Minutes of evidence: 10 April 2002

Committee for Regional Development

Wednesday 10 April 2002

Witnesses:
Mr P Robinson:      Minister for Regional Development
Mr N Hamilton    )
Mr R McMinnis   ) Department for Regional Development
Mrs B Faloona     )

The Chairperson: Good morning, Minister. Would you like to start off, or Mr Hamilton?

Minister for Regional Development (Mr P Robinson): Nigel is washing his hands off that one completely. Mr Chairman and members, I am grateful for the opportunity to attend the Committee's meeting this morning given the importance of this issue, both to yourselves as a Committee and, indeed, myself.

My officials and I have been working on the matter that you are considering this morning in detail since I was first made aware of the problem by Sir David Fell, the chairman of Harland & Wolff group of companies. I understand that Belfast Harbour Commissioner's chairman, Frank Cushnahan, and the chief executive, Gordon Irwin have already met with the Committee chairman, and deputy chairman, and I am also aware that the Committee has taken evidence from Sir David Fell.

You will, therefore, know that the proposition which Sir David has put forward forms part of the new business plan for Harland & Wolff Heavy Industries Limited, which is intended to ensure the survival of shipbuilding in Belfast, while at the same time facilitating the regeneration of a sizeable area of land no longer required for that purpose.

Both Sir Reg Empey at DETI and myself have ministerial roles to perform in relation to this proposition. Sir Reg, as industry Minister, has been required to make an assessment of the viability of the company's new business plan. In contrast my role emanates from the memorandum of understanding the "MOU" as we call it, between Belfast Harbour Commissioners and my Department under which the Commissioners must obtain our approval for any change in land use, or any planned disposal of harbour lands.

As you are aware the MOU Agreement was set in place last year as a direct result of the concern expressed by many elected representatives about the manner in which the original Titanic Quarter deal was concluded between Harland & Wolff and BHC. Because of the existence of the MOU the situation this time is very different. There has been extensive consultation by both parties with Government Departments, Belfast City Council as well as this Committee.

In addition, the proposed land deal cannot be implemented without the specific approval of my Department. Thus, the current process is much more transparent and characterised by greater public accountability. The approach I have taken in relation to the issue has been guided first and foremost by a concern to safeguard the public interest whatever the outcome. It follows from this that if the lands in question are no longer needed for shipbuilding, as the Minister for Regional Development I am keen to see them developed as soon as possible in the best interests of the people of Northern Ireland.

I have also made it clear that while I am keen to facilitate Harland & Wolff, and would hope that the new business plan will result in a marked improvement in the company's fortunes, I am equally concerned that any land deal must be justified in its own right, and produce clear, economic benefits.

Although Sir Reg and I, supported by our officials, have had several joint meetings with Sir David Fell, my officials and I have also had detailed bilateral discussions with BHC. Right from the outset we established a number of key principles for the conduct of the matter. These were that any deal must not only be in the best interests of Harland & Wolff and BHC, but also in the best interests of Northern Ireland plc, given the clear public interest. We have also looked at potential land use issues.

Recognition that there are read-across implications for any deal in relation to other tenants, or the same tenant, on other land. Recognition that the move requires BHC to engage with the Department prior and post any dealings on the land and to obtain our formal consent. That there should be no secrets between BHC and DRD in terms of any commercial negotiations. Recognition that the land issue arises from the new business plan, not the reverse. Recognition that the original lease was intended to support the Harland & Wolff shipbuilding business, it was not designed to facilitate other future business ventures.

Furthermore prior to BHC entering into negotiations with Harland & Wolff I had discussions with the chairman and chief executive to identify those matters which we considered needed to be taken into account. This discussion and a subsequent aide-memoire reflecting that discussion built on the key principles and identified a number of negotiating objectives including the need for the developers to address the infrastructure issue, the need for Harland & Wolff to establish arrangements to demonstrate that the required level of funding had been injected into the company, and arrangements for the monitoring of the progress.

