Leo Varadkar (Dublin West, Fine Gael)

I thank the Deputies for raising this matter. I share their concerns and their disappointment regarding this development.

Neither the Department of Transport, Tourism and Sport nor any of its agencies has any function in respect of or, more pertinently, finance for the subsidisation or provision of ferry services for this or any other route. Following the suspension of the service offered by the Cork Swansea Ferry Company in 2007, the West Cork Tourism Co-Op was formed in early 2009 with the objective of relaunching the service. In September of that year, the co-op purchased a vessel, the MV Julia. This transaction was financed through equity raised from local small investors and a bank loan. I take this opportunity to acknowledge the substantial local support afforded to this project.

In October 2009, the co-op announced further investment opportunities through an additional share offer and by means of a sale of secured corporate bonds. As a commercial State entity under the aegis of my Department, the Port of Cork Company took a commercial decision to purchase bonds totalling €300,000 in the service. This was a small investment relative to the size of the port company. The most recent investment was approved by my Department and the Department of Public Expenditure and Reform. Four other parties took up the public offer to purchase bonds. These include three public bodies - Cork County Council, Cork City Council and Kerry County Council - and the Clona Milk Co-Operative. In 2010, Enterprise Ireland approved an investment in Fastnet Line Operators Limited of €1 million in redeemable preference shares, on full commercial terms, to complete the funding round. This investment represented less than 10% of the overall funding round.

Enterprise Ireland made investments in Fastnet Line Operators Limited in 2010 and 2011 totalling €1 million by way of redeemable preference shares, on full commercial terms. Furthermore, Finance Wales, a body under the auspices of the Welsh Assembly, also agreed to invest in the business. The Fastnet Line had sufficient funds to launch and operate the service from March 2010. In that year, the ferry service recorded a €2.5 million operating loss over ten months. This was despite the increase in the number of passengers using ferry services as a result of the volcanic ash crisis.

The Cork-Swansea ferry resumed sailings in March 2011, after the winter months, and it was planned to extend the sailing schedule in 2011. On 1 November 2011, ferry sailings were suspended when the High Court appointed Grant Thornton as an interim examiner to the company. As the Deputies will be aware, this is a court process over which neither Parliament nor the Government has any control.

In addition to the commercial investment made by the Port of Cork in the ferry service, as well as Enterprise Ireland's investment, my Department, from the tourism side, has been supportive of the development of the Cork-Swansea route by the Fastnet Line. However, we are bound by the EU state aid rules and limitations these impose. That said, however, early on both Fáilte Ireland and Tourism Ireland were - as is the case with other air and sea access routes - involved in discussions with the promoters to support the service through active promotion and marketing. Subsequently, advertisements were placed, on a co-operative marketing basis with Tourism Ireland, in UK national and regional newspapers in order to promote the service to British tourists.

Fáilte Ireland also worked with the Fastnet Line to provide it with business support training. The training on offer ranged from web to marketing, finance, sales and practical culinary and hospitality-customer service supports. These were designed not only to ensure a quality passenger experience but also to deliver benefits such as cost savings and increased sales and revenue and, ultimately, to improve viability. In addition, Fáilte Ireland granted BES certification to the enterprise to assist it in raising finance and the line launched a drive to raise €1.5 million in funding. That kind of support from Fáilte Ireland and Tourism Ireland will remain available to the current operator, if it can resume sailings, or to a replacement operator.

I am disappointed that the service has run into difficulties. I am aware that there is a great deal of community and business support behind it. An access route such as this into the south west is beneficial to the region and I hope that the operator can find new financing to continue the service. I understand that a restructured business plan has been presented by the company as part of the examinership process and forecasts that the ferry service will resume in April 2012. However, ferry services must operate on a commercial basis and to do so must have the support of a sufficient customer base. It is not the function of the Department of Transport, Tourism and Sport - nor is the facility available - to provide finance for such ferry services. Moreover, to do so could, if traffic from unsubsidised services were to be displaced as a result, constitute illegal aid on the part of the State.

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