I move—
That a supplementary sum not exceeding £10 be granted to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1959, for Aviation and Meteorological Services, including a Grant-in-Aid.
The first sub-head of the Supplementary Estimate provides for an additional sum of £67,000 for land acquisition for airport purposes. The second sub-head is a grant-in-aid for the Shannon Free Airport Development Company Limited. There will in fact be no increase in the net total of the Vote as the additional provisions can be offset by savings on other services and the surplus in the receipts appropriated to the Vote.
The additional amounts needed for land acquisition are £29,500 in respect of Dublin Airport, £27,000 in respect of Shannon Airport, and £10,500 in respect of Cork Airport. In the case of Dublin, it was expected that the bulk of the 282 acres of land which were being acquired would be transferred in the previous financial year, but owing to legal difficulties, only two holdings were in fact transferred in that year. The remainder of the lands, excluding one holding, will, it is expected, be transferred in the present year and will create an excess of about £29,500 in respect of these lands.
The lands to be acquired at Shannon Airport are expected to cost about £41,400. That sum is expected to be expended in the present year and will create an excess of about £27,000 over the amount originally voted in respect of these lands. The lands being acquired for Cork Airport will cost about £40,500 and will be paid for in the present year. There is an excess of about £10,500 in respect of that item.
With regard to the second item, when the Government decided to provide all facilities necessary to equip Shannon Airport to receive jet aircraft, they had under consideration also the taking of other measures which would ensure the fullest possible utilisation of the airport and the maintenance of employment there. It was felt that the advent of the new jet aircraft would tend to lower the level of transit activity at the airport, unless some positive steps were taken to promote the use of the airport otherwise than as a transit stop. With the view of securing new traffic, particular attention was paid to the possibility of developing air freight traffic at the airport. The desirability of increasing terminal passenger traffic in order to offset the expected contraction in the airport's transit traffic was also realised and it was felt that this might best be secured through promotional activities directed primarily at the North American tourist trade.
However, no suitable organisation for undertaking the work was in existence at that time. The work was of such a nature that it could not very well be discharged satisfactorily within the framework of departmental organisation; furthermore, there was no State or semi-State body which could be expected to undertake all the varied activities required.
It was decided, therefore, to entrust the responsibility for commercial development of the airport to the Comptroller of Sales and Catering. The House is aware that the comptroller was primarily responsible for the building up of the airport's restaurant and shopping services into the present major industry which employs about 600 persons. The comptroller agreed to accept these additional responsibilities, namely, the responsibility for the development of transit traffic, the development of tourist facilities at or near the airport in order to attract terminal traffic, and the active promotion of freight traffic at the airport.
In carrying out his new duties, the comptroller operated as the "Shannon Free Airport Development Authority" and he was authorised to spend up to £50,000 annually out of the revenues of the sales and catering service to meet the running expenses of the authority.
On a review of the initial working of the authority, it became clear that it would be necessary to give special attention to the promotion of freight traffic at the airport and that progress could also be made in the promotion of industries there. The encouragement of industries at the airport is a matter requiring special treatment. One of the steps deemed necessary is the provision of limited factory accommodation for renting in advance of actual demand. The provision of such accommodation is a matter for the development authority. For this reason, and from the experience which the authority have already acquired in negotiation with interested firms, it became obvious that it was necessary to give the authority legal status for the general conduct of its business and, in particular, for such matters as the leasing or the letting of factory premises, the acquisition of rights in physical assets, such as premises and equipment, and the making of contracts and agreements.
The Government, therefore, decided that the authority should be reconstituted as a limited liability company with the title "Shannon Free Airport Development Company Limited". That company has been incorporated and the Government have approved of the introduction, in due course, of legislation to provide capital for the company by enabling the Minister for Finance to subscribe for shares in it and to provide moneys annually by way of Grant-in-Aid to enable the company to perform its functions.
Negotiations which the company have in hand with prospective manufacturers have reached an advanced stage and it would be harmful to the whole development scheme if the provision of capital had to await the enactment of legislation. The Government have decided, therefore, that for the purpose of providing the company with capital, in advance of legislation, the name of the company should be added to the Schedule to the State Guarantees Act of 1954, so that the Minister for Finance may guarantee borrowings by the company. That is the purpose of the motion which I propose to move seeking the approval of the Oireachtas to the making of an Order under the State Guarantees Act to add the name of the company to the Schedule and so empower the company to borrow £200,000. It would be the intention of the company to use that money for the construction of factory space for letting at the airport.
When the legislation, which I have mentioned, comes before the House, it will be seen that provision is being made to ensure that capital subscribed by the Minister for Finance will be applied, in the first instance, to the repayment of any moneys which the company may borrow on foot of the guarantee under the State Guarantees Act. It will be clear, therefore, that the arrangement now being made is a purely provisional arrangement to ensure that the company will not be handicapped owing to lack of funds between now and the enactment of the legislation.
I should explain that the avoidance of delay in bringing into effect the plans of the company to promote activity at the airport is of special importance. The changes in the traffic pattern of air transport over the North Atlantic which are upon us indicate that the probability is that the transit traffic on which Shannon has heretofore depended for the bulk of its revenues may diminish, although, as Deputies will have noted from Press reports, Shannon has had the best year ever in 1958. It is clear that vigorous and prompt measures are necessary to ensure that the level of activity and the employment position at the airport will be maintained.
The purpose of the Supplementary Estimate is to provide the company with funds by way of a Grant-in-Aid to enable it to meet all administrative and general expenses, including, in suitable cases, grants for the construction of buildings and grants towards the provision of industrial plant and machinery.
It is proposed that, as the company supersedes and assumes all the responsibilities of the authority, all expenditure incurred on the service by both the authority and the new company to 31st March next should be met out of the Grant-in-Aid. Provision to meet the authority's expenditure was made in the Estimate for the year by way of a deduction of £50,000 from the receipts of the catering service. The receipts can now be surrendered in full without deduction thereby increasing the Appropriation-in-Aid by £50,000, which, of course, offsets the amount required for the Grant-in-Aid. To that extent, that part of the transaction is merely a matter of book-keeping.
I think I should assure the House that the establishment of this Shannon Free Airport Development Company will not result in any overlapping between the functions of the company and those of the Industrial Development Authority or of An Foras Tionscal. Very full consideration was given to all aspects of that question in consultation with these bodies and I am satisfied that industrial development at Shannon Airport will present very special problems with which neither An Foras Tionscal nor the I.D.A. is equipped to deal with adequately and for the satisfactory solution of which a special company, provided with sufficient powers, is required. There will, of course, be full consultation with and co-ordination between all those bodies in relation to industrial projects at the airport.