Dáil Éireann díospóireacht -
Wednesday, 12 May 1982

Vol. 334 No. 5

Irish Shipping Limited Bill, 1982: Second Stage.

Minister for Transport (Mr. Wilson)

I move: "That the Bill be now read a Second Time."

I wish to say that this is not the second time but the third time that this was called and I was not harking back to a previous call when I attempted to start my speech, I think that I deserve an apology from the Leader of Fine Gael for that reason. He accused me in the wrong.

The immediate need for the proposed legislation derives from the intention of the Government to institute a special financing arrangement for the "Panamax" bulk carrier which is presently under construction at Verolme Cork Dockyard Limited for Irish Shipping Limited.

The cost of constructing the new vessel at Verolme is £28 million. Under the original financing plan Irish Shipping Limited would have been liable for £14.2 million of this and the balance would have been paid as shipbuilding subsidies by the Department of Industry and Energy to Verolme directly. The special financing arrangement which is now proposed and which will cover the total cost of the ship will incorporate a leasing contract in respect of the vessel on attractive terms, thus enabling the company to draw from sources of funding not otherwise available for Exchequer purposes and outside the ambit of the Exchequer borrowing requirement.

It is an integral part of the proposed arrangement that the Government should give certain formal assurances to the participating banking institutions. These would be similar in kind to the assurances given under existing legislation whenever Irish Shipping Limited borrows in the normal course. In effect, the Government would guarantee that, in the event of Irish Shipping Limited not being in a position to discharge its obligations to the banking institutions under the proposed arrangement, the necessary moneys would be made available by the Exchequer. This guarantee would, of course, embrace the obligations of Irish Shipping Limited in respect of the leasing contract.

The Government are empowered already to give such assurances in the case of other State bodies — for example, Coras Iompair Éireann, under the State Guarantees (Transport) Act, 1962 — but these powers do not yet extend to Irish Shipping Limited. The legislation which I am proposing today will remove the obstacles which presently exist to leasing and other contracts being entered into by Irish Shipping Limited with the benefit of a Government guarantee.

The past year has been one of considerable activity for Irish Shipping. Through its new subsidiary company — Oceanbank Limited — the company has sold a 25 per cent share of both Irish Continental Line and its shareholding in Insurance Corporation of Ireland and the Property Corporation of Ireland. This transaction released funds to the company which helped it to finance the purchase of a secondhand car ferry — the "St. Patrick II"— and to lengthen the existing ferry the "St. Killian". These developments have substantially increased carrying capacity on the Rosslare-Continental routes to the benefit of both tourist and commercial users.

The company has also been very much involved in the reinstatement of the Belfast-Liverpool service, previously operated by the P&O Company. The new service began on 1 May and is operated by the former "St. Patrick" now renamed "St. Colum I".

Irish Shipping's main activity, the operation of a fleet of deep-sea ships, has had to contend with a fall in freight rates due to the present stagnation in worldwide shipping resulting from recessions in the US and other industrial countries. The company, nevertheless, hope to benefit from the upsurge in activity in the bulk carrier trade in coal. The National Board for Science and Technology in its study of Ireland's coal shipping requirements estimated that the business of shipping coal to Ireland will increase from £18 million in 1984 to £29 million in 1986 and may reach £47 million by 1988. There is valuable business here for Irish shipowners and I have no doubt that Irish Shipping will be able to trade profitably the bulk carrier now being built in this market.

The final accounts for the year ended 31/3/1982 are not yet available but the indications are that the company will maintain its profit record and will improve on the profit of £3 million which the company returned in 1981. The company will also be reporting an increase in passenger carryings by Irish Continental Line of the order of 2 per cent. This is certainly a very satisfactory situation and very much to the credit of the board and personnel of the company — it is very good news to hear in times when such news is scarce — having regard to the tough trading conditions of recent years.

I accordingly recommend the Bill to the House.

Mr. Cooney

I shall start by making two complaints. One is that the explanatory memorandum would be of more assistance to the House if it was circulated with the Bill rather than at the time of Second Reading. It arrived at the same time as the Minister's speech. Having looked at the memorandum and listened to the Minister's speech, I regret to say that it is not of much assistance. My second complaint is that the Minister's speech was remarkably short on information. It assumes that Members will recall and know precisely the financial arrangements which were made at the time the contract for the vessel was placed. That was some time ago and Members may have forgotten. Certainly members of the public might not be aware of them.

One unfortunate consequence of the scarcity of information is that the nature of the Bill, to provide guarantees for Irish Shipping, could give the misleading impression that what we are about is giving subsidies for Irish Shipping. That would be unfair to this company which has traded at a profit without subsidy from the Exchequer in a fiercely competitive market. It is a market which is complex, difficult and cyclical. The company has survived through many years and has consistently shown a profit at the end of each trading year.

The Bill we are debating is providing for guarantees. The Minister gives no explanation of what this is all about. I propose to ask him questions in the hope that he might clarify the matter and refresh our memories about the financing of this ship. The genesis of the Bill lies in the previous Fianna Fáil administration asking Irish Shipping to have this vessel constructed at the Verolme shipyard. If left to themselves Irish Shipping would not have gone to this yard to construct the vessel because the price was twice as much as the best price they could have got in open competition, a difference between £14 million and £28 million. The Government were anxious that the vessel should be constructed in Cork and they arranged that Irish Shipping would finance the open commercial market price of the vessel and the Government would provide the balance by way of subsidy to the yard. That meant the Government would have to find £14 million to pay as a direct subsidy to the shipyard. I do not know what that would work out at in terms of the price of the job. It would be interesting to know how that subsidy would relate to job subsidies in other enterprises.

