Turf Development Bill, 1988: Second Stage.

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

Minister for Energy (Mr. Molloy)

The primary purpose of the Bill is to broaden the statutory remit of Bord na Móna. Under existing legislation the functions of the board are limited to the production and marketing of peat and peat products. While this will continue to be the company's core business for the foreseeable future, the Bill will give the board the added flexibility it needs to exploit commercial opportunities in ancillary areas. The object will be to diversify the board's operations where it is profitable to do so and to exploit the expertise developed by the board. The opportunity is also being taken in the Bill to make a number of routine amendments in relation to pay, superannuation and the format of the board's accounts.

I know that this House is well aware of the contribution that Board na Móna has made to the economic life of this country and, in particular, to the midlands region since it was set up in the mid-forties. The development of our indigenous peat resources has made a valuable contribution to the national economy because it both provides us with an alternative source of fuel supply which reduces our dependence on imported fuels and at the same time provides employment in midland areas.

Because of their economic and social role in the midlands the Government are anxious to ensure that Bord na Móna will provide viable and sustainable employment in the long term and will continue as a significant producer of indigenous energy. Concern was expressed in the Dáil about the financial position of Bord na Móna. As I indicated to that House, this issue is being comprehensively reviewed at present and I will be putting the matter before Government in the near future. In the circumstances I do not propose to comment on the board's financial position at this time. I am satisfied, however, that this enabling legislation will assist the board to take full advantage of development opportunities. I will now outline some of the specific provisions of the Bill.

Under the Bill, the board will be permitted to promote, form, take part in or acquire companies, either within the State or abroad. This will provide the board with the required flexibility to exploit worthwhile business opportunities. I might mention that providing a State-sponsored body with the power to form or take part in subsidiary companies will not be unique to Bord na Móna. Similar powers were provided to the ESB in 1988.

In addition, the Bill will also permit the board to engage in joint ventures in relation to its business as extended and defined in this Bill, again both within the State and abroad. Clearly, it would be the intention that participation in any such joint ventures would be on the basis that it will pay its way and in this regard participation in joint ventures will be subject to the approval of the Minister for Energy and the Minister for Finance. In attempting to exploit commercial opportunities in other countries, it may prove to be more effective to engage in a joint venture with an existing company or, if appropriate, to purchase an existing company. This is particularly so in relation to Bord na Móna's horticultural business as it should facilitate access to specific markets. The further development of the board's horticultural and related business is one of the best policies to secure existing employment and to create additional jobs in line with the planned growth of horticultural products.

Under the 1946 Act, the powers of Bord na Móna can only be exercised through the main board. The Bill permits Bord na Móna, subject to my approval, to delegate certain of its functions to sub-boards. These sub-boards will not be empowered to do anything which is outside the powers of the main board. The sub-boards will be appointed by the board and the members, including in each case the managing director of the company, will be drawn from the membership of the board. The purpose of the sub-boards is to ease the workload of the plenary board. Their existence will facilitate a speeding up of the decision-making process within the company and will allow for the more thorough examination of specific areas of the board's activities.

At present the board can only exercise certain of its functions within the State. This was unduly restrictive on the board in its efforts to develop and exploit new market opportunities abroad. Section 4 provides the board with the means, subject to ministerial control, to exercise the necessary powers abroad which will facilitate the exploitation of foreign market opportunities.

The functions of Bord na Móna, as outlined in the Turf Development Act, 1946 were restricted effectively to the extraction, production, marketing and sale of turf and turf products and all ancillary requirements necessary for this purpose. Under this Bill, the board will be empowered to engage in activities not directly related to peat, but which arise from expertise acquired and developed by the company in carrying out its original functions as defined in the 1946 Act. The board will now be in a position to exploit this expertise on a commercial basis.

The Bill will also enable the board to undertake consultancy work. The board has in the past offered consultancy services by way of seconding Bord na Móna staff to the Department of Foreign Affairs. It is now proposed to develop commercial consultancy activities.

The future use of cutaway bogs — bogs which have been substantially cleared of turf — is a question of great importance to Board na Móna. Some 2,500 acres of cutaway bog will become available from the board's operations each year over the next decade.

Senators will be aware that recently I established an independent expert committee to examine in depth the potential uses of this cutaway bog and to recommend measures which will ensure that the land is put to the best possible use. The terms of reference of the committee require that they examine the competing demands of forestry and agricultural-horticultural and amenity uses of the cutaway bogs. Interested parties were invited to make submissions to the committee and I am glad to say that the response has been very gratifying, with over 40 such submissions being made. I have asked the committee to report to me before the end of the year. This Bill empowers the board to develop such bogs in accordance with such directives as may be laid down by the Minister for Energy of the day. This provision will facilitate the implementation of the recommendations of the committee.

The section of the 1946 Act which deals with the accounts and audits of Bord na Móna provides that the board should keep, inter alia, a capital account and a revenue account. These type of accounts are no longer common in conventional accounting practices. Sections 7 and 9 of this Bill provide for the necessary amendments to the 1946 Act to allow for a change in the format of the board's accounts to bring them into line with the more conventional practice.

Section 10, relating to pay, simply formalises the controls relating to the remuneration of the employees of Bord na Móna and is in line with Government policy in relation to the public sector.

Bord na Móna are empowered, under sections 5 and 6 of the Turf Development Act, 1953 to operate superannuation schemes with the approval of the Minister for Energy and the agreement of the Minister for Finance. At present, the Act provides that benefits under the superannuation schemes can only be paid to full-time members of the board and its permanent employees. Benefits for spouses and children are therefore excluded. A non-statutory widows' and children's pension scheme has, however, been in operation with ministerial approval since 1970. The Comptroller and Auditor General has been concerned that this scheme continues to operate on a non-statutory basis and has reported, in his capacity as auditor of the Board na Móna superannuation schemes, that the 1953 Act requires to be amended in order to place the scheme on a statutory footing. Section 11 of the new Bill provides for this.

Since the introduction of this Bill in 1988, a major consultancy study has been undertaken of the operations of Bord na Móna. I have indicated to the Dáil that because of the sensitive commercial information contained in the report, I had concluded that I could not allow the report to be published. I would like to assure this House that the recommendations of the consultancy report are being addressed and, where appropriate, follow-up measures are being implemented.

As I said at the outset, Bord na Móna's core business will continue to be the production of peat and peat products. Bord na Móna will continue to provide a significant part of Ireland's energy needs through the supply of milled peat for electricity generation and solid fuels — particularly briquettes for the domestic market. The decision to ban bituminous coal in Dublin provides a particular opportunity for Bord na Móna to expand its briquette sales. In order to improve its financial performance the board, in common with any other company, must put considerable effort into producing its product range at the lowest possible cost and achieving all possible efficiencies in its operation. This is what is required to secure sustainable employment in the long term and to enable the board to compete successfully on domestic and international markets.

I am satisfied that Bord na Móna is capable of meeting the considerable challenges which faces it and, indeed, the board has already taken steps in that direction. Initiatives have been taken to reduce costs, including the introduction of a voluntary redundancy scheme, which will lead to a major reduction in costs and overheads. I would like to pay tribute to the staff of Bord na Móna who, in spite of the difficulties facing the company, have continued to demonstrate the necessary dedication and application, which will ultimately restore the company to profitability and enable it to maintain its position as a vital component of the national economy.

This Bill will extend the options open to the board to enable it to develop to its full potential and I commend the Bill to the House.

Pól Ó Foighil

Ba mhaith liom fáilte a chur roimh an Aire as bheith i láthair anseo inniu agus buíochas a ghabháil leis as an gcur i láthair atá déanta aige ar an mBille tábhachtach seo atá faoi chaibidil againn. Is Bille é seo, ar ndóigh, a bhaineann le hacmhainn nádúrtha, agus rud ar bith a bhfuil baint aige le forbairt acmhainní nádúrtha, ní mór dúinn ár n-intinn, go huile is go hiomlán a thabhairt do phlé na ceiste seo, go mórmhór má bhaineann sé le forbairt acmhainní ar chósta thiar na hÉireann. Is beag atá ann ó thaobh déantúsaíochta nó fhorbairt eacnamaíochta de. Bímid i gcónaí ag brath, mar is eol don Aire go maith, ar dheiseanna le forbairt a dhéanamh ar acmhainní nádúrtha, le deis a thabhairt do mhuintir na hÉireann, do mhuintir an iarthair go speisialta, teacht i dtír, ó thaobh fostaíochta de, ar aon bhealach gur féidir leo ar an achmhainn nádúrtha sin.

Tá sé sin déanta ar go leor bealaí, i dturasóireacht go mórmhór, in iarthar na tíre. Tá sé déanta againn i gcás fhorbairt fheilméireacht éisc, bíodh go dtuigim nach bhfuil an tAire féin an-chinnte an maith an rud é a leithéid a bheith ann. Tá 500 duine ar imeall chósta iarthar na hÉireann ag plé leis an bhforbairt sin. Mar an gcéanna i gcas na bportach, agus, má thugann na portaigh teacht isteach do mhuintir na hÉireann, tríd an earnáil phríobháideach nó trí Bhord na Móna, caithfimid bheith aireach agus buíoch de na hiarrachtaí atá á ndéanamh agus atá déanta.

