John McGuinness (Carlow-Kilkenny, Fianna Fail)
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We are now dealing with item 7, the 2012 financial statements of IDA Ireland. Before we begin, I remind members, witnesses and those in the public gallery to turn off their mobile phones. Interference from mobile phones affects the sound quality and transmission of the meeting. I advise witnesses that, by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to this committee. If they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a Member of either House, a person outside the House or an official by name or in such a way as to make him or her identifiable. Members are reminded of the provisions of Standing Order 163 to the effect that they should also refrain from inquiring into the merits of a policy or policies of the Government or a Minister of the Government or the merits or objectives of such policies. I welcome Mr. Barry O'Leary, chief executive officer of IDA Ireland, and ask him to introduce his officials.

Mr. Barry O'Leary:

I thank the Chairman and members of the Committee of Public Accounts for the opportunity to address them. I am accompanied by Mr. Dermot Clohessy, executive director, IDA Ireland, and Ms Regina Gannon, chief financial officer, IDA Ireland.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I ask the Comptroller and Auditor General to introduce the accounts.

Mr. Seamus McCarthy:

The primary role of IDA Ireland is to attract foreign direct investment to Ireland, including encouraging existing investors to invest further in the country. It does this by promoting Ireland as an attractive location to potential investors and through the payment of grant aid in appropriate cases and the development of industrial property.

In 2012 IDA Ireland spent €89 million on grant aid to industry, with almost half of this figure being spent on support for research and development activities. IDA Ireland has a substantial industrial property portfolio across the State which is held for the purpose of assisting the promotion and development of industry. The portfolio had a net book value of €116 million in December 2012. Inevitably, it has not been immune from the fall in property values in recent years. This is reflected in the cumulative provision for impairment which stood at €191 million at the end of December 2012.

The agency's expenditure in 2012 on promotion and administration amounted to €38.5 million, of which approximately €9 million was spent on marketing, consultancy, promotion and advertising. The primary source of the agency's income is Oireachtas grants which totalled €132 million in 2012. These were paid from a separate IDA Ireland subhead of the Vote for the Department of Jobs, Enterprise and Innovation. The agency's accounts for 2012 received a clear audit opinion.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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I invite Mr. O'Leary to make his opening statement.

Mr. Barry O'Leary:

I shall put the role of IDA Ireland in context of the national economy. Foreign direct investment plays a more important role in this economy than in any other European Union country. We have a portfolio of approximately 1,050 companies that we have attracted to Ireland over the years. They have a strong impact, with direct and indirect employment of 270,000 people and exports of €122 billion in goods and services. That accounts for more than 80% of all exports. They spend approximately €19 billion in the economy, of which €7.3 billion is by way of payroll. They are also the largest payers of corporation tax, with almost 70% of all corporation tax, as well as almost 70% of business expenditure on research and development, coming from multinationals.

IDA Ireland is global by nature. We have to travel the world to identify companies and convince them to come to Ireland. The primary market, or the one that is most productive in terms of foreign direct investment, is the United States where we have six offices. We have three offices in Europe but in the so-called emerging markets such as China, India and Brazil we have expanded in the last six years from two offices to 11 across a variety of countries and locations. As part of our strategy, we aim for an exceptionally high market share in the sectors on which we concentrate. In other words, if we are going after a sector, we want to be sure we have the environment that would attract the leading companies. Areas of particular strength in Ireland include information technology with names with which members will be familiar such as IBM, HP, Microsoft, Intel and EMC. In the pharmaceutical sector we have nine of the top ten companies in the world, with multiple locations in Ireland. These include Pfizer, Merck and Novartis. In respect of medical devices, we have 17 of the top 25 global players, including Abbot, Covidien and Johnston and Johnson. In the international financial services sector we have 50% of the leading institutions. Citibank, BNY Mellon and State Street are the key players in this regard. In the somewhat newer area of digital and social media we have the top ten companies, including Google, eBay and PayPal. We target development and manufacturing, research and development and global service in these sectors.

In 2012 the multinationals created 12,772 new jobs which resulted in 6,570 net jobs in IDA Ireland's portfolio. It was the largest increase in net job numbers in more than a decade, as well as the lowest number of job losses. Our key wins in 2012 included Allergan which will employ 200 people and invest €250 million in its facility in Westport; eBay; PayPal which will employ 1,400 people in Dundalk; Nypro's creation of 200 jobs in Waterford; Fidelity's 200 jobs in Galway and Dublin; SAP in Dublin and Galway; Northern Trust which will employ 400 people in Limerick; Abbot in Sligo; Eli Lily in Cork; and Cisco in Galway.

In the past two and a half years we have been targeting a sector in which we were previously not very active, namely, the emerging companies concentrated in the New York area and Silicon Valley in San Francisco. These are young companies which have gone through one round or two rounds of venture capital funding and are the future Googles or Facebooks. Since we started that programme we have attracted 55 of these companies. We are active with the large multinationals, mid-size companies and, increasingly, high growth companies in the technology sector.

We have observed increasing competition in the last year or two not only from emerging economies but also some of the most established economies in the world. The United Kingdom and the Netherlands have made significant changes to their offerings and places such as Luxembourg, Singapore, Switzerland and the eastern states of the United States have also come up with attractive packages that include corporate tax offerings.

A large proportion of IDA Ireland's budget is spent on what we describe as the transformation of the existing client base. We want to make sure the world leaders we have attracted to Ireland continue to invest and transform here. We offer a wide range of supports, including support for technology uplift, skills uplift, process improvements, research and development and energy efficiency in order to drive efficiency and place these corporations higher in their corporate world and attract new investment to Ireland. It is fair to say Ireland's value proposition - in other words, what makes Ireland attractive to multinationals - is constantly being enhanced. There is a constant task in maintaining the most important elements such as the talent base, our strong track record in attracting companies and getting them to reinvest in Ireland, the corporation tax offering and our technology capabilities. Other areas are also important. If, for example, we are trying to attract a pharmaceutical investment that could amount to €250 million to €500 million, we must be able to locate sites of 50 to 100 acres with access to 2 million gallons of water and 10 MW of power.

I thank my colleagues in IDA Ireland for their enormous commitment, dedication and flexibility in working long hours to secure foreign direct investment for Ireland. I have often referred to the importance of team Ireland in winning foreign direct investment. We have worked closely with the Taoiseach and the Minister for Jobs, Enterprise and Innovation and other Ministers in a wide range of Departments and State agencies to achieve substantial FDI benefits for Ireland.

This meeting is reviewing our accounts for 2012, but in regard to our outlook, the strong flow of foreign direct investment has continued in 2013. A number of leading companies have announced investments in new activities or the expansion of existing operations. However, we face a challenge in that the majority of the foreign direct investment we attract to Ireland is focused on supplying markets in Europe, the Middle East and Africa. These markets remain flat, but we are hopeful the European market will improve. Our efforts are firmly focused on generating a pipeline and converting it. At any one time we need in excess of 100 investments in play around the world, for which other countries will, of course, be competing.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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May we publish Mr. O'Leary's statement?

Mr. Barry O'Leary:

Yes.

Shane Ross (Dublin South, Independent)
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I thank the three witnesses for their statement, which is a fair reflection of their success. There is no doubt about the IDA's success in bringing multinational companies into Ireland over a period of years. It is one of the stars of the semi-State firmament and I congratulate the witnesses on that. Ireland is proud of what they have done and the extraordinarily large household names they have brought in, and we have prospered thanks to it. We are not here today to examine that. Mr. O'Leary said these huge multinationals which have come in and give great employment and spin-off benefits pay €1.9 billion in corporation tax and account for 70% of corporation tax. Is that correct?

Mr. Barry O'Leary:

It is €2.7 billion.

Shane Ross (Dublin South, Independent)
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Are they paying enough? Are they so large that they can, if not necessarily gain sweetheart deals, use the international rules to their benefit and use Ireland as a conduit for funds and as a tax reduction mechanism? Mr. O'Leary would be aware more than anybody of the EU probe which came up in the Financial Times, the US Congress report and the audit of multinational companies which was publicised by The Irish Times and other newspapers in August. Particularly the companies the IDA brought in are coming under increasing focus. While they are very good for Ireland, people are asking whether they are pushing us around and exploiting the situation here to an unacceptable extent. What is Mr. O'Leary's reaction to the fact that three bodies are putting us under scrutiny and are, therefore, presumably destabilising the image of Ireland and its tax regime in America and suggesting that things may have to change which will make Ireland less attractive?

Mr. Barry O'Leary:

There is much controversy about the global, not just the Irish, tax environment. On the question whether they pay enough, we must examine what happens around the globe. They are paying a substantial amount of corporation tax, €2.7 billion, which equates to €19,000 per year per employee in the multinational base. That is a high burden. In the EU, countries get approximately 2.4% of their GDP by way of corporation tax. Ireland gets 2.6%, so it is higher than average, and the UK gets nearly 3%. Countries compete for investment in a variety of areas. Some countries put massive amounts of money into research and development, including some of the most developed economies in the world such as Switzerland, Singapore and the Netherlands. Multinational companies deciding where to locate examine the transparency of the 12.5%. Everybody is entitled to it in Ireland. If one goes into cantons in Switzerland one could negotiate a rate of 3.2% or 1.8%, so it is discriminatory and that is getting even more focus than the Irish standard rate. A lot of tax is being paid by international comparison. We would like to get more and some global changes will arise from the current debate, but they will take quite some time because of the complexity of the global footprint of tax arrangements.

Shane Ross (Dublin South, Independent)
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While I understand Mr. O'Leary's point about international comparisons, I am doubtful that this is the right yardstick to use. It does not mean they should not pay more.

