idea of active entrepreneurial talent in the private sector. Their technical skills were inadequate, their financial projections totally haywire, their capacity to manage their labour forces almost nil. One can only wonder at the blindness of the whole of our financial market, or the people who thought it a good idea at one stage to invest heavily in Dublin Gas. There should be a question mark over the technical quality of many of the investment decisions taken by the private sector. It has nothing whatever to do with politics or ideology, rather has it to do with quality and skills. In terms of the Government's national strategy for development a real question mark hangs over the technical competence of many of those on whom it relies in the private sector.
The quality of the performance of the Electricity Supply Board, their capacity to sell their services on a bitterly competitive international market in consultancy services, to the tune of £30 million a year is in stark contrast to the fact that, first, Dublin Gas failed. Then having failed a receiver was appointed. Then when it turned out that not only had the company failed but that they had a serious safety risk on their hands they had to buy and import external expertise. The contrast between that and the remarkably successful record of the Electricity Supply Board does not prove any absolute point. It simply proves that one gets from a company a performance related directly to the quality of its management. The ESB are fortunate, because of the way they have developed, in having high quality management, organisation and a capacity to respond to customer needs. Anybody living in either Cork or Dublin who cares to compare the quality of customer service provided by the two different utilities, one in the public and the other in the private sector, will be in no doubt about that. Having said that, we were placed in a position in which the service in Dublin was seriously threatened with possible closure and quite definite serious disruption. In the climate obtaining had Dublin Gas been allowed close down even for a period of three or six months — which could have happened — the difficulties of persuading people to take the risk again of accepting natural gas a second time would have been insurmountable. The whole idea of a consumer gas service in Dublin would have had to be abandoned. Therefore somebody would have to deal with the issue.
I do resent the fact that, as far as I can establish, the commercial banks who queued up at one stage to put money into Dublin Gas have effectively escaped with no or minuscule losses, while a hitherto extremely successful State agency Bord Gáis Éireann is now undertaking responsibility for the debts incurred by an unsuccessful private company. I am beginning to get worried about the number of times in which the commercial incompetence of our major financial institutions had to be bailed out by the State. We have had it in the case of PMPA, in the case of Allied Irish Banks and now we have it in the case of the debts incurred by Dublin Gas, large parts of which are owed to the private financial sector. There is a serious question about whether we can really hope to have successful and forward looking entrepreneurial activity in a country where the financial institutions have such a record of incompetence and inadequate judgment.
I am not persuaded that there is a purely economic argument for what has been done in bringing gas to Dublin. I say this not through any Cork patriotism, because there is not necessarily any utilisation to which gas can be put on a scale in Cork which would use the entire production capacity. There are reasons of national economic policy for using natural gas in Dublin. It is important to realise that the single largest user of natural gas in Dublin is still the Electricity Supply Board. The domestic consumers are a poor second to them. The initial argument that the reason that gas should be brought to Dublin was to avoid the ESB using it all seems a little ridiculous when the single major largest consumer in Dublin is actually the same Electricity Supply Board.
That is why I am very sceptical about many of the free market economists who write for our newspapers and feature on our national television so frequently and who talk about international energy prices as the way to determine the efficient price for natural gas in this country. The truth is that if we were to try to sell Irish natural gas on the international market nobody would buy it because the cost of transporting it by tanker to where markets exist would be enormous because the cost of natural gas transporting tankers is enormous because refrigeration is involved and since we do not have a pipeline linking us to any international market.
To start from a premise that we should be charging something comparable to international energy unit prices, to try to analyse what are the economic and policy decisions to be made about natural gas is to be living in a sort of cloud cuckooland that mostly the economists would attribute to those of us who would believe in the role of the State in developing the economy. There is no international comparison which can be used to determine what is an optimum price for natural gas. Because of that, there are very good reasons on policy grounds, on development grounds, on the question of strategic energy independence, on minimisation of imports, for making a variety of uses of natural gas and not for any attempt to produce a free market model of how it should be used. Therefore, it is only to be expected that when people try to use a free market model to justify the sale of natural gas in Dublin, the whole house of cards should have collapsed around their ears.
In terms of analysing what is done with a resource like natural gas the best place to start is with a realistic commercial assessment of who will buy it, who can use it and how it can be used. That is not to say that only a commercial assessment should be used. I have long said that the idea that, because it is ours and because BGE are State owned, therefore BGE can be turned into a semi-social welfare organisation to bail out various areas of enterprise or various domestic gas suppliers is, to say the least, inadequate thinking and no great contribution to either the national wellbeing or the wellbeing of the whole concept of State enterprise. Socialism is no excuse for sloppy thinking, though regrettably for many people on the left of the idea that something is nationalised is an excuse for avoiding actual serious challenges to themselves and to the whole economics that underline decisions about State investment.