Dé réir mar a thuigim an Bille seo atá os ár gcomhair, is dul chun cinn é sa mhéid is go bhfuil sé i gceist deis a thabhairt do Bhord na Móna leathnú amach sa dóigh is go mbeidh deis acu dul amach ar an margadh chun troid le haghaidh sciar den mhargadh sin maidir le soláthair teasa nó ábhar tine a chur ar fáil. Ba chóir go mbeadh an-scil acu san obair seo mar caithfimid dul siar go dtí blianta an chogaidh 1939-45 nuair a chrom muintir na hÉireann i gcoitinne, le linn na hÉigeandála, ar an mhóin a bhaint. Chuamar, tar éis an chogaidh, chomh fada ó bhaile go dtí an Fhionlann agus go dtí an Rúis leis an nuatheicneolaíocht sin a fhoghlaim. Ní amháin gur thangamar abhaile agus gur chuireamar an teicneolaíocht sin chun maitheas na tíre seo trí bhunú Bhord na Móna ó thaobh soláthair agus cur ar fáil ábhar tine agus ábhar portaigh ar na réimsí éagsúla atá le déanamh.

Sa chúlra sin ba chóir dúinn i gcónaí bheith sásta agus toilteanach aon tacaíocht gur féidir linn a thabhairt don chineál seo forbartha. Ceann de na deacrachtaí seo a bhí ann trí an blianta, go ndeachaigh an costas táirgíochta chomh mór sin chun tosaigh ar an chostas díolacháin gur fhág sé sinn i gcomórtas le hábhair thine eile ar nós gáis, ola agus guail, agus go raibh mar aidhm againn, ag an Stát, go mbeadh fostaíocht mhór le fáil. Mar is eol dúinn, tá a lán fostaíochta curtha ar fáil ag Bord na Móna, go háirithe i lár na tíre, agus tá an tairbhe sin le feiceáil sna ceantair ina ndeachaigh Bord na Móna chun cinn.

Ach, é sin ráite, tá mé ag ceapadh go raibh toirmeasc nó ceangal ar Bhord na Móna an t-eolas agus an staidéar uilig a bhí déanta acu anuas trí na blianta, a roinnt le pobal na hÉireann agus le pobal tír ar bith eile. Mar sin, fáiltím roimh an Acht seo ann, ach, dar liom, tá go leor fabhtaí agus lochtanna sa Bhille féin sa mhéid go gceapaimse go bhfuil Bord na Móna fós faoi chuing, mar a déarfá, an Aire agus an Státseirbhísigh, agus nach bhfuil dóthain cumhachta nó neamhspleáchais acu mar bhord, mar dhaoine, le dul amach ar an margadh sin, go bhfuil siad ag iarraidh an sciar sin a thógáil orthu féin agus troid mhaith a dhéanamh ar a shon.

Tá sé an-deacair, agus beidh sé an-deacair, ag Bord na Móna, de réir a meoin — agus tá an dea-intinn ann — cur leis an réimse, nó diversification, atá ar bun acu go dtí seo. Tá an-iontas ormsa, mar shampla, nár éirigh le Bord na Móna go dtí seo a bheith bainteach le forbairt an phortaigh atá imithe, nó gearrtha, nó cut-away bogs mar a thugtar orthu. Tá roinnt iarrachtaí déanta ansin, ach tá an-iontas orm nár éirigh le Bord na Móna an cineál ruda a dtugtar biomass air a chur ar fáil agus a chur ag fás sna portaigh a bhí gearrtha acu cheana.

Is é an míniú atá agam air sin ná go raibh siad, mar fho-eagraíocht Stáit iad féin, faoi smacht iomlán ag an Stáit agus ní bhfuair siad na deiseanna forbartha ag an am gur ghá iad a bheith acu, nuair a theastaigh siad uathu. Bhí an-deis ag Bord na Móna tar éir an chogaidh, agus anuas trí na seascaidí agus na seachtóidí, dul ar aghaidh ar an gcaoi sin. Ní bhfuair siad an seans agus, mar sin, tharla go raibh Bord na Móna ag forbairt i lár na tíre, go raibh na costais tháirgíochta ag méadú agus nach raibh an costas díolacháin ag coinneáil céim an chéim leis an gcostas táirgíochta. Níiontas, mar sin, go raibh Bord na Móna, in áit a bheith ag cur lena gcuid sócmhainní airgeadais sna blianta rathúla, sna seascaidí, ag iarraidh, dar liom, coinneáil céim ar chéim ó thaobh fostaíochta de.

Ní féidir iad a lochtú sa mhéid gurbh shin é an aidhm a bhí acu, aidhm cineál sóisialta chomh maith le haidhm fhostaíochta, faoi mar a bhí ag an ESB agus ag go leor bhord Stáit eile. Bhíomar uilig i gcónaí ag caint faoi fhostaíocht ach ní maith an scéal é i ndeireadh an lae, mar atá faighte amach againn; is beag maith dúinn i ndeireadh an lae an fhostaíocht mura bhfuil sí bunaithe ar ghníomh eacnamúil, agus sin an fáth go bhfuil mé ag moladh an chuid sin den Bhille, go bhfuil iarracht á déanamh anseo le go mbeidh siad amuigh sa saol ag troid dóibh féin agus go mbeidh cúrsaí ar bhonn eacnamúil. Mar, mura mbíonn sé eacnamúil, níl aon fháth ná aon bhealach ann go n-éireoidh leis.

Bhí an-seans ag Bord na Móna, ó thaobh gairneoireachta de, dul chun cinn iontach a dhéanamh ansin. Tá daoine príobháideacha ag easportáil agus ag díol i bhfad níos mó le haghaidh gairneoireachta ná mar atá Bord na Móna, agus tá cumhacht an Stáit taobh thiar den bhord. Tá na daoine príobháideacha seo i bhfad níos láidre agus i bhfad níos fearr agus is é an chúis atá leis sin ná nach bhfuil aon laincisí orthu. Tá siad in ann dul amach agus na barrchostais uilig atá ar an eagraíocht Stáit a laghdú. Dá mbeadh an duine príobháideach ag plé leis an intinn a bhí ag Bord na Móna ag an am, faoi chuing an Stáit, ó thaobh fostaíocht a chur ar fáil bheadh sé an-deacair dóibh an dá rud sin a thabhairt le chéile.

Nuair a tháinig an drochaimsir roinnt blianta ó shin, chuaigh Bord na Móna chun donais ar fad. Bhíodar i ndrochchaoi cheart i leith airgeadais agus mar chomhlachta Stáit. Cuireann sé iontas orm freisin nuair a fheicim an chaoi a n-oibríonn an Stát-chóras ó thaobh rudaí éagsúla agus ó thaobh Bhord na Móna de. Tabharfaidh mé sampla den chaoi a n-oibríonn an Stát, ó phortach amháin go portach eile, agus táimid ag caint faoi fhorbairt portach nó obair ar phortaigh. I 1985, mar shampla, thug an Rialtas cead do Bhord na Móna portach i gClárach, Contae Uí bhFáilghe, a dhíol leis an Roinn Foraoiseachta ag an am mar go mbeadh siad in ann é a choinneáil; ba mhaith an plean é sin mar bhí siad ag rá gur blanket bog a bhí ann agus go raibh sé an-luachmhar.

Rinneadar socrú go n-íocfadh an Roinn Foraoiseachta £500,000 le Bord na Móna ar 1,150 acra. Anuas air sin, bhí an Roinn ag dul a íoc, agus sásta a íoc, an cháin agus an t-ús le blianta fada a bhí dlite do Bhord na Móna ón chéad uair a cheannaigh siad an portach céanna. Cuirfidh mé sin i gcomparáid leis an rud atá ar bun thiar i gConamara an lá atá inniu ann, agus má oibríonn tú amach 1,150 acra de phortach agus má roinneann tú é sin ar £500,000, móide an t-ús, feicfidh tú gur tugadh breis agus £500 in aghaidh an acra. Thug Roinn Stáit amháin breis agus £500 in aghaidh an acra le portaigh a cheannach agus thug siad an t-airgead sin do Bhord na Móna.

An lá atá inniu ann, tá feidhmeannaigh de chuid Oifig na nOibreacha Poiblí ag dul thart ar Chonamara ag iarraidh portaigh a cheannach ar £10 an t-acra. Nach aisteach an chaoi a bhfuil an saol ag athrú; go bhfuil Roinn Stáit in ann £500 punt in aghaidh an acra a thabhairt do Roinn Stáit eile ar phortach? Ach nuair atá an fear bocht thiar i gConamara ag iarraidh a phortach a dhíol, nach bhfuil sé mícheart don fhoroinn Stáit chéanna, Oifig na nOibreacha Poiblí, bheith ag iarraidh an cineál portaigh chéanna a cheannach — leis an aidhm ceannann céanna, is é sin, lena chaomhnú mar oidhreacht de chuid an náisiúin seo — ar £10 nó £15 in aghaidh an acra.