Mr. Barry O'Leary:

Yes.

Shane Ross (Dublin South, Independent)
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International comparison is probably a little different. When the Apple situation broke in the US Congress, the chief executive made a statement that it had a special corporate tax rate deal with Ireland of 2%. Mr. O'Leary went to America very soon after that to counter that claim. Could he explain what he said to them?

Mr. Barry O'Leary:

To Apple?

Shane Ross (Dublin South, Independent)
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Yes, and to members of Congress whom he met to explain why they were claiming 2%.

Mr. Barry O'Leary:

We would never talk about individual companies. There was no sweetheart deal for Apple. That is clear. It was a mistake. That comment should never have been made and it was retracted. The average annual salary in a multinational company is €43,000 compared to €36,000 in an Irish-owned company. On top of that, the multinationals pay another €19,000 per employee in corporation tax, so they pay a fair bit of tax.

Shane Ross (Dublin South, Independent)
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Could we talk about the corporate tax rate of 12.5%? Does anybody take any notice of headline figures anymore?

Mr. Barry O'Leary:

Most certainly because 12.5% is a brand that is associated with Ireland. The the tax system is simple. If tax was the only criterion used to judge an investment, nobody would come near Ireland but would go to Singapore and Switzerland. One can see the success they have had. Singapore will give companies 0% for ten to 15 years. Switzerland will probably give them 2% or 3%. The Netherlands talks in its published material about achieving a 5% effective rate for the pharmaceutical industry. In our mind they are discriminatory because one company can get it and another company cannot, whereas the Irish 12.5% is available to everybody. We have research and development tax credits that will reduce the effective tax rate but that is an important part of attracting research and development into Ireland.

Shane Ross (Dublin South, Independent)
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What is the effective tax rate here?

Mr. Barry O'Leary:

I have seen various studies from 11.9% to 8.2%.

Shane Ross (Dublin South, Independent)
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What does Mr. O'Leary tell people?

Mr. Barry O'Leary:

I would say 8.2% is more accurate.

Shane Ross (Dublin South, Independent)
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What is the effective tax rate in France?

Mr. Barry O'Leary:

The standard rate is 33% and the French Court of Auditors did a study and found an effective rate of 9% for the CAC 40, Cotation Assistée en Continu, companies.

Shane Ross (Dublin South, Independent)
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So the headline rate is not very relevant in European countries.

Mr. Barry O'Leary:

Not in a number of them. The UK, which happens to be behind some of the moves in the global tax environment, is introducing a "patent box" which is a very aggressive mechanism.

Shane Ross (Dublin South, Independent)
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I know.

Mr. Barry O'Leary:

Again, it is discriminatory because it applies only to certain activities, but it shows the strength of international tax competition. No matter what the new global environment will be, a competitive tax offering will be necessary.

Shane Ross (Dublin South, Independent)
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So the 12.5% is not the relevant figure they examine, is it? The IDA flags that rate and it is a brand, but it is not the real figure. The French rate of 33% is utterly irrelevant if the effective rate is 8% or 9%.

Mr. Barry O'Leary:

People are examining what their effective global tax rate is.

Shane Ross (Dublin South, Independent)
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So we are competing with France on an approximately level playing field.

Mr. Barry O'Leary:

Yes, if tax were the only consideration.

Shane Ross (Dublin South, Independent)
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How do the French get the effective tax rate down so low?

Mr. Barry O'Leary:

They do special deals. That is the point on the transparency of the 12.5%. Everybody can have it. Countries do special deals. They will come to an agreement whereby companies must make a certain amount of profit. In other words they must manage their business to achieve the particular rate through a variety of mechanisms.

Shane Ross (Dublin South, Independent)
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Why do we not do special deals?

Mr. Barry O'Leary:

It is because our transparency is winning us more business than those locations. We win more FDI in the sectors we go after.

We have a very high market share because of that transparency, the longevity, the regime itself and the fact that Ireland over the years had a consistent corporation tax policy in terms of helping investment overall in the country whereas other countries come in and out. The Swiss, for example, have been coming under a lot of pressure, particularly from Germany, because of the discriminatory nature of their tax offering. They have come and said that because it is discriminatory, they will make it available to everybody but they have signalled a five-year transition period in four particular areas that they are looking at whereas looking at the Irish system, it is not discriminatory

Shane Ross (Dublin South, Independent)
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Are the French, therefore, just playing competitive and not dirty?

Mr. Barry O'Leary:

I am not sure what one would call it.

Shane Ross (Dublin South, Independent)
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Are they giving sweeteners? That is what the IDA is accused of doing here.

Mr. Barry O'Leary:

Or they are allowing big write-offs. Both France and Germany have enormous research and development activities. They have big national industries. For example, EADS or Airbus are in an area with huge state subsidisation of activities.

Shane Ross (Dublin South, Independent)
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Are they working to difficult rules?

Mr. Barry O'Leary:

I would think so, yes.

Shane Ross (Dublin South, Independent)
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Is that unfair?

Mr. Barry O'Leary:

What is fair or unfair? A country competes not only on tax. If they put more into their talent management, is that unfair? There are probably 15 or 20 different items that make up a decision and a state has to compete on each and every one of them and it has to make sure that when they are all put into the mix, it is coming out on top in the scoring of 100 points.

Shane Ross (Dublin South, Independent)
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Do IDA officials sell research and development when they are abroad as a significant and important part of the package given to multinational companies?

Mr. Barry O'Leary:

Absolutely, including for new ones we want to attract to Ireland such as Qualcomm, a huge IT company from San Diego, which set up in Cork this year and Huawei from China. The biggest support from a research and development point of view goes into the existing client base because it is important to help the transformation of the activities they are doing; in other words, moving them continuously to more sophisticated activities. For instance, in the medical devices or pharmaceutical area, we have put a lot of support into the development function because if Ireland gets the development function, it will get the manufacturing function as well. That is a productive return to have development and manufacturing co-located on the one site rather than having manufacturing here and research and development in Connecticut or wherever.

Shane Ross (Dublin South, Independent)
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Do they not get a large tax credit for research and development?

Mr. Barry O'Leary:

They get a 25% tax credit plus some IDA grant support.

Shane Ross (Dublin South, Independent)
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It is massive.

Mr. Barry O'Leary:

Probably on average in the 30% to 35% range, which by international comparison leaves us competitive but not ahead of the international competition.

Shane Ross (Dublin South, Independent)
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Is it correct that approximately 300 companies out of 1,000 are engaged in research and development?

Mr. Barry O'Leary:

It is probably more but it is around that number for significant research and development.

Shane Ross (Dublin South, Independent)
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The research and development scenario has caused controversy and it is important for us to establish that this is not abused in any way. There have been authoritative reports that audits have been done on many of these companies and their use of research and development, and that it has been abused. Has Mr. O'Leary a comment on that?

Mr. Barry O'Leary:

I saw some reports on that in terms of inspections. There is a lot of money involved in supporting research and development but an awful lot of benefit is got by the country by supporting it as well. Revenue and the IDA operate to specific guidelines on what constitutes research and development and we have technical assessors to look at and verify that. There have been reports about Revenue disallowing certain aspects of it but I am not aware that this is a big number in the overall research and development scheme. Some of the research and development inspections are carried out retrospectively a few years after the credit is claimed but I have not seen it as a large problem. If 300 companies are involved, a number will be asked for clarification or checked to see whether they fit the guidelines set out in the research and development area.

Shane Ross (Dublin South, Independent)
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Are all the research and development activities taking place in Ireland?

Mr. Barry O'Leary:

Yes.

Shane Ross (Dublin South, Independent)
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Are there claims for tax credits for activities taking place outside Ireland?

Mr. Barry O'Leary:

No, the only way a company might get a tax credit in this regard is if it was sourcing materials from another country or there might be a small number using a specialised consultancy, which might mean people coming in from abroad. However, the vast majority of research and development is in Ireland.

Shane Ross (Dublin South, Independent)
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Do the companies claim the credit by self-assessment?

Mr. Barry O'Leary:

Yes, they make claims for the research and development credit and then it is subject to inspection.

Shane Ross (Dublin South, Independent)
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Are they all inspected?

Mr. Barry O'Leary:

The IDA inspects them all for grants. I am not 100% certain but I assume Revenue has a rota of sampling over time. We get a technical assessor to give us a report on what is planned in the research and development area to make sure it is technically research and development.

Shane Ross (Dublin South, Independent)
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Does the IDA inspect to make sure it is done?

Mr. Barry O'Leary:

Yes. First, we get audited claims in and then we have grant inspectors.

Shane Ross (Dublin South, Independent)
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The Irish Times reports, which were not denied, were that tax credits were not properly claimed in 26 out of 32 firms examined.

Mr. Barry O'Leary:

That is Revenue the Deputy is talking about as distinct from the IDA.

Shane Ross (Dublin South, Independent)
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Yes, but they are IDA companies.

Mr. Barry O'Leary:

I assume they are.

Shane Ross (Dublin South, Independent)
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Is Mr. O'Leary concerned about that?

Mr. Barry O'Leary:

We have a narrower definition of research and development. Without knowing the detail, I cannot say whether there are simple misclassifications, whether it is a matter of interpretation or whether it is a matter for the scientific advisors on both sides to assess if it is research and development or not. Revenue does not share the detail of its investigations with us.

Shane Ross (Dublin South, Independent)
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The reports were clear that a large sample of companies were claiming tax credits incorrectly, approximately €5 million had to be returned. It is alarming that if that sample is correct, the issue might be widespread and it would have to be remedied because it might raise concern overseas.