Things have obviously moved on considerably since then as a result of the DETI examination of the company's business plan and through the negotiations between Harland & Wolff and BHC. The position which we have now reached is that while nobody can ever guarantee the success of any business plan, the position which we have now reached indicates that the review undertaken by PricewaterhouseCoopers for DETI has, at least, confirmed that the company has access to the necessary finance it considers is required to successfully meet the costs of carrying through its restructuring proposals. Therefore they consider that the plan is capable of implementation. An important point to bear in mind in relation to this is that no public funds would be involved, the commercial risk will be borne entirely by the parent company, Fred Olsen Energy.

Turning to the proposed land deal, a further six acres have been introduced bringing the total to just over 78 acres. The proposed development is on a 50/50 basis, similar to the arrangement reached relating to the Titanic Quarter site. This is being recommended to the boards of the respective companies. Those boards have yet to meet to ratify that part of the proposal.

The Department must now seek to satisfy itself in relation to the actual legal agreements and is arranging for the Valuation and Lands Agency to examine the valuations of the site. We will also want to be satisfied that the proposed deal will not give rise to any state aid implications.

I can also advise you that most of the objectives set out in our original aide-memoire seem capable of realisation. For example, within the framework to which I referred, the developers have accepted the need for a statement up front on the funding of internal and external infrastructure and have agreed to liase with all interested parties in preparing a development plan for the area. Quite separately, DETI is seeking to agree with the company suitable arrangements to demonstrate that the necessary funds raised on the back of the proposed land deal have been invested in Harland & Wolff Heavy Industries Ltd to enable the new business plan to be implemented.

There is still much to be done and I am conscious, on the basis of the information given to me by Sir David Fell, of the relatively short amount of time left before the company finds itself in serious financial difficulty. I am clear on the direction and shape of the deal; whether it can be realised, I cannot yet say. However, because of the public interest in this matter, there are wider political consultations which I feel are essential and it is important for the Executive to have some further information and to consider the issues. Assuming, however, that the proposed land deal passes the legal and valuation tests, and the resolution of the remaining issues, I am minded to agree to BHC concluding an agreement with Titanic Quarter Ltd, which is a sister company of Harland & Wolff Heavy Industries, for the development of the site. In coming to this view, I have been influenced by several factors.

First, with the injection of significant funds, it would afford Harland & Wolff the opportunity to implement its new business plan and so ensure the survival of shipbuilding operations in the short-to-medium term. This will retain jobs and also allow the two RO-RO vessels to be completed. It also will improve the yard's prospects in the longer term by making it more compact and efficient and promote new jobs in the construction of renewable plant. The alternatives of mothballing or closure frankly have little to offer in comparison.

Secondly, it would facilitate the regeneration of a substantial area of the harbour estate, a prime site close to the city centre, which if it is left will rapidly become an eyesore. Development of the land offers further job opportunities. Both Harland & Wolff or BHC accept that the site lends itself to development at least in part for light industrial use. Taken together with the adjoining Titanic Quarter site and the new Science Park, this could become a dynamic new development area extending to over 160 acres in the form of an urban village or major enterprise park. The uses would of course be subject to the full rigours of the planning process.

Finally, I have asked myself about the risks in agreeing to the proposed deal. At worst, Harland & Wolff will fail in its effort to revitalise the yard. In which case the need for the regeneration of the surrounding area becomes all the more important in the interests of creating job opportunities. Subject, therefore, to the completion of our due diligence checks and the board approvals - and, of course, subject to the views of my political colleagues - I have come to the conclusion that in principle the proposed land deal would be in the public interest. As I see it, there is nothing to be gained from withholding the Department's consent if the shape of the deal is right.

I hope that you have found this update and my analysis useful. I have given it in the detail that I have because I believe there is a prime need for openness and transparency. I should be glad to have the Committee's own thoughts on the Harland & Wolff proposal.

The Chairperson: Thank you very much Minister for that very detailed and comprehensive statement. I am sure it has caused great interest around the table here.

Mr McFarland: Thank you for coming. We heard obviously last week from Harlands and I think there were one or two areas that the Committee was concerned about. The first one was, as we understood it, there was serious concern about the viability of the business plan by the consultants who examined it.

