Skip to main content
Normal View

Dáil Éireann debate -
Tuesday, 25 Jul 1961

Vol. 191 No. 10

Shannon Free Airport Development Company Limited (Amendment) Bill, 1961—Second Stage.

I move that the Bill be now read a Second Time.

The main objects of the Bill are:—

(i)to increase from £1,500,000 to £3,000,000 the aggregate amount of the shares in the Shannon Free Airport Development Company Limited which the Minister for Finance may take up;

(ii)to increase from £500,000 to £1,250,000 the aggregate of the grants which may be provided for the Company; and

(iii)to provide for the issue by the Minister for Finance of repayable advances to the Company to meet one-half of the expenditure by the Company on the provision of dwellings for workers employed on the Industrial Estate established at Shannon Airport. The aggregate amount of advances shall not exceed £400,000.

The Shannon Free Airport Development Company Limited was incorporated as a Limited Company under the Companies Acts on 28th January, 1959. The main function of the company is to promote the increased use of Shannon Airport for passenger and freight traffic and for tourist, commercial and industrial purposes. To that end, the main activities of the company have been concentrated on attracting industrialists to set up factories in the Customs Free Airport area. Under the provisions of Finance (Miscellaneous Provisions) Act, 1958, industries established in the Customs Free Airport enjoy certain taxation privileges, in particular, total exemption from income tax and corporation profits tax until 1983 on profits derived from export business.

To facilitate prospective industrialists the company has undertaken a factory building programme, and factories can be provided for industrial undertakings at Shannon in the following ways:—

(i)The undertaking may lease a site from the company on which to build its own factory and for this purpose a building grant from the company may be negotiated;

(ii)The company may build a factory to a special design to be leased to the undertaking;

(iii)The undertaking may lease one of the company's standard factories.

As an adjunct to the factory building programme, the company has also undertaken the provision of housing accommodation for a proportion of the workers employed on the Industrial Estate. A scheme of houses and flats, for renting to tenants, is in hands.

The company's main sources of finance are provided under the authority of the Shannon Free Airport Development Company Limited Act, 1959. The Act authorises:—

(i)The Minister for Finance to subscribe for shares in the company up to an aggregate limit of £1,500,000, and

(ii)the provision by way of grant-in-aid voted annually of sums which in the aggregate shall not exceed £500,000.

The capital being used by the company to acquire revenue-earning assets such as factory buildings and dwelling-houses, the income from which will go to supplement the company's grant income. The grant-in-aid is applied by the company towards meeting its running expenses and providing financial assistance to new industrial undertakings at the Airport. Capital issued to the company up to 30th June, 1961, amounted to £1,358,000 and payments by way of grant-in-aid to £402,500. It will be seen that these figures are approaching the existing statutory limits. Accordingly, it is now necessary to increase these limits so that the company may continue its operations. Of the share capital expenditure up to 30th June, 1961, £939,000 was expended on factory buildings and £394,000 on dwellings.

Up to 30th June, 1961, 15 factory bays had been completed together with a special factory of approximately 53,200 square feet constructed by an industrialist with the aid of a grant from the company. Including the special factory mentioned, the total area of factory floor space provided as at that date was 285,340 square feet. All the factories are, of course, situated within the Customs Free Airport area. At present five factory bays are under construction. Ancillary services such as water, sewerage, electricity and boiler house have also been provided. The company has almost completed ten houses and a scheme of 137 flats is nearing completion. Plans are in hands for the construction of a further 100 houses.

As at 30th June, 1961, eight factories were in operation in the Industrial Estate and the total number of workers employed was 724. Of these 64 per cent, are male. A good number of skilled craftsmen have immigrated to Shannon. Among the commodities being manufactured are transistor radios, floor maintenance machinery, knitted jersey fabrics and knitted garments, wire gauze for industrial purposes, precision threaded fasteners and miniature capacitors, pianos and record players and radiograms, tungsten carbide inserts and diamond drilling equipment. All these industries are primarily export industries and are not in competition for the home market with other Irish manufacturers. The company is in active negotiation with a number of potential industrialists and I am happy to say that there is every reason to be confident that this estate — the first industrial estate in the world to be situated in an airport — will succeed and will continue to develop. The industries already established have given a very considerable fillip to air freight traffic at the airport and it is estimated that by 1965 over 5,000 tons of air freight will be generated annually by the factory operations now established or planned at Shannon.

It is abundantly clear that industrialists are attracted to the estate by reason of the availability of the convenient air freight facilities. The company on my direction are concentrating their efforts on the creation of an air freight industrial community and are seeking new industries of a kind likely to make the fullest possible use of the air freight facilities. The examination of inquiries made by industrialists about the Shannon Estate, and the origin of these inquiries, makes it quite clear that the great majority of these firms are interested in this aspect. A major advantage in the regular use of air freight is of course that the manufacturers can avoid having to tie up a large proportion of their capital in maintaining large stocks of materials, while the finished goods can be dispatched all over the world in a matter of days — sometimes of hours.

All the indications are that factories can be leased as soon as they can be built. Apart from the five factory bays now under construction, plans are being prepared for the provision of a further 32 factory bays over the next four years. Capital expenditure during the current financial year on the development of the industrial estate is estimated at about £550,000. It is difficult to forecast the probable capital expenditure after that date because this is naturally related to the continuing success of the company's efforts to attract industrialists. If the rate of capital expenditure to date is maintained the increase of £1,500,000 provided for in the Bill would sustain operations for perhaps three to four years.

The Bill also provides for an increase from £500,000 to £1,250,000 in the aggregate amount of the grants which may be made to the company. These grants are to cover the running expenses of the company and to enable the company to do such things as are calculated to encourage the establishment of commercial, industrial and trading enterprises at the airport. Receipts by the company up to 30th June, 1961, amounted to £422,000 made up of grants-in-aid of £402,000 and £20,000 in other receipts. The company paid out £202,500 in running expenses and £216,000 in grants to industrialists. The latter figure is made up of grants as follows:—

machinery and equipment

£120,000;

factory premises,

£85,000

training of workers

£11,000.

It emerged at an early stage of the operation of the company that the provision of suitable type housing was an integral part of the industrial development. The Airport is somewhat isolated from existing communities and industrialists already in production and firms about to commence production urged that housing should be provided in the immediate vicinity of the factories for a proportion of the workers. As I have already indicated, expenditure on the provision of housing at the Airport up to 30th June, 1961 was £394,000.

