Vol. 583 No. 2
6 Mr. Deenihan asked the Minister for Communications, Marine and Natural Resources the reason system availability in power generation supplying electricity to the national grid has reduced from 88% in 1997 to 75% in 2004; and if he has discussed the implications with the ESB, the Commission for Electricity Regulation or Eirgrid. [10184/04]
A feature of our ongoing economic success is the growth in electricity consumption and pressure on generating plants. All the older and less reliable plants in the system are ESB-owned. The ESB has taken measures to address the availability problem. A special action programme is in place to improve its plant availability. Its key target is to increase such availability from 76% in 2003 to 82% this year. To make sure the action programme delivers, the CER will impose penalties on a progressive basis.
One of the larger units at Tarbert, contributing 256 MW, has recently returned to service following an extensive outage, and a further 376 MW should return to service by the summer resulting in good availability over the following winter months. One of the main factors determining the reliability of the country's electricity supply is the production time availability of the current stock of generating plant. Owing to the need to schedule plant out of service for maintenance and the random breakdown of plant from time to time, availability can never be 100%.
My Department continually monitors the position in conjunction with the CER and the ESB. In the new market arrangements for electricity to be introduced by February 2006, the CER has put in place a mechanism which will reward all power stations for improving their availability.
I am glad to see the Department is monitoring the trends of system availability, forced outage and so on. The graph of the past five years shows a dramatic dip in system availability. In 1997 we had almost 88% availability, but in 2004 we are down to about 73%. It is not as if this was a sudden shock. There has been a steady downward trend. Is that not an issue of concern to the Minister? Is he raising questions with the ESB about the levels of efficiency in its plants?
More seriously, over the same five-year period, the system's outage rate has risen from 5% to over 15%. Those are two indicators of efficiency and how plant is run. Has the Minister discussed this concern either with the ESB, of which he is the major shareholder, or with Eirgrid?
It is not so much that there has been a dramatic reduction, it is that in the last number of years there has been a dramatic rise in annual demand for electricity. The indications are that over the next few years we will have an average annual percentage increase in demand of approximately 3% to 4.3%. Even with long-term investment by energy companies in generating plants, the position could still prove to be difficult in the medium-term. The country is well served by the existing plant, however. Even this year, which was forecast to be one of the most difficult ones, we were never seriously concerned by the required peak. Due to the input by the CER, my Department and the ESB, there has been a significant investment not only to obtain the maximum from the North-South interconnector capacity, but also there have been contracts with Northern suppliers for the importation of temporary generation. The situation has been well taken care of.
The existing plants are becoming less efficient, however.
There is investment in them.
The closure of the ISI and ISPAT may have got us through this winter. Will the new "use it or lose it" clause in the emissions trading system force power generation companies to maintain old plant with high CO2 emissions in operation, even though we have seen dramatic decreases in the efficiency of such plant in providing electricity? Is there a concern that the clause will keep our oldest plant in existence while not helping us to introduce new plant?
Is it not the case that Eirgrid and the ESB have been incredibly remiss in recent months by blaming the introduction of renewables on possible shocks in the system? The reality is that the existence of this ancient clapped-out plant, which involves some of the greatest shocks to the system when it goes out of power very quickly, has been the real cause of lack of stability and problems with the grid. Would the Minister agree that is the issue which provides the greatest threat of power outages, rather than the presence of renewables on the grid? On that basis, will the Minister direct the ESB to lift its moratorium on renewables and start developing them to back up this clapped-out plant?
The ESB is undertaking a huge investment, not only in power generation but also in the distribution network. It has a target programme for generation units to improve availability to 82% this year. As a result of benchmarking, the ESB expects to achieve 92% availability at best. The programme of work the ESB has set out in this respect will deliver an improvement in plant availability.
