I welcome the Minister, Deputy O'Rourke, the Minister of State, Deputy Jacob, and the officials of the Department of Public Enterprise. The purpose of the meeting is to consider the revised Estimate falling within the remit of the Department. The proposed timetable for the consideration of the Estimate has been circulated. It has been suggested that the meeting should conclude no later than 4.15 p.m. to allow members to attend the Order of Business. Is that agreed? Agreed. There is also a suggestion that members may wish to make opening statements lasting 15 minutes each. Is that agreed? Agreed.
Estimates for Public Services, 2000.
Vote 32 - Public Enterprise (Revised).
I do not intend to do the ridiculous thing of ploughing through my script. It is available to any member who wishes to discuss it or ask questions. Perhaps the members want me to read its 40 pages out in a monologue but there is no point. It would be self-indulgent to do so. Copies are available if members want them.
That is fine.
I did this last year and nobody complained.
There is no problem about it.
I thought the members would be glad.
The Minister would not like to diminish the time available by wasting her sweetness on the desert air.
A Member
I pity the poor person who prepared the long script.
Will the meeting continue for three hours?
No, it is to conclude not later than 4.15 p.m. I have a list of times for the various subheads. Subheads A1 to A8 relating to administration are to be dealt with between 3.10 p.m. and 3.20 p.m. and subheads C1 to C6 relating to road and rail transport are to be dealt with between 3.20 p.m. and 4.05 p.m.
We should play it by ear.
Exactly.
The documentation was circulated already and I read it so that is fine. I have not read the Minister's script but Fine Gael will not oppose the Estimate. It involves an 18% increase, which we welcome. However, I wish to deal with some points of detail where I want clarification or where I consider inadequate money is being made available.
Regarding subhead C6, which relates to rail expenditure, earlier this year the Minister, IRMS and others appeared before the committee to discuss how the rail safety programme was progressing one year on. Some issues arose in the course of that discussion which suggested to me that a Supplementary Estimate should be considered under the heading of rail safety, subhead C6. In particular, IRMS mentioned a sum of £20 million which was required over and above the programme for signalling and there was talk about the mini-CTC. The Minister made the point that the first tender or estimate for the cost of the mini-CTC had increased and she had some questions which she wanted answered before she signed off on it.
Other issues also arose, such as the appointment of a dedicated manager to oversee the project. There was also mention of a liaison officer between IRMS, the Department and Irish Rail. This was to avoid an annual ritual and to ensure ongoing attention to detail. These issues arose in the context of 33 items being identified as unreasonable risks but Irish Rail then saying that they were fixed the day before the meeting. Another issue was the disturbance involved in the laying of Esat cable. Could the extra £20 million be provided by way of a Supplementary Estimate? This issue arose after the Estimates were published, and we are debating an historic Estimate.
The Minister referred to the establishment of a rail safety authority. Regarding her proposals for institutional public transport reform, she is proceeding with the idea of establishing a shadow authority first. Perhaps she could consider establishing a shadow rail safety authority. If the delay is due to the parliamentary draftsman, perhaps progress could be made on that issue first. A token Estimate could be included in subhead C to ensure a shadow rail safety authority is established.
Regarding capital expenditure generally and the situation in Dublin, will the Minister clarify the £90 million that has been proposed for Luas? Much of this Estimate deals with the money for Luas. What lines will we get for £90 million? Will we get Luas money for a tunnel to the airport? I am referring to Subheads C3 and C4. Is this money only for the Tallaght line and the Abbey Street link to Connolly or is it also for Dundrum?
There is a sum of £600,000 under Subhead D7 for the aviation regulator's office. I recently met Mr. Bill Prasifka and I was impressed with him. His background, interest and intelligence are first rate. A budget of £600,000 has been allocated to him. It is the experience of Etain Doyle and other international regulators that start-up costs are high because they usually get consultants, who are expensive. They do not have ten years' experience and they have not built up an in-house capability, as a Department would, of the historical and other aspects of a sector. Is the £600,000 only for the office and its core staff or does it include a consultancy budget?
The first issue to be dealt with is airport charges. We know Aer Rianta and Ryanair spent fortunes on consultants which came to opposing conclusions on whether charges should be higher or lower depending on who was paying for the report.
I also had an informative meeting with the Commissioner for Electricity Regulation, Mr. Tom Reeves, and his staff. He made one valid point that when we introduced the electricity regulation legislation, we did not give CHP the type of opportunity it deserves. The Bill did not provide for someone building an industrial estate who wants 20 megawatt heating and CHP plants. We must revisit that because the losers are householders and businesses who cannot avail of it. I am talking about a certain ceiling of CHP capacity, not about competing willy-nilly with IPPs or the ESB. He said it was a pity the legislation had prohibited this. When he said this to me during a discussion on wind energy, I felt we had made a mistake. We should look at that issue again.
The consultancy budget figure is £3.665 million, which is an increase of 138%. Does that figure include money for the Warburg Dillon Read report? I read the Estimates debate last year on the future shareholding of Aer Rianta when the Minister promised that by the middle of last year she would bring findings to the Cabinet about the future——
I received it at Christmas but I brought it to Cabinet.
When we discussed the Supplementary Estimate it was believed that by January or February the Minister would have proposals. The Arthur Andersen report proposed a change in ownership of Aer Rianta to provide equity to the company as the State could not give equity. The Warburg Dillon Read report agreed and recommended a 30% IPO. The Minister paid a lot of money for consultants. Aer Rianta was told this was being considered by the Government. However, a report in the Irish Examiner stated that nothing will happen during the lifetime of this Dáil to change the ownership of Aer Rianta. I opposed this all along, as did the Minister for Tourism, Sport and Recreation, Deputy McDaid, and the Minister for Arts, Heritage, Gaeltacht and the Islands, Deputy de Valera.