Here again, precise estimation of probable expenditure is difficult because expenditure will, of course, be related to the demand for housing which in turn will depend upon the rate of increase in the number of workers employed in the Industrial Estate. However, it is estimated that expenditure on housing in the current financial year will be of the order of £580,000. The cost of housing will be met as to one half from the company's share capital at a nominal rate of interest, the other half being met by way of repayable advances under this Bill. These advances will be on the same basis as loans from the Local Loans Fund, both as to rates of interest and repayments.

After making a most thorough investigation into housing requirements for the industrial estate, the company reached the conclusion that, subject to constant re-evaluation, up to one-third of the workers would seek housing accommodation adjacent to their work. In view of the many factors involved it has, however, been decided to limit the first stage of the housing estate to 250 houses and flats and to have a full reassessment of the housing problem from every aspect before reaching any decision to proceed further. The scheme for the 100 houses now being put in hands will cater for the needs of workers requiring accommodation at lower rents than those which can be charged for the flats now in course of completion. The industrial expansion at the Airport has also led to consideration by local authorities and private interests of house building programmes in adjacent towns and this is a development which I am sure all of us will welcome.

The work being undertaken by the Shannon Free Airport Development Company Limited is unique in the Irish economy and is probably without parallel in the economy of any other country. It is an experiment which involves considerable financial risk for the State but from the encouraging progress made so far, I am satisfied that the State should continue to finance the operation. The company has shown commendable enterprise, vision and enthusiasm in attracting industrialists to Shannon and I feel that I must take this opportunity of congratulating the directors and staff of the company on the results already achieved.

I recommend the Bill for the approval of the House.

Might I ask two questions? Am I correct in thinking that I have got the last report of the company in my hand — the one for 31st March, 1960?

That is the last one.

Secondly, will the Minister tell us what concerns started in Shannon and closed up.

There were two firms which failed to continue.

Doing what?

One was making bowling alleys and another was making a special kind of machine in relation to printing.

What about the chinchillas?

The chinchilla factory also closed. That was very small.

The House can accept this without much enthusiasm. I should like to get it into its proper framework. The concern has been operating for over two years. The company was started in January, 1959. A good many hysterical comments were made in the newspapers and by people sent there by the Government to write up the Shannon development matter. The comments have not helped. I read an article the effect of which was that within a very limited period there was to be a new city of 50,000 inhabitants brought together there and that there were to be all sorts of conditions for workers. The reality of the situation was given in an answer to a question the other day which said that the highest number of people employed on new production is 724, not on building.

The papers made great comments about the amount of production in the factory sent out by air. Last year, I asked a question on these lines. I was told that they were only estimates. There was no way of getting any record of what was being produced and sent out. This year, I was told that the collection of figures leading to a correct answer on such a matter had been put in hands somewhere. It was hoped that the estimates might be procurable some time later. There is no statistical information at all.

I notice that on page 4 of his statement the Minister says: "it is estimated that by 1965 over 5,000 tons of air freight will be generated annually." What is the basis for that estimate? How much of the tonnage of air freight has been generated already insofar as it is known? I got a figure which was open to many critical comments and I was suspicious about it. My suspicions were not relieved when the Minister spoke on the Estimate. He said there was no real statistical material available. Anything that was suggested was practically a guess.

The company started in January 1959. We are now dealing with the matter towards the end of July, 1961, and we are told that the highest number of people employed on new production is 724. We know nothing as to what tonnage of freight has been generated by the operations of this company. This must be put into its framework. The Minister is a member of a Government which succeeded in getting elected at the last election on the basis that 100,000 jobs were to be procured for workers.

The reality, as shown by Economic Statistics in respect of the Budget, is that the country is short by 51,000 employees as compared with 1956. Instead of there being 100,000 as was promised in the four years, we are faced with a loss of 51,000. Even if the estimate made in reply to a question of mine is realised, that there might be 1,000 workers employed by 31st March, it will still leave a deficit of 50,000 people as compared with 1956 and 150,000 people as compared with the promises made in the last election. Those are very serious calculations. They are all derived from Government statistics and they cannot be challenged. I notice that even recently there has been no great desire to enter into any conflict as to whether these promises were made or not.

The Minister in his statement also said: "All the indications are that factories can be leased as soon as they can be built." If that is the case, one is inclined to ask, with the lack of employment in the country and the failure to catch up on the promises made in 1957, why more factories were not built? I never understood that the situation was that industrialists were falling over one another with the object of getting to Shannon. It took a great deal of advertising. Two or three factories failed. There was no great success — nothing commensurate with all the propaganda used in regard to the Airport itself.

In regard to production in the Shannon industrial zone, I also asked how much of it derives from native raw materials. I asked a question on the Estimates last year what was the value added to native materials by native labour. I was aiming to get the statistics in relation to those employed and the break-down as between men and women and between foreigners and natives. In connection with any precautions taken with regard to specialised products that may be undertaken at Shannon, I should be glad to see that our own people will be trained by those who come in from abroad so that in a very reasonable time our people can take over whatever industrial development is in Shannon itself.

The Minister should have adverted to another matter. I do not think I am agitating in any unreasonable way or giving vent to views that are lightly held. How far does the Minister feel that the artificial arrangements made at Shannon can stand in regard to the new Economic Community into which it is thought we are going to go? The tariff side of industrial development has to be very carefully watched. The whole atmosphere of the European Economic Community is free trade under fair conditions. Any such thing as tariffs or incentives by way of reduced taxation applicable to certain industries is not likely to be regarded as fair trading in the new conditions. It works in the other direction. Anything in the way of an artificial advantage given to a group or series of places will certainly not, from my reading of the Rome Treaty, be regarded as fair trading in the new conditions,

When the Minister speaks of something that may happen by 1983, he is looking to a future unclouded by any suggestion that the Rome Treaty conditions might make the artificial aids given to Shannon obsolete, or at least unfair, and that they may have to be stopped. I do not think the conditions that operate in Shannon can possibly last outside the Rome Treaty. I know there are free ports elsewhere and that this is an effort to make the Shannon area something like them. It has a rival in the estuary project referred to in this House. But these special aids — remission of taxation, no profits and ploughing back of profits — are matters that are already being picked out by a lot of other countries as aids that can adversely impact on the Rome Treaty.

I give this Bill a welcome, but not a very enthusiastic one. There has been very little done in comparison to the propaganda used in regard to this place. The tot of the labour employed is very disappointing after a number of years and after all the State provided by way of financial sacrifice and some sacrifice on the local side by way of remission of rates. After all this, we have a total of 724 people employed, of whom somewhere around 300 are women workers — I do not know of what age or at what wage rates they are employed. One is always suspicious of new industries of 50 per cent female labour. The figure here is practically 50 per cent. The Minister says that 64 per cent of the 724 are male. About 400 would be male and about 300 would be female labour. The thing is disappointing and, as far as one can gauge the interpretation already being put on the Rome Treaty, whatever chance the industrial area has at the moment, its future is very definitely limited.

