Dáil debates

Wednesday, 24 October 2007

3:00 pm

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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Question 79: To ask the Minister for Enterprise, Trade and Employment the amount of grants, aids or other financial assistance provided by the Exchequer to a company (details supplied); if these moneys have been recovered; and if he will make a statement on the matter. [25374/07]

Photo of Deirdre CluneDeirdre Clune (Cork South Central, Fine Gael)
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Question 95: To ask the Minister for Enterprise, Trade and Employment the discussions he has had with IDA Ireland and a company (details supplied) regarding its development and subsequent withdrawal from the facility in Carrigtwohill, County Cork. [25430/07]

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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Question 108: To ask the Minister for Enterprise, Trade and Employment when he, his Department or any of the State agencies under the aegis of his Department first received an indication that a company (details supplied) was indefinitely postponing the project in east Cork; the contact or communications he, his Department or any of the State agencies under the aegis of his Department has had with the company since its announcement to indefinitely postpone the plant; and if he will make a statement on the matter. [25455/07]

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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Question 112: To ask the Minister for Enterprise, Trade and Employment the action being taken by him and by the enterprise development agencies to ensure the creation of jobs in east Cork, an area which has been particularly badly affected by job losses in recent years in view of the announcement by a company (details supplied) that it is postponing indefinitely its plans to come to Carrigtwohill, County Cork. [25412/07]

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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Question 132: To ask the Minister for Enterprise, Trade and Employment if he, his Department or any of the State agencies under the aegis of his Department has been given an indication from a company (details supplied) regarding the future of the site in east Cork; if he will provide a breakdown of the expenditure to date by local authorities, State agencies or any Department on works, grants and so on connected with the development of the site; if there is a planned future expenditure regarding same; and if he will make a statement on the matter. [25456/07]

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 79, 95, 108, 112 and 132 together.

As stated in my previous reply to the House on this matter, I was disappointed to hear about the decision by Amgen on 3 October last that it was to indefinitely postpone its proposed development of the Carrigtwohill site. On 15 October last detailed discussions were held in California between myself, the Secretary General of my Department, senior IDA Ireland personnel and senior corporate executives from the company.

With regard to the financial assistance provided to the project by the Exchequer, a total of €4 million in IDA Ireland grants has been paid to the company to date. While IDA Ireland has not sought repayment of IDA Ireland grants to date, the company is obliged to repay the grant in its entirety under its legally binding agreement with IDA Ireland in the event of the project not proceeding.

I have no function in regard to local authority expenditure. However, I understand that at a meeting held on Thursday, 9 October, Amgen confirmed to Cork County Council that it will reimburse the council for costs incurred by the council on works relating to the site. The company indicated that it expected to retain the site. As stated in my earlier reply, it confirmed that to me as late as last week. The county manager has also confirmed to me that he had fruitful discussions with Amgen on the infrastructural works. As stated earlier, the decision by Amgen was based purely on developments relating to its global business and is in no way reflective of the business environment in Ireland or of the high calibre staff it had hired.

IDA Ireland is actively promoting the greater east Cork region to prospective investors across the full range of IDA Ireland targeted sectors, such as pharmaceuticals, medical technologies, information and communications technologies and internationally traded services via its network of overseas offices and project divisions. The agency has seen the emergence of an economic corridor along the N25 with the initial development of Little Island many years ago followed by new developments at Eastgate, Fota Business Park, Carrigtwohill and Midleton.

IDA Ireland has also been instrumental in attracting additional client investment to the area with the development of the IDA Ireland Business and Technology Park in Carrigtwohill. The availability of quality property solutions in the east Cork area has proved attractive to visiting IDA Ireland clients.

There are currently 133 IDA Ireland assisted companies in County Cork employing almost 20,000 people. The corresponding figure a decade ago would have been 10,000. Cork city and county have benefited greatly from a number of important investment announcements this year which demonstrates the attractiveness of the greater Cork area as a location for inward investment by existing companies already located there and new overseas client companies choosing Cork as their location of choice.

Cork has seen consistent investment by new companies and reinvestment by existing companies in recent years in the pharmaceutical sector. The investment by GlaxoSmithKline of €250 million over five years in its production site at Currabinny followed the establishment of a research project in August 2006 into gastrointestinal diseases, in collaboration with the Alimentary Pharmabiotic Centre in UCC, which involved an investment of up to €13.7 million. Cork as a location was also endorsed by Eli Lilly with its intention to invest €400 million over five years in a biopharmaceuticals manufacturing facility at its existing site in Dunderrow, Kinsale and byPepsiCo Inc. with the establishment of its worldwide concentrate headquarters.

