The purpose of this Bill is to raise from £25 million to £30 million the limitation both on the aggregate borrowing powers of Bord Gáis Éireann for capital purposes and on the aggregate of such borrowings which may be guaranteed by the Minister for Finance.
The current limitation of £25 million is set under the Gas Act, 1976 by section 23 in regard to the board's capital borrowings and by section 25 in regard to borrowings which may be guaranteed by the Minister for Finance. The amendments now proposed are to enable the board to borrow in order to continue with their gas distribution projects in the Cork area. To date the total borrowings of the board amount to about £24½ million. This leaves an insufficient leeway for borrowings for capital projects for the remainder of the year and leaves no scope for borrowing in 1981.
As Senators know, following the discovery of natural gas off Kinsale Head, Bord Gáis Éireann were established under the Gas Act, 1976 to develop and maintain a system for the supply of natural gas. The board have carried out with diligence their duties in the intervening years since their formation and deserve to be congratulated. A transmission system from the offtake point at Inch to the ESB generating station at Marina was completed in 1977 ahead of time and within budget. A spurline to supply Nítrigin Éireann Teoranta at Marino Point was also completed in 1977.
In 1979 spur pipelines were constructed to the ESB generating station at Aghada and to the IDA industrial estates at Little Island and the Mahon Peninsula. Construction work on the natural gas pipeline to the Cork Gas Company works in Cork city was started by the board at the end of 1979 and completed in mid-1980. On 14 November last initial supplies of Kinsale gas were delivered to the company. Initially the company will supply town gas reformed from natural gas. Conversion of all consumer appliances to use natural gas directly is being planned and will be undertaken over the next four years. The Cork Gas Company plan that by 31 December this year all gas supply to their 27,000 customers will have natural gas as the feedstock. A further extension of the natural gas pipeline to Ringaskiddy was recently completed. This will supply Irish Steel Ltd., and the IDA industrial estate at Ringaskiddy. These are the hard core of projects for which capital borrowings of £24½ million were made by the board.
As a result of the availability of Kinsale gas in the Cork area about 600 extra jobs have already been created. About 652 jobs will become available arising out of industrial projects for which an allocation of natural gas has been already approved and there is the prospect of further jobs in connection with future natural gas based industries.
Kinsale gas is almost pure methane. It is virtually sulphur free and has a high calorific value. It is thus a highly efficient and valuable fuel source, and should not be allocated in a haphazard way. The Town Gas Industry Review Committee concluded that, pending the implementation of a reform programme within Dublin Gas and a decision on the question of a Cork-Dublin gas grid, a restrictive policy should be adopted in regard to new allocations of Kinsale gas. I agree with that conclusion. I have decided that, pending a decision on the Cork-Dublin pipeline, allocations to industry by BGE should be confined to new industrial undertakings where the use of natural gas would be a premium use and where its availability would be a major consideration in the decision to set up the industry here.
I think it is appropriate to emphasise at this stage that this Bill relates specifically to the raising of the board's borrowing powers to finance projects in the Cork area. This extension of BGE's borrowing powers is independent from and is not intended to pre-empt a decision on the feasibility of building a Cork/Dublin pipeline.
The Cork-Dublin pipeline project is composed of three elements. First, Bord Gáis Éireann have been asked to undertake a detailed feasibility study in line with best commercial practice encompassing the design, routing and costing of such a pipeline. The second element is the implementation by Dublin Gas Company of a development plan for the company. Consumers Gas, Toronto, were commissioned by Dublin Gas to examine the company's operation and recommend a strategy for the company which would make it a suitable vehicle for the efficient distribution of natural gas. Dublin Gas progress in achieving the performance targets set by the consultants is being monitored by my Department. A works agreement is currently being negotiated between Dublin Gas management and unions as an essential step in the reform programme.
The third element is the preparation of a financial package to enable the project to go ahead. No decision will be taken on the supply of natural gas to Dublin Gas Company in advance of the satisfactory conclusion of BGE's feasibility study and the demonstration by Dublin Gas Company, through the successful implementation of the reform programme, of their capability to distribute natural gas efficiently, cost-effectively and safely. If at that stage a Government decision is taken to go ahead the necessary legislation will be introduced.
Bearing in mind that to-date Bord Gáis Éireann have achieved the purposes for which they were established, I am confident that the House will support this Bill which is designed solely to enable the board to borrow for projects in the Cork area over the next few years. I therefore recommend the Bill to the House.