asked the Minister for Energy if any discussions or negotiations are taking place between his Department, Bord Gáis and Cork Gas Company with a view to a private consortium taking a majority shareholding in Cork Gas Company; and if he will sanction such a proposal or, if not, if he has plans for Bord Gáis to take a majority stake in Cork Gas.
Ceisteanna—Questions. Oral Answers. - Cork Gas Company.
2.
As I indicated in a recent statement, I have authorised Bord Gáis Éireann to proceed with an offer for the acquisition of all the shares of the Cork Gas Company. This followed the withdrawal from negotiations of a private sector company. The purpose of this offer is to enable BGE, as the supplier of gas to Cork Gas, to control the company, improve their management and restore them to a viable state.
Are Cork Gas Company to be wholly taken over by An Bord Gáis, and if they are not, what is to be the future structural breakdown of Cork Gas? When will the exact terms of this proposal be laid before the House, as I am not satisfied with contradictory statements to the press.
That is not a question.
I am at a loss to know what contradictory statements Deputy Lyons is referring to. I made a clear statement on Thursday last to the press in relation to Cork Gas. It is the only statement I made to the press. The procedure is that Bord Gáis Éireann are in the process of acquiring shares in Cork Gas. That will take some time because of the complicated acquisition of shares by An Bord Gáis Éireann. When the shares are acquired by An Bord Gáis Éireann, in a matter of weeks, I will be in a position to lay the order before the House.
Did the Minister not have an offer from a private consortium to take over Cork Gas? Is it intended that An Bord Gáis will take up all the shares and the full equity of the company?
Yes, it is intended that BGE will acquire the Cork Gas Company. I am sure the Deputy is well aware that negotiations have been taking place for a considerable period because it became obvious in 1984 that the Cork Gas Company were getting into an untenable financial position. A number of factors contributed to this position, their poor performance which resulted from excessive overheads, poor management, overmanning, excessive debt and inadequate equity. BGE, as the supplier of gas who were owed a considerable amount of money, were involved in negotiations over a period as the basis of which an agreement was formulated involving a majority shareholding by a private consortium and minority participation by BGE and the existing shareholders. The obvious things to be done would have included a rescheduling of the debt, the restructuring of overheads through redundancies, and so on. On 16 May 1985 the private consortium withdrew. On their withdrawal I had responsibility to the 25,000-plus gas consumers in the city of Cork and I decided, with Government approval, that BGE should make an offer for the shares in Cork Gas. I did that in the knowledge that every day the existing situation continued there would be an increase in the State's exposure and that any further delays probably would have jeopardised the redundancy package which had been put together by the previous agreement. That is what led to the announcement on Thursday last which was greeted with relief by the Cork Gas consumers.
In view of the anouncement that this Cork Gas Company would now be a semi-State body due to the take-over by An Bord Gáis, how does the Minister reconcile that with his reply to a question in relation to the removal of the meters and so on that he was concerned at the high-handed fashion but that they were still a private company? Are they a private company or a semi-State body? What exactly is the Minister proposing?
I am glad the Deputy has clarified his lack of understanding. The Cork Gas Company are still a private company and will remain so until BGE acquire the shares and then it will be the property of An Bord Gáis Éireann.
I asked twice already, will An Bord Gáis take 100 per cent control of this company?
That has been answered.
Yes.
Would the Minister not agree that there is an essential element in all of this and would he see to it that industrial relations will be improved as between management and workers——
That is a separate question. It is a discussion on the information the Deputy has now got.
Any discussion or answers that we can get about this measure will be very enlightening for the 27,000 domestic gas consumers.
The Chair's only difficulty is that this is not the way to deal with it at Question Time.
Is this the first step in the nationalisation of the gas industry? Was the fact that Bord Gáis allowed the Cork Gas Company to run up their debts to approximately £4 million part of the strategy for nationalising this company?
I assume that the banks allowing a £3.8 million debt to accumulate was not part of their strategy to nationalise the company.
I am asking about the money owed by Cork Gas to An Bord Gáis which amounted to approximately £4 million.
I am almost tempted to take credit for that strategy.
Is it the first step in nationalisation?
Deputy Reynolds, former Minister for Energy, has asked two questions, the first in relation to the first step in nationalisation. I made and got Government approval for decisions on the Cork Gas Company in order to ensure continuity of supply for gas consumers in Cork city. That was the basis of it.
The Minister could have done that 12 months ago.
Secondly, as I said, I will accept any credit the Deputy gives me for political strategy. It sounds quite clever in retrospect.
Is it not unusual for a semi-State body to allow a private company to run up debts of approximately £4 million knowing full well that this company was in bad financial circumstances two years ago?
That is a long——
Are the Government not very helpful to Cork?
If Deputy Collins wants to nationalise everything in this country I am surprised at him.
(Interruptions.)
They could have done it without any expense 12 months earlier but they did not want to do it.