Deputies Lyons, Wyse, E. O'Keeffe, Wallace and M. Ahern have been given permission to raise on the Adjournment the question of the Verolme Cork Dockyard. They have 20 minutes between them.
Adjournment Debate. - Verolme (Cork) Dockyard.
First, I want to express my appreciation and that of my colleagues to the Chair in allowing us to raise this very serious matter on the Adjournment. The published decision to close the Verolme Cork Dockyard at the end of November warrants immediate action on the part of the Government. As the Chair is aware, we have tried to raise this matter on a number of occasions, but that is now history. We have been given this opportunity to express our views on the matter and we appreciate it.
I contend that there are very considerable possibilities of ship repairing and other works that could and should be carried out in this dockyard. It would be nothing short of a national scandal if it were not allowed to continue in operation. A unique situation applies in the matter of this Cork dockyard. At its closure date, it would be in a position to discharge all its responsibilities to its creditors in full, have sufficient funds to pay redundancy money to the remaining workers in the yard and still have money left to repay what is outstanding to Fóir Teóranta. I am sure that the Minister, the Government — and everybody else for that matter — must realise that that unique position in modern business terms would amount to one of the most unsatisfactory close-downs of all time. The obvious implication is that with such resources the company could afford not to close down. I contend that there is not a shipyard in the entire world at this moment in such a position.
I indicated earlier that considerable possibilities existed for the yard in ship repairing. They also have offshore field development facilities, apart altogether from the building of rigs. There are many alternatives open to the dockyard.
It is my understanding that the dockyard presented the Government, last May I think, with at least five options that would allow them to continue trading, but all options were refused by the Government. Since then, efforts have been made to resume talks with the Department and the Government on the possibilities for the yard, but up to now those talks have not taken place. I am asking the Government to ensure that talks take place, with a view to ensuring that employment provided by work in the yard is safeguarded.
It is fair to say that the fisheries protection vessel now nearing completion in the yard, known as the P. 31, was designed and constructed in Verolme Dockyard from the keel to the last brush of paint with the aid of EC funding. What is very disappointing and disconcerting is that we are led to believe that our Department of Foreign Affairs gave no encouragement, but rather the very opposite, to the management of the dockyard to sell this quality boat to nations around the world. If that is the case, I must condemn that attitude. If something like the P. 31 can be produced and is a marketable product, there are nations, barring one or two for obvious reasons — and there I might mention South Africa — where we could market this quality boat and so retain work in the dockyard.
It must be said that the dockyard's strategic location is of immense importance to the nation. The facilities of the yard include the most modern, sophisticated equipment and an outstanding machine shop. Is it the intention of the Government — and I hope that it is not — to allow all the machinery, equipment, cranes to rust and rot due to inactivity for lack of co-operation from the Government? What about it if the Government have to subsidise the yard? Every shipyard in the world is subsidised by the national government. Are we to allow the skills developed over the years by the workforce to be thrown on the scrap heap, along with the machinery, gear and equipment? Is it not true to say on examination — and I hope that the Government and the Minister will examine the situation to the fullest degree — that there are immense possibilities for this dockyard to remain in business?
We may have lost some ship repairing business for various reasons which I have not time to go into now because my colleagues wish to contribute as well, but let people sit down around the table and work out a strategy and a structure for the survival of this dockyard. It can and would be done if there is a will to do it. I charge the Government with responsibility to ensure the continuation of this dockyard and to examine all the possibilities. If we have to diversify from ship building, and I am not satisfied at this point that we ought to, the ship repairing element should be sufficient to keep the yard going with plenty of employment for the professions and skills that I have already mentioned.
I appeal to the Minister, in the interests which I have outlined, of the workforce, the equipment, the strategic location, the fact that it is our only ship building yard, the immense possibilities with proper input, to ensure that it is kept open and in business for the employment content, for the spin-off industry and for its value to the nation. Perhaps present circumstances are dictating short-term decisions, but is it not reasonable to expect that, whatever deficiency may exist at present in the ship building business, the wind of change could come and we would be left without a dockyard to adapt to any work available? Even at present there is sufficient case for Cork dockyard to be kept open and people kept in employment.
I asked the Taoiseach and the Tánaiste this morning in the House if any arrangements had been made to meet the management of Verolme Cork Dockyard to discuss the present situation. Unfortunately I did not get any reply. When the Minister is replying to this debate, I hope that he will give some indication as to the Government's mood in this respect. We visited Verolme Cork Dockyard recently and we felt that there they were hoping for a meeting with management and Government Ministers. Surely an industry such as this cannot be allowed to go to the ground without first examining all options for its survival. I am aware that management submitted a number of options to the Minister's Department for consideration and yet they are awaiting a reply to their proposals.
