Priority Questions.
17 Mr. Durkan asked the Minister for Communications, Marine and Natural Resources if it is reasonable that the biggest exporter of software in the world should have one of the worst performances in terms of the delivery of broadband services at home; and if he will make a statement on the matter. [26962/06]
Amharc ar fhreagraThe Deputy may be aware that the communications market in Ireland is fully liberalised and that the Commission for Communications Regulation, ComReg, is the statutory body with responsibility for regulatory oversight of this market.
The Government recognises however that a principal reason for the slow roll-out of competitive, affordable broadband services in Ireland, principally in the regions, has been a lack of investment by the private sector in the necessary infrastructure. The Government's regulatory and infrastructure policy has supported the private sector developing a competitive, affordable and rapidly growing broadband market that offers choice of products and providers to Irish consumers and businesses.
Ireland's broadband take-up is growing very strongly. By end-March 2006, there were 322,500 broadband subscribers in Ireland. This is equivalent to almost 8% of the population or approximately 22% of households. Broadband take-up here grew by 112% over the 12 months to March, which is more than twice the EU broadband growth rate.
It is estimated that there are already well over 350,000 broadband subscribers up to mid-2006, which is equivalent to approximately 8% of the population or one quarter of households with broadband. This compares to a figure of approximately three in ten households in the EU at the end of 2005. Ireland is now one of the fastest growing broadband markets in the European Union. Broadband take-up has more than tripled to date since I set a target of 400,000 in late 2004.
The combination of telecommunications regulation and competition is driving prices down for the benefit of Irish consumers and businesses.
The Government is addressing the infrastructure deficit in the regions by building high speed, open access metropolitan area networks in 120 towns and cities nationwide. These networks will allow the private sector to offer world-class broadband services at competitive costs.
My Department offers funding assistance for smaller towns and rural communities through the county and group broadband scheme, GBS. The GBS initiative is continually under review to ensure that it supports private sector roll-out of broadband services to new locations.
My Department's website, www.broadband.gov.ie, gives full details of broadband pricing and availability around the country. The website also lists the different products on offer and the contact details for each service provider. Almost 70 of these broadband providers offer almost 300 different types of broadband products. There is a choice of broadband services that can technically deliver broadband to any customer in Ireland at the moment.
The Taoiseach expressed the view recently, when attempting to justify expenditure on electronic voting machines, that people in a country which is a leading worldwide exporter of software should, at least, be able to vote electronically. Does the Minister agree that we should equally expect that a country that is a leading exporter of software should be able to demonstrate how good the software is by ensuring broadband provision throughout the country is at least on a par with that available elsewhere in Europe?
Is the Minister aware of the recent OECD and EU reports on telecommunications technology in Ireland generally? These reports made severe criticisms of the costs associated with the provision of and access to broadband and the methodology used in its provision and demonstrated that the Irish consumer is the victim. Is he aware that in an open economy such as ours, it is essential that action is taken to drive forward the provision of broadband in a way that has not happened?
Will the Minister confirm that provision of broadband so far is only approximately 50% of what was anticipated for the end of 2005? Although Ireland is progressing at a faster rate than other European countries, this is only because we started from a much lower base. Despite this, we were placed further ahead four or five years ago.
Will the Minister indicate whether he as policy director has given instructions to ComReg and the service providers with regard to ensuring that obstacles to the provision of rapid broadband service are dealt with and resolved, for example, local loop unbundling, line rental costs and number change difficulties, which cost a fortune and take a colossal amount of time. Will the Minister indicate whether, because of the high dependence of the economy on such services, he has a programme or agenda in mind to seriously challenge those with responsibility for their provision?
The Deputy will be pleased to note that our international costs for broadband are the lowest of anywhere in Europe and that our domestic costs approximate the mid-European average.
With regard to our targets, I set a target of 400,000 broadband subscribers for the end of this year. In late 2004, there were just over 100,000 broadband subscribers. Many people said we would not achieve this, but I am delighted to inform Opposition Deputies that we will achieve that target quite comfortably and will be well on the way to 500,000 subscribers by the end of 2007.