Did we waste a lot of money on the Warburg Dillon Read report which was subsequently binned? The Minister asked a reasonablequestion recently that if we spend a lot of money on Eircom consultants how can we ignore their advice? It seems she happily ignored the advice of the Warburg Dillon Read report. Perhaps she could give me her side of that story.
The Deputy was not at the Cabinet today.
The Minister can tell me if we got value for the £3.6 million and if it included the Warburg Dillon Read report.
I was amused to read recently in The Irish Times that the Department was in dispute with Merrill Lynch and AIB Capital Markets about their level of fees. Last year we had an Estimate of £40 million and a Supplementary Estimate of £40 million, which totals £80 million. All the media reports stated that the amount spent by Government advisers on the Eircom flotation was £58 million, which worked out at £118 per shareholder. Yet the figure in the Estimates was £76.8 million. Perhaps the Minister could clarify how much was spent on the Eircom advisers and how much extra they got because of the higher price. The Minister decided not to sell all the shares and then she changed her mind, so the advisers got more money because it was a bigger job. Did they get a little icing on the cake?
Subhead E3 deals with Global Crossing and subhead E4 deals with the money to be spent on the roll-out of broadband communications. There was a move last year to put this subhead under IDA Ireland's budget. Now that we have brought Global Crossing to Ireland we must spend money on rolling it out across the country to different regions. This is a key issue. It will be said that the cable will be laid if the business comes along. I am sure the Minister remembers the celebrated case where Microsoft or another company did not come to Ireland. I ask the Minister to look at subheads E3 and E4 again to see if we can achieve a national roll-out.
I understand there is nothing in the Estimates for the IPO for Aer Lingus. What is the position on that? I know the legislation which was to be passed in both Houses before the recess has not yet been published. We are also trying to proceed with other legislation before the recess.
Not manfully.
However, if legislation is not published, it will not be passed before the recess.
The Deputy should go to the Government's stationery office in the morning.
I do not believe the Minister will spring four Bills on the Dáil to deal with in four sitting days. That is a little short for Committee and Report Stages.
The Deputy asked me for it.
There is nothing in the subhead for the IPO for Aer Lingus. It says it will happen by the end of the year, so what is the position on that?
The Minister included in her institutional reform the possible establishment of a new PPPs unit. There is no subhead for that. I have laid bare my criticisms of the Department and IBEC and others have criticised the Department as far as PPPs are concerned relative to other Departments, the general problems with the CSF in Brussels, the delays and the fact we will not be able to spend all of the £40 billion or the first year tranche of money which has increased from £2.4 billion to £7 billion a year. Will there be a subhead for a new PPPs unit? Is it projected that there will be a Supplementary Estimate this year?
It would be too much if everyone spoke before I reply. That would be more than my little head could bear. I would prefer to reply individually.
Is that how the Minister wants to do it? However, the Opposition spokespersons are asking questions and making statements at the same time. I am flexible.
In a way it would be much better if I replied to the Deputy first because there was a lot in what he said. It would be much easier for me to let everybody speak.
That is fine. Deputy Stagg is always very agreeable to the Minister.
Anything but.
On one recent occasion they had a little difference of opinion.
I do not know what that is about. Deputy Yates's first question related to subhead C.6 and rail safety. A sum of £20 million was identified by IRMS or CIE - it was in the book - as the amount required in addition to the £90 million or £100 million for rail safety in 2000. The cost of CTC has also galloped from a very modest £5 million or £6 million to £50 million or £60 million. The question was whether those two costs would be included in the rail safety money for this year. We took note of what was said at that stage. Whatever is needed for safety will be given. If that requires a Supplementary Estimate, it will be given. We are committed to rail safety. I think £100 million has been provided for this year. As yet, CIE has sent us no costings on the £20 million.
The ball is in its court.
No report or costings on the £20 million have been sent to us. We only have what CIE said. However, it will be provided if it is needed.
Deputy Yates asked about the dedicated project manager. Did he mean a dedicated project manager for safety and a liaison person between IRMS and CIE?
Yes.
I think that is a good idea. My official tells me that CIE does not think it is necessary and that it can manage that business itself. I think it would be better if CIE had somebody who could report back on any difficulties rather than waiting a long period for another report from IRMS. The situation is that if CIE wants to do that, it should. However, that would amount to interference by me.
The Deputy also raised the linked issue of the disturbance involved by the laying of Esat cable. One presumes that matter will be resolved in the ongoing talks between Iarnród Éireann and IRMS. It is very serious, in that the foundations of some rail lines have been undermined by digging for the laying down of Esat cable.
The Deputy referred to the rail safety authority. It is true that a shadow regulatory body is being established for the giving of licences and so on. We hope to have the heads of the rail safety Bill by the end of this month. We will then invite consultations, formulate the Bill and publish it by the end of the year. Therefore, setting up a shadow safety authority would not have the necessary effect. That will be done on a statutory basis. The new authority will be set up immediately after the legislation is passed.
In regard to capital expenditure, the £90 million is for whatever is needed for all the lines for this year. The Deputy asked which lines were included.
Mr. Prasifka has been allocated a budget of £600,000. That includes what he estimates he will need for consultancy fees for this year. CHP will be dealt with in the Bill tomorrow.