Do the companies use research and development as a tax reduction strategy or are the claims completely authentic?

Mr. Barry O'Leary:

It is all part of the development of the Irish activities. To win the manufacturing business, it is advantageous to have the research and development function co-located here. It is part of the strategic development of the site in the likes of the manufacturing sector. In the IT sector and the software sector, in particular, research and development is part of the business model. Companies are developing products here and commercialising out of Ireland and the tax credit helps them to be competitive.

Shane Ross (Dublin South, Independent)
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How much is claimed cumulatively in research and development tax credits?

Mr. Barry O'Leary:

It is a little over €200 million per annum whereas the IDA grants are probably of the order of €45 million.

Shane Ross (Dublin South, Independent)
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Is Mr. O'Leary satisfied that this tax credit is not abused?

Mr. Barry O'Leary:

I would not say it is abused. I do not know whether there is a matter of misinterpretation. If the amount returned was €5 million out of claims totalling €200 million, there will always be that variance. Like anything else, we are getting down to fine lines about what is scientific discovery, for example. We are not privy to the individual cases.

Shane Ross (Dublin South, Independent)
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I can understand Mr. O'Leary's interpretation of it and why he must be very defensive about it because it is something IDA Ireland has sold. Does he reject the statements in the media and elsewhere that this is a tax research loophole?

Mr. Barry O'Leary:

If it was a widespread problem where companies were being inspected and that had been found, we would definitely know about it. We are aware of a small number of companies that made us aware they were having some issues in claiming it, but it was a very small number. We have regular contact with all or most of our client base.

Shane Ross (Dublin South, Independent)
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The numbers claiming it and the costs have rocketed since 2008.

Mr. Barry O'Leary:

That is right. However, the Deputy must remember that the benefits have rocketed also.

Shane Ross (Dublin South, Independent)
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Yes, I accept that. I ask Mr. O'Leary to take us through the other more controversial areas about what Ireland offers to multinationals and IDA Ireland companies. Is transfer pricing abused?

Mr. Barry O'Leary:

There are guidelines by Revenue which are policed by it. They came in a small number of years ago on transfer pricing. Again, the Revenue Commissioners, when they are doing their tax audits, would cover that area. It is not an area in which IDA Ireland would get involved at all.

Shane Ross (Dublin South, Independent)
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Mr. O'Leary is aware of it.

Mr. Barry O'Leary:

I am aware of international transfer pricing, but that is a matter between Revenue and companies.

Shane Ross (Dublin South, Independent)
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Yes, but this is a sensitive issue. Is there not a danger that there is room for abuse? There are accusations of abuse. If changes are made, it could affect multinational investment in this country because they regard Ireland as a good - it is sometimes referred to in rather pejorative terms - conduit state where they can put the money in, transfer it out and do a few little dodges like transfer pricing which obviously affects their global profits. Does Mr. O'Leary not envisage the possibility of changes which would make Ireland less attractive?

Mr. Barry O'Leary:

The vast majority of investment here has huge substance behind it. If one has huge substance, it naturally gives one an advantage on transfer pricing. Ireland, going back a number of years, did not really have transfer pricing legislation. It was introduced a few years ago and is in operation now. If there are changes in transfer pricing, it depends because we do not know what the new world of global taxation is going to be, but the generation of intellectual property and its commercialisation and investment in bricks and mortar around it are going to be key elements of a competitive global tax offering. That will determine how transfer pricing works and the new rule. In other words, if one has a lot of the generation of the IP, the assets and the commercialisation, Ireland could benefit from the new changes around the world.

Shane Ross (Dublin South, Independent)
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I do not know how the double Irish works, even though it has been explained to me 100 times. Will Mr. O'Leary explain to me how it works?

Mr. Barry O'Leary:

No. Rather than getting caught up in it, whether it is double Irish, double Lux or double Dutch-----

Shane Ross (Dublin South, Independent)
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Double Dutch.

Mr. Barry O'Leary:

Whatever it is, the OECD BEPS, base erosion and profit shifting, discussions are under way and Ireland is part of them. One would have to wait and see. I think the Deputy will see a different global environment. The challenge for Ireland - other countries have made a strong point of it also - whatever happens is to remain very competitive in the global marketplace.

Shane Ross (Dublin South, Independent)
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It is bad for Ireland to have these particular little dodges and to be used as a conduit. It is quite obvious that Apple used the place to warehouse €77 million.

Mr. Barry O'Leary:

Can I just say to the Deputy there is no indication of that having any impact on Ireland's ability to attract foreign direct investment?

Shane Ross (Dublin South, Independent)
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No. I believe it helps it that there are all of these dodges here. It is actually an asset - they see it as a conduit. I am concerned about whether we get enough out of it - whether we condone it without actually getting anything out of it.

The property values have been marked down by €191 million. How does IDA Ireland work that out? What formula is it using for the reduction in property values?

Mr. Barry O'Leary:

We have a number of properties, a number of sites, around the country. The big land banks would be the strategic sites. Merck in Carlow bought our 65 acre strategic site because it could immediately provide the infrastructure for a vaccines facility. It bought that site maybe four years ago. Today it has nearly 500 people on site. One could say the same about Coca-Cola in Wexford. Of course, we get professional valuers every six months to value in line with market conditions. Therefore, it is pretty much the case that we are marked to market effectively. We do not value properties; it is actually done by property valuers.

Shane Ross (Dublin South, Independent)
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It is done by auctioneers, valuers. By how much are they marked down? By how much has the average property value reduced?

Mr. Barry O'Leary:

Over what period of time?

Shane Ross (Dublin South, Independent)
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They said €191 million.

Mr. Barry O'Leary:

I suppose by about 60%. Perhaps we might come back to the Deputy on that issue.

Shane Ross (Dublin South, Independent)
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I would appreciate it because it is important.

Mr. Barry O'Leary:

I would be surprised if it was not, in line with other property movements, around 60%, but we will come back to the Deputy.

Shane Ross (Dublin South, Independent)
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I would be interested in the detail of the amount of the markdown, what IDA Ireland has written off and the details of various buildings. I would like as much as Mr. O'Leary can supply without it being commercially sensitive.

John Deasy (Waterford, Fine Gael)
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I welcome Mr. O'Leary and his colleagues. That was an interesting exchange with Deputy Shane Ross, beginning by outlining his view that it was undeniable that IDA Ireland had been and was very successful and then questioning the reasons for that being the case. I did not know what to make of it.

As someone who worked on the issue of the US Senate finance committee dealing with trade, I am not too bothered about the angst of the members of the US Senate finance committee. I believe I know the motivation behind those hearings, which comes down to a competitive world in attracting companies to one location as opposed to another. I think we know that and have been very good at it. We annoy countries by being so successful in attracting so many companies into Ireland in the past 25 years. The reason the Netherlands, Singapore and the United Kingdom are changing their tax regimes is that ours has proved to be so successful. Waffling on about conduits and transfer pricing, etc. is naïve when everybody here understands why Ireland has become such an attractive location for such companies, particularly those from the United States. To pretend otherwise is disingenuous.

My concern - I have spoken to Mr. O'Leary about this over the years - is the level of our attractiveness now and how we can make ourselves more attractive considering what the United Kingdom, the Netherlands and others are doing. It is becoming more of a danger as far as our attractiveness is concerned. The number of companies that can be attracted to particular locations is tightening. There is a global downturn. Considering what other countries are doing with regard to the patent box and lowering their corporation tax rates, how can we become more attractive for inward investment?

Mr. Barry O'Leary:

First, the decision on a location around the world is a very complex one.

In general, companies with an investment in play look around the world and set out the top ten to 20 areas. They might put a weighting of 20% on one aspect or 2% on another and this is how it is done. We never get a free run at any investment and there is always plenty of competition. The only question is who the competition will be and how many different countries will be involved. We try to present what Ireland offers and its value proposition, which is complex. Looking back, 20 years ago we would have been sitting here speaking about companies such as Fruit of the Loom having 4,000 people in Donegal and Farah slacks. The success of Ireland has been constantly changing. We did not have an Internet company of scale before 2004 and we have the top ten in the world now. We had two bio-pharmaceutical companies in the early 2000s and today we have 11. Much is done to enhance the offering, such as getting strategic sites. With regard to the Glanbia investment in Waterford, the IDA acquired the Belview land a long time ago and spent a fortune on putting in water infrastructure. This water would be there for a major project, whether it was going to be Glanbia or something else.

John Deasy (Waterford, Fine Gael)
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I do not expect Mr. O'Leary to second guess the reasons the IDA has been successful; I expect him to come up with other reasons to be more successful.

Mr. Barry O'Leary:

This is my point. This is what we constantly do in our offering. We have a team of people working on the value proposition all the time, down to sector specifics and business models.

John Deasy (Waterford, Fine Gael)
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Based on these comments if I thought Mr. O'Leary was developing a conscience about issues raised by US Senate members or others within the European Commission I do not think he should be in the position he is in. He needs to drive on and find other reasons companies locate here. To consider anything otherwise is naive and, frankly, disingenuous because the public understands the reasons companies locate and remain here.

With regard to our technical capability, Mr. O'Leary mentioned Google and other technology companies which are more likely to locate in Ireland now than they were in the past. Do we have the type of capability required? Are there any issues with regard to engineering skills or technical expertise? Are there policy issues? Are there issues for us as a Parliament which we need to consider?