We have put regulations in place with regard to local loop unbundling, line rental costs and number portability. We have also passed legislation giving responsibility in this area to an independent regulator, ComReg. The regulator must work within the law and the Constitution and cannot make unilateral decisions that have no basis in law or it will find itself in trouble. We are moving to strengthen ComReg's powers, but this will not allow Ministers on a whim to direct private companies to roll out broadband faster. What we are trying to do is to create a climate that will make it commercially attractive for providers to roll out broadband and put in place stronger regulation that will enable ComReg to try to speed up its provision. We also hope to be in a position to provide the 10% to 15% of people throughout the country who are outside the loop with broadband, either through group or MANs schemes.
Is the existing legislation adequate to ensure the rapid provision of service and the removal of the obstacles to this? Is the Minister satisfied it is strong enough and that ComReg has the necessary power? Do we comply with EU and national legislation in the provision of broadband and other telecommunications facilities?
Has the Minister a plan or programme for investment in telecommunications infrastructure for the future?
Without strategic investment there will be little or no chance of this country competing with other countries in the development of our respective economies. Will the Minister agree this investment has not taken place in the past four or five years?
The Deputy will be aware from my statements on the subject since I became Minister for Communications, Marine and Natural Resources, that I am not satisfied with the state of play regarding broadband and neither is the Government. As far back as 2002, the Government stated it was not satisfied the private sector was providing sufficient broadband capability. This was the reason the Government issued a policy document which put in place the metropolitan area networks, the group broadband scheme and also the roll out of broadband service to all schools. I agree with the Deputy that we are not in the forefront in Europe. If the Government had not tackled the matter, we would be even further behind. I agree the existing legislation is not adequate. This the reason the Government is drafting the Bill to give co-competition powers to ComReg. This legislation will be brought before the House in the autumn. Both Deputies opposite indicated they would be supportive of this Bill which will give extra powers to the regulator.
One of the frustrations which is being voiced by the Deputy and which I have voiced is that in the past the attitude of the service providers has been very negative. They have tended to take the legal route and contest everything, thus slowing the process. I hope the combination of powers and a change of attitude from the incumbent will help to deal with some of the issues to which the Deputy referred, in particular the local loop unbundling and the number portability.
18 Mr. Broughan asked the Minister for Communications, Marine and Natural Resources if he intends for RTE to play a lead role in driving digital take-up here; if he has mandated RTE to begin a process of review and renewal to ensure, as the organisation itself has noted, that public service broadcasting will survive in the current competitive environment; his views on whether there is a need to review the structure of the television licence fee with the increasing preponderance of non-traditional television set technologies for receiving television services; if he will request RTE to offer new public broadcasting services in view of its continued success and profitability and the high earnings of its presenters and management; and if he will make a statement on the matter. [26679/06]
Amharc ar fhreagraMy core policy objectives for the development of the broadcasting sector including RTE are detailed in my Department's Statement of Strategy 2005-2007.
These objectives are to create an environment that encourages the maintenance of high quality Irish radio and television services by commercial, community and public service broadcasters; to seek to retain access to a range of high quality programming in analogue and digital form, on a universal and free-to-air basis; and to secure a viable future for high quality public service broadcasting.
My key priorities for achieving these objectives include developing the regulatory framework by bringing forward a Bill to provide for the establishment of a single content regulator for both public and private broadcasters and the restructuring of RTE from a corporate point of view, ensuring adequate public funding for RTE and TG4 so they can deliver on their statutory mandate, building on progress made in maximising the effectiveness of television licence fee collection and facilitating the successful establishment of a digital terrestrial television platform on a pilot basis in 2006.
The purpose of the digital terrestrial television pilot is to help inform my decision on the roll out of DTT and the transition to digital broadcasting. In addition, the pilot will generate awareness and discussion among interested parties about a full national roll out of digital terrestrial television.
A number of the issues raised by the Deputy, including the public service broadcasting remit of RTE and the operation of the television licence regime, are currently being considered in the context of the development of the legislative proposals that will form the basis of the forthcoming broadcasting Bill.
