Billy Kelleher (Cork North Central, Fianna Fail)

I thank Deputy O'Donoghue for raising this issue. The Minister for Transport, Deputy Dempsey, hopes the Cork to Swansea service can be relaunched successfully and that it is commercially sustainable. However, the Department of Transport has no function in or finance for the provision of ferries on this or any other route, other than by being as supportive as possible.

The Swansea Cork Ferries company suspended its service in 2007. The Minister for Transport fully appreciates that this has had an impact on the local region, particularly on tourism, and that there is a strong desire for the service to be re-launched. However, market conditions are challenging at present in the shipping sector. The slowdown in global trade, coupled with underlying problems in the international ship finance sector, have created difficult market conditions for Irish and foreign shipping groups. The sector has been hit harder than most by the global recession. As in all businesses, securing investment and bank financing in the shipping sector is at present very difficult.

Ferry services to the UK also face the additional challenge of operating year-round, including when tourist numbers are low, in order to offer a service to the freight industry. Such services are also vulnerable to fluctuating fuel prices. Even modest increases in the price of oil can have a large impact on profitability. Since the previous operator withdrew the service, the Port of Cork Company has engaged in discussions with a number of interested parties with the aim of ensuring the route is served by another operator. The port company also completed a feasibility study on the route.

In early 2009, a west Cork tourism co-operative was formed with the objective of re-launching the service. The port company has worked closely with the co-operative to facilitate the resumption of the service. I wish to express my appreciation of the efforts of the many people involved in the co-operative in organising the finance for this venture. As Deputy O'Donoghue said, from the bottom up everyone became involved. Despite the efforts of the port company and the co-operative, no existing shipping company could be found to operate the service. The co-operative then took the courageous decision to try to relaunch the service itself. The Minister recognises the major effort that has been made by all concerned in an effort to make this a success. This has been a community-based initiative and the Minister acknowledges that there is considerable and broad regional support for this venture.

Over the course of 2009, the co-operative raised €2.5 million from the sale of shares to local investors. It then established a shipping company, Fastnet Line Group, and in September 2009 it purchased the vessel Julia. The vessel cost €7.8 million and was financed by €1.5 million of the equity raised and a €6.3 million loan. In October 2009, the company issued an information memorandum seeking to raise a further €2.5 million to finance pre-launch costs and operating costs up to September 2010. The offer consisted of further share purchases and corporate bonds.

The Minister for Transport has recently given approval, with the consent of the Minister for Finance, for the Port of Cork Company to make a commercial investment by purchasing €200,000 of bonds from Fastnet Line. The final decision was entirely a matter for the board of the Port of Cork Company. The Minister understands that some local authorities have also made similar investments. It must be stressed that it is not open to the Government under State aid rules to provide direct financial support to the venture, but it is advised that commercial investments by State agencies are permissible.

As for any new venture, a range of supports is available from various State agencies. Fáilte Ireland is available to support any the new service through active promotion and marketing, as is the case for other air and sea access routes. Fáilte Ireland has also granted business expansion scheme certification to the enterprise. The Port of Cork Company has provided technical and marketing advice, and the Irish Maritime Development Office has met with Fastnet Line and is available to provide further advice and assistance. Thus, a broad range of support has been made available to Fastnet Line to help make it a success. Safety is also of key importance, particularly for passenger ferries, and before entering service, new ferries are subject to an inspection by the marine survey office of the Department of Transport.

The Government has taken a number of initiatives in recent years to support the development of the Irish shipping industry generally. The Irish Maritime Development Office is the shipping sector's statutory dedicated development and promotional agency, and pursues its promotional activities, supported by the Department as appropriate, through direct marketing, including contact through the embassy network and through the holding of information seminars for the industry. The Government has introduced a number of fiscal and strategic policy measures that have had significant positive impacts on the sector. Government policy to promote the shipping sector concentrates on fiscal areas, marketing and education.

A range of beneficial fiscal reliefs, with EU State aid approval, are in place for the shipping sector. These include a full refund to employers of social insurance contributions relating to seagoing employees, a unique €6,350 income tax allowance for seafarers who are at sea for more than 161 days and a €5,000 tax free allowance for Irish seafarers. The Government has also taken a number of initiatives in the area of maritime education. The €51 million National Maritime College of Ireland has been established in Ringaskiddy and is an excellent facility that has been gaining an international reputation as being a fine place at which to study maritime issues.

The above developments illustrate the many initiatives the Government is taking to promote the maritime sector, both at sea and on shore. I will relay Deputy O'Donoghue's opinions to the Minister and the Government because we all accept that a linkage to our markets, mainly the UK and Europe, is of critical importance in sustaining and developing the hospitality sector. We all know that there has been a considerable downturn in the number of tourists visiting Ireland because of the global recession and the weakness of sterling vis-À-vis the euro. All of these reasons are causing significant pressure, so anything that can assist in ensuring the MV Julia sails on the scheduled date I will raise with the Government on foot of Deputy O'Donoghue's representations tonight.

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