One of the issues is these areas that Harlands are planning to go into, in particular the wind farm. My understanding is that there are wind farm manufacturers or windmill manufacturers all over the place who are actually sitting on large quantities of constructed windmill generating towers. There was a suggestion that they were actually trying to go into an area where it was extremely unlikely that they would be able to become the cutting edge and all the things that they were saying that they were doing.

The other point that was made and perhaps it is a more important one is that if we are going to do this deal and the business plan does not work out in a year's time and we end up back where we are now with a death of a thousand cuts. There would seem to be a degree of sense in simply grabbing the nettle now and saying "Right well hang on a minute, shipbuilding as we have known it in Belfast is not going to survive in the longer term". We would be better now to produce a proper regeneration plan for this whole area which would produce 5,000 to 8,000 jobs and allow us to do what we started off doing with Titanic. This would be a phase two Titanic, and if and when Harlands went under, it would be a Phase III Titanic.

Is it the time to perhaps be realistic about this and simply accept the fact that the world does need to change? We need to grasp this now. We need a proper plan for redevelopment. Let us hold our nose and get on with it now, rather than simply having a thing now and ending up in two years' time with you sitting at the end of the table here, Minister, coming up with another plan for this other part of Harlands. That is obviously a concern.

Mr Robinson: Yes thank you for the question. First of all Mr Chairman I think you will be aware that in relation to the viability of the business plan, that is a matter for DETI and Sir Reg and I am very grateful for the close relationship that Sir Reg and I have had in looking at all of these matters.

To some extent, any business plan is viable at the point when it is being considered; it is how it actually operates. The viability is always dependent on whether people get orders for the work; that depends on whether they are competitive. There is no doubt that this business plan makes them more competitive than they have been before now. Ultimately it is a matter for market forces whether people get orders and whether they can get the business.

I have had to approach this leaving almost to one side the viability of the business plan to look at whether the land deal makes sense in its own right. I have looked at it, if you like, under three headings. One of the consequences is if we do a deal with Harland & Wolff at this stage under the kind of circumstances that I have referred to, or whether we do a deal at a later stage after Harland & Wolff would have gone down because that is a consequence of not proceeding on the first basis or thirdly not doing a deal at all. The reality is that the business plan and the arrangements which are being considered at the present time give Harland & Wolff a chance. Without them we are talking about the closure of Harland & Wolff and the end of shipbuilding in Belfast.

The misconception that I think a number of people have is that if Harland & Wolff was to close that there is some public asset that becomes available to us to do whatever we would wish to do with it. That is not the case. Harland & Wolff have a lease which lasts until 2114 so if Harland & Wolff were to close tomorrow I am pretty sure that they would be capable of putting on site such arrangements that they might think would keep their lease intact. Of course Government could attempt to vest the ground but at that stage at least we would be talking about protracted legal arrangements. We would also be talking about a considerably different arrangement because effectively I suppose the Valuation Office along with the Lands Tribunals would be deciding issues of the amount of money that Harland & Wolff would get. So we are going into an area where nobody knows what the outcome would be and the likelihood of us being able to have some planned development of the site would be much more remote, particularly as they already have control of the Titanic Quarter element of it.

My Department has, of course, responsibility for the Regional Development Plan and we assigned our chief planner to the task of looking at this site and which he concentrated on for a significant period of time and has produced some recommendations for us to look at. Of course the heads of agreement that we would have with Harland & Wolff would incorporate some joint consultation in terms of bringing forward whatever the regeneration proposal would be.

The fact that the public interest is protected by a 50% arrangement by BHC also indicates that we have further influence in the shape of the proposal. By my new Harbours Bill, I hope I said when it gets through the Assembly, Belfast City Council will have an even more influential role on BHC. So, there are a number of areas where the public interest will be protected to a greater degree, on top of which you have the influence of DRD with BHC, and as important as any of those the full rigours of the planning process. So, there are a number of protections as to how the land will be developed but I think that an area of land of about 160 acres is a substantial development, one that has to be carried out very carefully and one which no doubt the Department of Environment Planning Service will be looking at very closely as indeed will BHC and the wider public interest.

