Committee Reports > List of Committees > Dáil > 1973 > Committee of Public Accounts > Report - Appropriation Accounts 1970 - 1971

MIONTUAIRISC NA FINNEACHTA

(Minutes of Evidence)

Déardaoin, 8 Samhain, 1973

Thursday, 8th November, 1973

The Committee met at 11 a.m.

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.

VOTE 40—INDUSTRY AND COMMERCE.

Mr. P. Ó Slatarra called and examined.

572. Chairman.—We are varying our procedure in that we shall take the Comptroller and Auditor General’s comments where they arise under the appropriate subheads. Is that agreed?

Deputy H. Gibbons.—Very good.

573. Chairman.—On subhead E— Minerals Development—what does this cover?

—Subhead E, described as Minerals Development, relates largely to provision for compensation which may be payable by the Minister for mineral rights compulsorily acquired.

It does not seem that too much is acquired?

—No. Specifically, there are two or three Minerals Acquisition Orders. One relates to Slieveardagh coalfield in County Tipperary. Another relates to gypsum and anhydrite deposits in Counties Cavan, Monaghan and Meath and a third relates to copper deposits in Allihies, County Cork. In these cases where minerals were acquired compulsorily by the Minister compensation becomes payable on production of minerals, not immediately. This is paid by the Minister who is recouped by royalties on the actual production. In the three cases here which are covered by this subhead there has been very little production. In the case of the Slieveardagh coalfield, which is incorporated in the Ballingarry mines, production has ceased. That explains why the subhead is such a small figure and, incidentally, why there was a saving due to the fact that production in Ballingarry was tapering off.

574. Chairman.—On subhead H, paragraph 79 of the Report of the Comptroller and Auditor General reads:

“Subhead H.—Córas Tráchtála (Grant-in-Aid)

The total amount of grants which may be made to Córas Tráchtála was raised to £9,000,000 by the Export Promotion (Amendment) Act, 1969. The aggregate amount of grants issued to 31st March 1971 was £7,611,885 including £1,580,000 in the year under review. The accounts of Córas Tráchtála are audited by me.”

Mr. Mac Gearailt.—The accounts of Córas Tráchtála and its subsidiary, Kilkenny Design Workshops Ltd. are, as stated in my report, audited by me and are presented to the Houses of the Oireachtas. During the year under review Córas Tráchtála made £168,000 available to Kilkenny Design Workshops by way of grant.

575. Chairman.—On subheads I.1. and I.2., paragraph 80 of the Report of the Comptroller and Auditor General reads:

“Subhead I.1.—Industrial Development Authority—Administration and General Expenses (Grant-in-Aid)

Subhead I.2.—Industrial Development Authority—Capital Expenditure (Grant-in-Aid)

Under the provisions of the Industrial Development Act, 1969 An Foras Tionscal was dissolved on 1st April 1970 and the Industrial Development Authority took over the powers, functions, duties, liabilities and assets of the dissolved Board. Section 17 (3) of the Act provides that grants not exceeding £100,000,000, including grants paid to An Foras Tionscal, may be provided from the Exchequer to enable the Authority to perform its functions. The aggregate amount issued to 31st March 1971 was £70,225,446 of which £4,525,305 related to industrial estates. The accounts of the Authority are audited by me.”

Mr. Mac Gearailt.—This paragraph records the dissolution of An Foras Tionscal on the 1st April, 1970, from which date the Industrial Development Authority took over the powers, functions, duties, assets and liabilities of the dissolved Board.

Deputy H. Gibbons.—On subhead 1.2.— Industrial Development Authority—Capital Expenditure (Grant-in-Aid)—do we come back to the report of the IDA later?

Chairman.—Yes, of course. You can do it now if you want to.

Deputy H. Gibbons.—We will leave it until we are finished.

Chairman.—If you want to deal with the IDA this is the place to do it, while we are still on subhead I.2.

Deputy H. Gibbons.—We had better leave it until afterwards. We have a sheaf of documents here.

Chairman.—I have no objection, but if you want to raise it in general this is the natural place to raise any question on it.

576. Deputy H. Gibbons.—What struck me about it is that there is duplication between the IDA and Córas Tráchtála in their efforts and their work.

—I do not know on what you base that. So far as I am aware there is no duplication. In fact, we have an arrangement in the Department of Industry and Commerce under which we established a co-ordinating committee which brings together all bodies under our aegis for regular meetings to ensure that, in fact, duplication does not arise.

Right.

577. Chairman.—On subheads J.1. and J.2., paragraph 81 of the Report of the Comptroller and Auditor General reads:

“Shannon Free Airport Development Company Limited

Subhead J.1.—Administration and General Expenses (Grant-in-Aid)

Subhead J.2.—Grants to Industrialists (Grant-in-Aid)

Grants to the company from the above subheads and from Vote 41, Transport and Power, for tourism and aviation are limited to £10,000,000. The total of such grants paid to 31st March 1971 amounted to £5,493,500. The accounts of Shannon Free Airport Development Company Limited are audited by me.”

On subheads J.3. and J.4., paragraph 82 of the Report of the Comptroller and Auditor General reads:

“Subhead J.3.—Housing Subsidies

Subhead J.4.—Housing Grants

£93,371 was paid to the company to subsidise the letting of houses at reduced rents and £17,575 as grants for new houses, equivalent to the grants normally payable under the Housing Acts.”

Mr. Mac Gearailt.—Paragraph 81 shows, for the information of the Committee, the cumulative grants paid to the company in respect of administration and general expenses and grants to industrialists. These are limited to £10,000,000 by the Shannon Free Airport Development Company Limited Act, 1970. Paragraph 82 sets out the amounts paid to the company in the year in respect of housing subsidies and grants. In addition to the moneys made available to the company from this Vote, £220,000 was issued from Vote 41—Transport and Power, in the year under review, to meet expenditure by the company in tourism and aviation activities. The Central Fund advanced £2,534,000 in the year for housing and community services and for financing the acquisition of additional shares in the company by the Minister for Finance.

