Vol. 493 No. 3
9 Mr. Creed asked the Tánaiste and Minister for Enterprise, Trade and Employment her views on whether the vast majority of the new job announcements by foreign multinationals are either extensions to existing plants or are locating in existing vacant advance factory space; and the way in which she proposes to achieve new job opportunities in areas where the IDA has a land bank but where no vacant factory space exists. [15772/98]
In the January 1997-June 1998 period, IDA Ireland announced details of 125 investment projects from overseas companies. Of these, 72 were new greenfield investments involving the announcement of 19,199 new jobs and 53 were expansions of existing overseas companies involving the announcement of 9,041 new jobs.
The provision of suitable sites for industrial development is an important element of the overall strategy to promote enterprise and job creation and to this end the IDA acquires or retains suitable land in locations throughout the country which are attractive to foreign investors or which can be made to be attractive to them. The IDA works closely with the local authorities and the private sector to ensure that a selection of advance factories is available on a phased basis in suitable locations in different parts of the country for both existing and new clients.
The Minister said 72 of the investment projects are new greenfield investments. I suspect many of those are for existing vacant advance factories. The problem which is prevalent in my constituency concerns IDA land banks on which no development whatever has taken place over many years. In the context of such land banks where there has been virtually no activity, will Enterprise Ireland consider revisiting the policy of constructing advance factories so that these areas can get on the playing pitch and compete for inward investment? Without an advance factory space these areas will not be on the circuit to be visited by companies seeking to establish.
A question, please, Deputy.
The job announcements in the past 12 months were either extensions to existing plants or plants moving into existing vacant factories.
There was a policy in the 1970s and the 1980s whereby the IDA acquired land and built advance factories. While it had some success it tied down a good deal of taxpayers' money in buildings and land which lay idle for many years. The policy now is to dispose, in so far as the IDA can, of its land bank and any vacant factory space. Each year, under the provisions of the Finance Act, about six BES-funded advance factories are provided — four for IDA-Forbairt companies, one for Údarás and one for Shannon Development, if I understand it correctly. They tend to be small projects. The large greenfield projects tend to go into an existing site left vacant, such as Seagate in Clonmel which is an attractive facility. Advance factories suit smaller projects. Two weeks ago we announced a project for the advance factory provided in Carlow. It is also possible for the private sector to provide advance factories and if that is done in consultation with the IDA the agency undertakes to promote those factories. That programme has been successful and there may be possibilities in the area mentioned by Deputy Creed.
While the Government and the IDA has had good success in encouraging projects to locate outside the main cities, it is the larger towns close to cities which are attractive. Many of the industries now located in Ireland are knowledge-based, require workers with a high level of skill, and want to be connected to third level institutions. It remains difficult to get substantial investment for smaller towns in peripheral regions. That is not to say we do not try hard to put in place a grant aid package which makes them attractive, but it is still relatively difficult notwithstanding the number of new investments coming into the country. It is a case of horses for courses — only smaller enterprises will locate in smaller towns and rural areas with a small population base within ten to 15 miles of an investment location. The advance factory programme provided by the IDA and other agencies, together with the private sector programmes, might solve in the short term the problems highlighted by the Deputy.
Is the Minister aware of the reply by the Minister for Finance to a parliamentary question from me about Sligo enterprise park? The board of the park has been shocked by the reply, because it had a 40 acre land bank and assumed it had huge tax advantages. The EU Commission sought detailed information on the new tax relief for regional airports and enterprise areas provided in the 1997 Act, on foot of an article in The Irish Times, and following the Commission's investigation it became apparent that the park qualified only for developer capital allowance but not for owner-occupier or double rent allowance. This applies also to——
A question please, Deputy. There are four other Deputies waiting.
Can the Minister clarify the position not only for Sligo but for Cork, Donegal, Galway, Kerry, Knock and Waterford enterprise parks — is capital allowance the only relief available to them? This will jeopardise the development of Sligo airport because contracts issued to developers——
Deputy Perry, you are being grossly unfair to your colleagues.
Tax designation is a matter for the Minister for Finance. The designations announced by the previous Government were not cleared with the EU and because of the implication that they might be "state aid" they all must be so cleared, and I can assure the Deputy this is not a foregone conclusion. In so far as we can we will encourage, either through the tax system or through a grant aid package to industry, the location of investment in regions such as those he mentions, and that will continue to be Government policy.
As was discussed at the select committee, the IDA is disposing of property, particularly some of its slightly older technological facilities on the northside of Dublin.