Naturally, I welcome anything that benefits Shannon Airport for the one obvious reason that its prosperity reflects on the city of Limerick, which I have the honour to represent in this House. I must confess I am a bit disappointed at the amount of information the Minister made available to the House. The Shannon Free Airport Development Company followed the establishment of the Shannon Free Airport Development Authority in November, 1957. At a meeting held in Shannon Airport, some time around that period, the aims of the new Authority were set out. It was visualised that with the development of jet aircraft Shannon Airport would be overflown to a considerable extent and that that would re-act particularly on the transit passenger traffic and the transit freight traffic, which had brought such considerable expansion and employment to the airport. It was felt that unless a vigorous effort was made by a body charged with that duty, Shannon Airport might dwindle considerably from the point of view of giving employment. A good deal of credit is due to the first body set up, subsequently followed by the company, of which Mr. O'Regan is the chairman today.

The reason I said at the outset I was a little disappointed at the Minister's lack of information is because I have a very vivid recollection of the purpose of the original Authority followed by the company, about which we are talking this afternoon. I would have liked to have had from the Minister more particulars as to the success in attracting freight traffic to Shannon Airport. I know the Minister has given certain figures in regard to the amount of air freight traffic generated in the industrial zone, but that is still only a very small proportion of the total transit traffic passing through the airport.

Originally, a good deal of discussion took place on the possibility of developing Shannon as a centre where air freight could be flown in, packaged and broken up into smaller consignments, and flown out again. The Minister has been singularly uninformative in giving the House particulars of that development. I have always felt that that type of expansion would have been very useful for Shannon Airport and would have cost comparatively little by way of capital outlay. I know that three of four years ago, the Authority, not the Company, had very optimistic views of developing Shannon Airport as a transit centre for air traffic of all types suitable to be flown in and flown out of an airport. Could the Minister say how successful their efforts in that regard have been?

It is also quite true, as the Minister appreciates and as everybody living near Shannon Airport will understand, that with the falling off in the transit passenger traffic, the sales at Shannon Airport shop have gone down considerably. Unless this type of traffic can be expanded again, it looks as though that side of the airport's activities must look forward to a continuing drop in sales.

It is true, of course, that there has been a substantial increase in the amount of terminal traffic, passengers getting off at Shannon Airport and getting on again there. I think there is room for considerably greater improvement in that type of traffic. I think we have tended to look too much to the American traffic in the context of Shannon Airport. I see a very big future for Shannon within the context of the European countries. As this country develops as a tourist centre, great opportunities will offer of utilising Shannon Airport as the entry for air traffic from the various countries on the Continent and particularly for passengers wishing to visit the South and West of Ireland. I should like to see a greater drive to have this type of traffic concentrated at Shannon Airport rather than at Dublin Airport as at present. That development, to my mind, would work hand in hand with the present drive to increase hotel accommodation in the various holiday resorts throughout the South and West of Ireland. I should like to see the Minister giving the House some idea that he visualises the development of that type of traffic.

Shannon Airport, of itself, is not a community centre. Practically everybody who works there migrates into the Shannon Airport area. While it is true, as has been stated here on a number of occasions, that it is vitally necessary to maintain employment at Shannon Airport, one must not forget the fact that the workers at Shannon Airport live to the greatest extent in Limerick and to a lesser extent in the town of Ennis. In visualising the continuance of the employment of these men and women, it is well to take into consideration the fact they are working away from where they normally live and that any effort to increase employment in either Limerick city or in or near Ennis would have the same effect as providing employment at the airport.

That is why I have expressed the view here on more than one occasion that it is a great pity that an effort was not made to establish an industtrial zone contiguous to Limerick city.

I have never accepted the arguments that all the industries that could be established at Shannon Airport could not be set up near an established community of 50,000 people like Limerick, or even near a small community such as Ennis with 12,000 population. I am still strongly of the view, in spite of the success attending the efforts at Shannon Airport, that with far less capital outlay, an industrial estate could be established on the Shannon Airport side, if you like, of Limerick which would have provided even greater outlets in employment than Shannon has done up to now.

I appreciate the Minister's viewpoint that one of the main attractions of Shannon Airport is the fact that it is an international airport and that industrialists are encouraged to go there to manufacture a type of article that can be shipped out by air, but I think I am correct in saying that not all the imports of raw materials that go into the manufactures in the industrial zone at Shannon or all the exports that come out of it travel by air. On a number of occasions, I have tried to get particulars of the goods going into or out of the industrial zone otherwise than by air but up to now it has been impossible to get these figures.

If it is a fact that certain industries there are importing and exporting goods otherwise than by air, it seems it would have been a more sensible development to establish these industries near a large community centre like Limerick. If I am wrong in that argument. I hope the Minister will put me right, but it does seem that when we establish an industrial zone 15 miles away from Limerick with its 50,000 population and still with a very substantial number of unemployed and a high rate of emigration, the possibility, at least, of establishing an industrial zone closer to Limerick where the workpeople live would be worthy of investigation by the Minister or by some other Department. I still hope that in, or near, Limerick city an industrial zone of this type may be established and I believe that if it had city would have benefited very substantially and a good deal of capital would have been saved.

It seems to me more logical to expand an existing community rather than try to create a completely new community around the Airport. I must say that together with other public representatives in Limerick and elsewhere, I have been disturbed by the extent of the future town — I might almost describe it as a small city — which we were told recently was to rise at Shannon. Estimates of 30,000 to 50,000 people living at Shannon Airport have been made from time to time. If that is a fact, I think it does offer a very serious threat to the existing community of Limerick city. I was glad to hear the Minister say that there would be a break after the first stage to the extent of 250 dwellings, and that thereafter they would have another look at the situation to see how it was developing.

It is quite true that certain industries will require at least part of their staff to reside near their place of work but I should have thought the number involved would be comparatively small and that, in the main, workpeople employed in these factories would wish to live in their own homes, where their families have lived for several generations. Certainly, it would have been cheaper to build houses near Limerick and provide fast, cheap transport to the Airport, rather than start building what already amounts to a small town and what will, if the company's estimates reach fruition, become a very substantial town in a few years.

In offering these criticisms, I do not want to be taken as in any way wishing to dampen the efforts made at Shannon. A great deal of credit is due to the initiative of the Shannon Company in securing these industries. But I should like to know what expansion has taken place in the original concept of Shannon Airport as a centre for transatlantic freight. Secondly, I should like to know if the industries—or some of them— established there could not have been established at Limerick or Ennis and the finished goods taken out either by road or rail to the Airport? Thirdly, what are the possibilities of expanding tourist traffic from the Continent through Shannon Airport?