The Deputy should have no worries in respect of the "use it or lose it" clause. The ESB has set out an investment programme and the CER will keep a close eye on it. While there are differing opinions on renewable energy, it is the Government's stated policy to promote it. As the Deputy knows, however, there are technical difficulties that must be overcome due to the amount of renewable energy that we are now proposing to put on the grid.
Surely the technical difficulties with renewables are nothing compared with the massive technical difficulties with old plant that can only produce at 75% capacity?
That is the whole point.
Would the Minister agree with that?
No, I would not. There will always be technical difficulties with power generation. One cannot always expect to have 100% availability.
That is a problem with wind energy but not with conventional plant.
There are always such issues and one of the difficult issues over the last 18 months was the unfortunate incident in Tarbert.
7 Mr. E. Ryan asked the Minister for Communications, Marine and Natural Resources the person he asked to carry out a review of the proposed An Post ESOP; when he expects the report on the matter to be available; if he will make it available to members of the Oireachtas Joint Committee on Communications, Marine and Natural Resources; and the circumstances in which he will consider offering the workers shareholding in this company. [10310/04]
The purpose of the ESOP was to facilitate the transformation of An Post into a viable and profitable postal operator in order to deal successfully with the challenges arising from liberalisation and electronic substitution. Having regard to the recent financial situation in An Post and the substantial losses incurred by the company in 2002 and 2003, the board has been asked to review the cost savings verification. As part of this review process, the Department engaged Ernst & Young to undertake a review of the cost savings as stipulated by the ESOP term sheet. It is expected that the final report will be presented to my Department shortly.
As part of the ongoing work on this issue, the Department may decide to make the report available to the stakeholders involved in the ESOP process and will consider, in time, whether to make the report available to a wider audience. The Government is fully committed to an ESOP in An Post if it can be demonstrated that real transformation has occurred resulting in a viable and efficient company, and that the cost savings envisaged in the ESOP term sheet have been achieved. This has been communicated clearly to the CWU and other trade unions.
Over the past three years, the management accounts in An Post were clouded in uncertainty. Why is the Minister sticking to the cost savings that were set for the ESOP to be delivered, when it has been almost impossible to analyse the accounts and ascertain the cost savings? Is it the case that the company's former management came to the Minister's Department last year and said they believed the cost savings had been made and that, as such, the first phase, or 4.9% section, of the ESOP should be delivered?
It is 2%.
I understood that the first phase was to be 4.9%, based on the cost savings. In his speech last Tuesday, the Minister outlined that the cost savings would lead to the first phase of 4.9%.
I will clarify that in my reply.
We can clarify that later but is it the case that the management told the Minister's Department it considered it was appropriate to issue the ESOP? What was the Department's response at that time to such a request from the management?
I would have thought it was well known that in May 2003 the board of An Post verified that cost savings amounting to €7.17 million had been achieved. Under the terms of the agreement, that would trigger a 2% transfer of shares. We were aware that the company's financial position was in severe difficulty. In 2003, the company lost approximately €43 million. In discussions with the board of An Post, we stated that we wished to have this matter examined independently. That is why we asked Ernst & Young to produce a report on this matter in order to verify it. Equally, in 2003, it was forecast that An Post would make a profit of €1 million which turned out to be a loss of €29.5 million. In the context of what was supposed to be a transformation of the company, which is what the ESOP was all about, we indicated that the savings had not been achieved.
As regards the current financial position of An Post, cumulatively over the last two years, and this year, the company will have lost €100 million. To a large extent, the ESOP was a side issue compared to the investment of €100 million by An Post in new automation. At the moment, however, we are not getting the ultimate benefit of that expenditure.
The Minister has partially answered the question I wished to ask. Last summer the union received an indication from management that workers had fulfilled their commitments, thereby permitting the establishment of an ESOP comprising 2% of the company. The Minister keeps saying "we" but he means "I". He intervened to say he was not satisfied that the necessary changes had been made by the workers. He deliberately interfered but I do not criticise him because I only wish to establish the facts. Did he seek an independent audit to ascertain whether the necessary changes had been made?
