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Dáil Éireann díospóireacht -
Wednesday, 29 Nov 2000

Vol. 527 No. 1

Nítrigin Éireann Teoranta Bill, 2000: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Deputy Joe Higgins was in possession and has nine minutes remaining.

(Dublin West): Go raibh maith agat, a Cheann Comhairle. I feel a bit like a relay runner here. This is my third time to stand up here in the course of my 20 minute slot. It does not make it easy to keep the thread of thought or discourse.

The Nítrigin Éireann Teoranta Bill, 2000, provides for the handing over of a substantial debt of about £187 million to the National Treasury Management Agency. What has amazed me so far in the debate is that the Government acts as if this were a matter to be dealt with routinely in this Bill. In the Minister's introduction to the Second Stage we heard what I could only call contempt for the Irish taxpayer and the elected representatives in Dáil Éireann in the total failure to explain or attempt to explain, if explanation is possible, the fiasco that the management of Nítrigin Éireann Teoranta's debt has been up to the present time. It is an extraordinary situation. It is incredible that the Minister of State would make no effort to explain what has transpired since NET took over the debt in 1987. We have the extraordinary situation where, on a debt of £164 million in 1987, there was a staggering £188 million in interest payments alone to banks and financial institutions. In the year 2000, the bulk of the principal debt is still outstanding. Nitrigin Éireann Teoranta was borrowing money from banks to pay interest to the same banks on the initial loans. That is my reading of the situation, yet the Minister has failed to give us any kind of explanation for this disaster.

Earlier this year, I sought details from the Minister for Enterprise, Trade and Employment of the amount of interest paid to each of the four or five banks – a relatively narrow group of banks – which held the NET debts guaranteed by the State. The Minister provided the overall figure of £188 million but referred my request for specific amounts to the chief executive of Nítrigin Éireann Teoranta. In a letter dated 13 July, the chief executive refused to provide that information. He sent me copies of NET's annual reports and financial statements from 1987 to 1999 which showed the amount of interest paid in each year and went on to say:

You will understand that the operational management of our debt portfolio, banking relationships and, indeed, business relationships in general are, by nature, confidential. I regret, therefore, that I am not in a position to give the information requested.

That is highly unsatisfactory. When the Minister of State closes the debate, I want him to provide that information, specifically in regard to the £30 million loaned by Allied Irish Banks plc. in 1988 and 1989. On 31 December 1999, an amazing £17.9 million was still outstanding on the principal of that £30 million tranche. Will the Minister of State inform me how much interest has been paid to Allied Irish Banks on that loan since 1987 and will he provide similar information in regard to every other bank which loaned money to Nítrigin Éireann Teoranta? This is information to which taxpayers, who own the semi-State companies, are entitled. If the total amount of interest paid to the banks was much greater than the original amount loaned, was more than £30 million paid in interest on the £30 million loaned by AIB with the bulk of the principal still outstanding?

We have an incredible scenario where successive Governments have stood by and allowed the banks to legally pillage the resources of a semi-State company to fatten their already bloated profits; nobody cried "stop". It is not acceptable for the Minister of State to come into the House, gloss over this fact and fail to provide any explanation why this legalised robbery of the Irish people was permitted. The funds which should have been going towards investment and diversification were sucked out of NET simply to increase the banks' profits.

NET was contracted to purchase gas from Bord Gáis and sell it on to IFI. One semi-State company was purchasing a natural resource, which properly belongs to the Irish people in any event, from another semi-State company and any profit realised went towards feeding the maw of the banks.

The fertiliser market will come under severe threat owing to environmental and other concerns. However, IFI is the only company which produces fertiliser and if the massive amounts of money received by the banks had instead been invested in the company, it could have diversified into the production of natural fertilisers, composting, etc., as an alternative to chemical and polluting fertilisers. Doubtless, the Government also intends to sell off IFI, a measure to which I would be absolutely opposed. If that happens, the workers' jobs and terms and conditions of employment must be guaranteed. The Government must not betray a workforce which has served the State well by inserting one provision in this Bill to allow the company in question to be sold off to a multinational bidder which will not have any allegiance to the workforce, the Irish taxpayer or the Irish economy.

Dá bhrí sin tá ceisteanna tromchúiseacha le freagairt ag an Aire maidir le fiacha NÉT agus faoi mar a riaradh na fiacha úd. Cuireann sé déistean orm nach bhfuil aon eolas ag teacht ón Aire nó ón Rialtas mar gheall ar an oiread úis a íocadh do na bainc ó NÉT. Is iad na h-institiúidí airgeadais a bhain buntáiste amach is amach as an Staid seo, iad ag sú na meala agus lucht íoctha cánach, lucht PAYE, a bhí thíos leis. Dá bhrí sin teastaíonn uaim go mbeadh an t-eolas seo ar fáil agus beidh mé ag súil leis nuair a thiocfaidh an tAire ar ais.

The Bill before the House concerns State housekeeping and is designed to facilitate the transfer of liability for the historical debt of NET to the Minister for Finance who, in turn, will transfer management of the debt to the NTMA. These are limited, though sensible, measures which should have been implemented before now and which deserve to be supported. What is likely to flow from the enactment of this legislation in terms of what the future holds for the company and its employees?

During our previous discussion on the Bill, the Minister of State at the Department of Public Enterprise, Deputy Jacob, treated us to a very engaging stroll down memory lane in which he recalled the industry's heyday in Arklow. I was disappointed that the Minister avoided any meaningful reference to how the company got into its current state. The accumulated debt of £187 million is sufficiently large to have warranted some comment.

Deputy Rabbitte will be aware that the company did not get into the same state as another Wicklow company called Veha.

Deputy Rabbitte, without interruption.

With a debt of £187 million, the company would be in a far worse position than it is if the State was not supporting it in the manner described by Deputy Higgins. I do not object to the Minister for Enterprise, Trade and Employment, who is a busy woman, introducing a Bill in the House and asking her junior Ministers to deal with it. However, I do object to her treating this matter as if it were a parochial issue by giving it to the Minister of State at the Department of Public Enterprise to trot out cant about people he knew when men were men in Arklow 30 years ago. Since the Minister wants to be contentious, I wish to point out that is not the way to deal with legislation in the House.

I am happy to be contentious with the Deputy anytime.

That is not the way to deal with legislation in the House.

The Deputy destroyed the company in Wicklow; he was personally responsible for bringing a company with 200 employees, which was thriving and viable, to its knees.

Acting Chairman

The Minister should note the Chair is on its feet.

My apologies arís, Sir.

Acting Chairman

I would appreciate if Deputy Rabbitte spoke through the Chair in spite of the provocations.

I will do that in spite of the provocations. The Minister is referring to an industrial relations dispute in a private company and I do not intend discussing it here. The Minister blatantly came to the House as a parochial politician, asked the Tánaiste for permission to pilot the Bill through the House—

—and used his contribution to go on a wander down memory lane. He did not address any of the pertinent issues and is now—

I responded to a request to be helpful from a senior colleague in Government.