578. Chairman.—With regard to subhead L.—Technical Assistance—with note, are there any comments?

Deputy Staunton.—As a matter of interest, have these technical assistance grants not been transferred to AnCO?

—No, there are different types of technical assistance grants. We are concerned in the Department of Industry and Commerce with technical assistance grants available to industry and to the distributive sector for the engagement of consultants. Also, under that heading we have the tailend of the technical assistance grants paid to the old adaptation councils set up in the 1960s. There is also a provision there for private mineral exploration. This is within the sphere of the Department of Industry and Commerce. There are other technical assistance grants not within this Vote.

579. Chairman.—On subhead O.1., paragraph 83 of the Report of the Comptroller and Auditor General reads:

“Subhead O.1.—Shipbuilding Subsidy

Subsidy payments to Verolme Cork Dockyard Co. Ltd. have been referred to in previous reports. The charge of £160,000 to the subhead is a payment on account towards the cost of construction of three ships. Shares in the company amounting to £409,400 and debenture loans amounting to £2,052,214 were held by Taiscí Stáit Teoranta at 31st March 1971. The company has also received £717,892 in grants under Industrial Grants legislation.”

Mr. Mac Gearailt.—This paragraph is for the information of the Committee. The total subsidy payments made to the 31st March, 1971 were £1,523,654. Of this amount, £992,354 relates to five ships in respect of which subsidy payments are completed. The balance of £531,300 relates to payments on account for four ships.

580. Chairman.—On subhead O.2., paragraph 84 of the Report of the Comptroller and Auditor General reads:

“Subhead O.2.—Interest subsidy to Shipping Finance Corporation Limited

Reference was made in paragraph 77 of my previous report to a Government decision that Shipping Finance Corporation could make loans to shipowners at preferential rates of interest to encourage them to have their ships built in Irish yards. To compensate the Corporation for loss of income, a subsidy was approved equal to the difference between the interest paid on its borrowings and the interest received on these preferential loans plus a margin of 1 per cent. to cover out of pocket expenses and to allow a reasonable reserve to be built up.

In the year 1969-70 subsidy up to 31st March 1969 amounting to £81,219 was paid in respect of loans for two ships. The charge to the subhead, £64,158, represents subsidy payments for the year ended 31st March 1970 on these ships.”

Mr. Mac Gearailt.—The Shipping Finance Corporation was incorporated in 1961 as a wholly-owned subsidiary of the Industrial Credit Company to provide loan finance on a commercial basis to shipowners. In 1966 the Government decided to subsidise the Corporation so that they could make loans to foreign shipowners at preferential rates of interest to encourage them to have their ships built in Irish yards. The arrangement was extended to Irish shipowners in 1967. The paragraph indicates the basis of the arrangement and the subsidy payments made to 31st March 1971.

581. Chairman.—Has the position been affected by our entry into Europe?

—Slightly but not to an extent that would upset us in any way. There is an EEC directive which lays down a minimum lending rate. At present this is 7½ per cent, limited to an 80 per cent advance and an eight-year repayment loan. This will be further considered by the EEC before the end of the year but our information at the moment is that this is not likely to be varied substantially. As it stands at present it does not seriously affect us; we can work with it.

582. Chairman.—On subhead Q., paragraph 85 of the Report of the Comptroller and Auditor General reads:

“Subhead Q.—Castlecomer Collieries, Ltd.

In paragraph 69 of my report on the 1968-69 accounts I referred to the provision of financial assistance for Castlecomer Collieries, Ltd. and to the Government decision that further financial assistance from public funds should not be provided as the mine was considered not economically viable. The Company subsequently went into voluntary liquidation. As funds available to the liquidator were insufficient to meet in full claims from employees in receipt of workmen’s compensation at the time of the Government intervention in 1963, it was decided to provide funds from voted moneys to meet these claims and accordingly £54,000 was issued in the year.

The balance of the charge to the subhead, £2,650, comprises payments made on an ex-gratia basis to two former employees who did not qualify for payments under the Redundancy Payments Act, 1967.”

Mr. Mac Gearailt.—As stated in the paragraph, payments amounting to £56,650 made out of this subhead in the year included £54,000 paid to the liquidator of Castlecomer Collieries Ltd. to enable claims from certain of the company’s employees in receipt of workmen’s compensation to be met in full. In the years from 1965-66 to 1968-69, inclusive, payments amounting to £260,480 were made to Castlecomer Collieries Ltd. to assist the company to overcome its financial difficulties. When the company went into voluntary liquidation there were no funds available to meet the claims of the ordinary creditors, the largest of which was the Department of Industry and Commerce for the sum of £260,480 mentioned above plus £19,594 interest thereon, a total of £280,074.

583. Deputy H. Gibbons.—It has been stated that the mine was considered not economically viable. Does this mean there is coal there but it is not an economic proposition to take it out?

—Undoubtedly there is still coal there. One of the problems about Castlecomer is that the seams of coal are broken and interrupted. Economically speaking, this made production difficult.

584. In view of the position in this mine at present and all the talk about its future, would it be possible to work it economically in the future?

—This might not be ruled out in circumstances of energy shortage. In present conditions it seems clear it is not economic. If we have an energy crisis there will have to be a good deal of rethinking and quite possibly deposits of this kind, which ordinarily might not be regarded as economic, would have to be drawn on to provide sources of fuel.

585. Chairman.—Is it mostly anthracite production?

—Yes.

No doubt you are aware that recently it was impossible to buy anthracite in Dublin until a certain cargo came in? There was actually a shortage of anthracite.

—Yes.

586. If this mine is allowed to go derelict, will it mean that it will be more difficult to get it into operation again if and when required?

—This is true to some extent because when the mine is closed and if there is no immediate prospect of opening it the mine is flooded. To re-open the mine after that means that it must be pumped out before any operations can start.