The board of An Post indicated that the cost savings delivered in 2003 were supposed to have been delivered in 2000 and, therefore, were not delivered on time. However, I queried the cost savings indicated and Ernst & Young were asked to examine the figures because it was important to do so independently. Ernst & Young's draft report highlights the cost savings that were supposed to have been achieved and were not achieved.
According to 2002 accounts, the cost savings were between €8.5 million and €9 million. They were audited by KPMG. Does the Minister accept the 2002 accounts? I have continually asked this question of the Minister but he will not provide an answer.
In 2002, 2003 and this year——
Those are different figures.
One cannot say costs savings were achieved while the company outgoings increased dramatically.
KPMG says one thing and the Minister says another.
There was a delay during these years in producing information relating to the ESOP and the company's costs increased dramatically. Costs increased by approximately 9% in 2001 over 2000 and by 13% the following year. One issue cannot be examined in isolation in the context of the ESOP without examining the overall position.
The Minister intervened as a result.
Ultimately, I intervened because the board, under the terms of the ESOP, must seek the consent of the Ministers for Communication, Marine and Natural Resources and Finance for the share transfer. I did not intervene, I received a request. The company was in severe difficulty financially and we had a duty to the taxpayer to ensure that if shares were transferred the transformation agreement, which had been requested, had been delivered.
Did the Minister not question the competence of the directors?
The transformation agreement was not delivered. Has the company been transformed?
Did the Minister not question the board's ability?
Will the Minister clarify whether the €20 million loss equated to the projected cost of the ESOP? When Mr. John Hynes was chief executive officer he projected the company would be in the black by 2005 but that is far from the reality. Should there be an investigation into the manner in which An Post has arrived at the current impasse? Did the Minister tolerate the action taken by management to bounce the unions into a crisis, which will result in an even more radical clear-out in the company? Should it be pointed out in the negotiations that the Department will investigate how management arrived at the position where the company is making significant losses that were not even mentioned a few years ago?
During the Private Notice Question last week, I did not go through the full list of the contacts between my Department and the management of An Post regarding the company's deteriorating finances. Management continually said from May 2002 onwards that there was no need for a recovery strategy. It was only when I refused to bring the 2002 annual report to Cabinet for approval that management eventually admitted the position was as difficult as it is now.
That should be investigated.
Where were the directors of An Post?
8 Mr. Broughan asked the Minister for Communications, Marine and Natural Resources if he will investigate the situation at a company (details supplied) where it is alleged that a motor ferry is registered under a flag of convenience and that the crew is paid an average 65% of the minimum wage; his views on the operation of flags of convenience; and if he will make a statement on the matter. [10198/04]
All merchant vessels of significant size must be registered. More than 140 ship registers are in operation worldwide. Ship registers impose obligations on ship owners regarding maintenance, crewing standards and certification of those matters by the flag state or inspection bodies duly authorised by the flag state.
The development of flag state performance and standards are important issues for my Department and significant developments are taking place internationally to improve the performance of such states. Foremost among these is the development of the International Maritime Organisation flag state code and the IMO member state audit scheme. My Department is involved in these developments and organised a maritime safety forum in Gorey, County Wexford, last week to discuss ways to enhance the performance of flag states. The forum was attended by world leaders in the field of flag state performance.
As Minister, I have responsibility for the Irish ship register, that is, for Irish registered ships. The operations of other ship registers is governed by applicable national and international law. I cannot direct ship operators or owners to use a particular ship register. Within the European Community, ship operators are free to go on any EU or third country ship register.
I have no statutory function in regard to seafarers' wages. The ship operated by the company referred to by the Deputy is not registered on the Irish ship register. Obligations on the ship's owners regarding maintenance, crewing standards and certification of those matters are appropriate to the flag state operating the ship's register, St Vincent and the Grenadines.