I said I was disappointed the Minister avoided any meaningful reference to how the company got into its current state, upon which the Minister exploded.

The Deputy started the provocation.

Perhaps the Minister is visiting Sellafield too frequently.

Acting Chairman

I wish to explain to the Minister that political charges are in order but personal charges are not in order and cannot be made. I ask the Minister to refrain from making personal charges against Deputy Rabbitte.

I will comply with the instructions of the Chair.

The accumulated debt of £187 million is large enough to have deserved some comment by the Minister. The disastrous agreement reached with ICI in particular warranted some assessment, albeit with the benefit of hindsight, a point to which I will return.

Last year was one of the worst for the fertiliser industry for many years. While IFI did not have a good year, most players in the industry fared no better. The world leader in the industry, Norsk Hydro, managed a massive loss of about £200 million. Of course, the fertiliser industry is notoriously vulnerable to variations in commodity prices. Gas, its raw material, is subject to enormous variation, while the market for its product can be seriously affected by swings in agriculture as well as changing environmental demands relating to the use of fertiliser. Add to this the flooding of the market by cheap gas from eastern Europe, which has now subsided, and one has an idea of the turbulent nature of the world of fertiliser production.

At this stage the related problem of over-productivity in the industry is disappearing, which augurs well for the company. However, the interest rate problem again surfaces, as it has in the past, which is all the more reason to remove it from the situation for good. This should not take away from the fact that IFI has been profitable and seems to have been quite well managed over many years. The recent poor performance comes against a background of difficulties in the industry at large and the disastrous agreement reached with ICI, which allowed it to legitimately leach funds from the company which it badly needed. This was in accordance with the disastrous service agreement, which was called in regularly, despite the burden it placed on IFI.

The main component of the NET debt was the massive overrun on the construction of Marino Point, not trading difficulties in the company. In normal trading life investment would either have been provided for in advance by the shareholder or subsequently, although this may have been in breach of EU rules. Whatever the explanation, to saddle a company with a burden of debt, which was not far off £200 million, over many years was to do it little service and represents a lack of clarity to say the least in the shareholder's policy. That said, the tiny number of staff in NET managed some fairly spectacular success in the management of the debt, on occasion outperforming the NTMA in its debt management strategy.

What will be the future of NET? In the absence of the debt management function it might be said to be limited. Even if it is limited it is still important. It is the only vehicle which will permit continued worker participation in the company. While such involvement has been a disadvantage in theory and practice, the NET worker directors have shown the real value this can add to the business in both directions. Second, the company has acted as a strategic think tank for its subsidiary and provided a mechanism for the Irish shareholder to protect its interests, especially when the non-national shareholder was shedding involvement in the fertiliser business. Fortunately, I understand relations with ICI are now greatly improved. Nevertheless there will be an important role for the board of NET in protecting the State's investment in the company while its future is fully decided. It has the capacity to develop a strategic view of the subsidiary com pany's future, which is often denied company boards faced with the immediacy of its operating activity.

Unfortunately, the Minister chose not to comment or set out the future role for the board of NET. Second Stage was the ideal time for the Minister to inform the House of the role the board is expected to play. All we know is that the company is for sale and that the Bill provides that worker participation and State enterprises legislation will not apply to NET in the event of it disposing its 51% shareholding in IFI. It is regrettable that this step is considered necessary to prepare the company for sale. We have no indication from the speech of the Tánaiste, read by the Minister of State, Deputy Jacob, of the strategic role, if any, she envisages for the industry. Will this be a bargain basement sale where the only criterion will be the highest bidder? The workers at three locations need to know, now that the burden of debt is gone, if they will be exposed to a purely speculative purchase. Given the needs, for example, of the agricultural sector, surely a compatible purchaser ought to be sought and encouraged. I appreciate that farmers have not always been loyal to the domestic strategic interest.

What role, if any, is envisaged for the worker directors after the sale? The workers are concerned that the communications system, now well established, should not be undermined. The Minister has not really given any undertakings during the course of the debate that the workforce will be informed and consulted about perhaps imminent decisions which are likely to profoundly affect the future of their livelihoods.

I ceded my position earlier in the debate at the request of Deputy Joe Higgins who wanted to make a contribution. I wish to return to the central point he raised. I hope the Minister has calmed down. With respect, it is entirely legitimate to suggest that if the Minister comes to the House to pilot the Bill he should be able to deal with central questions which arise on Second Stage. This is a matter of great concern. The Minister spoke about a private company, but there is no private company about which it could be said, as the Minister said in answer to a parliamentary question on 8 June, that between 1987 and 1999, £188 million was paid in interest on the debt. It is not unreasonable to ask the Minister to address this as the situation may arise again, not in relation to NET but in relation to other companies. Can we be assured that there is greater expertise than there was when that disastrous agreement was entered into in 1987? There is nothing contentious in the House about expecting the Minister to address this issue.

The Minister for Enterprise, Trade and Employment laid before the House the following table on the borrowings of NET as at 31 December 1991:

Particulars of facility

Particulars of Guaranteesgiven

Amount of loanat date of Guarantee

Amount of principaloutstanding at 31 December, 1999.

1. Maximum of IR£30m Term Loan from Allied Irish Banks plc.

Guarantees dated 29.12.1988 29.09.1989 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 10,000,000IR£ 20,000,000IR£ 30,000,000

IR£ 17,900,000

2. Maximum of IR£5m from Allied Irish Banks plc.

Guarantees dated 19.12.1994 30.03.1995 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 2,000,000IR£ 3,000,000IR£ 5,000,000

IR£ 3,500,000

3. Maximum of IR£5m Term Loan from Ulster Bank Markets.

Guarantee dated 31.01.1997 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 15,000,000

IR£ 15,000,000

4. Maximum of IR15m Term Loan from AIB Capital Markets plc.

Guarantee dated 28.05.1990 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 15,000,000

IR£ 8,300,000

5. Maximum of IR£10m Term Loan from AIB Capital Markets plc.

Guarantee dated 30.09.1991 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 10,000,000

IR£ 6,900,000

6. Maximum of IR£20m from ABN-AMRO Bank.

Guarantees dated 18.08.1995 11.08.1998 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 16,928,571IR£ 3,071,429IR£ 20,000,000

IR£ 20,000,000

7. Maximum of IR£10m from ABN-AMRO Bank.

Guarantee dated 27.09.1995 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 10,000,000

IR£ 10,000,000

8. Maximum of IR£35m from Bank of Ireland

Guarantees dated 18.08.1995 30.08.1995 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 30,000,000IR£ 5,000,000IR£35,000,000

IR£ 26,250,000

9. Maximum of IR£33m from Bank of Ireland

Guarantees dated 18.08.1995 30.08.1995 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 29,500,000IR£ 3,500,000IR£ 33,000,000

IR£ 24,750,000

10. Maximum of IR£50m from Bank of Ireland

Guarantee dated 29.11.1999 to the Bank the due and punctual payment in Irish pounds of the principal, interest, commission and incidental expenses.

