At present Ordnance Survey Ireland or OSI is a Civil Service office under the aegis of the Minister for Finance. The primary purpose of this Bill is to set up OSI as a State body outside the Civil Service. This will enable OSI to have the freedom to operate with a more commercial focus, subject to appropriate controls. The Bill also makes provision that OSI will be required to provide for the State specific services to high standards of quality and value for money in return for a subvention from the Exchequer.
It is worth recalling that Ordnance Survey Ireland has a long and illustrious history of providing a mapping service to the State. Ordnance Survey Ireland or, as it is more colloquially known, The Survey, was established in 1824 as a centralised agency to provide mapping for the State. However, no organisation is static and the role of Ordnance Survey Ireland has evolved greatly since its foundation. From the early 20th century, its role in support of Government services developed still further as mapping became an increasingly important prerequisite for land valuation, land registration and asset recording for local authorities and utilities. Today, the products and services offered by Ordnance Survey Ireland extend to the commercial sector and the unprecedented prosperity achieved under this Administration's stewardship of the economy has also been accompanied by a large increase in commercial demand for the products and services produced by OSI.
The environment in which OSI operates has changed dramatically in the most recent decades. Over the past 20 years map-making has been transformed from a hand-drawn activity to a digital process which employs the most advanced information technology. As a result, all maps in Ordnance Survey Ireland are now stored digitally rather than in paper form. This means, for example, that customers who call to OSI headquarters or OSI agents can now get within minutes a specially printed map for anywhere in Ireland which meets their particular requirements.
The advent of cheaper and more efficient technology has also led to the emergence of geographic information systems or GIS. GIS combines map data with computer software to produce a powerful tool for analysing information. GIS is now an important part of the information society and there are hundreds of companies throughout the world producing thousands of GIS products. Among the myriad ways in which GIS can be used by the commercial sector is to link their customer data with map data to identify new business opportunities. These new applications have considerably broadened the customer base for mapping data and the prospects are that the demand for new and improved products and services derived from this data will continue to grow strongly for a long time to come.
It is against this changing background that the Government came to the conclusion that the restrictions imposed by its Civil Service status limit OSI's capacity to meet its customers' demands and to exploit new opportunities in the marketplace. Hence the necessity to bring forward this Bill to transform Ordnance Survey Ireland into a separate State body with a strong commercial remit. This conclusion has been validated by the findings of the interim board of OSI. In June 1997 the outgoing Government agreed to a proposal by the Minister for Finance to establish an interim board to advise the Minister for Finance on and to oversee the transition of OSI to a more commercial organisation. In April 1998 the interim board set out in a report its vision for the future of OSI. It suggested that OSI has considerable scope to develop the market for its products and to reduce the size of the State subvention. The interim board concluded that the fundamental organisational change needed for OSI to fulfil adequately its public service responsibilities and to anticipate wider customer demands in the fixture would be difficult, if not impossible, to achieve within the Civil Service.
The interim board reflects a wide range of users of OSI products and of other interest groups, including employer and employee groups. It is headed by Mr. Kevin Bonner, former Secretary General of the Department of Enterprise, Trade and Employment, and consists of representatives of the wholesale booksellers trade, the Irish Mountaineering Council, chartered surveyors, local authorities, IBEC and ICTU. I take this opportunity to compliment the chairperson, Mr. Bonner, and the other members of the interim board on the excellent work they have done to date.
A further reason for this Bill is to rectify the existing unsatisfactory situation where, despite its 177 year existence, there is no primary legislation governing OSI. All previous legislation, particularly the 19th century statutes, refers specifically to boundary survey work which is more relevant to the chief boundary surveyor who is attached to the Valuation Office. This Bill will rectify this and allow OSI to carry out its functions based on a sound legislative framework.
Despite the change in status under this Bill, the OSI will continue, as it did for the previous 177 years, to provide mapping services for the State's administrative, legislative and infrastructural needs. These fall into four main operational categories: the updating and maintenance of the framework on which national mapping is based and on which very many industries such as construction, surveying, transport and air navigation depend; a programme to complete soon a new mapping infrastructure for rural Ireland; an ongoing maintenance and development programme to ensure that urban and rural tourism and leisure mapping databases are up to date; and a developing marketing and sales function to ensure that products and services are developed to meet the needs of public and private customers. The Bill provides that the OSI will continue to be the State's national mapping service and will operate in the public interest by creating and maintaining the definitive maps and geographical information of the State, including those areas that it would not be commercially viable to map.
