IDA Ireland: Annual Financial Statements, 1996-1997.

Mr. S. Ó Cofaigh (Assistant Secretary, Department of Arts, Heritage, Gaeltacht and the Islands) and Mr. R. Long (Assistant Secretary, Department of Enterprise, Trade and Employment) called and examined.

The Committee of Public Accounts will deal with Údarás na Gaeltachta: Annual Financial Statements, 1994-1997, and IDA Ireland: Annual Financial Statements, 1996-1997. I draw the attention of witnesses to section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, and the rights contained therein. I welcome Mr. Ruán Ó Bric from Údarás na Gaeltachta.

Mr. Ó Bric

I am accompanied by Antóin Ó hIoruaidh who is in charge of financial services, and John Ó Labhraí, deputy chief executive, who is in charge of industrial development. I am also accompanied by Gearóid Breathnach who is our financial controller.

I welcome Sean Dorgan, chief executive, IDA Ireland.

Mr. Dorgan

I am accompanied by Martin Burbridge, chief accountant.

I also welcome Mr. Sean Ó Cofaigh, Assistant Secretary, Department of Arts, Heritage, Gaeltacht and the Islands, and Mr. Ronald Long, Assistant Secretary, Department of Enterprise, Trade and Employment.

Mr. Long

I am accompanied by Mr. Bill Brandon and Ms Marie Dempsey.

I welcome Mr. Michael Conroy from the Department of Finance. I call on Mr. Colm Dunne, Director of Audit, Office of the Comptroller and Auditor General, to introduce the two accounts.

Mr. Dunne

Má thoileann sé leis an choiste, tógfaimid na ceithre bliana le chéile sa ráiteas seo.

Cuireadh Údarás na Gaeltachta ar bun ar 1 Eanáir 1980 faoi réir Acht um Údarás na Gaeltachta, 1979. Is é aidhm an tÚdaráis ná eacnamaíocht na Gaeltachta a fhorbairt ionnas an Gaeilge a chaoimhniú agus a leathnú mar phríomh teanga an réigiún. Tá leagan amach na ráitis airgeadais athraithe i 1997 chun iad a chur ar an t-aon seasamh le eagraíochtaí forbaithe Stáit eile.

Tá an Árd-Reachtaire Cúntas agus Ciste freagrach as ucht an iniúchadh na ráitis airgeadais. Is é bharúil iniúchta do na blianta faoi bhráid ná gur choinnigh Údarás na Gaeltachta leabhair cuntais mar ba chuí go réitíonn an chlár comhardaithe leo, go dtugann na ráitis airgeadais léargas fíorcheart ar staid cursaí an tÚdaráis ar dáta an chlár comhardaithe agus ar ioncaim agus chaitheachas agus ar shruthairgead don bhliain dár chríoch ar an dáta sin.

De réir na ráitis airgeadais, d'íoc an Údaráis £55 milliún i ndeontais idir 1994 agus 1997. Sa tréimhse chéanna do mhéadaigh sócmhainní glan an tÚdarás ó £83 milliún go £104 milliún. Is é cúis leis an méadú seo ná an méadú i sóchmhainní dochta ó £72 milliíun go £92 milliúin, agus an méadú ins na infheistíochtaí ó beagnach £11 milliúin go beagnach £13 milliúin.

Tá an iniúchadh don bhliain 1998 beagnach chríochnaithe agus tá súil go mbeidh an tuarascáil iniúchadh eisithe i gceann cúpla seachtain.

The Industrial Development Agency Ireland was established on 1 January 1994 following the restructuring of the Industrial Development Authority and Eolas. The objective of the IDA is to create employment by influencing foreign investors to start or expand business enterprises in Ireland. Its powers for the promotion of inward investment have been delegated through Forfás, the body in which the State's legal powers for industrial promotion and technology has been vested.

On 1 January 1996 the investments in property vested in Forfás on the dissolution of the IDA and Eolas were transferred to the IDA and Forbairt at the value stated in the Forfás 1995 audited financial statements. During 1996 a review of the industrial property portfolio was undertaken by the IDA and the value of the portfolio was reduced downwards by £10.5 million to take account of a permanent diminution in value. The reduction in value of the industrial property was a major contributing factor to the negative outturn of £9.6 million on the agency's operating account for 1996.

In 1997 the agency returned an operating surplus of £3.5 million. Net income arising in the year from the disposal of industrial property amounting to £10.95 million was repaid to the State on the instructions of the Departments of Enterprise, Trade and Employment and Finance.

The Comptroller and Auditor General is responsible for the audit of the agency's financial statements under the Industrial Development Act, 1993. For each of the years under review the audit opinion has been that proper books have been kept, the balance sheet is in agreement with them and the financial statements give a true and fair view of the agency's affairs of the balance sheet date and the income, expenditure and cash flow for the year then ended. The 1998 audit has been recently completed with satisfactory results.