Foreign registered vessels using Irish ports are inspected regularly by the marine survey office of my Department in the exercise of Ireland's port state control obligations. These inspections are aimed at ensuring that such vessels are maintained and operated in compliance with international safety standards laid down by the IMO and, in terms of seafarers' social conditions, by the International Labour Organisation's maritime conventions, together with relevant EU initiatives in the maritime area. Deficiencies identified are brought to the attention of the owner and flag state administration and may have to be rectified before the ship continues its journey.
The ship operated by the company referred to by the Deputy was given a detailed port state control inspection earlier this year by officials of my Department. The inspection found several deficiencies, which the company was required to rectify prior to the vessel being allowed to re-enter service. Ireland participates in EU, IMO and ILO discussions on seafarers' welfare, supporting proposals aimed at improving their terms and conditions of employment. Ireland will continue to support efforts in all appropriate fora to enhance working conditions for seafarers and will continue to enforce safety and operational standards through the port state control framework.
Does the Minister agree the flags of convenience system is one of the most disgraceful and appalling aspects of world commerce, which this island nation should urgently address? I refer to the MV Superferry which operates between Cork and Swansea. Although it is owned locally, it is registered in St. Vincent and the Grenadines, which is regarded as a dangerous and high risk registration because of its track record. The ship’s staff is employed by a company called Grey River International.
I have a copy of a shocking report on the ship carried out by Tony Ayton of the International Transport Workers Federation, of which SIPTU is a member. The 65 employees worked extremely long hours — more than 77 hours per week — were not paid overtime and received few holidays. They did not receive sick pay or pension provisions and were often employed on temporary contracts which could be terminated every seven to ten months. Most of the crew was from eastern Europe and many were paid the princely sum of $2.70 per hour, with pay averaging $3.50 per hour, which is well below the minimum wage. Is the Minister not responsible for the treatment of staff on a ship in our waters which carries out important business between the south-west and Wales? This report from the ITF shows the staff were not paid or treated properly
I am aware of the importance of the MV Superferry to business and tourism in the Cork region. An agreement that the union tried to make with the company four years ago included an inability to pay clause, but that was never activated and the crews are discouraged from and terrified into not joining a union.
On the wider question of FOCs, the Minister may have seen me on the news bulletin on New Year's Eve asking what has been happening to the Irish register. Is it the case that a worse situation is developing whereby our highly valued register is taking on ships from throughout Europe, one of which was described as a 31 year old banger, and the companies do not have a brass nameplate in Ireland? Is this not a serious matter which the Minister for Communications, Marine and Natural Resources and the Minister for Enterprise, Trade and Employment should address forthwith?
This is supposed to be Question Time. The Leas-Cheann Comhairle should let the Deputy finish getting himself into a lather. I have no responsibility for seafaring——
Make your name, Minister.
The Deputy should let me answer. I did not interrupt him and I had to listen to his blather up to now. As the Deputy knows well, I have no responsibility for this area.
On the examination of the specific ship, the Port State Control inspection covered seafarers accommodation and working environment, which in its opinion was fine. The Deputy has been specific on some of the details regarding this ferry. The ferry company has advised the Department that the union has been trying to get the seafarers on this boat to join but, if they were to join, the union would collect $299 per man from the ship operators for each seafarer who joined. A SIPTU official was allowed by the ferry to visit the boat to talk to the seafarers who, we are informed, declined to have anything to do with the gentleman.
The Minister has repeatedly said that he can do nothing about it. It is similar to what he said a few weeks ago about An Post. He is great on the sidelines but he does not want to go on to the pitch. He has a serious responsibility. We are a maritime nation. There are 29 micro-states, two of which are on line — Cyprus and Malta. However, Gibraltar, the Cayman Islands, Liberia, Lebanon, Tonga and a list of other states have no controls. Will the Minister not go to the International Maritime Organisation and the various committees to which he referred and put it to them that, as an island nation, we want to take responsibility for seafarers and workers at sea in difficult conditions and when they are in our waters and doing business with Irish companies?
