Committee on Finance. - Shannon Free Airport Development Company, Limited (Amendment) Bill, 1965: Second Stage. – Dáil Éireann (18th Dáil) – Tuesday, 15 Jun 1965

Committee on Finance. - Shannon Free Airport Development Company, Limited (Amendment) Bill, 1965: Second Stage.

Minister for Transport and Power (Mr. Childers)

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

The purpose of the Bill is to provide for the further financing of the Shannon Free Airport Development Company Limited by extending the limits on investment contained in the current legislation. The Bill provides for: (1) an increase from £4 million to £6 million in the aggregate of the amounts which the Minister for Finance may subscribe in taking up shares of the company; (2) an increase from £2 million to £3 million in the aggregate amount of grants, voted annually, which may be made to the company; and (3) an increase from £2 million to £3 million in the existing statutory limit on repayable advances by the Minister for Finance for the provision of houses and community services.

The Development Company was set up to promote the increased use of Shannon Airport for passenger and freight traffic and for tourist, commercial and industrial purposes. The main activities of the company have been the attraction of industries to the airport and more recently the development of Shannon as an international warehousing centre.

Share capital subscribed to the company is used for the provision of factory buildings. These are normally rented to the occupiers but factory bays may also be purchased outright or may be built on sites leased from the company. Repayable advances are used for the provision of dwellings and community services for the purposes of the Industrial Estate. The houses are provided by the company at reasonable rents or to purchase, and developed sites are also made available for persons wishing to build their own houses, and for speculative building. The grant-in-aid moneys are applied towards meeting the company's running expenses and providing financial assistance to industries including grants towards factory buildings, new machinery and the training of workers.

The finances provided to the company under existing legislation up to 31st March, 1965 were as follows:

Share capital	£3,423,000
Repayable advances	£1,878,000
Grant-in-aid	£1,605,500

The balances remaining under existing statutory provisions are therefore:

Share capital	£577,000
Repayable advances	£122,000
Grant-in-aid	£394,500

It is expected that these balances will be exhausted at an early date and it is necessary, therefore, to promote amending legislation to provide for the further financing of the company so as to enable it to plan ahead and to enter into commitments with industrialists and others. The revised limits proposed under the new legislation should suffice until about 1968 when it is proposed to afford the House a further opportunity of reviewing the progress made by the company.

The company has been making steady progress in attracting new industries to Shannon. At 31st March, 1965, there were 14 manufacturing and ten trading concerns in operation at the airport. Thirty-two standard factory bays and three small bays were occupied by these firms on a rental basis and two firms were in occupation of their own factories—one built with the aid of a grant from the company and the other purchased from the company after allowance had been made for the equivalent of a building grant from the company. The output of the existing factories, practically all of which is exported, includes pianos and floor maintenance equipment, jersey fabric and fashion garments, office machines and equipment, diamond drilling equipment and electronic components, and the range of services provided includes warehousing and freight forwarding, data processing, public relations and management consultancy.

Eight warehousing units of 3,750 sq. ft. each have been constructed and two more are being constructed as part of the company's plan to encourage warehousing, freight consolidation, freight forwarding and redistribution of goods at the airport and to establish Shannon as a centre for the distribution of goods in international trade. At the 31st March, 1965 three of the units were occupied and five were allocated to prospective tenants, three of which were previously located in temporary premises at the airport. Although terminal freight at the airport in 1964 rose by 31 per cent to 4,182 tons from 3,196 tons in 1963, freight generated by the Industrial Estate—which was about one-fifth of the total—was down by about 9 per cent compared with 1963. However, in the first three months of this year Industrial Estate freight was up by nearly 70 per cent compared with the first quarter of 1964. The development of terminal freight traffic is difficult mainly because of the great disparity at present existing between air and surface rates but as this gap narrows it is expected that the volume of air shipments will increase substantially. The encouragement of warehousing is expected to give a considerable fillip to air cargo shipments. The company is also active in securing improved cargo rates, improved services and speedy clearance at destinations and in the publicising of the facilities available by air.