I am confident the policies being pursued for Cork city and county by the development agencies and by Government will continue to pay dividends in terms of investment and jobs for the region.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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Members on this side of the House are not seeking to play politics with this issue but we question, as is our right, the decision by Amgen and the Government's response to it. The company has had two postponements. On 15 October, the Minister for Enterprise, Trade and Employment, Deputy Micheál Martin met with Amgen. The people of Carrigtwohill and the region want to find out what the future holds for Amgen. Is it in a position to state whether it will proceed with the plant? If anybody is to be accused of playing politics with this issue it is the members of the Minister's party and his backbenchers.

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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The position is as I have stated. The company has not changed from its position, as articulated on 3 October 2007; in essence it has postponed the project indefinitely and is either redeploying or laying off staff. Prior to 3 October it was employing people and was planning and designing for the biopharmaceutical plant at Carrigtwohill. The company decided, however, it wants to hold on to the site. I do not wish to raise expectations one way or the other.

IDA Ireland would have pursued Amgen for quite a number of years. We have almost all the household names in the pharmaceutical and biopharmaceutical sector, but those we do not have, we pursue to get them to invest in Ireland. We won the Amgen company, having beaten the competition. Countries put up a great deal of competition to get biopharmaceutical companies to locate in their country, because the projects are very big in scale and there is a good deal of fixed investment. One can be fairly sure of the long-term prospect once the company locates in an area. We will continue——

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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A number of Deputies are offering.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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When did the Department of Enterprise, Trade and Employment first become aware of problems with Amgen? Were warning bells ringing in the Department or in State agencies when some of the drugs that Amgen had on the market were withdrawn from the US Medicare and Medicaid services in March? Did warning bells sound when the stock plummeted and it clearly ran into financial difficulties? The Minister postponed a sod turning ceremony in April; were the warning bells ringing at that stage? Am I correct in stating there is an advance warning system in the Department? Did that kick in at any stage and, if so, when? If not, why not? The Minister stated that the grants will be repaid; is there a timescale for the repayment of the €4 million advanced by the IDA?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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There is an ongoing early warning system in the Department but that is dependent on information from the companies themselves. We maintain contact with the companies but corporate headquarters do not always tell people lower down the hierarchy of a business about the decision they are soon to announce. Amgen made an announcement in April. The Amgen personnel travelled especially to Ireland to meet and communicate its decision which at that stage was to stagger the project out to 2012. Many people thought this made sense because of the extraordinary rapidity of the project, with construction timelines and so on, which was even faster than the Johnson & Johnson project in Ringaskiddy. The Amgen personnel raised some of the points made by Deputy Stanton, such as the falling share price and they reassured me that this was something they could deal with as it was a cash rich company and it was definitely going ahead with the project.

Deputy Stanton may not have been in the House when I stated that the executive vice-president said to me: "Do you honestly think that we would have proceeded post April to continue to plough resources into the company; to continue to employ people and pay salaries and to continue to employ people to design the plant if we were not going ahead with it or if we were postponing it indefinitely?" It was obviously a fluid situation. The company was committed to the plant but the situation has not improved for it in the interim with the difficulties with the FDA and so on. It is fair to say that all companies in this area go though periods of volatility; as we know from other companies, the sector is prone tothat.

On the question of the grant, there is no issue with the company on any of the matters. The company has been upfront and our strategy would be to keep the door open. I will say no more than that or I will raise expectations. There are clear legal obligations. It is only a month since the company made its announcement and indicated that it wanted to hold on to the site.

Photo of Arthur MorganArthur Morgan (Louth, Sinn Fein)
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Will the Minister indicate if he has a timeframe in mind as to when he might begin to pursue Amgen for the repayment of moneys advanced by the State agencies? I understand that while there is a significant chance of the development going ahead, the Minister would not want to pursue the company, but has the Department considered a timeframe? Would the Minister consider giving equivalent incentives to indigenous industry because clearly as my colleagues in Cork will testify, people are very anxious to ensure that employment opportunities are created?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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Today we announced the Enterprise Ireland strategic review for the next three years, which clearly illustrates the range of supports that will be available to indigenous Irish companies to grow, develop their research capability and become international.

This is not about pursuing Amgen. That is not in the spirt of the relationship. There are set procedures and processes in play that determine when all these issues are resolved between the IDA and its client companies. I have no reason to doubt that they will come into play in the context of what may emerge.

