Committee Reports > List of Committees > Joint > 1980 > Committee on Commercial State-Sponsored Bodies > Report No. 08 - Bord na Móna

APPENDIX I

MEMORANDUM FROM BORD NA MÓNA

1. THE TURF DEVELOPMENT PROGRAMME - ESTABLISHMENT OF BORD NA MÓNA

In 1933 a separate section of the Department of Industry and Commerce was established to organise the production and sale of hand won turf. In the following year it was decided to transfer the responsibility for continuing the work to a special body, and the Turf Development Board Ltd. was established. In addition to the work of organising the production and sale of hand won turf that Board was given responsibility for developing the turf resources of the country to the best advantage.

Following an investigation of the methods adopted to exploit peat resources in other countries, the Board undertook experimental enterprises in mechanical turf production and showed that mechanical production methods could be used to produce a relatively high grade fuel which would provide a satisfactory substitute for coal when consumed in suitably designed equipment.

In 1946 the Minister for Industry and Commerce was satisfied that a comprehensive plan for the development of the country’s peat resources should be adopted, and accordingly by the Turf Development Act 1946 Bord na Móna was established as a statutory corporation to implement this plan.

The duties of Bord na Móna are set out in Section 17 of the 1946 Act. They are, briefly—

1. to produce and market turf and turf products, and

2. to foster the production and use of turf and turf products.

The initial objectives of the Board, which were set out in a White Paper published in January 1946, were:—

(1) to develop selected bogs over a period of 10 years to produce 1,000,000 tons of machine turf per annum, the turf to be consumed mainly in the producing areas for firing electricity generating stations and for industrial and domestic purposes. When the bogs would be worked out they would be left in a condition suitable for reclamation as agricultural land or for afforestation.

(2) to increase the production of Lullymore briquette factory to 20,000 tons per annum.

(3) to erect a moss peat factory at Kilberry, County Kildare for the annual production of 50,000 cubic metres of moss peat.

(4) to establish an experimental station to investigate problems associated with turf production and utilisation.

Subsequent revision of plan led to the above proposals being expanded. The expansion of activities was authorised by various Acts under which the necessary capital was provided. The annual targets under the revised plan were:—

(1) production of 900,000 tons of machine turf;

(2) production of 3¼ million tons of milled peat for use in electricity generating stations and for briquetting;

(3) production of 313,000 tons of peat briquettes in three briquetting factories;

(4) production of 1,000,000 cubic metres of moss peat in two factories.

Under this revision the original concept of the experimental station was altered but the basic objective i.e. research into the production and utilisation of peat products was retained.

Taking one year with another these targets were being achieved when the world wide problem of energy supplies occurred in 1973.

A further revision and expansion of plan, proposed by the Board at the beginning of 1974 and adopted by the Government, established new targets for production annually of:—

(1) 6 million tonnes of milled peat for electricity generation and briquetting;

(2) 750,000 tonnes of briquettes;

(3) 1.9 million cubic metres of moss peat.

In addition machine turf production, which is now falling as older bogs are cut out, will be supplemented by output from new production areas of 32,000 tonnes per annum.

The last mentioned revision of plan will bring approximately 60,000 additional acres of bog into development, and the total area will be about 195,000 acres.

2. BOARD AND MANAGEMENT

To accommodate the provisions of the Worker Participation (State Enterprises) Act 1977 the number of members of Bord na Móna was fixed at 12.

Members of the Board, except members elected under the above mentioned Act, are appointed by the Government. Elected members are appointed by the Taoiseach.

The Chairman and the Managing Director are those members of the Board appointed by the Government to those offices.

The Managing Director is the Chief Executive of Bord na Móna.

The present members of the Board are:

Mr. L.D.G. Collen, Chairman

Mr. L. Rhatigan, Managing Director

Professor D.M. McAleese

Mr. J.H. Keegan

Mr. P. Cardiff

Mr. T. Byrne

Mr. R. Hooper

Mr. T. Browne, elected member

Mr. B. Corcoran, elected member

Mr. H. Devereux, elected member

Mr. J. Molloy, elected member

Mr. B. Murray.

The Managing Director is responsible for ensuring implementation of Board policy and for overall administration.

Responsibility for discharge of the various executive management functions is assigned to Heads of Function as listed below whose titles, in the main, denote their areas of responsibility. These Department Heads report directly to the Managing Director.

Secretary

Chief Engineer

General Works Manager

Personnel Manager

Sales Manager

Chief Accountant

Land Development Manager.

In varying degrees according to the function there is substantial devolvement of responsibility from Department Head level to Works (i.e. the operational centres throughout the country). Each Works Manager is responsible for day to day performance of all activities at his works in conformity with established overall policies and procedures.