Mr. Barry O'Leary:

With regard to technical capability it is important to recognise we have a balanced portfolio of businesses. We have Internet, technology and medical devices businesses and different skill sets are required for different sectors. There is no doubt with regard to engineering skills in particular. There is a global shortage of engineering skills and those countries which produce more engineering talent or create the environment where they can bring in talent will win a disproportionately strong part of foreign direct investment. It is a key area.

John Deasy (Waterford, Fine Gael)
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I spent the past couple of days in Budapest where I met Enterprise Ireland, Irish business individuals, the Prime Minister, the President, Ministers and others. The meeting with the Prime Minister was interesting. He was very clear about where he felt his assets lay with regard to attracting industry. He underlined technical ability in the young workforce as a huge asset. It is a very cheap labour source compared to ours and there are very low utility costs. Where are our danger areas? Where are we weak and potentially vulnerable with regard to being competitive and attracting industries from abroad? Are there issues of which we need to be aware outside of tax issues? There is nothing we can do about the UK lowering its corporate tax rate to 20%. Where are the areas we need to identify and give more attention?

Mr. Barry O'Leary:

On the top of any company's list of criteria is talent. It is a huge driver of location decision. Ireland has been very good in general at producing the talent base and we have been pretty good at bringing in talent where we need to do so. Part of any modern economy today is a mixture of staff from within the country and also people who have been brought in. It is an important part of the model. Of course there are needs, and the more thousands of engineers we have the more thousands of jobs we will be able to create. It is one area where investment needs to continue. The talent is the most important issue.

John Deasy (Waterford, Fine Gael)
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How are we doing with regard to talent?

Mr. Barry O'Leary:

Those who consider coming to Ireland examine the talent pool here and in other countries, and make a judgment call that the situation in Ireland is better than in most other countries. Of course the talent race is global and there are approximately 700,000 vacancies for engineers and technology people throughout the European Union. New and existing initiatives in Ireland and the European Union, and visas beyond this, are part of the model.

John Deasy (Waterford, Fine Gael)
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The witnesses coming before this committee are in a very difficult position; the Secretary General of a Department here does not exactly compete with the Secretary General of a similar department in France, but I know when I ask Mr. O'Leary a question he does not want to state we have a problem here. He needs to be careful with regard to how he expresses where we are because it is a competitive environment and I understand this. I will change my questioning and discuss the regional aid guidelines or incentives. Approximately nine months ago Mr. O'Leary made a comment which was picked up by a number of people including me. He stated the incentives were not working and that when it came to areas outside of Dublin and Cork the incentives in place based on unemployment figures were not attracting companies to those locations which received the least amount of foreign direct investment. The map has been redrawn and there is an extension of six months which, as I understand it, will allow a transition phase while the old incentives continue. What type of input did the IDA have with the Department and the Commission when it came to redrawing the map for these incentives?

Mr. Barry O'Leary:

To the best of our knowledge the geographical areas have not yet been re-drawn. I understand the current regime has been extended by six months.

John Deasy (Waterford, Fine Gael)
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That is right.

Mr. Barry O'Leary:

There will be a new regime after this which will still allow certain regional aid support to the current geographical footprint. In addition there is a small increase of a couple of percentage points which will allow some new areas to be brought into the regional aid guidelines. The current footprint will work until the end of June next year and it will be up to the Department and the Government to come up with the new map. There is scope for a small increase in the geographical areas.

John Deasy (Waterford, Fine Gael)
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Mr. O'Leary commented that it was not working. How has it changed and what input has the IDA had with the Department in the intervening period?

Mr. Barry O'Leary:

If I recall, my particular comment was that there are many examples of where we have brought companies on a tour of Ireland and made them substantial financial offers based on the regional aid guidelines to locate in certain areas but they declined, stating they will invest in Ireland but will not avail of any grant aid. A company locating in Dublin or Cork does not receive the traditional type of grant aid. Even if a few million euro for a couple of hundred jobs are involved it is not enough to sway companies to make a decision to go to-----

John Deasy (Waterford, Fine Gael)
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So they are not working. This is the point. I agree with Mr. O'Leary's comment; I know they are not working.

Mr. Barry O'Leary:

They are working in certain cases.

Nypro in Waterford is a clear example. In Donegal, United Healthcare and Prudential are examples. Different companies put different values on grant aid.

John Deasy (Waterford, Fine Gael)
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Mr. O'Leary knows which region I am from. It is expected that I will take a bash at the IDA - I will not do that - regarding the reason there is not more foreign direct investment, FDI, into my region. In the Horizon 2020 document, the IDA expressed the view that 50% of FDI should be outside of Dublin and Cork, the areas that have received most of it. How will the IDA achieve that target? A tweaking of the regional aid guidelines will not move companies. They may only consider it as part of the overall picture. Some people might doubt that 50% is achievable and simply view it as a governmental document intended to appease the likes of me - that is, people who are quite cynical about expressions of future success and aspirational comments from the Government. The track record has not been great.

I know the constraints on the IDA. It cannot make up CEOs' minds. However, it inserted the figure into the Horizon 2020 document. How will it achieve the target?

Mr. Barry O'Leary:

We will not and we have not. We have achieved many of the metrics, including FDI in its total volume for Ireland as a whole, but we are not getting enough regionally and will not do so. We inserted the figure to drive the ambition to get as much as possible. The Deputy is correct in that the CEOs make the decisions for their companies. We can incentivise companies to use a certain location.

Dublin, Cork and Galway have received a substantial portion of FDI, but real progress is being made in some regions. For example, Dundalk and Drogheda in the north east have seen a great deal of investment. There has been a fair bit of investment in Limerick. There has not been the same level of investment in Waterford, but the south east - the Waterford-Wexford-Clonmel area - enjoys a healthy pipeline of investments. There will be a few more in that area in the coming months. If one tracked planning permission applications in the region, one would be able to find information in that context.

John Deasy (Waterford, Fine Gael)
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Mr. O'Leary has been making the case for some time now that we need to focus more on the developing markets of Korea, China, Japan and India. What sort of success has the IDA met in them?

Mr. Barry O'Leary:

In the Horizon 2020 strategy, we set out that 20% of green-field business would come from the growth markets by the end of 2014. While we may achieve that, the projects are small in scale. We have put a great deal of effort into trying to win business from those countries. Practically every country in the world is in those markets and we have a relatively small presence. We are continuing to invest in their development, but that will take more time.

I referred to emerging companies in New York, Silicon Valley and San Francisco. We enjoyed an almost immediate payback on that initiative. There was an immediate payback from the transformation agenda. However, we are not getting an immediate payback of scale from the growth markets. Strategically, though, we must be in them in the medium to long term.

John Deasy (Waterford, Fine Gael)
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I will not take up more time, but I will outline how I perceive Mr. O'Leary's role. I do not expect the CEO of the IDA to second-guess the reasons for Ireland's and the IDA's success in attracting industry, particularly from America. Rather, I expect the CEO to do everything with the people who change the laws in this country to ensure that we are more competitive, notwithstanding Deputy Ross' comments. If our tax code must be tweaked to make Ireland more attractive to companies, regardless of whether doing so engenders more criticism from members of the US Senate's finance committee, a place of which I have some experience, I would feel better, not worse. Mr. O'Leary's role is to make us more competitive within the rules and guidelines. I do not expect him to second-guess the fundamental reasons for the IDA's success.

Mr. Barry O'Leary:

The IDA has a strong influencing agenda with the Government, although we do not publish it. We must work our way through various Departments. To exploit the biopharmaceutical industry, for example, we received €60 million to build the National Institute for Bioprocessing Research and Training, NIBRT. We also worked with a number of councils to have roads moved or changed. Our influencing agenda is a key part of our work and several of our people are working on it almost continuously.

Kieran O'Donnell (Limerick City, Fine Gael)
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I welcome Mr. O'Leary and his colleagues. I wish to address a number of points on a national level before I deal with the regions, being a Deputy from Limerick. Various discussions were held about the corporation tax rate. Has the IDA carried out work to compare the margin between our effective and actual rates with the margins of our competitors? Ireland offers transparency. In other countries, the margins are significant.

How has the ending of patents affected the pharmaceutical sector? What measures can be put in place to counteract the effects?

I wish to address the IDA's interaction with NAMA in terms of, for example, the office space that is made available in city centre environments. We have encountered this issue in Limerick.

Mr. Barry O'Leary:

I have seen two studies on the difference between the effective and standard corporation tax rates. One showed the effective rate to be 11.9% and the other showed it to be 8.2%. It is somewhere in that range.

Kieran O'Donnell (Limerick City, Fine Gael)
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A point that has not been mentioned but should be is that what we offer is straightforward. The standard rate is 12.5%. One can get write-offs in the form of capital allowances and research, development tax credits and a few other items. In France, the standard rate is more than 30%, yet companies can have an effective rate of as low as 6%. Has the IDA compared the difference between standard and effective rates in Ireland with the difference in competitor countries? Is our margin much smaller?

Mr. Barry O'Leary:

The gap between the two is much narrower in Ireland than it is in other countries.

Kieran O'Donnell (Limerick City, Fine Gael)
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That point has been missed in the public debate. What we offer is relatively straightforward.

Mr. Barry O'Leary:

We have made that point strongly in the global marketplace, particularly in the US, and not just with corporations, but at the highest level in the business media world. We have put a great deal of work into the likes of CNBC and Bloomberg, where we pushed that message strongly to their audiences.

Kieran O'Donnell (Limerick City, Fine Gael)
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What was the reaction to IDA Ireland in America?

Mr. Barry O'Leary:

The reaction among the business community in America is very positive towards Ireland. There is not the slightest doubt about this. In comparison with the situation a number of years ago, corporate America now has a positive view of Ireland.