Ag an am céanna freisin, i 1985 tugadh treoir ón Rialtas go dtiocfadh Bord na Móna agus an Roinn Foraoiseachta agus Iascaigh timpeall na tíre le breathnú ar áiteanna speisialta portaigh le go bhféadfadh siad iad a cheannach agus a chaomhnú mar a bhí á dhéanamh i gClárach. Ceannaíodh Clárach, íocadh an t-airgead, ach níor deineadh tada óshin. Tá na mílte acra thiar i gConamara, mar is eol don Aire go maith, agus tá an oiread cainte déanta faoi le bhliain anuas mar go raibh muintir na háite ag iarraidh 50 acra le haerfort beag a thógáil ann: 50 acra as 24,000 acra, twenty four thousand acres!

Mr. Dardis

Of blanket bog.

Pól Ó Foighil

Blanket bog is right, mar a bhí i gClárach, blanket bog a ceannaíodh thíos i gClárach freisin. Baineann sé seo uilig le Bord na Móna, le móin agus le portach. Nach aisteach an rud é, nuair a bhí siad ag iarraidh sin a dhéanamh, bhí siad ag iarraidh é a chaomhnú. Tá chuile dhuine ag léim ar an bandwagon seo maidir le caomhnú, environment agus chuile shórt eile, ach nuair atá muintir na háite ag iarraidh píosa beag den acmhainn nádúrtha atá acu lena fhorbairt dóibh féin, tá baic uafásacha orthu; níl siad in ann tada a dhéanamh faoi, agus níl siad ag fáil cúnaimh le haon rud a dhéanamh faoi.

Ní bhaineann sé sin le Bord na Móna amháin ná leis an gClochán, baineann sé le háiteanna eile timpeall na tíre chomh maith céanna. An pointe atá á dhéanamh agam ná gur chóir do Bhord na Móna dul i gcomhar leis an Rialtas nó le Roinn na Mara maidir le caomhnú portach agus, sa chaoi seo, bheadh siad, ar a laghad, in ann praghas réasúnta a thabhairt. Is é an fáth go bhfuil mé ag rá sin ná gurb í an aidhm agus an spiorad agus an prionsabal atá taobh thiar den Bhille seo ná go mbeadh Bord na Móna in ann struchtúr a chur ar fáil dóibh féin le go mbeadh siad ábalta dul i gcomórtas, nó, mar a deirtear i mBéarla, to be competitive; sin an aidhm atá leis an mBille, de réir mar a thuigimse é.

Nach aisteach an rud é go bhfuil sé mar aidhm ag an Stát go mbeadh Bord na Móna in ann comórtas a dhéanamh sa sórt saoil seo agus san am céanna, go bhfuil Roinn Stáit eile ag iarraidh fear Chonamara a dhéanamh níos boichte ná mar atá sé agus ag iarraidh an cúpla acra portaigh atá aige a fháil uaidh in aisce. Ní dóigh liom go bhfuil sé sin de réir an spioraid atá taobh thiar den Bhille seo. Tá súil agam go dtiocfaidh an spiorad céanna atá taobh thiar den Bhille seo ón Roinn Airgeadais nuair a bheidh plé acu le hobair a bhaineann le forbairt portach nó aon rud eile. I dtaca le Bord na Móna arís, caithfidh siad bheith an-chúramach. Tá a fhios againn uilig gur saol uafásach deacair atá anseo ó thaobh comórtais de, competitiveness. Feicimid timpeall orainn é gach lá. An té nach bhfuil in ann dul amach agus an margadh sin a fháil dó féin agus ag an am céanna brabach a dhéanamh dó féin, ní sheasfaidh sé.

Acting Chairman (Mr. Mooney)

I am sorry to interrupt you, Senator. For the information of the House, there is no agreed time limit on contributions on Second Stage, but I understand a considerable number of Senators are offering.

Pól Ó Foighil

Gabh mo leithscéal. Níor thuig mé é sin. Ní leanfaidh mé mar sin cé go bhféadfainn caint go maidin faoi phortaigh. An pointe atá á dhéanamh agam ná go gcaithfidh Bord na Móna bheith cinnte má tá said ag dul a bhriseadh amach agus fobhoird acu ag deileáil le earraí éagsúla mar bhricíní agus na fobhoird uilig faoi smacht ag an ollbhord, agus iadsan uilig faoi smacht an Aire agus na státseirbhíse, ag an deireadh, dar liomsa, ní oibreoidh sé sin. Mura mbíonn cead a gcos acu, cead a gcinn acu, a dhul agus a bheith neamhspleách agus a bheith in ann a mbealach a dhéanamh ar an saol mór eacnamúil seo, ní féidir leo dul chun cinn a dhéanamh.

Is cuma faoi smog nó gan smog a bheith i mBaile Átha Cliath, ní éireoidh le Bord na Móna sa chathair seo na brícíní a dhíol ar an gcineál praghais atá orthu faoi láthair. Níl sé eacnamúil. Níl sé eacnamúil ó thaobh an méid teasa a chuireann sé amach. Níl an margin sách láidir le go bhféadfadh fiontar príobháideach dul isteach agus airgead a ghnóthú, agus níl sé sách láidir mar gheall ar an struchtúr atá ag Bord na Móna féin ó thaobh fostaíochta de agus na gcostas.

Professor Conroy

I would like, if I may, first of all to welcome the Minister for Energy. We greatly appreciate that he is here personally to take this Bill through the House.

We also welcome the Bill itself, which is very necessary, an enabling Bill as the Minister has described it. I think we should listen to the wide-ranging comments of Senator Ó Foighil. We should recognise the fact that Bord na Móna has been a success story, and it would be very easy to forget this in the difficulties which have afflicted the board very recently, over the past two or three years.

Bord na Móna was set up in 1946 in a very different era, with a very different type of State company envisaged. Senator Ó Foighil referred to the private competition, and this is very true. It is a very different world. It was very successful in the way it acted in the forties and fifties; indeed, it helped to lay the basis for the effective industrial and modern industrial expansion which we had in the sixties.

Although perhaps we did not realise it at the time, that very expansion was putting a demand on our energy resources which previously related very much to hydro-electricity and to the Bord na Móna production. Effectively, it transferred that energy cost to a demand for mobile fuel for oil. That, in turn, meant when the oil crisis struck in the mid-seventies that Bord na Móna was faced with a request at that time to expand its production of fuel. It responded very successfully from its own point of view — in some ways too successfully — to that demand and to that request. It engaged in capital intensive and other actions the effects of which are being felt today when, of course, the price of oil is at a very different level from that projected in the mid-and late seventies.

It is very difficult for a body such as Bord na Móna, and particularly with the type of structure which it had, the operating rules under which it was working, to adapt. I would like to join with the Minister in paying tribute to the employees and staff of Bord na Móna for the way they have faced up — naturally it is a very emotional issue — in a very good, effective and, at the end of the day, a very co-operative manner to a very difficult situation. Only a few years ago there were 4,500 employees in Bord na Móna; now we are down to about 2,700 to 2,800, somewhere in that range of numbers. A very large number of those employees were situated, as the Minister and Senator Ó Foighil have indicated, in the midlands, particularly in County Offaly and adjacent counties. It has been an extremely traumatic process in human terms, in employment terms and in financial terms for those midland counties, and particularly for County Offaly because it affected quite a substantial area of the country.

Bord na Móna has basically been a success story but it has found itself faced with enormous capital outlays and it has also, of course, by the very fact that it was labour intensive, found itself in an extremely difficult financial position. Clearly, that has to be taken into account. It is not really, however, what is being dealt with in this Bill; and, as the Minister has indicated, it is receiving the very necessary attention which it requires, it is receiving that elsewhere. But the enormous debt burden on Bord na Móna is clearly something that has to be dealt with at some stage and I am quite sure it will be.

What this Bill is doing effectively means that Bord na Móna will be enabled to move ahead once again and once more, hopefully, to become a success story. Senator Ó Foighil referred to techniques is fearr sa domhain. He is absolutely right. The techniques developed by Bord na Móna employees are among the best in the world. Countries such as Finland and Germany, who are not exactly behind in modern machinery and modern techniques, came to this country, to Bord na Móna, in order to learn from them techniques relating to peat and turf technology. That is a very great achievement. Not only that, but it gives considerable hope that, with this Bill and other measures which the Minister clearly has in mind, it will be possible for Bord na Móna to move ahead again. We have seen the co-operative work of the employees. We have seen also the success of those employees in a very competitive, innovative modern world when given the opportunity to do so.