Here is an industry employing a very highly skilled staff for ship building and engineering construction. It has taken many years to develop this standard of skill and craftsmanship for those employed there. Another important aspect must be kept in mind. We must remember not alone the skills and craftsmanship there but the very large number of young boys who served their apprenticeship there and have now taken up secure employment in other industries. Let us not look back and see the years of existence of this industry being just cast aside as if they made no contribution to the welfare of our economy. Old established industries like Verolme Cork Dockyard are to close because of lack of Government action. It is felt in Cork that no action is being taken by the Government to save this industry. We know that there are labour relations problems in the dockyard, but I put it to the Minister that you will always get unrest among workers when there is no such thing as security in their employment. In any industry where workers are living from day to day without security in their employment you are bound to have unrest. You have only to look at the number of places in this country at the moment where unrest exists because they have not got that security which is so important for workers to enable them to give their effort and dedication to the welfare of our industry.
The Minister is also aware that this ship is unique. I understand it is the only one of its kind in the world.
Which ship?
A Deputy
The P. 31.
That ship could have been sold at the price for which it was built and we could have built a similar ship in its place. Let no one deny that. That ship, so unique for its purpose, could have been sold and a further order could have been given to the dockyard to build another ship of similar design. I am asking the Minister who is here now — he was not here this morning — what arrangement he is making to meet management to discuss a number of options which could ensure a continuation of this very old and important industry.
There have been many closures in the Cork region over the past couple of months and the Government were not directly involved with them. The appeals we made at that time fell on deaf ears, but the closure of Verolme Cork Dockyard is something that the Government can prevent with commitment and sincerity about the problems of the Cork area. I am not asking the Government to prop up a lame duck but to become involved in the prevention of that closure. I and many people, particularly the management of the dockyard, are convinced that the yard has a future if it can get over its present difficulties with co-operation from the Government. In the past on numerous occasions the dockyard had difficulties, but because Governments at that time realised the asset the dockyard was not alone to the Cork region but to the nation as a whole and the part it was playing as a shipyard and its benefit to the nation, ensured the assistance necessary was given to the yard in order to enable it to continue to play its part, which is so important for all of us.
Mention has been made by my colleagues of the skilled labour force that has been built up over the years. If that is to be lost to this nation it will be a scandal, and it will be an indictment of the Government and the Minister if he allows it to happen. Having met management this week and having listened to their side of the story, I am convinced more than ever that we must keep the dockyard open. If the Minister says that ship building is not on because of the depression in ship building throughout the world I will accept that, but diversification can take place and the dockyard can continue to play a role in the repair of ships. We are developing off-shore services, rigs are coming in here to develop off-shore oil and gas. Ships, boats and service vessels are being used every day out of Cork port to service those rigs, and they can play a part if the dockyard is given the opportunity to diversify in co-operation with the Government.
Financial assistance is needed. The dockyard is due to close on 30 November and nobody would be owed a penny. All the creditors, Fóir Teoranta and so on will be paid.
Is there any concern in this country? Not a shipyard in the world, which has been mentioned here, is in this situation. Management are committed to keeping the dockyard open. I say to the Minister here that he has an obligation not just to Cork but to the nation to ensure that that valuable service which it has played for many years in the development of our shipping is not allowed to close. The work done there can stand up to any ship building in the world. The ships built there are a credit to the workforce. We are making this appeal and we are not being political. We met the management last Monday and they outlined the situation to us. The Minister can play a part now to ensure that Cork Verolme Dockyard continues to play its part on behalf of the nation and not add to the unemployment problem in Cork about which the Government and their local spokespersons have been expressing so much concern. This is a project the Minister can do something about. Other projects we mentioned were not the direct responsibility of the Minister, but we are testing the sincerity of the Government in regard to the Cork region this evening.
The Minister should give this matter serious consideration. He should meet those concerned in an effort to ensure that the boatyard continues to play its part in the future.
I stated Government policy on this in the House on 1 June 1983, and it was to the effect that our policy would have to be geared to assisting the company to win orders on the open market. To that end the Government were prepared to offer the maximum production and credit subsidies acceptable to the EC. Those subsidies could cost the taxpayer £15 million on a £30 million individual building contract, and they were and have been available since to Verolme. The Government were prepared to offer that amount of taxpayers' money, up to the very maximum allowed by the EC, if Verolme could win orders on the open market for ships. They did not do so and, naturally, not having done so, closure now faces them. That, unfortunately, is a direct consequence of the very serious situation which obtains in the world shipbuilding market at present.