I thank the Minister for his reply. In the context of his objectives for public service broadcasting and RTE, is he concerned that currently there seems to be an atmosphere of fear and loathing in Donnybrook, Dublin 4, as some of the newspapers have characterised it? There has been a night of the long knives and there is blood on the tracks. Is the Minister concerned that recent events in Radio One have resulted in the removal or shunting to the graveyard shift of three of the jewels of public service broadcasting? Programmes removed include the major arts programme, "Rattlebag", fronted by Myles Dungan, which provided a number of years of distinguished broadcasting, and the eclectic music programme presented so brilliantly by John Kelly, "Mystery Train". The easygoing and affable broadcaster, John Creedon was moved first to the afternoon and then to the graveyard shift. Is the Minister concerned by what is happening in public service broadcasting, given the profitability of RTE and the huge salaries being paid to broadcasters? The leading broadcaster, Pat Kenny, earns almost €900,000 per annum, Mr. Gerry Ryan earns almost €500,000, Mr. Joe Duffy earns almost €300,000 and the director general earns €400,000 per annum. Is it possible that additional programming could be made available to encompass some of the programmes which have been shafted? Is RTE management trying to create a type of Radio Five in BBC terms to take on the new national talk broadcaster? We may need both a Radio Four and a Radio Five. Will the Minister ask for additional services? Is there the possibility of a 24-hour news programme? Both I and the Deputies opposite have asked many times for a Parliament programme which would cover Parliament, the county councils and all the other activities of politics, along the lines of the BBC programme.
The Minister was unclear in a reply to my colleague, Deputy Shortall, last April about other devices for receiving television such as a 3G phone or a computer linked to an LCD screen. Do such devices require a television licence according to current legislation? Will the Minister address this gap, if it exists, in the broadcasting Bill? Who will collect the licence now that An Post is not interested in doing so?
The Minister has trotted out once again an account of his belated conversion to digital broadcasting in the last days of this Government. He attended a conference a few weeks ago at which a member of the European Commission stated that the digital switchover should be well advanced by 2010 in all member states, with a final deadline of early 2012. Will he agree there is no chance that Ireland will be so advanced? The NTL-Chorus report published yesterday showed the bulk of cable television subscribers are still analogue subscribers. Just like the situation with broadband, the Government has been dilatory and it needs to take strong action. The RTE report on digital broadcasting states that analogue reception on the east coast will by 2008 be seriously affected by the UK digital roll out which is now well advanced for 2009 to 2010. The Minister needs to take strong and early action to encourage digital roll out and use RTE as the flagship.
In answer to the Deputy's first question, I do not believe everything I read in the newspapers. I have read different versions of the so-called fear and loathing in Dublin 4. I am not worried by something reported in a newspaper. I agree with the Deputy with regard to the radio programmes. I listen to the radio when I am travelling and the programmes referred to by the Deputy are three excellent and enjoyable programmes. I heard a discussion about the reasons for "Rattlebag" being moved. The explanation given by the head of radio at that stage was not unreasonable.
It is good for RTE to challenge itself, and it is good for programmes to be moved around. I will not get involved in how individual programmes should be managed or the daily running of RTE. The Deputy would be the first to challenge me if I did. The concept of shaking up the schedule, being innovative, changing programmes around and trying to hold people's interests is not a bad principle, especially in broadcasting as it gets even more competitive.
As somebody who always resented the inference that I was not earning the salary I was being paid out of the public purse, I will not comment on the salaries some of the people are being paid in RTE. The information is available and somebody clearly thinks the personnel are worth their salary. The issue would be subject to negotiation and I am sure RTE management is as good a negotiator as anybody else. Some of the salaries are based on returns coming back to the station relating to advertising. I do not know the details of the matter. We all feel that we earn our salaries. I will not comment on anybody else's salary.
There is merit in the Deputy's comments on Parliament programming. I recently met a person who has put forward a suggestion that there be a public service broadcasting station devoted entirely to parliamentary and political affairs. It would cover this House and the Seanad, along with the European Parliament and county councils etc. I am aware of another approach we are involved with which proposes to webcast the meeting of at least one county council. Such a development would be positive.