Employment has been growing at a satisfactory rate since the Industrial Estate was set up. From a figure of 453 at the end of March, 1961 it rose to 1,151 at March, 1962, to 1,542 at March, 1963 and to 2,109 at March, 1964. At the 31st March, 1965 employment had risen to 2,927, of whom 1,538 were male, and the increase of over 800 in the past year is most satisfactory. The Second Programme for Economic Expansion envisages that about 5,000 persons will be employed in the Industrial Estate by 1970. On the basis of progress to date, this target should be achieved, always provided of course, that a sufficient labour force continues to be available. No immediate difficulties are anticipated in finding male employees as trainees or unskilled workers though some problems are being experienced in finding men in suitable age groups. Skilled men who have emigrated are being attracted to return. Special consideration is being given to the provision of accommodation for female workers who may wish to reside at the airport. Industries employing predominantly male labour are those which are most encouraged and the projected community development should ensure the establishment of families in the estate. A notable feature in the development of the Industrial Estate has been the rapid rate of expansion of some of the firms and, in fact, the four major established firms have been mainly responsible for the increase in employment. Many of the firms have plans for further expansion and one of them now employing about 780 people envisages a work force of up to 2,000 by 1969.

So far, the importance of the Shannon project has been seen principally in the employment which it has provided and which continues to grow, and in the increasing business at the airport itself, where once the indications seemed to be that traffic might decline to a level which would mean virtual closure of the airport and widespread unemployment. Another aspect of its great national importance can now be measured because Córas Tráchtála recently completed a study of exports from the Shannon Free Airport Industrial Estate and this showed that, during the calendar year 1964, £14 million worth of manufactured goods were exported. The target set in the Second Programme for 1970 is an output of £20 million gross and the present rate of growth indicates that this target will be achieved.

Although the rate of introduction of new firms has not been as great as the rate of expansion of established ones, there has been no decrease in the number of inquiries being received by the company from industrial interests. While a certain amount of factory accommodation must be provided in anticipation of actual demand, factories are built on the basis of likely demand and building programmes are sanctioned on this basis. The company's factory building programme as incorporated in the Second Programme envisages a construction rate of eight factory bays each year to 1969-70. The company's programme to attract new industries is being promoted in the US, heretofore the most fruitful market, the UK and Europe. Because of their dependence on export markets, the success and expansion possibilities of industries are particularly susceptible to changes in international trading conditions, particularly the imposition of new tariffs such as the 15 per cent UK levy or restrictions imposed by other countries on investment abroad.

While every effort is made to ensure that industries establishing at Shannon will be viable, there is no absolute safeguard against the risk of a set-back arising out of circumstances beyond the control of the company and of the industries themselves. To cater for the smaller company with perhaps limited capital, the company has arranged for the construction of a number of small factory units. It is, of course, impossible to foresee with any certainty the extent of future development but the proposed increase in the share capital to £6 million should be sufficient for the next two or three years.

As the Industrial Estate expands, the demand for accommodation both for married and single people at the airport grows and the company is meeting this demand by providing houses to rent or purchase and also by providing developed sites for speculative building or on which persons may build their own houses. It is necessary to strike a balance between overambitious planning and under-planning. It is important that workers should not be discouraged from taking up employment at the airport because of lack of suitable accommodation. This is especially so in the case of key workers in new industries. It has been the policy to provide housing at the airport in line with likely demand and the company's housing schemes are planned on this basis. It is recognised that community development must be maintained in line with development on the industrial side. The present resident population at Shannon is about 1,200 and the amenities include shops, primary schools, banking and postal facilities, a recreation centre and a public house. Shannon has been selected as a location for one of the new comprehensive schools. It is estimated that the population will have risen to about 3,700 by 1970 and the company's building programme is proceeding on this basis. This programme is incorporated in the Second Programme which envisages a construction rate of about 80 houses a year.

Up to the 31st March, 1965 expenditure on housing amounted to £1.82 million, all of which had been provided by way of repayable advances. Two hundred and ninety-two houses and 137 flats had been completed. Almost all of these houses and flats were either occupied or allocated. A further 26 houses were under construction. Rents are fixed in relation to what the tenants can reasonably be expected to pay and a subsidy is provided from the annual Transport and Power Vote to meet the difference between the rent paid and the economic rent. The economic rents are calculated on the full cost of construction after deduction of the equivalent of the normal housing grants available to private persons under the Housing Acts. Provision is made in the rental agreements for increases in the rents as wages generally increase, thus reducing the amount of subsidy required.

In June, 1964 the rents were increased by 7 per cent. Tenants desiring to buy their own houses are encouraged to do so. In addition to houses provided by the company for rent and sale, 20 sites have been developed by the company for private construction of executive type houses and building has commenced on six of these sites. A significant advance is the undertaking by a private builder of a scheme of about 60 three and four-bedroomed houses for private sale on a site provided by the company and this is one of the most encouraging signs of the establishment of a permanent community at Shannon. However, the bulk of the housing requirements of workers on the Industrial Estate will have to be financed out of State funds for some years to come.

