Mary O'Rourke
Ceist:2 Mrs. O'Rourke asked the Minister for Enterprise and Employment the terms of the final settlement deal for Irish Steel; and the provisions, if any, in place in the event of future redundancies at the Steel Mill. [1598/96]
Ceisteanna—Questions. Oral Answers. - Irish Steel.
At the EU Council of Ministers meeting in Brussels on 20-21 December last the UK withdrew its reservations to the State aid involved in the Irish Steel restructuring plan, thus enabling the Council to unanimously approve the State aid package under Article 95 of the ECSC Treaty. To overcome the UK objections, production caps on finished steel and billets together with limits on the sale of finished steel products in the EU market, including Norway and Switzerland, were also agreed. The State aid package agreed by the EU for Irish Steel will involve an Exchequer contribution of £17.808 million in cash and the wiping out of an old Government loan of £17 million. The Exchequer's cash contribution of £17.808 million will cover balance sheet deficits, £2.831 million, remedial environmental works £2.36 million, pension fund deficit, £0.628 million, training grants £0.200 million, compensation for interest charges on existing debts, £4.617 million and compensation for the restrictions on production and sales imposed on the Irish Steel/ISPAT project to overcome UK objections, £7.172 million.
In addition to that figure of £17,808 million there is potentially a further Exchequer cash contribution of £2.445 million in respect of possible residual costs and financial claims arising from the past. This matter has to be discussed with Irish Steel/ISPAT over the next few weeks. This brings the total Exchequer liability to be covered in the contract with ISPAT to £20.253 million. Details about the restrictions on production and sales, agreed to overcome UK objections, are being circulated in tabular form.
The sale and purchase agreement which I signed with ISPAT International on 6 September last will now have to be revised in the light of the EU developments and discussions on this matter between the State negotiators and ISPAT representatives are taking place and will continue for some more weeks. Legislation will also be necessary before the takeover of Irish Steel by ISPAT International can take effect. I propose to circulate a short Bill very soon and I look forward to the co-operation of all parties in the House in passing the legislation quickly. Also it will be necessary for the European Commission to take a decision on the basis of the Council's conclusions that the aid be permitted, exceptionally.
In regard to redundancies the whole purpose of our efforts is to save jobs and have no redundancies. The contract provides that in the event of the company failing to meet the job guarantees a penalty clause will operate. However, the purpose of the Government's and my efforts has been to save the jobs at Irish Steel. This has been done.
Production Levels
|
ITEM |
Year 1 1995-96 |
Year 2 1996-97 |
Year 3 1997-98 |
Year 4 1998-99 |
Year 5 1999-00 |
|
tonnes |
|||||
|
Finished Steel Production Cap |
320,000 |
335,000 |
350,000 |
356,000 |
361,000 |
|
Restrictions in European Sales of Finished Steel |
298,000 |
302,000 |
312,000 |
320,000 |
320,000 |
|
Billets (unfinished Steel) Production Cap |
30,000 |
50,000 |
70,000 |
80,000 |
90,000 |
What restrictions were placed by the EU on the ISPAT deal in light of the intransigence of the British Government?
Essentially what is required is that roughly 10 per cent of the total production in the plant be sold on non-EU markets. There is provision for significant expansion from present levels of production, increasing to 361,000 tonnes of finished steel and 90,000 tonnes of unfinished steel. That represents an expansion in existing production in the order of about 40 per cent.
The question related to the original deal before the UK Government became obstreperous. In the original deal a certain output per annum was envisaged, but to placate the British a diminished tonnage per year was allowed. I would like to know the tonnage involved.
The EU document envisaged that in year three there would be 350,000 tonnes of finished steel and 100,000 tonnes of unfinished steel. The agreement provides for 350,000 tonnes of finished steel, the same as originally envisaged, and 70,000 tonnes of unfinished steel, 30,000 tonnes less than originally envisaged. The other restriction is that 10 per cent of sales must be to non-EU markets.
When we started to debate this issue in late summer-early autumn last year, before the rearguard action by the British Government, the forecasts for retention of employment by ISPAT International were based on the proposals of the EU Commission. Will the diminished amount of tonnage per year have an effect on the proposed retention of employment considering that it was based on the earlier submission?
There is a small modification in production as envisaged by the original proposal but it is not a great proportion — 30,000 tonnes of a total of 420,000 tonnes. In consideration of that matter ISPAT will modify its plans in terms of phasing its investment. I do not envisage that the change in plans will result in redundancies.
On a point of order, I put down a priority question which was disallowed by the Ceann Comhairle's office. I must abide by your ruling, but the question was disallowed on the basis that it impinged on matters pertaining to Cabinet——
The Deputy is out of order in raising this matter. He is eroding the precious time available for dealing with priority questions.
Your office deprived me of the right to ask a perfectly legitimate question. I do not mind not being allowed raise issues in the House but when the Minister——
The Deputy should resume his seat or leave the House. This is most audacious.
It is most unfortunate and is anti-democratic. It completely undermines the role of the Dáil that one cannot ask straightforward questions.
If the Deputy wants an explanation on the matter my office is at his disposal.
I always abide by the rules of the House but I get no co-operation from the Chair. I received a unilateral statement that a question, which is perfectly legitimate, has been excluded and I object very strongly to that.
The Deputy knows this is the wrong way to deal with the matter.
It is a way to draw the public's attention to the unfair way in which I am treated.
If all the Deputy wants to do is create publicity that is his business.
It is a matter of putting on the record that the Chair is not acting fairly.
What was the question about?
We will hear nothing about it now.