Mr. Ó Bric

On behalf of my colleagues and the organisation, I thank the committee for giving us this opportunity to discuss our financial results and our activities over the last four years. To set the context, given our broad mandate, we are charged with the economic, social and cultural development of the Gaeltacht. This mandate brings us into close contact with every aspect of Gaeltacht life. The broad nature and extent of this involvement and its impact on those communities can be seen in our annual reports.

To simplify our mandate, it is to help the people of the Gaeltacht to achieve their full potential in the language of their community. Socio-economic development must take account of unique linguistic and cultural considerations. It is a distinct community, not by its people, location or geography but by virtue of the language. We believe the region's distinctiveness, the basis for its identity, is a fundamental factor in sustaining its economic and social viability.

Various sectors of private business are the primary wealth creators and the Gaeltacht's economic vitality depends in large measure on their performance. The bulk of our funding over the four years under review would be directed towards financing mobile investment and the development and expansion of existing businesses. I acknowledge the considerable help and support of the IDA in helping us to secure those projects.

Over the period in question, employment grew by one third to 7,850 people employed full time. These results reflect the positive impact of the favourable economic circumstances which prevailed in that period. Part-time employment also increased by one third. This is an important aspect of economic development in the Gaeltacht, where families in coastal and rural communities often depend on a stream of income. Sometimes part-time jobs are more important than full-time jobs.

At the end of the period approximately 28 per cent of those at work in the Gaeltacht were employed in industry. This is a very high percentage for a rural area, certainly by reference to the sectoral profile in the more developed areas and economies where the service sector is growing rapidly in contrast to the decline in industrial employment.

There are some major challenges facing the west and the Gaeltacht in the years to come. One is the need to develop a service sector to meet the job aspirations and qualifications of younger people. Another major challenge is to improve the competitiveness of the existing industrial base, a large part of which involves low to medium skill employment. There have been attempts in the past four years to diversify the local economy and focus on non-industrial sectors such as cultural tourism, media maraculture and projects which are environmental in nature.

Mr. Dorgan

The accounts for the years 1996 and 1997 set out the State's investment in promoting inward investment and achieving economic results. In those two years, and also in 1998, there have been very good results from inward investment as well as from the broader economy. Job creation in IDA-backed companies in the two years in question increased by 8 per cent and 10 per cent respectively. There was a further increase of 8 per cent in 1998.

We aim for that unprecedented success to continue in future years but with a change of emphasis. As an organisation it will be necessary for us to contribute to the Government's aim of better regional development, particularly better regional distribution of inward investment, and to increase continually the quality provided by foreign investment projects in Ireland. IDA-backed companies employ 115,000 people directly. Those companies spend £8 billion per year in the Irish economy and they export goods and services worth £25 billion per year. The grants paid to IDA-backed companies in 1998 amounted to £137 million, but those companies paid in excess of £800 million in corporation tax in that year. Our activities have a substantial effect on the broader economy, and we want to continue that.

Tá brón orm nach bhfuil mé ábalta mo cheisteanna go léir a chur as Gaeilge. Tá an-Ghaeilge ag an Teachta Mac Cormaic agus beidh seisean ábalta ceisteanna a chur as Gaeilge.

It was interesting that the emphasis of Údarás na Gaeltachta is to improve the social, economic and cultural life of the area to which it is charged to attract investment and improve industry. How has the Irish language and culture benefited from the activities of Údarás na Gaeltachta? Is the Irish language and culture more vibrant now than when Údarás na Gaeltachta came into being?

Mr. Ó Bric

That is a complex question. Economic development of Gaeltacht areas over the years, supported as it has been by generous Government funding, has enabled us to stabilise communities through the provision of employment. The area lacked industrial and capital resources for historical reasons. There was a need to introduce outside investment and create employment within the region. We have been reasonably successful in that. We have helped to stabilise communities and enabled them to continue to use Irish as their language of everyday communication. If that had not been so, the Irish language would be in a more perilous state.

The social and cultural fabric of the region has strengthened in recent times because of the improved situation in employment and the economy. There are still, however, huge challenges facing the organisation. I stress that the language is at the centre of the identity of the region and, consequently, its social and economic vitality is closely associated with success in maintaining the language. There are positive signs in areas in the south - Dingle is an example. One would never hear Irish spoken years ago in Dingle, it was like a badge of backwardness. The mentality has changed, not just in Gaeltacht areas, but nationally in respect of the language. Gaelscoileanna outside the Gaeltacht regions help to reinforce a regard for the language.

We are more confident than we were ten years ago about the future of the language. In certain areas English is making inroads. There is a mix of languages. Where the language is strong and it is part of the Gaeltacht, it continues to be strong, but there are other areas where it may have gone beyond recovery. It is like the curate's egg, good in parts. We are confident that the language will survive and grow in the years to come.

When I was in Dunquin for a week at Christmas trying to improve my Irish, I found that the number of houses which were lán-Ghaelach was diminishing. This appeared to be a result of affluence and industrialisation and the fact that the area attracts large numbers of tourists, and "lá breás", like myself. Could the success of Údarás na Gaeltachta and the improvement of the economy in Gaeltacht areas damage the language and the culture of the Gaeltachta?