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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I have two questions. I preface my remarks by saying that nobody holds the Minister responsible for the problems that Amgen may have getting Arnest recognised by the FDA.

In the period between April and June, did the Minister or IDA Ireland receive any early warning, were there suggestions the project could be scuppered or was the company put on a hot list? In regard to ownership of the site, is the Minister satisfied that Amgen is retaining site ownership and, if so, does that preclude IDA Ireland seeking alternative investors for this serviced site, which was carried out largely at the expense of the taxpayer, albeit with a refund from Amgen?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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It is not largely at the expense of the taxpayer.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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What about the €4 million?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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This is a billion euro project. Let us be very careful. We have been very transparent, whereas normally we take a more confidential stand on the supports we give companies. We have a range of sites for potential investment. The Carrigtwohill site was developed specifically because Amgen had a view as to where it would locate. We offered a number of locations, and when this site was agreed with the company, the county council facilitated the provision of the site by rezoning it for major industrial facility that would bring significant jobs and investment to the region. Let us not forget the big picture and the spirit in which we engaged with Amgen. I do not know what the ultimate agenda is, but it does not impair the capacity of the IDA to attract investment into the Cork region. There are other sites that can host biopharmaceuticals. In response to the Deputy's question, I am happy that Amgen is holding on to the site. IDA Ireland is also happy that Amgen is holding on to the site because as I stated earlier we want to keep the door open. This business is volatile and cyclical and it changes. It is too early to close the door on the site or the company.

Many of the works were coming on stream in any event. The Amgen project merely accelerated a significant degree of utilities which the county council had put in. That is good news for the east Cork area. The Cork area strategic plan, as developed by Cork County Council and Corporation, identified east Cork as a growth area. Therefore, utilities are important there. It is a valuable site and is now zoned for major industrial activity. If Amgen does not develop it someone else will.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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We all accept the vagaries of the international market, that negotiations are delicate and that landmark projects of this nature sometimes do not proceed. If Amgen is retaining ownership of the site, the people of the region will want to know why it is doing so when they have postponed the project twice. Is the Minister continuing negotiations with Amgen? Will Amgen make a final decision on its intentions in a reasonable time? The people of the region want to know where Amgen is going? If it does not locate within the site will someone else do so?

Given that €4 million has been expended to attract this industry, a legitimate question hangs over the use of taxpayers' money to attract industry. The Amgen project could be used as a benchmark for foreign direct investment projects throughout the country and for global trends in industries of that nature. If the global financial and economic infrastructure is changing and Amgen can make a sudden decision of this nature, questions must be posed regarding the nature of foreign direct investment throughout Ireland. That is why we are asking these questions.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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Is the Minister saying the only early warning system his Department depends on comes from corporations themselves? In March, April, May and June when Amgen products were experiencing all kinds of problems, did no one in his Department alert him to the problems within the company or to the possibility that the project might not go ahead? Is he aware that these problems were spoken of throughout east Cork where everyone was saying Amgen was gone? Did no one in his Department raise with him the possibility that the project might not go ahead?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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I met representatives of the company in April for the tenth time. They reiterated clearly and determinedly that they were going ahead with the project.

Photo of Seán SherlockSeán Sherlock (Cork East, Labour)
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When did Deputy O'Keeffe meet them?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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In August, the company issued a public statement declaring it was going ahead, despite rumours. One cannot work on the basis of rumour machines.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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Did the Minister depend on that statement from the company?

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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No. IDA Ireland works with companies and has personnel who work with companies in California, the east coast of America, Japan, Germany or wherever they are located. We have IDA Ireland offices whose personnel liaise with companies in a tough competitive world.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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So, no one raised the issue.

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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That is how things work and there is no mystery here. Representatives of the company flew into Ireland in April and assured everyone they were going ahead.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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They postponed the sod turning ceremony.

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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It would have been totally inappropriate to hold a sod turning ceremony on the day the company announced that people were being laid off.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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No one told the Minister.

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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I am telling you what was said. I am not the corporate headquarters of Amgen, nor is IDA Ireland.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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So much else is happening out there.

Photo of Micheál MartinMicheál Martin (Minister, Department of Enterprise, Trade and Employment; Cork South Central, Fianna Fail)
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As late as August, the company said it was going ahead with the project and was making no deviation from its plans. There is no mystery. Companies make decisions. In some instances they communicate those decisions to IDA Ireland and in others they do not. In my experience, when one is alerted to a company closure one is alerted very late in the day and the company always insists on first communicating with staff. That is how it works.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Minister of State, Department of Education and Science; Cork East, Fianna Fail)
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That is how things work in the real world.