asked the Minister for Industry and Commerce why he allowed NET to place abroad a contract worth £10 million in connection with their development at Cork harbour without having invited any Irish firm to tender.
28.
Ceisteanna—Questions. Oral Answers. - Cork Harbour Development.
27.
asked the Minister for Industry and Commerce the number of firms asked to tender for the £10m. contract on the NET project at Marino Point; if his attention has been drawn to the dissatisfaction expressed by Irish firms; and if he will make a statement on the matter.
With the permission of the Ceann Comhairle, I propose to take Questions Nos. 27 and 28 together.
The placing of contracts by NET is a management function, and as such is for decision by the board of the company. My consent is not required.
I am, however, informed by NET that the position is as follows:
1. The work referred to in these questions is the very technical and sophisticated job of erecting the main plant, comprising the installation of major components, such as reactor chambers, heat exchangers and other vessels which operate under high temperatures and pressures, and the erection of the necessary inter-connecting work to establish a continuous process plant.
2. No separate contract has been placed for this work which forms part of the main contract for design and construction of the plant. Kellog International Corporation were selected by NET, after considering tenders from three foreign firms, as the contractors for the design, engineering, procurement, construction and commissioning of the complete plant. This firm is extremely experienced and competent in this specialised field and are and have been involved in the erection of a number of such plants throughout the world.
3. It has been the policy of NET that as far as possible subcontracts should be awarded by the main contractors to Irish contractors and a number of subcontracts have been awarded to such firms. The awarding of subcontracts is of course subject to the paramount consideration that the plant must be completed on time and must be fully efficient. It is the responsibility of the main contractor to ensure timely completion and quality of work.
4. The Marino Point project is different in scale and nature from anything so far built in Ireland. There is only one larger ammonia plant operating in the world than the plant to be erected at Marino Point. The Cork plant will have ten times the capacity of NET's existing ammonia plant at Arklow. The urea plant, at 1,000 tons per day, will also be very large by world standards. The work referred to by the Deputies is central to the safety and efficiency of the plant when completed and consequently it is essential that the optimum degree of management control must be applied to it and that it should be under the direct control of the main contractors, who are responsible for the design of the plant.
5. NET therefore decided that this aspect of the work should be carried out by direct labour under the guidance and supervision of the main contractors. Having so decided NET set about ensuring that the Irish input to the mechanical construction should be as high as possible. I understand that virtually 90 per cent of the total cost of this part of the overall contract will be paid to Irish concerns and workers.
Can the Minister tell the House why no Irish firm was asked to tender for this sub-contract although firms were asked to tender for other parts of the contract such as structural steelworks and so on?
I have told the House already that there were only three firms in the world considered competent to offer designs for a basic plant—one German and two US firms with British subsidiaries.
We are not talking about design.
Do not interrupt. I am answering the question.
The Minister is very touchy.
The work referred to in these questions concerns the efficient working up to the level guaranteed by the contract of extremely large and sophisticated chemical plant for which NET, in consultation with experts, considered there were only three firms in the world competent to undertake the work. If these were to do the assembly of the chemical part of the plant, not the subsidiary part but the core, crucial, chemical part, there had to be a guarantee that it would perform to specification and be delivered on time. In those circumstances it was decided that that part of the work should not be sub-contracted but should be supervised directly by the same people who manufactured the plant. These are the people who hold the patents for the plant and who export such plants worldwide. Therefore, the decision seems reasonable.
Is the Minister aware that this is the second major part of this plant in respect of which Irish firms were excluded deliberately and that the Construction Industry Federation have stated they are satisfied that there are several member firms of the federation who are capable of carrying out this sort of work, that those firms are short of work, some having laid off employees while others are in danger of doing so? In view of the high rate of unemployment that we are experiencing would the Minister not intervene with NET so as to ensure that the maximum possible amount of work arising out of this whole project is given to Irish firms?
