The token Supplementary Estimate for Vote 30, Department of Communications, Marine and Natural Resources, proposes additional funding for Bord Iasaigh Mhara in terms of grant-in-aid under subhead E.1. The additional funding sought for 2005 for the grant-in aid subhead amounts to €1.72 million. The additional expenditure is to be met from savings. The Supplementary Estimate sought is to be a token of €1,000.
In June this year I invited Mr. Padraic White to examine a report on the urgency, scope and cost of the decommissioning of vessels in the whitefish and shellfish fleets. The White report recognises the importance of Ireland's marine fishing industry as a valuable source of economic activity for Ireland, especially in coastal communities. The central recommendation of the report is to remove up to 25% of the capacity from the whitefish fleet and excess capacity in the scallop fleet. On 13 July, the Government approved the recommendations of this report and allocated €45 million to be spent on the scheme for the adjustment of fishing effort or decommissioning in the period 2005 to 2008. The scheme will be encompassed under the sea fisheries development measure of the productive sector operational programme of the NDP. The scheme which is administered by Bord Iascaigh Mhara was launched on 4 October, following receipt of EU approval.
BIM has issued letters of offer this week to those applicants who have been successful in the first of the three scheduled rounds of decommissioning. The speed with which the scheme has been brought forward gives a good indication of the importance of taking this action now to respond effectively to the situation faced by our fishermen in the whitefish and shellfish sectors of the fleet. The decommissioning scheme is the most extensive ever announced by the Government. It will provide €45 million in funding over four years. As recommended by the White report, the aim of the scheme is to permanently remove up to 25% of the older, larger and more active vessels in the whitefish fleet, as well as excess capacity in the scallop fleet.
The programme for Government contains a commitment to set out a long-term strategy for the sustainable development of the fishing industry. By far the most important ingredient in achieving such development is the urgent necessity to establish a better balance between fleet size and the available fishing entitlements. The scheme is a crucial factor in achieving this balance. It will support the securing of investments already made and return the fleet to a viable basis within the available fishing quotas.
I will now turn to the financial details of the scheme and outline how the delivery of this funding is structured. The sea fisheries development measure of the NDP through which the scheme is managed is co-financed with EU funds from the Structural Fund for fisheries, the financial instrument for fisheries guidance, FIFG, under which 75% of total eligible expenditure on decommissioning may be recouped by the Exchequer. However, under EU rules for Structural Funds, member states must adhere to spending targets or, as it is known, the N+2 rule. This means that certain amounts must be spent in each year. Any underspend against the EU target could lead to less than full take-up of available FIFG co-financing moneys.
This brings me to the second aspect of the proposed Supplementary Estimate — the importance of maintaining our rate of spend of EU moneys which necessitates matching national funds. BIM's projections show that the total funding requirement for the 2005 element of the decommissioning scheme will amount to €3.435 million, which sum represents the minimum amount that must be spent on decommissioning before the end of 2005 to ensure available FIFG co-financing moneys are taken up in full.
Within BIM's existing 2005 capital allocation of €10.9 million, an amount of €1.314 million was earmarked to support decommissioning. In view of the need to make as much progress as possible on the implementation of this important scheme and to ensure full take-up of available FIFG funding, my Department requested BIM to critically examine its overall capital spending proposals. The objective was to identify savings that could be reallocated to make up the shortfall of €2.121 million on the scheme. In the event, BIM reported that there was scope to allocate a further €400,000 to the scheme. This brings the total amount available for decommissioning in 2005 to €1.714 million, leaving a shortfall of €1.721 million against the target spending requirement of €3.435 million. BIM has confirmed that having regard to its other capital spending commitments, there is no possibility of reducing the amount of this shortfall to any appreciable extent within existing resources.
This token Supplementary Estimate is proposed to provide, under the Bord Iascaigh Mhara grant-in-aid provision — subhead E.1 — for additional capital expenditure of approximately €1.72 million on the fishing vessel decommissioning scheme before the end of 2005. Approval of this token Supplementary Estimate will enable the Department to make up the shortfall. This will provide for the full €3.435 million on decommissioning in 2005 and permit the lodgement of the overall sea fisheries claim of €4.34 million necessary to take up in full the available EU funding of some €2.6 million.
Approval of this token Supplementary Estimate will enable immediate action to be taken to address the serious situation facing the fishing fleet and deliver the maximum support to it at this crucial time. It is proposed to meet the additional funding for Bord Iascaigh Mhara from savings within subhead K of the Vote amounting to €1.721 million. Subhead K — other services — of Vote 30 provides for mining services, information society funding for agencies, the running costs of the gas technical standards committee, subscriptions to international organisations and support under cross-Border initiatives, namely, Peace II and INTERREG III programmes. The subhead also makes provision for the capital contingency fund which this Department is required, under the multi-annual capital investment framework, to make within the Estimate to meet any unforeseen demands or additional costs which might emerge. A contingency sum of €1.929 million is provided within the subhead for this purpose in 2005. It is proposed to use capital savings of €1.72 million from subhead K in 2005 to fund the additional requirement under subhead E.1.
I have now outlined to Deputies the detail of the Supplementary Estimate, the costs of which can be met by savings. I hope they will agree that the proposals are reasonable and can approve them as presented. It is a vital project and I appeal to members to give their approval. It will mean that we can draw down funding from the European Union.