Warburg Dillon were paid last year but there was an overhang of £18,000 into this year. The total bill was £90,000. I remember the sum distinctly. I presented that to Cabinet in February. The Deputy is right that I only presented the report to Cabinet and we did not have a memorandum on it. There are different views. I am amazed the Deputy would think that 15 people would suddenly be imbued with the same view and bob their heads up and down like the black baby on the box used to do - if one is allowed say "black baby" any more. We all used put our pennies into him.
There are very different views on it. I am of the view that the State should not put £500 million into Aer Rianta. Another point of view is being pushed by certain sources who like to think that if the State spent that money there would be no airport charges. A particular person has so infused a particular Minister with the point of view - I am not saying names because that person becomes very busy when names are mentioned - that if that money is put in——
It is Michael——
He has the same name as a former Tánaiste.
Michael O'Leary.
——there will immediately be no landing charges.
It was stated in The Irish Examiner that nothing would happen on this issue in the lifetime of this Dáil. Is that true?
I do not answer for The Irish Examiner. The Deputy should ask Mary——
It said the Minister said this.
It did not say I said it.
It said the Minister had decided to drop it and not bring a memorandum forward.
That is not true.
Is the Minister going to bring forward a memorandum?
Yes, I am.
I see.
It is a matter of wooing, which is getting a bit bothersome. However, I will continue to woo.
So the Minister has not dropped the ball yet.
I have not. The Deputy asked if Merrill Lynch got a little icing on the cake. Merrill Lynch got too much money. I said that at the Estimates last year, if members wish to look the committee's records. That was reflected in the freedom of information request, where it was shown the Department fought against an extra sum it was looking for. That has all come out through what is in that massive room. I boggle at what consultants get. It is a lot of money. However, I said that last year so there is no big secret about it. They are paid on percentages and for extra work. They got more money because we decided to sell more.
Did they get extra money because of the price?
Yes, it was a percentage of the total. We struck the middle ground between their figure of £3.27 and the other group's figure. However, one cannot attribute anything to a firm. I was asked if they got extra because of the high price and I am saying they did. The high price of the market at the time gave them that.
There is £120 million in the national development plan for the roll-out of broadband. People are asking me why Ocean is digging all over the land, which it is. Every road is dug up, with a nice sign at the side saying this is the work of Ocean. I was in Waterford yesterday at the launch of an e-kiosk, of which there will be 600 around the country. People who do not have Internet access in their homes will be able to go to a place of public access. I think it is £1 for ten minutes access. The Deputy is right that the roll-out of thebroadband must be inclusive. There is no point in this revolution just affecting a certain group of people, with others left on the sidelines. We are making it a feature that they will have to be in places of public access such as community halls, health boards, schools and wherever else people gather.
We have a PPP unit in the Department. I am going to ask to meet IBEC on this - I am meeting it soon about something else - because it never complained to us about how bad we were in regard to PPP. IBEC has complained to this committee only, which must be very special. We already have a unit within the Department. I do not know what IBEC is cross about because we are the only ones who have said openly that Luas will be done on a public-private partnership basis. Maybe we are missing something in regard to IBEC; maybe they are nice and do not like to be cross with us. I will meet IBEC soon about something else, so I will ask it about that.
I welcome the Minister and her staff to what I regard as the annual exercise in futility.
Because it is all over.
This is a ritual we go through after the horse has long since galloped. It would be much more useful if it was possible to discuss the future with the Minister rather than have this private chat in committee. The media, of course, totally ignore our existence. There is nothing less useful that we could do than what we are doing today. Although we could discuss the future today, technically, we are dealing with the past. It would be useful if there was a system in place to allow us to talk about what we will do next year with the Minister.
The Deputy is right. That is why I would not read that beautifully put together script - I thank everyone - because that is another exercise in futility.
Much of that happens and, as a result, we are not relevant to what is happening today. As can be seen, there are no media here to report what we are doing because there is nothing to report.
They do not come to any of the Estimates.
It is a fait accompli - most of the money is spent and if it is not spent, it is spoken for. We are wasting parliamentary, the Minister’s and the Department’s time with this exercise. If we had a system whereby at this time of the year we, with the Minister, could look at next year’s money, give the Oireachtas an input into the Department and support the Minister in what she sees as necessary and in making the argument with her to the Department of Finance, it would be a much more useful exercise than what we are doing now.
I refer to the energy conservation area. I am homing in on the areas I know well from my experience. There is a £3 million, or a 207%, increase in the allocation and there is a £3 million capital allocation. What is that for? My old farm electrification grant scheme which I did my damnedest to get rid of when I was in the Department is still clinging on for dear life but is not being used to any great extent. It is nearly a waste of ink printing it each year because I do not think they money is used, or at least very little of it is used, although some of it was used last year. I welcome the allocations for Luas and the rail safety programme. Is the Minister convinced that the systems in place will be able to draw down and use this money provided by her and the Department this year?
On the special marketing fund for regional airports, I understand Knock Airport does not get any money for some reason.
It got £0.5 million or£450,000 this year.
In the communications area, a huge amount of money - £76.819 million - was paid for the sale of Telecom, although maybe I am misreading the Estimates in that regard. Fees and expenses relating to sale of shares in Telecom Éireann are down under capital - £76 million odd. That is a huge amount of money. Another million pounds is included this year. Maybe that is a hangover of fees which were not paid. For the bargain we got, that is a bad bargain.
In regard to consultants, my experience was that highly qualified officials, who are as capable of giving an expert opinion as any consultants one might hire, were referring matters to consultants for opinion. The main reason for that was not to get a better opinion than theirs but to get an opinion which would cover their tail if anything went wrong and they could say the consultants had said that. I regularly saw experts in the Department - there are excellent experts in the Department - referring matters to consultants who came back with exactly the same opinion as theirs before any reference was made. A huge fee was paid out.