IR£ 48,600,000

IR£ 48,600,000

Total

IR£ 181,200,000

The conclusion one has to arrive at from looking at the table – and virtually every bank in the country has been favoured by the taxpayer in this arrangement – is that the banks did exceptionally well out of it. Yet in 2000 the principal is still outstanding and we are handing it over to the National Treasury Management Agency to manage it. In the interim, interest of the order of £188 million has been paid on the debt. Before glossing over what is essentially a housekeeping measure and given that the National Treasury Management Agency is charged with managing the national debt and is deemed to have done a good job, it seems sensible to do this. I would have no objection to that. Since Committee Stage is not the place for a discussion on the principle of the Bill and the issues involved here, Second Stage is the place for such a discussion. If the Minister chose not to discuss this in his introductory speech I hope that whoever gives the closing speech for the Government will address the issue because there are questions that need to be answered.

The table to which I refer deals with the schedule of banks going back to 1988 and right up to moneys that have been raised, for example, £50 million from the Bank of Ireland, where the guarantee is dated as recently as 29 November 1999 for £50 million. I do not think we can put a nail in the coffin of NET as we used to know it, and gloss over that entire period. That is a very reasonable point.

The Minister did not deal at all with the position in terms of preparing this company for sale. He told us much about all the people he knew in Arklow and so on and the tremendous work they did but there are workers there now who are accustomed, after a very difficult period, to putting in place structures in an area where there was no confidence in the past. Good communications channels have been established, the role of the worker directors on the board is appreciated by all sides but there are no assurances in terms of what happens after the worker participation State enterprises legislation no longer applies in the future. The year 1987 was of huge significance in the lifetime of this company but it is not the only period of huge significance given the cyclical nature of the industry. Clearly things could have gone under in 1987 and at a time of high unemployment people could have lost their jobs. I am not suggesting that applies now but it does not mean to say there are not concerns among the work force at the three locations as to what are the implications in terms of industrial relations, communications and consultation within the company of the changes in prospect. The Minister's speech did not deal with that. This is the opportunity to do that.

Parliamentary questions have been tabled from time to time on this issue and there have been some discussions. The Tánaiste made it patently clear that this is preparatory to privatisation, sale of the company and a prospective purchaser being found. I emphasise the importance of taking care to ensure that a compatible partner is found. This company is still of significance in the agricultural industry. There are companies in the agricultural area that have the capacity and, it seems to me, the synergies with NET that are required to go forward into the future.

Now that the balance sheet has been tidied up there are many people, including people on the board of NET, who are seriously concerned that what we are not doing here is preparing a bargain basement sale and that the Minister will sign on the dotted line to whoever is the highest bidder, irrespective of the purpose and intentions of that bidder, and that that is the last we will hear about it.

Given the history of this company and the developments in the country since the 1987 deal, I do not think it is practical to oppose the principle of the Bill. While it is presented as a housekeeping measure it is more than that in the sense that this House effectively gives the nod to the privatisation of the company. That is the stage we have reached. There is no cogent argument I can advance that this company ought to be maintained in State ownership. As a fertiliser production company it is not a public utility in the same sense as is the ESB or a company involved in the provision of water. I have no objection provided the decision is made in terms of the best strategic interests of the agricultural industry and of the people who work in the company. When replying I hope the Minister will address these questions.

Deputy Rabbitte's contribution was a sensible one and many of the questions he raised are worth raising. The Deputy will recall we were both on the Committee of Public Accounts in the 1992 when we looked at indebtedness and the management of indebtedness in the semi-State sector. At that time it ran into billions of pounds right across the sector. One of the arguments we had with those responsible was that given that the NTMA was managing the overall debt it would be appropriate that this debt, which was a millstone around the neck of NET, would be transferred at that time. It is appropriate, therefore, in 2000 that I should welcome the move given that we heralded that situation as far back as 1992. Given what has been said it is important to set the perspective in relation to this company. Following the gas find off Cork in the 1970s a major consumer was sought to ensure the viability of the operation. The ammonia plant at Marino Point was viewed as a major opportunity in terms of demand for the gas from the Cork field. The company being set up in Marino Point got the gas at an exceptionally low price. Under the special arrangement, difficulties arose with the construction of that plant. The overrun at the time was in excess of £70 million, which was quite dramatic. We should now ask what controls were in place at that time to allow such a cost overrun. However, that millstone hung around the neck of the company for all those years.

One of the reasons we looked for a strategic partner was that the borrowing requirement of the company was in the region of £200 million at the time. The company was in serious debt and there was major concern that it would collapse with the loss of approximately 350 jobs. The necessity for a strategic partner became obvious. The difficulty at the time was that it was not the best possible climate in which to seek such a strategic partner. Over the years we have all issued statements on the arrangements entered into and the fact that many of them may not have been in the best interest of the State at the time. However, the arrangement entered into was in the best interest of the community, the workers, and particularly the State, in that the gas now had a definitive consumer.

At the time the whole idea of the repayment of the debt centred on the fact that the gas was being supplied at a very special price. It was felt that the profits and advantages which would accrue to the company could be ploughed back in to reduce the debt. The way the company managed the debt was significant, well ordered and compares very well with other State companies. The difficulty was exacerbated when special arrangements for the supply of gas came to an end because, as Deputy Rabbitte correctly pointed out, the fertiliser market worldwide fell apart. Prices fell apart, oil prices increased dramatically and, of course, there is a direct connection between the price of oil and the price of gas. The inevitable question then arose as to how to deal with the debt. At long last the decision has been made and, as in the case of the health board debts, the time has come for the State to take over and manage this debt.

I am pleased the debt is being transferred from State ownership. Obviously, the company is being prepared for sale. We already know there have been two suitors for the company but the price being offered by both of those companies does not meet the price that should be demanded. It would be terrible if the State made the same mistake on two occasions. We must ensure the company holds out for a much better price than has been offered by the two companies that have come forward to date. There are companies in the agricultural sector who could take over this company, run it effectively and integrate it into their overall operations.

If the company is being privatised or sold off, it is legitimate to ask what will happen to the workers and their future. The Bill deals with the worker-director issue. Section 5 enables the Minister to make an order which would discontinue the entitlement of the four worker-directors to be elected to the board. I am not sure the workers would be too concerned about their membership of the board but they would be certainly concerned about the long-term commitment of any new company to the workforce in general and to the continuity of the whole manufacturing entity of ammonia and fertilisers in the plant. The issue is significant from that point of view.

I want to touch on a related issue, the relationship between the Marino Point plant and the general community surrounding it. At a time of environmental awareness, the safety record of the Marino Point plant and other plants has been excellent. They have been well managed and their health and safety record is exemplary. If Marino Point was currently being built, it certainly would not be allowed to locate in its present position. The location of this plant was dictated by the exigencies of the 1970s when it was easy to bring the gas pipeline into the facility. That obviated the necessity for putting the plant in place but it would not be allowed to locate in that area today.

