Since this is my first time performing under your chairmanship, I take this opportunity to congratulate you. I know you are doing a good job.
The Supplementary Estimate for Vote 30 for the Department of the Marine and Natural Resources proposes additional funding for the Marine Institute under Subhead F2, additional funding for An Bord Iascaigh Mhara under Subheads H1 and H2, and additional funding for the Petroleum Infrastructure Support Group under Subhead L3. The additional funding sought for 2000 for these grant-in-aid subheads amounts to £11.387 million. Following the application of savings and a shortfall in receipts, the net Supplementary Estimate required is £10.515 million.
Subhead F2 relates to the Marine Institute's capital development. The Marine Institute is responsible for the direction, co-ordination and promotion of the national marine research effort to support the seafood and marine industries and to realise the potential of the marine resource. Additional capital funding of £3.9 million is required for Subhead F2 in 2000 to provide for initial expenditure of £3.5 million on the new national marine research vessel and £400,000 for additional temporary accommodation for the Marine Institute.
Provision has been made under the national development plan for a new marine research vessel to cover outer continental shelf activities. Tenders have now been received and evaluated by the Marine Institute. A contract will be signed by the end of this December. The provision of £3.5 million this year for the new marine research vessel will enable a higher initial down payment to be made on the vessel when signing the contract. This will reduce the overall costs of the contract, hedge against inflation and ensure the delivery target of 2002 is met.
The provision of an additional £400,000 of capital expenditure will provide for essential temporary accommodation, including laboratories for staff of the Marine Institute, pending a decision on its relocation to permanent accommodation.
Subheads H1 and H2 relate to BIM and its administration and capital development. Additional non-capital funding of £6.389 million is required to meet additional expenditure by BIM in a number of critical areas. This will ensure delivery of immediate and urgent strategic support to assist the fishing and aquaculture sectors to adjust and adapt to an emerging difficult environment.
As regards measures to support and incentivise change in the sea fishing sector - the white fish quality assurance scheme - the fishing industry is heavily fuel dependent. Fuel costs are running at £29 million per annum and represent a substantial part of operational costs for fishermen. Fuel prices have risen by 100% since January 1999 and this increase is causing significant difficulties for the industry. High fuel prices are also exacerbating emerging labour shortages in the sector. Earnings for crews are estimated to have fallen by 25% since January 1999. Strategic measures to equip the industry to adapt to this new environment are clearly required.
With the agreement of the Minister for Finance, I am taking two key initiatives to assist the fishing sector to position itself more effectively to adapt to high fuel prices and labour shortages involving a once-off package of £4 million. The initiatives, comprising a fish quality and safety assurance scheme and a fuel efficiency grant scheme, are designed to incentivise improved operational standards in the industry and a structured response to change. The schemes will contribute to improved safety, quality, efficiency and best environmental practice in the short, medium and long-term.
Quality control has been identified as a critical development challenge for the fishing industry. Poor quality and grading of fish constitutes a significant constraint in terms of efficiency and maximising value. The introduction of total quality control systems for the catching sector is therefore a priority for skippers and crews. Enhanced quality is the key to better prices and is all the more critical given the decline in whitefish stocks. This initiative, which will be implemented by BIM, will involve incentivised modular safety and quality training programmes for skippers and crews, leading to best practice in operational safety and the introduction of quality protocols on board vessels. The total cost of the scheme is estimated at £3 million and funding is now sought for this purpose under Subhead H1. The objective is to have the scheme up and running with the first series of training modules in the next few weeks.
Capital funds of £1 million under Subhead H2 are sought to deliver on the second initiative proposed. The fuel efficiency grant scheme is an innovative scheme designed to deliver major improvements in the fuel efficiency of fishing vessels. In addition to the tangible benefits for fishermen in terms of fuel efficiency savings, the scheme will deliver an environmental dividend. The scheme will provide grant support for the introduction of new vessel management systems through the use of advanced computer technology, the installation of vessel trawl monitoring systems and improved insulation on board vessels. The fuel efficiency grant scheme will be administered by BIM and will be in place in the coming weeks. The total cost is estimated at £1 million.
