Oireachtas Joint and Select Committees

Tuesday, 28 November 2017

Joint Oireachtas Committee on Communications, Climate Action and Environment

Bord na Móna: Chairperson Designate

10:00 am

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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The purpose of this evening's meeting is to engage with the chairperson designate of Bord na Móna in order to discuss the approach Mr. Geoffrey Meagher proposes to take if and when appointed to the role and his views on the challenges currently facing that body.

Members are aware of the Government's decision of May 2011 which put new arrangements in place for the appointment of persons to State boards and bodies. Reference to this arrangement is also made in the Department of Public Expenditure and Reform guidelines on appointments to State boards of November 2014. The 2016 Programme for a Partnership Government suggests that nominees for chairs of State boards will be required to engage with the relevant Oireachtas committee prior to their appointment. The committee welcomes the opportunity to meet with the chairperson designate in public session to hear his views and we trust that this provides greater transparency to the process of appointment to our State boards and bodies. On behalf of the committee I would like to welcome Mr. Meagher here this evening.

I have to read out some formal notices. I wish to draw the witnesses' attention to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to this committee. However, if they are directed by the Chairman to cease giving evidence in relation to a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him or her identifiable.

I wish to advise that any submissions or opening statements the witnesses have made to the committee will be published on the committee website after this meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I ask members and witnesses to switch off their mobile phones or turn them onto flight mode.

I call on Mr. Meagher to make his presentation to the committee.

Mr. Geoffrey Meagher:

I am pleased to accept the invitation to meet with the committee this evening. I am honoured to accept the role of director and chairperson designate of Bord na Móna. It is an iconic Irish company with a proud tradition and a trusted brand name. I want to talk briefly about Bord na Móna. From a historical perspective Bord na Móna is a company that has derived great value and benefit from one natural resource, namely peat. It is now in the process of transformation going on to find further value from other resources. The company now has six divisions - peat, powergen, fuels, horticulture, resource recovery and the recently formed bio-energy business. I will speak about each of those briefly.

Peat, with more than 1,100 employees and a turnover of nearly €80 million, is the oldest business in the company and is primarily focused on the harvesting of peat, management of bogs and supply of peat to our major customers, including the ESB. It is facing the challenge of transitioning the business into a new regulatory environment for electricity generation post-2019 and ultimately the end of energy peat harvesting by 2030.

Powergen, with approximately 100 employees and a turnover of €82 million, is involved in electricity generation including at the power station in Edenderry and the development of renewable energy assets which currently involves wind farms.

Fuels, with 250 employees and a turnover of €74 million, is involved in the manufacture, development and sale of domestic heating products, including of course the iconic peat briquette. Due to changing consumer needs this business remains challenged.

Horticulture, with 250 employees and a turnover of €54 million, is concerned with the sale of horticultural products to the retail and professional markets in Ireland and overseas.

Resource recovery, with 400 employees and a turnover of €97 million, is a key enabler of national policy in terms of recycling, waste recovery and waste management.

Bio-energy has recently been set up to source and sell biomass for the Irish market. The business is developing a supply chain with a mix of imports and indigenous biomass.

Bord na Móna has a great history and a great association with communities, especially across the midlands of Ireland. These are communities of neighbours, suppliers, and employees. Indeed for many places in the midlands this company is the reason many communities were created and have been sustained. The mandate Bord na Móna has received from Government is clear. The company must support regional development in the midlands and sustainable employment in the region. This is a significant challenge, especially as the company exits peat production as nearly half of all Bord na Móna employees work in this area. As non-executive chairman, my role will be to remind management frequently that meeting this objective around jobs and employment is the number one priority for the company at this time. The second part of our mandate is ensuring that the company remains profitable and returns a dividend to the taxpayer, therefore making the right commercial decisions. The third and final part involves supporting the delivery of key strategic national policies, particularly in the areas of energy, carbon emissions, bog rehabilitation, biomass development and resource recovery. It is my intention that the board would help the company maintain its focus on this mandate into the future.

One of my other intentions as chairperson is to ensure that as the company changes the association between Bord na Móna, the bogs and the surrounding communities will remain important. Bord na Móna has always been about community and this will not change. The company provides many benefits to communities and the region. Amenity land, cycle and walkways, and the cultivation of biodiversity provide other tangible advantages to local communities. The economic value of these and other ecosystems services is increasingly being understood and accepted. Tourism also confers an economic benefit both in terms of employment and regional income generation.

In truth, however, it is difficult to place a euro value on these amenities that fully captures their real worth to the people who live near them and use them. As a company, we provide these because we recognise the need to give value beyond what we relate in our financial reports. Bord na Móna has a history of supporting community activities, whether that is through sponsorships of sporting, voluntary or cultural groups. Sustainability in this sense recognises that people have a range of needs, not just the economic, that enhance lives. For a company like Bord na Móna, we cannot be "of the community" unless we engage at this other level as well. It also makes sense from a business perspective. It is likely the reason Bord na Mona has a 100% record in progressing major planning applications to successful conclusions. If we are to maintain the support of communities, we must continue to engage with them in a meaningful way.

As we change, we will of course look to the 2,100 employees to continue being our most effective ambassadors. I have begun touring the company in recent weeks and have been impressed by the level of dedication and commitment to Bord na Móna exhibited by employees at all levels. The professionalism and expertise I have encountered so far are causes of optimism in the ability of the company to transition to a post-energy peat future.