The Deputy's second question was on the pharmaceutical industry and the patent cliff. Patents have been running out. They are subject to generic competition from generic manufacturers. Sufficient new products have not been coming on stream. However, that is changing. In other words, the bottom has been reached. If one looks at the pipeline of products, one will see that there is significant change taking place in that while the traditional white powder and tablets sector, the small molecule area, is declining somewhat, the areas of biopharmaceuticals is growing significantly. Notwithstanding some of the fall-outs we have had, during the past 18 months, since the beginning of 2012, we have secured approximately eight or nine investments in the biopharma area, with more to come. It is an issue of timing. These biopharmaceuticals are exceptionally expensive. The cost of treatment per year ranges from between €3,000 per person to €120,000. This will feed into the exports area. Amgen is investing €200 million in its biopharmaceuticals facility on Pottery Road in Dún Laoghaire, while Lilly is investing €400 million at its facility in Cork. In Westport Allergan is investing €250 million and will shortly have 500 construction workers on site. At the same time as we are getting the old going, new investments are coming in.

Kieran O'Donnell (Limerick City, Fine Gael)
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Regeneron, a US drug company, has made an SEC filing and indicated that it is at an advanced stage of purchasing a building in Limerick. The general view locally is that the building which was formerly occupied by the manufacturing section of Dell will provide a psychological boost for the area given the number of jobs lost there previously. Dell has continued its operations in Limerick and is a fantastic employer in employing more than 1,000 people. It is welcome that Regeneron has made that public disclosure. In terms of the project advancing, what is its current status and how does Mr. O'Leary, in terms of the timeframe, see it evolving? Regeneron is a hi-tech drug manufacturing company which will be very welcome in Limerick. I compliment the company on its work to date. Perhaps Mr. O'Leary, given that what I have disclosed is in the public domain, might elaborate on the current status of the project? I have read the company's SEC filing and I am conscious of the commercial sensitivities involved. However, this is a welcome announcement for the people of Limerick. I would welcome it if Mr. O'Leary could give us some indication of the current status of the project?

Mr. Barry O'Leary:

Anything I say on any particular project can only be what is in the public arena, although obviously IDA Ireland would be privy to negotiations across a wide range of investments. As part of its SEC filing, Regeneron issued a statement confirming it was at an advanced stage of negotiations on the acquisition of a building. Subject to the appropriate planning, it is expected it will spend €250 million to €300 million.

Kieran O'Donnell (Limerick City, Fine Gael)
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That is a phenomenal investment.

Mr. Barry O'Leary:

Regeneron has not issued any further statement in that regard. Its initial statement was made in the past couple of weeks. Regeneron is one of a number of next wave biopharma companies and would be a very attractive win. However, there are many hurdles one has to jump in winning large investments. At this stage, I can only comment on the status of the project from a public point of view.

Kieran O'Donnell (Limerick City, Fine Gael)
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Without disclosing the subject matter of the discussions, will Mr. O'Leary confirm that IDA Ireland is in ongoing discussions with Regeneron? I am sure he is keen to see the project come to fruition.

Mr. Barry O'Leary:

We are in constant discussions with all of the leading biopharmaceutical companies in the world.

Kieran O'Donnell (Limerick City, Fine Gael)
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Can Mr. O'Leary give us a timeframe for the coming on stream of the Regeneron project? What we know at this stage is that there will be a significant and substantial investment of €200 million plus and that the location will be the former Dell manufacturing plant, which extends to 400,000 sq. ft. This project is of enormous significance for Limerick. As a representative for the area, I would like to assist in any way possible in ensuring it comes to fruition. I compliment IDA Ireland on its work in Limerick in the past two years which has resulted in more than 1,000 additional jobs in the area. Can I take it from IDA Ireland's perspective that every effort is being made to ensure this project comes to fruition?

Mr. Barry O'Leary:

The Deputy can take it that IDA Ireland is engaged with all of the biopharmaceutical companies worldwide, some of which, through the SEC filing, are already in the public arena, while many others are not, and is aware of active projects they may have. There is plenty of competition while we wait for companies to take the final step.

Kieran O'Donnell (Limerick City, Fine Gael)
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I referred to IDA Ireland's interaction with NAMA. In a Limerick city context, perhaps Mr. O'Leary might comment on the issue of available office space and the current status of negotiations between IDA Ireland and Shannon Development on its proposal to take over management of the national technology park and Raheen business park? He might also elaborate on IDA Ireland's plans for the parks. Multinational companies are beginning to locate in Limerick city, which is fantastic. What is IDA Ireland's general plan for the area in that context?

Mr. Barry O'Leary:

Nationally, IDA Ireland has expressed a view about the shortage of reasonable scale office buildings on the basis that there are three large projects which, between them, will require approximately 320,000 sq. ft. There is a good stock of buildings but not all of it is immediately useable because it is of a different era. In other words, the required square footage may be available, but it is not suitable for the technology sector. We continue to have discussions with NAMA in that context on a national level. In certain areas there are particular problems which require the system to move in terms of construction. For example, in terms of the construction of a building of 100,000 sq. ft. in, say, the docklands, design, construction and fit-out would take some time. We are confident, however, that we will continue to bring in significant foreign direct investment, but we need available space. It is a work in progress.

Kieran O'Donnell (Limerick City, Fine Gael)
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Where does IDA Ireland stand on projects to date which have ended up in buildings under the control of NAMA?

Mr. Barry O'Leary:

I will have to come back to the Deputy on that issue. I do not know how many buildings in which we have located projects are under the control of NAMA.

Kieran O'Donnell (Limerick City, Fine Gael)
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Are there bottlenecks in terms of buildings coming on stream for IDA Ireland-backed projects? How well is the process working in IDA Ireland working with NAMA in terms of the urgency shown in securing premises for projects?

Mr. Barry O'Leary:

Around the middle of last year we signalled the issue around property but like anything, it is a case of proving what was being said. Now we have the proof of the three large projects that will hit the news in the not-too-distant future. That will provide one more piece of ammunition in bringing on that agenda, as people will see some leading corporates take some very significant space. That is at the big end of the issue but there is a fair demand on space in the 10,000 sq. ft. to 30,000 sq. ft. sector, and there is an active dialogue with NAMA. It is work in progress rather than anything concrete to report.

Kieran O'Donnell (Limerick City, Fine Gael)
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In Limerick city centre, there is a perception of a lack of total available office space for foreign direct investment companies so will the witness give an idea of how that is perceived? What about the negotiation to take over the management of the two business parks?

Mr. Barry O'Leary:

A major services project, Northern Trust, to create an additional 400 jobs has gone ahead in Limerick, and it will need office space etc. There is no doubt that in order to land a new services project for 200 to 400 people, there would be a property challenge in Limerick right now. IDA Ireland does not produce buildings per se so we rely on developers to do that.

Kieran O'Donnell (Limerick City, Fine Gael)
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What about the Plassey Technology Park and Raheen?

Mr. Barry O'Leary:

We are in negotiations with Shannon about acquiring all or part of those sites but this is a work in progress. Until we reach a conclusion, it would be too early to comment. With Plassey in particular, there is a strong number of clients but negotiations are not yet concluded.

Kieran O'Donnell (Limerick City, Fine Gael)
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Subject to conclusion of negotiations, what are the plans for those parks?

Mr. Barry O'Leary:

We will only have plans when we know we have ownership. It would be premature to comment otherwise.

Eoghan Murphy (Dublin South East, Fine Gael)
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I thank Mr. O'Leary and his officials for being here. We always have a debate about corporation tax being paid by companies and one might think sometimes that companies only exist to pay taxes and serve no other purpose. I find such an idea frustrating, particularly when we consider how foreign companies are here paying corporation tax and employing thousands of people, who are salaried, pay taxes and spend money in the economy. The companies also invest much time and money in helping to build ecosystems and infrastructures in certain areas, such as gaming and the technology sector. Big companies like Google and Facebook also get involved in the local communities through the likes of the silver surfer project and other digital inclusion work. It is important to say this every time we raise this matter, as the witness did in the opening address and initial exchange. I will focus on the issue of resources in the IDA and how many people are working there.

Mr. Barry O'Leary:

Until recently we had an employment control framework of 254 people; that does not necessarily mean we would have had 254 people on board as we must wait for permission to fill a vacancy and technically, the number would never be quite achieved. As part of a reorganisation of some State agencies, the majority of Forfás is going into the Department of Jobs, Enterprise and Innovation. We are in a multi-tenanted building and there may be five or six organisations in it. Forfás were running the services and management of leases, as well as some other properties. A team of 12 people from Forfás have come over to IDA Ireland from 1 July to work on those functions which are not just related to IDA. There are some accountants and lawyers in the building-----

Eoghan Murphy (Dublin South East, Fine Gael)
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I am interested in how we deploy those resources overseas.

Mr. Barry O'Leary:

We probably have between 50 and 55 overseas. The number is currently 50 and the United States would have 27 or 28 of them. Approximately 11 people are in Europe.

Eoghan Murphy (Dublin South East, Fine Gael)
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Are the rest in the BRIC countries of Brazil, Russia, India and China?

Mr. Barry O'Leary:

Yes. There are four in Mumbai, one in Bangalore, three in Shanghai, one in Beijing, one in Shenzhen, one in Singapore, and there is a part-time position in Sao Paolo and Moscow. There is a full-time position in Seoul in South Korea, and that has just opened in January this year.

