Sir, - In view of recent expressions of concern by politicians of all parties that there should be full disclosure of facts surrounding government decisions and the role of ministers and public servants in such decisions, it may now be opportune to query the role of both in the demise of Irish Shipping Ltd, 13 years ago this month.
Firstly, why did the then Minister for Communications, Mr Jim Mitchell, the Taoiseach, Dr FitzGerald, and the Secretary of the Department of Finance repeatedly claim that it would cost over £220 million to keep Irish Shipping in operation? The provisional liquidator's report of November 28th, 1984 showed that the total deficiency of the company's assets as compared with liabilities on November 14th that year amounted to £88.174 million, including a provision of £46 million to cover claims for damages by the Hong Kong shipowners.
Secondly, why did Mr Mitchell and his successors, as well as senior civil servants, continue to claim that the total cost to the Exchequer of the liquidation of Irish Shipping did not exceed £50 million when the Comptroller and Auditor General's Reports for 1984 and 1986 show those costs to have been over £101 million in cash, apart from the loss of company assets which amounted to £19.5 million?
I suspect that the liquidation of the company had more to do with the potential embarrassment to politicians and the Department of Finance over the Irish Spruce than with the exaggerated exposure to the Exchequer. Insofar as the political and public service establishment was concerned, the Irish Spruce affair was very conveniently laid to rest with the company's demise.
The Irish Spruce was built at Verolme Cork Dockyard as provided by government decision in June, 1980. The price was to be £27.8 million sterling, though the vessel could have been built elsewhere for approximately $14 million.
However, its building was financed under a leasing arrangement negotiated by the Department of Finance in December, 1982 with a Japanese leasing consortium, which leased the vessel to Irish Shipping Ltd for a period of 15 years with annual payments of approximately £5 million. The ship would have cost £75 million over the 15year term of the lease and, even if the company had survived, a totally unachievable daily time charter rate in excess of $20,000 would have been required just to cover the capital cost of the vessel, apart entirely from its running costs. The terms of the leasing agreement provided for a penalty payment for what was described as "the stipulated loss value" in the event of early termination of the agreement. Following the liquidation of Irish Shipping this penalty clause was enforced and the State had to pay £43 million for the "stipulated loss value" as confirmed in the Comptroller's Report for 1986, paragraph 9. The report, same paragraph, states that the total net cost of the Irish Spruce to the Exchequer was £59,957,993 or 59 per cent of the total cash spent by the State in the liquidation of Irish Shipping Ltd.
The cost of this Irish Spruce financing arrangement was not mentioned very often by those ministers or civil servants who were so eloquent and imaginative on the alleged cost of keeping Irish Shipping going. I wonder why?
At this time of transparency and accountability in public affairs, is it too much to hope for an Irish Shipping tribunal? Perhaps the tribunal might also inquire into the State rescue of AIB from the consequences of its venture into insurance around the same time! - Yours, etc.,
Hazelbrook Road, Terenure, Dublin 6W.