I remind the committee that my appointment is effective from 22 October. Therefore, my knowledge of the company at this point is just five weeks. In that time, my key priorities have been: to commence the interview process for a replacement CEO; commence visits to key sites to understand the businesses and meet the people; meet representatives of the Government on stakeholder expectations; understand the various business segments and performance; and get to know board colleagues and key management.

I will speak a little about my background. I am from a farming background and a native of south Kilkenny. I trained as an accountant with PricewaterhouseCoopers in Kilkenny, spent two years with a private engineering company and, in 1975, joined Avonmore. My career from there to retirement, on reaching the company retirement age in 2009, was basically with the same company but with many changes along the way, some of the key milestones being: significant growth in Irish milk output up to the introduction of EU milk quotas in 1984; the decision to set up a plc in 1988 to access capital and expand overseas; the completion of 35 acquisitions and joint ventures over the following ten years; the merger of Avonmore and Waterford Foods in 1998 to form Avonmore Waterford Group and, subsequently, Glanbia; and the uniting of a co-op culture with that of a plc.

Today, Glanbia is a successful company with operations in many parts of the world. However, that was not achieved without a great deal of hard work, difficult decisions being made, difficulties with business sectors and the need to change and innovate continually. I operated in various roles within Glanbia over the years, including more than 20 years as group finance director and the last four years also as deputy group managing director.

I see many similarities between Glanbia and Bord na Móna. The heritage of both is rooted in rural Ireland. Despite international expansion, the Irish operations of Glanbia in the east of Ireland provide significant employment and support a vibrant dairy and farming community.

Since retiring from Glanbia, I have run my own consultancy business. My other activities are: board member and chair of the audit committee of Enterprise Ireland; board member and chair of the audit committee of One51 plc; board member and chair of the finance committee of the Bon Secours Health System; chairman of the finance and development committee of the Kilkenny co-op mart; and chairman of SME Finance and Leasing Solutions, a startup leasing company serving the SME sector. I am involved in the Society of St. Vincent de Paul, having served as national treasurer for a five-year period up to 2012. I went on to serve as national president, also for a five-year period, which ended in May of this year.

I am honoured to be in attendance as chairman designate of Bord na Móna. I am aware that I follow in a long line of people who have given service to the company and the State in this role. It is a company with a proud history stretching back to the early days of the State when the country developed agencies and bodies necessary to sustain an independent Ireland. By 2030, we will be approaching the 100th anniversary of our establishment as a company by the State. We will be looking back on a first century marked in its early years by its development of energy peat and its recent ones by new sustainable businesses. I would like the common theme of our first century to be of a company that is rooted in the Irish bogs, delivering in a multitude of different ways for the State and the Irish people.

I look forward to answering whatever questions members might have.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I thank Mr. Meagher. I have a list of members who have indicated, so I might take a few at a time and Mr. Meagher might take note of their questions. I will take three members at a time, depending on how many questions each has. First will be Deputies Ryan, Stanley and Lowry.

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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I thank Mr. Meagher for attending. I have a couple of specific questions on particular ventures. My understanding is that Bord na Móna is considering the purchase of a company in Georgia in the US with a view to buying virgin forest there for importation to Ireland for burning in biomass power generation, co-firing with peat. Where does that project stand, what is the timeline, what is the requirement for ministerial approval and so on?

I understand that there was an announcement in April of a joint venture between the ESB and Bord na Móna regarding the introduction of four large solar farms. Where does that venture stand?

Mr. Meagher referred to divisions. In terms of the production and export of peat moss for horticultural purposes, how many tonnes are we collecting and exporting?

As a former finance director of a large multinational, has Mr. Meagher a view on what the price of carbon should be in terms of board assessments of investment decisions, including long-term capital investments? Would he advise a shadow price on carbon that would apply to Bord na Móna's investment decisions or planning? As chairman designate of a company that is "naturally driven", what is the price on carbon in Mr. Meagher's opinion?

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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Deputy Lowry might ask his questions next.

Photo of Michael LowryMichael Lowry (Tipperary, Independent)
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I welcome Mr. Meagher and congratulate him on his appointment as chairman of the company. His CV is impressive. He has a varied and extensive range of experience, and I am satisfied that he has the ability and commitment to give leadership and guidance to Bord na Móna at a time of great change and challenge for the company.

Mr. Meagher is aware that we in Tipperary are conscious of the fact that we have lost our briquette factory at Littleton. It is a significant blow to the workforce, their dependants, the local community and the local economy. In recent months, efforts have been made to resolve the issue of redundancies and the terms and conditions of disemployment. The workforce has been patient and engaged with Bord na Móna.

Next Wednesday is an important date in the negotiations. After a long engagement, there is little left dividing the company and the workforce from reaching an agreement. I ask that the chairman designate convey to his team representing the company in those negotiations the urgency of finalising the redundancy package. The company must understand that there is a need to be more generous in its approach. I have an indication of the figures that are preventing the negotiations from reaching a conclusion. The company owes it to the workforce to put an increased offer on the table for the final set of negotiations next Wednesday.

The workforce at Littleton has been committed and dedicated. It has given years of loyal service to the company. The least that workers should expect in return is for a generous package that reflects their commitment to be finalised in the coming weeks, if not week.

I ask Mr. Meagher to take back to his company the message that this is a matter of urgency and that there needs to be a conclusion at the earliest possible time.

Photo of Brian StanleyBrian Stanley (Laois, Sinn Fein)
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I welcome Mr. Meagher and Ms Curry. I congratulate Mr. Meagher on his appointment as chairman designate of the board.