The Minister told us that special financial arrangements are proposed. We are not given any details of what these will be. He said they will cover the total cost of the ship and will incorporate a leasing contract in respect of the vessel on attractive terms. We are not told the total sum involved. We are not told who will provide the vessel, what bankers, financial institutions or consortium of the same will put up the funds. We are not told the terms of the lease to Irish Shipping. The Minister said "attractive terms" and I should like to know what they are. I presume that the lessors will provide the total cost, £28 million, for this vessel and then they will lease it to Irish Shipping. However, we are not told this but left very much in the dark. If they are financial institutions they will lease to Irish Shipping on terms which will remunerate their investment of £28 million at commercial rates.

Does this mean Irish Shipping will have to pay rent for a vessel costing £28 million when the original deal was that all they would have to find was the commercial cost of the ship, £14 million? It is very important that this point be cleared up. If Irish Shipping are to be allowed to deal on the original terms, that is be involved in a vessel costing £14 million, will the Exchequer meet the difference between the cost of remunerating £14 million or £28 million or whatever the end cost of the vessel will be? We should have that information. Irish Shipping should be put into a position of having to take a lease only on the basis of a vessel costing £14 million, that is on the basis of the understanding and arrangement they entered into with the Government when the contract for the vessel was placed.

The company's success and strength has been the fact that it traded according to strict commercial norms. It only agreed to have this ship built in Cork provided the cost to it was the commercial cost and not the inflated cost which had to be paid to Verolme to build the ship. It is important for the morale of the company that its commercial viability and integrity is not interfered with and that the Minister will ensure that whatever leasing arrangement is made, as far as Irish Shipping are concerned, they will be tied purely to the commercial cost of the vessel. It is very important that the Minister should assure this House, the public and the commercial scene in which Irish Shipping have been operating that there is no question of Irish Shipping becoming a lame duck State company or the recipients of subsidies or of any special treatment. Irish Shipping are very proud of their commercial record and very jealous of their commercial integrity.

Having regard to the difficult commercial scene in which they operate, it is very important that the confidence of their customers and of those involved in shipping throughout the world should not be disturbed in any way by any suggestion coming from this House by reason of this Bill being called a "guarantee" Bill that Irish Shipping are to be the recipients of subsidies. I urge the Minister to assure this House that any subsidies to be paid on foot of this contract will be paid to Verolme and not to Irish Shipping. This is very important. It is regrettable that the Minister did not give us all these details in the course of his speech and clear the air so that we should know exactly what is proposed, how much money is proposed, who is to be involved and the attitude of Irish Shipping to this change in arrangements. We should like to know the length of the lease and its terms, who the lessors are, and other relevant information so that we could see exactly what was happening and judge whether the original bargain with Irish Shipping that they would get this ship on commercial terms is to be maintained.

The Minister might also indicate the present position with regard to payments to date to the shipyard. The ship has been in the course of construction for 18 months and obviously substantial payments have been made. It would be useful to know how much has been paid, by whom it has been paid and whether the funds have come from Irish Shipping or from the Exchequer. The latter is unlikely because it is quite clear that the Exchequer is in a straitened position and is not able to find the subsidy to the yard which was originally envisaged. We must assume that any payments made so far have been made by Irish Shipping. Have those payments been more than might normally fall to be paid by a shipping company to a shipyard having regard to the present stage of construction? What will happen to the payments made so far in relation to the leasing arrangements? Are they to be put up by the unknown lessor and repaid to Irish Shipping, the full cost being taken on to the lease, or is the amount on foot of the lease to be the gross cost less what has been paid so far? One would want to be assured that what has been paid so far has not been in excess of what a shipping company would normally pay at this stage of a contract.

The Minister refers to the activities of Irish Shipping during the past year and I wish to commend Irish Shipping on these activities and on their commercial expertise, particularly in the formation of the new subsidiary company and the various amalgamations and partnerships which have arisen from that. The effect will be a widening of the commercial base of Irish Shipping in a very positive and sensible way which will give them an interest in diverse activities which are concomitant with the basic operations of the company. The commercial skill exercised in the conceiving of that deal, negotiating it and putting it together so quickly, smoothly and profitably redounds tremendously well to those charged with the running of Irish Shipping, and I compliment them on what they achieved.

We wish them well in the reinstatement of the Belfast-Liverpool service. The Irish Sea is a notoriously difficult route on which to achieve profits and it will be a test of their expertise.

The Minister has referred to the study carried out by the National Board for Science and Technology in relation to our future coal requirements, which will be very substantial. The great bulk of this coal will be imported by another company owned by the same shareholder as Irish Shipping, namely, the State; in other words, the coal will be imported by the ESB. I hope that the Minister would continue the representations made by me to the ESB to the effect that, other things being equal, Irish Shipping would be the preferred carrier for the coal to be used by the ESB in their new generating station at Moneypoint. Irish Shipping would not ask for any preferential treatment because in effect that would mean asking for a subsidy. It makes common sense that the shareholder of both these companies should ensure co-operation between them, provided it would be commercially proper. I ask the Minister to assure the House that he will make it very clear to the ESB that he would like to see their coal-carrying business in the hands of Irish Shipping, provided that they will be as competitive as any other operation in the market.

