Dáil Éireann debate -
Wednesday, 21 Oct 1959

Vol. 177 No. 1

Committee on Finance. - Shannon Free Airport Development Company Limited Bill, 1959—Second Stage.

Minister for Transport and Power (Mr. Childers)

I move that the Bill be now read a Second Time. The main purpose of this Bill is to provide the finances necessary for the urgent and important work of the Shannon Free Airport Development Company Limited, which was incorporated on the 28th January, 1959. The House will recollect from previous debates that the work entrusted to this Company is regarded as vital in relation to the future of Shannon Airport and its maintenance as a major centre of employment.

In order to avoid limiting the activities of the Company pending the enactment of the present Bill, the House, in March, 1959, approved, as an interim measure, an Order adding the name of the Company to the Schedule to the State Guarantees Act, 1954, to enable the Minister for Finance to guarantee borrowing by the Company up to a maximum of £200,000. During the debate on the motion approving the draft Order it was indicated that legislation to regularise the financing of the Company would be introduced.

It is proposed that funds will be made available to the Company in two ways:—

(i) Money required for capital purposes, such as the construction of factory premises, will be provided by means of subscriptions for share capital by the Minister for Finance under Section 2 of the Bill.

(ii) Money required for other purposes, including administration and grants to industrial projects at the Airport, will be provided by way of non-repayable Grants-in-Aid voted annually. It would not be possible to forecast the exact amount of money required for grants in any one year as projects develop too quickly to permit long-term forecasting. It is therefore proposed to fix an aggregate amount of £500,000 to be allocated by way of grants as required. This is provided for in Section 8 of the Bill.

The Government decision in November, 1957, to set up a body for the particular purpose of developing employment-producing activity at Shannon was a positive indication of the determination of the Government to take all possible steps to maintain Shannon as a major international Airport and as an important centre of employment. The directive given by the Government was to take all practicable steps to counteract the effects on the level of employment and activity at the Airport of the tendency to overflying by jet aircraft. The Company was requested, in particular, to direct its efforts towards securing an increase in terminating passenger traffic and towards developing the use of the airport as a freight centre for terminal and transhipped air cargo.

In its efforts to increase the amount of terminating passenger traffic, the Company has undertaken an extensive publicity campaign in the United States and elsewhere to popularise the excellent facilities available at Shannon. In this campaign, use is made of press, radio, and television coverage particularly in the United States. In addition, there is an energetic publicity campaign to encourage travellers between Europe and America to break their journey for a holiday in this country even if only of a short duration. Emphasis is laid on the attractions of the South and West as holiday centres. In these activities the Company has maintained close liaison with Bord Fáilte Éireann and Aerlinte Éireann. It is intended that in the future the publicity campaigns of these bodies will be integrated as closely as possible to secure the best results. The Aer Lingus continental services and the Aerlinte transatlantic service will, it is hoped, provide an eastbound and westbound link which may, if fully exploited, induce an increased number of tourists and holiday makers from continental countries and from the Americas to spend some time in this country.

At an early stage in the development campaign it became clear that the establishment of industries in the Free Airport area would be essential to the future of the Airport. These would not alone provide a positive safeguard against diminution in activity and employment but would also promote the use of the Airport as a freight centre for the transport and handling of raw materials and finished products. The Company therefore undertook a campaign to attract business interests in this country and abroad to the attractive facilities available for industrial activity at Shannon Airport. The Oireachtas had given its approval to this campaign by agreeing, in the latter months of 1958, to two measures designed to facilitate the entry to and control of business at the airport and to exempt from taxation for a period of 25 years the profits of concerns established there. The present Bill to provide the finances necessary for the Company in its development work is a confirmation of the intention of the Oireachtas to assist in a material way in the encouragement and promotion of industrial activity and in the development of traffic at the Airport.

One of the principal objects of the Bill is to provide share capital for the construction of factory premises at the Airport. The amount proposed is £1,500,000. The Company has been proceeding with the work of building factories in advance of demand and at the same time has placed itself fully at the disposal of industrialists interested in establishing at the airport. The setting up of a new industry is not a simple matter and the preliminary negotiations are normally detailed and protracted.

Nevertheless, the results are heartening. Two undertakings have already been established and provide employment for 23 persons. Negotiations are in an advanced stage in respect of four other projects. Additional proposals are under consideration and there are good grounds for expecting that these will result in the establishment of further industries at the Airport. The projects which are in an advanced stage of development are expected to afford employment to about 300 persons.

The House will appreciate that I cannot at present give details of the exact nature of the undertakings. I can reveal, however, that factory premises are expected to be ready in early Spring 1960 for an undertaking which will afford initial employment to 40 persons and will thereafter increase substantially. In addition another undertaking has reached the stage of incorporation of a company and it is hoped that production will commence in the next month or six weeks. Factory premises for this firm are in course of erection.

The importance attached to the development of industries at the Airport cannot be overstated and the Shannon Company is prepared to consider every proposal fully and sympathetically. The services of the Industrial Development Authority are availed of to the fullest practical extent in the examination of proposals to establish industries at the airport and that body advises me on the desirability of granting a licence in each case. This arrangement precludes overlapping between activities of the Shannon Company and those of the other industrial promotion bodies and in addition enables each proposal for Shannon to be reviewed in relation to the industrial situation in the country generally.