As other speakers have said, the State has invested a great deal of money in Shannon Airport. In many ways, it has been a unique experiment. Everybody here wishes it every success. Personally, I wish it continuing success but I should like to feel certain that the capital so employed would not be better employed elsewhere. At this stage, I should like the Minister to have a look at the possibility of establishing an industrial zone near Limerick city from which goods could be transported to the Airport and thence by air or alternatively, could be exported through Limerick port which, as the Minister knows, is a port for ocean-going vessels.

The Minister deserves to be criticised very severely for having come to the House with this Bill without first having ensured that a more up-to-date report would be available in respect of this company than that for the year ending 31st March, 1960. Presumably, the company has kept to its accounting date and that 31st March last was the accounting date on which the balance sheet was struck and up to which income and expenditure accounts have been prepared. It should not be beyond the wit of man, in a concern of the size of this company, to ensure that their accounts are brought in and that the company meeting is held before the Minister comes to the Dáil towards the end of July, some four months after the end of the company's financial year.

Even if there were some hitch regarding completion of the accounts — and I do not see what hitch there should be—it should have been possible for the company to hold its annual meeting and adjourn it, and for the chairman to make an approximate statement at that annual meeting. I say that because I believe that it is at the annual meeting that the statement should have been made in such circumstances rather than by the Minister anticipating the chairman's report at such an annual meeting. The Minister is clearly to blame for not having made the appropriate arrangements with the company's board of directors so that the information would be available in that form, if it is not in final form.

Personally, I can see no reason why it should not be available in final form. If the experience of last week is repeated we will, I suppose, find the new report will be published next week. The Minister showed a complete disregard for the Dáil by the manner in which he announced a major step immediately after his Estimate concluded last week. That kind of slick procedure is a disgrace in its implications and in the aspersions it casts on this House. I am not making any comment at this stage either as to whether the Minister was wise or unwise to set up the super-State Board over State Boards, but it was a disgraceful thing that the Minister did not pay the Dáil the courtesy of advising the House that he had that in mind when his own Estimate was being discussed three or four days earlier.

On a point of explanation, I have been accused of being impolite to the House. I should like to say that the report in the newspaper concerned was not accurate and I issued a statement giving the truth about this committee to all the newspapers. I do not know if the Deputy read the corrected statement, but it made it quite clear that there was no such thing as a super-Government or State Company Board of an economic character. This was the heads of all the State companies meeting at intervals in order to discuss common problems. There is nothing in the nature of a new planning authority and nothing in the nature of an instrument over and beyond the instruments now in existence, such as the Industrial Development Authority, etc. I made that clear in the statement I issued to the newspapers.

I think the Minister is correct in what he says just now. He was so anxious about the initial blurb that he did give a false impression and the false impression was taken up.

The Deputy must give me the benefit of the doubt.

Surely, it would have been more courteous to advise the House when his own Estimate was being taken a few days before. I do not want to see the same thing happening in relation to the Shannon Free Airport Development Company. I do not want to see a balance sheet and accounts issued a few days after we have discussed a Bill instead of the House getting the information, as it should get it, while the Bill is actually under discussion.

One of the reasons I am particularly anxious to see the report to the 31st March, 1961, is because I cannot reconcile certain statements in the Minister's speech with the 1960 report. I am sure the Minister has the 1960 report there. If he turns to page 14 he will see that the report states that on 31st March last, 1960, in addition to the special factory, there were 22 factory units in operation. In paragraph 5 of his own speech he says there are 15 factory bays, a special factory bay, and five under construction. That makes only 21. Where are the 22 factory units? Where is the additional factory unit that the board of directors said was in existence on 31st March, 1960? Where has it gone in the interval? Has it got lost? Is it that the Minister does not know what is happening in a concern for which he himself is responsible?

Apart from all that, we have, I think, been given far too little information in relation to the costings of this concern and the projects in relation thereto. What is the average cost of these factory bays? On what basis is the rent fixed? For how long is it proposed to amortize the building costs by way of rent and apart from the return on the capital involved? Without being taken as criticising the project itself, when asked to increase so substantially the amount of money involved, the House is entitled to know the exact economic facts in relation thereto. We are entitled to know whether each of these factory bays is let at an economic rent, first, in relation to the return on the capital invested, secondly, in relation to getting back that capital by amortization in the ordinary way and, thirdly, whether we are entitled to know the split in the economic rent as between what is charged, on the one hand, and the free grant in respect of the factory bay on the other hand.

I accept without question that there must be from time to time variations in the cost of the individual factory bays. It is the principle with which I am concerned—the principle as to what is done in relation to costings, whether the lowest rent is fixed to produce an economic return, and over what period of years exactly that economic return will be made available. Apart from the actual factory buildings the Minister, in reply to a question, told us that three firms have ceased to function. Are we to understand that these companies have gone into liquidation? Are we to understand that there are no unsatisfied creditors, Irishmen and women, who have not been paid for the contracts which they took up? Everyone knows that, while the Minister does not accept legal responsibility in relation to these factories, there is a moral obligation on him to make a careful assessment of the work of the various concerns before they come in there.

I have seen articles in relation to one of the concerns that was established there and that subsequently closed up. The allegation was made that the way in which that particular concern was being run throughout the world was nothing short of a racket. The manner in which that article was written and the fact that it was published in a responsible and reputable magazine—a magazine with a financial background—made it perfectly clear to me that they must have had their facts correct because there was otherwise a clear action for libel, and no action for libel was taken.

According to what I hear, certain Irishmen and women lost through that concern, which was established in Shannon and which folded up, which was inevitably bound to fold up because the whole purpose behind it was to sell out the parent stock to people here and the company concerned were not going to take back the progeny of the parent stock for a number of years, before which time they would fold up their tent and creep away. I think both the Minister and the company have a moral obligation to ensure that we do not get under State sponsorship in Shannon Airport that type of concern. Nobody can possibly prevent an occasional mistake but there should be the most careful screening before there is an acceptance of factories for the free airport.

I must confess I also find some considerable difficulty in understanding the difference of the approach of the Minister to the Shannon Free Airport Development, on the one hand, and the Shannon estuary development on the other. In relation to the latter there are of necessity, perhaps, not exact estimates available, not exact forecasts available, not exact plans available. That is inevitable in the development of something new, even though as in this case, the Minister is dealing not only with his own money but with that of the taxpayer as well.