I hope that the Irish Continental Line will be able to report during the coming year a better increase in passenger carryings than the Minister mentioned in his speech, namely 2 per cent on last year. That is not a large increase. I appreciate that in times of recession passenger and commercial traffic is likely to fail to grow to the level one would wish and one can only hope that any lack of growth will be met by economies in the management of the company's operations. Irish Shipping are very experienced in dealing with the cycles which are a part of the shipping trade and are able to cut their cloth according to the measure of the trading climate. They have proved this in their deep sea operations over the years and I have no doubt that they will be able to manage their ferry operations equally efficiently.

I have no objection to this Bill but I have some questions to ask on Committee Stage regarding the meaning of various sections. I have no objection to provision being made for the giving of guarantees on the borrowings of Irish Shipping. However, we want to make it very clear that those borrowings, if they are to be incurred and require these guarantees, will be incurred for the purpose of subsidising a shipyard in Cork and not for the purpose of subsidising Irish Shipping. In fairness to the company, that needs to be spelled out here and I am sorry the Minister has not done so.

Mr. B. Desmond

This is an extremely serious Bill and one which the media might regard as just another Bill relating to the capital requirements of a State-sponsored body. I suggest that this is a very new situation and one which dramatically illustrates a complete change of policy by the Government in relation to the capital requirements of the State-sponsored sector. This is the first clear evidence of such a major change of Government policy when they decided to reduce substantially in the budget the capital requirements of the State sector.

In December 1980 the matter of the bulk carrier was debated in this House. At that time the carrier was to cost £25 million and it was to be funded in two parts — £14 million and £11 million. Of the £14 million Irish Shipping were to put up £7 million in equity and were to borrow £7 million. They were to be given a further £11 million by way of direct subvention. As was stated in the Official Report, the vessel was to be funded by "a combination of equity to the company, borrowing by the company and the payment of subvention to the yard". The Joint Committee on State-Sponsored Bodies, of which I was a member, reported as follows:

Irish Shipping will pay £14 million for the vessel which will be funded by borrowings (50%) and equity (50%). The balance of the cost, £11 million, will be made up by a direct subvention from the Department of Industry, Commerce and Tourism to Verolme Cork Dockyard.

Today we have been presented with a dramatically different situation. The Minister's speech was an incredible one. He stated:

The special financing arrangement which is now proposed and which will cover the total cost of the ship will incorporate a leasing contract in respect of the vessel on attractive terms, thus enabling the company to draw from sources of funding not otherwise available for Exchequer purposes and outside the ambit of the Exchequer borrowing requirement.

The question must be asked: is this not a total change of policy in relation to the funding and payment for this ship? It is a completely different arrangement. I put the question directly to the Minister: where is the £11 million which the then Department of Industry, Commerce and Tourism specifically said would be given by way of direct subvention to Verolme to build this ship? It is gone.

I can assure the Minister that this Bill will not be passed unless we get the information. The cost of the ship has increased from £25 million to £28 million. If this House has any sense of financial propriety, there is no way it can pass a Bill of this kind without inquiring what is the leasing contract and who are the participating financial institutions? Let us have it out in the open. What are the leasing arrangements? What are the proportions applicable to Verolme, Irish Shipping and the State? We are entitled to have this information. This kind of practice was started when the Taoiseach said that the Government would no longer provide £90 million for the State sector in 1982 and the amount was slashed down to £60 million. This will affect Aer Lingus, CIE, Irish Shipping and many others.

Mr. Wilson

I did not catch what the Deputy said about £60 million and £90 million.

Mr. B. Desmond

It is one of those glorious grey areas. We maintain that the amount is £60 million but about six or seven days ago it suddenly became £90 million, although it appeared quite differently in the budget. The editor of Business and Finance will advise the Minister about this.

Mr. Wilson

I know what the Deputy is talking about.

An Leas-Cheann Comhairle

Perhaps the Deputy will deal with Irish Shipping. He should be allowed to continue without interruption.

Mr. B. Desmond

I should like to quote from the 15th Report of the Joint Committee on State-Sponsored Bodies dated 3 March 1981, which a distinguished member of the Minister's party, Senator Eoin Ryan, signed as chairman of the committee on behalf of the members. I will quote the section relating to this ship, the ship that Irish Shipping did not want to build in this country. It could have been built in any other country for £14 million but they were told they must build it in Cork at a cost of £25 million. The cost is now £28 million and it may even be £31 million by the time we are finished. The ship is supposed to be ready next December but the question is if it will be ready by that time. The report stated:

The Irish Shipping Act, 1980, was enacted to make provision for the capital and borrowing requirements of Irish Shipping in respect of the new bulk carrier and for the financial needs of the Irish Shipping over the next few years. The contract for the new vessel — a Panamax bulk carrier of 72,000 tons dead weight — was signed in February of this year. The final cost of the vessel will be "in the region of £25 million". Irish Shipping will pay £14 million for the vessel which will be funded by borrowings (50%) and equity (50%). The balance of the cost, £11 million, will be made up by a direct subvention from the Department of Industry, Commerce and Tourism to Verolme Cork Dockyard. The Committee has already outlined what it described as "quasi-dividends" which Irish Shipping has had to pay. The purchase of the new bulk carrier may well fit under this description. Sufficient details are not available at present for the Committee to make any definite comment on the matter. However, the Committee is of the view that where costs of a non-commercial nature have to be incurred by Irish Shipping on the instruction of Government, such costs should be clearly identified in the accounts and an indication given of the extent, if any, to which they affect the commercial performance of the company.

