John O'Donoghue (Kerry South, Fianna Fail)
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I thank the Ceann Comhairle for allowing this matter. Following two extremely difficult years for the tourism industry, particularly in the south west, most people will realise it is of crucial importance that we improve transport facilities into the country in so far as that is possible. Fastnet Line, the new ferry service to be operated by a co-operative of 500 people from the south west, hopes to set sail between Cork and Swansea on 1 March. It was estimated that, until its cessation in 2006, the previous ferry service between both cities generated more than €40 million for the local economy annually. As more than two thirds of its users were coming from the UK into Ireland, its loss has had a significant negative impact on businesses in the south west - particularly small businesses operating in the hospitality and retail sectors - and it is estimated that the return of the ferry will preserve and create more than 1,000 jobs in the locality in the coming years.

A total of €13.5 million in aggregate needs to be raised to ensure the business commences as planned on 1 March. Following a fund-raising drive, which received tremendous support from people on the ground in Cork and Kerry and further afield, €4 million was raised in small lots from more than 500 people and local businesses, and €6.3 million was obtained from a Finnish bank. In addition, a private equity business in Wales has agreed to invest €1.7 million subject to the remaining balance being raised. Thus, €12 million in total has been already raised or committed - representing an incredibly positive community effort in the current economic climate - but the balance of €1.5 million needs to be fully committed immediately if this business is to become a reality.

The Fastnet Line business is taking shape. Sales for the year are ahead of target, as are car and passenger numbers for the first month of sailing, which is March. The company is expecting up to 30,000 cars and 80,000 passengers to use the service in 2010, and this number is expected to grow in subsequent years. These are people who, because of the nature of their visit, tend to stay longer and spend more than air travellers. They will be welcomed again to Ireland with the return of the ferry service.

Local businesses and private individuals have been supportive of this project to date. They have invested in the prospect of a €40 million annual injection into their local economy. These smaller investors could have found numerous ways to justify not investing in the current economic climate; had they taken that view earlier this year, the project would have gone nowhere. The Exchequer will also benefit from this project, both directly and indirectly, and we now need to find a way to make this project happen for the south west by finding €1.5 million immediately. This is of the utmost urgency and importance to all those involved in the tourism industry in the south west of the country.

Since the closure of the Cork to Swansea ferry in 2006 there has been a noticeable absence of cars with yellow number plates across Cork and Kerry. This is of crucial importance to small businesses and those involved in the hospitality sector. I forecast that if the ferry is not put back in place immediately, we will see closures in the hospitality sector across the south-west region.

We are often told by the IDA, Forfás and other agencies of major investments in which employment is created. These are welcome. However, we often unfortunately forget that we have an indigenous tourism industry on which we can capitalise, in which we should invest and which can yield real jobs for real people, not just in the medium to long term but also in the short term. In these circumstances, I strongly exhort the Government to find a way for these funds to be made available immediately in order that the ferry can recommence business on 1 March and in order that we can do justice to all those involved in the hospitality sector in the south west of the country, many of whom are totally dependent on the industry for their livelihoods.

I take the opportunity of thanking the Taoiseach for the personal interest he has taken in this project from the outset and for attending various meetings with a view to providing assistance. I sincerely hope the Minister of State who is here this evening will be in a position to put forward a positive proposal on behalf of the Government.

Billy Kelleher (Cork North Central, Fianna Fail)
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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.

John O'Donoghue (Kerry South, Fianna Fail)
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Arising from the Minister of State's comments, I propose that the State agencies make the necessary commercial investment available immediately to get around the State aid problem.