Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

I thank the Technical Group for bringing this motion before the House and giving me an opportunity to speak on the issue. I was not present for the start of the debate yesterday because I was in Brussels. I am pleased to be in the House this evening to contribute to this important debate which, however, may be somewhat premature. There is an assumption that a decision has been made and it is a matter of time before the sale takes place, but that is not necessarily the case. I want to explain what is happening. The Government decided some months ago to investigate the possibility of selling harvesting rights in our forests, as opposed to the sale of land or the company. We made it quite clear that during the process, we would protect the public good elements of Coillte, including the guaranteed public access onto Coillte lands, and that we would insist on maintaining the crucial importance of Coillte for the country's timber industry.

I wish to deal with some of the issues that have been raised so far in the debate. This is not a question of ideology. A company can function perfectly, employ people and make good use of natural resources in a sustainable, competitive and profitable way, regardless of whether it is State-owned or in the private sector. In the agri-food sector companies such as Kerry Group, Glanbia and Dairygold are spending hundreds of millions of euro to enable them to expand, grow and employ more people. Many are employed in private sector companies in the forestry and timber sector, including Glennon Brothers. These competitive and well run businesses are major clients of Coillte. I accept the point that we should proceed with caution in this regard, given that more than 80% of the commercial timber provided for the sawmills industry in Ireland comes from Coillte.

We need to do a number of things before we proceed with any sale. We have undertaken not one but a number of audits to establish the value of the rights about which we are talking. We have been accused of not doing so. We need to audit the company independently to ensure what we do safeguards its future. If we remove the harvesting rights which comprise a significant asset, we must not fundamentally undermine the ability of Coillte to survive, grow and expand. My Department and the Department of Public Expenditure and Reform have been doing a great deal of work with NewERA under the National Treasury Management Agency to inform our consideration of whether we should proceed with the sale of harvesting rights, whether it makes sense to sell a State asset and use 50% of the proceeds to stimulate job creation and whether this can be done without damaging the broader timber industry or the company and its subsidiaries, including SmartPly and Medite. All of these questions are being discussed in some detail. That is why we are not in a position to say a clear decision has been made on if, when or how we will proceed with the sale of harvesting rights. The decision will be taken by the Cabinet when the Minister for Public Expenditure and Reform, Deputy Brendan Howlin or I - or, more than likely, both of us - have brought a report and recommendation to our ministerial colleagues, which will happen in the not too distant future. At that time, we will make a decision and will stand over it.

The Government is committed to the forestry and timber sectors. The former Minister of State, the late Shane McEntee, did an extraordinary job in protecting the budgets of this sector and getting to know the personalities, companies and people involved, including in Coillte. It is worth noting that despite all of the expenditure reductions which have had to be imposed by all Ministers in recent years, no reduction in expenditure in the forestry sector has been provided for in either of the last two budgets, with the sole exception of a tiny reduction in capital expenditure for forestry roads. We are spending well over €100 million on forestry each year. That money is spent on premiums and afforestation, for example. We planted 7,000 hectares of trees in each of the last two years and will do the same this year. The programme for Government contains a very strong commitment to the sector. When we get an opportunity to spend more money on it and plant significantly more trees than we are currently able to, for reasons of affordability, we will do so.

Ireland is catching up with other European countries in terms of the percentage of land covered by forest. We want to use wood for good purposes - for the timber industry, obviously, but also for the energy and bioenergy industries. We want to use the lands that Coillte owns and for which it is responsible for other good purposes - for wind farms, telecommunications masts and recreation, etc. Some other countries that give an equal level of priority to their forestry sectors have decided to sell forestry rights in certain segments. It happened most recently in south Australia. In doing so, they have protected the timber industry in the local area. They have built into the sales process a requirement to offer to sell timber to local sawmills before the option to sell outside the locality can be considered. One can build whatever one wants into the sales process. I accept the impact of doing so can be to undermine the value of that sale. We are going through a process. We are looking at the viability or non-viability of proceeding with the sale of a very significant asset. When we complete that process, we will be open about how we have arrived at our conclusions. We will then proceed with whatever decision we have made.

I emphasise the Government's commitment to supporting Coillte as a semi-State company. We will proceed carefully with the finalisation of any decision made on the sale of harvesting rights. We are determined to continue to protect the public value that Coillte offers by maintaining public access to its forests and supporting the broader timber industry. As I have said, we should be more ambitious with regard to the potential future uses of Coillte lands. Equally, we should be more ambitious with the dividend we demand from a company as large as Coillte which is responsible for managing 7% of the land mass of the country. It is not good enough that just two financial dividends have ever come back to the State from Coillte which is a good company. Many really good people work for it and there is a great deal of expertise in it. We must demand of Coillte what we demand of all of the other arms of the State. As a country, we need all semi-State companies to perform as well as they can. They need to return a dividend to the State when it needs cash and protect all of the things they are charged with protecting, building and growing. There has been a great deal of innovation within the company. It is examining new ways of carving out profits and creating businesses and jobs through the use of timber, the asset for which it is primarily responsible.

It is important for me to say one more thing about the sale of State assets before I conclude. It has been suggested the only reason this is being considered is that it has been foisted on us by the troika. It is true that pressure from the troika to consider the sale of State assets has certainly been one of the main drivers that has forced the pace in this regard.

However, Fine Gael had a NewERA policy when in opposition which was not driven by ideology, as perhaps Deputy McDonald would suggest, because we were talking about creating new State companies as well as potentially selling some of the existing ones. We have followed through on that. We are setting up a semi-State called Irish Water at the moment, while we are potentially looking at selling a semi-State, Bord Gáis Energy. Any sensible country must look at its portfolio of assets every now and again and make a judgment call as to whether some of those assets should be sold because they are no longer strategically in need of State ownership, and it should look at raising money that can be pumped into building the new assets that are needed to progress an economy. That is what we are doing when setting up the semi-State Irish Water.

It is in that context that we have looked at all of the assets the State owns, both companies and the physical assets themselves. We then have to make a judgment call and a political decision, as a Government, as to what the State strategically needs to own and what the State could perhaps sell to raise money to be able to build the new assets the State strategically needs, given the pressures we are under at the moment. That is the context under which we are considering the sale of harvesting rights. However, at the moment, that is all we are doing. We are considering the sale and we must then make a decision. I might add that it will be an informed decision. There have been at least three audits and reports, including valuations, in regard to this decision, one undertaken by Coillte and two by NewERA. At the end of this process, we will have a recommendation coming to Government, and when we make that decision, we will of course come back into the House and defend it.

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