I am a firm believer in an efficient, dynamic State-sponsored enterprise. This Bill attacks the financial integrity of a major successful State-sponsored company. They employ about 900 people and have a payroll of £6 million to £7 million per year. We do not know what implications this Bill will have so far as the company are concerned. Section 5 states:

The Minister shall, as soon as may be after the expiration of every financial year, lay before each House of the Oireachtas a statement setting out as respects each guarantee given during such year or given at any time before and in force at, the commencement of such year—

(a) particulars of the guarantee,

(b) in case any payment has been made by the Minister under the guarantee before the end of such year, the amount of the payment and the amount (if any) repaid to the Minister in respect of the payment,

(c) the amount of moneys for which the Minister would, if the guarantee were enforced immediately upon the expiration of such year, be liable under the guarantee.

Does the Minister seriously suggest that we will pass this Bill — I do not know the precise date when the construction of the ship began but the Minister would have that information — without knowing what payments have been made under what departmental sub-heading and what subventions have been made from the Department of Industry and Commerce — or what was left of it after we dismembered it? What exactly was made by way of payments direct to Verolme or to Irish Shipping Limited or to the contractors? We are entitled to know. Where are the disbursements? Where are they guaranteed? Who are the financial and private banking institutions? I put these questions because it is absolutely essential that we know the answers.

Finally, in particular I draw the attention of the House and everybody in the House to a new policy of the Fianna Fáil Party. The Minister early in his Second Stage speech said:

...outside the ambit of the Exchequer borrowing requirement.

This is the new self-financing subsidy policy of the Fianna Fáil Party. From now on everything in this country will be outside the ambit of the Exchequer borrowing requirement, otherwise it might show up at the end of the year that the State in fact had borrowed. Every State-sponsored body from the Sugar Company to Aer Lingus to CIE to Bord na Móna to the devil knoes who will be told: "Off you go to the private banks. We will give a guarantee. We will give a letter of comfort if you run into trouble", but it will not appear in the Exchequer borrowing requirement at the end of the year.

Mr. Cooney

The guarantees will.

Mr. B. Desmond

The guarantees will, but that will not be regarded for political purposes as being of any consequence. I should say political party propaganda purposes because that is what invariably is done with the definition of the Exchequer borrowing requirement and, as we all know, ultimately it has a major impact. Therefore, I ask the Minister to elaborate for us what exactly he meant when he said:

The special financing arrangement which is now proposed and which will cover the total cost of the ship will incorporate a leasing contract in respect of the vessel on attractive terms, thus enabling the company to draw from sources of funding not otherwise available for Exchequer purposes and

—I stress this—

—outside the ambit of the Exchequer borrowing requirement.

What exactly is meant by that? What formal assurances are being given to the participating banking institutions? We are entitled to know who they are, and with the interest rates and exchange rates that we have today it is of critical importance in relation to any discussion that we have full details of participating financial institutions.

We will have a great deal more to say on Committee Stage in relation to this Bill. I concur completely with my colleague, Deputy Cooney, on his general endorsement of the general activities of Irish Shipping Limited who are one of our finest State-sponsored companies. They are one of the relatively few companies of whom we on the joint committee had no hesitation at our conclusion in March 1981 shortly before the general election in congratulating the board, management, staff, masters and crews of Irish Shipping Limited on the highly efficient manner in which they discharged their responsibilities. It is of critical importance now that the radically new arrangements which have transpired, which are completely different from those proposed originally in relation to the financing of this ship, should be subjected to very considerable public scrutiny in this House on both Second Stage and Committee Stage of this Bill. Therefore, we await with great interest the comments of the Minister for Transport and his elaboration on the politically scanty information given to us in his Second Stage speech.

Mr. O.J. Flanagan

I would like to express praise for and appreciation of Irish Shipping Limited who have an excellent record. The people who established Irish Shipping Limited can be described as far-seeing. The company are one of the authorities who were set up by an Irish Government and on whom we can look with very great pride. The setting up of the company has been a successful venture. Undoubtedly any requests by the Minister for Transport of the present or any Government in this House for any sums of money required for the financing of Irish Shipping Limited will be approved in the House.

Before the establishment of Irish Shipping Limited the high seas did not carry what we can describe as any seaworthy transport backed up financially by the Irish Government. We may have had a number of privately owned seaworthy carriers but it was only after the establishment of the company that we in this country began to undertake in a big way courageous and difficult voyages to faroff ports and destinations. Irish Shipping Limited should be complimented on the manner in which they recruited their personnel for those difficult voyages. The staffs of all the carriers of the company are well trained, very well disciplined and dedicated to their work and duties at port and on sea and at every seaport at which they dock they do so with very great distinction and great credit to Ireland.

We seldom get an opportunity to pay a tribute to a State-sponsored body which has a good financial record. This opportunity should be availed of today to pay a tribute to Irish Shipping Limited who have a record for making profits. Too often we have had discussions in this House on grave financial losses of taxpayers' money, as if there was a bottomless hole and the taxpayers money was being piped into it, but that is not the case with Irish Shipping Limited. For that reason we must salute everybody concerned, management, staff and the workers on board the carriers. The company pay well and get good service from their workers. So far we have not heard any sounds of staff discontent in Irish Shipping Limited. On the contrary, people have been encouraged to work, good rates of pay for work well done have been paid and there is outstanding co-operation among workers on the carriers. This reflects great credit on the personnel of that company.

This Bill will provide special financing arrangements for the "Panamax" bulk carrier which is being constructed at the Verolme Dockyard Cork at a cost of £28 million. In present financial circumstances that figure is a very modest sum for a carrier of that size.