If the Deputy is telling me that this is of interest to the Labour Party, I would be delighted to convey that to the person concerned. It would be of interest to our party and the Deputies in Opposition. I will go back to the relevant person and convey that to him.
We will get even more exposure.
On the issue of licences, the Deputy is correct in that I did not give a very specific answer to the question he raised. In the context of the broadcasting Bill, the issue will need to be considered.
Will the equipment I mentioned need a licence? Will a computer linked to an LCD screen require a licence, for example?
This is a debate which must be addressed in the broadcasting Bill. There needs to be anticipation, as God knows what will happen in the next six or 12 months as all the platforms come together. The question must be addressed, and it will be with the broadcasting Bill.
On the matter of An Post, the Deputy may be one step ahead of me. An Post indicated at one stage that it was not interested in continuing to collect licence fees. That was approximately 18 months ago. I raised the matter when we had a meeting with An Post. As it was not interested, I indicated we would put it to tender. I was told at that stage that An Post was interested and thinking the matter over again. More recently, with the retirement of the chief executive of An Post, it was stated by the outgoing chief executive that this was not an area in which An Post was interested. That is not the official information I have from An Post.
The Deputy may be aware that we have moved responsibility for the collection of the licence fee from the Department to RTE which clearly has a vested interest in maximising the take. From that point of view, I know the licence fee will be collected by An Post for the coming year. After that, if An Post indicates it is not interested in continuing collection, it will be open to others.
On the subject of digital terrestrial television, I am firmly set on the current course. We started on DTT in 2000, provided for it in 2001 and advertised at that time. We got no response from the commercial market. We started drawing up a trial run for the Department itself for DTT, which will begin in the autumn. The pilot scheme will be in place for a maximum of two years. We will move the platform from that.
We will be well within the 2012 target which the Commission has set for DTT and switching to digital. The Deputy is correct in that certain parts of the UK are rolling the system out over a period of three or four years. Wales is scheduled to have it around 2010. That will affect analogue television reception of BBC and HTV programmes. We should look after our own.
19 Mr. Ferris asked the Minister for Communications, Marine and Natural Resources his views on whether the strategy group established by his Department on the future of the fisheries sector is sufficiently representative of those involved in the sector. [26947/06]
Amharc ar fhreagraThe new seafood strategy group that I announced in Killybegs last week will develop a comprehensive, integrated, market-led vision for the future of the Irish seafood sector. It is based on a strategy that is centred on innovation, product development and value maximisation for our coastal communities and sustainable management of our marine resources and ecosystems. This strategy will also feed into the new national development plan being drawn up for the 2007 to 2013 period so that the sector has access to the necessary development funding in coming years.
Given the importance of this review, I, along with the industry, wanted the seafood strategy group to be chaired by an independent, eminent and committed person, with wide experience in the Irish and global food industry. I was pleased when Mr. Noel Cawley, the former chief executive of the Irish Dairy Board, agreed to become chairman of the group. The other two group members are an tUas. Ruan Ó Bric, chief executive of Udarás na Gaeltachta for 25 years, and Mr. Joey Murrin, chairman of the National Salmon Commission. Between them, the group members have a wealth of relevant knowledge and experience at the highest level, and I am satisfied that they are eminently suited to carrying out this important task.
The strategy group will begin an in-depth consultation with all stakeholders immediately. Regional meetings are planned for July in Wexford, Kerry, Galway and Donegal, and all stakeholders, including the fisheries sector, will be invited to these meetings. Individuals and organisations will also be invited to make written submissions to the group. Accordingly, I am satisfied that all stakeholders will have every opportunity to participate fully in the development of the new strategy and I encourage them to do so.
I thank the Minister of State for his response. Does he agree that the Government has failed to formulate a comprehensive strategy for the fishing industry, as requested by the main fishing organisations? Does he agree that it took considerable pressure from those organisations representing all sectors of the fishing industry to bring about a scenario where the Government will consider having them consulted as part of a future strategy?
I welcome that the strategy group has met the industry. Unless there is a comprehensive outcome which will contribute to the survival of the industry as well as its development, the strategy group will be little more than a talking shop. It will not have the support of those involved in the industry.