In order to provide the State with the quality services it needs, the OSI, despite its commercial focus, will continue to need Exchequer subvention. A financial scoping study, commissioned by the interim board to show what would be the OSI's financial position as a stand-alone commercial body, suggested that, on the basis of the revenues then being generated, the OSI's costs would leave an annual deficit for the foreseeable future of more than half its revenues.
The amount and the terms and conditions of the Exchequer subsidy will be in a service agreement between the OSI and the Minister for Finance. The agreement will set out in detail the range of activities OSI will carry out in the national interest. It will describe each such activity, the justification for and benefits arising from it, and details of the deliverables to be provided by OSI, including their standard and quality. It will state the amount of the subsidy to be allocated to each of the individual activities. An important benefit of the service agreement is that, in clearly identifying the national interest element in mapping, it will prevent the cross-subsidisation from the public purse of the OSI's commercial activity.
The Bill provides that the service agreement between the Minister for Finance and the OSI may contain terms and conditions of product pricing. The OSI's pricing policy should adhere to the principle of ensuring that maximum use is made of its products and services by all sectors of Irish society, public and private.
The Bill provides that OSI, when engaging in commercial activity, may do so through subsidiary companies with limited liability set up under the Companies Acts, 1963 to 1999. Any necessary capital for such companies will not come from the public purse but will be raised in the marketplace on the basis of the project's commercial merits. There will be no cross-subsidisation of commercial activity from the Exchequer, either by way of capital or running costs.
Measures in the Bill to ensure that there is no cross-subsidisation by the Exchequer include clear statements of the OSI's public interest functions, the requirement for a service agreement with the Minister for Finance to deliver specified public interest outputs in return for Exchequer money, and provision to establish separate limited companies by the OSI to operate on a purely commercial basis for each commercial product. OSI will operate transparent accounting practices to identify and separate commercial and non-commercial activities. It will also implement a fair and transparent pricing policy to ensure that its basic data is available to competitors in the marketplace on the same terms and conditions as to its subsidiaries.
OSI is preparing for its future as a commercially focused entity through the use of leading edge technology, to which I have already referred. Substantial sums have been allocated to OSI in recent years to ensure it uses up-to-date map production techniques. OSI is leading the way in the use of satellite positioning and is currently implementing a network of permanently operating global positioning system receivers for the country. This system is expected to be operational by the end of the year and will be controlled from a central computer in OSI headquarters. Similarly, OSI has a very advanced in-house geographic information system, or GIS, that is used to store all collected digital mapping data and for the supply, editing and management of data. It is anticipated that supplying GIS users with digital mapping products will be a major area of business growth.
In investing substantially in technology OSI has not neglected to invest in its staff, which is its major resource. The training of staff in new technology has been under way for many years. The Minister for Finance sanctioned a number of new managerial posts in anticipation of the move from the Civil Service, including a human resources manager, a corporate services manager, a marketing manager and an IT manager.
I would like now to refer to the staffing arrangements of the new body now that it will be operating outside the Civil Service. Ordnance Survey staff will cease to be civil servants on transfer to the new body. Meetings, including one with the Minister for Finance, have been held with staff association representatives to inform them at various stages of these plans and they are fully aware of the Bill's provisions on this and all other matters. The staff associations have welcomed the setting up of a semi-State body and are aware that their future, and that of OSI, lies with continuing to adapt to changing technological and user needs.
Negotiations on a wide range of issues of concern to staff will continue with associations and unions in a partnership framework. It is intended that all staff currently employed by the Ordnance Survey will transfer to the new body. There are standard provisions in the Bill to ensure that pay, terms and conditions of employment, including superannuation benefits, are maintained in the new body. The OSI's headquarters in the Phoenix Park and its six regional offices located in Cork, Ennis, Longford, Kilkenny, Sligo and Tuam are not affected by the Bill. The question of the relocation of OSI's headquarters in the Phoenix Park, acknowledged not to be ideal for a modern mapping organisation, will be decided on in the context of the Government's decentralisation programme.
Through continually adopting the latest mapping technology over many years, the staff of OSI has achieved a complete transformation of all aspects of map-making. OSI has been brought to a point where it has potential for dramatic expansion of, and improvement in, the range of products and services which it can provide to customers. The achievement of this potential depends on the staff of OSI fully supporting the proposed new structures. I am confident this support will continue to be given if there is consultation at all stages.