That plant and its relationship with the surrounding community will be significant in the future. I am referring to the European directives relating to risk industries and how these risk industries and the directives will impact on the immediate communities. I will give an example of an ironic twist in this regard. Many of us in the constituency agreed that the core of the town centre of Passage West was to a large extent derelict and would be ideal for urban renewal status. A lot of lobbying took place and there was much integration of activity between the local authorities, public representatives and those living in the area to obtain urban renewal status. We were successful in 1999 and major housing development is now taking place together with urban renewal. When seeking urban renewal status, we had recourse to the health and safety authority to see what would be acceptable. We were aware of the Seveso 1 and Seveso 2 directives. We looked at the regulations as they pertained to developments within two kilometres of the Marino Point plant, together with other plants.

The quayside development, which included a port and a dock, which was regarded as a dirty industry, had a series of derelict buildings along the quay wall and, therefore, it seemed appropriate that we should consult with the Health and Safety Authority. The authority referred those involved to the UK regulations which were being operated internationally at the time. It indicated the booklet from which the Health and Safety Authority was operating and said that if those concerned were operating within the guidelines they could continue with the work. Developers then decided to look at the viability of developments in the area and suddenly the goal posts changed. The new COMA directive is not included in legislation here but the Health and Safety Authority must examine every development that may be seen as a risk industry. Passage West urban renewal was suddenly the focus.

New regulations are contained in the COMA directive. These are US regulations which are far more stringent than those which were in operation when the submission for urban renewal was put in place. When people had invested heavily – one person invested £2 million – in preparing plans and co-ordinating activity with the local authority and with the Health and Safety Authority, they were suddenly told that substantial residential development in the Passage West-Monkstown area was not recommended. This directive is having an immediate impact on Passage West but it will also impact on Tivoli, Little Island, Ringaskiddy and other strategic areas throughout the country.

I am concerned about the relationship between the Marino Point plant and the general com munity within which it operates. Until now there has been an excellent relationship between both. I brought a deputation to meet the Minister on this issue. When development has been agreed and complies with the regulations which apply at the time, it is unfair to tell people they can not go ahead with a development just when they are ready to start. Such an action is morally unsustainable and I asked the Minister to investigate it. It would be an understatement to say I was disappointed with his response and I have told him of my intention to say so during this debate. The Health and Safety Authority has told the Minister it has carried out risk assessment and is concerned about substantial residential development.

The authority has also brought Nítrigin Éireann into the matter to say it has carried out a study and would not favour large scale residential development across the water. The Health and Safety Authority failed to tell the Minister that this study was carried out between six and ten years ago when the company was seeking a licence from the EPA, and had nothing to do with the current issue. I regard this as duplicitous, underhand and completely wrong. I call on the Minister to return to the Health and Safety Authority and ask it to produce the study referred to in a letter from the authority to him. The Minister will find that the study is out of date and takes no cognisance of the safety standards put in place in the plant in recent years.

The Health and Safety Authority points to two issues which are of concern. The first is the direction of the wind. In 20 years, the authority's monitoring station in Passage West has never recorded a concentration of ammonia in the air because the wind does not blow in that direction. The station might be different for Little Island or Cobh. The authority takes issue on a six metre pipe and the dangers of the release of ammonia from that pipe. One wonders if modern technology has moved on. If there has not been a major problem in 20 years, given modern technology and monitoring, how can there be a major risk? Ammonia does not explode and cannot catch fire. It is possible to work in an area which has a 25% concentration of ammonia. What about the 3,000 houses built in the area and currently being built? I wonder if I am living in the real world. Sanity and fair play must be applied to this issue.

This will have consequences for the plant where more than 200 people are working. The interim report on the strategic plan for Cork projects major developments for Midleton, Carrigtwohill and along the railway line to Youghal but residential development in Passage West or Monkstown is not mentioned. Are we to assume there will be no development in this area for the next 20 years? Is it conceivable that this could happen? Why is this plan in place if there is to be no residential development in Passage West and Monkstown? This poses a serious question regarding the viability of the plant. The issue is extremely divisive. Calls are already emanating from Passage West and Monkstown and will soon emanate from Cobh and other areas close to the plant, asking if sustainable development within a town is more important than a facility which is blocking development and investment. This is a serious issue which has wide repercussions for the relationship between industry, its workers and the general population. It will impact adversely on the development of the Cork Harbour area.

I listened with interest to Deputy O'Keeffe's contribution. As Deputy O'Keefe has said, this is an important plant for many reasons.

A strange event recently occurred in the Cork Harbour area. A short power failure, which only lasted a number of seconds, led to the closures of the Irish Refining plant in Whitegate, the Ispat plant and the IFI plant in Marino Point. While it took some time for the IFI plant to become operational again, safety mechanisms worked, the plant shut down safely and no incident occurred. The IFI plant must meet EPA guidelines in order to remain open. It has the most modern technology and constant monitoring is carried out. The plant is safe. I raised this matter with the Tánaiste when a slight accident occurred there some time ago. She told me there was no evidence to support media reports of a problem at the plant or of danger to the public.

I know management and workers at the plant are always quite concerned about safety which has to be paramount in such a plant. We are now talking about preparing the company for sale – whether that will happen is another issue – and under no circumstances should short cuts be taken in regard to safety where this plant is concerned. No matter where it comes from, investment in safety must be maintained in the plant both for the workers and the public. I am confident that is happening but I feel I must say that today, particularly in view of what Deputy Batt O'Keeffe has divulged to the House.

On the strategic importance of IFI, I have been told that without IFI, Ireland would be the only country in Europe without an indigenous fertiliser industry. We are an island nation and the fertiliser industry is of vital importance to our agriculture industry, which is one of our largest industries. We cannot be at the mercy of foreign imports. I would like the Minister to tell us what guarantees he plans to put in place to ensure this plant is kept open in the event of a sale.

There is another plant in the area which is related, that is, the Irish refining plant which the Government is in the process of selling. Again, that is of strategic importance. Deputy Rabbitte said that perhaps IFI is not of strategic importance. I do not totally agree with him – I think it is of strategic importance. If we were at the mercy of imports from abroad, if fertiliser is dumped here and if we are charged very high prices, then the agriculture industry could suffer and there would be corresponding knock on effects.

IFI produces roughly 1.5 million tonnes of fertiliser per year; I think about 0.6 million tonnes of that is exported. Another important factor concerning IFI is that it contributes hugely to the local economy. It is estimated that over £70 million is contributed to the local economies of Cork, Arklow and Belfast. We must remember there is a cross-Border dimension here which I am sure the Minister will agree is important and desirable.

I know a lot of capital expenditure has been put into IFI in recent years – up to £100 million or so – to keep it up to standard. For safety and productivity reasons, that has to continue. We know there are employee representatives on the NET board at present – that has been alluded to by other speakers. Part of the Bill envisages that in the event of a sale of IFI, this will cease. It would not make sense if it did. Many of the employees in the plant are constituents of mine and Deputy Michael Ahern and we have to ensure their employment is guaranteed in the event of a sale, and I am sure Deputy Ahern will be at one with me on this. That is quite important. I have already spoken about the strategic importance of the plant to the national interest but we also have to look at the importance of keeping these plants open because of the employment they generate and the contribution they make to the local economies both directly and indirectly.

