I was reading book by Eugene McCague on Kevin McCourt recently and he has an interesting last chapter on McCourt’s tenure as Chairman of Irish Steel in the 1970s onwards. McCourt was a very talented manager with a great track record at PJ Carrols, RTE, and Irish Distillers and was asked to become chairman of the state owned company.
The business dated from the late 1930s and was bailed out by Lemass in the early 1940s. By the mid 70s the writing was on the wall and unfortunately instead of shutting it a major redevelopent was embarked upon. This is documented in the book and the saga of cost overrunn, ‘equity injections’, losses and pleas to the then EEC for derogations to continue to make losses makes for grim reading. A toxic combination of politics, Jack Lynch for part of the period was Taoiseach but any local politician wanted to keep it going a stone age union mentality, the financials must have run in the 1980s into hundreds of millions. In mitigation it was a horrid time for the European steel industry. The Indian Company Ispat bought the business for a nominal amount and invested some money there they stayed for the minimum 5 years and then shut shop. This was the only location where they walked away, the bossman said his advisors told him there was no possibility of the plant being turned around.
The cost of remedial work to the site to clean up the toxic residues has been calculated by the Comptroller and Auditor General (September 2013) at €166 million.
It brought back to mind other state enterprises in the harbour area engaged in value abstraction on a grand scale. Verolme dockyard was started by the Dutch in the late 50s and the first ships were built without subsidies. Their control was relinquished in the mid 60s and thereafter the clients were Irish Shipping, the B&I. the Navy all state owned or foreign orders massively subsidised.
State owned Net Nitrate built at Marino Point, the sole purpose of the plant seemed to be to deplete the Kinsale Gas field as quickly as possible they got the gas for almost nothing and still lost colossal monies.
On the Kinsale Gas I think there was some formula whereby the ESB got the gas cheap and in turn provided cut price electricity to Irish Steel.
It would be an interesting exercise to compute the cost of these ‘enterprises’ from say 1965 to 1990 in present day money terms, to see the drag they imposed on the viable economy, before the property melt down we were well able to shoot ourselves collectively in the foot. In fairness there is plenty industry in Cork Harbour these days but they are viable businesses able to stand up on their own.