Will the Minister of State give an assurance that when the fishing organisations make their submissions to the strategy group later this summer, their views will be accorded priority? Will he assure the House that the recommendations they make for the future of the industry will be treated accordingly?
From the debates we have had, especially during the passage of the recent Bill, everybody is acquainted with the current state of the industry, irrespective of where they come from. We are also aware of the input and contribution of those who are actively involved in the industry and on the fishing fleets. It is important their views are taken into consideration and that they are given a paramount position in the development of the industry for the future.
Two months ago the Minister, Deputy Noel Dempsey, and I met in Dublin the industry liaison group, which is representative of all the fisheries organisations, processors and exporters. The suggestion came from them that we would create a totally independent group to look at the fishing industry in terms of quota reductions, the number of fishermen, the need for research and development and the need to introduce modern technology, innovation and added value, and, more importantly, to draw up a vision for the future of the fishing sector that will carry us over the next five or six years.
As a result, we drew up terms of reference and sent that to all the fisheries organisations and, indeed, to the Joint Committee on Communications, Marine and Natural Resources and those on the Opposition Front Bench. We received a number of recommended additions to the terms of reference which we have included — we have included practically all the fisheries organisations' additional recommendations to the terms of reference.
We also asked a number of eminent people to become actively involved under the chairmanship of Mr. Noel Cawley. Indeed, Mr. Cawley was very acceptable to the fishery sector as well as to the Department. Mr. Cawley and his group held a meeting yesterday morning with the industry liaison group. They have agreed to meet regularly over the coming months or as requested and agreed by Mr. Cawley and his group. I hope that this group will make recommendations by the end of September, although it may need a little extra time. The first meeting will take place in Wexford over the next week or two, and then across the country there will be meetings with full, open and frank discussion.
It is important to take on board that this is an independent look at the industry. Mr. Cawley has been very involved in drawing up strategies in the food sector in the past and we must acknowledge that the fishing industry is an important food sector. I hope that by the end of the year we will have a strong vision for the future of the fishing industry and that we can move forward together. As I stated in Killybegs, it is a matter not of the Department versus the fishermen, the fisheries organisations, the exporters and the processors, but of all of us moving forward together. Mr. Cawley's group will also look at the Department's role and we also may have some questions to answer. It is a totally independent review and we should leave it at that. The fisheries organisations are quite happy that some of the concerns they had over the past couple of weeks on the independence of the group and on their input have been ironed out. We should move forward together. Let us get on with the vision and develop a fishing industry strategy for the future.
I thank the Minister of State for his response. Without the fishermen everything else falls. There is much suspicion among those actively fishing, particularly given the way they have been treated over the past 30 years and in the recent past. The contact I have with the organisations is also one of suspicion and worry that if the submissions to develop the industry of those who fish day and night while at risk from the elements do not take precedence over everything else, the Minister will achieve nothing. I want the Minister of State to give an assurance here that their submissions will be afforded the considerations to which they are entitled.
Mr. Cawley agreed to take the job on the basis that it would be a totally independent review. The eminent group which we set up agreed to consult widely with the industry and to have a number of regular meetings with the industry as it progresses through to the final vision.
It is also important to maintain the group's independence. The fisheries organisations sought an independent group, which would look at the entire fishing industry, including the positive and negative aspects, the quota reduction and that too many fishermen are involved in the context of quota, and which would draw up a strategy that would enable fishermen and their families around our coastline to have a decent income for the future.
Let us be honest. What is happening at present, with reducing quota and the same number of fishermen, will not provide a viable fishing industry for the future. The group will look at all the aspects, including decommissioning, research and development, innovation, added value and new boats, replacement boats or removing fleet from the industry. We should not tie the hands of Mr. Cawley and his group because they would not take it on board. Mr. Cawley has been successful in the food sector and we should give him a chance. No doubt when he drafts the vision for the future, it will be one with which the fishermen will agree. Knowing Mr. Cawley, he cannot draft a fishing policy for the future without entering into dialogue with the fishery sectors and the communities on how any new policy for the future will affect coastal communities and the jobs in those communities, which is also important.