As a former employee of Bord na Móna, as someone whose family lived in a Bord na Móna house in Edenderry and as a midlands Deputy, I have a considerable interest in this. I want to try to address a number of specific issues. On the issue of biomass, all we have are media leaks or stories in the media about the purchase of a plant in Georgia, USA. Various figures are mentioned, one being €60 million. I want Mr. Meagher to address this directly.

The next issue is of significant concern. In 2030, peat extraction will be finished if we are still in the European Union. What is the position on replacing peat? When I first walked through the doors of this House seven years ago, Bord na Móna representatives were raising with us the need for a proper scheme to be put in place for the growing of willow for biomass in the midlands. What is happening in this regard if we are to reduce or put an end to peat extraction? There is a lot of marginal land across Laois, Offaly and west Kildare, which looks very like north Offaly. There is also marginal land in other areas, such as Roscommon and other parts of the midlands, that may be suitable for biomass. It is estimated that Ireland would have a very favourable climate in this regard. Why are we not developing that industry? I have raised this with the Minister before.

Some 150,000 tonnes of palm oil husks were brought to Edenderry from Indonesia. They came from virgin forests. What is the cost in terms of carbon miles? The product looks very clean but it is a bit like the case of the renewable heat incentive in the North in that the product going in looks lovely but diesel guzzlers have to haul it here by road and sea, clocking up considerable carbon miles. We are not generating the industry in the midlands. This needs to be dealt with. There is a considerable need in this regard.

I read the delegates' presentation twice before attending this meeting. I welcome the statement that Bord na Móna's first commitment is creating jobs, particularly in the midlands, and working with communities. This is all 100%. Obviously, the company's activities have to be commercially viable given that it is a commercial semi-State company. I understand that. Believe me, when I was involved, we worked hard to make sure that happened. The employees of Bord na Móna are hard workers. Biomass is one of the issues we need to address.

Another issue I wish to raise concerns biogas. Bord na Móna is involved in the waste management industry. I am a customer of AES, one of the company's subsidiaries. Has Bord na Móna considered biogas? We have a fairly large agriculture sector. There is a debate over what to do with agricultural waste. Agricultural waste mixed with other waste can be used to generate energy and make fertiliser, as Mr. Meagher knows having come from Glanbia, another very successful company.

The other issue concerning renewables is that of wind. I note revenue from the sale of wind energy from Mount Lucas in north Offaly has declined. I actually drew peat from the briquette factory there in a truck to Coolnamona many moons ago. Revenue from the sale of electricity generated by the plant fell by €5.2 million last year. It is said the company struggled with its second lowest yield in ten years. That is not an argument against wind energy but an argument for proportionality. We have large tracts of cutaway bog. There are major debates over where solar plants should be located. There is a large amount of bog where they could be located.

The last point I want to address with Mr. Meagher is the horticulture section of the company. I met the company's previous director and management a few times. I met Mr. Mike Quinn, Mr. Gabriel D'Arcy, Mr. Gerry Ryan, Colm Ó Gógáin and others at various times in respect of projects they were trying to develop. Regarding the horticulture sector, which was the sector in which I worked, Bord na Móna purchased a plant, White Moss Horticulture near Liverpool and Manchester, for €12.1 million. It has taken a €14 million hit on it. There was an inventory write-off in respect of the purchase. It did not turn out to be exactly what it was supposed to be. Issues also arose over compliance. The logic for buying White Moss Horticulture was that it would provide a bridge into Britain after Brexit. There could have been other methods used. I argued very strongly at the time in question that the plants in Coolnamona, Laois, and Kilberry, south Kildare, should be considered in order to up the game. That has not happened. The jackdaws are flying in and out of the plant at Coolnamona.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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Could the Deputy give Mr. Meagher a chance to reply?

Photo of Brian StanleyBrian Stanley (Laois, Sinn Fein)
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I ask Mr. Meagher to address that specifically. He mentioned site visits. I would like him to visit Coolnamona and Kilberry. I would like to meet him at Coolnamona, if that could be arranged at some time in the near future.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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There is a lot in that.

Photo of Brian StanleyBrian Stanley (Laois, Sinn Fein)
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I was waiting a long time.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I invite Mr. Meagher to go through the points at his leisure.

Mr. Geoffrey Meagher:

I remind the members that I am but five weeks in my role so I may have to revert to them on some of the questions. I will deal with some of them as I go along.

Deputy Eamon Ryan asked a question about biomass in the United States. A number of people asked the same question in different ways. My understanding is that biomass represents an alternative form of energy production that makes considerable sense. Bord na Móna's intention is to get as much raw material as possible from Ireland. Currently, however, not enough raw material is becoming available here. That is the reason there are imports.

With regard to the plant in the United States, this is a matter that Bord na Móna has examined. No decision has been made on it. Nothing has been done in regard to it and no proposition has been made to the board.

As I mentioned earlier, our wish is to obtain an increasing amount of material from Irish sources. If this is achieved by using some of our own lands for growing willow or for other forms of production, I will be all in favour of it. As I understand it, various trials are taking place in this regard. Therefore, I have no issue whatsoever about producing a home-grown product wherever we can and minimising imports.

On Deputy Eamon Ryan's point, there is no decision on a biomass plant in the United States. It is certainly a matter that was examined but there is no decision. Nothing has come back to the board. Obviously, if something is to be done, it will have to come back to the board in due course. That is the current position.