However, if we look at the product of Bord na Móna, clearly there are very grave problems. Possibly 50 per cent of Bord na Móna's output relates to milled peat and turf. If you look at that in terms of energy costs, then, as compared with coal, the cost is something in the region of about £30 a megawatt as compared with something under £15 a megawatt for coal at presentday prices. It is a very difficult situation. Nonetheless, of course, coal has very major disadvantages. There are those of us, many environmentalists, who would say that coal should be very sparingly used, that it is a very environmentally inappropriate substance, if it can possibly be avoided. But, if you are just thinking in harsh financial terms of what it costs a body such as the ESB to buy coal as compared with buying peat, there are obvious difficulties.

As regards solid fuels, I think the day when Bord na Móna could sell sods of turf is gone and finished with. In so far as it is an economic industry today it is for small private units that have extremely low overheads and work under very tight and flexible conditions, which is not possible once you go outside a very small number of people. You are left then, from the point of view of competitive fuels, with the briquettes. Here one would certainly like to applaud the Government for the steps they have taken in relation to smog — the situation here in this city, which was beginning to cause not just the obvious structural damage to the buildings but very definite health hazards. It is perhaps fortunate and good that in fact peat briquettes can compete quite effectively on that market, certainly as a smokeless fuel. Even there, however, there are certain problems at the actual sales end, the retail network as it were. Hopefully, those problems will be overcome. That accounts for about 75 per cent of product, so you can see some of the problems that are facing Bord na Móna. There are problems of capital, of labour intensity and problems of an extremely uncompetitive market.

One comes, then, to a market which Bord na Móna has been developing and exploiting very successfully and that is the horticultural market, where probably about 25 per cent at present of its revenue would be of a horticultural nature. There, Bord na Móna has been extremely successful. Probably worldwide it is a leader in the horticultural peat market and I see few reasons why that should not be very effectively developed and on a very large scale. There, you are building on success. There, you are building on a market which exists. There, you are building on a situation in which we have a competitive advantage. But, even there, there are some problems. There is the problem of increasing competition from Finland, from Germany and perhaps even from the Soviet Union. There is also a problem, from an environmental point of view. There are those who would argue that peat should not be used in horticulture. It is probably a very tenuous argument but it is one we have to be conscious of and which the board, in its advertising, in its working and in its sales, should turn perhaps to its advantage rather than allowing it to be to its disadvantage.

That is the present situation. The Minister and the Government in this Bill are bringing in the opportunity for the board to develop, to work outside the State in a much more effective manner and to work in joint ventures. There are many foreign companies who would be interested in working with Bord na Móna for a series of reasons — its innovative technology, its knowledge of the background in peat, its success in the horticultural market. These would all encourage foreign joint venture participation. Here you are talking of considerable highly added-value products as compared with the milled peat or solid fuel. I think it is an excellent move to make this more feasible, more practicable, to give Bord na Móna the opportunity to move ahead in this direction. It is going to have to move ahead in other directions as well. I know it is already working on some of these. One is activated carbon which probably from an environmental and technological point of view will be of some considerable importance. I think the board has to have the opportunity to develop into other related markets and this Bill would appear to open that opportunity to the board.

There are a number of particular points in the Bill. One that one should perhaps take a little bit further in relation to technology is that the Finns have come to this country to learn from us in this particular respect. They have shown us in some ways how, with very limited natural resources, very difficult economic and social conditions, you can, by occupying a high technology link, compete extremely successfully and also how that can be related to joint State-private enterprise co-operation. I think there are many lessons which we could usefully apply in that direction. These are particularly appropriate for Bord na Móna.

I am delighted to see the Minister bringing the archaic accounting system of Bord na Móna up to date. Again, if it is going to compete, you must have modern management and financial accounts. There was a great and unfortunate constraint there which, I am sure, in some ways did not make it any easier for the management of Bord na Móna over the past number of years.

Consultancy is another area which is already very open to us, which already been successfully performed by Bord na Móna but only by the extraordinary method of working through the Department of Foreign Affairs. Here again, the sister body, the Electricity Supply Board, has been extremely successful in this regard in the Middle East and indeed many other countries as well.

I am very glad to see the pensions scheme being brought into a proper arrangement. It was a very necessary measure and it is good that the Minister should have resolved the queries about the situation there.

There is one other small point which I think is a pointer towards the future. That is that it is very nice to see the clause in the Bill which refers to the sort of co-operation which we should see between our universities, our regional technical colleges and our industry. I am delighted to see that a clause to that effect has been inserted into the Bill. I welcome the Bill and I look forward to Bord na Móna once again having the success which it has had over many decades.

Mr. O'Toole

In general terms I welcome the introduction of this legislation. For many years industry and companies like Bord na Móna and the ESB were completely constricted and constrained by out-of-date legislation which forced them into the most devious contortions in order to involve themselves in operations from which they were forbidden by the legislation. It is a reflection of the gom-been mentality which existed in the twenties and thirties which really tried to suppress the development of the ESB and Bord na Móna at that stage. We in fact saw little of it but it raised its ugly head just 18 months ago when the ESB decided they could sell coal cheaper than anybody else. All the forces who were supposedly in favour of the free market at all times until that point suddenly found it was no longer suitable to allow the ESB to sell coal and at that stage the Government fought a rearguard action — and I must say I supported them on it — against many of the people whose predecessors had 40 years ago objected to the Shannon scheme. It was the same mentality which led to the setting up of this legislation 30, 40 or 50 years ago, legislation which did not allow Bord na Móna to develop along the lines on which it should have been allowed to develop. It is the same mentality which would shut down national radio stations when they feel it is in the interests of the other side at certain stages. However, there is enough said about that for today.

I am glad that the portfolios of Energy and Communications were separated from each other last July or August. At least I feel more secure in discussing this legislation here today.

I listened with interest to the Minister's input and his comprehensive report on various aspects. He outlined one of the issues which I was alluding to there — the question of having to put people on secondment to Foreign Affairs in order to let them work on operations abroad. I welcome the broadening out of the base of the board on this. I think it is very positive and progressive and that it will lead to both efficiency and effectiveness in the operation of Bord na Móna. To that extent it is very much to be welcomed. I have some problems about what I see as various conflicts between what the Minister said in his speech and sections 4 and 5 of the Bill which I will refer to in a few minutes.

We saw what was done with hotels in the States. Aer Lingus have on many occasions subsidised many of their operations through things like their hotels. Similarly, the ESB are now moving out into areas which they did not consider before. It is great to see the ESB taking full page advertisements dealing with their retail outlets, aspects of their work which they not only ignored but felt was not in their interest in years past. I am also delighted with the new thrust and impetus in the marketing of Bord na Móna products. It should not go without saying that the famous Marino Waltz advertisement certainly put the board before the public eye. It took the bog into the hit parade, which certainly was an important thing at that time.

I am not quite sure that I would agree with all that has been said. Senator Conroy refered to the end of the sod of turf. I am not sure about that. Until last year I operated my house, which is in the county of Dublin, on turf. There is a difficulty in terms of the pure bulk of the stuff. I always found it difficult to simply order ten tonnes of turf and get it delivered and to rely on the quality. The advantage of the briquette, of course, is that the quality control is superb — one briquette is the same as the other whether you buy it in Belmullet or in Dublin. It is a different ball game altogether with the sod of turf. The reason bulk buying of turf has become so difficult for the consumer is that one just cannot rely on the consistency of the quality; there is no quality control on the sod of turf. Obviously, the peat briquette is a much more manageable product in the way it is now being presented and it can be handled in supermarkets, etc.

I wonder about the bulk selling of sods of turf to people who wish to run their home on such turf. Oil is very cheap at the moment, but that is not always going to be the case. Every year in their statement of accounts or annual report Bord na Móna make it clear how world energy prices are really the main determining factor in working out the marketability and the saleability of a product. Bord na Móna have always been dependent on the weather and on world prices. These are the two great variables over which they have no control, on which they are utterly and totally dependent. Therefore, that is another reason why I welcome this legislation which allows them to broaden their base of activities so that they can involve themselves in areas which would allow them to compensate for difficulties which would arise because of weather problems and because of world energy price problems.

I am delighted that both the Minister and the first speaker from the Government side of the House found it important enough to make a reference to the workers in Bord na Móna. I think it would be wrong to allow any discussion on Bord na Móna to take place without recognising the great difficulties that those workers have gone through. They have taken a hiding from the media on quite a number of occasions over the last number of years. They have been absolutely loyal and dedicated to that company. They have gone through the trauma of lay-offs, short time, half-time and indeed of redundancies. They have come through and are as dedicated as ever they were. I certainly would also want to put on the record my admiration for their contribution, not just to their industry but in many ways to our economic policy.

