Vol. 429 No. 6
19 Mr. Noonan (Limerick East) asked the Minister for Transport, Energy and Communications if the Government has formally requested the EC Commission to allow the use of European Regional Development Fund and Cohesion Funds for the purchase of mobile assets such as airplanes; and if he will make a statement on the matter.
39 Mr. Barrett asked the Minister for Transport, Energy and Communications the steps, if any, he intends taking to ensure an all year round ferry service to France; if he will have discussions with the ferry companies with a view to extending a ferry service to other European countries; and if he will make a statement on the matter.
49 Mr. Deenihan asked the Minister for Transport, Energy and Communications if agreement has been reached with the EC to include aid for modern ferries to the continent and airline fleets replacement in the next tranche of Structural Funds.
257 Mr. Callely asked the Minister for Transport, Energy and Communications if his attention has been drawn to the fact that the only direct car ferry service from Ireland to mainland Europe may close if it cannot avail of EC grant aid; and if he will make a statement on the matter.
I propose to take Question Nos. 19, 39, 49 and 257 together.
I would like to remind the House of the background to Ireland's application for EC funding of mobile assets. Arising out of negotiations following submission of the National Development Plan 1989-93 to the EC Commission on 22 March 1989, the Commission agreed that, subject to the results of a feasibility study, investment in sea and air freight services might be considered.
The Access Transport Study, completed in July 1990 by KPMG Stokes Kennedy Crowley on behalf of the Irish Government and the EC Commission, found that while investment in internal transport facilities was necessary, it was not sufficient to cater for Ireland's unique peripherality problems. Substantial additional investment in access transport services was needed.
In the Operational Programme on Peripherality published in November 1990, the Irish Government and EC Commission undertook to examine the conclusions of the study and possibilities for co-financing by the Community of the access transport investment measures identified by the consultants.
Following detailed consideration of the consultants' findings by a high-level interdepartmental group, the Government made a formal application on 27 May 1991 for EC funding of external access transport services, with specific priority being sought for direct ro-ro and lo-lo shipping services to the European mainland.
Both my predecessors and the former Minister for the Marine met the relevant European Commissioners to advance our application and to seek a favourable decision.
Regrettably, a formal reply from the EC Commissioner for Regional Affairs indicated that the Commission had rejected Ireland's application. In January 1992, my predecessor, Deputy Séamus Brennan, wrote to the Commissioner expressing profound disappointment at the Commission's negative reaction. He requested further discussion with the Commission in order to critically examine the basis of the Commission's decision and to seek to reverse it.
Following further extensive discussions and correspondence with the Commission, a second proposal was forwarded to the Commission on behalf of the Irish Government in April 1992, followed by an updated version of the Access Transport Study which was forwarded to the Commission, at their request, in September 1992.
Unfortunately, the Commission's response was again negative. The main reason for rejection centres around the Commission's belief that aid for mobile assets would lead to a distortion of competition. It is understood that a number of representations have been made to the Commission by third parties about potential distortion of competition if they acceeded to the Irish Government's proposals. I do not, however, have details of these.
Despite the negative reaction from the European Commission both I and Government colleagues have continued to vigorously pursue the proposal in line with the specific commitment to press for it in the Programme for a Partnership Government which we are implementing.
I have recently discussed the matter with the EC Commissioners responsible for Transport, Competition and Regional Affairs. I have also written to the latter two Commissioners on the subject and I am awaiting their response.
However, I must inform the House that all Commissioners still see the competition problems arising from such aid as being the major reason they cannot grant the aid we are seeking.
On the question of services provided by operators on specific ferry routes, the Government's position is that it favours the maintenance and development of as many access transport services as possible to and from this country in the interests of our trade and tourism. However, the decision to operate specific services and the nature of the services provided on particular routes are ultimately matters appropriate to the commercial judgment of individual ferry operators.
In conclusion, I would like to put on the record of this House my appreciation for the support of all the social partners in Ireland for our case. My appreciation and thanks extend to our MEPs and many Members of the House from all political parties who have also vigorously supported our application.
(Limerick East): Will the Minister agree that while his two immediate predecessors and himself were foostering around with this catalogue of failure which he has now communicated to the House the Greek Government succeeded in obtaining co-funding for 13 aeroplanes and two helicopters, the Spanish Government for ten aeroplanes, the Portuguese Government for three aeroplanes, the United Kingdom Government for 15 ferries and the French Government for two aircraft? Is the Minister aware that in recent months, arising from interference with road transport in the Balkans, the Greek Government has got a subsidy for a ferry service through the Adriatic to the port of Trieste in Italy? Will the Minister explain how his Department, his two predecessors and himself have failed to deliver when precedents were set in relation to Greece, Spain, Portugal, the United Kingdom and France?
Yes, I can explain. With the exception of Greece, all the issues to which the Deputy referred relate to internal services and between the mainland and the islands. No grant-aid is made available in respect of shipping routes to the mainland of Europe. Therefore, the Commission does not accept that this precedent should apply to what we are seeking. Second, in relation to the Greek issue, I suggested to Commissioner Matutes and Commissioner Millan last week that a precedent may well have been set. It is my understanding — although I have not yet received a formal reply from the Commissioner — that it is being suggested co-funding will be available if it forms part of its national development plan. I should point out, however, that it is also being suggested that this would be made available from a private investor. I have sought clarification on this matter but I have not received a formal communication from the Commission that that will be the case. The issues to which the Deputy referred relate to internal services.
(Limerick East): Will the Minister agree that there has been a massive failure in the negotiations on behalf of the Government——
I would not agree.
(Limerick East):——in circumstances where the Spanish Government has received funding for ten aircraft to service the Canary Islands? On a geo-political basis, this could be described as an internal service but by any stretch of the imagination it could not be described as such. The British Government has received co-funding for 15 ferries to service the Western Isles, the Orkneys and the Shetlands. Meanwhile Aer Lingus is going down the tubes and the main difficulty lies in the replacement of shorthaul aircraft to provide services to Europe and the United Kingdom.
Would the Minister not agree that the purpose for the Cohesion Fund is to bring standards of living and economic activity in peripheral regions up to the level of that in the central areas of Europe? Will he not take this issue seriously and get for the peripheral areas of Ireland at least the same access to EC funding as is available to the strong countries such as Spain and France?
The Deputy is suggesting that we should seek EC funding to replace our short haul aircraft, which is the only modern part of the fleet and cost Aer Lingus £600 million.
(Limerick East): We spent that money but we did not get any aid.
I am dealing with the portfolio since February 1993 and I am not interested in the historical drama the Deputy wants to discuss.
(Limerick East): I am interested in the actions of the Minister's predecessors——
The Deputy's premise is incorrect when he suggests that I should seek EC aid for the replacement of short haul aircraft. These are the most modern aircraft in the fleet. That suggestion by the Deputy does not stand up.
I am continuing my representations in relation to this matter. I have not accepted yet that the final word has been given by the Commissioner and I will continue with my representations. May I ask the Deputy to be consistent in his assertions on this matter?