This plant or company will probably eventually be sold into private ownership. What guarantees or supports will the employees get in the event of such a sale? I know ESOPs were entered into in other such ventures and I know they are being discussed at the moment with the Irish refining people. Will the Minister tell us whether this has been examined by his officials or himself and what effect will it have on a possible sale? There is also a very large healthy pension fund associated with the company. Perhaps the Minister will give us some guarantees as to the position of that pension fund in the event of the sale going ahead. Will the pension fund be guaranteed and how will it be operated? I would like to hear some detail in regard to that.

I understand IFI is now profitable but in the past that was not so. The main thrust of this Bill is to prepare for the sale of IFI and to transfer the debt to the National Treasury Management Agency. In the very unlikely event of the company's profits falling – it is a very cyclical industry and profits rise and fall – a sale did not go ahead and the State was still the main shareholder, what would happen if the company went into a downward spiral in regard to profitability? The Minister might look at that.

What is happening at the moment in regard to the sale? I know that over 12 months ago, and before that, there was a flurry of activity in trying to offer this company for sale but that seems to have ceased. Has the Government decided to wait a while and not to sell the company for the time being? There is a certain amount of uncertainty about the future of the company because of that. Will the Minister tell us what he intends to do? Are discussions under way with other companies, either nationally or internationally, in regard to the sale of this company? I know there is confidentiality involved but is the company still openly on the market or has it been withdrawn?

What is the position in regard to IFI involvement? I understand ICI got a very good deal and has done very well out of this company over the years. I do know whether it has put an awful lot into it. Maybe the Minister will tell us the position in regard to its involvement. I understand this is the only company it has left in which fertiliser is being manufactured. When summing up, maybe the Minister will refer to that.

During the recent ILDA-CIE strike – the last time we discussed this it was ongoing – the company was under a lot of pressure. I am glad that matter has been resolved but it showed how vulnerable this company is. Deputy Batt O'Keeffe mentioned that if Marino Point was being built now, it would not be constructed where it is.

I have said to some representatives of the company that the company needs to do some public relations work. The company is safe and has contributed to the local community, especially in Cobh where it contributed to the construction of a promenade which was very welcome. There is a need for a company such as IFI to be proactive in its public relations and let the public know it is safe and what it has done to ensure the safety of the plant. This is something which could form part of Government policy, that is, that such companies would be proactive and would reach out into the community.

When, and if, any incidents occur, such as the recent ESB shut down which led to the shut down of other plants, such companies should have a mechanism whereby they would liaise with local communities. There have been incidents in Irish Ispat – explosions in the plant. Many companies seem to just man the bunkers and do not inform the public of what is happening. This leads to fears which are, most of the time, unjustified in terms of what might have occurred. There is also media speculation about dangers to the public and so on. That is not welcome or helpful. Companies should take a pro-active approach and have a strategy in place to deal with such incidents, which are relatively few, when they occur. Experience has shown that if a company is up front when an incident occurs there is no commotion about it but if it tries to hide it, there is suspicion and speculation. The company is damaged as is the relationship between it and the community. While that has not happened in IFI it could do more in the public relations area, as could other companies. Deputy O'Keeffe's comments reinforced my views on that.

There is a need for greater research on the impact on the environment of plants such as that at Marino Point. We know the EPA monitor them but we must be in a position to reassure the public on the safety of these plants. We must close the stable door before the horse bolts. What procedures are in place in the Department to strengthen this area?

I welcome this timely Bill. I am anxious that the plants remain open and that the safety aspects be reinforced. I am concerned that the employees be safeguarded. Perhaps it might be possible to have employee representatives on the IFI board. I do not know if the Minister considered that. I am anxious that the company is not just bought and closed down. If that happens I understand the plant in Marino will revert to a greenfield site. I would like the Minister to comment on the pension fund and the future of employees, whether there will be ESOPs and so on. There should be continuing investment in safety.

I am pleased to have an opportunity to speak on this Bill. Like my colleague, Deputy Stanton, I live next door to the plant. The last time I spoke in connection with NET was in 1986 at the time of the setting up of the joint venture company, Irish Fertiliser Industries, a partnership between Richardsons of Belfast and NET. NET was a holding company which was to service the debt.

My interest in the plant goes back much further than 1986, to the late 1970s when the plant was constructed. At that time, the building industry was in the doldrums but the construction of this facility ensured work for people not only in east Cork but further afield. People from all over the country and from abroad worked on that plant. There is a dark side to that development, however, in that the cost was over the original budget. There were more strikes during the building of Marino Point than during the building of any other facility in the area for the past 30 years.

The problems that beset NET were due to the overrun in building costs and the accumulated losses in the early years of the operation up to mid-1987 which resulted in a debt of £165 million. After the amalgamation, NET was to service the debt. The source of its income was to be the management and purchase of gas from Bord Gáis at a favourable price that would enable the company to sell it at a profit and the dividends of IFI. However, matters did not work out as planned and there were many changes over the years in the commodities market. The entry of China and other eastern bloc countries to the fertiliser market resulted in the flop of this promising market. The price dropped as did the profits of IFI and it soon recorded losses. The dividends were reduced and eventually were non-existent. NET did not have the income which had been budgeted for to service the debt of £165 million which it took over in 1986. The debt built up until it reached £187 million which it is today. The decision to sell was as a result of ICI divesting itself of its fertiliser arm. The board decided to sell the 51% stake held by the State and the 49% held by Richardson. There is no definite purchaser on the scene at present.

The Marino plant is one of the most modern, up to date and efficient plants in the world. It provides top class, well paid employment in the Cobh area and for people living in the vicinity. The management has, with the co-operation of the work force, managed change in work practices over the years and brought in equipment. That is what ensured the survival of the company in difficult times.

Over the past 20 years the company has brought great economic benefit to the area and has been involved in social projects. It provided funding for the development of the millennium park in Cobh which was opened earlier this year. It has also provided funding to local communities and made its facilities available when necessary to people in the area. It has taken part in the local community, which is right and proper.

NET has provided benefits to the local area, but it has also been a major source of income to Iarnród Éireann. This became apparent to people who were not aware of it during the strike in the summer when the Arklow plant was forced to close for a short period because trains were not travelling from Cobh to Arklow. Iarnród Éireann sources a significant amount of its income from the trains that run between the two plants. Approximately £70 million is circulated in the Cork, Arklow and Belfast districts through wages and payments to subcontractors and local suppliers to the plants in those areas. It is a significant contributor to local communities.

The Irish agricultural industry has benefited from the NET plants. Farmers were able to get nitrogenous fertiliser products produced at home at reasonable prices. If NET did not exist, the agricultural industry would have been at the mercy of foreign producers and importers who could have determined the price of fertiliser. NET was able to control and maintain the price of fertiliser at a reasonable level over the years. The price of fertiliser products has fallen in the past number of years and this has had a detrimental effect on the finances of NET. Exports have been affected. Although the products were purchased, the company did not get a sufficient price for them. In addition, imports are cheaper and they are now able to compete with the indigenous product.