Quite regularly those who leave the Department become consultants and we often hire them as consultants. However, when they were in the Department, we would not hire them as consultants and matters were referred elsewhere. We need to call a halt to that. Maybe we need to beef up certain sections in Departments to prevent that snowballing. We are at a point where everything has to be referred to consultants. The Minister has to make a decision in the long run and sometimes has to reject what a consultant has offered as an opinion in the same way as she sometimes rejects the advice of officials. That is why she is the political head of the Department - to make the decisions in the long-term.
We need to look at this madcap, constant and nearly automatic use of consultants for a range of relatively simple matters. I remember when departmental officials worked out what was the price for transporting through the pipelines but it still had to be referred to consultants who came back with exactly the same figure as the in-house people but the consultants were paid a large fee.
I refer to my old hobby horse in the Minister of State, Deputy Jacob's, area, that is, the Radiological Protection Institute. I am disappointed that the Minster of State has not convinced his senior Minister to kick hard enough at the Cabinet table to get what I understand is his position on the grants for the elimination of radon gas implemented. On the Minister of State's behalf and that of the 300 people in Ireland who will die this year from the effects of radon gas, I ask the Minister to go to Cabinet and get the small amount of money required to introduce the grant scheme for the elimination of radon gas, which has already been prepared by the Department. I cannot over-stress the importance of this simple measure which will, according to the experts, prevent 300 people from dying this and in each subsequent year from the effects of radon gas. That can be prevented by simple methods.
I know the Minister will say various other things are being done in that regard but there is not an incentive for people to do this. There should be an incentive and there was general acceptance that there would be agreement. I ask the Minister, on behalf of the Minister of State, Deputy Jacob, to again pursue this matter at Cabinet. She will be looking for about £2 million per year in the initial stages. That figure will decrease as the matter will be dealt with. Saving 300 lives for £2 million is an extremely good investment.
On the issue of radioactive waste, we produce radioactive waste mainly through medical practices but also through industry. We do not have a disposal method for it and the Radiological Protection Institute has brought forward proposals to dispose of it. We should put our house in order in this regard and the institute's proposals should be implemented. Essentially, what the institute is saying is that there should be one storage and disposal point in the country for this waste. Given the NIMBY factor which is abroad, I am not sure where it could be located and how we could convince people that they were not going to grow two heads arising from its presence in their locality. In fact, the waste about which we are talking is relatively harmless. However, because of our international commitments, it has to be disposed of in a certain way.
What is happening now is the worse of all worlds in that it is being stored on site. In some cases, it is badly stored despite the eagle eye of the Radiological Protection Institute and in other cases it is being disposed of on site. That should not be happening and the RPII has said that. The RPII has said what should happen and has suggested an area in its report, the military camp in the Curragh, where it might be dealt with safely and where there is an appropriate incinerator available for disposing of it after its active life and after the storage period has run out. That is all contained in its report. Will the Minister look at the radon gas issue, that old hobby horse of mine, because people's lives are at risk and at the storage and disposal of our radioactive waste?
I compliment the Minister of State, Deputy Jacob, on the progress he has made and the grip he has got on the Sellafield issue in its broad parameters. It has been progressed beyond what I thought was possible when I was Minister of State. I give him full credit for pursuing the issue vigorously and taking every advantage available to him. He may have had a slow start at the beginning of his tenure - that is to be expected - but he made up for that on this issue.
It is on the agenda every week.
Excellent progress has been made.
Given the State's finances, there is no reason why it should not invest in strategically important areas like transport. The infrastructure for transport to an island nation such as ours is the airports. It would be outrageous to sell off companies for the sake of lack of investment. If we did not have the money, as was often the case previously, and investment was not made and companies suffered in consequence, there would be a reason for this. However, we now have the money, as do the pension funds and various other sectors. They could invest in the companiesconcerned here, Aer Rianta and Aer Lingus,and perhaps create a new form of ownership other than privatisation, which is now the worst option.
Aer Lingus needs investment of £1,000 million. The company can find £800 million within its own capacity. It is unthinkable that it would be sold off for the sake of finding the balance of £200 million. If, and when, the company is sold off, the money obtained will be invested abroad because there will be no suitable vehicles for investing it at home. It will be invested by the State on behalf of pension funds and others in foreign economies. It is unbelievable that we would do that when we are money rich and when we can use the commercial semi-State companies as a vehicle for investment of our surpluses for the future of the country, thereby enhancing the value of the companies and their returns and profits.
The returns and the profits may not be that important for the State, but the strategic importance of these companies in terms of controlling transport in and out of the country cannot be over emphasised. I appeal to the Minister to reconsider this issue. I do not believe she is a mad privatiser, nor is she tied ideologically to that position. I ask her to consider it from the old Fianna Fáil perspective - from which I originally came - of looking to ourselves in this regard.
It is breaking out again.
Nature breaks out. Worse could happen. I ask the Minister to look at this issue from the perspective she would have held previously and not to be influenced unduly by some of the modernisers and privateers that might be around her, many of them in her Department and perhaps some of them around her in Government also.
I could not agree more with Deputy Stagg. On my way to the committee I said to myself, "I am about to embark on the most futile exercise I could ever engage in because it concerns money that was announced last December and the action has been or is about to be taken to use up the rest of the funding". The idea of nit-picking over it is dotty.