I have no responsibility for this area. This is the system set up under the International Labour Organisation, ILO, and the IMO. The Deputy is fooling people, if he is telling them otherwise. The seafarers did not want to join the union and that is their prerogative.
9 Mr. Wall asked the Minister for Communications, Marine and Natural Resources if he has satisfied himself that all necessary requirements for the international ship and port security code will be met by 1 July 2004; and if he will make a statement on the matter. [10204/04]
The maritime safety directorate in my Department is involved in the process of co-ordinating the implementation of the new maritime security measures. The directorate is constantly in touch with the relevant ship owners, ports and port facilities affected by the EU regulation and the international ship and port security code, ISPS, to ensure that they will all be compliant by the 1 July deadline and will, therefore, be in a position to continue to trade normally.
The current position is that all ports have submitted port facility security assessments, PFSAs, which are in the process of being verified and approved. A number of ports have already been approved and it is expected that all the remaining PFSAs will be approved within the next two weeks. The deadline for receipt of port facility security plans is 30 April 2004. These plans set out the procedures to be taken by port facilities during normal working conditions and also in the event of a terrorist threat. There will be no delay by my Department in the examination and approval of these plans where they are found to be compliant with the requirements of the regulation and code.
With regard to vessels, the regulation allows the responsibility for the implementation of the new security measures to be delegated to recognised security organisations, RSOs. Most ships affected by the new requirements have already submitted ship security assessments, and ship security plan verification process is under way. I am hopeful that Irish port facilities and Irish ships will all be in a position to meet the requirements of the EU regulation and ISPS code on maritime security.
I understand that the Commissioner, Loyola de Palacio, has been asking the Minister for a Europe-wide framework given the major security risks which are clearly present throughout Europe and the recent terrible events in Spain. Will the Minister confirm that, in our major ports, Dublin, Rosslare and Cork, a comprehensive security assessment was carried out for each together with the plan which I presume the Minister is getting? Has each port appointed a port security officer, in other words a co-ordinating officer? I am aware of the high level review of the ports and also the report of the port real estate task force. Are we thinking in terms of an overall port security authority or will it come within the responsibility of the Coastguard?
The maritime safety directorate in my Department is involved in the process. Two working groups have been established with the Naval Service, the Garda Síochána and the MSC in one group and a cross-departmental implementation committee chaired by an assistant secretary in the Department, Mr. Maurice Mullin, with representation from the Departments of Communications, Marine and Natural Resources, Justice, Equality and Law Reform, Transport and Defence, the Revenue Commissioners, the Naval Service and the Garda. In recent weeks, I have met the chairman and chief executive of Dublin Port, the chairman, chief executive and members of Cork, Waterford, and New Ross ports and Mr. Ben Gavin, chairman of Waterford Port, who is also chairman of the Irish Ports Association. We met Mr. Monnie Cliffe who is president of the Irish Ship Agents Association. The Deputy may rest assured that every effort and detail is being pursued to ensure we have full implementation by 1 July as required.
10 Mr. Gilmore asked the Minister for Communications, Marine and Natural Resources if, as reported in the media, the contract for the management services entity includes an ex-Eircom subsidiary with reportedly continuing close ties to that organisation; the way in which it is proposed to deal with any potential conflicts of interest issues that might arise; the effect that this might have on the desire to provide competition as opposed to the existing near monopoly position; and if he will make a statement on the matter. [10205/04]
39 Mr. Kehoe asked the Minister for Communications, Marine and Natural Resources the role of the entry of a company (details supplied) in the management and roll-out of broadband nationally; and when the appointment will be made and the contract agreed. [10188/04]
46 Dr. Upton asked the Minister for Communications, Marine and Natural Resources if he will list the tender applications for the management services entity competition and announce the winning tender; and if he will make a statement on the proposed operation of the MSE. [10202/04]
52 Mr. P. Breen asked the Minister for Communications, Marine and Natural Resources the role of the MSE in the management and roll-out of broadband services; and the reason its appointment has been delayed. [10236/04]
I propose to take Questions Nos. 10, 39, 46 and 52 together.
