Noel Ahern (Dublin North West, Fianna Fail)

The Deputy has the gist of the situation and I do not think it has developed any further. I have a rather lengthy reply but I will summarise parts of it.

The Deputy knows the background to the scheme. It is a tax incentive scheme aimed at encouraging the development of tourism infrastructure in the mid-Shannon area. Legislative provision for the scheme was made in this year's Finance Act. In the lead-up to budget 2006 a submission proposing a scheme such as this was received from Shannon Development. This was followed by various other reports and, based on the contents of these reports, the Minister for Arts, Sport and Tourism considered that Ireland's inner core appeared to be relatively underdeveloped in terms of tourism but did have sound tourism potential.

The designated areas involved in the scheme are in a corridor of about 12 kilometres on either side of the river stretching from roughly the bottom of Lough Derg to Lough Ree. The scheme is limited to a period of three years, within which qualifying capital expenditure may be incurred. Projects wishing to avail of relief must get approval in advance and must also obtain formal certification after completion. As the Deputy mentioned, the approval and certification will be given by a special board established for the purposes of the scheme and will be carried out in accordance with guidelines to be issued by the Minister for Arts, Sport and Tourism. The nature of the tourism infrastructure buildings and structures which may qualify under the scheme will be also set out in these guidelines.

Generally, it is proposed that the scheme should concentrate on non-accommodation tourist infrastructure and facilities of a capital nature such as marinas and mooring or docking facilities, leisure centres, sports facilities such as equestrian centres, adventure sport facilities or sailing schools, sports facilities such as golf clubs — but not golf courses, as no capital allowance applies to land — eco-tourism facilities, education and cultural tourism facilities including interpretative centres, health farms and spas, or heritage houses and gardens. Certain buildings, such as those that facilitate gaming or gambling, are specifically excluded from the scheme, as are licensed premises, but not restaurants. Tourism facilities that already qualify for capital allowances, such as hotels, guesthouses and holiday hostels, are also excluded. Accommodation facilities provided as part of a qualifying tourism project may qualify for relief, but expenditure on such accommodation facilities cannot be more than 50% of the overall expenditure on the project or cannot be more than the expenditure on non-accommodation facilities in the project.

Relief will be available over seven years for construction and refurbishment expenditure incurred in the qualifying period at the rate of 15% per annum in years one to six and 10% in year seven. In the case of refurbishment, the qualifying expenditure must exceed 20% of the market value of the property before work commences. In order to comply with the relevant State aid rules, only 80% of the construction and refurbishment expenditure will qualify for relief in areas which are not in the BMW region.

As the Deputy said, the scheme will be commenced by Ministerial order. However, certain steps must be taken before the order can be signed. The relevant guidelines must be drawn up and agreed, the scheme must be approved by the European Commission and the certification board must be established. The development of guidelines has been the subject of ongoing consultations between the Department of Arts, Sports and Tourism and the Department of Finance. These guidelines and accompanying application forms are now at an advanced stage and will be completed shortly. I am hopeful that EU Commission approval will follow on foot of notification of the scheme with the completed guidelines.

I appreciate the Deputy's point about Portumna Castle, which is not part of the scheme, and the money that was spent over a three-year period. I could make inquiries within the Department about this. The Deputy would wish this building to qualify for the scheme. Negotiations are continuing, although they have been slower than expected. It is expected that things will be wrapped up fairly soon.

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