Mr. Ó Bric

I hope the Deputy is wrong. The emphasis of the organisation is on non-industrial areas and activities such as cultural tourism. There is a growing realisation that people come to Ireland for cultural reasons, to experience something different. In that regard, the Irish language is a defining feature of the Gaeltacht region. There is an increasing use of Irish in Dingle and it is more in evidence on shop fronts and restaurant menus than in the past. This signifies a shift in perspective and attitude. I do not doubt that the Deputy's observations are also correct, which is why it is difficult to give a precise answer to his question. The number of young people who leave the region affects this issue. I have referred to the need to develop a service-based industry which would satisfy the job aspirations and recognise the educational attainments of young people. If young people can be retained in the Gaeltacht, the development the Deputy observed may be reversed. I cannot deny that his observations are accurate.

As tourists in France, we find that French people are more helpful if we make an effort to speak French. The same is true of visitors who use Irish in Kerry. Unfortunately, not many people have sufficient Irish to speak to Gaeltacht people. I hope the údarás can address this problem.

Údarás na Gaeltachta, at one time, was considered an easy source of grants. An industrialist could set up an enterprise in a Gaeltacht area using second-hand machinery to which a new plate had been attached and receive enormous grant aid from the údarás. Has that image disappeared? The údarás was regarded as an easy target for unscrupulous industrialists? Is this the case or was it ever the case?

Mr. Ó hIoruaidh

Like other stories which have appeared recently in newspapers, everyone has heard of that but no one can produce evidence of it. The story of the small plate being attached to a machine is well known. We make a point of rigorously examining the plates on machines. I would be surprised if much sneaking through of that sort is done. In the case of all grant applications, all machinery is inspected and auditors' and engineers' certificates must be produced. There is a vigorous regime governing all grant payments.

Mr. Ó Labhraí

In keeping with practice nationally, we seek guarantees regarding repayment of grants from the parent companies of companies which set up in the Gaeltacht. We have received substantial repayments from companies which invested in the Gaeltacht and whose projects failed. We have occasionally sought guarantees from individuals in cases where there was not a strong parent company. Our grants are backed up by grant agreements, which are binding on individuals or parent companies, to repay our grants if a project closes.

In how many cases have grants to projects which were not successful been repaid and what amount of money was involved?

Mr. Ó hIoruaidh

Quite recently, £1.8 million was repaid.

What is the success rate of businesses set up by Údarás na Gaeltachta? How many are still in business after five years? When did the údarás come into being?

Mr. Ó Bric

In 1980. Annual job losses are approximately 10 per cent of the gross number of jobs. Some of these are the result of closures, of which there have not been many. Others are the result of rationalisation within companies.

Mr. Ó hIoruaidh

Five years is a very short time and most of our companies survive more than five years. Many companies have been operating for 20 or 30 years.

Mr. Dorgan has told the committee that in 1997 £137 million was paid in grants by the IDA. Corporation tax for the same period was £800 million. Are there similar relative figures for Údarás na Gaeltachta grants?

Mr. Ó Bric

In the same four year period we paid £55 million in grants to industry.

What is the return to the economy for the same period?

Mr. Ó Bric

We do not have a figure for the return to the economy. The number of people employed rose by one third.

Has the population in Gaeltacht areas increased as a result of the efforts of Údarás na Gaeltachta?

Mr. Ó Bric

Yes, it has. The 1996 census showed an increase of approximately 4 per cent over the 1991 census. That represents a mixture of good and bad news. The population declined in some of the less developed areas. The population of the Galway Gaeltacht rose by about 12 per cent in that period, but this represents the encroachment of Galway city on Gaeltacht areas. The populations in Donegal and Kerry remained stable, that of west Cork grew and the population of Mayo declined. The population of areas such as Dunquin, which is underdeveloped and has few opportunities for the development of industry and natural resources, has declined. Deputy Ardagh would have noticed a decline in the number of Irish speakers in Dunquin. The population of the Gaeltacht stabilised in the 1960s after 100 years of decline and has increased since then.

Has per capita income in Gaeltacht areas risen in the past 19 years?

Mr. Ó Bric

Given that the Gaeltacht is scattered over seven counties and is not a region in the normal sense, it is difficult to monitor incomes in Gaeltacht areas. We are developing new systems which will do that in the future.

You are charged with the economic, social and cultural improvement of the areas. What targets, objectives or evaluation criteria do you set and how do you assess whether you have achieved those targets?

Mr. Ó Bric

The economic health of the region depends very much on the establishment of a prosperous economy within the region. That economy will depend very much on the performance of the private sector within the region. Much of our activity and expenditure has been made in that area over the years to provide jobs, both full time and part time. We can measure those outputs and inputs very clearly and accurately. We have targets and programmes for social, community and language development and development of cultural tourism which is not as strictly job related as traditional industrial development. It is more difficult to develop the measures of outputs, certainly in the areas of cultural and language activity, but we measure the inputs very accurately, for example, on issues relating to the language. It is difficult to track over the short-term issues that are essentially long-term. We do not have quantifiable targets in those areas, we have programmes.