Eoghan Murphy (Dublin South East, Fine Gael)
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Considering the people in the US, I visited Cleveland recently, which was a major industrial area in the early 20th century before going into decline. It is rebounding and many international companies are based there. The Taoiseach was there recently and in a way I was following up. It seemed people were only getting turned on to the idea of Ireland as a place to invest and locate companies based on that trade mission led by the Taoiseach. Are there enough resources in the US to capitalise on the potential that still exists there?

Mr. Barry O'Leary:

We have people in Boston, New York, Chicago, Atlanta, Mountain View and Irvine in Orange County, California. We base our business around global teams, with one for the technology sector, life sciences or financial services, for example. They operate under the global business head in Ireland, and that controls the strategy for the sector and resources. If somebody is working in life sciences in Mountain View, that person reports to the head of life sciences rather than a regional director. There are various geographical areas because of the sheer magnitude of the United States.

There is potential to win more foreign direct investment but it is a people-intensive activity and we must build relationships with a multitude of management and companies. We have also made choices, taking people from other areas and moving them to the BRIC countries.

Eoghan Murphy (Dublin South East, Fine Gael)
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Is the witness saying that if more people were working for IDA Ireland, we would be able to take better advantage of these parts of America that have not yet been tapped to the full potential?

Mr. Barry O'Leary:

I do not know about applying that to areas but we must consider the overall matter. There is an enormous number of emerging young companies and we were not in that market a few years ago so we had to find a team of people for that purpose. We find when we want to do more we may not have more people to do it, just as it is with anybody else. Our numbers were frozen for a couple of years after being reduced; that was positive in its own right but there is more potential in the US market across a wide variety of opportunities.

Eoghan Murphy (Dublin South East, Fine Gael)
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Is the Mountain View office at Palo Alto?

Mr. Barry O'Leary:

It is ten minutes from Palo Alto.

Eoghan Murphy (Dublin South East, Fine Gael)
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I had the chance to visit it a couple of years ago and I was very impressed by what they were doing. That was before we started looking at the emerging companies and if we can get them to come here, it would be incredibly important for the ecosystem and helping Irish companies build structures here. There is so much happening in that part of the world, with many events and people coming from the universities. If we had more resources there, could we take more advantage of the sector?

Mr. Barry O'Leary:

Yes. If we had more people, we would win more business.

Eoghan Murphy (Dublin South East, Fine Gael)
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Has IDA Ireland done a cost analysis to value staff with regard to the business being brought in?

Mr. Barry O'Leary:

Absolutely. For everybody extra we have made calls on what we can deliver. There are not many State agencies that indicate what will be delivered. It is a very public and transparent process. We have estimated that if we had X, Y and Z, it would lead to certain targets being met.

Eoghan Murphy (Dublin South East, Fine Gael)
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What is keeping the agency from getting extra resources?

Mr. Barry O'Leary:

We do not control that.

Eoghan Murphy (Dublin South East, Fine Gael)
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Does the IDA go to the Minister, then, to say it needs ---

Mr. Barry O'Leary:

We have made a submission. The biggest challenge at the moment is whether one looks at an initiative as a cost or a benefit. One can see why that is, but if one wants to gain more, one must invest in the same way that companies do. On the question of whether the IDA is a successful agency, we take pride in the fact that we work very much like a business. We have portfolio managers and a clear strategy in terms of what we go after and naturally, the resources available will determine the results.

Eoghan Murphy (Dublin South East, Fine Gael)
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Does Mr. O'Leary think that the line Department is minded to see extra staff in the IDA as an investment because of the extra business such staff help to win?

Mr. Barry O'Leary:

Departments and Ministers have to make calls across a whole variety of areas. We would not be privy to the decision-making process on a wide variety of items.

Eoghan Murphy (Dublin South East, Fine Gael)
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I wish to turn to the BRIC countries, namely Brazil, Russia, India and China. While America is very important now, in the context of a medium to long-term strategy, we must focus on getting into those countries and competing as best we can. If we can be a gateway to Europe for America, there is no reason we cannot be a gateway for China, for example. However, engaging with those countries is resource-intensive because they are all very large and are complex in ways that we are only beginning to understand. In terms of the current plan for resources, are we going to see more of a shift of people out of the USA and into places like China or Brazil?

Mr. Barry O'Leary:

No; we will not take staff from the USA, because it is our biggest market and there is more to be got out of it. We have taken staff from other areas in the organisation. We have slimmed down some of our regional presence in Ireland on the basis that it is much better to have people out in the market generating leads rather than waiting for site visits here. On a global scale, our competitors put far more into countries such as China and India than we do. They put enormous resources into those markets.

Eoghan Murphy (Dublin South East, Fine Gael)
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Is there a particular country, region or sector for which the IDA is pushing for extra resources at the moment?

Mr. Barry O'Leary:

There are a number of initiatives we would like to undertake and there are six areas into which we would put resources. These are areas that we strongly believe in but right now we do not actually have additional resources. For instance, the emerging business area that we spoke about is the most obvious and the one where we get the quickest return on investment. There are others such areas, including the transformation agenda with the big clients we have here to make sure they re-invest. If one looks at the corporate level, with some of the big companies we might have to talk to 30 people at any given time. There is a constant battle to win reinvestment. Competition for foreign direct investment is intense and has become even more so since the European market, in particular, has flattened out. More companies are turning to FDI for whatever growth there is.

Eoghan Murphy (Dublin South East, Fine Gael)
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I wish to ask about the IDA's relationship with our embassies in terms of sharing resources and improving performance. I raise this in the context of the multiplier effect and using the people we have on the ground. Is the IDA getting good help from the embassies in the BRIC countries?

Mr. Barry O'Leary:

Yes, we most certainly are. The embassies in the BRIC countries are very helpful. Embassies play a much stronger role in the emerging countries than would be the case in countries such as Germany, for example.

Eoghan Murphy (Dublin South East, Fine Gael)
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In terms of trade?

Mr. Barry O'Leary:

Yes. Ultimately, though, when we are dealing with the senior executives, we have subject matter experts who can talk to companies. They can talk the talk, which is very important. If it is a company in the technology sector, for example, we use experts in that field who can hold their own with anybody in the world. The same applies in the pharmaceutical sector. Having a representation role is helpful for certain things but at the end of the day, it is dealing with the C-level executives - either CEOs, CIOs or CTOs - which is important.

Eoghan Murphy (Dublin South East, Fine Gael)
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When it comes to the European markets, there would not be the same level of interaction with the embassies on trade issues. Is that correct?

Mr. Barry O'Leary:

No. Actually, the ambassadors in Paris, Germany and London, in particular, are very active. We have a dinner coming up in the Irish Embassy in London in the first week of October, for example. We are using the Embassy as a draw to try to attract 25 to 30 clients, with a mixture of existing and potential clients, particularly some whom we have found it difficult to access. We will do that, but it is not the main stream. We might organise one or two such dinners per year.

Eoghan Murphy (Dublin South East, Fine Gael)
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My last question relates to the IDA's relationship with the private sector in this area. There are a lot of successful Irish companies that are making connections with people all over the world. The Dublin Web Summit is one example. It brings a lot of people in and does a really good job of selling Dublin and Ireland a good places to locate and invest in. What is the IDA's relationship with such companies, and is there a sharing of resources?

Mr. Barry O'Leary:

The IDA is an exceptionally active participant in the Dublin Web Summit and in Founders, which is allied to it. We work very closely with Paddy Cosgrave and his team. It is great how he assembles so many entrepreneurs. We will have a number of people involved. Members of our team from around the world who deal with emerging companies are going to come back to Ireland for that event. We believe it is a great initiative.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I welcome Mr. O'Leary and his colleagues. I will begin with a number of general questions. Approximately 152,000 people are employed in IDA-backed companies located in Ireland. Does Mr. O'Leary have a comparative figure for the numbers employed outside Ireland by Irish companies? What is the relative balance between the two?

Mr. Barry O'Leary:

My understanding is that the figure is approximately 100,000 for Irish companies abroad. However, one must be careful in terms of comparing like with like. The business we are in involves companies coming to Ireland to engage in international activities. A lot of the Irish investment in the United States, for instance, is different. If one takes Cement Roadstone as an example, it employs 20,000 to 30,000 in the USA, but it is supplying cement to the US market and therefore it has to be located in the country. Such companies are not necessarily bringing the same degree of additionality in the economy. There is not much difference between the Mexican cement company and the Irish one, in that sense. Therefore, one is not comparing like with like.

Seán Fleming (Laois-Offaly, Fianna Fail)
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CEMEX is the American company.

Mr. Barry O'Leary:

I am not sure if it is American or Mexican.

Seán Fleming (Laois-Offaly, Fianna Fail)
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It is a Mexican cement company, based in Ireland. Is CEMEX not one of the IDA's clients?

Mr. Barry O'Leary:

No.

Seán Fleming (Laois-Offaly, Fianna Fail)
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So it is just here to do business in Ireland.

Mr. Barry O'Leary:

Yes, exactly, because if there is building going on, there is a captive market for cement and cement companies supply to that market. In the same way, Aldi or Lidl are coming in here to supply the market. I must be careful in what I say, but there is a finite market there. Our view is that such a market can be served by Dunnes, Superquinn, SuperValu or Aldi, and it is not of concern to us.

Seán Fleming (Laois-Offaly, Fianna Fail)
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People often forget that distinction. When they look at companies like CEMEX, an international Mexican cement company, they assume that it and other foreign companies are here because of the IDA, but Mr. O'Leary is saying that is not the case. Does he have any idea how many people are employed in foreign companies operating in Ireland that are not IDA clients?