I know you, Sir, your secretary, the members of the committee and the staff of my Department go through the Estimates exercise because, presumably, the Comptroller and Auditor General insists on this format. It would be far better to consider spending priorities for 2001. Perhaps we could consider ways of meeting on that basis, in the same way as the Estimates are considered with the Minister for Finance.
The Minister of State, Deputy Jacob, will talk about energy conservation. When I took office the farm electrification scheme was one of the first things put to me by a senior civil servant who said it should be abolished.
They stopped me from getting rid of it when I was Minister of State.
I was approached about getting rid of it, but we kept it going.
Knock Airport received a millennium grant of £500,000 for 2000. All the airports got special moneys. I was in Waterford Airport yesterday evening and met the chairman and the board. They seek £1.2 million for capital development to enable the runway to be expanded and to facilitate another airline which is interested in using the airport. They are making a go of it in Waterford. The regional airports are coming into their own. They are very important. Moneys will be provided to them under the national development plan. It will be well spent.
The point about consultants was well made. The trend is to employ a consultant when embarking on anything. It is an issue on which I and my officials are agreed. Consultants are not wished upon me by officials. The point is well made that officials have the expertise to deal with the topic in hand but because they want to cover themselves they engage consultants who the produce the same premise. However, we do not have the numbers required nor the time needed to focus on a specific aspect. That is usually the reason we employ a consultant with expertise.
I have found the officials advising me in my Department to be the best experts, not the people who come in from outside. However, there are not enough of them and they do not have the time necessary to give to specific topics. In this politically correct climate in which we all live and struggle to stay alive, the idea that officials will always be correct and have an aura of sanctity surrounding their advice is very difficult for them to put up with.
Sanctity is required, as well as being right?
The sanctity of righteousness.
That would not be my expectation of officials. I could do without the sanctity as long as they were right.
I refer to righteousness because of the PC climate in which we live, where everything must be covered, including the decisions officials take. I wish I had started out as a consultant.
There is still time.
It would be awful if I worked on the political end of matters.
The Minister of State, Deputy Jacob, will look at the question of radioactive waste and the one storage point.
Deputy Stagg asked about Aer Lingus and Aer Rianta. Europe has ruled on Aer Lingus - the Cahill plan is related to it - and all of the other EU member states are affected, especially France because it secured a good tranche of state funding for Air France. The EU has ruled that because of the competitive and liberalised airlines market, there can be no capital investment by the State.
That is wrong.
We checked on it.
Under the EU ruling, the Minister has full liberty to invest in the company. The company cannot be feather-bedded and the investment must be cleared by the EU. However, the Minister would have no difficulty in, for example, giving money to Aer Rianta to develop whatever structures are required.
I am talking about Aer Lingus.
Aer Lingus likewise. There is no difficulty in investing in a company that is owned for productive purposes, provided it could be shown, as far as possible, that the investment was not being made to hinder competition. That is possible.
The Deputy is referring to the investor principle.
Yes.
We checked the records of this because there has been a bit of toing and froing about it, and there is no doubt that the EU ruling in writing at that time stated that this was a once-off and a last investment by the State.
That was a different situation. That was a bail out.
I know the Deputy spoke of the investor principle, but let us park that. We can always get the EU to give us a ruling again on it. Let us leave out the question of whether or not there was ever an EU involvement or a need for an EU involvement. Let us just say that we are looking at Aer Lingus in Ireland, which is a small profitable well-run airline which is going well. It is competitive and it is in a liberalised environment. All of that is true. Airline travel is increasing still and the slough, which two years ago everybody was presaging, has not come. All over the world airlines are coming together and forming new partnerships and liaisons or they are breaking up earlier ones. In that environment, there is this small airline which needs a great deal of money for capital investment in aircraft.
It needs £1 billion.
Yes, it needs a fair amount of money.
And it can provide——
The Deputy should let us think this through. Now that there is money in Ireland's coffers we can be flaithiúilach. It is quite clear that this will not always be the way. If we think it will be otherwise, we are living in a fairy land. I do not know when the situation will change - we see already inflation figures which are worrying for the economy - but the airline is operating in good economic times and when due to world market forces airlines are merging and de-merging. If the Government was to give Aer Lingus the large sums it needs to build up its fleet, what would happen when bad times came and the country might not be able to afford it or would have to tell Aer Lingus that it could not give the airline the capital investment it sought?
I am taking the EU out of the equation. I am just talking as if the EU were not involved. We would have to tell Aer Lingus that five or six years previously we were able to invest in it when the country was awash with money, but that we could not do so again. What would Aer Lingus do then? It would be prey to whoever would be floating around and could snap it up handily and cheaply.
I do not approach this from any doctrinaire policy. The Deputy is right in that regard. I am not doing anything from an ideological point of view. I do not dislike trade unions. I like workers because I consider myself a worker too. I know that Mrs. Margaret Thatcher went into all of this from an ideological wish to wallop or stamp on the trade unions. I do not have that wish, but I do it out of plain common sense. I see Aer Lingus as a commercial semi-State company which should be able to pay its way, be profitable and manage its business. I hold the same view about Aer Rianta.
I find it extraordinary that the Minister is arguing that we should not invest now in case we would not be able to repeat the exercise in the future.
That is exactly it.
It is now a good investment, if the Minister wanted to find a place to invest the money.
It is a commercial semi-State company which, apart from the aberration back in the early 1990s when it got sorted out again, is meant to pay its way. It is meant to live above the bottom line.
Investing in it would not stop it from paying its way. If the Minister for Finance were to invest in this thriving company, which is expanding and growing, rather than putting the money into a bank, it would be a good investment.