A question was asked about the exportation of moss peat. This relates to the horticulture business. As Deputy Brian Stanley knows better than I do, there are two sides to that business, namely, retail and supplying products to professional gardeners.

On the retail side, about 80% of our product goes to the UK market and the balance is used in the home market. At the time, the proposition for White Moss Horticulture was recognition of the challenges associated with Brexit and sterling. The concept was that if we could export a certain amount of product to the UK, have further processing there and then sell on to our customers in the UK, effectively we would have a natural hedge in terms of currency and sales. It made sense in theory. As Deputy Stanley pointed out, this business in the UK ran into difficulties, however. The €14 million referred to by the Deputy was a write-down of the value of the purchase in light of the performance of the business. I have visited the White Moss business in the UK and it is making progress in sorting out the regulatory issues associated with it. There is no doubt the horticultural business will be challenged. It needs to address innovation and market diversification. Depending on the UK market, as well as where sterling is at the moment, these will be a severe challenge for the business. The Deputy referred to effectiveness and efficiencies which could be pursued. That is a valid comment. We need to address effectiveness and efficiency in order that we can compete. Unless we are commercial and efficient, we will be struggling with the business. There is a fair challenge to get that right. The team are on it and, hopefully, that will continue.

I have visited the Kilberry plant and it is a fine plant. On the price of carbon, I must plead the fifth amendment to some degree on it. In terms of investment, for anything one has to pay, one has to include that as part of the cost of the investment. It does not matter what it is. If one is paying cash for something, one must recognise that as part of the cost of the investment. Other than that, that is as far as I can go to clarify this.

Photo of Eamon RyanEamon Ryan (Dublin Bay South, Green Party)
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I asked that question because I believe the fundamental nature of the business is not sustainable on a carbon basis. We are a country which is shamed internationally in carbon leagues and so on. We cannot continue burning peat in power stations, importing palm oil kernels or acquiring forests in Georgia. The environmental community will soon start targeting companies which do that, arguing it is not naturally driven.

I asked the question on the price of carbon and moss peat products because we will soon count that as a store for carbon. The value of stored peat is a multiple of what it may be for commercial purposes. There is a fundamental need for the company to genuinely live up to what it is saying in its advertising. With the company's current trajectory and the ignoring of the carbon issue, I do not believe it will last another year or two. The publicity this will attract to the company and the country will be damaging. I am as interested in those jobs in the midlands as anyone else. However, hand on heart, we will not do it if we keep burning peat.

Mr. Geoffrey Meagher:

I take the Deputy's point on this but, to be fair, Bord na Móna needs to do this in an orderly way. We have a duty of care to our 2,100 employees, 1,100 of whom are in the peat business. The company is progressing towards renewables and will continue that. We obviously have contracts with the ESB and others which we need to honour and we cannot walk away from them. The progression to renewables might not be at the speed Deputy Eamon Ryan would like. However, it is doing it in a way that is fair to all parties involved of which there are many.

Photo of Brian StanleyBrian Stanley (Laois, Sinn Fein)
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Will Mr. Meagher address my questions on renewables and energy generation from wind, solar and biogas from waste?

Mr. Geoffrey Meagher:

On Deputy Lowry's question on the closure of the Littleton peat briquette plant, the company did not want to do it. However, with the decline in briquette sales, having two briquette plants did not make economic sense. While it was a decision we regretted, it had to be done for the future of the company. As I mentioned earlier, we are required to return a dividend to the State and, therefore, we have got to be commercial.

I will take back Deputy Lowry's comments on the current negotiations on the closure of the Littleton factory. As non-executive chairman, it is not my role to be involved in those discussions. As I understand it, the discussions are going well and progress has been made. It is obviously a sensitive issue for all of the parties involved. Apart from noting back to my colleagues on the management side that we would like to see it completed fairly, it would be our intention to ensure that is done.

I cannot comment on the economics of biogas as I am not familiar with the full details of it. It is an issue which could be examined as a possibility, however. We have several wind farm developments under way. We have been in wind energy since 1992. There are developments in the pipeline to produce 600 MW of electricity from wind over the next several years. If it was taken further with a larger landmass, there is the possibility of another 1,000 MW that could be developed. However, no work has been done on the siting of those wind farms. There are many opportunities for Bord na Móna in wind energy development. The company will be pursuing that over the coming years.

Photo of James LawlessJames Lawless (Kildare North, Fianna Fail)
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I welcome Mr. Meagher to the committee and wish him the best of luck with his new position. I know he is five weeks into the job and has probably had a baptism of fire. Tonight, the committee might help him with that because he is already taking questions thick and fast and is learning on the job.

I represent north Kildare. With the Bog of Allen, we are never too far from the bog, particularly in north-west Kildare. It is very close to the hearts of the people in the county in every sense, as a resource, an amenity and our heritage. I often think of James Joyce's short story, "The Dead", with its closing lines with the snow "falling softly upon the Bog of Allen". It is close to the heart of the Irish nation as much as it is to those in my county.

Mr. Meagher said he will undertake some site visits. I am sure he is familiar with the Drehid landfill in north-west Kildare which is due for expansion.