I would also ask the Minister to respond to the question of the long-term future of Bord na Móna. I am one of the people who objected to the setting up of Coillte Teoranta. I listened to what the Minister had to say agus bhí mé ag éisteacht chomh maith leis an tSeanadóir Ó Foighil agus an méid a bhí le rá aige mar gheall ar dhaoine i lár na tíre atá ag brath ar Bhord na Móna ó thaobh fostaíochta de agus gach rud a bhaineann leis sin. I want to hear the bad news as well. As I understand it — and I am open to correction as I am not an expert on this area — there is no long-term future for Bord na Móna and we are talking about their prospects in the medium term. What I want to know is whether there is going to be a Bord na Móna or a turf industry by the year 2010, 19 years from now? I do not believe there will be. I think it is misleading to talk in terms of their long-term prospects. What we are talking about is their prospects in the medium-term. It is a five to ten year industry and I cannot see what will be happening in this industry in ten years time.

I notice the Minister looks aghast. That is a warning shot of what I want to say. I see no need to have Coillte Teoranta and Bord na Móna running separate operations. To me they are synonymous, dealing with almost the same product. As well as this, the development of the biomass technique as a source of energy will bring them even closer together. I put it very strongly to the Government at the time that it would be a mistake to set up Coillte Teoranta. The operations of Coillte Teoranta should be an extension of the operations of Bord na Móna who have the expertise and the managing and marketing techniques, required by Coillte Teoranta.

We could have saved on costs and had a more efficient operation if we had put both of them together.

Section 2 states that the board may promote and take part in the formation or establishment of a company; acquire, hold and dispose of shares or any other interests in a company and become a member of a company etc., having regard to the definition of "company within this State" under the terms of the present Companies Act and the proposed Companies Bill. I would like to know if any difficulties will be created because of this in the long term?

What would happen if Bord na Móna merged into Coillte Teoranta? Is this a possibility? Would the Minister outline his view on this matter as this could not happen without ministerial blessing. There was a vote a short time ago on another Bill on the question of ministerial involvement and responsibility. I am in a state of confusion about what is involved in this Bill. Is there anything in this Bill which would prohibit, stop or block an attempt to merge Coillte Teoranta and Bord na Móna? Not only will this be necessary, it will also be inevitable by the turn of the century. I want to make sure that we clear the road for this to take place as it certainly will happen. The one thing that might delay this happening is developments in the cutaway bogs. I listened with some interest to what the Minister had to say on that matter. A major development will take place which is quite exciting. This legislation allows for such development to take place in an efficient manner.

I do not see the need for section 4 of the Bill. Obviously, I must be misreading it but I do not see the need for it. Therefore I am certainly going to propose that it be deleted from the Bill. I do not think it adds anything to it. I look forward in particular to the Minister's response on that matter. Section 4 states the board may engage in the marketing of turf and turf products, the production of turf and turf products; fostering the production and use of turf and turf products; the acquisition of bogs and other lands; the management, development and working of bogs — which basically amount to consultancy work — and generally doing all such other things as arise out of, or are consequential upon, the powers mentioned in the preceding paragraphs. That is fine. It moves on to state that the exercise of these powers shall be subject to the consent of the Minister and the Minister for Finance.

I do not understand the way in which it will operate. If Bord na Móna take up a minority interest in a viable company outside the State and this viable company proceeds to involve itself in something the Minister for Finance or Minister for Energy does not like, what will happen at that point? I do not think that adds anything to the Bill but rather will create extra work for the Department.

Section 5 states that the board may, inside or outside the State, engage in all such commercial activities, whether in relation to the production or marketing of turf or otherwise, as in the opinion of the board arise out of and can advantageously be conducted in conjunction with any function of the board. That is not right. It cannot engage in activities which, in the opinion of the board, can be advantageously conducted as it is stated in section 4 these are subject to the consent of the Minister. Therefore, it is not just a matter of whether the board consider these activities can be advantageously conducted, it is a matter of whether the Minister also agrees with them. That does not add anything to the Bill. This is one of the few points on which I might be in agreement with the Minister's party. It is a clear example of where a "hands off" policy should be adopted by the State. Once a board is set up, they should be left to get on with it.

Section 5 states the board may, inside or outside the State, engage in commercial activities. That is a clear statement. Why then do we need section 4? That section actually restricts the spirit of section 5. There is no sense including it and I certainly want to hear the reasons for including it.

The Minister in his speech said the Bill empowers the board to develop such bogs in accordance with such directives as may be laid down by the Minister for Energy of the day.

If the board decide that an activity can be advantageously conducted and the Minister decides he does not like it for some reason, such as somebody in high places is developing something privately hand-in-hand somewhere else, what would happen?

What kind of constraint does the Minister have in mind? I can see an immediate conflict. I envisage Bord na Móna saying they can produce electricity cheaper than the ESB and wish to sell it to the ESB. Perhaps that would be out of line with national energy policies. I can see the reason for imposing constraints, in terms of national policy rather than on economic and commercial activities. Sections 4 and 5 deal with commercial activities.

What would happen if Bord na Móna decide that perhaps the best thing they could do with a cutaway bog would be to start prospecting for minerals or oil? Where would that leave us in the long-term? Some people might begin to feel uncomfortable and put undue pressure on Ministers and the Government. Why is the Minister including that constraint in section 4 (2)? I believe sections 4 and 5 are in conflict with one another.

I believe there is an inbuilt conflict and contradiction in section 10. As the Minister is aware, I look very closely at the provisions on the remuneration to be paid to public servants and people attached to State industry, etc. The section states that in determining the remuneration to be paid, the board should have regard to Government or nationally agreed guidelines which are for the time being extant. I have a great difficulty in legislating for wage agreements. I immediately see a conflict in that there could well be a Government guideline which has not been nationally agreed. What happens in that case?

The section goes on to state the board should comply with any directives with regard to such remuneration, allowances etc. which the Minister may give from time to time to the board. Is that a wise and necessary interference by the State in the operation of the board? Why should the Minister have to tell the industry what they should pay their workers? I do not think there is any need for this and I look at it from both sides of the coin. First, I object to it because it would represent a centralised attempt to depress workers' wages to which I would obviously object. If an attempt was made to do that I hold that the very energetic and positive trade union representatives of the workers in that industry would ensure that it would not happen. I fail to see what the advantage to the State would be in interfering in the internal operations of the company. Why should the State interfere and tell the board or the industry what they should pay their workers? This is an interference which cannot be justified. I can see a conflict in this and I request the Minister to justify the inclusion of his section and indicate what effect it will have.

The provisions of the section do not do anything to develop the turf industry. What the board pay their workers is surely a matter for the board, perhaps at sub-board level. It may even be a matter which would not come before the board at all. This raises the question as to the Minister's style. Giving the Minister the final or a major say in the type of commercial activities in which the board may engage and allowing the Minister for Finance to decide on wage increases etc. for employees of the company amounts to inteference with the working of the industry.

This is fine legislation in many other ways but I do not think these two aspects add anything to it. I appeal to the Minister to reconsider these points. As I said, this is positive legislation which removes the chains and shackles on the industry. Let us not remove those shackles on the one hand and replace them with other constraints. I do not think Ministers need, want, or should be involved in the administration of the company or in the policy decisions of boards. We should put the right people on those boards so that they do not find themselves in conflict with Government on the one hand and, on the other, ensure the administration are able to decide on the appropriate level of wages for their workers.

With those two reservations, I welcome the general thrust of the legislation, I thank the Minister for his very comprehensive presentation and I look forward to his response on some of the issues I have raised.

Mr. R. Kiely

I welcome this very important Bill. It provides the board of management of Bord na Móna with some of the main tools they need to restructure and revitalise the operations of the board. The Bill's main purpose is to provide greater flexibility in the ways the board may adopt to reorganise and restore the core peat business to a sound financial basis, to enable the board to engage in other activities in which they have acquired particular expertise, to promote, form, take part in and require companies to enter into joint ventures to exploit cutaway bogs and other bogs not required for peat production and to undertake engineering and building works not related to peat and to engage in consultancy, advisory and training activities.

Since their formation in 1946, Bord na Móna have played an important role not just in providing an important alternative native source of energy but also providing a significant number of jobs in areas in which, in most cases, there was no alternative source of employment. The importance of peat in Ireland is emphasised by the fact that one-sixth of the total land area is peat land. Bord na Móna are unique in that the company are totally dependent on the unpredictable nature of Irish weather. They have faced major problems in recent years when we experienced summers ranging from poor to dismal.

Bord na Móna are central to the social and economic infrastructure of the midlands where there is a concentration of bog. The company employ 3,000 people despite almost 1,200 redundancies during the past few years. There have been job losses in County Offaly where peat production formed 50 per cent of the board's operations. In this respect, I compliment the workforce for the manner in which they accepted there was a need for rationalisation. There has been very little other industrial development in the areas where Bord na Móna have operated during the past 40 years. Job losses have taken place since rationalisation was undertaken by the board during the past few years and there is the added problem that no apprentices, fitters, carpenters etc, have been taken on by Bord na Móna since then.