I am not sure if I have followed this debate properly but am I to understand that it might have been possible to have a similar vessel constructed outside this country for a smaller sum or an equivalent sum? I want to put on record that we and the Government have a duty to ensure that Irish workers are employed constructing boats, ships or carriers for Irish Shipping Limited and other interested companies. If Irish Shipping Limited had decided to have the carrier constructed outside this country, many voices would have been raised in this House and among people from all over the country because Verolme Dockyard might have been forced to put their workers on short time, half time, or they might even have had to close down. It is the act of a sensible Government to channel all possible work into a source which will provide productive employment for our workers.

I have already paid a tribute to Irish Shipping Limited and I would like now to salute the management, staff and skilled workforce employed in Verolme Dockyard Cork. I also want to congratulate Irish Shipping Limited on their outstanding record and the ventures under consideration and planned for the future. This Bill gives each Member an opportunity to salute everybody connected with that dockyard. Long may they have orders to construct carriers not alone for Irish Shipping Limited but for foreign firms. We can only hope that this dockyard will at the end of the world recession be able to compete with the best shipbuilding authorities in the world and that they may acquire many orders from other countries and flourish. The then Minister and Government, whoever they might be, will be behind those engaged in our shipbuilding industry and will encourage them to seek orders at home and abroad so that our skilled workforce will be able to continue constructing ships and carriers at Cork.

I am sorry Deputy Desmond has left the House because I do not believe in commenting on a man in his absence. I am at a loss to understand why Deputy Desmond did not query the millions he is now querying when he was in the Department of Finance for six or seven months. If he was worried about the manner in which this money was being spent; I do not see why he could not have taken up the telephone and queried his colleagues or got in touch with the Verolme Dockyard people from whom I always received the greatest possible courtesy. During the short time I was Minister for Defence, when I visited the dockyard I was received in the most friendly spirit possible and in an atmosphere of willingness to co-operate in every way. If we want to check up on whether £11 million is due, what happened to the millions of pounds which were paid, the standard contract price of £28 million, the £14 million provided in the Estimates for the Department of Industry and Commerce, or the further £11 million which was guaranteed, we can do so. The Minister for Finance or any other Minister has nothing to hide in relation to this matter.

When will we approach debates in a sensible way without looking for the shadow of something suspect? I do not think there is anything suspect in relation to the work at Verolme Dockyard. Naturally they must have money to keep their business going. If they are to make progress with the carrier, they must get money. If they require money by a special date, I do not think there is anything that needs to be hidden. Every penny voted in this House to Irish Shipping for the carrier which is under construction in Verolme Dockyard goes into the pockets of Irish workers. Where else should it go? Are there people in this House who would like to see it going anywhere other than into the pockets of Irish workers?

Assuming this carrier could not have been constructed for the sum of £28 million, I would have no hesitation in defending the case for the payment of a larger sum. It would be Irish money spent on Irish workers in an Irish dockyard by an Irish company. Everyone connected with Irish Shipping has been dedicated to the company. Clouds of suspicion should not be created in the Irish Parliament about the spending of money which will keep Irish workers in employment. Such criticisms may be made in good faith and with the intention of eliciting information on where public money is going. The money being spent by Irish Shipping on the construction of this carrier is keeping the dockyards going, keeping Irish workers employed, and maintaining the craft and skill of boat building and ship building. I have nothing but praise for all that. I hope the good work will continue.

I want to refer to the purchase by Irish Shipping of the secondhand car ferry, the "St. Patrick II" and the work carried out on the existing ferry, the "St. Killian". It is very welcome news that these developments have increased substantially the carrying capacity on the Rosslare-Continental routes to the benefit of tourists and commercial users. Our tourist industry has suffered and is suffering enough. It is vital that every facility should be made available to attract tourists to come here with their own cars. The same applies to the commercial carriers. There has been a considerable growth of commercial trade particularly since our entry into the European Economic Community. The work of Irish Shipping has provided a close connection between ourselves and other countries across the sea. I do not know what plans Irish Shipping have for the future.

I am sure everyone connected with Irish Shipping will read the Official Report and particularly the report of the debate this afternoon. I appeal to everybody connected with Irish Shipping, and particularly the board and management, to be courageous about the future, and to look to the future with hope. Where possible, they should equip themselves with seaworthy vessels so that, when the recession ends, they will have at their disposal carriers to bring coal here and to bring traffic in and out of the country. We look to Irish Shipping to do this efficiently. Without Irish Shipping we would be isolated so far as the sea is concerned. The world recession cannot last for ever. If Irish Shipping purchase good seaworthy secondhand carriers now, perhaps they will get them at a cheaper rate than at the end of the recession. If there has to be borrowing for that purpose, when the recession ends it will be seen to have been a good, sound investment. There is nothing wrong about borrowing if one can foresee that it will yield a return.

We see that Irish Shipping Limited have purchased a secondhand car ferry, a wonderful addition to their fleet and an asset to this country. In addition to being an asset to Irish Shipping Limited and this country, it will convey people here who will spend money on hotels and so on, helping the tourist industry and also assist enormously in a higher standard of commercial and business activity. Furthermore, if Irish Shipping Limited see other secondhand ferries or carriers they feel would be good value, it would be very wrong of them to put off their purchase until we are able to pay, because we shall never be able to pay. In the 40 years in which I have been a Member of this House I remember one balanced budget only. Each successive Minister for Finance cuts down on expenditure, awaiting better times — a fantasy. Each budget appears to be an annual dream, a stretching out for the rainbow that seems always to recede further and further, even when the outstretched arms reach further and further.

Mr. B. Desmond

For some people it can be a nightmare.