The change in approach to environmental protection, particularly in the last number of years, and the greater awareness of problems associated with ground water and the pollution of rivers has brought about new thinking with regard to solving difficulties. Farmers now think about the amount of fertiliser that should be spread on land.

In addition to the environmental aspect, set aside has affected the amount of fertiliser used and climate changes have also had an effect. The climate has been milder in recent years with longer autumns and milder winters. Grass is growing for longer and the amount of fertiliser needed is not as great as previously. The effect of these changes contributes to a static to declining market in Ireland. This is not a rosy picture, but the fact that IFI is a low cost efficient producer, compared to the majority of European fertiliser operations, will ensure that it will survive and prosper in the years ahead.

Regarding the current stories about a sale, the immediate worries of the employees relate to the various issues mentioned already. They are important issues and I look forward to the Minister's response to the queries raised by members of the Opposition. One of the issues relates to job security. Many employees are worried about this because they do not know what will happen to their jobs in the years ahead, particularly if the plant is sold. They made representations to me about their employment conditions and whether they will change. The employees are anxious in that regard.

The pension fund is another concern that was raised. However, on the basis of the legislation, there should be no worries in that regard. Discussions had commenced on an employee share ownership scheme. The employees also raised this matter and they want to know what is happening in that regard. They want to know if it has been put on the back burner or if discussions will progress until a final decision is made on whether the company is to be sold.

The Bill has a number of purposes, including to provide for the transfer of the liabilities for the State sponsored debts of NET to the Minister for Finance. This is logical. The Bill also provides that the Worker Participation in State Enterprises Acts will not apply to NET in the event of any future sale by NET of the 51% shareholding in IFI. It is clear that the worker directors will continue to operate while the State holds a 51% shareholding in IFI.

Another provision relates to the First Schedule of the National Treasury Management Agency Act, 1990. This will allow the National Treasury Management Agency to take over paying the debt, if it comes into the hands of the Minister. This is a wise move. The NTMA since its conception by former Taoiseach, Charles J. Haughey, has saved the State millions of pounds. The agency has great expertise in this area and it should manage more areas. Given the change in its remit as a result of the euro, it will have more capacity to deal with other debts in semi-State bodies, companies in which the State has a 51% shareholding or local authorities. It is the ideal agency to deal with this matter and it is a good provision.

I look forward to the Marino Point and Arklow factories and other elements remaining in the control of the State. It may not be as important strategically as the refinery, but it is important that the agricultural sector has some control over an ingredient that is vital to the industry. I hope that IFI, which has proved to be efficient and profitable, despite the millstone put around its neck from the start, will continue to give a service to the agricultural community and provide good employment and social services to the people in the areas in which it is located.

I welcome the opportunity to contribute to the debate. While I do not have the same in-depth knowledge as previous speakers from the Cork region, I wish to consider the Bill from a different perspective. The Bill allows for the transfer of liability for the State guaranteed debts of NET to the Department of Finance, which will allow for the management of the NET debt by the National Treasury Management Agency. That debt is now in the region of £187 million.

NET was set up in very difficult times in 1961, first in Arklow and subsequently in Marino Point. It is interesting to note that, long before there was any talk of the peace dividend or the peace talks, in 1986, when Garret FitzGerald was Taoiseach, we saw the formation of a joint venture with ICI Richardson's fertiliser business in Belfast. This was truly a cross-Border project, long before the present peace talks. To its credit, that factory in Belfast employed staff from all communities during some very difficult times. The fact we have that linkage in the fertiliser, beef and dairy industries shows that a lot was happening on this island, in terms of people working together, long before the peace, for which some people in this House claim all the credit, took place.

These are changing times in agriculture. The introduction of REPS a few years ago, the extensification grants from Brussels, set aside and the new area payments will continue to affect the usage of fertiliser. This will impede the increased production that is needed to decrease costs.

TJ Maher, the former president of the IFA, always said one could go only two ways, forward or back. One cannot stand still. Unfortunately, an industry that does not have the opportunity to expand will certainly run into difficulties.

As the Minister said, the purpose of this Bill is to try to put IFI into a position where it can be sold. The 630 workers and their protection must be taken into account first. While they are nowhere near my area, I feel their rights must be taken into account. However, my main worry about the possible sale of IFI is that it might be bought by a major outsider. Any industry in the hands of too few people, especially if it is totally dependent on people from outside the State to supply its needs, is very vulnerable.

When I was the chairman of the national livestock committee of the IFA, a very beautiful lady, who was the agricultural attaché at the American embassy, went all around Ireland, including my county of Monaghan. She wined and dined us and advised us of the great value available in soya beans in her country. She said they could be sold for £120 a tonne on the Irish market and that no self-respecting Irish farmer should be without them. That was very welcome and allowed for a decrease in the price of the product at the time. The following year, however, there were weather problems in the US and neither the lovely lady from the embassy nor the soya bean mill could be found. The price rocketed up to about £280 per tonne.

I warn, with all due respect to the comments made by earlier speakers about the importance of this issue to the taxpayer, that if this is to be sold at a loss – which it will have to be because of its extremely high debts – we should ensure a group such as the IAWS controls it. This industry should remain in Irish hands and production should take place on this island. The implications of that not happening are extremely serious and there is no doubt farmers and the nation as a whole would be the losers.

Deputy Connaughton, who is sitting beside me, was at a meeting of the agriculture committee this morning. He and others will bear me out on the fact that the bottom has fallen out of the cattle business. That will have further effects on the sales of Irish Fertiliser Industries. The price of cow beef, according to the Minister in his address to the committee this morning, has fallen by at least 30p per pound and steers have fallen by at least 10p per pound. If that was happening in any other industry, people would be at the gates of this House. We saw what happened with the taxi drivers yesterday. Farming folk are going through a serious crisis.

The dairy sector has to become much more efficient. There will be fewer cows producing more milk to ensure that industry stays in line with its European and non-European counterparts. New Zealand and Australia can produce milk at a minimum cost and we must compete with them in the real world.

The future for the industry is not great. We cannot allow this sector to be sold off at a very low price to a foreign company that might decide, regardless of its commitment to us, that the best reason for buying it would be to close it and gain access to that plant's markets without having to pay the workers or give any long-term commitment to this country.

I met a member of the British Parliament the other day from Manchester who is dealing with a similar situation in that sector. An international company bought his local factory, which employed a lot of people. The day it bought the factory, it announced its closure. It bought the factory only for its sales book and nothing can be done about that. I warn the Minister that we should make every effort to ensure that does not happen here.

I welcome the transfer of the debt to the National Treasury Management Agency. It has been successful in regard to our national debt and I hope it will be able to handle this matter better than it was handled by the company.