The company have been authorised to purchase additional land in pursuance of their development plans as embodied in the Second Programme for Economic Expansion. The additional land which also provides for planned expansion beyond 1970 will be used for the building of houses, a town centre—commercial and shopping, civic and cultural and car parking-the provision of educational and institutional facilities and open parkland containing recreational facilities.

The company are co-operating fully with the planning authorities in the co-ordination of development plans for the Limerick/Clare region in which Shannon plays such a significant part and the company's own plans will be dovetailed into the overall planning for the region as a whole.

The success of the company's tourism promotion activities in conjunction with other promoting bodies including Bord Fáilte, the MidWestern Tourism Organisation, and the air companies is reflected in the increase in terminal traffic at the airport in 1964. The growth in this traffic more than offset the decrease in transit passenger traffic so that the combined total rose by almost 50,000 to 380,000, an increase of 13 per cent over the previous year. New services on the Shannon-Paris, Shannon-Manchester and Shannon-London routes, the new transatlantic turn-round service being introduced by Trans World Airlines and increased frequencies by Aerlinte and other operators should also provide a very considerable fillip to the growth of passenger traffic through the airport.

During 1964 the company's mediaeval tour and banquet attracted 20,000 people the great majority of whom were tourists including North American visitors to Europe encouraged to stop over at Shannon. So successful has the mediaeval banquet become that capacity at Bunratty is now nearing saturation point and the company has been forced to look around for other venues to cater for the overflow. The establishment of the Folk Village beside Bunratty has added greatly to the attractions of the Castle and 62,000 people visited the Castle and Folk Park in 1964.

The Bill also provides for an increase from £2 million to £3 million in the aggregate amount of grant-in-aid which may be paid to the company. These grants provide for the running expenses of the company and also enable the company to pay grants to industrialists for buildings, machinery and the training of workers. Grants paid to the company to 31st March, 1965 amounted to £1,605,500. In addition the company received £654,000 by way of rents and other income. £1,387,000 was used by the company for promotion and administrative expenses and grants were made to industrialists at follows: machinery, £525,000; factory premises, £127,000; and training of workers, £181,000.

It will be seen that the confidence which I expressed in the continued progress of the company when recommending the 1963 legislation for the approval of the House has been fully justified and that in fact it has become necessary to increase the finances provided for in the 1963 Act earlier than was then contemplated. The increase in the limits proposed is necessary to enable the company to fulfil its obligations under the Second Programme for Economic Expansion. The company must have adequate finances to proceed with its programme and it is accordingly necessary to promote amending legislation to enable these finances to be provided. The outline which I have given of the progress made by the company to date affords ample proof of the continuing value to the national economy of the Shannon enterprise and I am convinced that the additional finances now sought will prove to be a prudent investment in the national interest.

I recommend the Bill for the approval of the House.

Mr. Donegan

We on this side of the House are completely behind this project and want to see it pushed forward with every effort that can be made on the part of the Government and the Minister. This project has had its success and failure but that is inevitable in the case of any new effort of such a size. Recent questions in relation to failures of companies which have received grants have elioited replies which told the House and the country that there have been very few failures, in fact, in relation to grants and loans given from Government and semi-Government sources and that the story has been largely one of success. There has been, probably, a history of considerable conservatism on the part of these bodies and this may be a factor. Many cases where applications were refused might have turned out to be failures if the applications had been granted. Notwithstanding that feature, the truth is that, as far as can be ascertained, the story, not only in relation to the Shannon Free Airport Company sphere but in the industrialisation sphere all over the country in connection with grants and loans has been a success story.

One of the ideas behind the establishment of the Shannon Free Airport Company, apart from the provision of employment and the building up of the area, was the creation of air freight. It is a pity that the Minister had to tell us today that there is a reduction in the volume of air freight that passed from these factories last year. I am sure the Minister regrets that. So do we. The fact is that in relation to sea and land freight, air freight is highly expensive. One could understand that the end product of a diamond cutting industry would almost certainly go by air but this is an obvious example where a very valuable item is of very small weight. At the same time, one can see that many of the industries established at Shannon are industries which will never send their end products by air. That may not prove to be the case but it does appear as if in the foreseeable future a considerable quantity of the end product of these industries will not be sent by air. This is not anything to be decried or to be sad about but we do wish that it was not the case.