The Chairperson: Thank you very much, Minister.

Mr Ervine: Thank you, Minister. It seems to me that you used the word, I think, "ensure". I presume you were reading from a prepared script. To "ensure" a continuum of work in Harland & Wolff. It seems to me that that is an impossibility to "ensure" that in the absence of orders, and that the business plan, as far as I am aware, does not have any investigative detail about who the potential customers might be. Not only who the potential customers might be but what indeed the product might be other than the suggestion of a company in Holland who are prepared to share knowledge with Harland & Wolff for the windmill generators. As I understand it that is pretty much all there is, a suggestion, but I do not see that there is any investigating into this. In other words, we did not get these companies in as focus groups and say 'Look, if Harland & Wolff existed and they were selling X, Y and Z, would you buy it off them?".

One more bit that worries me is the suggestion that the financial package which the release of the land, results in money from Olsen, makes Harland & Wolff more competitive, I think this is a nonsense. We did hear from Sir David Fell the difficulty in relation to shipbuilding and that perhaps an abandonment of that may, in terms of building pods or pods coming in and being fitted out by the shipyard, may be an opportunity for them, and I emphasise the word "maybe".

But my experience with Harland & Wolff and my experience with an extremely flexible workforce in Harland & Wolff is that the workforce have done everything required of them. They have made every manoeuvre that Harland & Wolff have asked of them and yet we are still uncompetitive. Sir David Fell said that our productivity in Harland & Wolff was not great and yet we have a workforce that not only is our productivity not great we have no orders. We are sitting on two Roll On Roll Off that we would not have got if it had not have been for political pressure. There is a complaint from management about the productivity of the workers.

So, my argument will be is that the effectiveness of Harland & Wolff, assuming they get an order in terms of their financial capacity, will fall on the shoulders of the workforce. There will be changes in practice and custom and we I think as politicians in this Assembly, and indeed yourself as a Minister, will be facilitating a harsher regime on the workforce and all in the name of keeping their jobs alive with a management that frankly so far have proven incapable.

Mr P Robinson: Well, first of all let me read to you the reference to "ensure" so that you will see the caveat that I put in at the time, which maybe my speed of reading missed. I said that "it would ensure the survival of shipbuilding operations in the short-to-medium term."

Whether the short-term is the completion of the Ro/Ros, whether there is work beyond that, only the out working of the business plan we will be able to show.

Mr Ervine: I greatly appreciate that clarification, Minister.

Mr P Robinson: You are right. Simply injecting money into the company does not make the company more competitive. What it does is keeps the company going while a business plan which reduces their overheads, both in terms of the overheads that they have in running the size of the site that they presently have and the overheads in terms for instance of steel fabrication where they are bringing in modules under the business plan as opposed to the present arrangements, those they indicate make the company more viable and make them more competitive in the market. Time alone will see. It is clear that Mr Ervine has some doubts. Perhaps he can express his more clearly than I could. But I again come back to the issue. I have not taken any decisions on the basis of the viability in my terms of the future of Harland & Wolff.

I have had to look at the issue in terms of a stand alone arrangement because of the possible read-across to other tenants that there might be in the Harbour Estate and obviously the wider interest of developing that site in the interests of the people of Northern Ireland.

If the thrust of what Mr Ervine is saying is true, that it is not going to be competitive and it is not viable then it will ultimately close and in those circumstances it becomes all the more important that we have job opportunities on that site and that the site is developed in such a way as to be in the interests of the wider community.

Mr Ervine: It seems to me that Harland & Wolff are determined to be property developers and I cannot stop them being property developers. They are already involved with Titanic Quarter, which I supported. However, at this stage I have no proof that they are good property developers. We know that there are lots of good property developers out there and the question I have is, is there satisfaction in the mind of the Minister that Harland & Wolff on the assumption that they do get the opportunity to develop that land will make a good job of it.