The Government are fully satisfied about the need for this legislation and they are hopeful that the efforts of the company will be successful. In previous proceedings in this House Deputies have generally been appreciative of the importance of Shannon and of the urgency of taking the necessary steps to consolidate its position. I, therefore, recommend the measure to the House and confidently ask for the support of all sides in the efforts being made in relation to the Airport.

Mr. Cosgrave

As the Minister has said, this proposed legislation confirms certain undertakings which were given earlier to the Shannon Free Airport Development Company and, in so far as any legislative measures are necessary to facilitate the development of undertakings which will provide employment at Shannon, the House will give the proposals general approval.

There are several other matters which I should like to mention at this stage of the Bill, because I think it is well to consider, in conjunction with the development which has already been planned, where a particular policy is leading or may lead. During the course of the debate on the Estimate for the Department of Industry and Commerce, I expressed the view that the realistic approach to the problems which would arise in the event of Shannon being overflown was to concentrate on development opportunities for employment, either at Limerick or Ennis. In expressing that view I referred to the general trend of the advice contained in Economic Development, and the opinions expressed in that publication, where comment was made, not specifically on the particular problems of Shannon, but on the general problems created by the efforts to provide employment in the under-developed areas.

The general trend of the views expressed was that the efforts made so far had not been as successful as was expected, and that, in fact, the general tendency was for the industrial promoters, or entrepreneurs, or anyone concerned with establishing industries, to seek locations where other facilities were already available; that, in general, people seek opportunities for establishing new industries where they have an adequate pool of labour, port and other facilities—admittedly, port facilities are available here—that the normal facilities available in reasonably sized towns and cities attracted industrial developers; and that any attempt to provide artificial attractions even to the extent of financial encouragement failed to achieve the success which the natural facilities and the availability of other normal services required by those likely to develop industries achieved.

Therefore, I shall be glad to hear from the Minister whether the Government have considered the possibility of encouraging industrial development in a positive way at Limerick or Ennis—or, if necessary, at some of the smaller places such as Newmarket-on-Fergus—with the specific object of absorbing those persons who may lose their employment as a result of technical developments in aviation. It is a well-known fact that the persons already employed in Shannon come from either Limerick or Ennis or, for that matter, from further afield, but at the moment they reside in some of the adjacent cities or towns.

Consequently, there are no special advantages attaching to Shannon which did not already exist and, in fact, it appears that efforts should be concentrated on providing employment where the other facilities already exist for those persons who may lose their employment as a result of the general trend in aviation in recent times. In that connection, I should like the Minister, if he is in a position to do so, to say what will be the effect of the recent announcement by certain air companies that it is proposed to overfly Shannon and, if possible at this stage, to indicate the probable consequences on employment and revenue from landings at the airport.

This method of establishing a State company is, to some extent, unusual. Normally, most of those companies are established by a particular piece of legislation which outlines its object and lays down certain functions and responsibilities. I should be glad, therefore, to know from the Minister why this particular method was adopted, or is it merely because the company had already been set up and that this is the most convenient method of acquiring for the Minister for Finance the share capital of the company? Can he indicate what amount of capital has already been invested in this company, and the capital of the undertakings which have been established, to which he has referred?

As I understand it, two undertakings have been established giving employment to 23 persons. There is one further undertaking which may commence next Spring with the prospect of employment for a further 40 and I understand the proposals under consideration would, if established, give employment to a further 300 persons. In that connection, is employment in these undertakings confined exclusively to persons who lose their employment at Shannon Airport as a result of the diminution in work which has occurred or may occur because of the decision to over-fly Shannon?

It seems to me that there are a number of aspects of this matter which should be kept under careful review, and if possible, an industry should be developed there because of any special features which Shannon or the Airport has. Unless that is so, then the further considerations which I have mentioned which received very considerable attention in Economic Development should be considered. Of itself, Shannon, except that it has the facilities for air transport readily available, has no other advantage which Limerick or Ennis has not got in a far greater degree. With the exception of certain items of cargo which lend themselves to air transport, there are no other advantages there which are not already available in either of these centres. For that reason, I believe attention should be paid to that aspect of the question.

I understand from the Minister's remarks that the total State investment in this undertaking amounts to £1,500,000. In addition, there is power to provide grants not exceeding £500,000. The Minister also said it was proposed to build factories and have these available before actual specific undertakings had been established. In that connection, it is well to remember that where grants were provided elsewhere and, in fact, where factories were established, in a number of cases these buildings were left derelict because of the general trend in modern industrial development for individual industrial concerns to plan the building in accordance with their own wants and requirements. The mere provision of a building is not always the essential pre-requisite for the establishment of a particular industry.

