Seanad Éireann - Volume 155 - 24 April, 1998

Gas (Amendment) Bill, 1998: Committee and Remaining Stages.

SECTION 1.

Question proposed: “That section 1 stand part of the Bill.”

Mr. Costello: Section 1 is the heart of the Bill and concerns the repealing of section 37. What the Minister of State said about competition is not clear. He said that Bord Gáis Éireann is already in a hugely competitive market. However, he also stated that a de facto rather than a statutory monopoly is in operation. Will he clarify this aspect?

The Minister of State remarked that the Exchequer has received approximately £400 million in terms of financial benefit from the hugely successful monopoly company, Bord Gáis Éireann. Has analysis been carried out regarding the loss or gain to the State in terms of the dispensation which will take place? The private sector will now be able to avail of the track record and infrastructure of this highly profitable semi-State company. The Minister of State did not say whether parallel infrastructure will be established. How will competition operate? Will the State lose the valuable funds it has received over the years? Bord Gáis Éireann has been in existence for only 20 years and £400 million is a sizeable amount of revenue to have accrued to the State in that time. What are the Minister of State's views regarding the effects of the repeal of the section?

Mr. Walsh: Bord Gáis Éireann has a small customer base and I consider that the benefit of [279] repealing the section will be to the consumer. Does the Minister of State have any comments in that regard? We must always have the consumer in mind with regard to legislation. I do not subscribe to the philosophy of trying to increase the coffers of the State at the expense of the consumer.

Mr. L. Fitzgerald: Senator Costello took up my point about competition, which is a healthy mechanism to keep prices in order. However, there are schools of thought on both sides of the issue. The finest economic analysts have different points of view and the experience of the semi-State and private sectors in recent times has been good in relation to price reduction through competition. Nevertheless, I ask the Minister of State to confirm there will be a mechanism to set prices within the EU when the Treaty is ratified. It will not be a complete free for all. There will be some element of control.

Minister of State at the Department of Public Enterprise (Mr. Jacob): The consumer has been uppermost in the minds of Senators throughout the debate. Although different views have been expressed, competition is the key to consumers getting the best deal at the end of the day. Compliments flew during the debate and Members spoke in superlatives about the performance over the years of BGE. I have every confidence in the company, given its experience. Its commercial and business expertise is already proven. It will rise to the occasion with regard to competition. It will not only exist but thrive in a competitive market.

The issue of putting in place parallel infrastructure was raised. I assure the House that will not be the case. There may be a need for additional infrastructure but use will be made of existing structures. It will not be duplicated and parallel infrastructure will not be put in place. This will be the case not only in Ireland but throughout Europe where different companies and countries will use existing infrastructure in an organised and planned manner.

The issue of dividends was raised. Dividends are a matter for the Minister for Finance and the Minister for Public Enterprise. The level is decided by the profits and investment needs. I addressed the issue of prices in relation to consumers about which Members are concerned. The marketplace will determine price levels. I have full confidence that BGE will thrive and perform extremely well in that environment.

Mr. Costello: How does the Minister of State envisage the establishment of competition? He mentioned that ten corporate bodies would be recognised as capable of entering competition. What type of companies will be involved? What type of licensing process does the Minister of State intend to put in place? The problem is that the Bill only repeals a provision. It is a negative [280] Bill in that it is getting rid of a mechanism rather than putting one in place. It does not give any idea of what will happen in the future or what framework will operate. Does the Minister of State envisage that only the corporate sector will be involved? What bodies will be eligible? Will they include NET or the ESB? What are the ten eligible bodies he has in mind?

Does the Minister of State envisage that the new bodies which will provide competition to Bord Gáis Éireann will become involved in the domestic market? Will the Minister of State outline if any private competitors have indicated that they are interested in getting involved?

Mr. Jacob: I do not have to hand the names of the bodies which may be eligible. The big users are the ESB and NET, but I will give the Senator the names of the others in due course.

This matter involves opening up competition not only internally, but also externally throughout Europe. Continuity and security of supply was discussed. This is a big factor and the involvement and interest of suppliers is welcome. They may be external competitors but we live in times of international competition. We have a strong economy and we have proved that we can exist and thrive in that competitive world. We have no fear of competition. From where the competition will come remains to be seen. However, it will be possible for it to come from a wide range of outside sources.

Question put and agreed to.

Section 2 agreed to.

Title agreed to.

Bill reported without amendment and received for final consideration.

Question proposed: “That the Bill do now pass.”

Minister of State at the Department of Public Enterprise (Mr. Jacob): I have already paid my compliments and expressed my sincere thanks to the Cathaoirleach and the Senators who contributed so capably on the Bill. I reiterate that thanks now.

Mr. Costello: I thank the Minister for his courtesy and his response to the questions asked of him this morning. While my contribution might have seemed somewhat negative, it was only intended to tease out the implications of the Bill's provisions.

Mr. O'Dowd: I thank the Minister for his replies from which I learned a great deal. This is a useful and positive Bill. The world is changing, Ireland is changing and we must move forward. Competition and efficiency are the order of the day.

[281] Mr. L. Fitzgerald: I join other Members in thanking the Minister for addressing our concerns. This company will be perfectly capable of facing the new millennium and the challenges it poses.

Question put and agreed to.

An Cathaoirleach: When is it proposed to sit again?

Mr. L. Fitzgerald: Next Tuesday at 2.30 p.m.