In the other case the people were making the investigation with their own money and it does not seem to me that the analysis of the forecasts and estimates for which the Government asked the Shannon Estuary Company has been made in the same manner as it was in this case. People who were expending their own money, as those concerned in the Shannon Estuary Company were should, it seems to me, be entitled to at least the same facilities as operated in relation to estimating in the Government's own concern.

Deputy Russell referred to the provision of housing on the estate. That matter has been raised often already by Fine Gael speakers and, for the life of me, I cannot see what the advantages are in setting up the new residential area in the Airport, with the costs which that inevitably brings in its train compared with availing of the types of buildings which are adjacent to cities and towns—Limerick, Ennis and Clarecastle, let us say. After all, it is not only the question of the cost of the houses. You cannot expect people to live in houses without proper amenities. It would mean perhaps hospitalisation and almost inevitably new schools. I do not know what it will mean in relation to the costs of new religious buildings in the area concerned.

The whole idea of building a new town for the purpose of dealing with this is, I suspect, not really as the Minister says—because industrialists want people living near their work— but because the Minister was determined to try and make a splash of this. Of course there would be certain key personnel required near factories, but the number of those would be very small, indeed, compared to what the Minister referred to in his speech. It would, to my mind, be far better that adjacent towns would be built up with the shops and the business people already in them and having other facilities and amenities such as cinemas and schools. Dispensaries would also have to be set up and that could all have been done far more cheaply and far better in the adjacent towns.

One of the difficulties with which every political Party is concerned is the manner in which towns, in certain cases, are being depopulated. Here was a chance to avoid that in relation to this area and I cannot see why this additional cost was incurred when we could have, for the same or less cost, availed of the amenities which are necessary adjuncts to the adjacent towns. I must confess that in relation to this Act—and I make allowances because it is the first Act—I find far less information being made available to the House than should be made available. I hope that when we are giving this increased subvention to the company we will bear in mind the onus that there is, because public money is being made available, to have a frank and complete disclosure of the economic costings to date and in the future in relation to individual projects.

It is not a question of suggesting that the money involved here should not be given. The House is entitled to know the exact basis upon which it is being asked to provide the money and I think it is unfair to the House that this should be brought here by the Minister with only a balance sheet 16 months old available and that available only for a trivial period of a couple of months. I do not quite understand one technical question in relation to the Bill. As I read the Bill, we are required to guarantee the £200,000 available which, at the same time, is being provided out of advances of £400,000 under Section 4. Is that merely a switch in the manner of financing or is it now consequent upon the order made on April 28th last removing the Shannon Free Airport Development Company Limited from the Schedule to the State Guarantees Act? Either now or during Committee Stage, I should like the Minister to provide us with that information.

This is the second if not the third of the Bills introduced in this House for the purpose of developing Shannon Airport. I always understood that the original of these Bills was for the purpose of ensuring that Shannon Airport might remain open. When the Minister introduced one of the earlier Bills he stressed the point that Shannon Airport was likely to be overflown on account of the approaching jet age and that, for that purpose, he wanted to ensure he would be able to establish an industrial arm at the airport. This Bill, as far as I can see, is purely an extension of the capital and State guarantees behind this concern. As well as that, a clause relates to the building of houses in the vicinity of the Airport.

The Minister must acknowledge that on the last occasion on which he introduced a Bill quite a few Deputies, not alone from the Fine Gael Party but from other Parties as well, stressed the point that as Shannon Airport was in an outlying area it might be better, in considering an overall scheme, to encourage industrialisation in that area, and within the vicinity of the airport itself that we should take into consideration the fact that the industries could be just as economically centred in or around the existing towns—places like the centre of Limerick and the other towns near the airport. If my memory serves me right, the Minister's reply was that it was the intention to save the Airport at all costs and that he thought that that would be the natural sequence of events, that these industries would be sited not only around the Airport itself but in the surrounding towns and cities. The fact that the Minister has come to this House this afternoon with a clause providing £400,000 for the building of houses in the vicinity of the airport suggests that that was wishful thinking on his part and also that he does not appear to have paid sufficient heed to the advice given to him from the Opposition benches and even from his own benches in the last debate we had.

In the front page of his opening speech today the Minister says that the main function of the Shannon development scheme is to increase the freight traffic and to promote commercial, industrial and tourist activities. I do not find anything in his speech to suggest there is any definite link-up between the development company and tourism. I do not see anything in his speech about tourists being invited to fly into Ireland, about a definite link-up between, say Bord Fáilte and the Shannon Free Airport Development Company and about the availability of transport facilities to convey people to the different scenic spots around Ireland where we have so much to offer the tourists. Could the Minister tell me, for instance, if there is any bus running from Shannon Airport to Bunratty Castle which is not very far away and which I think he himself went down to open with a great flourish some months ago, or whether there are any buses available to transport people to other places of interest in the immediate vicinity or in other parts of Ireland?

If this House is to be asked to guarantee an increase in capital up to £3,000,000 for this area, seeing that this is State money, are other parts of the country not entitled to such consideration? Would the Minister like to tell us whether this Shannon Free Airport Development Company is solely for the purpose of setting up industries in and around Shannon Airport? Is it solely for the purpose of providing facilities for companies who wish to set up there or is its purpose an all-out drive to secure more transport business for the air company itself and to benefit the national economy as a whole?

Representing a constituency on the east coast of Ireland, I was naturally suspicious when the Minister came into the House to tell us: "We have this company set up because if it is not set up, the airport may close down; we may be overflown." At that time I expressed the view that Shannon Airport would never close down because it is indispensable to the other air companies. There is not a month goes by that there is not some news of an impending disaster to an aeroplane out over the Atlantic which must return to Shannon Airport as the most westerly point. It is less than a fortnight since an aeroplane got into serious difficulties off the west coast of Ireland because of which Shannon Airport had to be alerted to receive the plane coming back.

The Shannon Free Airport Development Company could be a good idea. It would have been a very good idea if it were utilised entirely for light industries, products of which could be transported from Shannon Airport to countries in the western hemisphere and to different parts of the world. We have no information from the Minister as to what are the trade returns, whether the Airport is being used by air companies for transporting their material, whether the type of stuff manufactured at the Airport is suitable for transport by air at all. We know nothing about that. When the Minister introduces a Bill here he is probably under the impression that every Deputy knows all about the industries that are starting there. We do not. We do not know what the type of industry is. We do not know whether these industries are based on Irish raw material, whether they are heavy industries or whether they are light industries the products of which are capable of being transported at an economic price. Recently an article appeared in a certain journal—I am not sure whether it was an industrial journal or the journal associated with the chambers of commerce—in which they complained that some of these industries were being started under false pretences, that they were not fully utilising the air transport facilities available to them at the Airport. These are matters on which the Minister should give us some information.

