Dáil Éireann Debate, Tuesday - 23 September 2014
9. Deputy Richard Boyd Barrett asked the Minister for Agriculture, Food and the Marine if he will provide a list of all the contracts between Coillte and other State agencies and the total amount of funding from all State agencies transferred to Coillte since 1989; if he will provide any cost-benefit analysis or reviews related to this State funding of Coillte; and if he will make a statement on the matter. [35165/14]
View answerAs the question spells out, it is about supports and funding to Coillte since it was set up in 1989. The context for this question is that I favour public support and investment for a semi-State company engaged in forestry. After the meeting which the Minister kindly set up with Coillte for me last week, what came across clearly was Coillte's fairly bald statement that it is precluded, primarily by the EU, from contributing to meeting our afforestation targets. Coillte cannot contribute to one of its core activities. I asked for what are we giving Coillte funding and support if it cannot do what should be its primary activity and whether it is, in fact, that funding is going to push Coillte towards more commercialised activities which have little to do with its core activity.
Coillte Teoranta was established as a private commercial company under the Forestry Act 1988 and day-to-day operational matters, such as contractual arrangements and sources of funding, are the responsibility of the company.
As a commercial company, Coillte is required to publish annual accounts, copies of which are laid before the Houses of the Oireachtas, in accordance with the Forestry Act 1988. Coillte's annual report 2013 was accordingly laid before the Houses on 30 June last. I wish to advise that note 28 to those financial statements outline the sales and purchases of goods, property and services to entities controlled by the Government.
While such contracts are operational matters for the company, a list was, however, also sought from the company. Coillte has advised that it was not possible in the time available to provide a list of all the contracts between Coillte and other State agencies as this would need to be clearly defined.
The company further advised that the Coillte Group sold goods, property and services to RTE and the ESB in 2013 in the normal course of business but that a range of contracts would exist, some of which involve consideration being paid to Coillte for goods and services and some of which involve Coillte making payments.
As for the total amount of funding from all State agencies transferred to Coillte since 1989, Coillte advises it has received some €12.4 million, mostly in its provision of forest recreational facilities. Up to €1.4 million was from the Irish Sports Council in respect of the trail managers programme. Another €1.4 million was received and managed by Coillte on behalf of the Dublin Mountain Partnership while some €9.6 million has been received from Fáilte Ireland. This latter amount encompassed funding for its development of Lough Key forest park in conjunction with Roscommon County Council and capital funding towards forest recreation infrastructure.
Additional information not given on the floor of the House
With reference to the undertaking of cost-benefit analyses relating to such funding, Coillte and the Heritage Council have conducted research to evaluate the public goods value of three important services, namely, biodiversity-nature, landscape and cultural heritage. These were found to have a cumulative value of over €500 million, with biodiversity-nature estimated to be €322 million, landscape to be €96 million and cultural heritage to be €92 million. Information on the valuation of such public goods, and case studies so illustrating, is available on the publications page of the Coillte website. The final report, from 2005, of a study on the economic value of trails and forest recreation jointly commissioned by Coillte and the Irish Sports Council is also available on the website.
Coillte has also advised that it is happy to engage directly with the Deputy to discuss the issues raised.
I would appreciate if we could get the list of all contracts between Coillte and other State agencies going back to 1989 as soon as it becomes available.
The initial loan facility for Coillte, when it was established and as provided for in legislation, was €30 million. In 2009, this was increased to €400 million. Around that time there was a large deficit in Coillte’s pension fund. The National Pensions Reserve Fund bought harvesting rights through the Irish Forestry Unit Trust for some of Coillte’s forests. When I met the company last week, it explained to me it sells the harvesting rights of its forests to entities of various sorts to get cash which it then invests elsewhere. Are we giving indirect supports and subsidies, as well as direct supports, to Coillte but not knowing where this money is going? It is certainly not going into afforestation programmes because Coillte is not allowed do such programmes and cannot contribute to what should be its core objective. Where is the money going then?
Coillte is a large operation with SmartPly, Medite and other forestry product projects. The whole forestry industry is growing, including the private forestry sector. Coillte has been responsible over many years for the development of our forest business. The potential for exporting timber is now significant.
As the Deputy said, he visited Coillte last week and engaged with the company. It is happy to engage further to give him the specific details he may require. After all, it is a public company and it must outline to this House the moneys it spends. I assure the Deputy the company will engage with him in providing the detailed information he requires.
Coillte was helpful and informative. My questions are more directed at the Government’s policy and, as it is the main shareholder, to where it is driving Coillte. If Coillte cannot contribute to afforestation and increasing our forest cover, then it seems to me that it is being driven in the direction of providing industrialised wind turbines, for example. In 2009, when the loan facility was extended from €30 million to €400 million, it was said in this House that some of that might be used to move into the area of providing nursing homes. Coillte is moving into controversial areas such as providing industrialised wind turbines which is arguably nothing to do with what it really should be doing. It is being pushed into a more commercialised, for-profit, privatised direction by government policy.
We have no control over it even though we are owners of 100% of it. It is in a type of limbo where there is no transparency over its investment decisions, strategic direction or whether it is applying itself to its core activities, namely, growing trees and managing the forest estate.
I assure Deputy Boyd Barrett that Coillte must publish its accounts each year. We want the company to be profitable. When the Government took office it carried out a root and branch assessment of many public bodies and companies, including Coillte. It was the Government's view that the company should be more focused, on afforestation in particular. We want Coillte to be progressive, profitable and to get a dividend for the State. Coillte is now more focused than might have been the case in the past. It is important that its current line of actions be continued.
