Dáil Éireann - Volume 326 - 28 January, 1981

Ceisteanna—Questions. Oral Answers. - Verolme Dockyard.

9. Mr. B. Desmond asked the Minister for Industry, Commerce and Tourism if he will make a statement concerning the current position of Verolme Dockyard, Cork, with particular reference to the placing by the Government of orders for vessels in this yard and the provision of a subsidy to Irish Shipping Ltd. to allow them to place their proposed order for a bulk carrier with this yard.

Mr. O'Malley: On 30 July 1980 the Government decided that a number of [333] new shipbuilding orders should be placed with Verolme Cork Dockyard—a fisheries research vessel by the Minister for Fisheries and Forestry, two new-design naval vessels by the Minister for Defence and a bulk carrier by Irish Shipping Ltd. The placing of these orders was subject to the satisfactory negotiation of contract terms and delivery dates. It was envisaged that these new orders would provide work for the yard up to 1983.

Letters of intent were issued by the Departments of Fisheries and Forestry and Defence on 10 December 1980 in respect of the placing of contracts for the fisheries research vessel and the naval vessels. Negotiations in relation to the bulk carrier order for Irish Shipping are now nearing completion and it is expected that, all going well, this order will be placed in the near future.

In order to allow Irish Shipping to acquire the bulk carrier at a price related to a fair world market price, a substantial subsidy will have to be paid by the State. Significant subsidies are also inherent in the prices to be paid for the other vessels.

Although construction work on these vessels has not yet commenced because complicated advance design preparations are still in progress. I understand that there have been no redundancies in the yard to date.

Mr. P. Barry: The Minister said that letters of intent were placed on 10 December. Is that correct?

Mr. O'Malley: Yes.

Mr. P. Barry: Does that in effect mean an order?

Mr. O'Malley: In practice it does not constitute a form of contract which I understand can be signed only when the final specifications are arrived at and agreed on. In view of the fact that the letters of intent are issued by two Departments I think it can be taken in practice as being equivalent to an order.

Mr. P. Barry: And the bulk carrier order?

[334] Mr. O'Malley: It is hoped to place that very shortly.

Mr. P. Barry: The sooner it is done the better.