Bord na Móna have always been regarded as the flagship of the semi-State sector. In the two oil crises during the seventies, at the direction of the Government the board embarked on a substantial development programme, which involved huge capital, to substantially increase output to provide milled peat for the ESB power station to create energy and reduce our dependence on oil when the price of oil was highly volatile. It was the exploitation of an indigenous natural resource to provide substantial employment, and substituting for imported oil required to generate electricity. As a semi-State company and because of the way it was structured financially, they have to borrow substantial sums on the open market to fund capital programmes. Unlike a private company, which could develop in such circumstances, they were unable to go to the stock market to raise equity funds. As the company must fund their operations by borrowing they have incurred substantial repayment costs on their borrowings, particularly during the era of high interest rates in the late seventies and early eighties. This meant that an increasing amount of profits went in fund interest on borrowings rather than part of it being made available for substantial research and development and diversification programmes to widen the product base and provide alternative sources of revenue, to give added value to the product and to provide substantial employment.

Bord na Móna borrowings stand at £180 million, despite profits of £20 million. They have to make huge interest repayments on borrowings each year with the result that the enterprise is being choked and deprived of the necessary breathing space in seeking to restructure their operations. It is reported in the accounts for the last financial year yet to be published that despite their efforts to cut costs by reducing overhead costs by £6 million, their interest repayments increased by an extra £7 million for the same financial year. It is clear that Bord na Móna are having to run in order to stand still and that the future of the company rests on a proposal at present being considered by the Government in relation to financial restructuring of the company.

The principal submission is to set up a holding company to take over the debt and provide a moratorium period of approximately five years while the Government arrange for payment of interest on the debts of the holding company so as to give Bord na Móna breathing space during that five year period, to generate profits and reinvest substantially in the company, so that when the moratorium is up the company will be in a position to take over the repayments of the debt from a more financially secure and sound position.

Stokes Kennedy Crowley have been commissioned by the Minister for Energy to vet the submission from Bord na Móna and decisions are imminent.

Given the economic and social importance of Bord na Móna in the areas in which they operate, particularly the midlands, it is vital that the Government arrange for a financial restructuring of the company without any further depletion in employment having regard to the fact that the board have reduced numbers and increased productivity to a maximum, as a result of their voluntary redundancy programme agreed with the unions, over the past two years. New work practices have been introduced and the new Haku system of operation for milled peat has been introduced side by side with the old Peco system. Enterprise units have been set up whereby groups of workers operate autonomously within the board, and act as a private company making milled peat with Bord na Móna purchasing from them as agents. This is an attempt by the new management team to encourage enterprise and initiative in the company, cut costs, secure employment and provide a product at a competitive cost with other fuels being purchased by the ESB in the generation of electricity. The price of milled peat, in terms of energy generated, is more expensive than oil or coal. However, it is important that we retain our indigenous solid fuel resource while, at the same time, insisting that Bord na Móna operate commercially and provide solid fuel at the most competitive price possible.

In relation to the Bill and the provisions which provide for greater flexibility within the institutional set-up of the board through the creation of sub-boards, Bord na Móna is being divided into three semi-autonomous divisions, with the head office being decentralised to their place of operation, as follows: horticultural peat, with its head office at Cul na Mona near Portlaoise, the milled peat division, with its head office at Boora, County Offaly, and the turf division, which will deal with peat briquettes, to be located at Croghan, County Offaly. It would seem that some rationalisation is required having regard to the fact that there are four briquette factories, located at Lullymore, County Kildare; Littleton, County Tipperary; Derryinlough, and Croghan, County Offaly. Sales of briquettes should increase, given that the sale of bituminous coal has been banned in Dublin from next winter.

I would like to see a big marketing drive being undertaken by Bord na Móna to increase their very small share of the solid fuel market, at present standing at 7 or 8 per cent. Sales from the four factories, when in simultaneous production, account for only 75 per cent of the total output. I hope the slack can be taken up by an increase in their share of the Dublin market. There have been temporary closures in all four factories to allow for overproduction and the fact that sales have been slack, particularly last winter.

In considering the options for the board's future, one obvious question is the future use of bogs from which commercial quantities of turf have already been extracted and which are not suitable for use for forestry purposes. In July 1987, the Government decided that Bord na Móna cutaway bogs which were suitable for forestry were to be transferred to the forestry services of the Department of Energy. I agree with this decision and disagree with Senator O'Toole who I think objected to the Bill which provided for the setting-up of Coillte Teoranta. It was an important step because it is also very important that we develop forestry. The decision applies to the cutaway bogs at present available for planting and to those areas of cutaway which will become available in the future. This area will rise in the future as more and more bogs are depleted in so far as commercial exploitation by Bord na Móna is concerned. The board have no statutory power to use cutaway bogs to establish any activity related to peat production for which there may be a commercial opportunity. This Bill provides the board with such power but emphasises that as far as cutaway bogs are concerned the power applies only to cutaway which is not required for forestry purposes. It further provides that all cutaway bog no longer commercially viable for the exploitation and extraction of turf must first be offered to Coillte Teoranta to ensure that it is unsuitable for forestry.

All Bord na Móna operations are very much weather-dependent and this has to be taken into account in assessing their performance. The board are working to provide systems of operation which will make it less weather dependent. The Haku system has been introduced with this purpose in mind. They have made a signficant contribution to the local economy, particularly in County Offaly, where 50 per cent of its operation is located. Fianna Fáil were associated with Bord na Móna in the time of the late Sean Lemass. Under the chairmanship and stewardship of the late Todd Andrews it has gone from strength to strength. It is vitally important at this critical time for the company that the measures taken by the Government will be supportive and helpful to a semi-State company who have undertaken their own rationalisation programme in an attempt to do all it can internally. They cannot get away from the fact that a financial restructuring of the company needs to take place as soon as possible and it is in the interests of the company and the workers that the matter be clarified as soon as possible. The Government should now come forward with a decision, having considered the matter carefully over the past few months, since the submission was first made to the Government.

I welcome the section dealing with the pensions of the workers. The Turf Development Bill takes note of the fact that the board are operating in a more commercial market than heretofore and the flexibility enshrined in the Bill will help for quick decision-making and decisive leadership from the management of the company as they enter a critical phase in their development. I welcome the Bill.

Mr. Staunton

I welcome the Bill and the Minister to the House. May I first welcome the Minister's recent decision concerning Croagh Patrick. I know this is unrelated to the peat industry but I greatly welcome the decision and compliment the Minister for taking it.

Acting Chairman (Mr. O'Keeffe)

We will forgive the Senator for being parochial.

Mr. Staunton

I know you will accept it is a national issue and not, in the least, a parochial issue. The Bill is necessary to tidy up the position largely because of Bord na Móna recent activities in the horticultural sector outside the country. There have been wide-ranging comments concerning the board. I wish I could be as sanguine as other speakers but, with some experience, I would find this difficult for certain reasons which I would like to comment on.

I am a little bit uneasy about proposals which give too much latitude to Bord na Móna. This is not an issue which concerns Bord na Móna any more or less than any other semi-State company but it is a fact of life that many Governments in the past established what were described as semi-State bodies but which more properly should have been entitled State bodies. There is a great national spirit when a board is established to perform a certain function, be it in the airline business, or in the peat or sugar production sectors.

There is great fervour at the beginning but if these boards are given latitude to exceed their original brief, they can abuse their function. There is a history of this running through State investments. For that philosophical reason — and nothing specifically related to Bord na Móna — I would be making these comments regardless of the State body for which the Minister was proposing latitude — I am uneasy.

I note from the Minister's speech that the board will be given the added flexibility to exploit commercial opportunities in ancillary areas. There is latitude involved in sections of the Bill. Section 5 says that the board may, inside or outside the State, engage in all such commercial activity whether in relation to the production, marketing of turf or otherwise as in the opinion of the board arise out of or advantageously can be conducted in conjunction with any function of the board. There is huge latitude there, much wider latitude than I would give to any State company.

Section 8 (1) states:

(1) In the performance and exercise of its functions in or outside the State, the board may do all or any of the following:—

(a) manufacture any plant, machine, apparatus or appliance.

There is extraordinary latitude there. My view is that it was certainly not the intention on the establishment of Bord na Móna that it should engage in the manufacture of any plant, machine, apparatus or appliance. The section continues:

(b) erect buildings,

If there are people making agricultural buildings like Keenans in Bagenalstown, McCartan's in Newtowngore, is it reasonable that a State body should get into this sector at a certain time to protect what it believes to be its interests but which could decimate what is happening in the private sector in that particular area?

Section 8 (1) (e) says:

to establish and operate shops and showrooms.

We have witnessed the controversy where the ESB are concerned with showrooms around the country and the views of the private sector people in the electical business.

