Mr. John Horgan:

As I understand it, Deputy Cowen is asking whether we fought the Government policy on carbon tax. The answer is "no, we did not". We are required to have regard to Government policy and to comply with it. Having said that, we let the Minister and the Department know on a continual basis of the effects of carbon tax on our business. They are continually updated on that. It is not something we are in a position to take a stance on. The Government has wider issues to consider with regard to carbon tax than its simple effect on Bord na Móna. I assure the committee that the departmental officials and the Minister are continually kept informed of the effect carbon tax has on us. We work closely with Departments on a continual basis to let them know what the effects of prospective and existing Government policies might be.

I was also asked to explain why we are cutting our costs now when we do not know what they will be in 2019.

The answer to that question is that we operate a peat-fired power station. We know the economics of it. The two power stations that the ESB operate are broadly similar to our own. We know what it takes to make our plant competitive and stay in business. Because we lose the PSO this year, we know what the price of peat has to be from next year going into our power station to make it economic. In other words, we have a demonstration project. If we cannot show to the ESB that we can make our project operate commercially, the ESB will not be interested in operating its project on a non-commercial basis. We have never said that we will ask anyone to operate a power station on a non-commercial basis. Our job is to make our plant work next year on an economic basis. When we can demonstrate that to the ESB, then we are in a strong position to say to the ESB that we have done it with ours and therefore the ESB can do it with its project. We know from our internal analysis what the costs would be; therefore, we know the extent of the cost cutting that has to take place.

The third point raised by Deputy Barry Cowen was about industrial relations practices. During my time as chairman - it was probably the first time ever - the board asked the management of Bord na Móna to reach an agreement, a protocol, a broad framework as to how the trade unions and the company would interact. A protocol was agreed and approved by the trade unions and approved at board level and signed off by the board. I am not sure if that had ever been done in the history of Bord na Móna. The management of the company has been operating in accordance with that protocol ever since. It is an agreed protocol. The difficulties that the company and the unions face and the difficulties that face employees are, perhaps, unprecedented, but they have to be tackled. We cannot just pretend that hard decisions do not have to be taken. We have honestly and openly put those proposals to our trade unions in accordance with our protocol. While a number of issues have been through the Labour Court in respect of these changes, I would point out that on every single occasion the Labour Court has found that the company acted in accordance with the protocol agreed and in accordance with good industrial relations practice and has recommended that the employees implement the various changes. It is not unusual for a company that is going through such a difficult period in readjustment to have difficulties in negotiation and for both parties to use the services provided by the State to help resolve those difficulties. That is what we have done, and we will continue to do that.

There was a mention of a 30% cut in pay. I want to say that no basic pay rates in Bord na Móna are being cut or proposed to be cut. Some elements of other allowances and so on are being cut and some people are taking other jobs that are of a lower total remuneration. That is true. All of that is being managed carefully through the established procedures and in accordance with the protocol that has been agreed with the trade unions.