587 Has anyone considered keeping the mine in a minimum state of preparedness?

—This question was considered both in relation to Castlecomer and Ballingarry. The difficulty is that a considerable amount of annual expense is entailed which, in the circumstances of these two mines, would have to be met by the State because nobody else would meet it. In the circumstances of the time it was considered this was not justified.

588. If the mines remain derelict for a considerable period, is it not likely that the labour force available will dissipate?

—This is true. A new force would have to be got together if the mines were to be re-opened.

589. Is there a market for Irish anthracite at present?

—The difficulty about it is that while there may be a market in terms of physical demand an economic element is involved also and this is what has hit both of these mines.

590. Has anybody balanced the difference between subsidising Irish anthracite production and the expenditure consequent on closing the mines and the payments that would have to be made as a consequence?

—I do not know if a cost-benefit analysis, in the strict sense of the term, has been carried out.

Do you not think it should be?

—It is something that would be considered in a fuel crisis situation. We are dealing with the period 1970-71—

I appreciate that.

—and therefore decisions taken at that time were related to the circumstances of the time.

591. Deputy MacSharry.—Are the mines a dead letter at the moment?

—Both Castlecomer and Ballingarry at present are dead letters in that they are closed.

Because of the pending or threatened fuel crisis these have not been re-opened?

—Not so far; but as I said earlier, this is something that I think could well have to be considered in a fuel crisis situation.

592. Deputy Crotty.—The witness mentioned Ballingarry. What is the actual position where mines like that are closed? Ballingarry has been flooded. I was in touch with the Department at one stage, when people wanted to do open-cast mining there and I gather there was some question of royalties. Apparently the Department or the Government could give these royalties to the firms but they did not want to deal with the liquidator. They were anxious to do open-cast mining. That is why I ask if Ballingarry is being left closed.

—There are two elements in this: underground mining which is affected by the closure and by the flooding, and open-cast mining which is conducted on the surface and therefore the closure and the flooding would not affect the possibility of open-cast mining if anybody is in a position to undertake it. He, at present, would have to deal with the liquidator because under ordinary procedures of company law the liquidator is the person responsible for carrying out any negotiations of that kind.

593. And the same applies in Castlecomer?

—I think Castlecomer is completely wound up. I do not know of any question of a liquidator remaining, so far as I recall.

594. Who owns what is left?

—I presume a certain residue remains with the old Castlecomer Company after the liquidation. It is certainly not in State hands.

595. I think this arose due to the present energy problem and we are talking about 1970-71. Actually the decision on the Ballingarry mines was taken much more recently.

—True, the decision to close the Ballingarry mine was taken only last year.

In the last six months?

—Further back than six months, I think.

596. I wondered if any consideration was given to the energy problem?

—The actual flooding might have taken place in more recent months but the decision to close the mine and that nothing further could be done about it would have been taken a good deal earlier.

597. Yes, but would the State not have a maintenance gang there who would keep the mine from flooding?

—Yes, the State did undertake to be responsible for maintenance of the mine up to the time it was finally clear that it was no longer economically possible to keep the mine in operation.

598. In relation to the general background of these mines—they are not economic?

—No, they are not economic in the ordinary sense but, as has been said, it may be that we will have a new situation. I cannot say what the outcome would then be.

599. You were not thinking of this situation in the case of Ballingarry?

—It was not thought of in terms of an energy crisis because I think the energy crisis has only come upon us in a very definite way in the last few months.

600. Chairman.—On subhead R—Miscellaneous Payments—there is a note saying that the excess was due to expenditure on scientific awards for which no provision had been included in the Estimates. What were these scientific awards?

—This was a new scheme introduced to run to some extent parallel with the export awards scheme. It was felt that the development of a scheme for scientific and technical innovations would be an encouragement to Irish firms in that field to extend their efforts. This was an incentive.

601. Chairman.—Paragraph 86 of the Report of the Comptroller and Auditor General states:

“National Productivity Year (Grant-in-aid)

As indicated in my reports for the years 1968-69 and 1969-70 grants amounting to £92,000 were issued to the Irish National Productivity Committee which organised and administered the National Productivity Year project (M.O.V.E. campaign). An account of expenditure from these grant moneys covering the period from 1st September 1968 to 31st August 1971 has been audited by me.”

Mr. Mac Gearailt.—The account to 31st August, 1971, showed an amount of £4,019 unexpended at that date. I have since received a final statement from the committee which showed that, after meeting a few outstanding claims, the final unexpended balance was £2,191 which was surrendered to the Department in December, 1972—just a tidying-up process.

602. Deputy H. Gibbons.—In regard to expenditure on committees etc., what is the position about the Working Party on Flax and Hemp?

—That committee examined the situation in regard to flax and prepared a report which I think did not yield very positive results. As a consequence it was decided not to proceed with any inquiry into hemp. The committee is now, in effect, wound up.

603. Deputy MacSharry.—What about the Committee on Insurance?

—It covers a wide range of insurance. You may recall that the committee has already presented an interim report on motor insurance. They are now proceeding to consider other aspects of insurance in a wide sphere.

It is still meeting?

—Yes, and it will be for some time.

Chairman.—Are there any more questions on this Vote?

604. Deputy H. Gibbons.—There are a few things in the IDA Annual Report 1970-71 which interest me. On page 9, if I understand it correctly, there is a suggestion that in France and Germany growth was slow because of increased investment in 1969 and 1970 and in Austria and Belgium and three other countries, growth was slow because of a shortage of productive resources and government economic restraints. To my mind, that seems to be two sides of the coin: both giving the same result?

—I am not quite sure that I follow your question.

I understand from the paragraph that growth became slow in 1970 because of increased investment in France and Germany and growth became slow in five other countries because of economic restraints, which would suggest that investment was less, that there was decreased investment. In other words, increased investment and decreased investment gave the same result?

