asked the Minister for Industry, Commerce and Energy if he is reviewing the performance of Nitrigin Eireann Teoranta in the light of their latest annual report; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - NET Performance.
16.
I do not propose to carry out a special review of the performance of this company in the light of their annual report for 1978.
Since the 1973 energy crisis, the production of fertilisers from an oil feedstock and from imported ammonia has not been competitive with imported fertilisers based on natural gas. This fact has been basic to the poor performance of NET in recent years. The new ammonia/urea plant at Marino Point, based on natural gas supplies from Kinsale Head, is designed to overcome this drawback and to place the company in a competitive position in both the domestic and export markets while, at the same time, bringing them to a profitable position.
Serious delays have occurred, however, in the bringing on stream of the Marino Point plant and these have resulted in the unforeseen extension of the company's loss making phase. The losses in 1978 were worsened by a strike at the Arklow factory for three months of that year. The causes and effects of the increasing cost of the Marino project are being examined with a view, inter alia, to ascertaining what implications this experience may have for public sector projects.
The production of ammonia on a commercial scale at Marino Point commenced in May this year and the Arklow factory is now using some of that ammonia. From now on, therefore, there should be gradual improvement in the performance of the company.
Who is bearing the losses of NET? Are they being borne by the banks or the Government?
The shareholder as to 100 per cent is the Minister for Finance, so it can be assumed that the Irish taxpayer is bearing the loss.
How has this burden been borne? Has it been borne in the form of a subsidy paid to NET or merely devaluation in the shares which the Minister holds?
There is no subsidy but there was a Bill before the House some few months ago in which the equity capital, the borrowing powers and the guarantee limits in respect of NET were increased very substantially.
Is the Minister satisfied therefore, that there is no need for any internal re-organisation in NET and that the problem can be accounted for wholly by a lack of demand changing the economies of fertiliser-making and by this industrial dispute?
I never mentioned a lack of demand. There is no lack of demand for nitrogenous fertilisers; there is a growth market. The main cause of NET problems has been the 1973-1974 energy crisis which gave an enormous advantage to those who were producing fertilisers from natural gas as against those who were producing it from oil feedstocks and from imported ammonia. NET are now themselves manufacturing ammonia and urea from natural gas and using that ammonia in the manufacture of nitrogenous fertilisers. They should, therefore, be in a much stronger position in the years to come than they have been in the past. Nevertheless, I am very concerned indeed at the poor results from the company over the last few years. A major factor in it has been this very prolonged strike in Arklow. The other major factor has been the fact that Marino Point is a very long time behind schedule in coming onstream and is coming onstream at a cost which is roughly double what was originally budgeted for.