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 £6,000,000 to £8,000,000 in the aggregate of the amounts which the Minister for Finance may subscribe in taking up shares of the company;
(2) An increase from £3,000,000 to £6,000,000 in the aggregate amount of grants, voted annually, which may be made to the company, and
(3) An increase from £3,000,000 to £7,000,000 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. It has been recognised that the greatest scope for the company's energies lies in developing the Industrial Estate and in using the existing advantages at the airport to promote industry. In addition the company has promoted the establishment at Shannon of warehousing and commercial and service activities. It has also engaged very successfully in the promotion of passenger traffic at the airport mainly through the encouragement of tourism in the surrounding area. All these activities contribute markedly to the maintenance and development of Shannon Airport which is a very important national investment and asset and a focal point for economic growth.
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 to rent 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 (SFADCO Ltd. Acts 1959 to 1965) up to 31st March, 1968 were as follows:—
Share capital |
£5,051,000 |
Repayable advances |
£3,050,000 |
Grant-in-aid |
£2,856,000 |
The balances remaining under existing statutory provisions are therefore:—
Share capital |
£949,000 |
Repayable advances |
£3,050,000 |
(deficit) |
|
Grant-in-aid |
£144,500 |
The balance available in the case of grant-in-aid is not sufficient to meet requirements for the current financial year while the balance of share capital is barely sufficient for the year. The existing limit of £3,000,000 on repayable advances has already been reached and it is necessary to finance repayable advances temporarily from share capital pending enactment of the present legislation. Interest on the amounts temporarily issued as share capital will be payable from the date of issue. The introduction of new legislation at this stage is in accordance with the intention when the 1965 Act was under consideration. It was decided then that the limits settled should cover the company's operations up to about the present time.
The company has been making steady progress in attracting new industries to Shannon. At 31st March, 1968, there were 27 manufacturing concerns in operation at the airport compared with 14 at 31st March, 1965. Of the 27 concerns, one had built their own factory, two had purchased their factories and the rest occupied factories on a rental basis. Proposals for the establishment of four further manufacturing concerns are under consideration.
The manufacturing activities cover a wide range of products including electronic equipment, yarn, fabric, finished garments, pianos, industrial diamonds, precision tools, floor maintenance equipment and many other items. Practically all the output is exported.
The company promotes the establishment of warehousing activities with a view to stimulating air freight traffic through the airport. At 31st March, 1968, seven warehousing concerns were in operation and proposals from another concern were being considered. In addition, 13 commercial and service concerns were operating at 31st March, 1968, with a proposal for a further concern under consideration. The commercial activities included data processing and consultancy and trading business.
A total of 60 factories and ten warehouses were occupied at 31st March, 1968, compared with 40 factories and three warehouses occupied at 31st March, 1965. Twelve more factories and two warehouses were under construction and a further 31 sites had been reserved by existing firms with a view to expansion of their activities.
In the calendar year 1967 exports from the Industrial Estate amounted to £32.6 million and imports were valued at £22.5 million, leaving a net balance of £10.1 million. This balance gives an idea of the volume of work being carried out at the Industrial Estate and its contribution to the country's balance of payments. The percentage of total national exports of manufactured goods represented by exports from Shannon increased from 21 per cent in 1964 to 29 per cent in 1967. In relation to total national trade in 1967, Shannon exported 1½ per cent of total exports and imported four per cent of total imports. Air freight generated by the Industrial Estate in 1967 was 3,301 tonnes compared with 876 tonnes in 1964.
The company promotes tourism through Shannon in conjunction with other promoting bodies including Bord Fáilte, the air companies and CIE. This promotion is reflected in the growth of terminal passenger traffic at Shannon. Terminal traffic in the year ended March, 1968 exceeded 320,000, the highest figure in the airport's history. The tours, banquets and other tourist activities promoted by the company catered for over 100,000 people in 1967.
At 31st March, 1968, 3,942 people— 2,238 males and 1,704 females—were employed in the Industrial Estate as compared with 2,927—1,538 males and 1,389 females—at 31st March, 1965. The total employment in the whole Shannon complex at 31st March, 1968 was over 6,000 people and their total annual income has been conservatively estimated as being in the region of £4 million. The number of people resident in the Shannon community was over 2,100; 443 houses and 137 flats had been constructed by the company for rent or sale and almost all of these were occupied or allocated. A further 130 houses were under construction. In addition to the company-built houses, 25 houses had been constructed by private builders on developed sites provided by the company and 18 such houses were in course of construction. Consideration was being given to arrangements with a speculative builder who proposes to build further houses for sale. Clare County Council also plans to construct houses in the new town. However, the bulk of the housing requirements at Shannon will have to be provided by the company for a number of years to come. In addition to housing development, certain community services have been provided by the community, the company or by other authorities. These include two churches, a comprehensive school, a community hall, two primary schools, shops and recreational and library facilities.
The majority of the workers at Shannon live outside the community and commute to the factories at Shannon. The development of the new community is becoming the biggest single element of the company's work, in terms of the finances involved, of its complexity and of its vital importance to the attraction of industry and to stabilising future industrial growth in the region. It is clear to the company that industrial development and community development are interdependent whether in planning or in building, in working or in social living. Having regard to these factors and to the relevant observations in the report of Dr. Lichfield, the planning consultant for the region, the company are fully satisfied that the minimum viable community which must be aimed at in Shannon's particular geographic environment is one of not less than 6,000 people. Based on the rate of progress necessary to attain this end, it is proposed that provision should be made in the new legislation for the necessary funds for the three years to 31st March, 1971, by raising the limits in existing legislation to the figures which I have quoted.
In regard to grants-in-aid, 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 29th February, 1968 amounted to £2,687,500. In addition, the company received £1,201,567 by way of rents and other income; £2,327,376 was used by the company for promotion and administrative expenses and grants totalling £1,463,314 were made to industrialists.
It will be seen that the confidence which I expressed in the continued progress of the company when recommending the 1965 legislation for the approval of the House has been fully justified and I consider that it is necessary that the company should be provided with the financial resources up to the limits now proposed to enable them to consolidate the progress already made and to provide for further orderly progress in the future. 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. For my own part, I wish to congratulate the board, management and staff of the company and all those who are contributing to the success of the Shannon project.
As has already been announced, it is the Government's view that it would be clearly beneficial to make use of the successful experience of the Shannon Free Airport Development Company Limited within the Limerick/Clare/ North Tipperary region. Accordingly, it has been decided that the company will function as an organ of industrial development within this region and will be responsible to the Minister for Industry and Commerce for industrial estate development and possibly the building of advance factories within the region.
The company will report to the Minister for Industry and Commerce on all industrial and related matters, including those at the Shannon Industrial Estate, but will continue to report to me on its tourism and aviation activities. This Bill is without prejudice in any way to what may be done under the new arrangements and is related to requirements under the existing arrangements. Any additional financial arrangements for developments in the company's extended area of operations will be announced separately as will the details of any legislative action necessary.
I recommend the Bill for the approval of the House.