It has had an uneasy peace with its nearest neighbours but that has been jeopardised in recent times. It is one of the largest landfills in the country at this stage. It has been discussed in the Dáil with the Minister and with various other interested parties. With the intensity of landfills and the shortage of such capacity around the country, more and more municipal waste from the Dublin region is heading towards the Drehid site in Kildare. Last year it exceeded its capacity before the end of year and operations had to ground to a halt. There is an issue currently in that an application for a hazardous waste licence is being made. It is bypassing Kildare County Council and going through An Bord Pleanála directly in terms of the strategic infrastructure. I have seen that happen previously with other applications. I was a member of that council at one stage and I have seen how that can often be counterproductive in that the local authority becomes an objector and rather than being something of a facilitator. It can go the other way.

The bulk of the local community is not opposed to the presence of landfill and there is a working relationship, but what is of major concern is the haul routes. There are four haul routes in the planning but, in reality, one or two of them, for example, the Sallins-Clane-Prosperous-Millicent route is a rural back road which will be subject to heavy traffic at different hours of the day, even during down hours, at times when children would be walking home from school and when people are out and about. It is a real concern. The fact that additional volumes of waste will be going into that landfill site will cause great alarm in the community. The nature of the material and the fact that it will be hazardous has already caused alarm. As recently as yesterday, I was contacted about that. With respect to when Mr. Meagher is making a visit to that site, I might correspond with him about that after the meeting separately or in further correspondence, but I would suggest that he explores other haul routes. There are four haul routes available but only one or two of them are being used. I would say the Kilshanroe-Edenderry road would be a more appropriate haul route and there may be other ways to access the site rather than the one that is being currently used. That is what I would say on the Drehid site.

I wish to refer to a solar facility being developed at Timahoe North-Timahoe South in my constituency. The plan is that it will have a 500 MW capacity. It has been reasonably well received. Often energy facilities can have a mixed reaction but there is reasonable openness to it. People are on board with renewable energy and understandably have made that transition. There is not necessarily opposition to it yet. Mr. Meagher might need to check this and come back to me on it but in terms of community gain, I understand that the Mount Lucas site down the road has a 84 MW capacity. I understand there are grants in the region of €85,000 available to the local community. For a facility with a 500 MW capacity, I would hope that €500,000 would be made available, if I could be so blunt as to use the same ratio for the Timahoe site. I do not know if there are plans in that regard but I certainly hope that there are. It may help to sweeten the deal for the community. One of the reasons people are so accepting of the Drehid site is that there is a good relationship with the community and a good grant scheme in operation. Mr. Meagher might respond to me on those points.

We have a few raised bogs in north Kildare. There are a couple of sites with which I am familiar where turf-cutting has been prohibited on individual plots of turf. I am not sure if the areas are designated special areas of conversation or natural heritage areas but strictures have been imposed. I understand that sometimes a deal can be done or an arrangement can be made where Bord na Móna can work with the landowners and the National Parks and Wildlife Service to do a swap. I am aware of a couple of instances of that. Again, perhaps we could correspond about that off-line. Mr. Meagher might be able to give me a general answer on that now, and perhaps we would correspond off-line about the specific cases that I want to raise.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I call Deputy Cowen.

Photo of Barry CowenBarry Cowen (Offaly, Fianna Fail)
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Like others, I wish to congratulate Mr. Meagher on his appointment. I acknowledge his suitability based on his distinguished and successful career at Glanbia and note his comment that it, too, like Bord na Móna is rooted in rural Ireland. He is well aware of the historical fact that Bord na Móna has been to the forefront of economic life, vitality and the social fabric of the midlands region for many years. I welcome the fact that he saw fit to specifically mention the commitment and the mandate the board has from Government to support regional development in the midlands and to sustain, where possible, employment in the region, and obviously to do so based on market forces and return of profit to the taxpayer.

Mr. Meagher also said that the company is committed to the community. It is greatly challenged in how it does that nowadays and over the years it obviously has had to diversify and have less of a dependency on its core activity of peat excavation. As he rightly said, it has diversified to meet those challenges with respect to Powergen, the fuels element, horticulture as he mentioned, and the move towards bioenergy and, indeed, tourism. I am mindful of the fantastic investment and return that has accrued to both the company and to the locality, and I am conscious especially of Lough Boora, those parklands and the marvellous addition it is to the tourism product. That is a new development, added to the other diversifications that have happened. Tourism is a sector in respect of which the company can work in tandem with the local authorities, local community groups and local ventures to gain a return for the locality, the community and to the economy.

The company still retains peat production as being its core product. The numbers have diminished back towards the thousands and there is a commitment towards 2030, as Mr. Meagher acknowledged. He spoke about the orderly move away from peat excavation and peat production towards renewables, but that is being done in conjunction with the partnership with the company has with the ESB and the negotiations that are ongoing regarding post-2019 and the public service obligation commitment. How are those negotiations going? It is vital they would come to a successful conclusion to allow the generating stations to have the potential to be in a position to co-fuel or to go into other activities in order to maintain their capacity to provide energy.

I am also conscious of Derrinlough and the decision that was taken prior to Mr. Meagher coming into this position and the commitment that was given to the workforce there and to the diversification that will take place and the improvements in that plant in order to meet the demands of the industry. Is progress on that proceeding at the pace expected and will it be in a position for that to come to fruition? I am also conscious that as that orderly move takes place, much plant will be available or will not be in use. Will Mr. Meagher begin a process again of exploring with local authorities and communities the potential for those facilities to be of benefit to the economy and to the social fabric of the areas where they can play a part?