20 Mr. Perry asked the Minister for Communications, Marine and Natural Resources if he will clarify the position regarding the future development of Ros a’Mhíl harbour, due to his Department’s commissioned report to assess the viability which recommended two separate developments and in further view of the commitment given by the then Minister, Deputy Fahey, of €14.8 million for Ros a’Mhíl; and if he will make a statement on the matter. [26682/06]
Amharc ar fhreagraIn 2000, the Department commissioned O'Hare and Associates to carry out an assessment of the capability of the existing infrastructure and onshore facilities at Ros a'Mhíl fishery harbour centre to service safely and efficiently the existing and future requirements of the fishing industry and other potential sources of commercial traffic.
The thrust of the report recommended a phased development. Phase one of the development entailed the provision of dedicated ferry berths in an area of the inner harbour dredged to 3.6 meters and a small craft harbour in the same dredge area. Phase 2 involved the provision of a deep-water berth, with facilities for vessels up to eight metres draught. The report went on to recommend further phased developments.
This Department appointed consulting engineers to the project in July 2001 and they estimated the total cost of the development at €30 million. In 2004, the Department of Community, Rural and Gaeltacht Affairs agreed to co-fund phase one of the development. The dredging of the inner harbour and the dredging for the small boat facility is now complete at a cost of €5.1 million. This amount does not include any sum to cover the contractor's claim for additional fees.
Planning permission was sought and obtained for the overall development in 2002 and all statutory permits are in place. Amendments subsequently made to the development were submitted to Galway County Council for planning approval. Planning permission has been received for amendments to the layout of the inner harbour entailing construction of a rock spoil breakwater and shore access area. Currently, amendments to the proposed layout of the ferry berth pontoons and the configuration of the proposed deep-water quay are with Galway County Council for approval.
In light of the announcement by the then Minister, Deputy Fahey, of the investment of €14.8 million, while I welcome what the Minister of State, Deputy Browne, stated on the work carried out, this development is required because Ros a'Mhíl is a major fishery harbour centre situated close to the most productive fishing grounds. The Department's fishing figures for the past three years show that Ros a'Mhíl is the second most important fish landing port in the country. The difficulty is that landing of fish declined over the past year as the new generation of vessels are unable to land. Fishing boats over 100 ft. have been prohibited from entering the harbour and unless deep-water facilities are provided Ros a'Mhíl's declining trend in fish landings will continue. One processing company cannot get fish.
From the tourism point of view, Ros a'Mhíl is the main port of access to the Aran Islands. With in excess of 350,000 passengers per annum, it is the fourth largest port in terms of passenger movements in the country. There are six ferries to the Aran Islands on a daily basis and a deep water berth would facilitate visits from cruise liners, with passengers disembarking for Connemara and the Aran Islands.
Given the fishing, tourism and commercial potential, the difficulty is that this was agreed in the national development plan and the then Minister, Deputy Fahey, announced €14.8 million for Ros a'Mhíl. The development has been slow and phase 2 has been frustrated. The Minister of State replied that certain works have been done, which I have seen, but there is a deep concern that the development will not proceed as originally envisaged. No funding is ring-fenced in the Department's budget, which we discussed a few weeks ago.
The dredging is complete and representatives of my Department and the Department of Community, Rural and Gaeltacht Affairs are carrying out a detailed analysis of the need for a dedicated passenger ferry terminal and the building of a number of pontoon berths required. The next stage is the completion of phase 1 through the installation of the pontoon berths and I hope planning permission will be granted in this regard soon. The contract will be awarded in the autumn with the work completed by spring 2007. The provision of the deep water quay is the next stage and this will provide a facility for the larger pelagic vessels using the harbour and for visiting foreign and domestic trawlers. The deep water quay will also be available to serve other industries such as offshore exploration.
With regard to funding, €84.35 million is available under the national development plan while up to the end of 2005 the Department had spent €120 million under this programme. This year €22.5 million is available for fishery harbour development. Planning permission rather than money is the issue. I hope permission will be granted soon and then we can go to tender to award the contract.