—I see your point. Those are two sides of the coin. You will notice in the Report that in relation to France and Germany it suggests that the slackening reflects pressures after rapid increases in investment spending. One might expect that if there has been a period in which there has been a good deal of investment there will be a tapering off period which will cause a kind of slowing down. Equally, in the opposite situation, where there is a scarcity of resources, the slowing down arises but for different reasons. As you know, these things tend to go cyclically and you get periods of upward curve and then periods of downward curve on the graph.

605. On page 11 under the heading “EEC” the report mentions the expectation for 1972 and hope that Japan and the United States will take more interest in our country with a view to starting industries. What is the situation?

—There are two elements there which, perhaps, I should take separately. Taking Japan, the prospects of development by Japanese industrialists here are fairly good, I think. The IDA have been taking an interest in Japan in recent times and, in fact, have established an office in Tokyo with a representative there. They went into Japan at a very good time psychologically in that the Japanese at that stage were suffering from the problem of their trade surplus and one of the ways in which they could deal with that problem would be the setting up of industry outside Japan. I understand that the IDA have found considerable interest in Japan and that a number of firms have been in touch with the office in Tokyo and have put forward proposals. These will have to be examined and discussed, of course, with the industrialists. It is, perhaps, too early yet to show positive results. At the same time, there has been, as you probably know, quite recently the announcement that one Japanese company is already setting up in Cork with a highly technological plant. There was also an announcement recently that another Japanese firm in the fibre manufacturing line would be establishing in Ireland. That is the Japanese situation. The American situation is slightly different in that, while the United States contributed a great part of external investment in the country earlier, there was a mark-time period within the past year and the situation was overshadowed, perhaps, by two elements. One was the position in the North of Ireland, which gave rise to unease on the part of industrialists outside, and the other was the suggestion that the United States tax system would be changed in a way that might affect us adversely. The second element has been removed for the present. We know that the new Trade Bill which is being introduced in Washington will not contain tax provisions of the kind which we had feared. The first element, apart from any ease in the tension that may exist, is being met by the fact that industrialists have become more aware of the situation in Ireland and more conscious of the fact that this part of Ireland, the Republic, is not affected in any serious way and that we have not got here the kind of disturbance that unfortunately they have in the North.

606. Thank you. On page 15 of the report it is stated that “our planning is thus a continuous process, based on the closed-loop concept in planning”. What does that mean?

—This is an IDA report.

607. The point I am making is that it is difficult to understand the report because some terms are used which the ordinary layman cannot understand and some of the observations do not make sense.

Chairman.—Does that not come back to the relationship of this Committee to these bodies? Is that not the point you are raising?

Deputy H. Gibbons.—In one place they use the term “pressure of labour” and in another place the term “tight labour market” when they should have said “scarcity of labour”. They use “GNP” in one place and three lines further down they use “GDP”.

608. Chairman.—The Accounting Officer is not responsible. You are raising again the very important and complete gap that exists where these semi-State bodies are concerned. They are not under Parliamentary control really. We will get into policy if we pursue this any further. It is right to point out that the Accounting Officer is not answerable for this?

—This is true, Chairman.

Deputy MacSharry.—He is making a very good shot at it.

609. Chairman.—You direct and to a large extent control these companies, do you not?

—We do in a broad sense. What I have been trying to do, in reference to Deputy MacSharry’s remark, is to be as helpful as I can to the Committee and to explain what I can within my own range of knowledge.

That is appreciated.

—I cannot offer to interpret every precise phrase in the IDA Report.

610. Am I right in saying that finally the Department of Finance control these companies?

—And our Department.

And your Department control their operations?

—And also the budgeting because when any of these State-sponsored bodies come to prepare their budget for the following year they must submit the detail to us and must justify the detail and that is further discussed with the Department of Finance so that there is a good measure of strict financial control up to the point that the Dáil votes the actual grant-in-aid. After that we pay the grant-in-aid on requisition at monthly intervals according as the need for payment is demonstrated.

611. In effect, there is a large area of your activity which we cannot query in detail?

—There is a large area of the activity of the IDA and similar bodies which, in that sense, the Committe of Public Accounts cannot query because the Accounting Officer, as you say, has not got responsibility.

612. Nevertheless the Accounting Officer and the Department do, in effect, direct these bodies?

—In a broad sense, yes, but obviously they are allowed a great deal of discretion within their own terms of reference and the Act which enables them to operate.

613. This means that arising from such a technicality the Committee of Public Accounts are not in a position completely to investigate the activities of your Department. Does it not boil down to that?

—Not to investigate in the kind of detail that has been raised. From what you said earlier I think you appreciate that I am quite happy to answer as far as I can any general question that may be raised.

That is appreciated. It is the actual technical position about which we are concerned.

614. Deputy MacSharry.—Do the IDA go directly to the Department of Finance for resources?

—No. Any requisitions for financial assistance, any proposals for extra funds that might be required either at the time of preparation of a budget or in the interval, would come to our Department first.

You would go to the Department of Finance?

—We would go to Finance, if necessary bringing the IDA with us if the matter required discussion and further elucidation might be necessary.

615. Deputy H. Gibbons.—With regard to the projected 40,000 jobs in four years where the eventual realisation was 22,000, can you tell us what is the position now?

—The latest IDA report, which I have seen only this morning, indicates that for the year 1972-73 their target for job creation has been met and slightly exceeded. In other words, they have a situation where they have a net 14,000 jobs in prospect from the approvals they gave in the past year. The actual gross figure was somewhere in excess of 16,000, but by making allowance for redundancies and the filling of vacancies caused by redundancies, the net figure is slightly more than 14,000. They said in the report that they expect their target of 16,000 for the coming year will be met comfortably. I think the indications are that the IDA’s programme, which was intensified within the past year because of problems created by the North of Ireland situation in particular, is proving successful and they are getting the industrialists and the projects.

616. Deputy MacSharry.—I am always cynical about these reports. Of the 14,000 or the 16,000 jobs, how many are a carry over from last year’s report? Between the initial announcement and the date employment is actually given, two or three years may have elapsed and the 500 jobs in a particular place may have been counted three times.