Mr. O.J. Flanagan

That is why I contend that, if borrowing has to be engaged in for the purchase of secondhand ferries or other ships Irish Shipping Limited see as being necessary to their activities, they should not hesitate in any way but rather enter into such commitments because most certainly they will prove to have been profitable at the end of the recession. I feel also that commercial users will benefit and they at the end of the recession will expect a higher standard of speed and efficiency in regard to sea journeys between our ports and those abroad, to mention but a few, Liverpool, Rotterdam and others.

That is why Irish Shipping Limited should now be examining their present position and that which will obtain for the remainder of this decade and that taking us into the next century. In equipping oneself for activity on the high seas one must commence before the need arises and plan ahead several years. Now is the time Irish Shipping Limited should be giving what might be described as an international lead in regard to equipping themselves for the high seas between now and the end of this century. I am convinced they have the will to do so and that everybody connected with them has the courage to face up to that challenge. All that is needed is the political will on the part of political parties to give them full backing because such venture will yield tremendous benefits for this country in times to come.

I am glad to note also that Irish Shipping Limited are very much involved in the Belfast/Liverpool service, the service begun on 1 May, which it is to be hoped will be availed of by many and that the high standard of efficiency of Irish Shipping Limited will be reflected on that service route. We are all aware that Irish Shipping Limited's main activity, that for which they were established originally, was the operation of a fleet of deep-sea ships, which they have done extremely successfully to date. If the board of Irish Shipping Limited feel it necessary to engage the services of some world shipping experts, I hope they will do so — I think there are many Members of this House who would so advocate — so that they may be first in their field in regard to development and planning for the years ahead.

We are aware that difficulties arose in relation to freight rates not only for Irish Shipping Limited but for all other shipping interests throughout the world. The Japanese have encountered such difficulty. That difficulty has been experienced also in the United States, all resulting from the recession within the United States and in other industrialised countries. However, despite that recession, Irish Shipping Limited have behaved very well and have come through these difficult times with flying colours. Indeed, that can be said even by those of us who might be inclined to be critical. We Irish are extremely slow to praise but very quick to criticise and condemn. Were we quicker to give a clap on the back and praise, where warranted, our appreciation would undoubtedly fall on the ears of those who would give greater financial return to this country.

We must remember that the recession will not continue always. In my opinion we are beginning to see the light at the end of the tunnel. Anybody who was listening to the speech by Mr. Van Lennep, Secretary of the OECD in Strasbourg recently would clearly understand that we were getting through the worst part of the world recession and that the most serious effects of it have passed. That is why I say there will be an upsurge in activity in the bulk carrier trade in coal and heavy merchandise. If that occurs why should Irish Shipping not get in now and be well equipped to take full advantage of the benefits that will be readily available for them at the end of the recession? The carrier trade in coal should be seriously examined. If we are to have coal burning stations in the period up to 2000 the high volume of coal we have in the Leinster coalfield, in Arigna and elsewhere and the high standard anthracite we have in the Leinster coalfield and the Castlecomer and Tipperary areas may not be sufficient to keep these stations going. Because of the possible benefits available we must look to Irish Shipping to make a serious study of Ireland's coal shipping requirements. Such a survey is urgent, necessary and important and should be undertaken. I hope Irish Shipping will be able to operate the bulk carrier now being built very profitably on the coal market and on the commercial end of this business.

This is a most welcome opportunity for the House — I am sorry there has not been great participation in the debate — to give the Minister for Transport our views and to pay tribute to the work of his predecessor, Deputy Cooney, in regard to this matter. We want to ensure that all Irish Ministers and Governments and all Members of the House give their fullest support in the strongest possible manner for the borrowing or raising of money by any means considered necessary for the provision of every possible resource and equipment that Irish Shipping will need for future development.

Apart from participation in the Belfast-Liverpool service and in the Rosslare development, there must be new openings as yet unexplored. I ask the Minister to give the green light to Irish Shipping to submit any proposals they feel appropriate, together with costs, so that we may look into their future. I believe that what is preventing the submission of extension and development plans is that they are not putting on paper their full requirements because they know they will be shot down on cost. That should not prevent submission of expansion and development plans. If world shipping experts are to be consulted, I believe it pays to consult people with experience who know the business. I am sure the services of the best experts can be obtained by Irish Shipping Limited so that they and we may know their future prospects and be in a position to provide the financial assistance they need. If necessary our Government should be able fully to participate with other members of the EEC in seeing what money can be got from that source and, if it can, to get it for the benefit of Irish Shipping. Although the EEC seems to be in a state of semi-bankruptcy, it must be that somewhere on the shelves in Brussels, Luxembourg or Strasburg there is a policy in relation to development of future deep sea carrier operations for all member states.

We have a very good case to make because of the creditworthiness and extreme efficiency of Irish Shipping as well as the extreme efficiency of the Verolme Dockyard which is engaged in the construction of deep sea carriers. I wish we had frequent debates in this House to stimulate greater interest and activity on the part of Members in regard to the work of Irish Shipping, its future progress and its proud record so that we could see how we as Parliamentarians could give them encouragement for future development. They have a very important role to play. I wish to express high appreciation of the support which the Government are giving to Irish Shipping and the support given by the former Government. Let us not be cheeseparing. These people are expert at their jobs. If greater development which will yield profit is possible, let us be courageous enough to row in with them and say "You will have the full support financially and otherwise of the Government and of Parliament in general".

