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Dáil Éireann díospóireacht -
Thursday, 17 Feb 1994

Vol. 439 No. 1

Ceisteanna-Questions. Oral Answers. - Ireland-UK Gas Interconnector.

Donal Carey

Ceist:

2 Mr. Carey asked the Minister for Transport, Energy and Communications if, in respect of the gas interconnector between Ireland and the UK, he will give his views on whether an economic return on the investment is being achieved; and if he will make a statement on the matter.

Delivery of the first supply of gas through the Ireland-UK interconnector pipeline took place in December last. For the first time Ireland has security of supply in the event of a disruption to our supplies from the Celtic Sea. The interconnector pipeline also provides us with an alternative source of supply when supplies from the Kinsale Head and Ballycotton fields begin to tail off from 1997 onwards and run out early in the next decade.

When this project was first being considered a comprehensive feasibility study of the project was undertaken. This study showed that over the life of the pipeline an economic return on the investment would be earned and that it would be superior in economic terms to alternative options designed to ensure security of supply while at the same time keeping gas competitive with alternative fuels.

The European Commission is satisfied as to the economic viability of the project, and has grant-aided the project at 35 per cent of eligible cost from its REGEN initiative. Some 102 million ECU has been paid so far. A final tranche will be paid when the last elements of the project are complete and the final accounts prepared.

I thank the Minister for his reply. When this project was mooted there was an expectation that substantial funds would be expended in this area and that there would be keen competitive interest. Would the Minister confirm that only two companies have taken an active interest in this project, and is he satisfied that in the long run it will add to the economic return expected when the feasibility study was done?

The project has come within budget and on time. It has been successful. It is one of the major engineering projects which has taken place here between this country and the UK. It connects the sub-sea pipeline and the overground pipeline from Loughshinny to Moffat in Scotland to our national grid here. The job was done competitively and we got good value for money. The European Commission, who consider such projects strictly in terms of cost benefit analysis, has shown confidence in the project, given the high level of grant-aid made available for it. The project is now substantially completed and I assure the Deputy and the House that we got good value for money in terms of construction costs.

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