I remind Members that this House was recalled to prop up the Allied Irish Bank which was in serious trouble. We saw it as a national institution that needed to be preserved. We did not get much thanks for that. In fact, we saw from the DIRT inquiry how that bank did anything but thank this House for its preservation in those difficult days. The House was also recalled to ensure the Goodman group did not collapse. There is now an onus on the House to ensure, through this Bill, that NET and its associates in Belfast will continue to produce fertiliser in this country, that farmers will have a base to work from and that this industry will be preserved.

We must be realistic. The real problem arises from the over-run of the initial cost. In the present climate most projects in which the State becomes involved, be it through the National Roads Authority or any other group, are completed on or before time and mainly within anticipated cost structures. In this instance there was a major delay in completing the project and a major increase in costs. This was compounded by external factors over which those involved had no control, such as a huge increase in interest charges. Those of us in the business can recall interest charges increasing in our ordinary businesses from 10% in the late 1970s and early 1980s to 22% or 23%. Given its level of debts, that must have had a serious impact on this company. Nevertheless, the situation must be addressed.

In this House and other public fora much has been made of the virtues of being big in industry. Commitments and guarantees were made when Larry Goodman was trying to take over the dairy industry in my constituency of Cavan-Monaghan, but the farming community has benefited greatly from the failure of that enterprise. By contrast, when Avonmore and Waterford Co-Operatives came together to create Glanbia trouble ensued. I saw the consequences when I canvassed during the recent by-election in Tipperary South. Sizeable dairy units closed down because they had lost faith in the structures and no young people were prepared to come into the business.

We in this House must ensure industries such as NET are in operation, not only for us but for future generations. They were established in hard times. We live in the commercial world and some people spend money as if there is no tomorrow while demanding that the taxpayers act as a safeguard when times become difficult. Nevertheless, jobs in this industry are important, as is the overall structure of the agricultural community. It is important, therefore, that we have some base for our raw materials.

I was amused to hear the Minister of State speak of his involvement. I do not depreciate his efforts in ensuring that NET could deliver all its products to the nearest railway station. It did not happen in Cavan-Monaghan and I wonder why. We must carry this very heavy, dense product in lorries for transport on completely inadequate roads. There is still no proper road structure from Arklow to Monaghan. That has caused unnecessary problems for the haulage industry and for farmers. Before the Minister of State leaves office, I hope he will establish a station in the Cavan-Monaghan region to ensure fertilisers can be delivered by some other mode of transport.

Perhaps Deputy Crawford hopes for the return of the Great Northern or the Cavan to Leitrim railway lines.

This short Bill allows for changes to the debt position of NET. It is proposed that it be taken over by the National Treasury Management Agency. When the NTMA was established the House was sceptical about its capabilities. However, it has proved itself well able to look after State borrowings. In this case it has taken responsibility for a sizeable borrowing. By 30 September, NET's total borrowings amounted to £187.2 million. This compares with total borrowing of £164.6 million in 1987. The company is to be complimented for ensuring its debts did not spiral, as happened with some other semi-State companies.

We must be realistic and acknowledge that the Irish fertiliser market is small in terms of the global players. That is why the State established NET in 1961 as a semi-State company. However, a monopoly has been created. In practical terms, the fertiliser industry is, like the feed industry, a monopoly. Certain people control practically every aspect of it.

We are now suffering with regard to costs. World commodity prices have been mentioned as a way to bring down the cost of inputs, yet this week some grain merchants and millers are trying to increase the prices of feed for livestock. Given that prices are falling that will have a detrimental effect. This situation has been caused by monopoly conditions because only a limited number of people have the resources or wherewithal to import large amounts of feed. Likewise it is questionable as to the number people who can secure port capacity for imports of product, whether it be in terms of shipping or storage facilities. Much of that is now controlled by one or two major companies. This is a dangerous precedent. Something will have to be done to enable greater numbers participate in this business.

Certain people have a monopoly over imports of a number of concentrates because they can buy at lower prices without passing them on to the end customer. That is regrettable. People may use the strong dollar as a mechanism for justifying an increase in prices, but that should not happen. There should be a freeing up of this market and of the capacity for people to become involved in this business.

In many cases fertiliser prices here are much higher than they are in Northern Ireland or England. When sterling and the punt were at parity there was a difference of between £10 and £15 per tonne with regard to certain fertilisers. This suggests there was no competition in the marketplace here. This is a small market and over the years the tonnage used has been in decline. It has been left to two or three groups to service it and without competition.

The present operation, which is run by IFI, is probably much better run than when it was in the hands of a semi-State company. The fact that the State maintained a 51% shareholding illustrates that when it went into partnership with ICI it had the interests of workers and people at heart. However, nobody has made an acceptable approach to take over the business. Is this because the industry was established 40 years ago and it probably needs considerable reinvestment to be able to compete on a global market or is it because the Irish market is seen as too small? This should be investigated.

Perhaps it might be possible to revamp the old plants which have been in existence since the 1960s and bring them up to modern standards. That would require substantial investment but the net value to the end user would be considerable. There is a global market for nitrogen and other products but our prices have always been higher than those in other countries. We all accept that our production costs are probably slightly higher as well. The monopoly has meant that Irish farmers have not been able to benefit from cheaper nitrogen which might be available in oil producing countries. That point has been proven in recent years.

The decision to hand over the financial management of NET's debt to the National Treasury Management Agency is a positive one which will lead to better management of the debt and less cost to the State. I welcome anything which saves the State making interest payments. I welcome the Bill.

I am delighted to have the opportunity to speak on this Bill. I know how important it is to the Minister of State, Deputy Jacob, and to his constituency.

I have spent a long time examining the affairs of NET and its related companies. It has a chequered history. It generated great hope at the beginning. I remember as a young boy being led to believe that the State would get involved on the basis that a twin-track approach was required. We badly needed jobs and we were importing a large tonnage of fertilisers for cash, which was bad news for the economy. When agricultural production started 30 or 40 years ago, this was seen as important in reducing import costs. It was believed at the time that we should be able to supply a product which would help to increase our agricultural production.

Everyone in this House understands what happened. For some strange reason, every possible problem that could befall NET did so. I will not apportion blame but it gave State run industries a bad name at the time. Nítrigin Éireann Teoranta was lumped in with Iarnród Éireann and others at that time. Its management did not seem to be focused and it had little to do with competition. We are paying the price for that since then. It is true that in recent years it has had a break through IFI and at least its borrowings have not escalated.

The Minister of State knows as well as I do that there is a fundamental problem. It reminds me of the sugar company in Tuam many years ago. We did everything in our power to ensure it would be kept open because it was important for our area. However, we were beaten by economic arguments and world trends. I hope that does not happen to NET in Arklow. I am afraid this change through the National Treasury Management Agency is the beginning of the end. It is not in the interests of the farming community or of the areas in Cork and Arklow. I hope greater efforts are made to ensure it is better focused on the market.

If 6% or 7% of a total borrowing of £187.2 million is paid in interest, that means approximately £10 million, £12 million or £13 million must be paid each year to keep it ticking over. That is a huge drain on any company, particularly at a time when the use of fertilisers is decreasing from 1.9 million tonnes to approximately 1.5 million tonnes. I assume nitrogen would account for 50% or 60% of that total. That is a huge albatross for a company to carry around its neck.