Mr P Robinson: Let us get it clear: Harland & Wolff will not be developing that land on their own. Harland & Wolff will be part of a partnership that will be developing that land. You do have some evidence that the land itself is very attractive, and Mr Ervine will know from his East Belfast experience there is a vast potential with that land. Therefore, it is important that it is developed properly.

A lot of those controls are controls that as elected representatives we have some say in. We have say in it through the planning processes and it is important that we exercise those elements of control that we have. We also have a role in terms of the Belfast Harbour Commissioners and I hope the increased role the City Council will have in that.

Mr Byrne: Given that we are talking about a Harland & Wolff survival plan in relation to ship building engineering and maritime engineering and given that DETI are really looking after that, we are limited as to the influence we can have on that.

I think the key issue is the type of development that is likely to be placed on this land that is going to be freed up as a result of the lease. Therefore, I am wondering if the Minister or his Department has any thoughts on putting in any criteria regarding the mix of type of development that needs to take place on that land. There may be very attractive immediate, short-term dynamic benefits to the Titanic Quarter Company if they go for a particular type of development which may be lucrative but may not be in the best interests of creating or providing a mix of employment opportunities.

Mr P Robinson: Can I indicate that Titanic Quarter Company will not be taking the decisions on its own? It will be taking them in conjunction with Belfast Harbour Commissioners in terms of the development and all of it will be subject to the full rigour of the planning process.

However, we do have some views as to how it should be developed. I think that the last thing that any of us want to see is a whole swathe of apartments from the Odyssey right through to the new concentrated site. It has to be some form of mixed development but we have an emphasis on the light-engineering, light-industry element. Happily there is no argument with Harland & Wolff in terms of the attractiveness of that element to the site. They believe that the site lends itself to that kind of use. Obviously there will be other uses as well.

We have gone to the extent of preparing, if you like, a draft in-house plan ourselves, so we have some view of what should be done to the site. We will, I suspect, have some influence, at least through Belfast Harbour Commissioners on what is eventually put forward by way of an application.

There is an added value in this piece of ground being added to the Titanic Quarter site and being developed as one site, which I think, will have massive job opportunities for Northern Ireland.

Mr Byrne: The only concern I have is the definition of light engineering. I think we all have an obligation to make sure that we have some value added sophisticated engineering potential retained in Belfast as regards of the development of the overall Northern Ireland economy. A very loose definition of light engineering may not be in our best interests in the long term. It is only an observation, Chairman.

Mr P Robinson: I can only respond to that in terms of I share the desire but point out the use classifications within planning law are such that they have a fairly wide interpretation under that classification.

Mr McNamee: I would just like to ask the Minister if he is satisfied that the public interest is being well served in terms of the valuation that is put in the added value of the lease on the restrictive cover. If a rescue package is not secured at Harland & Wolff and the company will go into liquidation or rather Titanic Properties Ltd would still hold the lease to the year 2114 on that piece of land. But they would hold a lease which is restricted for that property to the use for harbour related activities.

Now if agreement is reached and the restrictive covenant is removed, there is a significant added value to the lease itself. Potentially there may be other people in those circumstances not disregarding the fact that if Harland & Wolff goes down, there are consequences in terms of jobs and potential development of other parts of the Harbour Estate. But in those circumstances there will be the potential for another party to be interested in acquiring the lease in partnership with Belfast Harbour Commissioners. The question I am asking the Minister is, is he satisfied that the value being put on the improved value of the lease is serving the public interest.

Mr P Robinson: Although I do have some background in estate agency I would not dare to satisfy myself on those matters. Therefore the Valuation and Lands Agency have been asked to look at the matters. We are still awaiting a report one of the outstanding issues that has to be dealt with. Their view of the four valuations that have already been carried out independently of the land, there is some commonality between the valuations that have been carried out by private companies on the land but I would await for the assessment of the Valuation and Lands Agency on that. In terms of the added value of the site, there are several factors.

