Written answers

Wednesday, 29 October 2008

Department of Enterprise, Trade and Employment

Industrial Development

9:00 pm

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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Question 188: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her proposals to reduce the grant-aid to Shannon Development in 2009 for grants payable to industry; the implications of this decision for Shannon Development and for industries located in the mid-west region; and if she will make a statement on the matter. [37017/08]

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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Question 189: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her proposals to reduce the grant-aid to Shannon Development in 2009 for administration and general expenses; the implications of this decision for Shannon Development; and if she will make a statement on the matter. [37018/08]

Photo of Mary CoughlanMary Coughlan (Donegal South West, Fianna Fail)
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I propose to take Questions Nos. 188 and 189 together.

Shannon Development, in common with all Government Departments and state agencies, were required to effect specified levels of savings in their Pay and Administration expenditure for 2009. All of Shannon Development's Pay and Administration costs are met from the Company's own resource income, generated mainly from its management of state property assets in the mid-west region. While there is a nominal provision in my Department's Estimate for Shannon Development Pay and Administration there has been no requirement to draw down funding from this source for the past ten years or so.

Shannon Development has nevertheless been asked to implement necessary savings in relation to pay costs, consultancy/advertising etc. The benefit of these savings, estimated at €1.3m would, in the normal course, accrue to Shannon Development rather than the Exchequer. The Company has accordingly been asked to use these savings to fund grants to industry which would otherwise require funding from the Exchequer. My Department is in consultation with the Company with regard to how the necessary savings can be achieved.

My Department's Estimate provides for funding for Shannon Development to grant aid industry in Shannon Free Zone. Expenditure for this purpose in 2009 had been forecast at €2m in the Capital Envelopes exercise and the Exchequer provision for 2009 has been now reduced to €700k. Given that Shannon Development has been asked to make up this amount from own resource income, there will be no reduction in the level of funding available for this purpose. In the event that a major new project or expansion requiring significant levels of funding comes on stream, my Department, in consultation with Shannon Development will, of course, explore ways to meet this need. In the circumstances, I am satisfied that these measures will not impact adversely on Shannon Development's ability to deliver on its mandate or on industries located in the region.

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