We have always heard from the manufacturing sector, for example, of the great quality of fitter that emanated from the Bord na Móna. Many manufacturers would now say that the quality they have now is nothing compared to when those numbers were at their best and what was coming out of Bord na Móna. Does Mr. Meagher see a role in that respect? There has been a great call in recent years regarding the lack of facilities and making provision for apprenticeships. It could have an educational and beneficial role in working with State educationalists and in being in a position to use much of that plant for that purpose. The Mount Lucas facility was mentioned earlier. It has gone into other ownership but that facility, together with the education and training board and the Construction Industry Federation, are providing courses that are yielding jobs in the workplace to meet the demands that have been placed on the construction sector, and the intention that it has to grow in the future. Similarly, that could be done in different locations where the plant exits.

I welcome Mr. Meagher and wish him every success. Based on his record and from the research I have done, I am sure he will be a perfect fit. I hope he will work hand in glove with the management and the workforce, whom, in the past, have met the challenge that has been placed on them, and in recent times that has been a difficult one to say the least, but they are hugely committed to their communities and to the company. I hope that together we will in the position to have a successful stint while Mr. Meagher is chairperson of the company.

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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I welcome Mr. Meagher to his new role. I crossed swords with him previously when he was the chief financial officer in Glanbia for which he was an excellent operator. He had a great grasp of the dairy industry and I am sure he will be of great benefit to Bord na Móna and its mission statement. With regard to that mission statement, Bord na Móna was established to create jobs in rural areas that were unable to attract industry. Unfortunately, as mentioned previously, a decision was taken to close the plant at Littleton, a decision that will leave a serious void in the area. The talks on a redundancy package are at an advanced stage. Bord na Móna is a very profitable company and the plant at Littleton contributed to that profit. The company owes it to the workforce to bring the negotiations to a successful conclusion. The gap between the two sides is not huge and I hope the incoming chairman will advise the board that the negotiations must be brought to a successful conclusion in the interests of goodwill in the area towards Bord na Móna. Given the financial state of the company, we can make strong arguments this should happen.

We must accept that the decision on the closure of the plant at Littleton was taken for economic reasons, as the company only wanted to have one briquette production plant for the future, but one of the major criticisms of the decision in my area is that no plan was put in place before the closure. How much will the closure of the plant cost? How much will its dismantling cost? How many employees will be employed while the plant is being dismantled and for what period will they be employed? The plant is located on a very big site. It is most disheartening that a semi-State company made no plans for the use of that huge acreage before the plant was closed. The decision to close it was not taken overnight. It is unacceptable for a semi-State company to leave us with what could be called a desert of bog.

Horticulture has been mentioned with reference to the alternative use of peat. There are 1,100 acres of land in Littleton and other significant tracts in other areas of the country. It is incumbent on Bord na Móna to put that acreage to use for the local communities. If it was used in the horticulture sector, there could be 20 to 30 jobs created it Littleton alone. While that would not replace the jobs that were provided previously, it would be a step towards making Bord na Móna relevant in the community again. We reluctantly had to accept the decision to close the plant, but our main criticism is that no alternative use for either the plant or the huge tract of land available was found by the board.

I also have questions about different ventures Bord na Móna has in the pipeline. An agreement was signed with a Chinese company on the use of a hydro electric plant in the Silvermines. What is the position on that project? Has a feasibility study been carried out and will the project get off the ground? If it is feasible, what is the timeframe for construction and so forth? We have seen much coverage of the issue in the media, but I have seen no concrete evidence that the plant will be viable in the future. What is Bord na Móna's position on the use of this hydro electric plant? Will it be a runner and what is the position on the agreement with the Chinese company?

We have also heard about the plans to invest in a wood pellet plant in Georgia in the United States. As a farmer by trade, I cannot understand an Irish company investing in the United States in the production of biomass to be imported into this country. It smells of bringing coal to Newcastle and defies logic.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I do not mean to interrupt the Deputy, but these are detailed questions that might be more relevant for management, if the committee wishes me to invite it to attend a meeting. I am not stopping the Deputy from asking the questions, but the chairperson designate might not be able to answer such detailed questions today.

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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I accept that he is new to his position, but it is important that he know what our views are.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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The Deputy can ask them.

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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We can produce significant quantities of biomass in this country, but it must be economically viable to do so. That is where the focus must be. The agriculture sector has the potential to produce biomass. The stocking rate in this country is only 50% of what is permitted under the EU regulation for nitrates; therefore, there is huge potential in the sector to produce biomass which could be a huge economic driver in rural Ireland. It defies logis for a semi-State company to consider investing in the United States to import biomass into this country. I will argue very strongly at every opportunity that this is doing nothing for rural Ireland and flies in the face of what Bord na Móna's mission statement should be.

My colleague, Deputy Barry Cowen, spoke about the agreement with the ESB. What is the position on that agreement with reference to the use of peat and biomass in ESB plants? We need an answer to that question.

I greatly respect the reputation of the new incoming chairman, with whom, as I said, I have worked in the past. However, I cannot stress strongly enough that this country has the potential to use biomass as an economic driver in rural Ireland. We cannot let that opportunity pass.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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Mr. Meagher is taking a list of all of the questions asked.

Photo of Michael FitzmauriceMichael Fitzmaurice (Roscommon-Galway, Independent)
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I wish Mr. Meagher the best of luck in his new position. I wish to hear his vision for apprenticeships in Bord na Móna in the coming years. In fairness, the company had a great name for bringing forward new generations of apprentices, particularly fitters.