I repeat again what I have said at the beginning of these few remarks, that I accept there was no option but to give BGE the job of sustaining the domestic consumer gas service in Dublin. I am certain that they will do a considerably better job than their predecessors. If BGE in supplying natural gas as a consumer utility can be as successful as the ESB have been in supplying electricity, we shall have a model of how a State utility should operate.
I regret that the banks yet again have been shielded from the consequences of their own incompetence. I am astonished at the fact that over a number of years major banks have made policy mistakes on a scale that is almost unimaginable. Yet the same senior executives of those banks still feel both competent and qualified to lecture the rest of society about how our affairs should be run. They describe themselves in the private sector as being accountable but there is no evident accountability in the banking sector where some of the extraordinary decisions of recent years were made. Half the board of Allied Irish Banks, including most of the senior executives, should have been fired. When one aircraft penetrated Soviet air defences the first person the Soviet Union fired was the Minister and the next person they fired was his deputy.
That model should have been considered by Allied Irish Banks.
I do not like the sound of that at all.
I did not think the Minister would. One of his blind spots is that he can look only in one direction and that is west.
There is a presumption that safety and profitability are somehow at odds. The idea that companies can be tempted to cut corners on safety in order to maximise profitability is an old fashioned socialist vision of how capitalism operates. While it does happen, and the consultants that reported on the Raglan House explosion, Cremer and Warner, are one of the world's most eminent chemical engineering consultants, profitability and safety are mutually supportive. In the area I am familiar with which is related to natural gas and which is the chemical industry, those companies which have been most progressive, radical and innovative in the area of safety investment and safety auditing, the whole area of loss prevention, with new insight into expanding safety, into the concept of loss prevention, have all been amongst the most successful in terms of wealth creation over the last 20 years. ICI, DOW, Shell, any of the major multi-nationals have demonstrated something that people should begin to appreciate, that is, that a company who run a very effective safety policy are of necessity an efficient company. They are an efficient company because every person understands what the company are doing, everybody knows who they are accountable to, everybody to whom somebody is accountable knows clearly what he is responsible for. It is all these factors, training, accountability, responsibility, which make a company safe.
The reason Dublin Gas ended up being unsafe was because of poor management, poor technical expertise, poor training, poor planning and poor organisation. All of these areas are the responsibility of management. If BGE can introduce those skills at management level the inevitable result will be an upgrading of safety. Safety is a narrower concept than the whole idea of loss prevention. Loss prevention is not just a question of avoiding explosions. It is a question of minimising risks of explosions, damage to people, damage to the environment, etc. The two things are mutually supportive. An efficient company are a safe company. The idea that in any major utility which uses anything like natural gas there can be some short cut to profitability while avoiding the optimisation of safety, is totally false.
I welcome the Bill. Can the Minister tell me what proportion of Dublin natural gas consumption is actually consumed by the Electricity Supply Board in Dublin? I am interested in whether the ESB are either the largest or one of the largest consumers of gas. I have a notion that they consume a huge proportion of the total natural gas consumed in Dublin.
One very trivial point which irritates me and other Members of the Oireachtas, is that Bord Gáis Éireann describe themselves as the Irish Gas Board. I do not understand why Bord Gáis Éireann seem to feel embarrassed by using the title Oireachtas Éireann conferred on them. Every citizen knows that Bord Gáis Éireann are the company who look after natural gas. There is no commercial reason for Bord Gáis Éireann persisting in describing themselves as Irish Gas but there are good, ordinary, Irish reasons for using the title conferred on them. We all know who CIE are and we all know who Aer Lingus are; they do not have to produce translations.
There is no CIE any more.
CIE still exists. CIE now have three subsidiary companies but CIE still exist as a holding company for the three subsidiaries.
I am not a company lawyer nor am I an expert, but I do not understand why Dublin Gas have not been kept as a subsidiary company. It would have been prudent to set up a subsidiary company with limited liabilities, separate from Bord Gáis Éireann, to look after Dublin Gas, other than have this position where all of the assets of Dublin Gas could effectively be in question if Dublin Gas were to run into serious financial risk.
The Minister has already been welcomed to this House. May I add my voice also? I know the Minister has never been a member of the Seanad, but if he ever should have that privilege I can assure him that he will find it a rewarding, refreshing and an eminently more civilised experience than membership of the other House.