Nowadays we are very prone to have Bills hurled at us by the Government. At the moment we are having them thrown at us at the heel of the hunt practically on the verge of a dissolution. There are 15 or 16 Bills confronting the House and I think I am right in saying that this is the third Bill the Minister has introduced relating to the Shannon Free Airport Development Company. I do not think we have had sufficient information. In replying the Minister should tell the House in minute detail what the returns are, what are the prospects of this company being a paying concern, whether in the main it is helping to increase transport business by making more use of the Airport than there has been. It is very easy to say we require this money for further development but all it really means is that the Minister is looking for more capital to start more industries and to build houses. Does that indicate to Dáil Éireann that this is a satisfactory company? It may be a commercial concern but I could very easily ask: "Why should that £3,000,000 not be utilised in County Wexford" which I represent and where I should be very happy to see it utilised, if it is purely for the purpose of expanding the national economy?

If this Bill is for the purpose of keeping alive the Airport and if the Airport is being kept alive purely by the fact that industries are centred around it, it is not achieving the object for which it was set up. I understand its function was to increase the freight traffic of the Airport and to expand tourism in Ireland by bringing more people into Ireland. If it is not fulfilling that function, we are just having further money expended on having industries sited in one area. Deputy Russell said just now there are a vast number of unemployed people in Limerick. Of course there are. There are a vast number of unemployed people in every town in Ireland. Instead of spending a vast amount of money in providing industrial employment in a new town, even if full employment is provided in that new town, would it not be far more sensible to give employment in existing towns? I would ask the Minister to deal with the points I have made when replying.

This Bill gives us an opportunity of looking at this Shannon Free Airport project and observing the progress, it is making, if any. As I understood the scheme in the first instance, it came to life from the idea of protecting employment at Shannon when there was a fear that, with the development of large jet aircraft, Shannon might be overflown to such an extent that employment there might be imperilled. The idea was then conceived of creating a free airport at Shannon as a lifeboat operation for the purpose of saving the employment of personnel who might be displaced with the introduction of the more powerful aircraft which it was then contemplated would use Shannon.

It was in pursuance of that policy, I take it, that firms have been encouraged to establish themselves at Shannon where certain advantages have been made available to them. The idea has progressed sufficiently to justify us asking at this stage what is the general plan about the future of Shannon. Is it the objective to locate only a certain number of industries there and to allow industrial development to take place in other areas? How many industries is it intended to locate at Shannon? What is the employment potential aimed at there? Is it intended to develop at Shannon the necessary attributes of civilised living so as to ensure that persons employed there will have at least the amenities they would have in, say the nearby City of Limerick or the substantial town of Ennis?

The idea of living on an airport is rather abnormal in 1961. Nobody would select as a place in which to live, unless driven to it by economic necessity, the perimeter of an airport over which 707 Boeing jets were flying day and night. It would be an interesting study to examine the second generation of Irish who had been born and reared on a jet airport and to see the physical characteristics they reveal. Everybody will agree that as a site for a home and a place to rear young children the perimeter of an airport has been avoided as far as possible. To select Shannon Airport as the ideal site for a bungalow, a place where one can get rest and peace, a place with a halcyon climate, would seem to be a complete reversal of everything that human ingenuity has thought of up to now.

The Deputy is exaggreating a little.

I am not exaggerating. I should be happy to be told in what way I am exaggerating. The Minister is taking power in this Bill to spend money on housing. I take it somebody will live in the houses, that we will not have another folly such as we had at Foynes and that the houses will be occupied.

The houses are not at either end of the runway, which is the main point.

One does not need to be at either end of the runway to hear a 707 as people in this city who hear them go over at night know to their disadvantage, apart from Shannon or any other airport in the world.

I want to find out the exact reasons why it is contemplated making Shannon, not merely a factory site, but a residential area. As has been pointed out by other Deputies, if it is intended to make it a residential area consideration must be given to the provision of schools, hospitals, clinics, dispensaries, secondary schools. Alternatively, one must contemplate long travelling from the residential area around the Airport to whatever place these facilities are available. It is not the best possible type of planning which involves persons having almost to leave home in order to get these facilities.

If there were no towns or cities near Shannon I could understand the reasons for proceeding in this way to build houses at Shannon and to provide these other facilities there in order to accommodate staff working at the Airport but in view of the proximity of Limerick City, with its scenic attractions, and the modern town of Ennis and other fair sized towns and villages, I cannot understand why, in planning for industrial development regard is not had to the need for building up Limerick and these other towns and villages instead of, as it were, concentrating on the Shannon project to the neglect of these other areas.

Every one of the firms at Shannon could be given precisely the same facilities in Ennis or Limerick. All that this House has to do is to decide how they should get them. There is no great disadvantage in importing the raw material or exporting the finished article. All that could be done, if firms decided to come here and if we wanted to facilitate manufacture and export of goods, by duty free import and facilities for export. We could let them take in the raw materials free of duty and put no impediment to their export. If these firms were located in Limerick, Ennis or any other town they could get the facilities that are available at Shannon. That would obviate the risk of over-industrial sing Shannon to the neglect of other places which have been centres of human activity and where equal facilities are available for the establishment of industry.

I do not say, and have never said, that this whole project is undesirable. I realise the necessity for a lifeboat operation by establishing industries at Shannon to take up the possible sag in employment caused by Shannon being overflown by the larger type of aircraft but we have to review this matter from time to time and see where we are travelling and not accept that what we do today inevitably drives us to do something next year which was not contemplated in the first instance. This matter must be examined from time to time from the standpoint of operating a lifeboat service to save employment and the heavy capital investment at Shannon but having regard to the very legitimate claims of other towns and cities for a share of the industrial development which at the moment, so far as that portion of Ireland is concerned, seems to be concentrated somewhat unduly at the Shannon Free Airport. I do not want to be over-critical of what has been done, but I do say that a considerable amount of prudence is necessary to make sure that we are not putting, as it were, all of our money on one horse, while many equally deserving horses are available to carry our money, perhaps to ultimately more rewarding ends.

I should like to reinforce some of the remarks I made on previous occasions, and which have been stressed by Deputies this afternoon. The original plan when facilities were provided at Shannon, as I understood it, was to cater for those who might be disemployed as a result of the development of modern aircraft, and the likelihood that Shannon would be over-flown. That, in itself, was a desirable objective, but, as I mentioned previously, and as other Deputies have said, it is worth while seeing where we are going in regard to these facilities that are now being provided, or which may have to be provided, at Shannon, which to a very considerable extent are already available at Limerick or Ennis.

