asked the Minister for Communications the total amount in Irish puint which the Government guaranteed for the lapsed charter Irish Spruce; and his plans to incorporate the Irish Spruce service in a new Irish strategic fleet.
20.
Ceisteanna—Questions. Oral Answers. - Strategic Fleet.
18.
asked the Minister for Communications his proposals for the formation of a company either fully or partly State-owned to acquire a 200,000 tonne strategic fleet; and if he has been approached by former Irish Shipping staff to ascertain if he will support a co-operative society to effect that purpose.
I propose to take Questions Nos. 18 and 20 together.
I would refer the Deputy to my statement to Dáil Éireann on 14 November 1984 in relation to the appointment of a liquidator to Irish Shipping Limited. I indicated that the Government had given careful consideration to the question of a strategic fleet and was satisfied that the winding up of Irish Shipping Limited was not a cause for concern in terms of our current strategic needs. I have recently initiated a review of maritime transport policy, which is now under way in my Department.
The acquisition of the Irish Spruce was funded by a consortium of Japanese leasing companies and operated by Irish Shipping Limited under a Bareboat Charter which was fully guaranteed by the Minister for Finance. The total amount guaranteed by the Minister at current exchange rates is £38 million approximately. Consideration is being given to the situation of the Irish Spruce following the liquidation of Irish Shipping.
I have been approached by the co-operative set up by former Irish Shipping staff regarding a possible contract for the management and chartering out of the Irish Spruce. This aspect is under consideration at present.
I am surprised at the Minister taking those two questions together. However, my first supplementary concerns the present legal position of the vessel, Irish Spruce. Does it belong to the Irish Government?
I am sure the Deputy recognises that this is a rather complex matter which I hope is in the process of being resolved. The Deputy will be aware that the Irish Spruce was built at Verolme Cork Dockyard. It was built on foot of an agreement between the Irish Government, Irish Shipping and certain Japanese institutions so these are the owners of the vessel. The total cost of the vessel which was greatly in excess of the going rate at the time, included a very significant dockyard subsidy. For that reason three-quarters of the payments were taken on by the Government — half from the Department of Finance Vote, one-quarter from the Department of Communications Vote and one-quarter from Irish Shipping. The arrangement was that at the end of the leasing period the ship was to become the property of the State but I cannot be sure what will be the final outcome of the discussions that are in progress. I assure the Deputy that as soon as the position is clear I will make an announcement on the matter.
Would the Minister agree that the Government in making the decision to have this ship built in the Cork Dockyard had in mind the transport of coal from the US to Moneypoint and would he agree that this vessel is particularly suited for that trade? Can he assure us that he will take these factors into consideration when considering the proposition put to him by the former employees who have formed the co-operative society so that all may not be lost and that the coal being taken into Moneypoint will not be brought in by foreign ships being paid in our hard earned currency?
I am not sure what all the considerations were that the then Government took into account in deciding to have the vessel built in Cork and to fund it in the manner I have outlined but there were discussions between Irish Shipping and the ESB in relation to the carrying of coal to the Moneypoint project. At least one Panamax on full time service would be needed for that purpose. I do not wish to speculate, until such time as the position of the Irish Spruce is clarified, as to how the coal might be carried.
The Minister said in his original reply that he did not think the liquidation of Irish Shipping affected our strategic fleet, but would he not agree that the smaller shipping companies with an average of about 20,000 deadweight tonnes, all put together would not constitute anything like enough tonnage for a strategic fleet? Would he not further agree that their trading is mainly with north-western Europe and that they do little, if any trading with the United States?
Deputy Wilson will know that the concept of a strategic fleet arose during the Second World War. This was re-evaluated in the early sixties, when the strategic needs were reduced to 155,000 deadweight tonnes. Since then a great number of things have happened. First there have been major developments in transport modes. Secondly, the B & I Company were acquired by the State since then. Thirdly, we joined the European Economic Community. There are different factors which must be assessed. What I have said, and repeat readily to the Deputy, is that our current strategic needs are met. That is not to say that, looking into the future, our strategic needs might not change.
That these will not be met by Irish-owned ships?
Well, Irish registered ships. There is no difficulty about our current needs.
The Minister speculated as to why the then Government commissioned a ship from Verolme Dockyard. We had a whole concatenation of considerations, including employment, which was very important. The decision having been taken, are we going to lose the Irish Spruce to the service of the ESB Moneypoint power station? Would the Minister like to say, with regard to the consideration of the co-operative, what stage that consideration is at in his Department?
The Irish Spruce now forms part of the Irish merchant fleet. If there is to be any change in that status, I shall make an announcement. I know that it would be the wish of many Deputies on all sides of the House that there would not be a change in that position. I cannot say any more than that at the moment. The future of the Irish Spruce is very much connected with the question of who should run that ship if it does remain part of the Irish fleet. The co-operative mentioned by Deputy Wilson is one of the groups which have expressed interest in running the ship.
In management.
In managing it. I would be bound to go for that proposal, should it arise, which would be most likely to succeed on a financial basis.
A final supplementary.
Very briefly, would the Minister confirm three points of information which are available to me — first, that the Irish Spruce is not the property of the liquidator, but rather the property of both the Department of Finance and this other group; secondly, that there is a £38 million guarantee on this ship which is today worth £80 million — a loss of £20 million; thirdly, that the board of Irish Shipping unanimously suggested to the Minister that he would slim down the company to just three ships at an overall cost of £25 million and he rejected that proposal and went for liquidation?
Deputy Brennan, in the latter part of his question, is anticipating questions set down by him which will be reached, if not today, on Tuesday next. In relation to the first part of his question, what he said is largely correct. The Irish Spruce is not the property of the liquidator. I note that he put it as being the property of the Department of Finance and the Japanese institution. That possibly articulates more accurately than I could the situation.
It does not belong to the liquidator?
It does not belong to the liquidator. In relation to the £38 million mentioned by the Deputy, it must be remembered that the then Government decided to go for the Irish ship which was being built at Verolme Dockyard at a much larger price than it could have been built elsewhere, because of many factors.
Trading with Japan.
Deputy Wilson has referred to the employment factor and so forth. A large part of the £38 million is, in fact, a shipyard subsidy.
The remaining questions will appear on——
Arising out of the Minister's reply——
I am sorry, Deputy. It is 3.35 p.m.
It is a very important matter.
That may be.
The Deputy has a cold.
Give her a chance.
I have remained in the hope of asking this question.
By agreement of the House, I shall permit the Deputy one short question.
The Minister has indicated that there are a number of groups interested, along with the co-operative proposals which have come from the Irish Shipping workers. Could he indicate at this stage broadly how many groups are interested in the management? Secondly, he indicated that his priority in making a decision would be the commercial potential of management groups, if I understand him correctly on that. There is the question of employment, which I know is an important element of the proposals put by the co-operative. It was a significant factor and it is important that it should be on the record and open for debate in the future.
The Deputy can be assured that I shall be seeking, if it should arise, the best possible arrangement. First, I shall be seeking permanence and continuity and the management arrangements to be made would be ones likely to succeed. Of course, I am also concerned about employment and reviewing or regrading as much employment as possible.
The remaining questions will appear on next Tuesday's Order Paper.