Chairman, I would like to join with you in welcoming His Excellency, President Soares, and his esteemed entourage.
I would now like to turn to the Estimate details. Deputies have already been provided with a briefing note on the subheads. The gross Estimate for my Department for 1993 is £165.805 million. Appropriations-in-Aid are estimated at £55.469 million, giving a net estimate of £110.316 million to cover salaries, expenses and other services administered by my Department and for payment of grants and grants-in-aid.
The cost of administration, the "A" Subheads, is set at £40.406 million and covers the running costs of the Department. These costs are governed by the terms of a three year administative budget agreement which each Department has concluded with the Department of Finance. My Department has managed to meet the 2 per cent reduction target required by the agreement for each of the years 1992 and 1993. The 1993 estimate in this area contains a figure of just over £2 million carried over from savings achieved in 1992, which arose mainly due to delays in certain capital projects. This carry-over will be used this year primarily to fund essential IT projects, for necessary increased staff training in financial, managerial and IT skills, for consultancies and some overdue office maintenance work.
In relation to the "B" subheads, which cover the Energy area, members will note that the major items of expenditure relate to day to day expenses of the Geological Survey of Ireland, a provision for energy conservation and the grant-in-aid to the Radiological Protection Institute of Ireland.
As outlined in the Programme for a Partnership Government, energy conservation is an important part of Government policy and will be promoted in all sectors of the economy. The energy conservation programme is intended to encourage the efficient use of all forms of energy in order to conserve scarce resources, to achieve financial savings and to protect the environment. My Department's role is to persuade others to act. Much of the energy savings which are possible will be realised through individual actions and improved practices. This is the case in industry as much as it is in the home. To this end, education and awareness campaigns administered by Eolas and aimed at specific sectors of the economy are an important feature of the Department's programme.
In recognising that my Department's energy conservation programme is by its nature constantly evolving, a detailed statistical analysis study is currently being carried out to identify where future incentives can have the greatest impact on consumption and the pattern of energy supply.
A grant-in-aid is provided in the Estimate for the Radiological Protection Institute of Ireland, which was established on 1 April 1992. On that day the Nuclear Energy Board was officially dissolved and its assets and liabilities transferred to the new Institute, which formally took over the functions of the old board as well as embarking on a more specific role in relation to nuclear safety and radiological protection of the Irish public.
A five year programme of capital expenditure on the National Radiological Emergency Protection Plan was completed and published in 1992. The plan ensures, among other things, that we in Ireland will be able to detect without delay any increase in radiation arising from a nuclear accident abroad. It provides for immediate appropriate action to be decided by an emergency response committee in conjunction with the Radiological Protection Institute of Ireland. A test of the plan took place in November 1992.
Deputies will also be aware of the Government's concern regarding Sellafield and its future developments. I have recently sent a detailed and wide-ranging submission to the UK authorities with regard to the proposed THORP extension of Sellafield. This submission conveyed in the strongest possible terms the Government's total opposition to the continued operation of all nuclear activities carried out at Sellafield and to any expansion of these activities. In particular, the submission expressed the Government's grave concerns about commissioning the proposed new THORP plant on the site and called on the UK authorities to hold a full public inquiry before any decision is taken to allow the plant to go ahead.
Before leaving the topic of energy, I would like to refer to the work of some of the other semi-State bodies in this area. Bord na Móna, which is nearing 50 years in operation, has played a major role in the energy area. The company has developed and utilised a national resource on a scale that would not have been possible without the direct involvement of the State. For a long period peat was the only significant indigenous energy source and today still represents a vital element of our energy supply as well as being a major employer.
In recent years Bord na Móna has made enormous progress in stabilising its financial situation through a variety of cost reducing measures and improved productivity. As a result, operating profits per employee have risen by a factor of four over the last four years. I am satisfied that continued progress on this front is the only means to secure the future of the company and safeguard long term employment and I am confident that management and the workforce will build on the achievements already made.
Deputies will be aware that Bord na Móna is currently in the process of conducting a feasibility study into the construction of a new peat-fired power station. The Government is committed to such a station provided that it is found to be feasible. If it proceeds it will utilise almost one million tonnes of peat per annum and Bord na Móna estimates that the station would create over 450 permanent and seasonal jobs between the operation of the station and peat harvesting operations. This will be an important element of the programme to secure the future of the peat industry and will point the way for continued utilisation of this valuable resource.