Deputy Broughan, there are four Deputies offering and in fairness to them I appeal to all Deputies to ask a question. The purpose of Question Time is to elicit information from the Minister, not to make statements. Deputies should ask questions to ensure they get as much information as possible from whichever Minister is answering.
The IDA has sold its land bank around factories which have closed, such as ACCO, Applied Magnetics and GE. How does the Minister propose to reintroduce high-tech foreign industry into these places when the land bank is no longer there?
The State does not have to acquire land to encourage investment in a location. If a private company owns land or factory facilities it is always keen to dispose of it as quickly as possible — it does not want idle assets on its balance sheet. In recent closures the private sector has acted rapidly and in the next few weeks the Deputy will see that several facilities have been sold, with IDA assistance, to other inward investors. It is a question of being flexible. The IDA has a great deal of land and in South County Dublin, for example, it is trying in conjunction with the county council to promote private and public sector land. It has been successful in getting a number of new projects onto private sector land at Citywest; there is also public sector land owned by the local authority at Kilmahuddrick, Clondalkin. I cannot say that one set of land is higher than the other on the priority list — all land banks of that kind, regardless of their ownership, are promoted vigorously by the IDA to potential investors and ultimately it is the investors who decide what is the ideal location for their investment.
Where does shortage of factory space or a diminishing land bank rank in terms of the factors constraining inward investment, as compared to skills shortages, for instance? How acute is the problem or do we still have a competitive advantage in that area?
The skills shortage was becoming acute and the £250 million education technology fund will help to relieve that but it will take time because there is still a lot of pressure, particularly for engineers. Many of the smaller Irish companies are finding it difficult to hold staff because they are finding opportunities in larger international companies more attractive. One complaint I hear is that companies cannot find workers, and even at a higher skill level they find it difficult to hold workers. There has been much inflation in some sectors because of the demand for particular skills and to some extent we are becoming the victims of our success.
That is a bigger factor than the availability of factory space or land banks — that becomes an issue when a company is looking at one area as opposed to another. If they want to start up quickly —"ramp up", as the Americans call it — they will be more attracted to a location if it has a suitable facility. That is why the points made by Deputy Creed are valid — the small company we recently attracted to Carlow might have gone elsewhere had there not been a facility available, and in towns of the size of Carlow and Killarney, that can be an attraction. On the other hand, some places have facilities but we cannot get people to fill the space. The ideal is to have the facility in the correct place but it is not always possible to get that right.
The important thing is that we are getting the projects for Ireland and we should try to achieve the widest possible dispersal of those projects, particularly to regions outside Dublin, and that is Government policy. For example, 4,500 jobs for Cork were announced in the past 12 months, which is the highest number ever — equivalent to the number of jobs announced for Dublin — and is a large proportion of the overall investment. We will continue to try to locate projects around the regions and as far from the cities as possible, if we can, so that people have a reason to live in more peripheral areas, and schools and other facilities have the possibility to be sustained by a local population.
I am glad Cork is doing so well. Is the Minister aware of possible difficulties which might be faced by the IDA in the Cork region as a result of the ESB's failure to supply power to Ringaskiddy? She will be aware that the ESB is insisting on supplying power via pylons rather than by underground cable. Will there be difficulties, or has the Minister been made aware of them, and what does she propose to do about them?
Is the Minister aware that a pharmaceutical company has booked a building in Ballinasloe, and that land is available in Ballaghaderreen and Creagh, near her home town of Ballinasloe, yet a small distribution company cannot acquire a building for its purposes? What plans does she have to ensure industrial investment in these sites? Does she agree we must be biased towards underdeveloped counties like Roscommon and does she have plans to introduce such a bias?
(Carlow/Kilkenny): Will the Minister ensure that towns like Carlow, which built an advance factory, are rewarded for their initiative and are not by-passed by other projects? There were many visitors to the Braun and Lapple plant in Carlow but they went elsewhere. Will the Minister guarantee that towns without advance factories will be looked after?
Carlow is an attractive location because of its third level college, the reputation the area has gained as a result of the good experience of multinational companies located there and its proximity to Dublin. These positive factors continue to make Carlow an attractive destination for investors.
A new project for Roscommon was announced recently. There is always competition between local companies who want to use facilities as warehouses or distribution centres and agencies who wish to install more sustainable projects in those buildings. We must maximise possibilities for idle space in Roscommon, Galway or other areas.
There have been a number of site visits to the Creagh-Ballinasloe area recently. I am optimistic that we will get a suitable investor for the lands acquired there by the IDA. That will be good news for the area.