I would be extremely uneasy about allowing that kind of latitude to a State body, particularly in the case of Bord na Móna, for this particular reason: the board has the most appalling problems, some of its own creation and some because of the function it has, obsolescence and so on. What I mean by obsolescence is that our bogs are running out. The major raised bogs in the midlands have a limited lifespan left, to which Senator O'Toole referred. He suggested that there may not be a turf industry in Ireland in the year 2010, only 20 years hence. Looking at the projections of the board, that is approximately the fact of life, that where the major employment of the board is in the midlands, there is a short time-span to the extinction of those bogs. When you get past that point and down to the subsoil and start forestry or whatever else, whatever happens on that land past that point is an infinitesimal employer of people in comparison with the turf industry in its own right. Consequently there will be the most extreme administrative and political pressure on the board to diversify. The broad latitude I see in this Bill I would regard as giving the board carte blanche and far more powers than I would be happy about because of the potential abuses I can see looming.

For that reason I would urge greatest diligence possible by whatever Minister is in the Department of Energy to ensure that what they do is fairly closely related to their core business.

The Minister referred to the concern expressed in the Dáil about the financial position of the board and that was with very good reason. Senator Kiely gave some details about the extent of their indebtedness. I do not have the figure in front of me because I had a very limited time to prepare my speech but I understand that it is greatly in excess of £100 million.

I have a few critical comments to make but I am very glad to note at this time the sense of realism of the present chief executive of Bord na Móna, who acknowledged the problems of the debt and who in so far as the operations of Bord na Móna are concerned acknowledges the level of overmanning which exists, the extent to which he has to get his house in order and has the courage, which is unusual for the chief executive in a semi-State company, to draw adverse comparisons between the historical performance of his own board and of equivalent boards in other countries. For example he has gone publicly on record — it is a fact of life but it is refreshing to hear him recognise the fact — that an approximately similar amount of peat is harvested in Finland as here. Historically, we have been producing the same volume of peat with over 6,000 people, whereas the number of people employed in Finland to perform the same function, to produce the same volume, the same wealth, has been something of the order of about 1,700, implying that the redundancy level here, if one is cost effective in line with the modern approach in the sector is in the region of 3,000 or 4,000 people. This is a fact of life, recognised by the chief executive of Bord na Móna, recognised by the Department and, I presume, recognised by the Minister, which forces the board to put its house in order.

In so far as the present level of the debt is concerned, the board itself has been the architect of much of that because when it was given a brief by Government, 20-30 years ago, when the energy crisis loomed to set up a first and then a second national programme for fuel production, unfortunately the prevailing view was that in Ireland we knew what this sector was all about and we should continue to do things as had always been done here. While we laid our plans to continue major capital investment in line with what had been established practice here, there was a revolution taking place in the peat sector in the Nordic countries. What was happening in the Nordic countries at that time was that, at the height of this energy crisis, a country such as Finland had a vast peat resource, had never used it, had virtually no alternative energy resources and their Government adopted a strong political position of insisting that the peat resources be developed. They took people out of their technical institutes to do it. They knew nothing about the sector before they started and that was a blessing because they did not have tunnel vision. They went out and looked at a sector with a good but open mind and developed in a different way. Basically what they did is very simple and is now being copied here — Senator Kiely referred to it — namely the Haku system.

The fundamental difference is that as we had developed, we developed with mega-machines, mega-bogs, mega-rail-way systems, mega-investment and mega-people, which meant that if you wanted to develop a peat bog on the traditional method here you got into the direct employment of contractors, mechanics, fitters and electricians. It did not relate in any sense to what was required in the sector, having regard to the weather factor. We had three successive years which were until last year three of the worst in this century. The board was brought to its knees because it was not geared to the modern approach, towards modern technology. The bad winters came; there was no production in the summer; there were thousands on the payroll.

In contrast to that you can run bogs today, you can scrap your railway systems; you can replace them with simple trailers which can be towed by standard farmers' tractors. You do not need permanent workers on the production side. You can bring in farmers and sub-contractors to carry out that work. You need a limited number of mechanics and electricians on a permanent wage roll because if you are subcontracting, the farmer will look after the maintenance of his own tractor.

The whole principle of what is described as the Haku system is that it is entirely related to weather. If there is a good summer, the farmers make a lot of money. If there is a bad summer, they batten down the hatches. They might not make very much but they contain their overheads and the energy company is not bled. Bord na Móna had been bled. If 20 or 30 years ago when we made major investments, if senior management in Bord na Móna and the boards to which they were accountable, and the Governments in turn to which they were accountable, looked at what was happening in this sector internationally the debt which exists in Bord na Móna today would not exist to a fraction of the extent. I will give you two figures. The Littleton complex, including factory, bog development and bog machinery cost something of the order of £40 million. A major part of the technology is obsolete and what costs £40 million might more reasonably, using different methods, have cost about £10 million. There is conceivably a cost saving of the order of about £30 million. I see Senator Conroy shaking his head. It is a fact of life which I can prove to him.

The other point is that based on the balance sheet, if they try to service the interest charges in Littleton on the huge borrowings there, you end up with a profit and loss account which suggests that the factory is losing about £5 million a year. These are facts which I would be glad to relate outside this Chamber to my friend at any time and to produce the figures.

Professor Conroy

I am not denying what the Senator is saying. I was just shaking my head in incredulity.

Mr. Staunton

We had the abortive Ballyforan venture in which about £12 million was expended and there is not a factory there. There were strange events at that time concerning Ballyforan. There was a certain amount of evidence that some millions of pounds of equipment was ordered after the Minister of the time scrapped the project. In that sense, if there is a substantial debt, to an extent people in past times responsible for what was going on in Bord na Móna were architects of it but, having said that, one does not want to be unduly critical. We have to look at the present and look to the future. I am glad to see the sense of realism there is at present.

In so far as that realism is concerned, I welcome very much the decision by Bord na Móna to sell their headquarters in Dublin. I have been in the building many times. I am a great admirer of it. I gather there are structural problems but I will not argue that. Architecturally, it is a gem. It is a lovely building. But, from the beginning my view was that it was a crime for an organisation such as Bord na Móna, with its roots in the bogs, to insist on having its headquarters in Dublin when their headquarters other than Dublin was as close to Dublin as Newbridge, which is a dormitory village of this city. I can understand workers and executives wanting to work in the city so that their children are near the universities and the schools. I can take all this into account but I could see no reason in the world why executives or others working in Newbridge could not have access to the superb educational facilities in this whole region. This decentralisation into these three or four other areas is very much to be welcomed. The grandiose concept of the Dublin headquarters and all that went with it was a form of madness and was part of the syndrome that led to that type of debt situation. There is a sense of realism shown in the sale of that headquarters.

Sod turf has been mentioned. Of course, the board is doing very much less in the sod turf sector than it had done previously and the reason is very simple. It is not that sod turf production does not pay, it does pay and is a substantial source of income for many farmers; but it is because the private turf plan into which the State has put a very limited amount of money to help the farmers has been hugely successful. From a cost benefit point of view, if the Government want to analyse what they have been losing annually on the direct route through the board or what they have gained in production through putting a very few hundreds of thousands of pounds or millions into the private turf scheme, the private turf scheme is yielding about one million tons of turf each year produced cost effectively by Irish farmers who can sell it at the right price. Effectively, common sense private sector activity has been so successful in the sector that it has rendered obsolete what the board could do. The board, weighed down by so much of its structure, with its private workforce, the cost structure, etc, simply could not compete. That is a fact of life.

There is another issue I just point to very briefly before I revert to the specifics of the Bill. These State companies have consolidated balance sheets and you can work miracles with a consolidated balance sheet because you do not publish the accounts of the various sectors. You can have profit-making sectors and loss-making sectors and you can have the profit-making sector picking up the tab for what happens in the loss-making sector. One of the horrifying aspects of the level of Bord na Mona indebtedness and subsequent cost is that at the end of the day the Irish consumer is paying for it. Let me give you one or two facts in relation to this which are of great concern. It is no wonder that many in the Dáil were concerned about the financial state of the board because of the spinoff.

What has been happening is, that the profit and loss account will show that the Ballyforan factory is losing about £5 million a year if you service the interest and, of course, you must service the interest. That is one simple example. You build the accumulative effect of two or three of those and you run into an enormous loss situation. What do you do? You are selling milled peat to the ESB for electricity generation so you charge the ESB about 50 per cent more than you should charge them, in order to recoup what you are losing. About four or five years ago, when conventional energy prices are running very high and the board was running into a financial catastrophe and the Minister for Energy wore a hat for the ESB and he wore a hat for Bord na Móna, effectively a political decision was made in relation to what the price of milled peat was because at the end of the day the two boards should be one board, responsible to the same Minister. At the stroke of a pen, a decision was made insisting that the ESB pay an energy-related price for milled peat. "Energy-related" equated the price of milled peat with the price of oil.

Those of you who know the energy sector around the world will know that in the case of solid fuels the lower in energy value you go, the less value they are in equivalent BTU terms. Simply because peat is a desperately low BTU, even when you relate it in energy value to oil, because of the huge costs of using the kind of fuel that it is and the capital costs incurred and everything else that goes with it, the value is discounted in energy terms. It might be 50 per cent cheaper because of the problems associated with it, but the paying of the same price was an outrageous decision.

