Dáil debates

Wednesday, 16 July 2014

Ceisteanna - Questions - Priority Quesitons

Sale of State Assets

9:40 am

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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3. To ask the Minister for Arts, Heritage and the Gaeltacht if she will make public the terms under which the State seaweed company Arramara Teo was sold; and if she will make a statement on the matter. [31286/14]

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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I wish the Minister and Minister of State all the best in their new jobs and I hope they enjoy them.

Seaweed is a valuable resource and is now used in a wide range of areas. It has been harvested by local people on the west coast for generations. These traditional harvesters are afraid that Údarás na Gaeltachta has done a deal with Arcadian Seaplants that will prevent them from cutting seaweed. They have described the lack of transparency in the deal as a bit frightening. Will the Minister publish the terms of the sale of Arramara Teo?

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I call the Minister of State to respond.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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As bearla?

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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As bearla.

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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Yes. He will enjoy this more.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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The sale of Údarás na Gaeltachta's shares in Arramara Teo to Acadian Seaplants Limited was approved by the board of Údarás on 1 March 2013, subject to ministerial approval being obtained and legal details being agreed. Following an assessment of the proposal, approval was granted for the sale on 29 July 2013, subject to a number of specific conditions being fulfilled. I am advised that the sale of Arramara Teo was concluded on 7 May 2014 and that Údarás na Gaeltachta is satisfied that the conditions laid down have been fully complied with. I am satisfied that the best value that could be obtained for Arramara Teo was achieved through this course of action.

As a multinational company based in Nova Scotia, Canada, with significant experience in the seaweed processing sector, I am satisfied that Acadian Seaplants Limited has the expertise to develop Arramara Teo and secure its long-term future for the benefit of its stakeholders. I believe this strategic partnership will secure Arramara's future in Connemara and will result in the development of the seaweed processing sector here.

While I am unable to give further details with regard to the terms of the sale of Arramara Teo because of the confidentiality provisions of the contract, I am advised by Údarás na Gaeltachta that continuity of supply to Arramara's existing Irish customers is assured. One of the conditions of the sale agreement between Údarás na Gaeltachta and Acadian Seaplants Limited related to existing Irish customers of Arramara Teo being guaranteed supply of product on reasonable terms and conditions into the future. In that regard, Údarás na Gaeltachta has confirmed that the sale agreement provides for the protection of future supply to existing Irish customers of Arramara Teo, with no increase in price for year one and with prices advantageous to Irish customers as against international customers being secured. It is also understood that Acadian Seaplants Limited has covenanted to continue supplying the Irish customers. In the event of a breach of covenant, Údarás na Gaeltachta has advised that penalties would apply.

In overall terms, it is envisaged that the sale of Údarás na Gaeltachta's shares in Arramara Teo will benefit the State through a cash consideration to Údarás na Gaeltachta, a significant investment in Arramara Teo and the development of the seaweed sector, with benefit accruing to the State as a result of increased economic activity.

If I might say-----

9:50 am

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry, but we are over time. I will revert to the Minister of State.

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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Questions have been raised about the manner in which the sale took place. It is not good enough for a State body to claim that it cannot tell us exactly how something was done because of commercial sensitivity. Everything could have been done perfectly and completely in order - I am not saying for a second that it was not - but some of the smaller seaweed companies are dubious about how the process was handled. It would be a good idea for the Government to release the details and open the books. If everything is fine, there should be nothing to hide. Alternatively, the Minister of State might consider using an independent investigator to do away with doubts, reservations and suspicions and to clear the air.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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This matter came to my attention a number of weeks ago. In my role as Minister for State, I held a meeting in the Department yesterday because I was anxious to have as much detail on all of today's questions as I could. Seaweed processing is an issue that affects my county as well as a number of others. This contract primarily affects counties on the west coast.

When I asked the Deputy's question about disclosure yesterday, it was categorically stated that there was a confidentiality clause. I can raise the Deputy's question about public disclosure again but, according to the information I was given yesterday, the contract was confidential.

As to the public advertisement and transparency of the process, I understand that Údarás na Gaeltachta considered that the most appropriate mechanism was to engage consultants to identify potential strategic partners in the seaweed industry for the future development of Arramara Teo. I am advised by Údarás na Gaeltachta that the process was carried out in accordance with the 2009 code of practice for the governance of State bodies.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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As a result, Údarás na Gaeltachta engaged consultants RSM FGS in July 2010 to assist in identifying a potential strategic partner for Arramara Teo.

Photo of Seán BarrettSeán Barrett (Dún Laoghaire, Ceann Comhairle)
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I am sorry for interrupting, but there is a limit of a minute on the Minister of State's speaking time.

Photo of Mick WallaceMick Wallace (Wexford, Independent)
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I realise that Údarás na Gaeltachta contacted likely bidders, but it is disappointing that there was no public tender. It is difficult to have transparency without one.

Údarás na Gaeltachta did not apply for a licence. Rather, Arramara Teo did. The licence application was included in the sale. Traditional harvesters could be pushed off the pitch. They are uneasy. Arramara Teo is seeking a three-year licence. Will the Minister of State consider ensuring the licence will not be issued to the new company until three-year deals have been agreed with indigenous harvesters? They will be under pressure standing up against a powerful foreign operation like the Canadian company and could do with State protection. It would be good if the State held off on awarding the licence until contracts were in place with the indigenous harvesters.

Photo of Joe McHughJoe McHugh (Donegal North East, Fine Gael)
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As the Deputy knows, the sale of Údarás na Gaeltachta's shares in Arramara Teo to Acadian Seaplants Limited was approved by the board of Údarás na Gaeltachta on 1 March 2013, subject to ministerial approval. On 7 May 2014, Údarás na Gaeltachta was satisfied that the conditions laid down had been complied with fully. The point on penalties is important, however. In the event of a breach of covenant, Údarás na Gaeltachta has advised that penalties will apply. This also relates to the protection of processors. I will remain vigilant in ensuring the harvesters are protected.