Dáil Éireann - Volume 361 - 14 November, 1985

Ceisteanna — Questions. Oral Answers. - Irish Spruce.

11. Tomás Mac Giolla asked the Minister for Communications the total estimated cost to the Exchequer arising from the liquidation of Irish Shipping Limited; the total daily cost of keeping the Irish Spruce at Marseilles; and if he will make a statement on the matter.

16. Mr. Wilson asked the Minister for Communications if he will clarify for Dáil Éireann his statement of 14 February 1985 that the Irish Spruce was part of the Irish Merchant Fleet; the cost per week to the Exchequer of the maintenance of the ship and crew at Marseilles; the total expenditure by the State on this ship; and the total future liabilities.

Mr. Nealon: I propose to take Question Nos. 11 and 16 together.

Mr. Wilson: No. 16 is a Priority Question and I should like to know the procedure in regard to it.

An Ceann Comhairle: Deputies may ask questions on Nos. 11 and 16 and, in [2363] the unlikely event that we will be at those questions when we reach 3.30 p.m., then the right to ask further supplementaries will be available only to Deputy Wilson.

Mr. Wilson: I do not quite understand that.

An Ceann Comhairle: We are taking a balloted question, No. 11, and a Priority Question, No. 16, and when we reach 3.30 p.m. we will move to Priority Questions. Question No. 16 will then be available to Deputy Wilson and not to any other Member.

Mr. Nealon: The purpose of the Minister's statement of 14 February last was to indicate that the MV Irish Spruce was entered on the Irish register of shipping. The national register of shipping in any country constitutes those ships entered on the register at any given time. The total register constitutes its merchant fleet at that time.

The Irish Spruce was never owned by Irish Shipping Limited; it was leased by the company from the owners Jura Shipping Limited and the lease payments were guaranteed by the Minister for Finance. The Government recognise the arguments in favour of the Irish Spruce remaining on the Irish register. There are, however, a number of legal and operational difficulties in this regard. The Minister anticipates that the final disposition of the vessel will be settled within a short period. The cost of the care and maintenance of the Irish Spruce while it has been berthed at Marseilles has been approximately £34,000 per week. These costs include port charges, victualling and so on in addition to crewing costs.

The total expenditure to date by the State, including expenditure by Irish Shipping Limited prior to the liquidation, on the Irish Spruce amounts to £14½ million approximately. This is made up of payments related to the construction and leasing of the vessel, and its care and maintenance since the liquidation.

It is estimated that the total net cost of meeting the entire guarantee given by the Minister for Finance in respect of the [2364] Irish Spruce would be £35 million approximately at current exchange rates. Of this, about a quarter is in respect of Irish Shipping Limited's former liabilities and, arising from the liquidation of the company, this represents the extra liability falling to be paid by the Exchequer. The remaining three-quarters were an Exchequer liability from the time of the construction of the Irish Spruce.

The estimated total cost to the Exchequer of the liquidation of Irish Shipping Limited will be of the order of just under £50 million. This compares to an estimate, a year ago, of the cost of keeping Irish Shipping Limited going to the end of 1989 of aproximately £200 million. Since then tramp shipping rates have further decreased and at present levels a recent estimate puts the cost of this option now at approximately £220 million.

Tomás Mac Giolla: The Minister of State has mentioned a lot of figures in his reply and I should like to know if £34,000 per week is the cost of maintaining the ship. Does it cover the charter costs?

Mr. Nealon: That includes the port charges, victualling and so on and the crewing costs.

Tomás Mac Giolla: In his reply the Minister said that the Irish Spruce was never owned by Irish Shipping but was leased from the owners, Jura Shipping Limited, and I should like the Minister to say when that company came into ownership of that vessel. I understand that Irish Shipping agreed to the purchase of the Irish Spruce from Verolme on an understanding from the Government at the time that they would pay half of the cost. When was the arrangement made with Jura? How did Jura come into ownership of the Irish Spruce? What is the length of their ownership? Do they own it permanently. How long is the lease for?

Mr. Nealon: As the Deputy is aware, the decision to build in the Cork dockyard was taken in order to preserve employment there. It was because of that, and [2365] that a ship of similar size could be got considerably cheaper in other parts of the world, that certain responsibility for the payments were taken on by the Government. As far as I know, from the time of the commissioning of the ship Jura Shiping Limited were the owners. I do not have detailed information on that in front of me, but my belief is that at no time from its commissioning was the ship owned by anybody else.

Tomás Mac Giolla: Ignoring all the figures I must point out that the ship is leased by the Irish Government and I want to know who is keeping the Irish Spruce in Marseilles. What has happened over the last few months? Why can the Government not put the ship back to work to do the job for which it was designed, bringing coals to Moneypoint? If we have to pay £5 million a year lease, why can the ship not be put to work? What is holding it up in Marseilles?