No. That is not as I see it in the market, in which airlines play and in which there will be a need for it to become more stringent and rigorous and mindful of the cost/benefit implications.
The Government will sell it off and hand them the money.
I ask the Deputy to bear with me. He talked about Aer Rianta. It is true that as of now the EU - to bring it into the equation for a moment - has not made a ruling on airports such as that which it made on airlines in 1993 in the case of the Cahill plan.
It has made a ruling.
I would hold the same point of view about the airport company. It is a commercial semi-State body which should be able to pay its way also. Heretofore, through duty-free it was able more or less to pay its way and make improvements in capital expenditure. As the results showed, that has been cut back. Aer Rianta has invested in airports abroad which seem to be doing reasonably well. The returns are a little flat at present, but I think those are good investments which will realise a good return in time.
In that regard, there is a Commission interpretation of a directive on airports. It states clearly that the Commission would not have input, that it would not even need to be asked about infrastructural investment by the owner, even if the owner were the State.
I know that. As of yet, that is the case. I am aware of that because, as the Deputy may recall, there was a question on that in the Dáil and I checked it subsequently. The Deputy is quite correct. That is not to say that if one went to do it, the competition directorate would not then take up the matter for being anti-competitive. That would remain to be tested.
The Minister would win the argument.
I would not have too many difficulties about that. That remains my position on those matters. I may not yet win the argument. The IPO Bill was passed for publication last week. There was some delay in Government Publications, but it will be published in the next two days.
We will see it in October.
I hope I see the Deputy in October. I will, of course, because the people elect us.
If we have dealt with subheads A to G, for which the Minister herself is responsible, we can move on to those under the remit of the Minister of State at the Department of Public Enterprise, Deputy Jacob.
Before I respond to four issues raised by Deputy Stagg which I ought to address, I want to revert to an item which Deputy Yates raised earlier, that is the CHP. I am in agreement with Deputy Yates sentiments in that regard and, indeed, with the sentiments expressed recently to him by Mr. Tom Reeves. I felt that way when that legislation was being put in place. We will be beavering away for some hours after this session today in preparation for our session here tomorrow, and I would like to think that we would be able to deal with that issue when we sit down tomorrow.
The first issue Deputy Stagg raised was the expenditure on energy conservation. He will be aware that these moneys are provided to strengthen the activities of the Irish Energy Centre as provided for in the Green Paper published last September. The Irish Energy Centre will be spearheading the thrust on energy conservation and renewables. Since the moneys were provided and since the publication of the Green Paper, there is a new spring in the centre's step. The Irish Energy Centre is doing a great job.
What is the purpose of the £3 million capital allocation?
I understand the moneys to which the Deputy refers are being provided under the heading of capital grants.
They are being allocated in respect of the grants scheme?
Yes.
I thank the Minister of State for his reply.
With regard to the incidence of radon gas, as Deputy Stagg requested I will not provide information on the various surveys which have been carried out. Suffice to say that this is a serious problem and we have identified the geographical areas in which the incidence of radon gas is at its highest. Grants relating to this matter should already be in situ and I am resolved to ensuring that they will be introduced. I am not Minister for Finance and I cannot provide information regarding the date on which those grants will be put in place. However, I will be extremely angry if they are not introduced. The Minister for Public Enterprise shares my views on this matter. Deputy Stagg used the word “incentive” and that is exactly what these grants will provide. The grant scheme has been drawn up, it is merely a question of authorising it and putting it in place. We intend to ensure that this happens.
For many years the RPII has advocated that radioactive waste should be held in one storage location for eventual disposal. Alarmist messages should not emanate from this meeting and people should be aware of the fact that Ireland has very little radioactive waste. However, whatever radioactive waste exists in this country should be dealt with in the manner advised by the professional and technical experts at the RPII. This matter will be addressed.
I thank Deputy Stagg for his kind comments about the stance I have taken in respect of Sellafield. This is the one issue about the Members should avoid being adversarial. I appreciate the atmosphere of co-operation and consensus which has obtained among Members of both Houses in relation to this matter because this has helped us to make progress. If we are determined to fight, we should fight about some other issue. In the interests of the State and the health and well being of its people, however, we should continue to pursue our current policy in respect of this issue. If we do, further progress will be made.
I agree with the Minister of State in respect of Sellafield. A consensus exists among Members in respect this issue, namely, the sooner this installation is closed down the better. The Minister of State knows he can rely on our total support on this matter. I set him a deadline, in a private capacity, of having Sellafield closed by the end of the month.
Is that so?
Yes. On each occasion I meet the Minister of State in the corridor I remind him that 30 June is the deadline.
A third Member, Deputy Hans Christian Andersen, was present on the occasions to which Deputy Currie refers.
I left the stories of Hans Christian Andersen behind a long time ago. As the Minister of State is aware, a crucial meeting on this matter will be held before the end of the month. I have tabled parliamentary questions, including a number nominated for priority, which will be taken in the House next week and I hope the Minister of State, when replying, will be able to provide more detailed information on this matter . Everyone is aware of the importance of this crucial meeting which is being held in Copenhagen. I will be quizzing the Minister of State on this matter in more detail during Question Time next week.
The Minister of State referred to the number of proposals made be BGE and private developers in respect of the construction of natural gas pipelines. Is he in a position to elaborate on that matter? I agree with the sentiments other Members expressed about the inadequate nature of proceedings in this regard.
It was stated earlier that £200,000 has been set aside in the Department's Vote for 2000 to facilitate payment of financial aid to the County Louth residents. This money will go towards offsetting the cost of scientific research being undertaken by the residents in the context of their independent legal proceedings against BNFL. Will the Minister of State indicate whether the arrangements he has made in this regard have proven satisfactory to the residents concerned?
