Vol. 402 No. 9
4 Tomás Mac Giolla asked the Minister for Energy the reasons the Government have turned down the request of Bord na Móna for additional equity funding; if he will outline the Government's proposals for the future development of Bord na Móna; and if he will make a statement on the matter.
6 Mr. Belton asked the Minister for Energy the basis for his belief that Bord na Móna can continue to operate successfully on the basis of their existing capital structure; and if he will make a statement on the matter.
8 Mr. Enright asked the Minister for Energy the basis for his belief that Bord na Móna can continue to operate successfully on the basis of their existing capital structure; and if he will make a statement on the matter.
9 Mr. R. Bruton asked the Minister for Energy the basis for his belief that Bord na Móna can continue to operate successfully on the basis of their existing capital structure; and if he will make a statement on the matter.
21 Mr. Connor asked the Minister for Energy the reason for the Government's decision to refuse the request to take equity in Bord na Móna, in view of the fact that a Government commissioned study of the company recommended this course; the steps the Government now propose towards the financing of the company given the problems arising from their debt overhang; and his views on whether the refusal to provide the recommended equity will have serious adverse effects on the future of this State company, threatening all their new venture programmes and further threatening employment levels in the company.
33 Mr. Flanagan asked the Minister for Energy the basis for his belief that Bord na Móna can continue to operate successfully on the basis of their existing capital structure; and if he will make a statement on the matter.
40 Mr. McGrath asked the Minister for Energy the basis for his belief that Bord na Móna can continue to operate successfully on the basis of their existing capital structure; and if he will make a statement on the matter.
48 Mr. J. Bruton asked the Minister for Energy the basis for his belief that Bord na Móna can continue to operate successfully on the basis of their existing capital structure; and if he will make a statement on the matter.
I propose to take Questions Nos. 4, 6, 8, 9, 21, 33, 40 and 48 together.
The Government's decision not to accede to Bord na Móna's request for an injection of £105 million equity was based on the belief that, at a time when the need for discipline in the public finances remains paramount and when there are many other demands on the Exchequer, the company can support their existing level of debt and continue to operate successfully.
This decision was taken after a detailed review of Bord na Móna's financial position by my Department and independent consultants. This review indicated that equity is not needed in the company's core business — the milled peat and solid fuel divisions. In fact, these divisions should be in a position to contribute to the other sections of the business.
A need for capital was identified to develop the horticultural business and new products. It is proposed that worthwhile projects in these areas will be financed either from internally generated funds or by co-financing developments with joint venture partners.
As regards the future prospects for the company, the board's finances have improved markedly in recent years. The company are now returning a profit and this positive operational performance is projected to continue. I am quite satisfied that the company can operate profitably and remain an important contributor to the Irish economy.
The Minister's report from consultants, and form his Department, seems to be totally at variance with the Bord na Móna report on their prospects. In view of the restructing of the company to have three separate divisions, I presume with the Minister's agreement, each to operate independently and be profit making on their own, how does the Minister propose that the core business, that is milled peat and so on, should subsidise the horticultural area which requires the capital? That seems to be totally at variance with the new structures set up in the company, with which I presume the Minister agreed. There are two further questions I wish to ask the Minister. Can he say if the financial difficulties of the company have been exacerbated by the redundancy programme which was forced on them by the Government? Can the Minister specifically say how the deficit of £12.1 million in the pension fund arose?
The Deputy has raised a number of questions. He asks me why the views expressed by the board seem to be at variance with the views expressed by the Government in regard to the ability of this company to trade profitably without the necessity for a massive equity injection by the State. I would answer that by saying that we have very carefully studied the Bord na Móna operation by having outside consultants examine the company and there is absolutely no evidence to suggest that they need this kind of equity injection in order for them to continue to trade profitably, and that the opposite is in fact the case. Because of the successful reorganisation and rationalisation programme that has been carried out, the company have restored themselves to a very satisfactory trading position returning profits for last year and this year and projected profits for next year. Because of that, they are clearly in a position to fund their debt. It is the core business in Bord na Móna which provides the weight of employment which is of great importance to the midlands and the areas where Bord na Móna are operating. My concern is to ensure the continuation of the core business and to do what is necessary to protect employment in those areas. The rationalisation programme that has been carried out has greatly strengthened the company; has introduced greater efficiencies which have resulted in these profits, which are a better guarantee than anything else for the continuation of the successful trading of the company and the stability of employment for the majority of the people working in the company. That is the answer to the primary question and that is the position that obtains.
The question of the pension fund is a separate matter which I have answered in great detail in the Seanad and I would be happy to supply the Deputy with detailed information on that.
