Tuesday, 14 February 2012
Department of Enterprise, Trade and Innovation
Question 291: To ask the Minister for Jobs, Enterprise and Innovation if he will clarify the reasons for the refusal by Enterprise Ireland to invest in a company (details supplied); and if he will make a statement on the matter. [7915/12]
The Cork Swansea ferry route was re-launched in 2010 by the company concerned on the back of raising substantial local community and private sector funding. Enterprise Ireland approved an investment in the company in 2010 of €1m in redeemable preference shares, on full commercial terms, to complete the funding round. This investment represented less than 10% of the overall funding round.
Having sustained significant losses, the company entered interim examinership on 1 November 2011 and full examinership was granted on 15 November. The Examiner assisted the company in drawing up plans to restructure its business and in seeking buyers/investors for the business.
Enterprise Ireland met with the Examiner on 27 January last and the agency was asked to consider further investment in the company. The agency immediately undertook a due diligence process and its findings raised a number of issues regarding the viability of the business plan, the proposed balance between private sector investment and State funding and consequent EU State Aid implications. I understand from Enterprise Ireland that the agency concluded that substantial private sector funding, committed on a long term basis, would have been required to make the business plan viable.
The owners of the Cork-to-Swansea service announced the end of the service on 2 February 2012. The effect that this outcome has had on the company’s employees, their families and the local community as well as on business and tourism development in both Ireland and Wales is very regrettable.
One of the targets in IDA Ireland’s strategy document ‘Horizon 2020’ is the creation of 62,000 direct jobs in 640 investment projects over the period 2010-2014, resulting in an additional 105,000 jobs overall in the economy, with 50% of these investments to be based in locations outside of Dublin and Cork. Central to IDA’s strategy is to build on existing regional strengths to ensure Ireland’s economic development, while optimising regional spread, in line with the National Spatial Strategy.
To achieve balanced regional development, IDA Ireland markets the Gateway locations within each Region as areas of critical mass and highlights the opportunities provided by Hub locations which are within commuting distance of these Gateways. The East Region has one Gateway (Dublin) and a number of large towns including Navan, Drogheda, Naas, Arklow and Carlow and, as such, will continue to be a key location of focus for the winning of foreign direct investment (FDI). As well as marketing the region for new Greenfield investment, IDA Ireland continues to work with existing clients in encouraging them to broaden their mandate and to continue to re-invest in their sites within the region.
The availability of cost effective and flexible private property solutions forms a central part of IDA Ireland’s marketing efforts. The Agency has informed me that there are 16 IDA Ireland supported companies in Co Meath employing approximately 1,300 people in key companies such as Generali International, Welch Allyn and Europ Assist.
IDA has developed a significant Business Park at Johnstown in Navan and spent approximately €3 million on developing and upgrading the park as and when required. Planning permission has also been obtained for a 2,500 sq.m advance facility in the Business Park.
Globally the outlook for FDI continues to be challenging, but there are still investment opportunities in global markets. IDA will continue to compete vigorously for these projects for Ireland and will continue to promote the East Region in line with the objectives set out in “Horizon 2020”.