Micheál Martin (Cork South Central, Fianna Fail)

I move: "That the Bill be now read a Second Time."

In accordance with the recommendations of the enterprise strategy group and the new mandate for Shannon Development, the indigenous industry support functions carried out by Shannon Development, under delegated authority from Enterprise Ireland, will revert to Enterprise Ireland on 1 January 2007. The reversion of these functions will also involve the transfer of approximately 40 staff from Shannon Development to Enterprise Ireland.

The purpose of this Bill is to provide the legislative basis to designate the transfer of the individual staff members concerned and provide a statutory guarantee to the staff who are so designated that their pay, conditions of service and pension arrangements shall not be diminished by virtue of the transfer.

The context for the new arrangements for indigenous enterprise is that by the start of 2005 a range of developments had occurred which necessitated a review of the role of Shannon Development. These included the enterprise strategy group recommendation, accepted by Government, that Shannon Development's enterprise development functions should be brought within the remit of the national enterprise development agencies; the establishment of an independent Shannon Airport Authority; the proposed relocation of the headquarters of Enterprise Ireland to Shannon as part of the Government's decentralisation programme; the transfer of responsibility for Shannon town from Shannon Development to Clare County Council; and the abolition of the licensing requirement for companies setting up in the Shannon Free Zone.

Against the background of these developments, I asked Shannon Development to submit proposals to me for a new strategy for the company. These proposals, which included exiting the role of support for indigenous enterprises, are reflected in the new mandate I have authorised for the company. Shannon Development will now have a more focussed strategic role on the broader regional economic development of the Shannon region. The company will work in partnership with key public and private sector organisations in the region to identify and bring forward new initiatives, projects and programmes to maximise the development potential of the region and help create a viable counter-pole to the more developed eastern region. In this context I have specifically instructed the company to give priority to addressing the needs of less developed parts of the region.

Shannon Development will use its extensive property portfolio, located throughout the region, as a lever to drive the delivery of the economic development infrastructure that is essential for regional development. The company will also continue to work closely with Enterprise Ireland and IDA Ireland in identifying and addressing the property needs of both indigenous and FDI companies and in promoting the Shannon Free Zone as a location for foreign direct investment. The company's activities as the regional tourism authority for the Shannon region will also continue to have a key role to play in the economic development of the region.

I have recently approved a new three-year corporate plan for the company which reflects the terms of the new mandate. The specific activities that Shannon Development will undertake will be selected on the basis of its potential to generate significant economic impact locally, regionally and nationally. For example, included in the plan are projects such as the e-towns initiative, designed to build the knowledge economy of the Shannon region, the development of the Kerry deepwater zone and the regeneration of the Shannon Free Zone as a location for high value added, knowledge age investment. Shannon Development is uniquely placed to meet the challenge of regional economic development and specifically to maximise the development potential of the Shannon region in line with the objectives of the national spatial strategy. For more than four decades, initiatives developed and delivered by the company have been adopted and reproduced successfully in Ireland and internationally. With the more focussed remit that it now has, the company will be in a position to meet the new challenges the region faces.

The reversion of responsibility for indigenous enterprises support to Enterprise Ireland will also provide a more logical delineation of responsibilities between the two agencies in the mid-west region. As the support programmes currently provided by Shannon Development to enterprise clients in the region are operated under delegated authority from Enterprise Ireland, and provision has been made for Shannon Development staff to transfer with the functions, it is anticipated the transition to the new arrangements will be seamless from the perspective of the company's clients. As Enterprise Ireland is a significantly larger organisation than Shannon Development, the staff who will transfer from Shannon Development will consequently have access to more career development opportunities.

I will now briefly outline the main provisions of the Bill which are set out in a new section 21A to the Industrial Development Act 1993. These provisions are based on numerous precedents for transferring staff between statutory bodies. Subsection (1) of the new section contains a number of definitions. Subsection (2) is an enabling provision. It provides legislative authority to designate the transfer of staff from Shannon Development to Forfás. Forfás is the legal employer of the staff in the three agencies established under the Industrial Development Acts, namely, IDA Ireland, Enterprise Ireland and Science Foundation Ireland. Subsection (3) provides that staff designated for transfer by the Minister will be appointed to the staff of Forfás. Section 3 of the Bill subsequently amends the Second Schedule to the 1993 Act to include staff transferred from Shannon Development, in the categories of staff that Forfás may second to the agencies. Subsections (4) and (5) of the new section contain the terms of the guarantee that is being provided to the Shannon Development staff who will be designated for transfer. Specifically it provides that staff who are designated for transfer may not receive a lesser scale of pay or be subject to any less favourable conditions of service than they were entitled to in Shannon Development. The superannuation benefits of the staff concerned may not be less favourable than those to which they were entitled to in Shannon Development.

It has been normal practice to include the type of provisions contained in this Bill in legislation providing for the reorganisation of State agencies. In this instance no new body is being established and both Enterprise Ireland and Shannon Development will continue to operate as separate agencies, each with its own distinct remit.

Shannon Development and Enterprise Ireland are well advanced in identifying the number of posts to be transferred. Shannon Development staff and their representatives are engaging positively with the process and I understand that a strong level of interest is being expressed by staff in transferring to Enterprise Ireland. Enterprise Ireland has also recently announced that it intends to move both its regional development headquarters and the newly established city and county enterprise boards unit to Shannon. Enterprise Ireland plans to have interim office accommodation in Shannon to accommodate both the Shannon Development staff and the regional headquarters staff by mid-2007. It is anticipated that approximately 70 Enterprise Ireland staff will transfer into this new accommodation as soon as it is available.

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