Mr. Bellew

I wish to make a brief contribution. I do not propose, and indeed I would be unable, to follow either the eloquence or scope of Deputy Flanagan's contribution; but, as a new Deputy I want to thank him for his frankness and absolute honesty in this debate. It was refreshing to hear his contribution and the welcome he gave to the Bill we are discussing. I would like to join with him in welcoming this Bill. I listened on the monitor to Deputy Desmond's contribution which I can only describe as cant and humbug. I am amazed at the amount of unconstructive contributions this Deputy makes on many other matters as well as on this Bill. He queried certain job costs involved in the construction of this bulk carrier but when he is speaking on other matters he can produce figures like a magician producing rabbits out of a hat and he never seems to be short of the answer he requires when putting any particular case. He continuously seems to omit, deliberately or otherwise, the human factor and the care and welfare of human beings.

It is very important that the House should agree to this Bill to allow the construction of this bulk carrier to go ahead to give Irish Shipping this vessel which is required for their projected commercial needs, to protect and safeguard the country's strategic needs and to give much-needed employment in our ship building industry in Verolme dockyard. Those are very worthwhile things which every Deputy should support. I believe it would be very difficult to find a shipyard anywhere in the world which would be prepared to commit themselves to a fixed price contract for a ship of that size. We constantly see reports in newspapers and trade magazines of the losses incurred by shipbuilding firms throughout the world on ship building contracts. I do not see how we, as a small nation with a small ship building industry, can be any different from any of the great ship building yards around the world.

I am not unduly worried about the cost of this ship, keeping in mind that it will ensure that a considerable number of our work force will be employed on its construction and that the ship, although in its trading throughout the world may not be used in any strategic sense for the benefit of the country, will be there if a situation should arise when it is needed. It is only right that we should reflect that Irish Shipping Limited were founded because of a difficult international situation which required that we should have our own independent means of transporting essential commodities from their countries of origin to this country. It would be tantamount to national treason to suggest that we should not keep Irish Shipping Limited as efficient as possible so that they are at all stages capable of providing the transportation of all our strategic materials which would be required in any situation, to ferry those commodities into our ports to keep our industries turning over and our people employed. If we had not got Irish Shipping it is not difficult to visualise that a certain lady in another country might be confiscating any ships we depended on to send on an expedition to the South Atlantic. One can only wonder where we would be in that situation. The Government and the Minister should be encouraged to go ahead with the financing of this particular bulk carrier and to ensure that at all times Irish Shipping have the expertise and the finance they need.

Minister for Transport (Mr. Wilson)

First of all, I will take up the very constructive speech of Deputy Oliver Flanagan with regard to this Bill, having thanked Deputies Cooney and Desmond for their contributions. I was very impressed by Deputy Flanagan's speech. He has the benefit of experience in the House, he knows what the situation was when he came in here for the first time, he knows how progress was made, what particular agencies and what particular companies made that progress. He said at the start of his speech that at the beginning there was no ship flying an Irish flag supported by the Irish Government and he paid tribute to the far-seeing people who were responsible for the establishment of Irish Shipping. This Bill is about Irish Shipping and the progress of Irish Shipping.

Deputy Flanagan pointed out that the ships of this line brought credit and prestige to the country in any ports they found themselves in, apart from the fact that they were engaged in a sound commercial proposition and benefiting the country commercially as well. The reason for bringing the Bill before the House is to give Government guarantees for certain financial arrangements. Deputy Flanagan put his finger on it when he said that the Government were concerned when this ship was to be built that it should be built by Irish workers. I was astounded that Deputy Barry Desmond, representing the Labour Party, could come into the House, talk about this Bill and this ship without once mentioning that in having it built in Verolme dockyard in Cork work was being provided for Irish workers and they were being sustained in employment as well as their families.

Mr. B. Desmond

That was not so in 1980.

An Leas-Cheann Comhairle

Will Deputy Desmond allow the Minister to proceed?

Mr. Wilson

It was blindness on the part of Deputy Desmond that he did not think in terms of the placing of this contract at a cost which was far above what it could have been built for elsewhere as he said, but the purpose in so doing was to provide employment for the skilled people in this industry in this country rather than improving the GNP of Japan or some other country. Deputy Oliver Flanagan saw, with his historic imagination, that the draftsmen, the engineer, the welder, the riveter and the fitter in Verolme in Cork and Cobh were entitled to get first consideration from an Irish Government and that so far as possible they should have been kept in employment. A recognition of the skills available in that area is something that is worthwhile, too. For far too long a recognition of those skills available in this country has not been forthcoming anywhere in the world. I recall a small matter recently whereby the Arklow yard built a boat in which a very famous sailor sailed around the world. From reading the English papers in regard to the event one would never know that the boat had been built in Ireland by skilled Irishmen. We must take every opportunity we can get to make work available to the skilled people in this line and that is what we are doing in this instance.

I could sum up what Deputy Flanagan said in this regard by indicating my belief that Deputy Desmond was brainwashed for seven months into regarding the balancing of books as more important than the provision of work for our people. It reminds me of a very famous occasion when a general in Sicily was addressing his men at the moment of truth. He belonged to a nation that was the most seafaring nation in the world at that time. He was addressing the men before a crucial sea battle and he told them that everything depended on them because in the end it is men and not ships that make a nation. Here we have ship making men and making a nation. The Government, when they decided to build this ship and to finance it, were right. It is something we should be proud of. I am very pleased with the general optimistic and expansionary tone of Deputy Flanagan's contribution. He said, and I am making note of this and asking my officials to make note of it too, that we should be encouraging Irish Shipping Limited to expand not merely within but without — to try outside for orders in the future so that their commercial toing and froing around the world should enrich the country as it has been enriching it in the past. In my Second Stage speech I indicated the most recent figure available from the company in terms of profits.