We are pleased to see the numbers employed. It is necessary on an occasion when we are voting money to consider the cost per worker. I do not regard the cost per worker, which appears to be between £2,000 and £2,400, according to the figures in the Minister's brief, as being excessive. This figure is probably quite in line with the cost of providing a job in any other sphere in the country today. From that point of view, it looks as if this has been an economic operation and this is, of course, another reason why it should be supported from all sides of the House.

There is just this point: if we are not to get a very high level of air freight from the end products, was it right to place this company there or should it have been placed at, say, Limerick or Ennis where it would have done the same job in the same area and could have availed of existing services which have now to be provided at extremely high cost?

That is not to say that I regard the whole operation as being too costly; I do not; but it would not be right if an Opposition speaker here today did not advert to the fact that, in addition to the figures given by the Minister of cost and investment, there are other investments by the Government and by the local authorities in the form of grants towards house building, the provision of sewerage and water, roads and all the other investments that had to be made in order that the project could succeed.

Happily, it looks now as if the project is succeeding and I can speak for our Party and say that the project will receive every support, help and encouragement. It would appear now that possibly—and I deliberately use the word "possibly" rather than the word "probably"—it might have been better to site the Shannon Free Airport Company at Limerick or Ennis. That would be, perhaps, to forget all about this question of a free airport.

The Minister has mentioned the question of warehousing and this could have an application here. Warehousing, as such, is an operation that has not got a high employment content. Neither is it an operation which in relation to the expenditure on new buildings gives a very quick return on capital. Therefore while it would help the development of Shannon Airport as such, and thus could be a valid reason why the Government and this House would fully support such a line, it would not give the return, the extremely pleasurable return that we can see in relation to the volume of employment that has been created and the cost of such employment at £2,300 to £2,400 per worker which, I would emphasise, is not a high figure today and is, in my view, a highly satisfactory figure. There is one question I would ask in relation to this figure: Does it include constructional work, and if it includes workers who are engaged on the construction of factory bays or on the construction of housing, then it is to a certain extent——

Mr. Childers

No.

Mr. Donegan

It does not? I am very pleased to hear that, because it means that the figure is factual. The practice of leasing factory space is one that is in operation in England where there are pockets of unemployment such as the north-west of England and in Wales where factory space is leased out at a rate per foot. This has been successful at Shannon and it is a question now as to whether in relation to its success we should examine our system of grants for industry and see whether or not there might be better application of them in connection with the leasing of factory space at an uneconomic figure by subsidising that uneconomic figure with a grant from the State, rather than the present system of giving a lump sum grant for industrial buildings.

This system seems to have worked in Shannon but perhaps with this exception: Shannon Free Airport has not as yet attracted such industries as one would imagine could go there, having regard to all the facilities available. I am suggesting there should be established there the sort of industries that have a high employment potential such as the Philips concern at Clonskeagh, Unidare at Finglas, or GEC in the part of the country from which I come. There is every encouragement for such firms to go to Shannon Free Airport. I imagine these things will happen in the future. I should like to hear from the Minister as to what is the position in relation to the goods produced there and the British levy of ten per cent. I presume these goods are subject to that levy.

Mr. Childers

Yes.

Mr. Donegan

That is not an extra advantage but it does appear to me that if the source of good quality labour does not run dry—and my information is that it does not seem to be running dry at this stage—then we should attract far more industries and, indeed, industries that would have a very high employment potential.

I welcome also the fact that the Minister is building small factory bays. Some of the failures there have been in relation to our encouragement of industries have been due to the fact that the small man has found it difficult to get a grant and twice as difficult to get a loan from Government sources. If he has second-hand machinery, he has very little hope of getting a loan or a grant. The fact that the Minister intends to provide factory bays for the small industrialist is a good thing and something that can develop, perhaps not quickly but over the years, so that we shall see an increase in terms of employment.

The only other matter to which I want to advert is the fact that the employment is divided almost equally between males and females. This is a pity. It would be a good thing to establish heavy industry so as to increase the number of male workers over that of female workers. This would be a sign of real success. In most industrial centres it is quite easy for a girl between 17 and 19 years to get a job but the majority of them get married in their early twenties. It is very difficult to get a job for a boy that would bring him, after five or six years, to a position of permanent employment in which he can hope to spend his life. We realise they will not all spend their lives there because with changing industrial situations, as we have had, there will be upheavals. We must accept that, but I hope something will be done which will give a future to the boy of 17 or 18 when he emerges from the technical school or from the local Christian Brothers' school. I am not being critical in this regard. I am very pleased to see 2,900 people employed in this way. I am just a little sad that 2,000 of them are not men. I know this would be looking for Shangri-La but I shall certainly ask for it anyway.