The committee will be aware of the exceptional problems this year arising from naturally occurring biotoxins which have resulted in prolonged closures of a number of shellfish production areas. This has impacted badly on the rope mussel sector in particular. The shellfish sector is vitally important to coastal regions and is currently at a production level of 16,000 tonnes. The main production areas affected by the prolonged closures are Bantry Bay, Kenmare Bay, Bruckless Bay in County Donegal and, to a lesser extent, Dunmanus Bay and Killary Harbour. In the five key bay areas above, 9,000 tonnes of rope mussel production, valued at £6 million, have not been harvested. A substantial part of that production will be lost and future crops are at risk. Losses of more than £5 million have been estimated with the risk of the sector collapsing.
The objective of the shellfish package, which will be administered by BIM, is to provide financial aid to assist eligible shellfish producers with a once-off environmental clean up of the redundant stock and to restore and secure production capability for the future. The package is designed to remedy the immediate crisis caused by the prolonged closure and will also be directly linked to the medium term strategic measures which will position the industry to adapt to and overcome the challenges posed by harvesting closures.
Some £2.5 million is required for the total quality management system under Subhead H1. It is intended to have the scheme in place within the next few weeks. An additional £100,000 is sought to complete this year's programme under the total quality management system for mussel processors. The additional £100,000 for 2000 of current funding arises specifically from the significant demand from client processing companies for staff training and the engagement of technical advice to design quality control systems. Under BIM's budget for 2001, Book of Estimates, £1 million will be provided to further enhance the total quality management programme, which is a significant increase in funding.
As regards retirement gratuities and pensions, £661,000 is required to fund additional retirement and superannuation requirements of BIM in 2000 arising primarily from the implementation of a voluntary early retirement scheme as part of a restructuring and overhaul of BIM's domestic and export marketing capability.
A co-ordinated local aquaculture management system initiative, CLAMS, is under way for the Killary Harbour area. This is a further phase of the CLAMS process already in place in Bannow Bay and Roaringwater Bay. The funding of £50,000 will support phase 1 of the Killary CLAMS plan which involves the removal of obsolete old mussel rafts and the re-positioning of long lines to comply with licensing and environmental requirements. Inshore fisheries initiatives will total £45,000. BIM is putting in place pilot inshore fisheries development committees on a phased basis around the coast. South Wexford, the Dingle peninsula, west Galway and north Mayo are the locations of the first pilot projects. The additional funding sought for this year will underpin progress on these initiatives before the year's end. Further significant expansion of the inshore fisheries development committee network will take place in 2001. These initiatives are the cornerstone of a new strategic approach to conservation management and development of our inshore fisheries resources.
Marine diversification projects will total £32,000. The PESCA programme, now nearing completion, supported fishermen to diversify into marine leisure and tourism activities by the acquisition of dedicated vessels. Follow up support for promotional and marketing activities has been identified as critical for these projects. Funding will enable six promotional projects to proceed before the end of the year.
Under subhead L3, additional funding of £98,000 is required this year to facilitate projects under the petroleum infrastructure programme which supports infrastructure for petroleum exploration and development through training, goods and services, equipment purchase, limited data acquisition and research support.
Subhead U deals with appropriations-in-aid. Projected receipts of £53.123 million reflect a shortfall of £17.202 million on the original Estimate provision. The shortfall primarily relates to the postponement of forestry and fishery receipts from the EU under the respective operational programmes 1994-99; delays in EU advances and draw downs for forestry pending final approval of the regional operational programmes 2000-2006, and reduced levels of EAGGF funding under the regional operational programmes and rural development programme 2000-2006.
Estimated savings totalling more than £18 million are projected on a number of subheads under Vote 30. I understand that details in this regard have already been provided to the committee.
Total additional grant-in-aid funding of £11.387 million is requested; a reduction of £17.2 million in receipts is projected, and estimated savings of more than £18 million have been identified. A net Supplementary Estimate of £10,515,000 is required. The funding will enable the delivery of key strategic initiatives, notably for the fishing and aquaculture sectors at a most critical juncture for their future. The initiatives are designed to assist the sectors to adapt to the difficult environment which has emerged, and to overcome the considerable challenges faced.