Select Committee on Enterprise and Economic Strategy debate -
Wednesday, 6 Sep 1995

SECTION 23.

Question proposed: "That section 23 stand part of the Bill."

Mr. M. Smith

Section 23 (1) (b) states:

The aggregate at any one time of borrowings under paragraph (a) by a company and a subsidiary or either of them shall not exceed 50 per cent. of the value of so much of the company's assets as are treated as fixed assets for the purposes of its accounts.

Many of the port companies have very valuable assets and for the purposes of their accounts they could have a trading profit. However, when depreciation and maintenance of those very valuable assets are allowed for I am not sure if that provision would enable a company to borrow properly. Will the Minister of State look again at this question of the company's assets and those which are treated as fixed assets for the purposes of its accounts?

Mr. Gilmore

We are looking at the question of the company's assets and we have commissioned a study by a firm of consultants. That has to be done in relation to the share capital of the company and pension liabilities before the company is established. That exercise is being carried out at present.

I take Deputy Smith's point. Obviously, the provision here relates to the question of borrowing. The capacity of individual ports to borrow will vary from port to port and will depend not only on the assets of that company but also on the existing borrowings the company will have inherited. There is provision in section 23 (2) whereby, with the consent of the Minister for Finance, the Minister may, by order, vary the percentage. That would be used in cases where difficulties arise in relation to the percentage provided for in section 23 (1) (b).

Mr. Molloy

Can the Minister of State give any indication as to what procedures would be followed in determining the value of the fixed assets of the new companies?

Mr. Gilmore

No decision has been made on that yet. A study is under way and when that has been completed the question of how the value of the fixed assets of the companies is to be calculated will be looked at. Deputies are aware that there are a number of ways in which that can be done.

Mr. Molloy

Can the Minister of State give an assurance that there will be full consultation with each of the companies in the determnination of the valuation of their assets for this purpose?

Mr. Gilmore

Yes, the companies will be consulted about that.

Question put an agreed to.

Section 24 to 27, inclusive, agreed to.

Mr. Gilmore

I move amendment No. 21:

In page 26, subsection (4) (c), line 45, after "adhered to" to insert "in the said year".

Section 28 (4) which requires the chairperson of each port company to make a detailed report to the Minister each year, is a novel provision but it is clearly a desirable innovation. It is in line with the guidelines on reporting arrangements issued by the Minister for Finance to State bodies in March 1992. Amendment No. 21 is a technical amendment to clarify that the chairperson's statement in respect of the matters set out in section 28 (4) (c) relate to the accounting year just past.

Amendment agreed to.

Mr. Gilmore

I move amendment No. 22:

In page 27, subsection (4), to delete lines 21 and 22.

This amendment is inserted at the request of the Irish Port Authorities Association and a number of individual harbour authorities who pointed out that the chairperson's report could contain sensitive commercial information. As the new port companies will be competing with one another they are anxious to ensure that the chairperson's report be treated in the strictest confidence. The ports have no objections to furnishing such reports to the Minister for the Marine but they do not want a situation to arise whereby such reports will be available in the Dáil library and easily accessible by competitors or persons acting on behalf of competitors. They strongly object to the requirement that the chairperson's report be laid before both Houses of the Oireachtas. I have sympathy with the views expressed by the ports and I understand that the March 1992 Department of Finance State bodies guidelines did not require that the chairperson's reports should be laid before both Houses of the Oireachtas. For this reason I propose the deletion of the words "and the Minister shall cause copies of the report to be laid berfore each House of the Oireachtas" from section 28 (4). The audited accounts of each company together with the auditors reports thereon will in any event be laid before both Houses of the Oireachtas. The more detailed chairperson's reports will be submitted to the Minister.

Mr. M. Smith

The amendment is a wise commercial decision.

Amendment agreed to.

Section 28, as amended, agreed to.