From this side of the House I should like to welcome the developments at Shannon Free Airport, and it is my intention to take a trip there during the summer to see the latest developments. I hope I shall see the Minister there and that he will convey me to a mediaeval banquet at Bunratty Castle.

Mr. Corish

We have always supported such measures for the establishment of industry, and the Labour Party support this amendment of the parent Act and the financial proposals in the Bill before us. The Minister has suggested in his introductory speech that a general review of development in this area would be appropriate to another occasion under the new financial proposals to be discussed by the Dáil. For that reason it would be superfluous for any of us to engage in a detailed discussion on this project at Shannon. However, there are a few points on which the Minister may be able to give us some information so that, in the interim period, we can give further consideration to what has been described here by the Minister as a very successful venture.

The Minister stated there were 14 manufacturing and ten trading concerns in operation at Shannon Airport. The Minister—and he is a man who goes into great detail—should have given us an indication of the nationalities of those who have established industries here and who have availed of the offer of floor space by the Shannon Development Company. There is no indication here as to whether they are German, Dutch, British or American, or whether there is any sizeable proportion of Irish nationals who are interested in this operation.

This, according to the Minister, has been an eminently successful venture, the establishment of this development area four or five years ago. Mark you, I think he must concede it is a pretty attractive sort of area for a trader or manufacturer to enter. As Deputy Donegan has said, however, this business of leasing factory space is not peculiar to the Shannon Free Airport area. It is a practice that has been engaged in in Great Britain and also, to some extent, by the Government of the Six Counties.

This area is, of course, in the underdeveloped areas and I assume they get the pretty attractive grants available from the subsidiary bodies of the Department of Industry and Commerce. I would say that the venture has been successful but I think it clearly demonstrates the validity of the argument put forward by the Labour Party on many occasions that much more could be done in the way of establishing industries here if the Government were to take greater initiative. The Government have taken initiative here. They have provided money for the building of factories; they have provided money for the building of stores. These are offered to potential manufacturers or traders. If, within four or five years, it is possible to give employment to nearly 3,000 in this area, it should also be possible to make similar facilities available in other areas, thereby providing much needed employment. I know this area has advantages which other areas may not have. Its nearness to Shannon Airport is a distinct advantage. The fact that Limerick has a pretty good harbour is also, I suppose, an attraction. However, we believe the Government could and should take greater initiative and engage in similar activities elsewhere to ensure that industries will be established in a bigger way than they have been in recent years.

The numbers employed in this area have gone up, the Minister said, from 453 in March 1961 to 2,927 in March, 1965. Deputy Donegan posed the question—it is a question that has been agitating the minds of many in recent times—as to what has been the cost of the employment of these 3,000 people. We are always reluctant to calculate employment, security of employment, livelihood and standard of living in terms of money and all I query is whether or not they are getting the best value. It is our belief that in the establishment of industry, in Shannon or anywhere else, the primary emphasis in making loans available and giving grants should be on the employment content. The various Acts of Parliament passed for the encouragement of industry have been passed in the name of creating more employment. A partial condition at least of the making of grants, particularly to those from abroad, should be that they must employ a certain number of persons per thousands of pounds of grant or loan advanced.

Deputy Donegan also commented on the distribution of the employment as between male and female. Frankly, I am disturbed by the figures given by the Minister. Of the 2,927, the Minister says that 1,538 are male, or roughly half. I am sure the Minister did not mean to boast about this, but, as it is phrased, it seems to me the Minister was pretty satisfied with that kind of figure. I should never be satisfied with that. In relation to this area and in relation to many other industries, there is an exploitation to some extent of female labour. I believe also that there is the practice growing up—perhaps not in these factories—of using girls for a few years in unskilled employment and then getting rid of them and taking in another batch straight from school, keeping them for two or three years, and getting rid of them.

The type of employment needed in Shannon and in the country as a whole is secure male employment. I am told that a great number of these jobs are jobs with no prospects for those who engage in them. It is not the Minister's business to ensure well paid and secure employment. That is the function of the various trade unions. The trade unions are not encouraged—I do not put it any stronger than that—by some of those who avail of this factory space at Shannon. The Minister ought to intimate to these foreign industrialists that this country has a healthy respect for the trade union movement and that one of the best aids to industry is to have a good understanding and good co-operation between management and the trade union movement because nobody wants to see any sort of trouble at Shannon or, for that matter, in any industry, whether it is established by an Irish national or someone from abroad. This figure of approximately 1,300 females employed in this particular area in which such a great deal of money has been invested is very disturbing.