In fact, workers who may be disemployed as a result of any of these developments now reside, in the main, either at Limerick or Ennis, and those who were formally employed dealing with aircraft at Shannon had to travel to Shannon from Limerick or Ennis where their families resided, and where the various facilities were available.

What I want to find out is: what special facilities are available at Shannon that cannot be provided at Limerick or Ennis? It may be that for certain types of industries which import raw materials which are suitable for air transport, an airport is a convenient place to set up a factory to process the raw materials and, in turn, export the finished article. On the other hand, there is no inherent difficulty in providing the same facilities for the establishment of such an industry at Limerick or Ennis, or some of those smaller places such as Newmarket-on-Fergus or Clarecastle.

In the case of Limerick and Ennis, one of which is a large city and the other a very considerable town, both have ample facilities available. They have all the ancillary services, churches, housing schemes, schools, shops, and so on. There are many examples of special arrangements being made for existing industries which have to comply with certain requirements. It would be possible to get similar requirements complied with, if necessary, at either Limerick or Ennis.

There appears to be some magic in the words "Shannon Free Airport." Because of the description "free airport," the same facilities could be provided either under licence or whatever other statutory or technical requirement is necessary at either of these other places. I believe that what has been said this evening by Deputy Norton is correct. We should have another look at this matter. No one will criticise the Government for efforts made to absorb those who may have been disemployed. On the contrary, everyone supports that intention.

Merely because an effort was made to do that at the Airport—and because of the fact that the other facilities exist in abundance in normal conditions at Limerick or Ennis—is no reason why we should not now reconsider the question. It may be argued that it might be too costly to establish a factory or factories at one of these other places and bring the finished article or the raw material to the Airport, that is, the finished article in the case of finished commodities and the raw material in the case of imports. On the other hand, it would probably be far less costly to do that than to provide housing schemes, churches, schools and the other necessary adjuncts to a development scheme such as is envisaged here.

I have never yet got a satisfactory answer as to why these facilities which are being provided cannot be provided at Limerick or Ennis. If there is any lingering fear that there would be criticism if the project were altered, or the original project changed, there need be no doubt about that, because Deputies on all sides of the House are quite prepared to have this matter looked at afresh and examined with a view to arriving at the best possible solution from the point of view of providing employment for those who may lose their employment. This scheme has very considerable possibilities but these necessary services are already available in these other places. They could be provided far more cheaply by availing of the existing services which are catering for substantially more people, without embarking on an undertaking the full consequences of which cannot be actually foreseen or entirely estimated on a financial basis.

Some speakers have been cautious in their acceptance of this Bill and others have questioned the whole project. Most of the questions asked have already been answered in my Second Reading speech, and I do not propose to repeat either what I said on that occasion or what I said during the course of my Estimate speech. I shall try to deal so far as I can with the new questions that have been raised.

The purpose of this air industrial estate is to provide employment for those who may be disemployed as a result of aircraft flying over Shannon. It has already emerged since that decision was taken that there is a new demand, for property adjacent to the airfield from which raw materials and finished goods can be directly despatched and discharged from the factory to the airplane.

The answer to the Deputy who raised the question as to whether we could not have established these industries in Ennis or Limerick is that this is a specific type of new industrial estate which does not exist anywhere else in the world, except in Luxembourg, where they are already planning an estate of the same kind. Therefore, the project is entirely new and development is proceeding. I cannot tell the House how quickly it will grow. I can only give estimates on the basis of the present bookings of factory bays. If the number of factory bays built each year—which is roughly from eight to ten—and the bookings, continue on as satisfactory a basis as at present, several thousand people will be employed at the Shannon industrial estate in the course of the next few years. Much depends on international trade and on other conditions over which we have no control, or little control.

Deputies asked why we were building houses at Shannon. There again, the answer has been given many times in the Press, and in my speeches on the Estimate, and on other occasions. These houses are not being constructed in order to provide a splash by way of Government publicity. The housing scheme is based on the most minute and detailed inquiries having been made from expert town planners with international reputations. We consulted our own town planning experts and the town planning experts of at least three other countries on the complicated question of how many people, if you give employment in an isolated part will want to live near their work, how many must live there, and how many are prepared to go by bus, whether subsidised or unsubsidised, 14 or 20 miles away from their homes.

This is a question on which there is a great deal of evidence from foreign countries, through the building of entirely new towns such as those built as satellite towns in England. There is a variety of evidence based on individual psychology, domestic habits, and related to various types of workers. On the basis of the expert advice, it is reckoned that about one in three workers will want to live in Shannon and the rest will want to live in Limerick, Ennis, Sixmilebridge, New-market-on-Fergus or somewhere adjacent. The Government decided that the matter should be examined further and so, as I indicated in my Second Reading speech, we plan at the moment to build 250 dwellings, including flats let at higher rents and houses let at lower rents. The demand for these dwellings is already very favourable, showing that at least to some extent we know already that the town planners and the experts were right when they said that in any new industrial area, there will be people who wish to live close to their work.

I should also add that the industrialists contributed their measure of information and help by making it clear to us that there must be housing for certain classes of workers adjacent to the Airport. These industrialists included firms of international and very fine reputation who had built factories in other places where there was a floating population and had some experience of where their workers wished to live. I have now outlined the purpose behind the development of this estate.

In reply to Deputy McGilligan, there are 724 persons employed now. That again is a figure which we regard as very hopeful. He spoke about the small numbers of persons employed, but the estate is just getting into operation and many of the firms have not yet installed all their plant. The firms have told us that, other things being equal, they hope they will eventually employ 2,000 people. That is what the firms tell us. This forecast again will be affected by international conditions and the state of trade in general, but I think it is a very good indication from the point of view of industrial development in the country. The firms themselves have invested about £1,000,000 in the estate, exclusive of all grants by the Shannon Company. They have told the company that their total investment will be £2,000,000, which again is quite considerable.

With regard to the question of our joining the Common Market, it would be much too difficult for me to go into detail in regard to its effect on the Shannon industrial estate. All I can say at the moment is that the inquiries coming in for factory space are increasing, if anything, and show no decline whatever since this matter has been discussed and since all the talk about the Common Market started in earnest, both in Great Britain and here. It would take me much too long to give the House full particulars of how the Common Market could affect the estate. I think we can look at it in a reasonably optimistic frame of mind and if the firms are doing their job properly, and if their costs are low and their productivity high, I think with some adjustment they might be able to take advantage of the greater market in the future.