Even more outrageous was this: the decision was made to compensate the board on an equal price for oil and this gave Bord na Móna in a single balance sheet an extra £20 million in that given year, or of the order of what happened the following year. The price of oil came back by about 40 per cent and there was no question of an energy-related price for peat. The whole concept went out the window. I have not had time today to get the up-to-date position but the ESB was paying of the order of about £20 million a year more than it should have been for milled peat, given world prices for the commodity and equivalent energy prices. If that is the case, it kicks back on the Irish consumer whether it is a farmer in a milk parlour in east Galway or a housewife in Ballyfermot with her electric cooker or an industry under pressure to maintain jobs. It is one of the factors why energy prices have been much higher in this country than they should have been. It is for all of these reasons that I have a fairly jaundiced view where this debate is concerned and why I have to express my reservations as well as what I would like to say of a more positive nature.

The Bill stems from the activity of the board in the horticulture sector and it seems that is one of their best profit centres. It seems they are very adept commercially in the sector. They seem to be very successful in the acquisition they made in France and that is suggesting to them that they should engage in other activity outside the State. In so far as this activity is in the peat sector and they see a role to play, given the potential redundancies, this in itself is very welcome.

State companies' have to be compared against an international standard. While the board is successful in the horticultural sector outside Ireland, there is no evidence to suggest that it is being successful in the energy sector. Bord na Móna are competing in the developed world for consultancy services in the peat energy sector but are picking up a tiny fraction of the business. They are picking up a limited amount of business on the African continent in some fourth world countries. But, in the United States of America, Canada, Germany or Sweden, a huge proportion of the consultancy services in the peat energy sector are provided by Finland and Sweden. This is a fact of life which must be considered.

I welcome the opportunity the board will have to get involved in joint ventures. It is a very good idea. I note that the Minister said it will be the intention that participation in any such joint ventures would be on the basis that it would pay its way. I would hope that comment would not be necessary. It should go without saying. The fact that the board would have to get into bed with private sector people who would not entertain the venture unless, in the first instance, it looked like paying its way is certainly healthy. A real semi-state company, in my view is a company which is a joint venture; in which there is investment by the State and investment by the private sector. If there is not that private sector investment I call them State companies.

The idea of sub-boards, breaking up the activities of the board, is an excellent idea because there are three or four different profit centres there, each very different, requiring different talents. I note from the Minister's speech that the board have power to engage in activities not directly related to peat but which arise from expertise acquired and developed by the company in carrying out their original functions. That is far too broad for my liking.

On the cutaway bogs issue, I have very strong views because we are a country of farmers and largely private sector people. Land is land. Unfortunately, in past years, as the board developed, the farming community had to sell bogland to the board at abysmal prices. They did not have any choice for two reasons; they were very poor and they needed the money. In other cases, in areas of high emigration, the board had statutory powers for compulsory acquisition. Families who went to Manchester, London or Boston were under intense pressure and the forcible acquisition route was taken.

I have seen around Ballycroy and Belmullet in County Mayo a couple of thousand acres of the best of bogland bought as recently as 20 to 25 years ago for £7 an acre. I saw land bought in a year prior to that for £1.50 and £2 an acre. I saw the board coming in on a family of an elderly woman who was forced to sign something. There was no legal documentation and they came back 30 years later claiming that they had a title to it, which they did not have. They were beaten in that regard.

There is one thing I find highly unsatisfactorily about the cutaway issue. I do not approve of the compulsory acquisition powers of the board. In many other countries when an energy company needs bogland to develop the energy resource, there are two ways in can be done. The farmer might voluntarily want to sell that land but there is an alternative route. The farmer might be much more attracted towards leasing that land to an energy company. If you go the leasing route, the farmer holds his title to the land, it is there for future generations in his family, he has employment on the land during the time the turf is being cut; the energy company incurs all the expenditure in field drains, main drains, roads and boundaries and, at the end of the day, when the energy is gone, the land reverts to the farmer in a far better condition than the first day because it is drained and there are roads through the system and future generations of the family will have that holding as part of that family's heritage. Much more of that type of activity should have developed over the years.

What do we now find? We find a social mess because we are building up through the direct labour method, towns and villages in the midlands, built up solely by direct employment, in which in future there will not be direct employment to a fraction of the extent. At the same time, we have taken this peat bog almost forcibly from the farming community and on what are now thousands acres of cut away bog we are adopting a kind of Gulag approach, we are into collective farming, practically into socialist farming, where vast tracts are now owned by the State and the State decides how the cutaway will be worked. We would have a much better structure in this country if this cutaway bog was now reverting to the farmers who owned the land and the fringe of it, who owned it in the first instance. There are very strong views on that issue in the IFA, in other farming organisations and among the farming community.

I request the Minister, with this group that has been set up, to look at this issue, and to consider that rather than go down the route of the State having to do the forestry, having to put the sheep, the cattle or the calves on it, that cognisance is taken of the original owners of the land and the input that the small farmers in these areas could have in the working of the lands.

The board is given far too much latitude to go anywhere they like. I can see the reason and I can see the pressure. It needs to be tightened a little bit. I would like, for the second time, to put on record my welcome to the Minister, Deputy Molloy, to this House particularly because of his recent banning of mining in Croagh Patrick.

Mr. Fallon

Like other speakers, I would like to welcome the Minister for Energy, Deputy Molloy, to the House for this important Turf Development Bill. Coming from a midlands area, it is appropriate that I should speak, if only briefly, on this important Bill. It is a fact that Bord na Móna has been an outstanding employer in the midlands region over the past 50 or so years. While, of course, it gave good permanent positions to many people, a feature of the employment of Bord na Móna was the seasonal or temporary work it gave to many people. You had a situation where many people, particularly many small farming people living within ten or 12 miles of their particular bog, found their living standards were increased and improved as a result of temporary or seasonal work.

In general, it can be said that Bord na Móna added enormously to the economic life of the country and to none more, I would suggest, than to the entire region of the midlands. I want to stress what Bord na Móna has meant to so many people in the midlands. It was for them their way of life, their life line and any change in direction must preserve viable, permanent worth-while jobs. This is what the Bill is basically about, the financial stability of the company; continuation of jobs and survival of the company. We are in a changing world. Bord na Móna is not the only State-sponsored organisation to change. Indeed, many State-sponsored bodies over the years have changed or have diversified their areas of activity to remain viable and profit-making, in the interest of job retention and job creation.

For the economic and social life of so many people, in the midlands region in particular, Bord na Móna must continue to be an important employer and must make every effort in its restructuring to improve its position, to protect its future and the jobs of the employees. The expertise which the board have developed must be to the benefit of the economy, even though I realise it is in a changing, very challenging and highly competitive marketplace. Personally I have no hang-up about change. Changes are necessary to make obvious improvements in a changing marketplace.

The board over the past number of years have had many problems, many difficulties. We all know that. Basically, what we are doing in this Bill is to give the board greater flexibility, in the way the board may adapt to reorganise and to restore its core peat business on a sound, financial basis to enable it to engage in other activities in areas where it has acquired particular expertise; to enable it to acquire companies, if that is what they want; to enable it to enter joint ventures.

Senator O'Toole has referred to the work of Coillte Teoranta. I certainly feel that Bord na Móna and Coillte Teoranta will be working very closely together for obvious reasons. This year we had the passing of the Horticultural Bill giving effect to the setting up of Bord Glas. I visualise Bord na Móna and Bord Glas as being mutually interested in one another's activities. It is well known nationally, it is well known internationally, that Bord na Móna horticultural peat moss products are in great demand and sales of peat moss come to about £20 million annually. There is great scope for improvement in this area, for better sales nationally and internationally. This area of activity is one that the board will obviously be examining.

There is the whole question of rationalisation, of changes in companies. We have had it in the financial services over the past year. In this House we have had debates on the changes in the building society movement and changes in the ACC. We had the levelling of the playing field for the Trustee Savings Banks and changes in the ESB in 1988. We are living in a changing world and Bord na Móna must move with the times. In fact, I reckon they have no choice but to move with the changing times.

Bord na Móna, we know, are set to have major losses again this year. The bottom line is that we are really talking about the survival of Bord na Móna and the staff agree that if changes are necessary for the survival of that company, then so be it. The board must move forward from their traditional functions, the production and marketing of peat products. They must look forward to a new marketplace. The Bill will improve the lot of Bord na Móna. I certainly welcome it and wish Bord na Móna and their staff every success.

Debate adjourned.

An Leas-Chathaoirleach

When is it proposed to sit again?

Mr. Fallon

It is proposed to sit again at 10.30 a.m. tomorrow.

Seanad Éireann díospóireacht - Wednesday, 30 May 1990

Turf Development Bill, 1988: Second Stage.

An Leas-Chathaoirleach

Seanad Éireann díospóireacht -
Wednesday, 30 May 1990