Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

In fairness, local authorities in the west are under severe pressure in dealing with the damage.

The good news is that it will act as a stimulus for employment. We need to get the local contractors working on the plan. Most of the work will be done by the private sector, notwithstanding the fact that the OPW and local authority staff are doing really important work.

I agree with the point about insurance companies cherry-picking those whom they will insure. We need to have a debate on flooding to deal with this specific issue.

I will meet, at Senator Kelly's request, a gentleman who has come up with a solution to the problem, and we will certainly look at what he is suggesting.

Senator Darragh O'Brien mentioned an insurance levy. As the Senator will know, the previous Government looked at this issue, and it was reported to the Government in 2010 that a levy was not the solution at that stage. We announced that we would consider that again in the next four to six weeks. At present, insurance companies have declined insurance cover to those in areas that have flooded. That is the current situation for many of the businesses that I visited in Cork last week. It is intolerable. A State indemnification scheme would be a major undertaking. We would have to consider the extent of the funding involved and who would make a contribution to the fund. My understanding is that from EUROSTAT's perspective this potential liability would go onto the State's debt. That would have significant economic repercussions, were we to take that route. The preferred solution would be to have an element of State indemnification, which would give support to everybody. The present situation is that people have no recourse and no solution. We must find the middle ground. I am open to considering the levy proposal or a contribution. Interestingly, in the case of the UK, as mentioned by my good colleague Senator Mooney, the insurance companies are breaking with Government and are getting out of it now because 95% of the cost to the insurance industry has been borne in the past two years because of the severity of weather conditions in the south of England. We need to deal with the issue in accordance with our ability. We cannot pretend there is a quick-fix solution.

I do not disagree with the Senator about SACs. I think Europe is being blamed rather than our over-zealous application locally, which is the cause of the problem more so than the actual SACs. In Portrane, an attempt to improve the growth of marram grass in the dunes is being examined with the aim of creating a better barrier. Those involved can apply under the minor works scheme, and I expect to receive an application shortly. I give Senator O'Brien a commitment that I will turn it around, as the sums involved are not significant. I am aware that Fingal County Council will make an application shortly to the Department, and we will turn it around if it will give us a cost benefit.

Senator Michael D'Arcy, among others, called on the public to keep away from the coastline. Senator Cullinane raised the issue of applications for minor works. I hope I have explained that the total cost of minor work carried out by the local authorities comes to €19 million, whereas I have only €3.5 million to spend. I presume I will have that money spent by the end of March. I then return to the Minister for Public Expenditure and Reform, Deputy Howlin, and put the case for a supplementary estimate, and we will extend it again. The best way to proceed is by using the local authority minor works scheme.

The estimated cost of the damage is in the region of €60 million to €70 million currently, notwithstanding what happens today. The GNI threshold for the EU Solidarity Fund is €770 million for the country. The damage caused by the weather would need to be worth €770 million and one would need to prove to the Solidarity Fund that a part of the national wealth or GDP had been knocked out as a result of this disaster to be able to get a significant drawdown. We are looking at whether we can apply on a regional basis, where the thresholds are slightly less, but it is not looking particularly strong at present. If we were to succeed in drawing down funds from this account, I understand we would be talking about €1 million or €2 million. Virtually all the resources will come from the insurance industry or our own national resources.

I hope I have answered Senator Gilroy, who also spoke about Cork defences.