Mr. Nealon: This is a matter of concern. The matters we have been talking about, the owners of the vessel being Jura Shipping Limited, and it being on charter to the former Irish Shipping Limited, guaranteed in turn by the Minister for Finance, make it an extraordinarily complex legal matter. Naturally, everybody is seeking to do precisely what Deputy Mac Giolla is asking for; to ensure the end of this situation in Marseilles. The Deputy can easily understand that there are many complications there. It is to be hoped that the matter will be settled within a short time.

An Ceann Comhairle: Deputy Wilson, in Priority Question Time.

Mr. Wilson: I have a lot to ask, a Cheann Comhairle. Did the Irish Spruce become the property of the Japanese company on 11 January, 1983?

Mr. Nealon: I understand that the leasing arrangement was undertaken in January 1983. I do not know the exact date [2366] of the ship becoming the property of the company.

Mr. Wilson: Was this for a consideration from the Japanese of £26.5 million?

Mr. Nealon: I regret that I do not have those details.

Mr. Wilson: The Minister should have them, because my question was quite explicit.

Tomás Mac Giolla: They should be available.

Mr. Wilson: Was this for a consideration of £26.5 million from the Japanese company to Irish Shipping?

Mr. Nealon: I regret that I do not have those details. I can certainly get them for the Deputy.

Mr. Wilson: It is a grave derelection of duty on the part of the Minister, or on the part of his senior Minister who sent him in here. Did that money come? Who got that money? Did Irish Shipping Limited get that £26.5 million, or did the liquidator get it, or did it leave the Japanese pocket at all? Could the Minister tell me that?

Mr. Nealon: I do not think that aspect is covered in either of the questions to which I am replying.

Mr. Wilson: It is. My question is more than comprehensive. Surely the Minister is not asking the House to believe that a ship of 70,000 tonnes deadweight was passed over to the Japanese without the handing over of any money? Was that £26.5 million paid out and, if so, when and to whom?

Mr. Nealon: As I say, I do not have the specific information that the Deputy requires, which I regret. I shall be able to supply it to him.

Mr. Wilson: The Minister will agree that in coming to a conclusion about the [2367] total cost as asked for by me this is a very important figure. My second question is: did Irish Shipping Limited lease the Irish Spruce back at £4.9 million per annum over 15 years?

Mr. Nealon: I understand that the leasing period was over 15 years, but I do not have the actual details of the lease.

Tomás Mac Giolla: The Minister has nothing.

Mr. Nealon: I regret that I do not have this information.

Mr. Wilson: Would the Minister not agree that the answer he gave and that his senior Minister gave in the Seanad is cockeyed if he has not that kind of information? Does he not agree that the House is entitled to that information because that answer means than an undertaking was given that over £70 million would be paid on foot of the lease over 15 years?

Mr. Nealon: As I said in reply, the total expenditure to date by the State, including expenditure by Irish Shipping Limited prior to liquidation, on the Irish Spruce amounts to £14.5 million aproximately. This is made up of payments related to the construction and leasing of the vessel, its care and maintenance since liquidation.

Mr. Wilson: Could the Minister let us know how much has been paid up to now, either by Irish Shipping Limited or by the liquidator or both, on foot of this lease? Is it £10 million, £15 million or how much? In what currency denomination was it paid?

Mr. Nealon: Total expenditure, as I have said, by the State, including expenditure by Irish Shipping Limited — that is what they paid in their portion of the rental prior to the liquidation — on the Irish Spruce amounts to £14.5 million approximately.

Mr. Wilson: And that covers the [2368] period from the leasing from 11 January 1983 to 14 November — 12 months ago today is the infamous date — that plus what the liquidator has paid from 14 November 1984 to 14 November 1985?

Mr. Nealon: That is right.

An Ceann Comhairle: Does that conclude the supplementary questions?

Mr. Wilson: I am afraid that I have many more to ask. When the 15 year lease period is over who will own the Irish Spruce?

Mr. Nealon: As I understand, the regulation was that the vessel would then be the property of Irish Shipping.

Mr. Wilson: Would the Minister like to indicate whether the liquidator would have any legal talon to stick into it at that stage, or is it important when the liquidation proceedings would be completed?

Mr. Nealon: The liquidator's presence in dealing with this matter is on an operational basis on behalf of the Government. He is simply dealing with crewing and maintenance of the ship at present.