The policy of NET is for the maximum possible Irish content both of product and of labour. In this instance it makes no difference to the Irish labour content whether there is an Irish subcontractor or whether there is the supervision of the parent firm, Kellog, who designed and built the plant. The number of Irish people would not be one more on that plant should the work be done in a different way. As agreed with my Department for many years both under previous Administrations and this one, and as reiterated frequently and accepted wholeheartedly by them, it is the policy of NET that there should be the maximum possible Irish content. There is that content in the circumstances in question but I must make the distinction between routine construction and the very complex sophisticated producer plant which is not the same as structural steelwork but is something which is at the limit of technology. The NET decision is in the best interests of their workers, of the profitability of the company, of Irish agriculture which will benefit from the gas and of the whole Irish economy.
I will allow a final supplementary from Deputy Fitzgerald.
Would the Minister elaborate on the final part of his reply where he stated that 90 per cent of the cost of this part of the contract will be spent in Ireland? Is he not being inconsistent in this regard in view of his attack in Cork last week on those engaged in the construction industry?
The Deputy is bringing in new matter.
There was no such attack.
Does the 90 per cent refer to both labour and materials?
If the Deputy would like to put down a separate question I shall endeavour to give him a breakdown of the figures.
I am asking a supplementary.
But the Deputy is asking me for a breakdown of the 90 per cent into detailed heads. I cannot give this information by way of supplementary.
Is it not very difficult to accept the Minister's statement in regard to this 90 per cent when he has told us that because of the nature of the plant it must be imported?
I did not say that. I said that in so far as the crucial part of the plant is concerned there are only a few firms in the world capable of making it to the standard we require. I said that 90 per cent of the total cost of this part of the overall contract will be paid to Irish concerns and workers; that NET decided that this aspect of the work should be carried out by direct labour under the guidance and supervision of the main contractors. The great bulk of the expenditure is on purchasing the plant. More of the expenditure is on putting it together and commissioning it. Parts of it must be imported since we cannot make them here but of the parts that can be obtained in Ireland I understand that virtually 90 per cent of the total cost of the overall contract will be paid to Irish concerns and workers. I can itemise that if the Deputy wishes but I can try also to reassure him as to the extent of surveillance because there are 30 of the staff of NET employed exclusively on the project. These conlist of a project managers, a construction manager, a personnel manager, 17 engineers, two accountants and supporting staff. The NET development division with a chemical engineer as head are in overall charge and they are working continuously with Kellog to ensure that at no stage will there be scope for temptation on the part of an overseas firm to talk to their pals and exclude Irish firms. There is major Irish surveillance by experts at every step so as to ensure that the benefit to Ireland, not only in the end result but during the course of construction, is maximised.
(Interruptions.)
Order.
Will the Minister reconcile what he has just been saying about the capacity of Irish chemical engineers to take part in this construction with his denigration of the Irish construction industry in a Press interview in Cork last week, when he said that the Irish construction industry was not capable of undertaking sophisticated construction work? Will he agree with me that the construction industry regard his remarks as grossly denigrating their capacity and will he take note of the fact that at present people associated with the Irish construction industry—architects, surveyors, engineers and other —are discussing the making of contracts by them in countries abroad, and that the Minister's remarks are regarded as having jeopardised the successful conclusion of these discussions? Can he reconcile his denigration of the Irish construction industry with the fact that the Minister for Finance gives tax-free allowances on the export of these services and that an agency under his own control, Córas Tráchtála, give practical assistance to these people going abroad and taking these sophisticated contracts?
We cannot have a debate on this matter.
There is no denigration of the Irish construction industry.
The Minister said they are only capable of building houses.
This thing, of long standing, is between the CIF, which do not correspond to the totality of the Irish construction industry, and NET on the other hand. I have the greatest pride in the achievements of the engineers in NET and I have participated in efforts to promote work overseas by Irish engineers. They well know my esteem for them and they well understand what is at the base of this. The effort to distort words will not get the Deputy anywhere.
Did I distort what the Minister said—that the Irish construction industry is incapable of undertaking sophisticated contracts?
The Deputy did. I was not referring to the Irish construction industry but to CIF.
I am very concerned about this.
I have given extensive latitude to the subject.
In view of the unsatisfactory nature of the Minister's replies to Question Nos. 27 and 28, I propose to raise the matter on the Adjournment.
I will communicate with the Deputy. The remaining questions will appear on tomorrow's Order Paper.