If you were the chief executive of a private company, publicly quoted, with directors on a salary and bonuses were part of the remuneration package, what achievements would you envisage by the executive team which would warrant bonuses if they were in place?

Mr. Ó Bric

Every year we lay down targets for the divisions inside the house which relate, for example, to the amount of building that will be done during the year. We would agree certain building programmes which would be carried out, the expenditure associated with the building programme and the maintenance programme. On the industrial development side, we would agree targets for the years, the number of jobs involved, the expenditure, the areas in which those jobs are to be created and the mix and nature of those activities. On the areas of community development, we would refer to the number of programmes that communities would bring forward and set targets for those areas. We would set targets for initiatives for people dealing with language and cultural issues, that they would put in place certain activities and programmes, for example, promotion of competitions within companies for language and international linkages, which are in place this year between Wales, Scotland and Ireland in respect of the use of language in marketing within companies. We have targets for naíonra, which are pre-schools, and training targets in the media area for schools which are both technology and language related. There is a whole variety of different targets which we set down.

Have you overachieved on those targets on a regular basis?

Mr. Ó Bric

I have an evaluation with my management team every year. We have agreed targets and go down through those targets which are obviously related to the plan laid down for the year in question. We also have a review.

Are there many external non-executive directors on the board of Údarás na Gaeltachta and what input would they have into examining whether údarás had actually achieved the targets set at the beginning of the year? Is there an outside, non-executive examination of the targets you set and achievement of them?

Mr. Ó Bric

I report to my chairman. Recently I gave him a document for the last year which he will review with outsiders. That will cover every aspect of the organisation's activities and performance.

Who are the outsiders?

Mr. Ó Bric

A person from the University of Limerick, two board members and the chairman will review my performance based on the document I have given them, which will encompass the year's activities and the achievements or otherwise in various areas.

Mr. Ó hIoruaidh

There is also an end of year review which will go before the board proper. The board is made up of 13 members, seven of whom are elected and six are nominated by the Minister of the day.

I am not in any way reflecting on each member, but what time and effort would be put into consideration of the report, irrespective of who is on the board to examine the executive actions for the past year, and what detail would be undertaken by the board?

Mr. Ó Labhraí

On the industrial side, all projects will be examined by the board. The board meets once a month, with each meeting lasting possibly three to four hours.

What about each individual project?

Mr. Ó Labhraí

Each individual project is presented to the board and it gets a summary of results on a regular basis which encapsulates decisions it had previously been involved in, so the board's input would be at a very detailed level with regard to virtually all expenditure.

The distance from Dublin city, and from Europe, is greater from the areas under your control. Has there been much technological progress on the industry that you actually get there? Is optical fibre now available in the areas for which you are charged with responsibility? Is there equality between the industries in the regions and industries in Dublin regarding software development or other technological industries and, if not, what developments will be made to ensure that will be the case?

Mr. Ó Labhraí

There are two issues which relate to the development of technology-based industries within the Gaeltacht. The primary issue is probably the skill set that is available. We will have to invest large amounts of money in human resource development in order to develop a skills base that will attract the industries. If we had that, we could make the case for the physical infrastructure. While these technologies offer opportunities to remote regions, these businesses have not started to locate in remote areas as of yet. It is a complex issue but the people who work in these industries like to live in an urban environment. Maybe the people working in the high tech industry may move to rural locations as they get older but it has not started to happen yet. One of the big challenges facing an organisation like ours is how do we attract IT-based industries into rural areas. There is no model that we know of anywhere in the world to do that.

Is Údarás na Gaeltachta knocking down the door of the IDA to get more industry?

Mr. Ó Labhraí

The opportunity for projects is not the issue. If the skills were available in these areas, the projects would automatically gravitate towards them.

I will not question the IDA at the moment, I will come back to that.

Is there a dichotomy between the task of Údarás na Gaeltachta, especially covering rural areas, and the major task of industrialisation? They seem to be at odds with each other.

Mr. Ó Bric

This point engages us constantly. The results to date show that up to 28 per cent of those employed in the Gaeltacht are employed in industry. This is good but it is also worrying. It is good in that it is a high percentage compared to the profile for more developed regions where there is a strong service base. However, in the more developed areas, industrial jobs are declining. This concerns us as the numbers employed - 28 per cent - are high. As John pointed out, we do not have a new technology or service base in Gaeltacht areas. Recently the ESRI carried out a survey to address this question and it showed many trained and educated young people leave the Gaeltacht to go to jobs which match their aspirations and educational attainments. For the most part they are located outside the Gaeltacht. We are now trying to develop strategies to reverse that. To our knowledge there are no models which can help or guide us in that work. It is a major challenge to any region which continues to lose its young people.

