Sir, - Sunday, November 14th, marked the 15th anniversary of the liquidation of Irish Shipping Ltd, in which over 300 employees lost their jobs, their life assurance cover and two-thirds of their contributory pension entitlements. At the time, the government and senior civil servants involved claimed that the cost of the liquidation to the Exchequer was less than £50 million. However, the Comptroller and Auditor General's reports for 1984 and 1986 show that the actual cash cost to the Exchequer was in excess of £101 million, apart altogether from the loss of assets valued by the provisional liquidator at more than £20 million.
They also claimed that it would cost the State £220 million to keep the company in business. The provisional liquidator's estimate of the assets and liabilities of the company, as at November 14th, 1984, showed a total deficiency of £88.174 million which included a provision against possible claims for liquidated damages by the owners of chartered vessels. Significantly, this estimate excludes all liability and asset value pertaining to the Irish Spruce, and for good reason.
It was, and still is, my view that the liquidation was not really about possible loss to the Exchequer but had more to do with concealing a major waste of taxpayers' money by politicians in commissioning, and by civil servants in financing, the building of the Irish Spruce at Verolme Cork Dockyard. Placing the order for this vessel and for an offshore patrol vessel at the same time, in 1980, was a cynical political exercise, carried out by the government ostensibly to maintain employment at the Dockyard, but which included in the price of both vessels a total sum of £9,035,786 to meet agreed redundancy payments to the workers at Verolme Cork Dockyard! (See C. & A.G.'s report for 1984, paragraph 51.)
Incidentally, the workers in Irish Shipping Ltd, which, unlike Verolme Cork Dockyard, was wholly State-owned, had to institute legal proceedings to secure minimal compensation for loss of employment after a 10-year campaign for justice. Even then the miserly compensation was subjected to income tax at the top rate and to PRSI deductions. A senior Department of Finance official told the writer that he had opposed payment of compensation as it might create a precedent for employees of other State-owned companies.
The Irish Spruce was built at the Cork dockyard as a result of a government decision in June, 1980, and was financed through a leasing agreement, guaranteed by government, and dated January, 1983. The entire building project was government-sponsored and was foisted on Irish Shipping Ltd against the wishes of the company as the vessel was particularly unsuited to the shipment of coal from the Gulf of Mexico to Moneypoint, her supposed raison d'etre. The leasing agreement provided for a penalty if Irish Shipping Ltd was liquidated during the repayment period. As a result, following the appointment of a liquidator, the Exchequer paid out a net £59,957,993 in respect of the vessel as set out in the report of the Comptroller and Auditor General for 1986, paragraph 9. In other words, the government paid £60 million for an asset in which it no longer had any interest!
In view of the current wave of openness and transparency in public life and in fairness to those who suffered so much in the process of the Irish Shipping liquidation, is it too much to hope that the truth might, at last, be told? - Yours, etc.,
John Higgins, Hazelbrook Road, Terenure, Dublin 6W.