They have to value a site as it presently sits, the site will become much more valuable after infrastructure improvements have been made to it. They themselves have a cost and I have not emphasised it much to date but perhaps I should now. It is very strongly the view that I have argued throughout this whole process, that whereas Titanic Quarter was very much based on an arrangement between BHC and Harland & Wolff, there is a third party who wants to be very certain about what it is going to get out of any arrangement done and that is Northern Ireland PLC. Not only is it a job potential that we have referred to, not only is there safeguards which we are attempting to put within the process but there is also infrastructural improvement. We are talking about very significant infrastructural improvement that is necessary, not just within the Harbour which of course makes the Harbour more attractive, but the area leading to the harbour. So there are many benefits for the wider community which when they are carried out increase the value hopefully of the site. To increase the value of the site they are going to have to invest.

The Chairperson: Could I just ask the Minister in a sense, or quite correctly, we are not dealing with the viability of the business plan and the reconstructed Harland & Wolff that might or might not emerge from the present situation? Indeed, if Harland & Wolff were to close tomorrow or at the end of this month, the reality would be that we would be faced as an Assembly with a situation in which we had, or the public had an interest in a piece of land which Harland & Wolff still held an interest. In that situation we would have to deal with that in any of that. So whether Harland & Wolff is restructured and continues or closes, we still have to deal with the situation of what or how is this still going to be developed. Is that the reality of the situation? It is the reality from this Committee's point of view and the remit that this Committee has.

Mr P Robinson: In relation to this piece of land it is even more clear because what Harland & Wolff are saying to us whether Harland & Wolff survive or not, this piece of ground is surplus to our requirements. So what are we going to do with this piece of ground irrespective of what happens to Harland & Wolff. So, from a Committee view as well as from a Department's view we have to look at what the best arrangements are for this piece of ground, which Harland & Wolff have through their business plan indicated is no longer going to be used for shipbuilding purposes.

The Chairperson: So we have to focus on how this land is going to be developed, how it is going to be used. What you are telling this Committee is irrespective of whether Harland & Wolff continues or closes that lease still continues in some form, some shape or form. That Harland & Wolff will still continue to have interest in that land and it would be very difficult for somebody to come along and say, "Well we will take over the lease and we will now develop this land". Is that really the situation?

Mr P Robinson: It is impossible for anybody just to take over the land. If anybody wants to take over the Harland & Wolff interest in the lease then they either have to negotiate it or else they have to go through vesting procedures if it is going to be Government we would be doing it. Vesting procedures obviously would be long drawn out, protracted and indeed there will be a figure at the end of it. Nobody knows what that figure might be.

The Chairperson: Now assuming that the company is restructured and the rescue plan goes through, who would continue to lease the land? What company would it be?

Mr P Robinson: What land are we talking about now?

The Chairperson: The piece that the 76 acres or thereabouts which is now surplus to the requirements of Harland & Wolff.

Mr P Robinson: My understanding is that it would form part of the same arrangement as the Titanic Quarter. I am looking to Robin for confirmation.

The Chairperson: We very loosely use the term Harland & Wolff, but I want to identify —

Mr P Robinson: It would be a 50/50 arrangement if the boards agree in the same way as Titanic Quarter, so Belfast Harbour Commissioners and Titanic Quarter Limited.

The Chairperson: So, it would be that company effectively —

Mr P Robinson: Those companies. Belfast Harbour Commissioners will have a 50% interest. It may seem unclear but I think it is important because the general language out there is that Harland & Wolff or Titanic Properties are the ones that are going to develop. They are not. It will be a partnership between Titanic Quarter and Belfast Harbour Commissioners both in terms of the costs involved in developing and indeed in the profits from development.

The Chairperson: I am trying to tie down who the actual company is that the Belfast Harbour Commissioners will partner with. That is important because we blandly use the term "Harland & Wolff" and of course we are dealing with different companies who are as it were related to Harland & Wolff, but it is not necessarily Harland & Wolff itself as the public out there might understand it.