The fact is that there is a gross excess of supply over demand in every sector of the world shipping fleet, with the result that laid-up shipping in 1983 exceeded all previous records. In other words, shipping laid up and ready to enter the market if there is any improvement in rates represents 13 per cent of the entire fleet. That clearly indicates why people are not keen to build more ships. Many ships are not in use but are waiting to go into use if there is any improvement in the market. Frankly, and unfortunately, Verolme were not able to win orders in that situation.
I do not see how any more could be done. It may be suggested that the Government should ignore the market situation and through some means give an order to Verolme to build a ship even though the market is as I have indicated. All Members, aware of the financial situation of B & I and Irish Shipping, two State-owned companies, know they have not the capacity to place orders for ships at present. Likewise, in so far as fishery protection vessels are concerned, the fact is that the Department of Defence and the European Commission accept that, in the light of protection measures initiated since 1978, the present mix of ships and aircraft, including the patrol vessel now being completed, will provide an adequate protection in the medium term. There is no immediate demand for a ship to be built under that heading either.
What about the wider markets?
With regard to the wider markets I should like to point out that serious efforts were made, with the assistance of the Department of Foreign Affairs, by the shipyard to find orders for the specialist fishery protection vessel now being completed. However, in spite of the best efforts made, no orders were forthcoming. Unless somebody is prepared to pay for a ship there is no point in building it. As I understand it, nobody, including people from the places mentioned by a senior colleague of the Deputy opposite was prepared to make any offer of this kind.
Suggestions have been made that we should continue ship repairs at Verolme. This is the burden of the five options made by Verolme. I am advised that the cash loss which would be sustained by the company in 1985 in so doing would be between £1.6 and £2.1 million and that this does not take into account depreciation. It would also be subject to the risk that the losses could be higher. That money would have to be found by the taxpayer if that were to continue. I do not think Deputies can have such confidence in the market or, indeed, in the capacity of the taxpayer to find additional sums of money, that one could be justified in continuing next year to incur such losses in the hope that, perhaps, in the following year things might get better. I do not believe there is evidence that the yard in its present condition, under its present system of ownership, would be capable of obtaining a different result. One would be into a prospect of continuous and repeated injections of funds by the taxpayer which clearly the taxpayer cannot afford.
There is also the added question of the dredging that would be necessary if the yard were to continue beyond the end of 1985, and that would amount to a further cost of £700,000. In the light of all the foregoing I believe the only responsible action is to allow the company's plant to close. It must be remembered that these decisions will be taken by a privately owned company. The company's plan to close the yard should be allowed to proceed with a view to doing everything possible in the aftermath of the closure to attract a private sector interest to a renewed and viable ship repair operation on a new structural basis and on the basis of a new system of ownership.
That is what we are not happy about.
That is the only way viable jobs can be secured. I do not believe that to prolong the present structure by the injection of more State funds on a drip-feed basis, such as Deputies opposite seem to be suggesting, would offer long-term viable jobs or a long-term viable future to anyone. Regrettably it is the case that a clean break must be made so that conditions, hopefully, can be created in which, on a new basis, viable operations can recommence.
The Minister is contradicting himself. Earlier he ruled out repairs and then he tells us there is a possibility of having them carried out in the yard.
The Deputies brought the Minister to the House to talk to him and they should listen to him now.
My understanding in respect of the proposals put up by the company in regard to repairs is that the prospective losses would be as I have described. Those losses would have to be subscribed to by the State from taxpayers' resources, but that money is not available. However, if after closure a third party can come in, adopting a different approach from the present company, and if that third party can recommence operations, that will be most welcome. One is not in a position, I regret to say, to give any guarantees that that will happen. Unfortunately, there is not the possibility of further taxpayers' money being made available in regard to the type of operation there at present.
This morning I asked the Minister if the Government will meet management and I did not get a reply. I put that question this evening and I did not get a reply.
I understand that there have been constant consultations between representatives of the Government and the management of the yard.
I asked the Minister if members of the Government had met management. The Minister should answer "yes" or "no".
It is the facts of the situation, and not the people who meet or do not meet, that dictate the result. If, even at this stage, new evidence or proposals can be adduced that have not been adduced before and that would suggest a further meeting is necessary then such a meeting can, of course, take place.
This is typical of the Government's attitude to the Cork region.
The Dáil adjourned at 5.30 p.m. to 2.30 p.m. on Wednesday, 31 October 1984.