Dáil Éireann díospóireacht -
Wednesday, 16 May 1990

Vol. 398 No. 8

Written Answers. - Irish Shipping Limited Liquidation Costs.

Liam Fitzgerald

Ceist:

85 Mr. L. Fitzgerald asked the Minister for the Marine the cost, to date, of the liquidation of Irish Shipping Limited; if this cost is in keeping with the estimated cost of the liquidation at the time of the decision to liquidate; if not, the reason for the difference in costs; the Department's estimated cost of the liquidation to the State at that time; his views on whether the real cost could have been less, given the significant improvement in the shipping freight rate; and his views on whether the freight shipping lines which stayed in operation are experiencing a lucrative market at present.

Minister for the Marine (Mr. Wilson)

With regard to the first part of the question, I would refer the Deputy to the reply which the former Minister of State at the Department of the Marine, Deputy Gallagher gave to a similar question on 3 May 1988. The figures quoted on that occasion have not changed.

The cost of liquidation at the time the decision was taken was estimated as being of the order of £50 million. Since the majority of the liabilities which the State was obliged to discharge were known, the estimated cost was substantially correct. Certain costs such as the cost of maintaining the M. V. Irish Spruce and the revenue which would revert to the State on the disposal of the vessel could not be definitively predicted. In the event however the difference between estimated and actual cost was just 1 per cent. The third part of the Deputy's question does not therefore arise.

As regards the remainder of the Deputy's question, it should be noted that once a liquidator had been appointed to the company, the terms of the State guarantees of borrowings and of the lease arrangements in relation to theIrish Spruce required immediate discharge of the cost involved.

During the recession in world shipping demand, virtually every shipping company in Europe found the going very tough. Indeed over the period the European share of the world fleet was reduced by half. While the resurgence in demand which has taken place over the last two to three years has been welcome, in real terms freight rates are still somewhat lower than they were at the beginning of the 1980s.