Deputy Flanagan referred to a number of points I made in general on Second Stage debate about developments with regard to the "Saint Patrick" and to the extension of the "Saint Killian". As I may have mentioned here before, I have a particular interest in "Saint Killian" since he was from Mullagh in County Cavan. He was killed in Wurzburg. I regard as a tribute to the area from which he came any extension of a ship named after him. As the House knows "Saint Columba" was also an Ulsterman. The "St. Colum I" is now plying between Belfast and Liverpool in substitution for a company which discontinued providing that service between the north-eastern part of the country and Liverpool.

Deputy Flanagan mentioned also the possibilities of development arising from studies made in the OECD and of plans available in Europe. He finished by asking us to give the green light to Irish Shipping Limited to accept whatever proposals for development we may get from them and to consider any such proposals with the greatest possible sympathy. That is the kind of positive contribution that we seldom get in this House. Coming from a man of long experience here, a man who knows, not from textbooks, what we started from and where we have arrived at, that approach is very welcome.

Regarding Deputy Cooney's contribution, there is not to be found anywhere in my speech any implication that we are subsidising an ailing company in this exercise of guaranteeing certain borrowings with regard to the construction of the ship in question. There is no implication that we are subsiding what Deputy Cooney said would be regarded, if we were so subsiding it, as a lame duck. If the Deputy examines my Second Stage speech he will find that what we are doing is asking for a Government guarantee for a method of financing the Panamax carrier.

Mr. Cooney

There is an element of subsidisation.

Mr. Wilson

Let us be clear on one point, that is, that Irish Shipping Limited will have no heavier commitment now than the commitment they undertook at the beginning. I can give Deputy Cooney an assurance on that. There will be no burden placed on Irish Shipping Limited apart from the amounts thay were asked to pay in accordance with the original arrangement. I wish to put on record also that Irish Shipping Limited are in full agreement with the arrangements being made by way of this Bill.

Deputy Cooney said he was anxious that the company would undertake the bulk of coal carrying for the ESB. On coming into a Department one often is not aware of everything that was done by one's predecessor and I appreciate very much what the Deputy said about his having been in touch with the ESB and indicating to them that he regarded it as desirable that Irish Shipping Limited provide the transport for the coal, presumably, to the new Moneypoint station, which will be a heavy user of coal. Since I took office I too have written to the ESB telling them that I would regard it as more than desirable that Irish Shipping Limited carry the coal for the ESB.

As I have said, Deputy Desmond did not refer to the main purpose of this contract being placed with Verolme Cork Dockyard. The contract was placed in the interest of the provision of work for the skilled people in the various categories who are available to us at Verolme. We are not forcing Irish Shipping Limited to have the vessel built there and to pay more than they would have to pay on the open competitive market. The financial arrangements were made in order to make up the difference between what they could have got the ship built for elsewhere and what it is costing at home. What we are doing in this Bill is getting a Government guarantee for certain financial arrangements in order to enable this to happen. Again, I emphasise that there is no extra burden being placed on Irish Shipping Limited.

Deputy Desmond was in doubt as to whether the Government were providing the £90 million by way of equity for the various State companies that are in need of equity. I can assure him that we are providing this money.

Mr. Cooney

When will the Minister be announcing the division of the money as between the various companies?

Mr. Wilson

That is a matter for the Minister for Finance but I should expect the division to be announced reasonably soon, though in saying that I am speaking off the top of my head.

Mr. B. Desmond

How much of the £90 million will be allotted to this area?

Mr. Wilson

Again that will be announced in due course by the Minister for Finance.

Mr. B. Desmond

This is what the thing is supposed to be all about today.

Mr. Wilson

The thing is supposed to be all about precisely what I dealt with in my Second Stage speech, with special reference to the most important area as far as I am concerned — it was ignored totally by Deputy Desmond — and that relates to the provision of employment for Irish citizens with skills. Deputy Cooney asked me to state what disbursement has taken place up to now. I should like to tell him that £1.42 million of State equity was provided to get things launched. Irish Shipping Limited have spent £10 million since then and they got that by way of bridging loan in agreement with the Minister for Finance and pending finalisation of the leasing arrangements. State equity, a loan and a subsidy was the original proposal. Privatisation was proposed later and that involved leasing funds from the private sector to take the place of State funding. The negotiations are very delicate and we cannot give details at this stage until the arrangements are finalised but full details will be laid before the Houses of the Oireachtas in due course.

I should like to emphasise that the funding as now proposed is as favourable to Irish Shipping Limited as was originally proposed. It has the full agreement of the company. Today all speakers paid tribute to the commercial, business and financial expertise of the company and I am sure that if they agree to the proposal before the House there is no way that the arrangements can be impugned. The original funding was to be £7.1 million equity and the balance by way of a subsidy. The cost is now estimated to be in the region of £28 million. The £10 million temporary borrowing and £1.42 State equity has been spent already. The proposed financing is an arrangement with financial institutions to put up the full cost of the vessel which will be repaid by leasehold payments over a period of approximately 12 years. Those arrangements have not been finalised as yet but full details of them will be laid before the Houses of the Oireachtas when that has been done. I should like to thank the Deputies for their contributions. We know we are supporting a company of which we can be proud. Deputy Cooney, a former Minister, will agree that it is very consoling to have representatives of a company not looking for money but for ways of making more profit.

Question put and agreed to. Agreed to take remaining Stages today.