—That is not so.

I hope not but it looks like it.

—The figures I have been quoting from the IDA are for potential job creation. They relate to proposals that were positively approved by the IDA in the past year. There are two figures which I confess tend to be confusing. There are the potential jobs created from approvals and the actual jobs that have come into existence in the year.

617. Deputy Staunton.—I think Deputy MacSharry’s concern is in relation to projects which, when announced, make projections that in a certain industry 100 people will be employed but if one checks a few years later a different situation exists.

—That is possible. You will appreciate that when the IDA are examining a proposal—and they examine it in detail—it may appear 100 jobs will be created. It can happen that in the intervening period—it can be anything up to two or three years before the factory comes into production— technological developments may have occurred that will affect the level of employment and instead of 100 jobs it may be less. I can, however, recall instances of industries where the projected employment that was mentioned at the time of approval was exceeded when the industries came into production.

618. There is also the tendency of certain promoters, for obvious reasons when dealing with State authorities, to be optimistic in terms of the numbers of people they suggest will be employed.

—This may be, but the IDA now have got to a very sophisticated stage of examination of projects and the chances that an industrialist could inflate the employment projection merely to make the project more attractive are slimmer than they were.

619. Deputy H. Gibbons.—With regard to the question of job projection, would it be possible for the Accounting Officer to have a note circulated, indicating in detail if necessary the basis for calculating a certain number of jobs in a period of time. The IDA have issued projections for the coming five years and certain figures have been given for the area around me which I hope are true. I should be grateful for a note indicating how those calculations are based.

—I am in a slight difficulty here. As the Chairman indicated earlier, I have not responsibility for the IDA and how they make their projections and, therefore, as Accounting Officer this would be difficult. However, to facilitate the Deputy I would be prepared to arrange in another capacity to ask the IDA to prepare such a note and to let him have it.

Chairman.—This brings up a difficulty for the Committee. Strictly speaking what the Deputy has asked has nothing to do with the Committee but should be asked in the House. However, if he asks a question in the House he will not get an answer. We are practically in the same position here.

Deputy H. Gibbons.—The Accounting Officer has answered my point. He will get the IDA to give the information.

—I am making the distinction between my position as Accounting Officer and my other capacity. In the second capacity I think I can arrange it.

620. With regard to industries closing down because markets are not available, I understand there is a warning system open to these people to use. Is it used frequently and with success? Fóir Teoranta were established to take care of those organisations. Are they successful?

—There are two elements in the question. One is what we would call our early warning system which is an arrangement under which the Departments, in conjunction with the IDA and any other bodies, try to ensure that they get notice in advance of difficulties a firm may encounter with the idea that the combined forces available would try to help the firm out of the difficulties. The position of Fóir Teoranta, as you know from the legislation, is that they give assistance to industries which are potentially viable and have run into difficulties at present. They do not provide funds for lost causes. The other element of the question is the extent to which firms themselves may become aware of declining markets. I am not so sure I could answer that in detail. In a broad way, sometimes firms do become aware sufficiently in advance and are able to notify their difficulties and this in turn may give rise to some proposal for diversification of the firm’s activities. On the other hand, there have been cases of sudden changes in market conditions which firms might not reasonably be expected to anticipate and in that situation there is very little they can do about it except look for some fire brigade action as quickly as possible.

621. Has Córas Tráchtála any part to play in this?

—Yes, Córas Tráchtála is included in the group within the scope of our Department which is brought into action in a situation where a firm runs into difficulties. We draw on all existing State resources, the IDA, Córas Tráchtála and the Institute for Industrial Research and Standards together with any other body such as the Industrial Credit Company or Fóir Teoranta that may be appropriate.

622. Deputy MacSharry.—That is fine when the situation arises but is there a warning system? Do all these bodies you have mentioned examine the position in relation to all the products manufactured in this country so as to have this warning available to firms?

—When I spoke about a warning system in relation to our own situation, I was referring to the fact that we have an arrangement that if any of the State bodies including the Department becomes aware at an early stage that a firm is in difficulties steps are then taken to try to deal with the situation. We have not a warning system in the sense of overall monitoring which I think the Deputy has in mind under which we would become aware that such-and-such a market was becoming sensitive. There is no overall system but I would expect it would come up through individual industrial sectors.

Chairman.—There is no doubt we are going beyond our proper job here altogether and unless there is a specific question now we shall have to move on.

Deputy MacSharry.—As the Chairman rightly pointed out the difficulty of the Committee is the fact that, whether technically or otherwise, the Accounting Officer for the IDA is here and he is the man who passes their money through Finance or negotiates it for them I think it is the only place we can get answers to these questions.

Deputy Crotty.—In fairness to our Chairman I think he has defined our position precisely and I have great sympathy with Deputy MacSharry in regard to his difficulties because they symbolise the frustration of Parliament that is there. A body such as the Committee on Procedure and Privileges—

Chairman.—Yes, I think we shall have to follow it up. We are grateful to the Accounting Officer for his comments.

The witness withdrew.

VOTE 34—LANDS

Mr. T. O’Brien called and examined.

623. Deputy MacSharry.—On subhead D, Statutory Contributions to Land Bond Fund, Local Loans Fund and Church Temporalities Fund, what is the contribution to the Church Temporalities Fund?

—The contribution there is trifling.

Can it not be purchased outright?