We have as much industrial employment as we could hope for. Given the way the Irish economy is going, there is a chance the industrial base could begin to diminish as it is low to medium skilled. It will have to be replaced with newer technologically based jobs. That presents the kind of challenge we have just described. I cannot answer the question satisfactorily.

Mr. Ó hIoruaidh

As there is very little agriculture in Gaeltacht areas, if we do not succeed in attracting those types of jobs the areas will decline.

I sense a central contradiction in the role Údarás na Gaeltachta has been given. It must save and restore the Irish language as a spoken language while, almost by definition, being consigned to rural areas. On the other hand, over the past 25 years there has, thank God, been a blossoming of scoileanna lán-Ghaelacha, meánscoileanna, bunscoileanna and naíonraí. What was said about Dingle is also true in Dublin - Irish is now more fashionable. There are great scoileanna lán-Ghaelacha and great results in those schools. Has the time come to question whether the focus of the údarás should be changed? How does the údarás relate to the IDA? Is there some competition in industrial development? Should this be taken from the údarás and given to the IDA and should the remit of the údarás extend into other areas, suchas education and culture, throughout the country?

Mr. Ó Labhraí

There is no competition between us and the IDA. The IDA represents us overseas. If it or its overseas offices see a project which they consider for the area in which we get involved, they will speak to us about it and refer projects to us. Competition is not an issue.

Mr. Ó Bric

The second part of the question related to a wider remit in education. Over the past few years we have discussed with educational institutions ways in which we can develop two things in the Gaeltacht. We would like to develop the entrepreneurial capabilities of people in the Gaeltacht because new technologies offer opportunities for native based industries such as cultural industries. We also want to position that in the context of the language where the difference represented by the language provides an opportunity for a different mindset or platform on which to develop entrepreneurial mentalities. There are opportunities to use education as a key to developing these kinds of entrepreneurial mentalities and a sense of place and understanding as to the importance of the language and the cultural difference in offering a basis for creating new kinds of cultural industries. Education is the key in this area and links entrepreneurship and market values with non-market values. This is an interesting prospect for the Gaeltacht and we are discussing it with educational institutions. The chairman is correct. Education and training are critical to the future economic and social vitality of the area.

Radio na Gaeltachta is very much Gaeltacht-based covering Gaeltacht issues rather than the wider remit of Gaelic language issues. I always thought it was a mistake for it to be Radio na Gaeltachta as opposed to Radio na Gaeilge. Even though TnaG is Teilifís na Gaeilge rather than Teilifís na Gaeltachta, it is essentially a Gaeltacht service. That remit is missing a development taking place in urban areas, including my constituency, Dublin Central where there is a movement towards all-Irish schools. Perhaps we are spending money and missing a development. This may be an appropriate time to look at this aspect of Exchequer expenditure and see if it could be spent better.

Many roads have name plates in Irish and English but one end of a road could have a different version of the Irish name from the other. Obviously no one is co-ordinating the language and protecting it. One sees woeful translations. Clearly this area needs attention. Will Mr. Dorgan tell me how the IDA relates to Údarás na Gaeltachta?

Mr. Dorgan

The IDA is responsible for the promotion of inward investment nationally but it does not take direct interest in Gaeltacht areas. We liaise on an operational level with Údarás na Gaeltachta. At times our executives overseas come across projects which could be of interest to Údarás na Gaeltachta but would not fit the type of portfolio we pursue. We refer those types of projects. I was glad to hear Mr. Ó Bric's acknowledgement that it works for Údarás na Gaeltachta. It is no difficulty for us.

Tá 86,000 duine ina gcomhnaí sa Ghaeltacht agus ag obair innti. Cé mhéid postanna nua a cothaíodh sa Ghaeltacht le dhá bhliain anuas?

Mr. Ó Labhraí

I 1997 cothaíodh 1,073 post nua agus i 1998 cothaíodh 1,295 post nua sa Ghaeltacht.

Tá fhios agam go bhfuil a lán daoine ina gcomhnaí sa Ghaeltacht agus ag obair i gcathair na Gaillimhe. An bhfuil fhios agat cé mhéid daoine ón Ghaeltacht atá ag obair i gcathair na Gaillimhe nó in áiteanna eile taobh amuigh den Ghaeltacht?

Mr. Ó Labhraí

Ní bhéadh teacht againn ar na figiúirí sin. Níl aon bhealach go bhféadfaí teacht ar na figiúirí. Bhí an chuid gluaisteáin ar an mbóthar gach maidin ós na h-oileáin, ó Ros a' Mhíl, ón Spidéal agus eile.

Mr. Ó Labhraí

Bíonn fadhbanna againn féin leis an trácht sin ar maidin.

Mr. Ó hIoruaidh

B'fhearr linn go dtarlódh sé sin ar an mbonn sin seachas a mhalairt. B'fhearr linn go mbeadh cónaí orthu sa Ghaeltacht, fiú dá gcaithfidís dul isteach sa mbaile mór chun obair a fháil, seachas a bheith ag obair sa Ghaeltacht agus ag filleadh ón nGaeltacht chun cónaithe i nGaillimh.