I am in a quandary this afternoon because I agree with almost everything that Senator Brendan Ryan has said. For the second time today, I am substantially on the same side as he, in almost every detail of what he said on this Bill. For that reason my remarks will be brief.
I welcome the Bill. It was the sensible and the only option open to the Government. I am glad the Minister brought the proposals forward so quickly and is so obviously serious about putting them into effect.
There could probably be no greater contrast in terms of efficiency and performance or clarity of purpose than that between Bord Gáis Éireann and Dublin Gas. BGE were set up with a clear man-date. They began life unencumbered with bad industrial relations or bad work practices. They have set about their task over the past decade in an ordered way. Their contribution to this State has been significant and profitable. It could perhaps have been even more profitable had it not had to work under constraints, rightly imposed, by various Governments in the past decade. Dublin Gas could hardly be more different. For many years they were a sleepy and inefficient private company who survived for one reason only, that was their monopoly position. The management structures were archaic, the management were aloof, ineffective, and out of touch. The work-force was overmanned and inefficient. There were some appalling work practices. There were appalling areas of protection within the workforce. The whole industrial relations structure was primitive and virtually no effort was made over the years to plough profits into research and development, and into updating the entire network of Dublin Gas. In hindsight — again I find myself in agreement with Senator Brendan Ryan — when the ESB were being devised in 1925 and set up in 1927 — when one of the key decisions in the history of this State was taken, the decision that we would have our first nationalised industry, that the supply of energy was too important not to be under some form of State control, especially if it was be be a key to the industrialisation of the country — it was a great pity that the decision was not taken also to include gas within the national energy network as set up by the ESB. Obviously, such a decision would have been totally at variance with the conventional wisdom of the twenties.
It gives those of us who are involved in public life a certain satisfaction to look back at what the conventional wisdom, as expressed through the newspaper editorials of those days, was saying about even the very decision to take the supply of energy under nationalised control. It was described as being not just an extreme form of socialism but it virtually had us on the way to Bolshevism of some sort. The newspapers — not for the first time — the chambers of commerce and The Irish Times in particular, of that time, were wrong in the advice they gave to the infant State at that stage. It should give us a little bit of perspective to read the editorials, especially in relation to those involved in the day to day taking of decisions where often the full facts cannot be made public immediately. In hindsight it was a great pity that gas, which was then not in a very developed stage, was not brought under the aegis of the ESB because, as Senator Ryan said, whatever one can say about aspects of the ESB, they have been always in the forefront of modernisation. They have always had the highest international standards in their engineering, and have been involved always in research and development. Indeed, many innovations which have been accepted internationally have come from the ESB. They have played a very important part in selling consultancy services and earning hard cash for this country in a variety of international markets. They have always — this is the key area where I agree with Senator Ryan — seen themselves as an integral part of the public service. Their function is to serve the State and the people of the State and to put public service ahead of any other factor or consideration. How different that situation has been to that of Dublin Gas, whose performance over the years is one of the great public scandals.
The Minister in his speech today was very fair and open about the options open to the Government now. The decision taken is the right one. I exclude from what I say about Dublin Gas the present receiver and staff who have had to work against great odds to try to make some sense of the situation, working against the accumulated years of neglect, inefficiency, bad engineering and bad industrial relations. I feel sorry for Bord Gáis Éireann in having to take over Dublin Gas but I accept that it is the only realistic way in the circumstances. If the standards shown by BGE in the past ten years are continued, eventually there will be a realistic and hopeful future for Dublin Gas, but that is a long way down the road. The Minister will face many crises and many difficulties from that quarter in the coming years. They will not be the fault of Bord Gáis Éireann but will be due to the accumulated inherited problems.
The issue which dominates most people's thinking about the gas services at present is not the future of Dublin Gas but the ever-present question of safety. The Minister has shown himself to be very much aware of this and he has been very vigorous in turning his mind to it. He has assured us here today that the safety factors and the points made in this House and in the other House will be taken on board in an order which will be issued shortly. I would be interested to hear from the Minister in somewhat more detail just what he has in mind because he knows as well as I do of the extreme concern in Dublin at present on the question of safety.
There is a widespread belief that the full facts have simply not been made available. It is not surprising that this belief persists when it is impossible to get any accurate estimate of the number of holes that have been dug in the streets of Dublin over the past number of months, when it is impossible to get any estimate as to how much more work needs to be done, when it is impossible to get any accurate indication as to just how bad the state of disrepair of the pipe systems is in this area and when daily the citizens of Dublin see the damage to the infrastructure of the city, to the roads and see the dangers the holes are causing when on occasion people fall or drive into them. This obstruction is evident and one does not have to labour the point because it is there and it is causing great concern.