We have tabled a proposal for the OSPAR meeting in Copenhagen later this month which calls for the cessation of reprocessing facilities at Sellafield. The Danish Government has put forward a similar proposal but the terminology used therein is somewhat different. The Danes are seeking a suspension of operations at Sellafield and they are using the rationale that if such operations are suspended they will not recommence. Both proposals are appropriately worded and we have done a great deal of work to secure support from the Nordic countries and all parties involved in the OSPAR Convention.
Deputy Currie also inquired about BGE and the natural gas pipelines. BGE has applied for permission to construct a pipeline from Dublin to Galway and on to Limerick. Enterprise Oil, the company involved in the exploration of the Corrib field, has notified the Department of its intention to build a pipeline from the west which will link into BGE's existing network. I understand discussions are ongoing between Enterprise Oil and BGE in respect of this proposal.
We have adopted a wait and see policy in respect of developments in the area of gas supplies. BGE has put forward a proposal regarding the construction of a new interconnector from Scotland which will run parallel to the existing interconnector. Another company has proposed the building of a pipeline from Wales to Dublin. There is also a plan to construct an interconnector between Belfast and Dublin. At this stage we are waiting for Enterprise Oil to make a declaration about the commerciality of its find in the Corrib field. We requested on a number of occasions that we should not be kept waiting in this regard and we expect the declaration to be made in the third quarter of this year. A decision will then be taken about the best way to proceed. I have no doubt that the decisions we take in respect of BGE's plans in this area will have an effect on other companies' proposals.
Deputy Currie's final question related to the County Louth residents, to whom a sum of £171,000 has been paid. There has not been a great deal of contact between the residents and my Department in recent months but I do not intend to speculate on the reasons for this.
It is hardly an expression of satisfaction.
Money has been provided and paid out on invoices submitted. I believe no invoices, certainly no full ones, are unpaid at this point. I am anxious to continue to facilitate the County Louth residents and their representatives on an ongoing basis with the financial facility which has been made available to me by Government.
Subhead E3 deals with international telecommunications interconnectivity. Concern has been expressed in Cork, by the chamber of commerce and the business community, that we are not competitive and that this is unfair to Cork. The broadband telecommunications infrastructure means that the line comes to the Wexford coast and goes directly to Dublin, which is a welcome advance. The line continues around the country in an arc and finishes in Cork. Cork has significant potential for e-commerce investment but a city will not attract the top companies unless it has a direct broadband link. Cork is at the end of a long line which goes around the country through Galway and Limerick.
It is currently being routed through Galway.
If something should happen along the line, it would interrupt the service for Cork. I understand there is a proposal for a second broadband cable to be directed to Dublin as a back-up service. We propose that there is a stronger argument to link it directly to Cork from Wexford, which would form a circle around the country. If there was a breakdown in Dublin, one could work back the other way. Cork would also have the benefit of a direct line which would make it equally competitive as Dublin. If we are trying to promote decentralisation, Cork is particularly suitable for e-commerce because of the expertise there.
I take the Deputy's point. As he said, the broadband cable comes in at Wexford. It has been routed through Athlone and is now between Loughrea and Galway. Cork is at the end of this exercise.
Which makes it unattractive for companies.
It does for a major city. The Secretary General met with Cork Chamber of Commerce recently and we are considering its proposals. It had not occurred to me because the line must begin and end somewhere. A second link which would go to Cork and act as a back-up for the first one is an attractive idea. Cork, as a second city, is at the end of the line while towns like Ballinasloe, Loughrea and Athlone are benefiting from it because it has gone through.
I agree with the Minister and thank her for her generous comment. The sensible way forward is to have a ring around the country so there will be back-up no matter where the break because one can go the other way.
It would be best if Deputy Coveney could talk to Neil O'Donoghue, who is working on this for the Cork Chamber of Commerce who made a submission. It makes sense that there would be an alternative line. Different companies are working on lines but Ocean has the biggest contract and is digging at the moment. Deputy Coveney should go over the proposal with Neil O'Donoghue because it is eminently sensible.
I have no problem with subhead A. On subheads C to C6 and the park and ride facilities allied to the QBCs, I am in favour of CPO powers for park and ride facilities which are crucial in getting full value from the QBCs. Does this Estimate provide for park and ride acquisition, construction and so on? This is not a matter which can be resolved by Dublin Bus. Will the Minister clarify the matter of public service contracts? Her institutional transport reform paper was predicated on public service contracts being put in place. Previously, the AG advised that public service contracts could not be given. Will the Minister clarify how she plans to proceed with allocating the £16 million Dublin Bus subsidy to certain routes even though it is not legally permissible to give public service contracts?
Park and ride facilities and QBCs are not in our Department's remit but are the responsibility of the DTO and the Department of the Environment and Local Government. This is one of the anomalies of not having one ministry of transport. Rail park and ride has been reasonably successful and we have managed to develop a number of sites. The problem with bus park and ride is finding suitable sites which are very expensive.
When I brought the matter of public service contracts to Cabinet, the AG sent me a letter clearly stating I could not give out public service contracts. That was the end of the matter. He was correct to give such advice at Cabinet. We need legislation for public service contracts. The preparation of this will coincide with advancing the establishment of a shadow regulatory authority.
There will be legislation.
Yes, then we can award public service contracts to whoever competes and succeeds.
The holders of the contract will initially be CIE.
Subheads C1 to C6 are agreed. We will now deal with subheads D to G.