Mr P Robinson: I hope I am right in this; if I am not I will ask officials to come in. My understanding is that upon agreement between Belfast Harbour Commissioners and Harland & Wolff about the future use of that part of their lease, the Titanic Quarter Ltd would invest in the Harland & Wolff Heavy Industries the amount of money that is referred to in the agreement that is being considered, therefore the leases would go to Titanic Property Ltd and the development arrangement will be one between Titanic Quarter Ltd. and BHC.

Mr Ervine: It is a Harland in sheep's clothing.

The Chairperson: Of course that means that if there is a potential development plan put in place for the vacated land that would then be surplus to Harland & Wolff requirements, Titanic Quarter itself would become a more valuable asset.

Mr P Robinson: The two pieces of ground - Titanic Quarter's existing site and this new site - will have a greater value than the value of the two added together if they are developed as one whole. The valuations support that view.

The Chairperson: What I am trying to get at is what is talked about is somewhere in the region of £20 million to £30 million being put into Harland & Wolff by Olsen. Of course people are saying that he is putting this money into a project which may or may not work. What is the benefit to his company financially? Of course there is the benefit, is there not, to Titanic Quarter Ltd if all this goes ahead; a fairly considerable benefit?

Mr P Robinson: He will have paid for whatever benefit he can attract to it along with BHC. The reality is that if Fred Olsen was to invest from the benefit that he would attract by way of the arrangements that are being considered into Harland & Wolff Heavy Industries, he is doing that in advance of him knowing whether he even has planning permission for the site that he intends to develop. So, from his point of view there is considerable risk involved. He is also in effect taking a significant amount of money and investing it, whereas if he was to allow Harland & Wolff to go down he would not have to invest that money in Harland & Wolff. People cannot be unkind to Fred Olsen in a way that if they scrutinise the arrangements further, they might not be.

Mr McFarland: We remarked to Sir David Fell about the timing of all this. We are in an election year, both Ministers involved are East Belfast MLAs and if one was unkind about it all you might wonder why at this particular stage all this has arrived with us. The reality is that unless Harland & Wolff can do something with all this land it is useless to them because the lease is for metal-bashing and the moment you stop metal-bashing that is useless land and all they can do is then sit on it. There were enormous potential benefits for them, if they can get this land off into Titanic Quarter. The predictions for profit and development for that whole area are enormous both in terms of jobs and profits for those have shares in it. Fred Olsen will get all his money back, he also owns something like 90% of the shares in Harland & Wolff through a number of little companies, but in the end it is all owned there, so he is definitely not going to lose, but he will win mightily if they can swing this deal.

I am wondering if we are being robust enough about this. I know it fits in well and it is comfy and it is not going to annoy anybody. I am just wondering whether in the end in the same way that those who made the deal in 1986 with Harlands where we basically gave them hundreds of years' leases for two pence a year or whatever, it was in order that they bail out what was a nationalised industry at that stage. I am just wondering whether we are being robust enough with a longer-term view to all this because you can be absolutely certain Fred Olsen industries are not going to loose anything out of this. In fact, they stand to make enormous gains out of it.

Mr P Robinson: Can I first of all say that if Harland & Wolff or Fred Olsen felt that they had an advantage with the two Ministers who represented East Belfast and the proximity of an election, I think that in the meetings that Sir Reg Empey and I have had with them, that will long ago have been dispelled. In fact because we are representatives for East Belfast, and both of us, I suspect, are hoping to continue to be representatives for East Belfast, what happens on that site is vitally important to us from a constituency point of view as well as our ministerial responsibilities. I would have thought that on closer examination he might well have concluded that we would have much more sensitivity and be taking much more care about the detail of the arrangements because of our constituency interests than if we did not have such interests.

Nonetheless, I know that Sir Reg Empey and I have approached this from a wider and, I might say, higher interest and that is the interests of Northern Ireland as a whole. I am convinced that anybody when the full detail is capable of being examined will recognise and judge that for Northern Ireland, if it is agreed by the boards of the Belfast Harbour Commissioner and the Harland & Wolff companies, if it is supported by the wider consultations that I have to have politically, it is a good deal. Set aside Titanic Quarter, I think they will see it as being a better deal.

