In aonacht le mo chara ar an taobh eile den Teach, ba mhaith liom fáilte a chur roimh an Aire Stáit, atá anseo inniu chun an Bhille gairid tábhachtach seo a phlé. Aontaím le mórán den méid a dúirt an Seanadóir O'Reilly san óráid a thug sé.
While the Bill is short, it is none the less important and is intended to increase the borrowing provision of Bord Gáis Éireann from €1.7 billion to €3 billion. The Minister of State outlined what developments were yielded by the 2002 increase in permitted borrowings. It is important that Bord Gáis Éireann be able to fund its capital programme and provide necessary infrastructure in the interests of our energy objectives. That Bord Gáis Éireann is expected to reach its borrowing limit of €1.7 billion in 2009 is interesting.
Interest rates during this recession are exceptionally low, possibly as little as 0% in the United States of America. I am waiting to see whether one will be paid deposit interest on borrowings. Were that day to arrive, we might all be at the bank to find out what we could borrow. Many commentators believe that deflation will occur in many western economies this year, which would impose its own challenges. Now is probably a good time to consider increasing borrowings and to stress test their costs. A number of economists have forecasted that, when we get through the recession in one, two, three or four years' time, hyperinflation will be a risk. Apparently, it is a feature of downturns. This downturn, which appears to be deep, could result in hyperinflation. If so, the House can rest assured that interest rates will pursue it to get it under control.
It is important we learn the lessons of the past decade, a time when we might not have foreseen a rainy day and borrowed and invested accordingly. When interest rates are low, we should ensure we do not go to the other extreme and fail to plan for when the repayments will be in excess of this year and next year's levels.
Like Senator O'Reilly, it is welcome that the Minister will, as a shareholder, maintain control over investments on a case by case basis. This element is especially important. Bord Gáis Éireann has been a success. Not only is it involved in the gas market, it is also involved in electricity generation. While many claim it has done so to compete within the energy field, I am sceptical whenever I see State companies competing because they often do not provide the extent of competition found in the private sector. We must be mindful of this issue.
Other companies are entering the market in my area. For example, Endesa has purchased some generating stations. I hope it has done so to generate electricity rather than to incinerate, which is not the way the country should go. Perhaps one incinerator might be required, but a proliferation would lead to our losing control and remaining on the second last step of the ladder of the waste disposal hierarchy. We should be considering the top end, namely, prevention in the first instance and minimising, recycling and reusing. While we are heading in that direction, the thrust of incineration will be to undermine our attempts because incinerators will need to be provided with waste.
I welcome the investment in transportation and the pipe network. I agree with Senator O'Reilly that there has been much inflation in energy prices. According to the regulator and others, it is linked with the international price of gas. However, we can make the necessary economies. Like Senator O'Reilly, I am a member of the Joint Committee on Communications, Energy and Natural Resources. None of the regulators who has appeared before it has given me the sense that competition, price control and value for money for the consumer are a major feature of his or her thinking. This deficiency must be strongly tackled.
There has been much debate in the past week on the cost of public service pensions. As I have stated previously, they will be unsustainable regardless of any increase in contributions. A number of Senators referred to the defined benefit scheme at Waterford Crystal. Many defined benefit schemes in the private sector are in serious difficulty because of the significant global drop in stock markets and investments. I do not know how people could have been insulated other than to have their pension funds on deposit, which might not have been acceptable during the past decade. We are also losing sight of defined contribution schemes. People put their money into funds and were not guaranteed returns, but have seen their funds depleted because of the stock markets.
Why am I saying this in a debate on Bord Gáis Éireann? I do so because it still has golden parachutes. If one leaves Bord Gáis Éireann, one gets multiples of one's salary and a 50% pension until reaching the age of 65 years and getting the proper pension. This situation is not sustainable. While it is a profitable company, is it right that, in 2009, we are repeating the mistakes we made in many semi-State companies? We must be consistent across the public and private sectors. There is no reason workers in one industry should be featherbedded against workers in another industry who may be often more productive.
The Minister of State outlined the benefits derived from the last borrowing which increased from €700 million to €1.7 billion, saying that the second gas interconnector from Dublin to Galway and Limerick, the north west pipeline from Belfast to Derry, the south-north pipeline from Dublin to Belfast and the Mayo-Galway pipeline were all an essential part of the investment programme. That came to a bill of €1.41 billion. It is also good that the company's profit after tax in 2006 was €142 million. I am not sure what percentage return on investment that represents but it is a sizeable sum of money. I also note the dividends paid to the Exchequer. The Minister of State cited the cumulative dividend for that year as €28 million at December 2008. The Exchequer will welcome these dividends as the fiscal position becomes more serious.
When business is profitable, whether in private, semi-State or State organisations, it is easy to let costs slide. We must ensure, particularly in companies that do not have real competition, that the efficiencies and cost-effectiveness are primed and subject to constant attention and that executives and those working within the companies are measured by their performance in that area and in the development of the company.
It is good to see that the gas network has grown from 112,000 to 600,000 but I am disappointed to note that Bord Gáis Éireann has re-partitioned the country. It was unfortunately partitioned in 1922 but now we have lost eight counties. Wexford, Kerry, Donegal, Sligo, Leitrim, Roscommon, Tyrone and Fermanagh are not connected to the natural gas pipeline. That puts those counties at a disadvantage industrially and commercially from the point of view of attracting industry into their areas. I would like to see that tackled.
I am more familiar with my own county where the gas comes to our front door, in Arklow, but does not come into Wexford, and to the back door in Waterford but does not come into New Ross. If I may be parochial, I would like that to be examined.
The Minister of State spoke about the need for security of gas supplies and mentioned the difficulties between Russia and Ukraine. We are dependent on Britain, the old enemy. It is important, given the industrial unrest in Britain, that we try to ensure we have other sources of supply so that we are not caught in a political argument between two countries, such as happened in Russia and Ukraine, or by industrial relations difficulties, such as are occurring in Britain, or by conflict. Security of supply is essential and is a priority with the Minister who I hope will address it.
I support the Bill and the increased borrowings and hope that some of the borrowings will be used to provide a pipeline to Wexford.