Mr. Barry O'Leary:

We actually have an exercise going on at the moment to quantify that. The figure is quite substantial and could be in the order of 70,000 to 80,000. Tesco, for example, is a multinational company employing 15,000 people here. Ulster Bank also employs significant numbers of people. While such companies are not clients, that is not to say we do not interact with them, but our interaction is in the context of targeting international activities - in other words, things such as making Ireland the base for their international supply chain management, their IT systems, shared services and so forth. It is not that we do not deal with such companies; rather, we do not deal with them on their Irish market business.

Seán Fleming (Laois-Offaly, Fianna Fail)
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How can the IDA distinguish between those companies - for example, the banks and financial service providers? Some of them are based in the Irish market while others-----

Mr. Barry O'Leary:

Precisely, but we do not deal with them for their activities in the Irish market. We target their international business. We try to encourage them, for example, to set up new hubs here, whether that be a technology hub, an operations hub or something else.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I saw an article a year or two ago which suggested that foreign direct investment by Irish companies abroad is greater than foreign direct investment by overseas companies in Ireland. Is that correct?

Is the level of investment by Irish companies abroad greater than the level of foreign direct investment in Ireland?

Mr. Barry O'Leary:

It is very hard to get absolute accurate statistics. UNTAG, the organisation that gives the figures, indicates massive amounts in money transfers and financial transactions. I think far more money is coming into rather than going out of Ireland.

Seán Fleming (Laois-Offaly, Fianna Fail)
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What is UNTAG?

Mr. Barry O'Leary:

The United Nations Transition Assistance Group.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will Mr. O'Leary send us information on the figures?

Mr. Barry O'Leary:

They are freely available, but we will send them to the Deputy.

Seán Fleming (Laois-Offaly, Fianna Fail)
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A major part of Mr. O'Leary's role is to try to have some of the Irish companies that invest abroad locate their investment here. Obviously, the Kerry Co-operative facility in County Kildare is an example of a project that could have moved abroad.

Mr. Barry O'Leary:

That is handled by Enterprise Ireland. If the company is Irish-owned, Enterprise Ireland will deal with it.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I do not want to focus on the controversy about the payment of tax by multinationals. However, will Mr. O'Leary outline the level of engagement between IDA Ireland and the Department of Finance prior to the budget? Is there a structure in place for liaising with IDA Ireland?

I recall two minor issues that arose last year. A tax incentive was given to the employees of Irish companies abroad on business for a specified number of days in the year. There was also an arrangement whereby education fees of up to €5,000 per child would be paid to executives who relocated to Ireland. Who dreams up these measures and do they have a real effect?

Mr. Barry O'Leary:

The Deputy's first question relates to the staff of Irish companies posted abroad. That would not have come from us because IDA Ireland does not deal with Irish companies. There is a formal process in place on which we make a submission on our wish list for the budget, which naturally is a matter of public record. We do it mostly in conjunction with Forfás and Enterprise Ireland. We try to have a combined agency submission on issues we would like to have dealt with. That happens every year.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Is the process conducted in writing?

Mr. Barry O'Leary:

It is written.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Do the parties meet to discuss it?

Mr. Barry O'Leary:

We often meet officials from the Department of Finance.

Seán Fleming (Laois-Offaly, Fianna Fail)
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On the issue of paying education fees for the children of executives coming to Ireland-----

Mr. Barry O'Leary:

I am trying to think of the detail. I know there was provision for a tax exemption and a lower tax rate for mobile high earning individuals. I do not think the taxpayer would have paid for school fees, but the executive might have received a tax allowance for the children who were being relocated to Ireland. The take up of that measure has been relatively limited.

Seán Fleming (Laois-Offaly, Fianna Fail)
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That is what I would have expected. I wonder why we went through the hoo-ha.

Mr. Barry O'Leary:

That is not to say it would have no relevance. Again, the higher the level of activities one is trying to bring in to the economy, the higher is the economic benefit. In some industries such as aircraft leasing, for which Singapore has become a very strong location in offering individuals very attractive deals, one must make sure one is not excluding oneself from these types of investment.

Seán Fleming (Laois-Offaly, Fianna Fail)
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How much is paid to attract companies to invest in the regions?

Mr. Barry O'Leary:

I suspect we do not have that figure with us. We will come back to the Deputy with that information.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Is the figure large - is it in the single or double digit figures?

Mr. Barry O'Leary:

It is certainly over €10 million.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will Mr. O'Leary provide a breakdown between counties as to the level of inducements offered?

Mr. Barry O'Leary:

Yes.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I know that IDA Ireland concentrates on attracting companies to Ireland, not to individual regions. It is a victory to get companies to locate in Ireland, whether in Dublin or elsewhere, but does IDA Ireland have a strategy for counties where no companies have located in recent times? I am sure Mr. O'Leary knows I am from Portlaoise and that no jobs have been created in County Laois in the past 20 years. Other counties have similar problems.

Mr. Barry O'Leary:

As discussed earlier, companies make the judgment on where they want to locate. One must remember that we are competing for foreign direct investment with places such as Zurich, Munich, Paris and so on.

Seán Fleming (Laois-Offaly, Fianna Fail)
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For the regions that have not benefited from direct investment, what can be done to make them more attractive to investors?

Mr. Barry O'Leary:

We regularly meet the various county managers and their teams, as well as politicians, to discuss what can be done. The key challenge is what a region will do to make itself more attractive than another region. It could be related to road infrastructure and access. Some county managers and their county councils have been very good at promoting a more competitive offering in terms of capital contributions or development levies and infrastructure, as well as education. We tend to take the view that because of the motorway network, one does not talk about individual counties. Let me give an example. On Friday, 6 September I was in Carlow where Merck now employs almost 500 people and Unum now employs 100. One can locate in areas with facilities within a 45 minute commute; that is part of the reason we have that infrastructure. While facilities may not be located in an individual county, they are available within a reasonable commute.

Seán Fleming (Laois-Offaly, Fianna Fail)
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There are 22,000 people working in the pharmaceutical sector. IDA Ireland has done very well in bringing the pharmaceutical sector to Ireland, but when it comes to the HSE purchasing pharmaceuticals, it pays three to four times as much as what is paid for these products in Northern Ireland. A product that one will pay €7 in Northern Ireland will cost €30 in Dublin. It is my honest belief the Department of Health and IDA Ireland are afraid to tackle the pharmaceutical companies on what they are charging the HSE. I do not understand how a product can be produced in Ireland and sold to the National Health Service in the United Kingdom for a fraction of the price at which they will sell it to the HSE. I know IDA Ireland has the job of attracting companies to locate here and that the HSE is charged with negotiating the price of products. I understand from the proceedings of the Committee of Public Accounts that HSE personnel do not meet directly with company personnel to discuss price but rather meet a committee which represents the industry. Is there anything Mr. O'Leary can do to ease the burden on taxpayers when attracting pharmaceutical companies to Ireland in order that they charge the same price for their products in Ireland as they charge abroad? I will never forget an incident a few years ago when I used to wear contact lenses. Allergan Pharmaceuticals manufactures all of the products used and before the introduction of the euro, I had to pay IR£14. When I was on holiday in Brazil, I found the same product that had been manufactured in Westport, County Mayo and for which I paid for one quarter of the price.

I do not understand why the Irish pharmaceutical companies come to Ireland and charge the Irish customer three or four times the price that they charge for the product they make in Ireland, having shipped it half way around the world. What is Mr. O'Leary's view on that?

Mr. Barry O'Leary:

Negotiating pricing is not something in which we would be closely involved. While we would like to think we had all the pharmaceutical investment in the world in Ireland, a substantial number of companies are not here and the pricing applies equally to them regardless of whether they are in Ireland or not. The decision we are talking about is a major investment and we want to make sure that our mission is very firm on what we are out to achieve. Other people have to take on the responsibility for their particular missions.

Seán Fleming (Laois-Offaly, Fianna Fail)
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We will raise the issue of linking up between the IDA and the Department of Health. What we spend on medicines in Ireland produced by the IDA's client companies is a big item. Perhaps Mr. O'Leary can have a word with them at some stage.

Mr. Barry O'Leary:

I really do not think that is a role for the IDA.

Seán Fleming (Laois-Offaly, Fianna Fail)
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So Mr. O'Leary feels we cannot do anything on that.

There is a provision of €8 million for doubtful debts. What is that about?

Ms Regina Gannon:

We carefully monitor all debts on an ongoing basis. At the end of every year, we review the debtors and make a provision accordingly. We have made provision for a number of companies that are in liquidation at the moment-----

Seán Fleming (Laois-Offaly, Fianna Fail)
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Is that repayable grants that cannot be repaid?

Ms Regina Gannon:

-----and that provision has been there for a number of years. Some of it would be in respect of rent and would have nothing to do with grants.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I see the accounts have a 41% provision for impairment against costs in respect of the IDA's industrial property holdings. The total cost of the IDA's land, site development, industrial property and industrial property for accommodation is €463 million, and there is a total impairment of €190 million. Is that just for a pure reduction in value of that property of over 40%?

Ms Regina Gannon:

That is correct. The impairments in the years prior to 2012 were actually greater and that was a reflection of the land prices nationally at the time. It reduced to €15 million in 2012 because the impairments are actually tapering off due to the reductions in value. The impairment reflects the estimated recoverable value less the net book value.

Seán Fleming (Laois-Offaly, Fianna Fail)
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So Ms Gannon feels that there is a write-down of €190 million out of the €463 million. That is fairly significant. The taxpayer has had to write off €190 million worth of IDA land, sites and buildings.