Certainly, in the Six Counties, when facilities were provided there, quite a number of the buildings were left derelict. This matter was considered when the Industrial Grants Act legislation was being framed. My recollection is that the point was discussed here during the course of the debates. Experience elsewhere has shown that the initiative which it was thought would be gained by the provision of a building does not always work out in practice and that in fact most individual industrial operators prefer to have the opportunity themselves of erecting a building in accordance with the particular requirements of the industry concerned.

Mr. Russell

Any development that will mitigate the falling-off of transit traffic at Shannon Airport is to be welcomed. I am sure every Deputy will wish the Shannon Airport Development Company every success in its efforts. We probably would not be considering this Bill this evening were it not that certain factors outside the control of the Minister and of this country have operated substantially to reduce transit traffic through Shannon Airport. Modern plane development, particularly the expansion of development of the jet plane, has come as a very severe threat to Shannon Airport. Deputies who do not live in the vicinity of Shannon Airport may not realise what that means to Limerick and Clare, particularly. Almost 2,000 persons are employed at Shannon Airport, the bulk of whom reside in the City of Limerick and the remainder near Ennis. In the main, these people are paid a high rate of wage, and naturally they spend their earnings in the City of Limerick or in the town of Ennis.

It has been said, not without reason, that if anything drastic were to happen at Shannon Airport it would result in Limerick becoming virtually a ghost town. For that reason, as a Deputy living very close to Shannon Airport, I welcome any effort that will help to mitigate these likely developments and that will, at the same time, give a reasonable return to capital invested. I am sure the Minister will agree that that should be a sine qua non of any State investment at present. It would be a very serious matter if this House were to vote a substantial sum of money for investment at Shannon Airport and if the greatest discretion and business acumen were not exercised in selecting the type of industry to be developed there.

We all know of instances such as were referred to by Deputy Cosgrave where considerable State funds—which means, in effect, the taxpayers' money —went into an enterprise which flourished for a year or so and then the promoters vanished and the countryside was left with an empty building as an indication of a very bad investment of State moneys. It should not be forgotten that part of the reason why the traffic through Shannon Airport and into Shannon Airport is declining is because of the contrary development which necessitates transatlantic planes touching down at Shannon for a few minutes and then travelling on to Dublin.

As I said on the Estimate for the Department of Industry and Commerce earlier this year, it seems to me that such an arrangement could not possibly continue when the new jets are brought into operation on the transatlantic flights and, indeed, when the jet planes of the other companies come into regular service, as they are doing at present. If Shannon could be a link with other airports in Britain and the Continent it could encourage a greater amount of traffic to Shannon Airport. If Shannon could offer a direct link with Aerlinte to the various services covered by the Aer Lingus system it would be to the benefit of Shannon Airport. Sooner or later, the persons concerned will have to determine whether they will have a sort of half-developed airport as a transatlantic airport or whether they will have Shannon as their essential transatlantic base, linked with the cities on the Continent and London, Glasgow and other cities in Great Britain.

If that system could be brought into operation I think it would straightaway increase the amount of transatlantic traffic through Shannon Airport and the amount of tourists getting off at Shannon Airport. Deputy Cosgrave is quite right. I have consistently advocated here that the advantages which are applicable to the customs-free zone at Shannon Airport should be extended to a wider area to include both Limerick city and the town of Ennis. The logical place for people to work is near where they live. The majority of the workers at Shannon Airport go down in buses or cars from Limerick city or from Ennis. It seems far more logical to try to develop industries near to either of these larger centres of population where the people concerned have schools, churches and facilities for amusement quite close to where they are living.

I suggested to the Taoiseach when he was Minister for Industry and Commerce that the benefits applicable to the Customs Free zone at Shannon Airport might be extended to industries, established outside the zone, that use Shannon Airport for exporting their goods. If you want to develop Shannon Airport, it does not much matter where your factory is— whether it is in the free zone or 50 miles away—so long as it uses Shannon Airport to export its goods and employs commercial freight planes so to do.

The Minister stated in the course of his introductory speech that a campaign was being carried on in the United States and elsewhere to promote particularly the South and West of Ireland as tourist centres. I should like to add my voice to support that programme. If more could be done in conjunction with Bord Fáilte to develop these areas as tourist centres and to encourage tourists to come by plane to Shannon to visit them, that development would be of benefit to Shannon Airport.

As the previous Minister for Industry and Commerce, the Taoiseach, indicated when speaking on the Vote for his Department some months ago, the outlook for Shannon is very serious and the unfortunate aspect of the matter is that it is due to developments over which we in this country have no control. However, there are certain things we can and should do and one is to keep in mind that Shannon Airport was built as an airport, not as an industrial zone. Every possible encouragement should be given to air companies to use Shannon airport as a transit stop by reducing the charges for touching down there or, as I suggested earlier on in my speech, by linking Shannon Airport with cities on the Continent and in Great Britain.

I hope this injection of capital into the area contiguous to Shannon Airport will have the desired effect, and that not alone will it help the present numbers employed there but that it will result in an expansion of employment in the airport. I want to support the point made by Deputy Cosgrave that the ideal solution would be not to have just a customs free zone but to have a Shannon free zone in an area within 20 to 25 miles of Shannon Airport so that industries could be started near places of population like Limerick and Ennis.

Debate adjourned.