I thank the Minister of State for his reply. He said the project is ready for tender. The funding announced by the former Minister for the Marine, Deputy Fahey, is critical. Will the building of the deep water facility proceed, given that I have been assured planning permission is in place and funding is all that is required?
A number of stages were agreed and the next phase is the installation of the pontoon berths. As soon as planning permission is granted, that project will go to tender and a contract will be awarded in the autumn or earlier, if the permission comes through quickly. The work will be completed by next spring. Phase 2 is the provision of the deep water quay, which will be built after the pontoon berths have been installed. These phases have been agreed by both Departments and the people in Ros a'Mhíl. The issue is obtaining planning permission, installing the pontoon berths and then moving on to phase 2, the provision of the deep water quay, which, as the Deputy stated, is important for large pelagic vessels.
I thank the Minister of State for the clarification because there was major uncertainty among the people of Ros a'Mhíl. There was ambiguity among the key partners in the fishery harbour regarding the direction and timescale of the development. They sought clarity on the timsecale and funding, not promises. The original cost of the development was estimated at €29 million, which was agreed by the Department and designs and costings were produced for the provision of dedicated ferry berths and a deep water pier 200 metres long with a minimum depth of 8 metres. Does the Minister of State agree to that?
I am not in the business of making promises. If planning permission is granted to provide the pontoon berths, the contract will be awarded in the autumn and completed by spring 2007. I have visited a number of ports in recent weeks. I intend to visit Ros-a-Mhíl in the next two or three weeks and I will have discussions while I am there. Phases 1 and 2 have been agreed. Phase 1 is about to be achieved as the planning permission should be granted soon. The Deputy and the people of Ros a'Mhíl should not be worried because we will honour whatever commitments have been agreed.
There were massive celebrations when the former Minister for the Marine, Deputy Fahey, made the original announcement in 2000. A marquee was erected amid high expectations. There has been much disappointment since but I am assured the Minister of State is not in festive mode and he will deliver what he has outlined. If he does not, the next Government will.
The former Minister, Deputy Fahey, made a commitment to Ros a'Mhíl and the development is under way. The senior Minister and I intend to see it through to the end. The Deputy should have no concerns. The first phase will be completed next spring and when we return following the election, we will complete the project.
Á la marquee. The Minister of State should not hold his breath.
We would not like to have the people of Ros a'Mhíl waiting for the Opposition parties to get back into Government.
The Minister needs a rest.
I am mad for a fight.
21 Dr. Cowley asked the Minister for Communications, Marine and Natural Resources his views on whether a long-term strategic plan for the oil and gas industry operating here, and a repayment of at least 20 per cent on gross profits, should be enforced by statute on these speculator companies; and if he will make a statement on the matter. [26681/06]
Amharc ar fhreagraThe fiscal terms for the licensing regime under which offshore exploration companies operate are provided for by the Finance Act 1992. The system is straightforward and is based on a corporation tax rate of 25% applying to profits earned. Historic capital expenditures are 100% deductible at the start of production. No royalty or production bonus or their equivalents are required. The regime was introduced with a view to establishing a risk-reward balance, which reflects Ireland's circumstances, including the industry perception of relative prospectivity, and acknowledges the realities of competition for internationally mobile exploration/ production investment.
I recently put in motion a review of the licensing regime under which offshore exploration companies operate in the State. My Department will engage the advice of external experts to independently validate the proposed changes and terms of reference for such engagement are being finalised. My concern is that the regime in place must be sufficiently progressive to accommodate both future variations in oil and gas prices and the high cost of deep-water field development. Amendment of the existing terms would only apply to future licences. Changes in the make-up of licensed entities are a normal part of the exploration business and, in the instance referred to, I very much welcome the renewed interest in the Irish offshore scene by the incoming partner. Since exploration is a licensed private sector activity, the question of a strategic plan for the industry prepared by Government does not arise.
I thank the Minister for his detailed reply. I welcome the review of the fiscal terms and I am glad the Private Members' motion tabled by the Technical Group was instrumental in this happening.