Ms Regina Gannon:

When we look back, it is from 2008 when there was a significant reduction-----

Seán Fleming (Laois-Offaly, Fianna Fail)
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Can Ms Gannon talk me through the repayment application for the €68 million site? In 2009, the IDA agreed a charge over industrial land which was the subject of an uncompleted sale for €68.5 million. Where and what was that transaction? What is the outcome of that? Why did the IDA have to pay that money? What does it have at the end of it?

Mr. Barry O'Leary:

At the end we have a strategic site to attract a particularly capital intensive project into Ireland. We have found that in competing in the bio-pharmaceutical sector, we need to have large tracts of land with the infrastructure. If we look at north of Dundalk, around Dublin, Waterford, Cork and Galway, we have a number of these sites that are ready to go mainly for the bio-pharmaceutical industry and for companies like Merck and so on. That is why we assemble them over time.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Was this a specific site?

Mr. Barry O'Leary:

This is a site in Carrigtwohill in Cork.

Seán Fleming (Laois-Offaly, Fianna Fail)
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How big is the site?

Mr. Barry O'Leary:

I think it is 134 acres.

Seán Fleming (Laois-Offaly, Fianna Fail)
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A total of €68.5 million was spent on that.

Mr. Barry O'Leary:

Yes.

Seán Fleming (Laois-Offaly, Fianna Fail)
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It is still a green field. Is it grazing sheep at the moment? That is the kind of thing that is done when it is not being used.

Mr. Barry O'Leary:

Yes, but it would be one of the key sites we show on itineraries for these big capital intensive projects.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Would the IDA have outline planning for that to speed up the process if it was to attract a company?

Mr. Barry O'Leary:

We do not have outline planning on that site, as far as I know. We do have such planning in other locations.

Áine Collins (Cork North West, Fine Gael)
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I welcome Mr. O'Leary and his team. I congratulate them on their work and their continued commitment to Ireland in selling us abroad and bringing in such valuable jobs to Ireland. I have seen first hand the work that his team does hand in hand with the ambassadors, Enterprise Ireland and so on. If we could have one wish, it would be to have more resources to put more into that particular success.

There has been much talk about a talent pool in Ireland, especially in the IT sector and the gaming industry, which is a growing market here. We are competing worldwide for talent in that area, but we do not have enough of it at home because many people did not get into computer engineering over the last ten years. Even if they did, some of what they have done is well behind the curve of what is going on across the world. Is there an issue with the flexibility of the permit system that we need to bring people in who have this talent? I am very familiar with the permit system, but does it need to be more flexible, especially in respect of IT professionals?

Mr. Barry O'Leary:

There were changes made that would allow for 700 permits to be given. Our system is that when somebody is coming in, we provide a letter of support and it generally gets processed in a reasonable amount of time. The appropriate number for receiving work permits and visas is something that needs to be kept under review. It is important to have that flexibility to bring in people. By bringing in people, we are winning an overall investment and then we have the spin off in the local economy which is where a large number of local jobs come on stream.

Áine Collins (Cork North West, Fine Gael)
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We are also training the new talent coming up when we bring in the expertise.

Mr. Barry O'Leary:

Precisely. It also provides for an increase in numbers through conversion courses, JobBridge and so on. In particular, there will need to be more initiatives like the cloud computing programme between EMC and CIT in the Deputy's own constituency. In Athlone, Ericsson is working with 50 graduates on a special dedicated programme. There is much of that happening and a fair number of other initiatives being undertaken, but obviously there is more to do.

Áine Collins (Cork North West, Fine Gael)
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We have spoken about some of the emerging markets such as India. Indonesia has 250 million people and a growing market, but we do not have a footprint there at the moment as it is being worked out of Australia. The World Bank has spoken about developing countries in Africa and so on, and again we do not have any footprints down there. I appreciate there are issues with resources, but does Mr. O'Leary think it might be worth considering a joint venture with Enterprise Ireland down there, even though it might be at an early stage of development. These conversions can take some time, so if we had some footprint down there we would at least be looking at it. We often talk about our fantastic relationship with America and much of that is down to our own diaspora, but 40% of Australia is of Irish descent and I am sure there is a huge possibility for growth there as well. What are Mr. O'Leary's thoughts on that?

Mr. Barry O'Leary:

We have had somebody working on a part-time basis in Australia for a number of years, but from January we will be putting a formal presence into the Australian market. We visit a number of markets. People have been to Malaysia, to Israel and South Africa on one-off programmes and we work closely with Enterprise Ireland as well. We are co-located in a number of places around the world but we are not in some places due to different business reasons.

Anyway, I suppose there are a certain number of initial countries that we are putting effort into now and we cannot spread too thinly. There is a company going into Cavan from Indonesia, or perhaps I am mixing it up with Thailand. Anyway, there are individual projects that we deal with. It is something to keep under review, but I emphasise that we are rather stretched where we are at the moment and we would have a few priorities ahead of that.

Áine Collins (Cork North West, Fine Gael)
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Let us consider the sectors that are here. There is a good deal of talk at the moment about developing manufacturing in Ireland again. In the engineering sector, particularly steel engineering, Germany seems to be one of the markets that does not have space, and we in Ireland have a good deal of talent in that area. I wonder if more could be done in that area to bring some of the German companies into Ireland to set up plant here.

Mr. Barry O'Leary:

Does Deputy Collins mean manufacturing?

Áine Collins (Cork North West, Fine Gael)
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Yes, steel.

Mr. Barry O'Leary:

There are approximately 100 German companies in Ireland at the moment and two thirds of them are involved in manufacturing, particularly engineering. Many of them are what are called Mittelstand companies or family-owned companies, which can be sizable in their own right, and a number of them have substantial operations here. Kostal has approximately 800 people between Mallow and Abbeyfeale, while Liebherr in Killarney has between 500 and 600. However, it has proved rather tough to get manufacturing in the engineering sector here because of the competitive nature of it. In particular, much of the business is tied to the automotive industry or capital goods. A good deal of the German investment in automotive components is going to where the big plants are and many of the big plants are going into Slovakia, Hungary, the Czech Republic, Poland, etc. However, it is an area we continue to monitor and I believe Ovens has, thankfully, recovered competitiveness. There are some opportunities there and we have people working in the German market to try to make the most of them.

Áine Collins (Cork North West, Fine Gael)
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That is good to hear. I will ask one or two regional questions. Cork has been mentioned as a place that gets significant investment, and it does. However, as we all know, Cork is a large county. I come from north Cork, which does not get the same penetration, and I am keen to discuss that. We have EMC in Ballincollig and VMware, which is an amazing success story that would not be there otherwise. I know this because I have a close relationship with those involved down there. They give great credit to Mr. O'Leary and his team for what is happening down there, and the spin-offs that have resulted for Ballincollig have been incredible. The company has recently opened a new plant in Mahon. Macroom has Nutricia, and Millstreet is another success story. In the 1980s the IDA did a great deal of work there. It is a small town - the one that I live in - with only approximately 1,500 people. In the 1980s Apple came to Millstreet. Then the plant closed down. IDA Ireland came in and we now have ALPS there, which will celebrate 25 years in business this year. It employs approximately 600 people as well as some seasonal work. The spin-off to that area is phenomenal. It is an example of where a region works really well because of the commitment that exists. I was a small girl when the company came first and I do not remember all the details but my understanding is that one of our local people built the factory and it was a case of "If you build it, they will come." I am unsure whether that works all the time, but that was a good example of when it did. However, Kanturk is a complete black spot. There has been no investment there for several years. Our bakeries are gone. It is a major food and agricultural area and one would have thought that some areas could have been examined in that regard. I have been in touch with the Cork office about Charleville on many occasions and it is an area that has a good deal of engineering. One of the things we were asked to do by IDA Ireland was a skills survey. We have now completed that at a cost to the community of between €20,000 and €25,000 and we are getting support from the locals to figure it out. What will the next engagement be? Charleville is between Cork and Limerick. There are significant numbers of people in Cork and Limerick and therefore it has a good deal of potential given its location. How do we develop Charleville with an IDA Ireland footprint? I appreciate that when people come here to set up businesses we do not have a choice and cannot tell them where to set up. How can we sell some of these regions better? Now that we have carried out the skills survey, what is the next plan?

Mr. Barry O'Leary:

I imagine Deputy Collins will fully understand that it is impossible to have investments for each and every town or city. We are working at it. The question is what is the commute and the labour pool. The tendency is to go for larger population centres. There may be individual chances based on engineering capability. How many minutes is it from, say, Kanturk to Cork?

Áine Collins (Cork North West, Fine Gael)
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It is 45 minutes.

Mr. Barry O'Leary:

That is a regular commuting time throughout the country. It is not unusual to have to travel that far. What is the time to Limerick?

Áine Collins (Cork North West, Fine Gael)
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It is probably the same into Limerick, perhaps 50 or 55 minutes.

Mr. Barry O'Leary:

That is the principle. One will never populate each individual town. The question is can we get investment somewhere that can draw on the 45 minutes? If one is going from north Dublin to south Dublin it takes 45 minutes alone. That is not to say there would not be individual projects that we come across, but they tend to be in the more populated centres.

Áine Collins (Cork North West, Fine Gael)
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I am referring to the smaller investments and when they come in, not the big plants. Mr. O'Leary referred to doing a good deal of work with some of the small new high-tech companies coming out of New York. Would areas such as this be suitable for such projects?

Mr. Barry O'Leary:

For those projects in particular the age profile is very young and they tend to prefer to be in the centre of cities. They want to be in the docklands here and in downtown Cork rather than out in Little Island. That is the type of activity there.

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Is it agreed to dispose of the IDA Ireland financial statement 2012? Agreed. I thank the witnesses for coming along.