The monitoring of safety has two aspects. First will the Minister tell us when the order will be made, how elaborate it will be and just what he has in mind when he tells us that the safety factor is receiving, as I am sure it is, his urgent and detailed attention. I would like to get some further details on that. Perhaps he would also give us reassurance of the independence of the monitoring services on safety for Dublin Gas. Concern was expressed in the other House about the independence of those who would monitor the safety of our gas system. The independence of this body is something which needs to be spelled out.
This Bill gives the Minister the opportunity to put at rest or at least to assuage the worries which have exercised so many people and public bodies on this issue over the past number of months. I agree with Senator Ryan on the question of safety and profitability and it is very clear that only a safe network will be a profitable network. On this occasion, as so often, the two needs coincide.
This new regime for BGE could hardly be starting under worse circumstances. There is very little credibility among the people in the financial, the engineering, or the safety standards of Dublin Gas. BGE are facing a mammoth task. It is a task which can only be accomplished if Bord Gáis Éireann are fully open and make fully available all of the facts concerning safety and the plans of what they intend to do with this lame and injured duck which they have so reluctantly inherited.
The Bill is an urgent one, it is noncontroversial and it is to a great extent a rescue operation. However the stakes are very high and if we want to see a viable gas service in Dublin and the drain on public funds stanched as a matter of urgency, the basic thrust behind this Bill is one which will be supported by all sides in this House.
I thank all the Senators who contributed to this debate and for the warm welcome thay have given to this Bill. Senators Bradford, McGowan, Lanigan, Ferris, Ryan and Manning have in their own way in their contributions emphasised the question of safety. I want to assure the Members of the Seanad and you, a Chathaoirligh that safety is a paramount feature of the Government's thinking on this legislation.
When we came into power in March the receivership in Dublin Gas was nearly a year in existence, there were the unfortunate tragedies after Christmas at Raglan House and Dolphin House. The Cremer and Warner Report was being compiled, and the Government were not satisfied to leave a utility with 130,000 customers in the hands of a receiver. No matter how good a job he was doing, a receivership was the wrong way to run that type of an organisation. We felt that the best way to do it was to have BGE make a bid for Dublin Gas and to get this utility under proper management. We had to strengthen the management of BGE considerably to take on this task. Safety was the one factor that was in front of our minds at all times.
I want to assure the House, as I did the lower House, that the Government will be insisting on the highest standards of safety at all times. Already technical officers of my Department are monitoring the implementation of the Cremer and Warner Report which, as the Senators will be aware, was a report on the explosions at Raglan House and Dolphin House. The report made specific recommendations with regard to action in various areas and, in particular, in relation to the operations of Dublin Gas. A technical official of my Department who has been allocated by me has been given the responsibility of monitoring the implementation by Dublin Gas of the recommendations of Cremer and Warner. In advance of BGE taking over the Dublin Gas Company, they have sent a technical expert from their Cork operation, which is very good on the distribution side, to oversee standards and other safety aspects. Everything that can be done in relation to safety is being done.
We had a long debate on Committee Stage as to what measures are going to be taken on the order to be signed under section 2 of the Bill and a number of questions were asked by Senators in relation to this. The heads of this Order under section 2 of the Gas (Amendment) Bill, 1987, are already prepared and I want to assure the Members of the Seanad that there will be no delay in the signing of this order. It will cover such areas as the laying of the pipes, the entry on premises, the appliances, the metering of the gas, the protection of the board's rights, general safety questions, emergencies, compensations, records of items such as, for example, those mentioned by Senator Bradford and Senator Manning and mentioned by Deputy Bruton in the other House, that is in relation to maintaining records of leak reports, leak investigations and repairs. All of these items are included in the draft order which I have to send to the parliamentary draftsman and hopefully it will be signed very shortly. I want to assure Senators that there will be no delay whatsoever in the signing of that order because safety, as I say, is of paramount importance.
Again on the question of safety, natural gas — and this was emphasised in the Cremer and Warner Report — was not the cause of the Raglan House incident. That happened for other reasons which were laid out in the report. Concentrating still on the safety aspect, let me say that I gave a guarantee in the Dáil that period safety checks and audits will be carried out.
Senator Bradford referred to the question of the accounts of BGE being presented in such a way as to show transparency in relation to Dublin Gas. I want to assure the Seanad that the commitment has been given and the amendment that was proposed in the Dáil has been accepted in relation to a separate set of accounts for Dublin Gas which will appear in the overall accounts of BGE. The pension fund section was put in because we believe the workers of Dublin Gas should be fully protected as far as their pension rights are concerned.
