Plant's 62 years spanned boom and bust as economy evolved

Barry Roche - Southern Correspondent
The Irish Times 22/8/05

The Ispat site crumbled latterly under lack of investment, poor safety and falling global steel prices, writes Barry Roche.

This week's start of the clean-up operation of the former Irish Ispat plant on Haulbowline in Cork Harbour marks the first step in the process of rehabilitation of the island, after over 60 years as the home of Ireland's heaviest industrial activity.

Originally opened in August 1939 as Irish Steel Ltd at a cost of £500,000, the privately-owned firm went into receivership in 1946. A year later, the Government purchased the company's assets and nationalised the industry to secure some 240 jobs. The 1960s saw boom times at Irish Steel with new furnaces allowing production increase to seven days a week, 24 hours a day, with staff numbers rising to a peak of 1,200 in 1971. Then the economic crisis of 1973 triggered the start of turbulent times for the plant.

The Government had already invested some £65 million in the plant to prepare it for increasing competition, but the collapse of steel prices in Europe in the 1980s led to further hardships and staff numbers at the plant were progressively cut back from 650. Throughout the 1980s, the plant was beset with difficulties. Workers accepted a pay freeze in 1986 before recording a £2 million profit in 1989 - only for the company to record losses in the 1990s, leading to further rationalisation and job cuts.

Eventually, in 1996, the State wrote off debts of £27.5 million and sold Irish Steel to Indian company Ispat International Group for £1. This was on the understanding that £30 million would be invested in the plant and its 330 jobs would be secured under a five-year plan. Steel prices dropped on the world market and sales fell to their lowest level in 10 years but, in 1998, Irish Ispat - as the new company was called - broke even for the first time in 10 years. But sales fell again in 1999 when the company lost £1.8 million.

In May 2001, Irish Ispat sought a 10 per cent pay cut from staff, while it also sought to increase annual production to 420,000 tonnes - 70,000 tonnes more than its previous highest output - in order for the plant to survive.

But on June 15th, 2001, just days after the terms of its five-year deal with the Government expired, Irish Ispat announced it was closing the plant with accumulated losses of £10 million and losses running at an unsustainable £750,000 a month. The closure led to the loss of 400 jobs, while Irish Ispat also left debts of £45 million - including £23.7 million it claimed it owed to its parent company Ispat International, as well as £4.2 million owed to workers. Irish Ispat's tenure at Haulbowline was marked by controversy, with the firm failing to invest in the plant as it had promised when it took over Irish Steel. It also sold off land in Ringaskiddy just prior to closure, which led to accusations of asset-stripping.

Irish Ispat's ownership of the plant was also marked by tragedy. In April 1999, Cobh man John Murphy died when he fell from the gantry of a crane, while in March 2001, a British engineer suffered massive burns when he was electrocuted and died some weeks later. In January 2001, lab technician Thomas Mulcahy lost his life in a fire at the plant's administrative block. An inquest heard the building had no fire alarms, sprinklers or fire escapes, and that the company's fire engine failed to start because of a flat battery.

Siptu revealed a proposal to set up a safety committee was vetoed by Irish Ispat, while former plant safety manager Brian Purcell revealed that he had been refused a budget - estimated at €15,000 - to introduce a better fire-safety training regime.

Irish Ispat had applied for an integrated pollution control (IPC) licence in 1999 from the Environmental Protection Agency (EPA). This followed years of lobbying by environmentalists who had campaigned for tighter controls on emissions from the ageing steel plant.

In March 2001, the EPA issued a draft IPC licence with some 15 conditions attached, relating to emissions, noise and waste management, but Irish Ispat closed the plant before ever implementing any of these. Indeed, the company cited the conditions as one of the factors in its decision to close and, after the EPA failed in a court bid in July 2004 to oblige the liquidator, Ray Jackson, to fund the clean-up, the State has now been left to foot the €30 million clean-up bill.

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