Dáil Éireann debate -
Tuesday, 3 Apr 2001

Vol. 533 No. 6

Written Answers. - Town Renewal Scheme.

Alan M. Dukes

Question:

193 Mr. Dukes asked the Minister for Finance when he expects that negotiations between his Department and the European Commission in relation to the introduction of the commercial element of the town renewal scheme will be concluded; if his attention has been drawn to the fact that the delay in the implementation of this part of the scheme is proving extremely difficult for a large number of business people around the country; and if he will ensure that the negotiations in question conclude at an early date so that the scheme can be fully implemented. [9695/01]

Minister for Finance (Mr. McCreevy):

Agreement has now been reached with the European Commission to allow the application of commercial and industrial incentives to the majority of projects under the town renewal scheme. Details of the new arrangements tailored to meet the Commission's requirements on State aids were announced by the Minister of State at the Department of the Environment and Local Government on 16 March last.

Incentives will be available to small and medium-sized enterprises, SMEs, enterprises defined by the EU as having certain characteristics, including a staff of fewer than 250 employees, with either an annual turnover not exceeding 40 million or an annual balance sheet total not exceeding 27 million. The range of projects cleared to proceed from 6 April 2001 following discussions with the European Commission include: all new build SME projects – such projects will be eligible for both commercial and industrial incentives; and refurbishment projects in the following categories – SME projects where the expenditure incurred is below 800,000 or £630,051 will qualify for the full range of commercial and industrial incentives, SME projects which involve both expenditure on refurbishment and the provision of an extension where the cost of the extension is at least 25% of the market value of the existing building – this category will also qualify for commercial and industrial incen tives, and local retail SME projects, excluding mail order and financial services. Incentives for office and industrial development are, therefore, excluded under this category.

Projects which qualify under any of the three refurbishment categories outlined above will be eligible under the scheme. Refurbishment projects which do not fall within these categories are the subject of ongoing discussions with the EU Commission. While it is not possible to indicate when these discussions will finally conclude, it is my understanding that the arrangements that have now been agreed will now allow the vast majority of projects planned under the scheme to proceed. In view of the delay in reaching agreement with the Commission on the commencement of the commercial and industrial element of the scheme, the termination date of the scheme has been extended from 31 March 2003 to 31 December 2003.

Provision to allow the implementation of these arrangements was included on Report Stage of the Finance Bill, 2001, in the Dáil. The provision also provided that capital allowances will not apply in respect of expenditure incurred on or after 6 April 2001 on industrial and commercial premises in designated areas under this scheme where any part of that expenditure is met by way of grant assistance from State bodies or elsewhere. This amendment is being made to ensure that the scheme complies with the European Commission's regional aid guidelines for the period to 2006 and similar amendments were made on Committee Stage in respect of the urban and rural renewal schemes.