—We are, in fact, arranging for the purchase outright of tithe rents now. The general situation in relation to that fund is on the following page, page 89, under item 1 of Appropriations in Aid. The overall position in relation to that is that there is a capital sum of about £2.5 million in the Church Temporalities Account and that is invested. The dividend from that comes to £115,000; on top of that there are annual receipts of £9,000 which give a total income to the fund of £124,000. There are charges on the fund also to the extent of £124,000 and they are disbursed in a variety of ways. For example, the £124,000 income is distributed in this way: £30,000 goes to the Department of Education, £26,598 to the Department of Finance—that is a contribution to the national teachers’ pension fund—£10,000 to the Department of Agriculture and Fisheries, £10,000 to the National University and there is a variety of small items: administration, superannuation, audit fee and income tax. A surplus is left of £39,055 which is payable to the Vote as an appropriation in aid. The situation in relation to the Church Temporalities is this: the agitation against the payment of tithes in Ireland did not arise from any feeling that the tithes were a penal imposition but because at the time of the agitation they were payable to the minority Church. The tithe rent war, as such, was regarded as a success not because it succeeded in abolishing the payment of tithes, which it did not, but because as a result of it the Protestant Church in Ireland was disestablished and, after its disestablishment, the rents that were collected were no longer payable for its upkeep but were invested and devoted to these national purposes which I have mentioned. The only income of the fund in 1970-71 apart from the huge sum of dividends on the capital sum invested, £115,000, was the figure of £9,000 collectible annually. At the request of this Committee about two or three years ago, and made in particular by the Comptroller and Auditor General, we conducted a campaign for the redemption of those rents and they are now redeemable; they are down to the small sum of less than £2,000 a year.

624. Is anybody still paying contributions to the Church Temporalities Fund?

—Yes.

Who are they paying them to?

—The Land Commission.

625. Can they buy them out?

—They can.

There is a tremendous amount of difficulty about this?

—No.

I am not personally concerned but I heard about it.

—The simplest possible procedure has been introduced in the past two or three years. They can be redeemed for a very small sum based on a five years purchase. It is almost wound up.

626. Deputy H. Gibbons.—On subhead F.—Deficiency of Income from Untenanted Land—what is the explanation for that?

—A deficiency may possibly arise, for example, from our management of untenanted land on hands. We operate a separate account for that. In that year the income to the account from untenanted land was £499,000 mainly from lettings through auctioneers and stock managers.

This is land you have acquired and not resold?

—Yes. The outgoings that year were £507,000 mainly for wages, rates and the servicing of land bonds. That left a deficit of £8,000. There was an unappropriated surplus of £14,000 from the previous year and thus there was no necessity to draw on the subhead.

627. On the question of untenanted land, am I right in saying that this is land you have acquired and not resold?

—That is right. It is retained on hands awaiting the completion of improvements or the erection of houses preliminary to ultimate preparation for resale. While on hands land is let for revenue purposes.

628. Deputy MacSharry.—You do not need this subhead at all?

—There was no draw on the subhead in that year.

629. On subhead I.—Improvement of Estates, etc.—is that improvement of estates you own permanently or are just passing through?

—Passing through. This money was devoted in that year—£466,000 to the erection of new houses and £313,300 to general improvements such as roads, fencing and field drainage.

630. Chairman.—On subhead K.—Losses by Default, Accident, etc.—there is a rather unusual note?

—About the two Adam fireplaces? Actually, what happened there was that a property with two Adam fireplaces was sold at public auction on Thursday, 19th October, 1967. We had confirmed the previous day that the fireplaces were still there. The purchaser visited the premises on the following Sunday and the fireplaces were missing. He claimed £1,000 damages and senior counsel advised us that as it could not be proved that the property was intact at the time of auction we should negotiate a settlement. This we did for £800. The real point was that the purchaser definitely bought in the belief that the fireplaces were there and we could not certify that they were.

631. Chairman.—On subhead L, paragraph 51 of the Report of the Comptroller and Auditor General reads:

“Subhead L.—Game and Wildlife Development

The expenditure under this subhead is made up as follows:—

Mr. Mac Gearailt.—Game and wildlife development includes research, conservation and consultation as well as schemes related to tourist attraction. The tourist schemes have for their objective increased earnings from foreign sportsmen by the development of shooting on private estates and the provision of information about the availability of the shoots. The Regional Game Councils are concerned with development of the country’s own resources for the people of this country. Research grants are mainly made to An Foras Talúntais and Trinity College.

632. Deputy MacSharry.—There is a tremendous amount of duplication in this kind of activity between the Department of Local Government, Bord Fáilte, the Department of Transport and Power and the Forestry Division. Apparently they have been doing exactly the same thing?

—Subhead L which appears that year in the Lands Vote was to prevent that type of duplication. We transferred it the following year to Forestry and it is now an essential part of that Division which has been re-named the Forest and Wildlife Service. We took it away from the Lands Vote.

VOTE 35—FORESTRY

Mr. T. O’Brien further examined.

633. Deputy MacSharry.—On subhead C.1.—Acquisition of Land (Grant-in-Aid) —was the amount provided expended on this item?

—There is a special account for subhead C.1. on page 93. The amount spent was £442,744. It is a grant-in-aid subhead and the unexpended balance of the grant is not liable to surrender at the end of the year. The reason is that we cannot control the date of incidence of charge and it is desirable to have a reserve to cushion against commitments. Strictly, there should be sufficient in the fund to meet all our obligations; otherwise we would offend against the canons of accounting as we are not to enter into contracts for which the Dáil has not voted money. For the Deputy’s information, we acquired 34,497 acres for the sum of £442,744, that is an average price of £13 per acre.

Are you having any difficulty in getting land for forestry?

—For the past two or three years we have been able to get a good amount of land but from now onwards I believe we will feel the pinch. Because of the price that agricultural products, particularly sheep, can command we will not get the mountain foothills that we got before. We can expect a fall back.

634. Chairman.—On subhead C.2., paragraph 52 of the Report of the Comptroller and Auditor General reads:

“Subhead C.2.—Forest Development and Management

In paragraph 42 of my Report for 1968-69 I referred to improvement works, including the provision of tourist amenities, at Lough Key Forest Park, Boyle, Co. Roscommon. Further development works at the Park are being carried out and are estimated to bring the total expenditure to £365,000 which will be apportioned between Bord Fáilte Éireann and the Forestry vote on a 70:30 basis. The charge to the subhead in the year includes £16,780 towards the cost of the works, thus bringing to £46,550 the total expenditure from the vote at 31 March 1971.”