I will now outline for the House the key provisions of the Bill. Section 3 formally establishes a new body to be known as Ordnance Survey Ireland which will have its own powers and will be separate from the Civil Service. Section 4 sets out in detail the functions to be performed by the body. The OSI's general function is to provide national mapping services for the administrative, legislative and infrastructural needs of the State. The OSI will be the national mapping service in the State and will operate in the public interest by creating and maintaining the definitive maps and geographical information of the State. In other words, OSI's traditional role for the last 177 years will continue. This section also places a general duty of care on the new body to conduct all its business, both commercial and non-commercial, in a cost effective and efficient manner.
Sections 5 and 6 allow the Minister for Finance to give directions to OSI and to confer additional functions on it. Section 7 allows OSI to establish subsidiary companies with limited liability when engaging in commercial activity. It is a key element of the Bill that the OSI, when engaging in commercial activity, does so through subsidiary companies with limited liability set up under the Companies Acts, 1963 to 1999. Any necessary capital will not come from the public purse but will be raised in the marketplace by reference to the commercial merits of the project concerned. There are two main advantages to this approach. First, the Exchequer's liability in potential loss making situations is limited and, second, in keeping commercial activity separate from national interest mapping activity, cross-subsidisation from the Exchequer is avoided.
Section 8 allows OSI to hold and dispose of shares or other interests in a company with the Minister's consent. Section 9 allows the OSI or any subsidiary to borrow money but the Minister may set ceilings on such borrowings.
Section 10 gives OSI staff powers to enter private lands and premises in connection with the carrying out of their functions. It also authorises OSI to place survey marks on any land or premises for the purposes of supporting the national grid, geodetic or height frameworks. Where an authorised person is prevented from entering lands or premises when carrying out OSI functions, the Bill provides for a warrant to be obtained from the District Court to allow required access. Obstruction of a member of OSI staff in the exercise of his or her powers under the section will be an offence, as will the intentional destruction or removal of an OSI survey mark. A person found guilty of an offence under this section will be liable, on summary conviction, to a fine not exceeding £1,500.
Sections 11 to 13 provide that there shall be a board of the OSI and that members may be remunerated from funds at the disposal of OSI. These sections also contain the provisions in regard to the appointment of a chairperson and deal with the meetings and procedures of the board of OSI.
Section 14 provides for the appointment of a chief executive officer. The chief executive officer will be appointed by the board and will hold office subject to the terms and conditions which may be determined by the board with the consent of the Minister for Finance. The chief executive officer will be responsible for the staff, administration and business of OSI. He or she will be the person charged with the day to day running of the new OSI and the carrying out of its functions under the Bill and will be answerable to the board. The chief executive officer will be responsible for the propriety of OSI's accounts and the economic and efficient use of its resources. He or she will also be answerable to any committee of the Houses of the Oireachtas set up to examine OSI's affairs.
Sections 15 to 17 outline the provisions for the transfer of staff from the Civil Service to the new body. Staff will cease to be civil servants on transfer to the new body and these sections contain the provisions for their remuneration and superannuation. There is a guarantee that the pay and terms and conditions of employment, including superannuation benefits, will not be less favourable in the new body than those prevailing before the changeover date. Sections 20 to 22 provide for the disclosure of interests by staff, members of the board of OSI and directors of a company set up as a subsidiary of OSI.
Section 25 provides that the Minister may make an agreement – entitled a "service agreement"– with OSI which will deal with the performance of its public functions. This is a key element of the Bill. The service agreement will set out in detail the range of activities OSI will carry out in the national interest and the amount of the subsidy from the Exchequer for so doing. A further important benefit of the service agreement is that by clearly identifying the national interest activities of OSI, it will also prevent the cross-subsidisation from the public purse of any OSI commercial activity.
Section 27 provides for the keeping of accounts and the conduct of audits of the financial accounts of OSI. Responsibility for the accounts rests with the chief executive officer. The accounts will be audited by the Comptroller and Auditor General and the audit report will be laid before the Oireachtas.
Section 28 provides that OSI will make an annual report to the Minister. Section 30 expressly allows the OSI to charge for its products and services. Sections 32 to 36 deal with the dissolution of the existing Ordnance Survey and the transfer of assets, liabilities, contracts and pending legal proceedings to the new body.
The Ordnance Survey was established in 1824 to provide a national mapping service. The operational environment has changed dramatically in recent years and there is now a need for OSI to become a more clearly focused business organisation while at the same time continuing its public service role. This Bill allows the OSI to build on the strengths it already possesses and provides it with the freedom to operate with a more commercial focus while at the same time ensuring appropriate public policy safeguards. I commend the Bill to the House.
For Members' information, I am due in the Dáil immediately for Question Time but I will return as soon as possible. I apologise for this clash between my responsibilities.