The management services entity, MSE, is the independent body which will be engaged to manage, market and maintain the fibre-optic metropolitan area networks, MANs, being constructed under the regional broadband programme, on a basis which is consistent with the Government's strategy of providing broadband infrastructure on an open access and carrier neutral basis.
It is intended that this open-access principle will be enshrined in a code of practice for the use of the metropolitan area networks, thus ensuring that access to the infrastructure is administered on fair, transparent and non-discriminatory terms to all interested parties. Notice of my Department's intention to commence a competitive tender process for the engagement of an MSE was published in the Official Journal of the European Communities on 19 June 2003.
Responses received by the tender deadline of 15 August 2003 have been evaluated and it is anticipated that the MSE procurement process, as outlined in the instructions to tender document which issued on 19 June 2003, will reach a conclusion shortly. It is not proposed to make any public statement on the identity of participating parties prior to such conclusion. The competition for the appointment of the management services entity is a public procurement process. I have, and have had, no role in the selection process.
The Minister states he cannot confirm when the identity of the operator of the management services entity will be made known. Therefore, he cannot confirm the essence of my question which was reported in the media. The group which has obtained the management contract includes a former subsidiary of Eircom. Does the Minister agree that the concerns which lie behind the question relate to the appalling vista which has opened over the last number of years due to the failure of the Department and COMREG to bring down the price of broadband access and address continuing deficiencies in the 200,000 km national network of the Eircom grid.
Last Wednesday, my colleagues, Deputies Coveney and Eamon Ryan, and I met along with members from the Minister's party including Deputy Brady and the Chairman of the Committee on Communications, Marine and Natural Resources, Deputy O'Flynn. Does the Minister agree that the broadband report prepared by the Oireachtas committee constitutes a severe criticism of the achievements of his Department on broadband? It has left Ireland three to five years behind the leading states.
I do not accept that.
I do not accept that the Minister has no role in the process of choosing a management services entity. A management services entity should have been announced last September, but we still do not know who has been chosen. While we have been told that there is, supposedly, a preferred bidder, a cloak over the process means no one can mention who that might be. What is the problem with allocating the contract? All over the country there are MANs which the Minister, in fairness, has pushed. These are the main focus of broadband roll out. We require a management services entity to develop access and manage their use to ensure that we achieve the maximum benefit from MANs. While all of the above is positive, there has been a six month delay in the awarding of the contract. Why has it been delayed? It is a nonsense to suggest that the Minister has nothing to do with the process. He is responsible for the roll out of broadband. The awarding of the contract is a key part of that strategy. What is the delay and why is there so much secrecy involved?
If we cannot be told which company has been awarded the contract, has the Minister initiated an investigation within his Department to discover why and how it has been leaked to the press that this has happened?
One of the recommendations in the report of the Oireachtas Joint Committee on Communications, Marine and Natural Resources was that the management services entity should adopt a carrot-and-stick approach to ensure that resources are not duplicated in the development of fibre, particularly in the ground. Can the Minister provide specific directions to the management services entity prior to the awarding of the contract?
I am told by my officials that it is expected a decision will be made at the end of April. Deputies are asking why there is so much secrecy and wondering why I am not involved. They need go no further than the Moriarty tribunal for an answer. I will say no more.
We are not asking the Minister to choose the management services entity.
The Deputies opposite have obviously been lobbied by people who have been unsuccessful.
We have not.
I have received no lobby on this matter.
I ask the Minister to withdraw his outrageous accusation.
Deputies should consider the Moriarty tribunal. I am not making the mistakes of the past.
The Minister is three years behind schedule. The secrecy issue arises because the awarding of the contract is six months late, yet the Minister does not appear to have any interest in it. I suppose we will read about it in the newspapers.
Written Answers follow Adjournment Debate.