An bhfuil a fhios agat an méid duine ón nGaeltacht atá ag obair sa Ghaeltacht?

Mr. Ó Labhraí

I dtograí a fhaigheann tacaíocht ón údarás tá 8,174 duine fostaithe sa Ghaeltacht. Formhór acu siúd, b'fhéidir 95 fán gcéad díobh, is as an nGaeltacht iad.

Tá go leor daoine, mar a deir an tUasal Ó Bric, ag tógáil tithe sa Ghaeltacht. Fuíollach iad na daoine seo as cathair na Gaillimhe agus daoine ag tógáil tithe saoire agus mar sin de. Maidir leis an bhfigiúr seo 86,000 duine - an bhfuil áiteanna ar nós Cnoc na Cathrach san áireamh anseo?

Mr. Ó Labhraí

Tá, agus Tír Oileáin chomh maith.

It is not a true figure then, ní figiúr ceart atá ann.

Mr. Ó Bric

Admhaíonn muid é sin. Tá fadhb ann leis na damhaltaigh, mar a deirtear.

An mbeidh vóta ag na daoine seo as Tír Oileáin agus Cnoc na Cathrach i dtoghcháin an údaráis?

Mr. Ó Cofaigh

An chéad fhreagra ná go bhfuil muid ag oibriú ar limistéirí Gaeltachta a leagadh amach i 1957 agus taobh istigh dhó sin deineann an Central Statistics Office an comhaireamh. Clúdaíonn an figiúr sin, 86,000, áiteanna ar nós Cnoc na Cathrach agus Tír Oileáin. An t-aon áit a bhfuil an eisceacht seo ann ná thart ar chathair na Gaillimhe.

Maidir le ceisteanna toghchán an údaráis, sa toghchán údaráis deireannach a bhí ann, cúigbhliain ó shin, bhí cead vótála ag muintir Cnoc na Cathrach dá mbeidís ar an liosta agus an rud céanna faoi Tír Oileáin. Sa chéad toghchán eile a bhéas ann, roimh Nollaig, beidh cead vótála ag na daoine ansin freisin, má théann an Bille tríd mar atá sé ceaptha dhul tríd an tOireachtais mura nathróidh an tOireachtas an Bille. Go raibh maith agat.

I dtoghchán na seachtaine seo caite, toghchán Chomhairle Chathair na Gailimhe, bhí mé ag canbhasáil i dTír Oileáin. An bhfuil vóta ag na daoine sin i dtoghchán an údaráis atá le teacht?

Mr. Ó Cofaigh

Tá.

Níl a fhios agat.

Mr. Ó Cofaigh

Is mó fios a bheadh agatsa faoi thoghcháin agus faoi thaillte Tír Oileáin ná mar a bheadh agamsa, ach go ginearálta tá Tír Oileáin sa Ghaeltacht agus tá Cnoc na Cathrach sa Ghaeltacht agus má tá cead vótála ansin agat, tá cead vótála agat i dtoghchán an údaráis.

Mr. Ó Labhraí

Níl iomlán Cnoc na Cathrach sa Ghaeltacht, níl ach cuid de sa Ghaeltacht.

Tuigim é sin, Bóthar na gCeapach, Bóthar Bhaile Mhóinín, agus an Buaile Bheag.

Mr. Ó Bríc

Tá go leor Gaeilge thuas i mBuaile Bheag.

Tá ach sin an áit ina bhfuil an Ghaeltacht, i mBuaile Bheag, ag na sean-daoine.

Bhfuil aon cheist ag Teachta eile?

Regarding Objective One regions - this may be of interest to members of the Oireachtas whose constituencies are in counties that nearly attained Objective One status - particularly those in the south-east where the GNP per person reaches 75 per cent of the European norm, it is very close to 75 per cent in a number of areas in any event, and yet I see from your recent report that you intend to target at least 50 per cent of the inward foreign investment into Objective One regions. Those regions that produce at 74 per cent of the European norm will make a killing and the regions in the 77 per cent area will feel hard done by if the distribution of inward investment is targeted in such a way. What is the rationale behind putting so much time and effort into the Objective One regions for inward investment?

Mr. Dorgan, to assist our reporters, will you state your name as it is difficult to hear at the back of the room.

Mr. Dorgan

Seán Dorgan, IDA. There is no absolute, black and white line between Objective One status and Objective One in transition, nor will the IDA seek to draw an absolutely clear line. What we have set ourselves for the next few years is a target to deliver, to a greater extent than we have done previously, inward investment into the Objective One region for a particular reason.

The Objective One region is generally lesser developed and it has, in recent years, benefited less than the main cities. The growth which has occurred in Ireland in recent years, especially in Dublin but also in Cork, Limerick and Galway, has tended to be urban based. We need to correct that to some extent and will correct it by adopting for ourselves internally a target of delivering half of all new, greenfield investment into the Objective One region. However, new greenfield investment is only half of all investment coming into Ireland backed by IDA, the other half is expansions of existing businesses which is a very important part of inward investment.