Mr. MacGearailt.—This project was originally administered by Bord Fáilte but is now carried out by Forestry with contributions from Bord Fáilte. Payments from the Vote on the undertaking were as follows:—

635. Chairman.—On the question of conservation, has industrial activity done any damage in the area of forestry?

—On the whole, no. Industrial activity and forestry could be regarded as almost mutually exclusive. In general forestry is sited in remote regions and is normally well removed from industrial development.

I take it that forestry extends to the conservation of trees?

—Yes.

636. What is the position at Avoca? There is a chemical factory there that is demonstrably destroying the areas in its vicinity. Has that come to your notice?

—Yes.

What is the position?

—We have suffered some damage at Shelton Abbey from the industry located there. In fact, we had to close down our forest nursery at Shelton near Arklow.

637. Under the heading of conservation, do you not think your Department have a duty to protect such areas?

—Yes. It would, however, depend on the priorities assigned to the closure of the Avoca mines and the establishment of the fertiliser industry at Arklow. At the time the decision was made there was a certain amount of disagreement between the Department of Lands on the forestry side and the Department of Industry and Commerce regarding the siting of the Nitrigin factory at Arklow.

638. Leaving out that vexed question, have you done anything about the control of fumes from Nitrigin Éireann?

—No, we were “semi” assured at the time that the fumes would not be noxious.

639. Has anyone from your Department inspected this area recently?

—Yes, we have inspected it.

640. Have you seen the sulphur fumes coming from the chimneys of the factory?

—Yes.

641. Has anything been done on the conservation side to deal with that? Has anyone seen the pollution of the atmosphere that can be seen from the coast?

—We brought in the Institute of Industrial Research and Standards to advise us on this problem and to monitor the nature and quantity of the fumes.

642. Have your Department any function in this matter?

—Not directly as a matter of conservation. We have a conservation subhead but this was the first year it was introduced. It was introduced on 24th March, 1971, the last week of the financial year with which we are dealing. As it came in the last week we did not spend any money under the heading for that year.

643. Has there been any activity in your Department since then in connection with this matter?

—We have of course discussed the question of damage with the management of Nitrigin on the basis of findings by the Institute of Industrial Research and Standards and our own scientific staff.

644. You agree that considerable damage has been done?

—Yes. The nursery at Shelton Abbey was damaged and some of the trees were seriously affected.

645. In that area there are hardwoods and deciduous trees. Your Department plant mainly conifers and that type of tree?

—Yes.

The preservation of that type of tree in the area is important from the point of view of ecological balance?

—Yes.

You agree this is a serious matter?

—I accept it is a serious problem.

646. In the early days of enthusiastic plantation and in face of all the difficulties of getting a substantial forestry policy going, you planted mainly certain types of trees that gave quick growth and return?

—Yes, that would be the commercial, the economic objective.

647. Have your Department given any thought to balancing this with hardwoods and deciduous trees? Is there any programme to obtain that balance?

—Our forests consist of 95 per cent softwoods—that is conifers, mainly sitka spruce and pine—and hardwoods are only 5 per cent, beech and oak mainly. They are not as productive as the conifers; they take much longer to grow and the difficulty is that they require a far better quality of land. We find it very difficult to get the superior quality land these hardwoods demand. It will not be sold to us because farmers and other landowners feel that it would be better devoted to the production of food.

648. Do you think you will balance up in the future?

—We do all we can. We would like to get more land suitable for hardwoods.

649. Does that not add to the urgency of the conservation of that whole area of Wicklow where there is still a considerable amount of trees other than what you plant yourselves?

—The intention and the Department’s ambition is that where there are hardwoods we will retain them; when they are felled we will replace them with more hardwoods.

650. That being your laudable policy does it not make it all the more urgent to conserve these areas in County Wicklow where these trees are now being destroyed by pollution?

—Yes, it does.

651. Can we take it that funds for conservation will be applied in that way?

—I shall take particular note of what the Chairman and the Committee say and convey it to the responsible technical people in our Department.

Chairman.—There may be other areas.

Deputy Crotty.—Dungarvan and around there.

652. Deputy H. Gibbons.—I was surprised to hear the Accounting Officer say the Department had responsibility for the trees. I understood the Department of Local Government were the people responsible?

—The Department of Local Government could be involved under the planning laws and the Alkali Act. I refrained from mentioning that.

Chairman.—I am sorry if I gave the impression that I was holding you responsible.

Deputy MacSharry.—I think action has been taken to the extent that the Institute for Industrial Research and Standards are reporting on this.

Chairman.—If anybody took the trouble to go down there they would see this pall of smoke and when they came close to it they would see the brown-yellow nitrous fumes issuing into the atmosphere, practically nitric acid coming out into the atmosphere.

653. Deputy MacSharry.—May I ask another question on forestry development? This situation may have arisen in other areas also, where the Forestry Division have tried on three occasions to plant land they had bought but the trees failed. The Forestry Division still insist on holding this land even though there are people willing to buy it back?

—I have no knowledge of this. If the trees failed the land itself must be poor.

654. But it is quite sufficient for sheep producing purposes, as a run for sheep alongside a mountain. I had a specific example at Ballintrillick in County Sligo. We have been in touch with the Department for quite some time but they still persist in holding on to the land. I am sure there are other places throughout the country along mountain ranges where particularly. because of the subsidy on sheep, people are anxious to expand their runs for sheep, and where there are areas where trees have failed on, perhaps, three occasions and the Department still hold on to the land.

—I shall take particular note of that.

655. Deputy MacSharry.—On subhead D, Grants for Afforestation Purposes, is this on the wane?

—We have improved the scale of the grant from £20 to £35 per acre. £20 is payable on the laying down of the plantation and £15 is payable after seven years satisfactory maintenance. In all, only 19,000 acres have been planted since these grants were instituted 40 or 50 years ago. In that particular year 800 acres were planted under the private planting grants scheme. This illustrates how small it is in comparison with what the State has been doing. The overall figures for the State are: we own 770,000 acres of land; of that 690,000 acres are plantable and of that 600,000 acres have, in fact, been planted at 233 different forest centres throughout the country.