The question of exploration and export of gas is receiving considerable attention at the moment because we believe that we have as a nation to involve ourselves in an extensive exploration programme. I am involved in negotiations at present and will be making an announcement shortly in relation to exploration terms on gas and oil. The question of gas going to Northern Ireland was raised by Senator McGowan and by Senator Bradford. The Government took a decision to extend the gas pipeline through north County Dublin for the benefit of the horticultural industry there and also through Drogheda to Dundalk, to give the capacity for us to go north and northwest, but we have to go as far as Dundalk first.
Many of the points raised by Senator McGowan were related to a general energy policy. I should like to inform the Seanad, and to take the opportunity of saying so publicly, that the Government have taken a decision to publish an energy policy and work on that is already underway in the Department. I hope to be in a position to publish a full energy policy document — a comprehensive policy document — before the end of the year. That also covers a number of points raised by Senator Ryan regarding the question of whether the gas system should have been extended from Cork, whether the pipeline should have come to Dublin, whether it would have been better to use it in other places around the country or what should have been done? We want to look at the whole relationship between gas, electricity, turf and all other energy sources — imported fuel oils and so on — our exploration programme and our whole energy policy. We believe it is time to look at it at this stage. The work is already under way.
I fully support the point made by Senator McGowan regarding the north County Dublin horticultural area. The potential of our horticultural area in this country is great. It is a scandal that we are importing so much of the food that we could produce at home. The provision of natural gas will be of great benefit to the horticultural community. So far as extending the gas to Northern Ireland is concerned, as I have said, we are taking it as far as Dundalk. The next step will be to go north west if that is to be decided. I had discussions within the past three or four weeks with the gas interests in the North. They have made a submission to me as to how they feel we in the Republic could be helpful to them. That is being examined at present. I cannot go any further on it at this stage.
Senator Ferris expressed a certain amazement that in April of 1986 BGE suddenly found themselves having to put in a receiver. I am amazed at Senator Ferris's amazement because the former Tánaiste — and I do not want to bring politics into this discussion — in the late summer of 1985 had been told of the problems of Dublin Gas at the time and unfortunately did not take any remedial measures.
Senator Lanigan referred to Kilkenny. The work in Kilkenny will start as soon as the Clonmel project is finished. So far as safety in Dublin in concerned, again this was mentioned by Senator Lanigan, after the tragedy in Raglan House there was a general increase in the number of reports of gas leaks to the extent that there was at one stage over 3,000 holes around the city. These have been reduced to 200 and I can assure the House I am doing everything I can to ensure that there is as little disturbance as possible to the citizens of Dublin, to the business community of Dublin and to the tourists. Disturbance is one thing but safety must be the primary concern. Reference was made by Senator Ryan to the increase in the borrowing limit. That is what this Bill is about. He wondered if BGE would make a success of it. I assure the Senator that it is my view that BGE will make a success of the Dublin takeover. The citizens and business community of Dublin generally can have confidence in Dublin Gas under BGE's management. I have no doubt that we will work to achieve the rates of gas sales we require to make this a viable proposition.
Senator Ryan entered into a long debate on private versus public enterprise which I am not going to follow at this stage. That is for himself. So far as the ESB question is concerned, they have benefited by gas coming to Dublin. They use about one-third of the total gas supplied at present. The Senator asked a question with regard to a subsidiary. The question of working on the basis of a subsidiary or of a complete take over was argued by the previous Government who had a report in this regard carried out. The then Government decided on the basis of a full takeover and I had no reason to change that. I accept fully the arguments put forward by the previous Administration and in the independent report on the suggested organisation as well. The line we are taking is the only line possible. In addition to mentioning the ESB Senator Manning referred to the record of the work practices. There have been, as in relation to many other organisations, criticisms of the work practices of the Gas Company workers. I am confident — and I said this in the final part of my speech — that with proper care and attention and with hard work and concentrated effort, BGE can run a successful and profitable gas undertaking. I am also confident that the new venture — the extended BGE — will have the full and loyal support of the workforce of BGE and Dublin Gas. I have no doubt it will merit the support of the citizens in the business community in Dublin. I am confident that the workers of Dublin Gas, like any other workers, will respond to good management once they know the direction in which their company are going and that their future is secure. The workers of Dublin Gas are no different from any other workers in the country and will respond in a positive way to proper management and proper direction.
I thank all Members of the Seanad for the welcome I received on this, my first visit to the present Seanad. I thank them also for the welcome they have given to the Bill.
Question put and agreed to.
Bill put through Committee, reported without amendment, received for final consideration and passed.