Mr. Dorgan, how can you be sure you can deliver half in a world where more and more IT companies, in particular, are indicating that they want to be near major cities, universities, airports and so on. How can you say that you will deliver half of new greenfield investment to Objective One regions?

Mr. Dorgan

We cannot be sure that we will do it but we are targeting it in order to help redress the imbalance of recent years. IT companies and other activities have tended to be attracted to cities. They will continue to be so attracted and significant investments will come into Ireland, which we believe will benefit Ireland and will add to our strength in a particular sector. We will not try to push them out of a city if they consider only a city as a location.

There are other activities which can be located elsewhere. In recent years we have achieved a high market share in mobile projects in software development. Many of those have come into Dublin - they do not have to come only to Dublin - and in recent years to Cork, Limerick and Galway. They can go elsewhere and we are beginning to make an impression on them so that they can locate in other institute of technology towns around the country, such as, Letterkenny, Castlebar, Tralee and Waterford, each of which offers a very good base for software development because their institutes of technology are producing very good graduates. In many cases, the graduates coming out of those colleges are migrating to Dublin for jobs and in many ways that is putting pressure on Dublin.

We are convinced that the imbalance can be redressed, although it will not be an absolute reversal of what is happening at the moment. We are not going to reject projects going into Dublin or try to stop people going into Dublin, Cork, Limerick or Galway. We recognise that there is a need to develop other towns also and there are considerable advantages for investors in moving into other towns. They can get people at, perhaps, a more reasonable cost, people who will have to pay less for houses and spend less time going to work and who are more likely to stay with an employer than have a very high turnover in moving from one job to another because of the degree of activity that is taking place. We have adopted an internal target which we believe is capable of delivering. It is only for part of our business; the other part is to sustain what we have, add quality to its growth and ensure we continue to have an impact in the main urban centres and in the south-east, a region that has not done well because it has been blotted out by the east and the south.

Infrastructural deficiency makes it a challenge to achieve our goal. It is a hard sell to put an inward investor in a car and drive him for four hours as they like to get in and out of a location quickly. Roads and regional air services are important. It is in line with Government policy to achieve a better regional balance in development.

Mr. Dorgan acknowledges the attempt to redress the imbalance of previous years, an example of which occurred in the last phase of Structural and Cohesion funding when £3.5 billion was allocated to the eastern counties and £1.6 billion to the 13 western, border and midland counties. This imbalance has grown over the past five years. Because the 13 western, border and midland counties have Objective One status it is appropriate that imbalance be redressed now. Dublin is not one of the 13 eastern counties that qualified and does not benefit from the migration of people from the west seeking jobs and houses and adding to the traffic congestion. If they were dispersed throughout the regions, particularly those that have qualified for Objective One status, it would be better. The fact that the western counties attained Objective One status did not affect the transitional status of the other counties which will receive their grants.

I counted about 26 flyovers and overpasses when I was travelling on the Naas Road recently. In contrast the main road from Oranmore to Galway City has only one flyover. Why cannot a proper infrastructural system be devised for Galway to cater for the increase in traffic?

Could the types of infrastructure needed and the amount of money required to put in place the infrastructure desirable in the Objective One status regions be quantified? Is there a need for that funding to be put in place given the improved condition of the economy and if so, at what speed?

Would Mr. Dorgan address the necessity for broadband fibre optic capacity development and the extent to which he sees it as a matter for the private sector, provided other decisions are made, rather than for public investment?

What are the infrastructural deficiencies? In one of today's newspapers you are quoted as saying that we need to do this over five to seven years rather than 20 years. Could you elaborate on the kind of infrastructural deficiencies that should be addressed and how soon they can be made?

Mr. Dorgan

The essential infrastructural developments that are important to support more and better inward investment in the future and ensure that existing businesses can be efficient and compete globally are better roads, good regional air services, broad band communications and education.

The National Roads Authority has completed an assessment of road needs over a 20 year period. Our pace of development has been such that the 20 year forecast needs to be foreshortened. The sooner motorway standard roads are achieved on the main routes the better. Distances in Ireland are relatively short; it is the time taken that is the problem. I do not have a figure for the amount of spending required. It is not necessarily spending on Objective One regions but on projects such as the bypassing of Enfield and Kinnegad so that the Dublin-Galway, Dublin-Sligo and Dublin-Mayo routes can be completed more quickly.

What is the view of the Industrial Development Authority on work being done within a foreshortened time frame regardless of resources?

Mr. Dorgan

There are two elements which the Government is addressing. First, with regard to the organising and funding of it, the Minister for Finance has made an announcement about public and private partnerships in the past month and there are plans to proceed with road development on a broader scale. I expect it will be catered for in the national development plan being prepared.

Second is the time it takes to develop roads. The planning process must be shortened, constitutional and democratic needs taken care of, the difficulty resolved about getting routes agreed and ensuring that, once agreed, the plans are carried forward if public and private partnerships are to work in road development. A private developer will not take on a road project if the route is unclear.