Mr. Wilson: The Minister should have come in here and briefed his Minister of State a lot better than he has. Would the Minister of State tell us what is the relationship between Merrion Shipping, the defunct Irish Shipping Limited and the liquidator in regard to ownership of the Irish Spruce, or what will the position be at the end of the 15-year leasing period?

Mr. Nealon: I do not have the material available to reply to that.

Mr. Wilson: Would the Minister of State indicate whether the costings that he has given for the Irish Spruce at Marseilles include payment for the propellor work done on that vessel which brought the Irish Spruce to Marseilles in the first [2369] place when, unfortunately, it was quarantined?

Mr. Nealon: The figure I have given relates to payments on the construction of the ship and its care and maintenance since the liquidation, so I assume that the payment about which the Deputy asks is involved there.

Mr. Wilson: Could the Minister state why the Irish Spruce is not trading as of now, even if freight and charter rates are at an all time low, seeing that if it were trading it would be cutting into some of the losses that are being sustained by the State at present?

Mr. Nealon: Naturally, the desire is that the vessel commence trading as quickly as possible. There are, as I have said, extraordinary difficulties arising in this case, but it is hoped that the disposition of the vessel will be settled within a short period.

An Ceann Comhairle: A final supplementary question.

Mr. Wilson: I have about ten more supplementary questions and I shall not be able to get them in time. I also have another question here.

An Ceann Comhairle: We will have a debate on our hands.

Mr. Wilson: I am asking blunt questions. I regret to say I am not getting satisfactory answers. I know the Chair will say he has no responsibility for the answers. But the taxpayer is entitled to more accurate information than I am now getting from the Minister of State. Would the Minister of State agree that the figure he mentioned of £200 million it would have cost the State to maintain Irish Shipping Limited is a false one — I am not accusing the Minister of being deliberately false — in that it does not take into account what would be the assets of the company at that time? Would he further agree that had it been maintained the [2370] Irish Spruce would be Irish owned as would five or six of the ill-fated charters which were the cause of all the trouble? Is it not right that that should be taken into account to balance the figure he mentioned of £200 million?

Mr. Nealon: The important question there is: would we have had a viable company at the particular stage and of what value would these assets be? It is not possible to quantify those at this stage. With the further deterioration that has taken place now quantified, had we not liquidated, the cost would have gone to £220 million. Therefore, the wisdom of the decision is becoming clearer as the days go past.

Mr. Wilson: Would the Minister not agree that in giving the figures he did give to the House and then telling us that he has not got other figures — namely, approximately £75 million of costs to the taxpayers, at £5 million per year — it demonstates that he has not knowledge of those figures? Does he not agree that he should have knowledge and that that changes the whole picture which he and his senior Minister are attempting to give this House and the country?

Mr. Nealon: As I said, I regret I do not have the knowledge in the detail which the Deputy seeks. Naturally, I will seek to supply all of the information that the Deputy sought, as is his right. I stand over the fact that the cost of continuing the company would seem, on present estimates, to be approximately £220 million.

Mr. Wilson: Would the Minister not agree that, since I took the trouble to put this down as a priority question, the least the Minister for Communications should do is to provide in the brief for his Minister of State full details with regard to Irish Shipping Limited? Does he not agree that it is an insult to this House to come in here and say time and time again that the brief does not contain information, vital information to which the taxpayers are entitled?

[2371] An Ceann Comhairle: The Chair must point out — it does not know but it could be — that the question is much too big to deal with at Question Time and that the amount of material that would be required could necessitate transport.

Mr. Wilson: I have never heard the Chair say that it was part of his duty to throw out a life belt.

Mr. S. Brennan: There are only a few figures needed.

Mr. Nealon: I have had quite exceptional briefing on this case but not covering the specifics Deputy Wilson wants.

Mr. S. Brennan: It is the specifics that are important.

An Ceann Comhairle: Question Time is concluded.

Mr. Wilson: A Cheann Comhairle, I still have a question and I have two minutes remaining on that clock.

An Ceann Comhairle: No, you have not, Deputy. We are in priority Question Time and there are no more priority questions. Question No. 17 was answered with another question.

Mr. S. Brennan: Would you allow other Deputies to speak on this, Sir.

An Ceann Comhairle: No.

Mr. Wilson: I thought you indicated to me, a Cheann Comhairle, that when priority Question Time came——

An Ceann Comhairle: If it was still under consideration you would be. I have proceeded strictly in accordance with the rules.

Mr. S. Brennan: Is it not priority time for questions?

An Ceann Comhairle: We can have no impromptu Question Time so far as I am aware.

[2372] Mr. Wilson: Might I ask the Minister of State to make inquiries in his Department if there is a copy of the charter agreement which the Department of Finance, not his Department, made with Jura Shipping Limited on 11 January 1983?