I know the National Treasury Management Agency does a good job and it has recourse to foreign borrowings. I assume that whatever else happens, the cost of the borrowing requirement for NET through that system will be lower than it would be if the company looked after it. That is good management by the Government which I support. However, I do not like the underlying trend.

I telephoned a fertiliser distributor this morning because I was told there was a huge increase in fertiliser prices this year. I had not taken much notice of it because it is not the time of the year to spread fertiliser. However, I was not prepared for what I was told. If I had bought nitrogen and had it delivered this day last year in my home village of Mountbellew I would have paid £120, but that figure has now increased to £155. The same is true for other fertilisers, such as 10:10:20 and 8:6:12. Their prices have increased by between £25 and £40 a tonne.

The price of the dollar and the cost of oil have contributed to the increases. I know there is nothing NET in Arklow can do if oil prices increase. However, I thought the gas merger would have helped to stabilise the unit cost. I know what will happen. The cost of fertiliser, when it is distributed from Arklow throughout the country next spring, will not be any different from the cost of imported fertiliser. The reason is the fertiliser industry is not competitive. We have not been able to compete with our imports. I do not know who we should blame for that or even if it is possible to compete. If we want a thriving fertiliser industry, we must be able to beat all comers. It is like the banks. Unless we can export our goods we will always be under the finger of the big international operators because of the small size of our domestic market. I am not sufficiently involved in this business to know if it is possible for the fertiliser industry to take on every operator which imports goods into this country.

I became worried when I heard the boss of IAWS say only a year ago that his company was not interested in NET. Mr. Lynch and his people have an eye for companies which might not be doing well but which, through their managerial ability, could be turned around. They have studied the European fertiliser business. I do not want to be a prophet of doom because I want an Irish fertiliser industry. It makes good sense to have it. If we are not careful, there will be a parallel situation in NET to the National Petroleum Corporation in Cork which the Government is now about to sell off on the basis that it has outlived its usefulness and one could get the product cheaper anywhere else. I am long enough in the House, as is the Minister of State, to know that this was a great white hope only 15 or 20 years ago and that we hoped to have it for reserves of the supply of petroleum in case of a shortage of product. We now know that if there is a problem with oil supplies worldwide, we are hit two or three days later. It is as simple as that. It appears that we do not have the ability to have the level of supply in reserve one would like, to tide us over three or four weeks, for instance, if we are faced with a problem of that nature.

Similarly in the fertiliser area, it appears that we are at a crossroads because from what I know of it, ICI said it will only stay in it for a year or two. If it transpired that it decided to pull out for the reasons I have already expressed, then the company would be very open to market forces. One could see that a wind down might happen extremely quickly. If I was an employee of Nítrigin Éireann in Arklow or elsewhere I would be extremely worried about the current situation. I am sure they are and that the Minister of State is hearing that from his constituents regularly. I have no doubt that everything will be done to try to keep the industry there because, in my view, this is a national issue. One hopes that it will, despite the fact that the emphasis on production agriculture has now waned in the sense that, as everybody here knows, we are now talking about organic foods, curbs on production, the environment, etc. Nevertheless as a plant grows, it uses nutrients and we have no other way of replacing those nutrients than by the old means, the organic means and by artificial fertilisers. No matter how the scientists look at it, we will always need artificial fertilisers if we are to keep production up. It is how we use them that makes the difference.

Against that background there will always be a great need for a fertiliser industry and because of the expertise that NET acquired over the years and now has, it appears it is in the best position to spearhead it. Its past is coming back to haunt it though. The question of the overruns, which I remember from many years ago, was a scandal where any set of figures given for the completion of a particular job was never met. The situation was out of control.

However, we have a fertiliser industry that is very important nationally. If it is bought for the wrong reasons, if a buyer is interested in it only to ensure that its company on the continent or elsewhere will have an open market for its prod uct, that will not be good for Irish farmers or for buinesss. I sincerely hope the Government will keep a very close eye on that and that everything will be done to try to get the type of buyer, at whatever cost, who will have a commitment to Ireland, to the farming community of Ireland and to the workers who make up that industry. In so far as this Bill is concerned, this is a mechanical exercise really. The National Treasury Management Agency is the right conduit to handle this because of their expertise. However, this is only a symptom and I greatly fear for the future of this industry unless the Government becomes more proactive and lets the good points of the industry be known because it certainly has not received a good press.

This company has a debt of £180 million and the treasury is checking over it. What will happen now is that this company will look for a buyer. It should try to get someone who will protect the industry and jobs. This is very important. The jobs should be protected and we should not be dependent on imports of fertiliser. This is an agricultural country. I am not a farmer but I listen to farmers daily complaining about the cost of fertiliser. There is no doubt that if we lose this company, we will lose our national industry and we will be dependent on supplies from other countries. This is not good. We saw what happened recently in relation to BSE and the products we were importing to feed our cattle. The problem developed because farmers were buying something but did not know where or how it was produced. That industry has been in difficulty in past years because of this disease.

It is important that we protect this industry and the staff. If a buyer is found, we must ensure the company will protect the jobs. That is what this is all about. The jobs should be protected. I do not see why the people who have worked for that company and given loyal service should be worried and upset now. Many of them are concerned about the future of this company. It is important we make sure that whatever can be done will be done to protect this industry.

Farmers are complaining daily about the price of fertiliser. With all the restrictions, county councils throughout the State now tell farmers that, in some cases, they will have to apply for planning permission to spread fertiliser. This is a step too far and the time has come for us, the Irish Government and Parliament, to put down the foot in Europe. This is a step too far. Farmers have always been good at looking after the environment. As regards farmers and landowners, there has always been a tradition that land is passed on to the son or the daughter. Farmers are not people who like to abuse land or abuse their own profession. It is outrageous that farmers must obtain planning permission from the county council in order to spread fertiliser on their land. If anybody had suggested 30 or 40 years ago that this would happen in rural Ireland, they would have been laughed at. I do not know where it will all end.

Last Monday night, I attended a public meeting in Newport in connection with farmers who are trying to supplement their income from the sea, but the whole Clew Bay area is to be sterilised in the context of special areas of conservation and natural heritage areas. One wonders what that has to do with the Bill, but it all relates to what is happening in this country at the moment. Ministers should be honest and tell farmers whether Governments want them to stay in the business of farming or to get out so that reservations can be created in the west. Then there would be no need for fertiliser. We fought hard, and people gave their lives to get independence. People here have always had a love of the land and a love of agriculture. However, daily we see rules and regulations from Europe which prevent farmers from farming and from putting fertiliser on the land. Now this is moving to the sea where farmers supplement their income by fishing, and there will be restrictions on what they can do. Europe wants to isolate and freeze all these areas. What is the hidden agenda? We used to have landlords from England at one time. Now we have landlords from Europe.

Debate adjourned.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.
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