HC Deb 18 July 1983 vol 46 cc11-2
15. Sir Raymond Gower

asked the Secretary of State for Wales if he will make a statement about the failure of the freight services of Welsh-Irish Ferries Ltd.

Mr. Nicholas Edwards

I was naturally sorry to learn of the failure of a venture in which the Welsh Development Agency had made an investment and which my own Department had offered to support with grant-aid.

Sir Raymond Gower

In view of the favourable feasibility study that preceded the launching of this undertaking and the study given to it by local authorities and others, is my right hon. Friend aware that there is a good deal of concern about this early failure, after only three months of operation? Has my right hon. Friend any idea of the reasons for the failure?

Mr. Edwards

I must tell my hon. Friend, who pressed the case for this investment very hard, that I am sad that it has not succeeded. My hon. Friend is right. A detailed study was undertaken by Coopers and Lybrand, and the WDA looked into the case. But it was always clear that there were some risks, especially with the long sea haul involved. Anyone who has studied the matter will know that a long sea haul adds to the risk. If the WDA is to fulfil its role of supporting new projects, I am afraid that not all of them will succeed. The grant offered by my Department has not been paid, as the instalments come only 12 months after the creation of the first job.

Mr. Anderson

How much of the £112,000 which was granted by the WDA will be salvaged? Is my right hon. Friend aware that south Wales is littered with redundant ferry port facilities that have been provided out of public funds both at Swansea and Pembroke? Why was this investment allowed to go ahead in the first place and to collapse after a few months?

Mr. Edwards

The usual criticism made of the WDA is that it is not sufficiently enterprising in backing such projects. I was strongly pressed by both Labour and Conservative Members that this project should be backed by my Department and the agency. The agency had a full feasibility study undertaken by an extremely well-known firm and it was on that basis that the investment was made. I am sure that the agency will want to investigate the circumstances of the collapse fairly fully and will be able to give the hon. Gentleman further information if he asks for it.