However, it will only be when 50% of the Corrib gas field has been exploited that the company will have to pay 1 cent in tax. Given the 100% capital write off, it will be light years before tax is paid. In the meantime, significant funding is needed for hospital beds and so on. A licence was granted to Tony O'Reilly's companies, Providence Resources and Sosina Exploration, in November 2004. They, in turn, sold it to Exxon Mobil while retaining a 20% stake but Exxon Mobil is paying all the exploration costs, which are estimated at hundreds of millions of euro, before anything is found. It would have been much more equitable if the Exchequer had received this money. This leaves a dirty taste in every person's mouth in the context of the Corrib gas project because such funding could have been targeted at the local community. In County Donegal, an Irish company, Grianan, states it will give 10% of gross profits to the local community. It would be wonderful if 20% of gross profits resulting from exploration went to the local community affected. It would also act as an incentive. Will the Minister consider it?
I am on record as seeking a 50% stake in any oil or gas discovery for the State, including royalties. Sounds emanating from Providence Resources and Sosina Exploration suggest they have great hopes that much more gas will be found. It would be a shame not to be able to take advantage of such a situation. Both Norway and the community on the Shetlands have done well from exploration. Why should we always be the poor relation? Will the Minister comment on whether the local community should benefit?
I have stated all along that the community in the immediate vicinity of the pipeline and the terminal should benefit from any gas find. I have believed for a long time that where people are discommoded by a development in the national interest they should gain locally, and that includes those near the pipeline. Unfortunately, no one can gain from it until the gas is piped ashore, which has been a difficulty in the Corrib area.
I agree a local community, wider region and nation should benefit from any gas or oil exploration success. That is Government policy. Where Deputy Cowley and I differ is in what he might demand or feel is reasonable in that context. Our disagreement is a matter of figures rather than principle.
At present, the corporation tax rate of 25% applies to finds, with a 100% write-off of historic capital costs. That was deemed necessary when it was put in place between 1987 and 1992, particularly in the Finance Act 1992. Despite what Deputy Cowley previously described as generous terms — I agree they are generous — we have received few responses. We must keep exploration attractive and not put people off by taking too much. Circumstances have fundamentally changed, particularly with the rise in prices of oil and gas during the past 18 months to two years. This enables us to review and revise the terms to ensure the State and taxpayers benefit more from future finds without scaring companies away.
We must remember 25% or 50% of nothing is nothing. If we do not attract exploration companies, the State itself must carry out that exploration. I recently spoke to someone who knows about these matters. Regarding the area off the west coast of Ireland, the usual cost for an exploration well is €20 million but it is estimated it will cost €70 million in some places. We must maintain a balance in the terms to make it attractive to prospectors. However, we are reviewing the terms and we will seek a greater take.
If, as I hope and as seems to be the case, greater prospectivity occurs and we have more discoveries, we will be in a much stronger position to increase the terms. I have spoken to experts who are not directly associated with oil exploration companies and who have conducted negotiations for other countries. They state if companies believe they have a good chance of finding oil and gas, they do not mind the terms increasing or the State's take being larger so long as they know they have a return.
I do not want to rake over old sores, but in the case of the Corrib, the costs have doubled during the past two years while the company is waiting to bring the gas ashore. The price has gone up so it is balanced to a certain extent. However, we must progress the issue.
I agree that unless the Corrib gas does come ashore we can never profit from it. The difficulty is that a material deviation has taken place in the development plan under the 1992 terms. This deviation takes the form of transporting material several kilometres instead of putting it behind concrete dams at the site in Ballinaboy, and the Advantica report suggests major changes in pressure and so on. Does the Minister agree this is a material deviation requiring the development plan to be thrown out and negotiating a new plan to take people's safety fears into account? I attended a briefing with Shell and I am disappointed because it appears it will not change its position and is intent on doing what it intended from day one.
Neither the Deputy nor I should anticipate what Shell intends to do. The Advantica report deals with all safety issues in an objective way — I was asked about this matter prior to and after the report was published. It was given a free hand to examine those issues of concern to the people in the area. I categorically state to the Deputy that any future consent I give, and there are a number I must still give to Shell as the Corrib developer, must contain specifications fully in line with the Advantica report, and Shell accepts that. I assure the Deputy and people locally that all aspects of safety have been dealt with and will be fully met in any future consent.