The Minister said in his speech that skilled men who emigrate have been attracted back. If that is true—I have no reason to doubt it—it is a very welcome development. I should like to know, however, how they have been attracted to return and by whom. Has this campaign been engaged in by the Shannon Free Airport Development Company or is it done by individual employers? We have been talking over the years about attracting workers back here. I do not know what the results have been. I do not know whether there has been any response to this encouragement—by whom, I do not know—for people from Britain and elsewhere to return here and take up employment in the Shannon Free Airport area.

Everybody supports and applauds the efforts being made by this company to build houses for the workers. That is something that has been encouraged by the Minister. It is something we all hope will be very successful because, if the anticipated employment of 5,000 in this area is to be realised by 1970, it will mean a tremendous effort to provide houses for those of the 5,000 who will want to make their permanent home there.

I have the advantage of Deputy Donegan in that, coming back from Kilkee last Friday, I suddenly took the notion to see Bunratty Castle. I was very much impressed.

Mr. Donegan

Did the Deputy have a mediaeval dinner?

Mr. Corish

I could not afford it.

Mr. Donegan

That is not surprising, coming from Kilkee.

Mr. Corish

We had to spread our finances. I should like to pay tribute to those who met me. They were very courteous and kind to my party and myself. We were particularly impressed with the castle and with what the Minister calls the Folk Village. There is nothing brash, nothing of the stage Irishman about it. It should be, as it appeared to be that day, a great success particularly from the point of view of foreign visitors. It is not the type of project that should offend any Irishman, who is always very sensitive about this sort of thing. Could the Minister tell us if this venture is profit-making? I assume it is but the Minister omitted to say so. He merely said it was successful; I trust he meant successful from a financial point of view. In any event, let us await the full debate on this particular company and its activities when the appropriate Bill is introduced. In the meantime the Minister can rest assured that he will have our support for the financial proposals contained in the measure.

Mr. P. Hogan

(South Tipperary): I regret the Minister has given us a rather sketchy review of this company. We have here, as far as I can calculate, a company in which up to date about £5½ million has been invested. Yet, the Minister has not seen fit to give us a list of the manufacturing firms operating there and the products they make. He told us there were 14 manufacturing and ten trading concerns operating there. I can understand what he means by manufacturing concerns but what does he mean by trading concerns? Neither has he told us whether any losses have been incurred by factories which were set up and then disappeared. In a discussion like this that is appropriate information which should and could be given to the House. It is always difficult to get information as to losses incurred. We never like to show that side of the picture. We are always very pleased to boast about our successes. Therefore, I should like the Minister to tell us what companies were set up, what were they doing, what did they cost, how long did they survive and what was the ultimate cost to the State in the case of each. I should like him to give us the particular activity of each of the present 14 companies and their nationality.

I have been over this Industrial Estate and I have seen some of these companies working in the little bays there. It looked to me, going around, that some of these companies did not seem to be of a very permanent nature. It looked to me that, if things did not go right with them, they could charter a large plane and be gone in 24 hours, lock, stock and barrel. Their equipment consisted of a series of individual pieces all of which could be loaded on to a plane and brought back to Tokyo tomorrow morning. Perhaps, I am of a suspicious nature but from the very set up of these light industries they looked to me as industries that would avail of what we have to offer but did not give me the impression of having that permanency one would like to feel they should have. One found that, after the expenditure of this money on a lot of industrial bays, some houses and flats, employment—a very desirable thing—was being given but wondered whether we had anything worth while for our £5 million.

Mr. Childers

A lovely picture the Deputy is giving, in contrast to that of Deputy Donegan.

Mr. P. Hogan

(South Tipperary): That is the picture I personally got when going through the various small industries in Shannon. Therefore, I would like the Minister to tell us how successful they have been, what losses were incurred and how many of them disappeared or were swallowed up. It is right that we should know exactly the nature of the particular manufacture in which they are engaged.