Titanic Quarter leases, of course, were not as attractive as are the leases that we presently have in terms of the number of years to go.

Sorry, I think I had not picked up the second part of your question, which was about the huge benefits that might flow to Fred Olsen or his companies.

There are potential benefits for not only Fred Olsen and his companies but for Belfast Harbour Commissioners and for Northern Ireland because of the development potential of the land. But to secure that advantage there is significant infrastructural investment that will be required. So, not only is he in some way giving up an interest in the lease because that money is going back into Harland & Wolff, he is also going to have to invest in the roads and water infrastructure in that area. I am talking about a significant investment.

Mr Hay: We should not forget this. Fred Olsen, the parent company, have continued to support Harland & Wolff under difficult circumstances. I think we need to remember that, and did not get much in return is an issue. But one issue that did come out of the briefing with Sir David Fell was the issue of timing and it was something that we all I suppose got into trying to tease out as to what stage would decisions have to be made by them in running the company down, if their cash-flow problem came to a situation where they had no other option but to bring people in to either run the company down or look at the whole issue of cash-flow. Certainly, we got the clear impression from them and from the whole delegation that morning that time was not on their side in doing this deal. I am just wondering when can the deal be done and dusted to allow Harland & Wolff that breathing space to continue.

Mr P Robinson: Yes. Sir David, on the earliest moment of our discussion, made clear that he and his colleagues on the board of Harland & Wolff have fiduciary responsibilities and legal responsibilities under the Companies Act, which requires them to take action if certain things did not happen, and he made his best assessment of when they might happen. I must say that both Sir Reg and I have a responsibility to ensure that whatever considerations we give, cannot be forced into timeframes that are unrealistic. We have therefore already taken longer than Harland & Wolff would have like us to take in considering the matter. In fact, we have taken considerably longer than they would have liked us to take.

From our point of view we could not have done justice to the issues within the original timeframe. Therefore, it was essential that we properly considered the matter at all of the check studies carried out that we needed to. There are many outstanding issues, all of which are capable of resolution in a matter of weeks. I believe that the timeframe that we are now operating to and, indeed, could meet is one that would be consistent with the needs of Harland & Wolff.

All of this, of course, is subject to a number of matters, which are still being considered. I do not want to give the impression that it is a done-deal; it is not. Both boards have to consider the matter. There are further political consultations, and we are still waiting on some reports - valuation was mentioned earlier. So, there are still matters to be tidied up. There are still some provisions that we have not reached final agreement on as well. So there are still outstanding matters.

Mr Byrne: If I accept what the Minister has said that there has been negotiations involving BHC, Titanic Quarter and Harland & Wolff, if all of this were to be agreed, mutually satisfied, when do you think there would be a comprehensive development plan published?

Mr P Robinson: Because it is not my Department's responsibility it would be difficult for me to say. I am pretty sure that there will be some reference to the type of mixed development at an early stage. The detailed planning process will take much longer, and needs to take much longer. Indeed, the full application would be much longer still. While we might have a picture at an early stage, detail will take much longer and certainly well outside the period when it will be necessary for a decision to be taken to invest in Harland & Wolff by the Olsen companies.

I should just say because there has been some criticism of Harland & Wolff, I found Sir David to have been forthright and honourable in all the dealings that I have had with him, and I would not want to give any other impression. You are dealing usefully with someone who has a very well recognised and respected interest in Northern Ireland. I believe that in any dealings in which he would be involved he will have that wider backdrop as an interest.

The Chairperson: I think we will draw to a close there. Minister, are you content? Are there any matters that you want to deal with?

Mr P Robinson: No. As I said, Mr Chairman, I want to be as open and transparent in the matters because of previous experiences, though I was not in office at the time, but I think it is important. BHC, I should add, have worked with us throughout this process. There have been no aspects of the negotiations that have been hidden from us, and it has been a very useful relationship that we have had with them in this process, and I think that should be put on record.

The Chairperson: I appreciate that. Thank you very much, Minister.