Unfortunately, it appears that in the period between now and 2030 some 1,600 to 1,700 jobs in peat production will be under pressure. One can look at the company's track record and what it did with the last batch of workers who were employed on temporary contracts. When the company took the lorries from them, it brought in private contractors. It put full-time lorry drivers on the bogs and got rid of the part-time workers who had made a living by farming or working for a while during the winter and working in Bord na Móna during the summer. That is not the way to ensure there will be sustainable jobs in rural Ireland. I wish to hear Mr. Meagher's views on that issue.

This was mentioned earlier and I will not dwell on it, but I do not believe Bord na Móna should receive a tariff to produce biomass in Georgia or elsewhere. It should be examining such ideas as the use of solar panels here.

On flooding - I appreciate that Mr. Meagher will not be able to answer all of our questions - we have looked at areas along the River Shannon where water could be parked. Is Bord na Móna willing to work on that matter with either the local authorities or the Office of Public Works? Parts of the Little Brosna river were dredged. Is Bord na Móna willing to help in the cleaning of rivers in which there is a huge amount of silt? The debate on the amount of silt in rivers is over and Bord na Móna should make a gesture in that regard. In fairness, it has plenty of 22RBs, crawler cranes and so forth, available, the use of which would be a help.

Bord na Móna is involved in the operation of wind farms. To be honest, we had a bad experience in County Roscommon where Bord na Móna became involved in the Sliabh Bawn wind farm. Due to flooding and so forth, it has been a very protracted issue for people living in the area.

The company needs to handle things and work with the communities.

I wish to touch on a question asked earlier. Natural heritage areas and special areas of conservation have been designated throughout the country, north, south, east and west. A tranche of natural heritage areas has come on-stream. Bord na Móna has vast tracts of bog that it will probably not use. The company decided not sell this land to the National Parks and Wildlife Service. Bord na Móna wanted to have the title of the land and a 65-year licence. I would not tolerate that, to be honest. Is Mr. Meagher willing to give a commitment to resolve the problem in order that we can protect bogs under so-called EU legislation and under Irish legislation, in particular, the Wildlife Act? Is Mr. Meagher prepared to see it outright? Coillte is doing that, in fairness. Other State or semi-State bodies have co-operated to resolve the problem. Funnily enough, Bord na Móna has decided to hold the title and give a 65-year licence. Is Bord na Móna willing to go down the road of making a decision in that regard?

Peat production in my area for Shannonbridge and Lanesboro will be reduced in the coming years. Bord na Móna has a vast amount of railway track. There are communities in the west that have large amounts of designation in their areas. Is Bord na Móna willing to work with these communities to give them these railway lines? We could create jobs through potential tourism.

Photo of Fiona O'LoughlinFiona O'Loughlin (Kildare South, Fianna Fail)
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I will be brief. I welcome Mr. Meagher and wish him well. I note that he is only in the position five weeks. While I have no doubt that he can provide a high level of detail, we would be delighted to hear back from him at a later stage in respect of some of the queries we are putting to him.

I note that in the past five weeks Mr. Meagher has travelled to areas throughout the country. No doubt he has been to Kildare, my home county. If he wishes to come back again, I would be more than happy to meet him there.

Bord na Móna has been crucial to my county. I come from Rathangan, where we have Ballydermot. My home is beside where An Foras Taluntais used to be so I am familiar with Bord na Móna. I live in Newbridge now. Of course that is where the headquarters of Bord na Móna is situated. Bord na Móna is something we have always been very proud of and I have always been proud to be associated with Bord na Móna. I am proud to be a bog woman, to use the words of Luka Bloom. I will never shy away from that.

I have two queries, one of which is around the apprenticeships. This is relevant for people in Rathangan, Ballydermot, Coill Dubh and Timahoe. These people came from all over to serve their time with Bord na Móna and greatly added to our culture and society. They married and settled down. We have second and third generations there. At one stage, per head of population Rathangan had the highest number of start-ups in the country. I imagine that was due to the legacy of Bord na Móna. People who had worked for the company could leave, having served their time and secured an excellent training in every sense of the word. Many left to start up successful businesses. That is something we need to start looking at again.

My particular question relates to Kilberry. Across south and north-west Kildare, Bord na Móna has been essential to the economic, social and community fabrics. In January of last year we heard that an acquisition was made of the White Moss company in England. The 60 people in Kilberry were concerned about this because they believed it would impact on their jobs and livelihoods. An extended community within Kilberry and Athy are dependent on these jobs. I had the opportunity to raise the matter in the Chamber with the Minister. We had a subsequent meeting with Bord na Móna.

Sadly, what the employees foretold has come to pass despite all the reassurances we were given at the time. I accept that Mr. Meagher may not be able to respond to that particular query at this point. Money had been invested recently in the plant. It is the only plant in Ireland for developing horticultural compost of a high standard. I understand that the English product Bord na Móna invested in is not of the same standard and this is impacting on the quality.

There was to have been a strike last week but it was called off at the last minute. I would have been happy to stand shoulder to shoulder with the workers because there is no doubt their livelihoods are being threatened. At the time, I said that there was a real sense of fear among the workers about asking the questions and speaking out. They felt they were being intimidated. That is not right in any organisation. There has to be a commitment to a given level of consultation. Unfortunately, I have heard that to some extent there is the same cultural ethos within headquarters. Having said that, I know many excellent people who work there and I wish them well.

I accept that there are challenging times ahead and that, as a company, Bord na Móna has to diversify and become sustainable. There should be a commitment to sustaining the jobs in Ireland and developing the resources in Ireland rather than outside the country.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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There are several questions for you, Mr. Meagher. I imagine you will not be in a position to answer some of them now but I know you may be able to relay them to management.