Thanks to the achievements of Bord Gáis since it was set up in 1976, we now have a vibrant gas industry in Ireland, with natural gas now accounting for about 17 per cent of primary energy requirement. For reasons of efficiency, economy and environmental concerns, increased use of this clean, versatile and, for now, indigenous fuel source, is an important component of energy policy and we confidently expect it to double its penetration of the market by the year 2015.
The provision of long term secure supplies of gas into the future, both to replace current indigenous reserves, which will be depleted shortly after the year 2000, and to cater for the projected expansion of the gas market, is a major priority. The discovery in recent years of the Ballycotton gas field, now in production, was an encouraging, if modest, sign that further indigenous reserves may well be waiting to be found in our off-shore.
The current situation where we have only a single source of supply and a single link to the country's largest market, Dublin, is worrying, and I am anxious to see that an alternative source of supply is available in the event of a disruption. Accordingly, I am pleased to report progress on the construction this year of the Ireland-UK gas interconnector pipeline from Loughshinny to Moffat in Scotland.
The project is now well advanced. Subsea construction is complete and work has commenced on the compressor station in Scotland and on both the Scottish and Irish onshore sections of the pipeline. The project is on target for completion in October this year at a total cost of around £287 million, of which 35 per cent is being provided by the EC. This major project is on time and within budget.
Turning to electricity matters, it is vital that society in general and industry in particular have access to a reliable and competitively priced source of electricity. Growth in demand in recent years has reduced the surplus capacity available and there is now a need for substantial investment in additional capacity, network development and plant renewal in the medium term. This puts the onus on the ESB to examine all facets of its operations in order to identify potential savings and to maintain the competitiveness of product generally.
The Government recently approved proposals for a major restructuring of the ESB which includes, inter alia, internal reorganisation of the ESB into five business units. These proposals are designed to encourage greater cost transparency and competition into the electricity industry. These proposals are fully in line with the Government decision on the recommendations of the Culliton Task Force and also reflect general trends within the EC. As it will be necessary to prepare legislation to give effect to these changes, Deputies will have another opportunity to comment on these proposals.
Subhead C. covers road and rail transport expenditure. The largest single item of expenditure in my Department's Estimate, at £108.4 million, is the proposed Exchequer grant to CIE in respect of the provision of essential public transport services. This represents the same allocation in cash terms as the company received in 1992. Of the £108.4 million, Iarnród Éireann will receive £90.4 million of which £45 million will go on the maintenance and upkeep of the railway infrastructure. The other £45 million will go to support the operation of socially desirable services which cannot operate on a fully commercial basis and to make interest and other exceptional payments including £10 million in respect of interest on loans taken out to finance the development of the DART system.
The level of Exchequer subvention paid to CIE over the last decade has been substantial especially when viewed against the difficult budgetary constraints faced by the Exchequer. For example, in the period 1980-92 total direct Exchequer subvention payments to CIE amounted to over £1 billion. With the railway accounting for the bulk of Exchequer support, future subvention policy and policy as regards future investment in the railway network are obviously interrelated. As far as the latter is concerned, a strategic study on the future of the railway has been carried out by my Department in conjunction with the Department of Finance, CIE and independent consultants. This study has addressed all the major issues including costs, long term investment requirements and possible sources of funding for investment in the rail network.
On the basis of this work, a bid for EC funds for an investment programme for the development of the railway has been included in my Department's submission for the next tranche of Structural and Cohesion Funds. The scale of such an investment programme and the level of EC assistance will be determined by the Government and the EC authorities in the overall context of the national development plan which the Government will be submitting to the EC authorities later this year.
The severe traffic congestion and transportation problems of Dublin city and its immediate hinterland are the subject of a major initiative — the Dublin Transportation Initiative — which is being co-funded by the EC authorities. The interim report of the DTI has recently been published and contains proposals for an integrated strategy involving a programme of transportation investment, including roads, public transport, traffic management and enforcement measures for the period 1994-97 under the next phase of EC Structural Funds. This programme is set in the context of a full transportation strategy for Dublin up to the year 2011. The interim report also contains significant recommendations for major public transport invesment including the development of a light rail system and a significant enhancement of existing bus and rail services.
At present, the recommendations in the interim report are the subject of further analysis by the DTI, the results of which will be reflected in the final report which is expected shortly. This final report will form an integral part of the Government's input into negotiations on EC funds for the period after 1993. The availability of significant levels of EC funds will be essential for the implementation of the public transport elements of the DTI.