With regard to regional air services, there is a need for further investment. First, the timing of air services from regional airports is good. The airports of Kerry and Galway have the advantage of early morning and late evening flights whereas the midday flights of the airport in County Sligo are neither suitable for the conduct of business nor for the selling of a location by way of giving efficient, daily access to investors.

Second, Aer Lingus does not focus on the provision of regional air services; it is concerned with medium and long haul services. Its commuter section is part of the entire service. A regional air service is needed that is badged by Air Lingus or a private operator that feeds into the company.

Did the IDA give grant aid to that industry?

Mr. Dorgan

No, that is not our business. We need regional air services that help to improve access to regions with a cost structure that is appropriate to regional airspace unlike that of Aer Lingus.

On the third element, broadband communications, a tender has been invited for the provision of connectivity into the European network and back to the United States. I expect that the Minister for Public Enterprise will be in a position to make an announcement about that in the next month or so. That will be very important indeed. In addition, it is necessary to have broadband investment within the national network. Telecom Éireann has provided a significant part of that up to now. Other private investors, the competitive telecommunications companies, can do so also. Certainly for the promotion of Ireland for inward investment, it is very important, particularly from the point of view of ensuring a balanced regional development, that there is that investment. In some cases the State will have to take the lead because it may not seem like a good economic investment for the private sector, but again there can be a balance achieved in that.

The major connectivity project which is planned is intended as a public private partnership also. The State will make a significant seed investment to cause it to happen but we would expect the telecommunications companies, both Telecom Éireann and the private companies, to come on board and to support that investment and to have access to the optical fibre pipe which will be provided, but access on an open basis to ensure that no one operator dominates and that there is adequate competition.

They are the main elements of infrastructure and how we believe they can be approached, and the Government is very much approaching them in that way. The National Development Plan will be a key part of ensuring that infrastructure does develop over future years.

Would you not accept that if you have these radial motorways all the way from Dublin to the north-west, the west and the south that again the traffic will continue to be preponderantly one way - people going home for the weekend and coming back to Dublin and overcrowding in Dublin? Does it not need more? Should we not be thinking in terms of building new towns and new cities in the regions, in the north-west, the west, the south and the south-east? You did not mention the need to develop rail connections. Surely we are looking at this still at too low a level, given our economic development.

Mr. Dorgan

We would not say that the only roads that are needed are roads in and out of Dublin. There is a significant need for routes from Cork, Limerick, Galway and Sligo to Letterkenny and Derry. There is a need for routes from, for example, Athlone to Dundalk. There is a need for much better roads. The selling of Cavan as a location for industry is significantly affected by the quality of the roads which serve that whole area. There is a need to develop larger urban centres in the northern half of the country. Fitzpatrick Associates for some of the regional authorities came up with the suggestion that Sligo and Athlone in particular should be developed as cities, and there is a good logic to that. Equally, Letterkenny-Derry should be a significant urban centre which can have a dynamic which encourages further growth and that can help to promote those sorts of centres for inward investment.

We need centres in the country where educated young people will want to stay because the cultural, social, educational and job opportunities are there. That is the reality. We will not get these in small towns. There is not the range of services needed in small towns. That is why I am surprised that there is not more talk about literally building new towns. This is not an original idea. It is what has happened in other countries.

Mr. Dorgan

I am not sure that we need to talk about new towns in Ireland. However, we need to develop a few significant growth centres. That does not exclude the possibility of development in other centres. Some centres will self-select. Sligo and Athlone have institutes of technology. So have Castlebar and Letterkenny. That is a very good starting point. One can go on from there.

First, I compliment Údarás na Gaeltachta on its success in developing industrial units and the industrialisation of remote rural areas in Ireland. Were it not for the fact that it has worked so hard and so consistently and been so successful, certain parts of rural Ireland would have been wiped clear and totally depopulated.

Further to that, let me comment on a point made by you, Chairman, where you said that you saw a role for Údarás na Gaeltachta in education and the lessening of its role in industrialisation. I totally disagree with that. I would have grave reservations about the future of rural Ireland if the role of údarás in industrialisation were terminated. It is thanks to Údarás na Gaeltachta that so many jobs are available now in rural Gaeltacht areas. Were it not for údarás that would not be so. While I welcome the IDA's new thinking on bringing industrialisation to rural Ireland, I await their success and enthusiasm before agreeing to any lessening of the role of údarás in the industrialisation of the Gaeltacht.

Objective One status for rural Ireland, for 13 counties, has been very important, and has been achieved against the wishes of some very influential people and parties here in Dublin. I hope to see regionalisation properly implemented on this occasion. While so much of the European Union infrastructural funding was secured because of the economic depression of the west of Ireland, the west and the north-west did not receive their fair share of funding in the past. Now that there is a 13 county region we will have to make sure that the funding so secured will be spent where it was intended to be spent, that is, in the 13 counties involved.

We will note the accounts and move on. I thank the witnesses and discharge them.

The witnesses withdrew.