Deputy Stagg discussed the pros and cons of the Aer Lingus IPO. What is the latest position? Is an ESOP or legislation required? Will it go ahead this autumn? Is that possible? What is the Minister's best estimate?
As I have always said, my best estimate is the end of the year, before or immediately after Christmas. That is what I said when the Government approved the process of legislation. The legislation will be published this week. I do not think it is realistic. It will be difficult enough to get the legislation we are currently discussing through.
There are three Bills.
That puts some strain on this committee and its members. Deputy O'Shea deals with e-commerce which helps the Labour Party. From our point of view, Deputy Yates will deal with the three Bills.
Is the position late 2000 to early 2001?
Yes, that would put the Bill to the end of September. Talks are progressing steadily, but not spectacularly. A framework has been laid down and various issues are being raised and dealt with or postponed to be dealt with later. That is the way it is proceeding and I regard that as steady.
How does that answer the question?
Aer Lingus has not yet recruited its chief executive officer.
Mr. Cahill attended a meeting of the committee and promised it would be done in a matter of weeks.
I understand it will be in early July.
As the initial public offer for Eircom was over-subscribed, the question of underwriting did not arise. I asked Mr. Cahill about this and did not receive a straight answer. Is it the case that, if the Aer Lingus IPO were not over-subscribed, the Government's underwriters would have to buy the shares at whatever the selling price may be? Is that the arrangement?
I do not know.
They have been appointed.
We have advisers but we have not advanced that far in the debate.
Is it the position that the Minister has advisers but they are not yet underwriters?
We would not have got that far in the——
However, it is a crucial question——
Yes.
——if we are to avoid a belly-flop such as Guinness Peat Aviation. If one knows they will buy the shares, it is their problem after that.
We have not got that far in the debate with the advisers.
That was the contract with Eircom. The underwriters were obliged to take the shares, but because it was over-subscribed that did not arise.
We can come back to that.
Perhaps the Department could clarify that for me.
I would be glad to ensure it does so because the debate has only just begun. The Bill has only been published, the talks are progressing steadily but not spectacularly and the chief executive officer has not been appointed. All that means the debate with the advisers is not very advanced.
I would be much more reassured about the process if I felt there was no risk of the shares being unsold and that it would be guaranteed that whatever it was decided to sell would be bought by these people at whatever the selling price so that it could not flop. Perhaps the Minister could write to me on it.
I will write the Deputy a letter on it and I will do the same for Deputy Coveney.
My final question on this section relates to the ground handling directive. It is the same issue I raised before and I will table an amendment to the Bill, if we get to it at this stage.
The Aer Lingus Bill?
The aviation regulation Bill. No one seems to want to take responsibility for this. There is a problem with charter companies. The loading of planes to ensure they are properly balanced is a skill. That is one function and there are other maintenance functions. The Irish Aviation Authority, carriers and the Department have said it is not their concern. ICTU has said that someone must be responsible. We want to give the responsibility to the new regulator, Mr. Prasifka. The Minister said talks were taking place between the Department and ICTU.
I met with Peter Cassells and others about three or four months ago. We told them we would have talks with the industry, the IAA, the Health and Safety Authority and others. However, it seems to have left everyone in the same position as when they started. The ground planning directive seeks to open up ground handling in airports to competition. Some people have made bids to run ground handling at airports and approval has been granted to all of them. The airport regulator will have responsibility for the directive when he is installed.
That would be the economic aspect.
Yes, it would not be the well being aspect. It would include the safety aspect.
The IAA could be obliged to do it, but that might not necessarily be the best approach. The issue has not gone away.
The issue may not have gone away, but no one seems to want to be in charge of the directive.
That is all on that subhead.
Are subheads D, E, F and G agreed? Agreed.
On subheads B1 to B6, I could not let the Minister of State do a soft shoe shuffle in answering about new pipelines. Nothing that was said was incorrect. It is just that the position is much sharper than he indicated in that he is committed to making a decision on additional pipelines by the end of the year. I want to be absolutely clear on this and I would like the Minister of State to respond. I believe a Dublin-Belfast pipeline and a second interconnector will be built because of the growth in the economy. We are enacting legislation to allocate spare capacity in gas pipelines because demand is greater than supply. If we were to build more pipelines, there would be no need for that Bill. This is having a knock-on effect on electricity deregulation.
Is the Minister of State standing by his commitment to make a decision on either the Premier Transco or the BTE proposal and to make a decision on Corrib by the end of the year? We have waited two years for Corrib to decide yes or no. It is fine if it decides to bring gas ashore, but we cannot postpone further decisions. This a crucial national issue because, under Kyoto, gas is an environmentally friendly fuel and it is also the cheapest and most efficient fuel. This is a major national economic question as far as I am concerned.
In short, the answer is yes. The terminology I have used is October. It is imperative that those decisions be taken by the end of the year. The rationale we have used is correct. We will wait for Corrib. It can be in production very quickly once it declares itself commercially viable.
What if Corrib remains inconclusive?
Then we cannot remain inconclusive. Those decisions must be taken.
That is fine. Subhead B is agreed.
Are there any concluding questions?
I have one for the Minister. Is it intended to have a Supplementary Estimate?
If the need arises, yes.
I am so much wiser.
The Deputy is asking if there are any significant overruns as of now.
Or does the Minister envisage any. I mentioned rail safety.
There might be in respect of subsidies for Dublin Bus and public transport. There could be transfers of moneys not used.
I take it that neither the Minister nor the Minister of State wishes to make concluding statements.
No.
The Select Committee went into private session at 3.30 p.m. and resumed in public session at 3.34 p.m.