I am also disappointed that there has been such a small amount of air freight. The Minister's statement says they provided only one-fifth. I think the House was given to understand originally when these industries were being established that, in view of future difficulties as regards passenger income, they were to bolster up and help the situation by providing air freight. Therefore, I am disappointed that the freight from the industrial estate constitutes only one-fifth of the total out of Shannon. I would again ask has there been adequate supervision and attention paid to seeing that the industries being established there with the aid of grants and subsidies produce articles that lend themselves to air freight and were not just picked willy-nilly on the basis: it is an industry, well and good if it goes. That is my reason for particularly asking the nature of the manufacturing enterprises—to see do they produce articles that would lend themselves to air freight. That is all I have to say on the matter. If the Minister thinks I am particularly critical, I believe it is my duty to lay emphasis on the critical aspects of this matter and to find out how the people's money is being spent.

Mr. Jones

I am glad further money is being made available for the Shannon Development Company. One matter I should like to put to the Minister concerns female employees, some of whom travel from my constituency to work there. I am glad that opportunity exists for them, but I think some attempt ought to be made to provide accommodation for these girls at the airport. They have to do a round trip of 80 or 90 miles a day. That means they must start early in the morning and return late in the evening. This is something that would militate against their good health and the permanency of their employment. Since the Development Company are availing of the Town Planning Acts, perhaps they would consider the provision of some type of hostel accommodation for these girls?

They start work at an early age and, as another Deputy mentioned, the wage they receive is not sufficient to enable them to do a whole lot with it. It would be a step in the right direction if the Minister would bring to the notice of the company that in relation to female staff and younger people generally, something should be done to provide better conditions for them. If their conditions are improved, they will remain in employment there and become a permanent part of the estate. They will have an interest in the growth of Shannon.

The development taking place at Shannon Airport is very admirable from the point of view of the estate itself and the employment given there. So far as the areas contiguous to it are concerned, we would wish to see development companies providing factory bays of the smaller type mentioned by the Minister. If we had some such company in my constituency of West Limerick, it might induce industrialists to establish small industries which would provide the type of growth which is so desirable in rural areas.

The other point I wish to make in regard to this is the tourist potential from Shannon. Bunratty Castle has proved a great attraction. The establishment of a folk village has created a further interest in the place. The Minister says the Shannon Free Airport Development Company is now seeking further outlets for their activities so far as tourism is concerned. I would suggest to the Minister that he might convey to the Development Company that we have, across the Shannon in County Limerick, other castles and I am sure it would not be beyond the creative powers of the Development Company and those connected with that type of potential to establish an itinerary which would bring tourists across the Shannon to visit the Geraldine castles in County Limerick. These castles could be visited in association with Bunratty Castle.

There was a proposal a few years ago for a ferry service across the Shannon. Foynes, which was the original point at which transatlantic traffic began, has those facilities to offer. It should be possible, if good roads are made available in the vicinity, to provide such a ferry service across the Shannon. This would redound to the development of the area.

I was interested in what the Minister said in regard to the housing situation there from the point of view of the differential between the economic rent and the rent the people are charged. The difference in the rents is being met by his Department. I wonder if the Minister could put a figure on the extent to which the rents are being supported by his Department. What is the difference between the economic rent of the houses and the actual rent charged? Are the rents based on the number of people occupying the houses or is there an upper and lower limit? It would be interesting to learn to what extent the Department subsidise those rents. This is an innovation from the point of view of the estate. It will encourage people to remain there when they find they have not to pay the true rent for their houses. It will result in further growth of the airport and its potential.

The region has been a great attraction and its development will result in bringing more people into the area and we in Limerick are very conscious of that fact. We are interested in this company because it can generate money for the people living in our area. It is certainly very welcome. We should like to have some of the overflow which Bunratty Castle is not able to cater for across the Shannon in Limerick. We would be very glad to do something, with the co-operation of the Shannon Free Airport Development Company, to attract some of those people to our area.

Minister for Transport and Power (Mr. Childers)

I should like to thank Deputies Donegan, Corish and Jones for their welcome for the terms of this Bill. Deputy Corish raised the question of the proportion of females employed at the Shannon Free Airport Company Industrial Estate. I think it is true to say in the development of industry there the employment of some female labour is absolutely inevitable. The Shannon Free Airport Development Company do their best to select industries where there is a reasonable proportion of male labour. The proportion of female to male labour has not grown very considerably in the past three years. All I can say at the moment is that everything will be done to secure employment for men in the key engineering industries for which Shannon Airport is suitable as a location. It is hoped that the greater proportion of production and raw materials will be carried by air freight. I do not think I can go further than that.