In particular reply to Deputy Russell, if the industrial estate had been established in Limerick, there would be two additional transshipments of raw materials and finished goods and that is one of the particular factors which is very important to the promoters of industry there. They do not want to transship their goods, if they can avoid it. They want only single handling. If Deputy Russell and Deputy McGilligan would like to go to Shannon, I am sure they would be received by the chairman and other officers and they could be introduced to some of the managers of the factories who would explain to them why it was so important to have the industrial estate on the actual taxi-way of the airport. It is the development of this new idea which I think is going to bring prosperity to the industrial estate at Shannon.

I should make it clear that I have emphasised to the board of directors of the Shannon Free Airport Development Company the necessity of keeping to the principle that this is an air industrial estate, in order that they should not compete unfairly with the development associations in other towns throughout Ireland who are trying to secure industries for themselves. I am very glad to say from the origin of the inquiries made to the Shannon Free Airport Development Company that it is perfectly evident that the firms coming in there are, in the great majority, those looking for sites right on the verge of the Airport for the particular advantages that accrue from that situation.

Could I ask the Minister does that apply to all the factories established and the factories likely to be established?

I would say it would apply to all factories likely to be established. There was some discussion about some casualities that occurred in the estate.

About one of the casualities.

I think I can say I have not received any indication of amounts of a substantial character owed to any firm or individual as a result of liquidation. Deputy Russell and Deputy Esmonde asked some questions about bringing traffic to Shannon, both freight and passenger traffic. The answer is that the Shannon Company spends considerable sums on advertising campaigns, both direct and in collaboration with other air companies and agencies. Television advertising is also carried out and other promotion methods are used to promote Shannon as a travel centre. Tours are organised from Shannon to other parts of Ireland and the Shannon Company itself manages Bunratty Castle and ensures that there are excellent travel facilities to the Castle from all directions.

In regard to air freight, as the House knows, there will be a reduction of air freight rates on September 1st of this year, and it will take some time to estimate how far that will help Shannon to become to a greater extent an entrepôt for transatlantic air freight. Much depends on the effect of the fixed points at which changes of rates are made in regard to bulk cargo. It may be that these weight break points will encourage the use of Shannon as an entrepôt for trade and on the contrary, it may encourage aircraft to go further to other countries. That matter is being studied and as soon as the Shannon Company is able to assess the position accurately, they, encouraged by us, will do what they possibly can to tell the whole of the freight world how the rates can affect freight costs and enable companies to benefit in their costings and dispatch by using Shannon as an entrepôt. There is an element of controversy in regard to the future use of Shannon Airport for freight purposes. The question arises as to whether it is better to encourage a large number of planes to visit the airport and to fill up spare capacity with freight or to encourage a few large freighters to take very large quantities. All that enters into the general examination of the position.

I am sorry that the accounts for the period ending 31st March, 1961, are not ready. The officers of the Shannon Development Association have been working extremely hard. They have been working overtime. They have been dealing with an entirely new project in which innumerable questions of a novel kind had to be answered. They have had to help industrialists to establish themselves. They have had to arrange for the training of workers. They have had to plan the housing. I believe the Company to be efficiently run. There is no special reason why the accounts should be delayed. I understand they should be ready in the course of a month.

In regard to the whole of my Department, that position arises in the presentation of accounts. Were it not that it would mean other complications, the ideal period for the Department's Estimate would be September each year. The final accounts of the companies seem to come just at the end of the Dáil period. I was able to extract some provisional figures, in connection with some of the State companies over which I have supervision, in time for the Estimate.

September this year would hardly be an appropriate time.

No, and it never will be because of the constitutional and statutory difficulties of which the Deputy is aware in having Estimates at that period of the year.

It might be possible to work out a future system by which the Estimate could be argued in October on a "take note" motion and not argued at the time of the Estimate.

Deputy Sweetman asked some questions about the arrangements for the provision of factory buildings. It would be very unwise for me to give details of the individual agreements made with each factory. Over the whole period it is expected that the Industrial Estate will be a viable undertaking to the point that it will eventually pay interest on the capital invested in factory buildings at an economic rate. I doubt whether capital will be repaid. The investment will provide an economic interest eventually. It would be impossible to give particulars of each individual factory because these agreements are made privately. At a certain point the rents will be of an economic category as the rents rise over a period; in some cases they are struck at an average rate. The whole effort is intended to be economic in the long run.

By "economic" does the Minister mean servicing the capital employed for interest only or advertising as well?

I think servicing the capital paid with interest only. There is nothing significant in the change about the arrangement for financing housing. The present £400,000 is for housing loans and replaces advances for houses from the Local Loans Fund. The terms are exactly the same as though the money was raised through the Local Loans Fund. I think I have answered all the main points.

How many persons were employed in the firms that closed down? What is the total there?

I have not that figure, I am afraid, at the moment. It was not very high—about 30 or 40.

That is the aggregate figure?

Are economic rents charged on the houses based on full charge of the service of the loans?

They are charged on the basis that half the cost of the housing will be met from company capital. Only a nominal rate of interest is paid on this capital. In respect of the half of the capital issued in the form of repayable advances, the full rent is paid on that proportion.

If that is so, how does the Minister say it is anticipated that the amount of capital involved would be serviced for interest?

I was speaking of the capital involved for the construction of factory buildings as distinct from housing.

Factory buildings on the one hand and building houses on the other hand; where does the estate company, as such, get its revenue?

I should have made clear that, in respect of the housing, half of the capital being derived from repayable advances for which the terms are the same as the terms under the Local Loans Fund, full economic rent is paid. On the half of the capital derived from the company itself, only a nominal rate of interest is charged. In the case of the factory buildings, it is anticipated that the rents paid for the factory buildings will, at a certain point, be equivalent to the normal full rate of interest on the capital advanced but there will be no amortisation.

Does that mean that the houses are subsidised——

To some extent, yes.

Does the company get its gross income from anything other than rent of factory buildings on the one hand and rent of houses on the other hand?

That is the principal source of income.

There is virtually no other income. If it gets its income from only those two sources—and, in respect of the house, only half is economic and, in respect of the rents, they will be economic for interest only after a period—how can the Minister say the whole company will meet its capital costs for interest purposes?

The Deputy is quite right. I was confining my remarks to that portion of the capital devoted to factory buildings. If you take the whole concern, the interest paid will not be the normal interest on the capital because of the deficiency arising on the housing end.

What is the deficiency likely to be in the years ahead?

It would be difficult to say.

I am quite sure the Minister's colleague asked him for a figure before he was agreeable to the proposition.

The Deputy might raise that on the Committee Stage.

There will be a Money Resolution.

Question put and agreed to.
Committee Stage ordered for Tuesday, 1st August, 1961.
Top
Share