I propose to take Questions Nos. 13 and 15 together.
I am glad of the opportunity to give Deputies an update on the new peat fired power station. This project will underpin the future of Bord na Mona over the next 20 or more years and ensure the continued use of peat in this country's energy fuel mix. The station will be acquired by way of open competition. This will be the first competition of its kind in Ireland for a major power station and I want to make sure it is successful. I have engaged independent consultants to run the competition.
The project has been included in the Economic Infrastructure Operational Programme with EU grant aid of £21 million. The allocation of funding for the project was agreed in a memorandum of understanding agreed with Regional Affairs Commissioner Monika Wulf-Mathies. The schedule for drawing down funds under the Economic Infrastructure Operational Programme requires expenditure commitments to be made by the end of 1999 with actual expenditure completed by the end of 2000. On the basis of the preliminary work done by the independent consultants, there should be no difficulty in complying with the first of these deadlines. The main constraint in complying with the second deadline is the time necessary to secure environmental and planning permissions for the project. The Commission can extend these deadlines and I intend to seek such an extension to cater for this uncertainty.
Press reports last week referred to the midterm review of the Structural Funds. Consultants have been engaged to evaluate all projects under the various operational programmes. The new peat station is just one of the projects under review and it has not, in any way, been singled out for special treatment. This process is part of the normal routine of the Structural Funds and contrary to reports in the press last week, my Department has not received instructions from the Commission about references to the grant in tender documents. Firms which are interested in bidding for the project have known for some time that the Government has EU approval for the grant.
I stress that Government support for the peat station project is not dependent on the availability of Structural Funds, as reports in the press seem to indicate. Successive Governments have taken the view that Ireland must use its own fuels to protect our security of supply as far as is possible. The Government is fully committed to the peat station and we look forward to a competition which will see a new modern peat fired power station being built in the east midlands.
I accept that it has taken some time to get this competition under way. This is the first time that such a competition has been undertaken here. Any extra time taken reflects the care which the Government is exercising over the establishment of this competition and its desire to see that it is conducted properly.
With regard to the issue of engaging consultants for the project, the House will be aware that it was originally intended that the ESB power procurer would run the competition for the new station. On that basis, a firm of consultants, Combustion Systems Incorporated, was engaged to advise my Department with regard to the technical specification which the ESB proposed for the competition. The cost incurred, £26,957, was cofinanced from the Technical Assistance Programme amounting to £20,217.
However, as I indicated in a written answer to Deputy Molloy yesterday, following legal advice from the Attorney General it was decided that the competition should be conducted by independent consultants rather than by the ESB. This assignment is complex and onerous and requires a broad range of skills. Following a selection process in accordance with EU procurement rules, a consortium of consulting firms was selected for the task. The consortium comprises five firms who have been given the task of designing the framework for the competition and running the competition itself. They have been working on the project for the last few months and have almost completed their consideration of the competition framework. There is some further work to be done to complete the project documentation and I expect the competition will be formally announced by the end of March. No EIOP expenditure has been incurred so far on this project.