Line control in the organisation operates through the Works Managers to the General Works Manager.

3. FINANCE

The Board has no fixed capital. Exchequer investment (the principal source of capital) has been by way of interest-bearing advances with repayment terms fixed by the Minister for Finance.

Figures of capitalisation, financial results and revenue, and other significant statistics are summarised in respect of each of the five years ending 31st March 1974 to 1978 in a Table herewith.

Financial control is exercised through a standard costing and budgetary system.

Detailed budgets based on performance and cost standards are prepared at works in respect of production expenditure before the start of each financial year. These budgets are examined by senior management, and when passed are summarised and submitted to the Board for approval.

Operating statements are prepared weekly covering direct operations at each Works and provide an immediate indicator of local performance. Every four week period more detailed operating statements are prepared, and these are summarised and furnished to senior management and the Board together with a revised projection of results for the year.

A comparison with budget of production and sales quantities, costs, revenue, level of debtors and creditors, bank balance, and capital expenditure, is furnished to management weekly.

In conjunction with the Annual Budgeted Profit and Loss Account a cash flow projection is made. Trends are monitored weekly by management, and a detailed analysis of performance to date is furnished monthly to management and the Board with an up-dated projection of the end-of-year position.

Capital budgets which accord with the Board’s plans and programmes are prepared each year on similar lines to the budgets covering production expenditure. Consultation with the Department of Industry, Commerce and Energy takes place before they are completed. Monitoring of these budgets is carried out on a monthly basis.

Long term capital budgets are prepared in relation to scheduled future development works. These budgets are up-dated annually, as also are overall production, sales, and financial projections which have been made for the period to year 2,000.

FINANCIAL STATISTICS

4 INDUSTRIAL RELATIONS

The vast majority of employees of the Board are organised in Trade Unions. The number of Unions is 7, but as some Unions represent more than one category of employee there are 10 negotiating bodies. Most of the Unions are associated in a Congress sponsored Bord na Móna Group of Unions under the auspices of which issues common to more than one Union are processed. However, a considerable degree of Union autonomy is exercised either outside the Group, or by classes of Unions (e.g. crafts) acting in concert inside the Group.

In the cases of general workers and craft workers the Board entered into agreements which provide for trade union membership to be a condition of employment, and for union contributions to be deducted weekly with his consent from each member’s pay.

There is an agreement of long standing relating to general workers, and a similar agreement made subsequently for craft workers, providing for disputes to be dealt with by a conciliation procedure as far as the Labour Court, if necessary. Comparable procedure is commonly followed in cases of disputes affecting other classes of employees although it is not provided for in formal agreements.

The Board’s policy in regard to pay and conditions of employment is that these should be maintained at a level of fair comparison with other corresponding employments in the public sector. In most cases a schedule of employments for purpose of comparison is agreed with the representing Unions.

5 FUTURE PLANS

Central to the Board’s plans for the future are:—

(1) continuing the work of bog development in discharge of its statutory duty

(2) investigating and planning the future use of Bord na Móna cutaway bog areas

(3) investigating and planning diversification into activities which have an organic link with the present technology of the enterprise.

In regard to (1) there still remains a substantial total area of undeveloped peat deposits which will bear detailed investigation even though comprised of relatively small bogs in a wide geographical spread throughout the middle and western areas of the country. The Board’s plan provides for examination of these bogs to assess their suitability for production of peat by present methods on an economic basis measured against prevailing and projected costs of energy. Also, account must be taken of the possibility that re-examination of alternative techniques for processing raw peat which have not heretofore been successful whether by reason of excessive cost or for other reasons may yield fresh prospects of overcoming the technical, geological and climatological problems which have militated against development of these areas.

In regard to (2) an appraisal of the scale and nature of the operations involved in cutaway bog development is contained in the Interim Report of the Inter-Departmental Committee appointed to investigate the possible uses of cutaway bog which is attached hereto.

In regard to (3) the Board has identified specific organically linked areas of activity which would be initial objectives for new enterprises. These are:

(1) Peatland reclamation

(2) Machinery fabrication

(3) Consultancy services.

Planning of new enterprises in these areas of activity has not been progressed to detailed stages, but in the cases of (2) and (3) an infrastructure has already been laid down. An engineering fabrication workshop has been established at Derrinlough Co. Offaly the capacity of which is at present wholly absorbed in manufacture of specialised machines for the Board’s own programmes. Consultancy services on peat development investigations have already been provided in a number of overseas locations, and a detailed survey is at present being carried out by a Bord na Móna team in Burundi, Central Africa.

October 1979

*Total interest paid to 31st March 1978—£17.24 million