Thursday, 24 February 2005
As I indicated in response to similar questions previously, a number of developments will impact on the future role of Shannon Development. The most significant of these are the proposed relocation of the headquarters of Enterprise Ireland to Shannon as part of the decentralisation programme, the enterprise strategy group recommendation that Shannon Development disengage from industrial development functions and the establishment of an independent Shannon Airport Authority.
The new airport authority was incorporated in October. As I previously indicated, Shannon Development fully supports the decision to establish an independent airport authority and agrees it is vital to the economic development of the region. The company has further agreed on the need to refocus its activities on the airport with a view to generating business for the airport and to the use of its assets to support the airport authority, particularly in its early vulnerable years.
A number of options were identified by the working group established last July to examine the specific issue of how Shannon Development could best contribute to the development of the new airport and these remain under consideration. Shannon Development and the new airport authority have engaged in direct discussions on the matter and work under way on developing the business plan for the new airport authority will help inform the optimum relationship between the two agencies.
In light of these developments, the Shannon Development board has been asked to devise a new strategy for the company. I understand this exercise is at an advanced stage and the strategy will be submitted to me in the near future, following which I plan to have discussions with the board.
The Minister indicated he recommended that Shannon Development disengage from industrial development in the region. Has he identified who will replace its industrial development activities? While he stated that Enterprise Ireland and IDA Ireland would do so, as he is aware, the activities of the latter focus mainly on attracting foreign investment, while the former does not have a property base in the region. Shannon Development has good projects, including the e-towns programme, knowledge networks and Shannon Broadband.
The Minister stated that Shannon Development's assets should be used to support the airport authority in developing Shannon Airport. Shannon Development's rental income from its property in the Shannon free zone is approximately €8 million per annum. I understand that it requires €30 million to upgrade its properties in the zone. How will this affect the activities of Shannon Development? Does the Minister envisage a role for the company?
The recommendation that Shannon Development disengage from industrial development functions in the region was made by the enterprise strategy group rather than by me. The Shannon Airport Authority and Shannon Development entered into direct discussions on this matter in late 2004 and these are ongoing. It also employed a consultant to determine with greater precision costing elements and funding issues vis-À-vis the airport and Shannon Development and the likely revenue stream available.
I have held meetings with several Ministers with a direct interest in this question. We are examining the overall context for Shannon on the aviation and industrial sides and endeavouring to produce a solution which will have the support of all concerned. We are anxious to achieve consensus on the future of Shannon Development in co-operation with local interests. That is the current position. The process is still under way and involves the Ministers for Transport and Arts, Sport and Tourism and the Minister of State at my Department, Deputy Killeen, who, as a representative for the area, has a particular interest in this matter and particular insights to offer, as does the Minster for Defence, Deputy O'Dea.
Is it not the case that continuing uncertainty is having a negative impact on the Shannon region? Last week, Pan European Communications closed down with the loss of up to 100 jobs in the region. What role does the Minister envisage for Shannon Development? I believe the answer is "none".
The Minister referred to Enterprise Ireland, which will not move to Shannon in the near future as it does not feature in the first or second round of decentralisation. He may have commissioned many reports and held many discussions, but an air of gloom hangs over the region as regards the regional focus for Shannon Development. On what should the company focus?
No air of gloom should hang over the area given that the job market in the mid-west is improving. Shannon Development participated admirably in the recent trade mission to China. I attended a very successful function it hosted for the Chinese authorities and was impressed by its presentation.
Shannon Development was part of the Irish trade mission. It gave a good presentation on the issue of regional development in which the Chinese have a historical interest. The ultimate objective is to get the best package to guarantee increased sustained employment in the mid-west region.
The change in the status of Shannon Airport and the establishment of an independent Shannon Airport Authority is a significant development for the area which was broadly welcomed by business and industrial interests in the region. The key issue is the necessity to underpin it in future because Shannon Airport is probably the most important infrastructure in the region. Issues must still be worked out and this is being done. I am allowing discussions to take place at local level and await responses from other Ministers, particularly the Minister for Transport, before finalising the issue.