656. The 19,000 acres planted—was that done by people providing shelterbelts of an acre and a half or so?

—No. We do not pay private planting grants for shelterbelts. Generally, this would come under county committees of agriculture. For private planting grants generally we require the planting to be about one acre in extent, at least 44 yards wide and the timber would be commercial in the ordinary way.

657. Chairman.—On subhead G there is a comment in the Report of the Comptroller and Auditor General. It is paragraph 53 which states:

“Subhead G.—John F. Kennedy Park

Expenditure of £10,000 during the year brings the total capital expenditure incurred in establishing John F. Kennedy Park to £307,000 at 31 March, 1971. Voluntary contributions received towards the cost of the project amounted to £56,000 at that date.”

Mr. Mac Gearailt.—This paragraph sets out the total capital expenditure incurred in establishing the Park at 31st March, 1971 and the voluntary contributions received towards the cost. No voluntary contributions were received in the year 1970/71.

658. Chairman.—On subhead I, there is also comment from the Comptroller and Auditor General in paragraph 54 of his Report which states:

“Subhead I.—Conservation (Grant-in-Aid)

The grant-in-aid, which was paid into the Conservation (Grant-in-Aid) Account, will be accounted for by the Accounting Officer of the Forestry vote and will be used, subject to the consent of the Minister for Finance, to meet the cost of conservation projects whether undertaken by the Department of Lands or any other Department. The account is subject to examination by me.”

Mr. Mac Gearailt.—The purpose of this new subhead is to defray the organisational costs of a comprehensive national programme for conservation, various aspects of which are engaged in by Government Departments and Agencies. Payments are being made out of a Conservation (Grant-in-Aid) Account administered by the Forestry and Wildlife Division of the Department of Lands. The use of this grant-in-aid procedure will enable projects to be planned ahead on the basis of entering into commitments which will not always mature within a given year. There was no expenditure out of the Conservation (Grant-in-Aid) Account at 31st March, 1971.

659. Deputy MacSharry.—Does this subhead allow for compensation in relation to certain aspects of conservation?

—Yes, it would be wide enough to include that.

660. Chairman.—Could it be of assistance to you, say, in balancing up hardwoods and deciduous trees?

—I doubt if it would; this problem of achieving a balance between hardwoods and softwoods is something that should be regarded as part of ordinary policy.

661. You now have forests over a large part of the country with resulting long stretches of road through conifers. A little variety would be desirable from the amenity point-of-view?

—Yes, we are very conscious of that and variety is gradually being introduced.

662. Deputy H. Gibbons.—I take it that this is by the cutting of trees?

—Sometimes it is that. If the trees are coming out very far to the roadside we can make a V-cutting to give a vista inwards. What the Chairman is referring to is the long tunnels of sunless stands of spruce; they have already been long since planted. The money is in these commercial stands and we keep in mind the economic objective. I agree that the amenity side is important. It is a question of balance. I know that the ambition, the current intention, is to flatter the countryside and not to fight with it.

663. Chairman.—Has afforestation got to the point now where it would have a significant effect on the local climate?

—It is reaching that point.

You are looking ahead and considering consequences?

—Yes. What you have in mind is no doubt, the control of flooding, the prevention of erosion by rainfall and things like that.

664. Deputy H. Gibbons.—With regard to the development of forestry to be used as an amenity you have done this successfully in Newport?

—In Newport in Mayo, yes.

In some areas the trees will cut off the view?

—Where there is any injury done to the view we will, where possible, take steps to remedy it. Some of the trees can be kept small. They can be taken out from near the roadside and sold off, for example, as Christmas trees.

665. On the question of conservation and pollution which go hand in hand on the forestry side you have no law to deal with it?

—No.

I understand that legislation will be coming from the Department of Local Government. Is there any consultation between your Department and the Department of Local Government?

—There is, yes. We will be having a Bill of our own dealing with game and wild life which the Minister recently announced will be introduced in the Dáil. There may be amenity considerations in it.

666. Chairman.—Is there any conflict between the requirements and desires of your Department and the requirements of the Department of Agriculture and Fisheries in the matter of sheep farming?

—Yes, there can be conflict.

In view of the meat position in the world?

—Yes, there can be conflict in relation to land use: trees versus sheep.

This is also being co-ordinated?

—Yes.

667. Deputy MacSharry.—It is like gold dust. They will not give away any land?

—Timber has its own definite value, a worthwhile asset.

668. On the question of conservation and re-opening of forests and amenities generally so far as my area is concerned the forestry division are to be complimented on the tremendous work they have done. I should like to ask a question: do you find that much damage is done to these tremendous amenities you have opened up to the public?

—Fortunately the public have been most responsive and responsible in relation to the nature trails and forest walks we have opened up.

I am delighted. They are a tremendous asset to the community.

669. Chairman.—On the Notes, I see that to assist Nitrigin Éireann Teoranta to take necessary action in regard to erosion and flooding affecting their property, an area of 15 acres, approximately, was transferred to them free of charge. Do you not think that you could get them to control their fumes? It is a sad reflection—I am only talking about atmospheric contamination; I know there are other serious problems that may not be tractable—on activities of a State body. I suggest to you that you get after their fumes as well as assisting them in other areas. I think that completes the accounts. There are some abstracts on page 94 of saw milling operations and there is a profit and loss account.

—These represent fixed saw mills we have at Cong, County Mayo and Dundrum, County Tipperary. The employment is 23 men at each. In that year there was a loss of £4,930. The deficit that year was merely temporary. My information is that both mills have, in fact, come back into profitability in the succeeding two years.

Chairman.—Thank you, Mr. O’Brien.

The witness withdrew.

The Committee adjourned.