Mr. Geoffrey Meagher:

I will go back to the questions from Deputy Lawless first. He asked about Drehid. I take his point on the traffic and congestion. I have been to the Drehid site. It is impressive in terms of the technology being used and the professional ways things are done. It is a great asset to the State in terms of waste recycling and recovery and in terms of how to do things well. That should not be forgotten.

Deputy Lawless asked a question about hazardous waste. At the moment, all that is being done is work on an application to see if we could apply for a licence. No decision has been made in respect of what we want to do within that context. Anything we do is totally within Government policy and what is required. From what I have seen, one area in which members can be assured is that whatever will be done will be done not alone within all the licences required but in excess of the licences in terms of safety. Certainly, what I have seen in Drehid is along those lines.

There was a question about Timahoe. I am sure the members will negotiate well with regard to Mount Lucas. Again, that is a local issue. To be fair, we want to work with communities. We want to be fair to communities and to be consistent in the way we operate. I am sure that issue will be dealt with.

Reference was made to a local issue relating to prohibited areas for cutting. That is a local issue that I will bring back. We can refer back to management.

I thank Deputy Cowen for his comments, especially on tourism. I agree with his comments in that regard. Deputy Cowen referred to peat production post-2019 and the position with the ESB on the two power plants. Those negotiations are ongoing. The discussions are at sensitive stage at the moment. They are going positively in the sense that both sides want to do a deal. In fairness to both sides, they have to do a deal that makes commercial sense. It is work in progress at the moment. Both sides would like to have the deal completed.

They are at a sensitive point but both sides are actively working towards something that will work for both.

In the past year, 65% of biomass used by Bord na Móna was local and Irish, while 35% was imported. I take the point on doing more and I understand various trials have been done or are ongoing on the possibility of using more Irish biomass. It is a fair challenge but one we should follow up. There would be no great wish on the part of Bord na Móna to have a plant in America or anywhere else if we could get the supply here in Ireland.

I understand the concerns over the closure of Littleton and the impact it had. The discussions with the workforce about redeployment, training opportunities, etc., are ongoing and at a delicate stage but I am sure that both parties will come to a satisfactory conclusion over the coming weeks. The costs of closure have not yet been finalised but the redundancy package is the largest part of it and that has not been completed yet. It will be finalised over the coming couple of months. It is regrettable that the decision had to be made but Bord na Móna has to be a commercial operation. The Government rightly requires us to pay a dividend so we have to make commercial decisions, although I accept the point that we have to act fairly, reasonably and proportionately in doing so.

I take Deputy Cahill's point about the plant in Georgia but no decision has been made by board on that issue. It is still just a discussion on something that might or might not happen and the opportunities on the Irish side will be pursued.

I covered the issues relating to Kilberry and White Moss earlier. Strike action was mentioned but my understanding is that what is being done at Kilberry is part of an overall agreement at the WRC as to the savings the company was putting in place. I have been in Kilberry and we want to protect that facility but 80% of what Kilberry produces is exported to the United Kingdom. Without some action to diversify markets or some developments within the UK, part of that business will be under threat.

Photo of Brian StanleyBrian Stanley (Laois, Sinn Fein)
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I understand that 80% of what is produced at Cul na Móna goes to Britain.

Mr. Geoffrey Meagher:

Yes. Biomass was expected to be one of the possible answers but there were difficulties with that, although hopefully they are on the road to being resolved. We do need to find solutions, however, because of Brexit and the current level of sterling, things will be difficult. We want to protect Kilberry and the jobs at that facility.

I was asked about apprenticeships. I have travelled around the various sites and I learned that there was a link between Bord na Móna and the Army, which uses apprenticeships from Bord na Móna. This shows that the value of our apprenticeships should not be underestimated.

Deputy Fitzmaurice raised the issue of flooding on the Shannon. We will co-operate with whatever works are ongoing in this area but our lands in the Shannon represent about 2% of the catchment area, and less than 1% of that is inactive in terms of peat production for the two electricity generating plants. Within the terms of our licences and the rules under which we operate, we will work with local authorities and others to help in any way we can. It is a question, however, of what we can and cannot do.

In regard to railway tracks, we will talk to the local communities about what we can and cannot support and we would be very open-minded about things we could do which make sense for all parties, as we are part of the community.

Photo of Michael FitzmauriceMichael Fitzmaurice (Roscommon-Galway, Independent)
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Other Deputies asked about making bogs available for relocation, which would sort another of the State's problems.

Mr. Geoffrey Meagher:

I do not know the background to this idea and I am not aware of the issues relating to it so I will have to get back to the Deputies on it.

Photo of Jackie CahillJackie Cahill (Tipperary, Fianna Fail)
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What is the status of the hydro plant in Silvermines?

Mr. Geoffrey Meagher:

My understanding is that it is at a very early stage and nothing is imminent at this moment.

Photo of Hildegarde NaughtonHildegarde Naughton (Galway West, Fine Gael)
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I wish Mr. Meagher well in his new position and thank him and Ms Anna-Marie Curry for appearing before us this evening. I propose to forward the transcript of today's discussion to the Minister for Communications, Climate Action and Environment for his information and consideration. Is that agreed? Agreed.

The joint committee adjourned at 8.18 p.m. until 5 p.m. on Tuesday, 12 December 2017.