I agree with Deputy Corish that the Shannon Free Airport Development Company should be fully aware of the reason for providing employment for as many men as possible. It can equally be said that the employment of female labour in rural districts also has considerable social value. This question was also raised by Deputy P. Hogan of Tipperary. He said that Shannon Free Airport should do their best to be selective in the choice of industry with a view to developing air freight. Air freight development all over the world has gone forward steadily over the past ten years and as I said, there has been a big expansion in air freight in the first quarter of this year. There was a setback due partly to the fairly rapid development of the container and palletised service transport business. That has been in operation for less than ten years and it has been gradually extending. It was extended to the Limerick area and as a result air freight began to face a new kind of competition of an extremely speedy transport service using containers. Quite obviously another look will be taken in the future by the aviation authority at the air freight business. Just as there has been a startling reduction in air fares in times past, so, as conditions improve, air freight should become more competitive. I cannot give any guarantee as to what the position is likely to be in the immediate future.

Deputy Donegan suggested there were some industries in Shannon, the finished products of which would never be carried by air. One could say that fashion garments are not likely to be carried by air whereas in fact there is a very considerable air-freight business in fashion garments from this country to Great Britain. The position is constantly changing. All we can do is to ensure that SFADCO has as its immediate objective the employment of as many men as possible and the setting-up of industries and businesses where air freight and air travel enter into the picture.

I should mention that SFADCO carry out their own sewerage and water development. It is not carried out for them by the local authority, at least not to date.

The arrangements for leasing factory sities have been changing. New factory sites are now leased on an economic basis. In other words, the rent covers the interest on the capital investment in the factory, including the development costs. This means that some part of the operation is fully economic.

Deputy Donegan referred to the cost per worker of developing the Shannon Industrial Estate. This question of capital subsidy for industry is controversial. If one reads economic reports from abroad or even some of the speculations of our own Statistics Office, it is very difficult to calculate what the capital cost per worker of such a scheme is. One could take the simple basis that the total spent on promotion, including grants, of factories at Shannon is equivalent to about £450 per worker employed or £1,400,000 divided by 3,000.

There is also capital expenditure on the factories and there is capital expenditure on housing. The capital expenditure on the factories is being recovered. In some cases the rentals, in the initial stage, were not economic but they were raised during the period and became economic. At least part of the capital expenditure on the housing is recovered in rents but equally there are grants equivalent to the Department of Local Government grants and also there are subsidies. Therefore, I think it is a very difficult calculation to make. In relation to some of the larger factories established here, a simple figure could be derived by dividing the total grants by Foras Tionscal by the number of persons at the moment employed in factories to which Foras Tionscal made a grant. If you go through that calculation, you will find that there is nothing excessive in the SFADCO operation and so we can say that it is not an extravagant operation in the way it is being conducted. Further than that, there is no need to go. If it becomes prohibitive, no doubt Deputies can suggest an alternative way of spending the money but the cost is undoubtedly reasonable. In reply to Deputy Jones, I may say that arrangements are being made for housing accommodation for female workers so that they will not have to endure the long journey which at present is the case with a good number of them and that matter is in train.

Deputy Jones asked what the subsidy is to bring rents at Shannon up to an acceptable level. For 1965-66, it is approximately £40,000. It is rather hard to make a comparison between the subsidy as afforded for Shannon housing and the subsidy afforded in connection with, for example, Limerick housing. In the case of Shannon, there is no differential rents system. However, if one makes allowance for that and examines the operative subsidy, there again, although they are not completely comparable, one can say that there is nothing extravagant about the subsidy arranged in connection with Shannon housing. It is equally true to say that the cost of building houses at Shannon, allowing for the terrain and for the fact that at Shannon it must obviously be a little bit more costly to build houses than in the Limerick area, is not excessive or extravagant.

Deputy Corish asked about the nationality of the various manufacturing concerns. I think perhaps it is better to deal with this on the basis of employment. Perhaps the best way to put it is to say that at least three-quarters of the workers employed at Shannon are employed by American and British companies. I think one need not go into greater detail than that. No grants from Foras Tionscal are available for Shannon factories. Under section 11 of the 1959 Act, Foras Tionscal may not give grants to SFADCO so there is no duplication grant in that respect.

Deputy P. Hogan of Tipperary asked for particulars of grants to companies which have ceased to operate. There again, I do not think there is any need to dramatise this situation. Only one sizeable undertaking at Shannon has closed down. Some very small units also closed but the finances involved were not of consequence. In the case of the sizeable undertaking that closed down, this company received no grant from the State.

I think I have answered all the questions put to me. I again thank the House for their kindly reception of this Bill.

Question put and agreed to.

Dáil Éireann debate -
Tuesday, 15 Jun 1965