I thank the Chairman for inviting Shannon Chamber to present to the committee today. Ms Downes and I appreciate the opportunity to provide our observations and recommendations on the Bill. While we are here in our roles as chairman and CEO, respectively, of Shannon Chamber, we have the support of the Galway, Ennis and Limerick chambers, comprising a membership base of approximately 1,400 businesses and 45,000 employees. The chambers in that corridor are essentially saying that Shannon Airport is our business airport, so we are here on their behalf.
As the committee has already received our submission, I will go straight into our observations and recommendations on the heads of the Bill. Those observations are structured in three headings: the focus of the group; governance issues; and operations. On the focus of the group, our first comments relate to head 9. Head 9(a) refers to the Shannon group overseeing the functioning of the airport and Shannon Development. Head 9(b) refers to promoting the development of aviation-related and other businesses. We believe there should be explicit reference to airport traffic. While the airport must function, it must also grow in terms of airport traffic, something that is not covered in the existing wording. Our first recommendation is that the words "airport traffic and" be inserted before the word "aviation" in head 9(b).
Second, in respect of the group's functions or focus, there is reference to aviation-related and other business activities in the vicinity of Shannon Airport. We would make two recommendations in this regard. First, Shannon is much more than aviation, as there is a strong multisectoral base of business in engineering, information and communications technology, international services, finance, logistics and so on. We believe it is very important that the national agencies, namely, IDA and Enterprise Ireland, together with the airport authority, would also have a focus on growing those sectors. Our third overall recommendation is that the same would apply in respect of tourism. As the diagram included as figure 1 in my submission illustrates, Shannon feeds tourist traffic up and down the western seaboard regions. From that perspective, it is important that the national agencies, namely, Tourism Ireland and Fáilte Ireland continue to provide back up behind the airport authority's work on that front.
I will move on to the next item on function, which relates to head 38. While Mr. Neil Pakey has already referred to this issue, I also wish to build on it. The proposed new name for Shannon Development in the future is Shannon Commercial Enterprises Limited and I speak on this subject from my experience as chief executive officer, CEO, of a semi-State company. As CEO of Shannon Development, I had the experience of giving part of the company a brief for commercial activity. One difficulty into which we then ran was we had generated confusion regarding what were the assets there for in the first place. My strong view is the assets are there to generate economic activity and both Ministers referred to this when publishing the legislation last July. Be it the airport itself or the property assets, they primarily are there to generate economic activity. This is not to state they cannot be managed in a commercial way but the primary objective must be economic. For example, if one is driven mainly by commercial considerations, why would one not develop shopping centres or car sales activities in the free zone? One would generate a lot of commercial return but would contribute little in terms of economic impact. While this may seem like a minor point, it is a major strategic issue and for that reason, our fourth recommendation is to drop the word "commercial" from the proposed name in head 38. In addition, while I can understand the reason that in a new organisation, people might wish to break the link with the past, there is quite a level of brand definition in the term "Shannon Development". However, that really is a matter for the shareholder, the board and the Government. We consider the main item to be the dropping of the word "commercial" from the proposed name.
I will now move on to governance and in respect of Part 5 of the Bill, there already has been some discussion on the main item in the last few minutes. Our main recommendation in this regard, our fifth, is that in the appointment of members to the board and its subsidiaries, the process should be clear and transparent and that the primary objective always should be to ensure the board has the skills necessary to deal with whatever the upcoming challenges may be. In some instances, that involves appointing people from outside the organisation, which would not be unusual in semi-State companies. In that context, our sixth recommendation highlights the fact that among the membership of the aforementioned four chambers of commerce, namely, Shannon, Ennis, Limerick and Galway, there is a depth of expertise. We think the committee could give consideration, in its potential amendments to the Bill, to the possibility of the chambers of commerce nominating or at least providing a panel of people who could provide the requisite skills for the board.
Finally, in respect of the day-to-day operation of the company, it is important that once the legislation has passed, the board and executive are empowered to get on with delivering the job that has been set down for them in legislation. Mr. Neil Pakey already has referred to the borrowing limit of €100 million and our seventh recommendation deals with this. We believe it is very important that the threshold is kept at that high level and note there is a footnote in the draft legislation stating this is subject to confirmation with the Department of Public Expenditure and Reform. While I acknowledge everyone must control costs in this difficult environment, if that threshold is too low it will have an impact on the day-to-day operations. To take a particular example, if there is a need to provide a building for an existing or incoming mobile investment client, Mr. Pakey and his team must be able to react quickly and a threshold is required. One can have a high threshold and still have the company operating under the normal public sector guidelines. Consequently, we recommend strongly that the threshold remains at €100 million. These are our key recommendations and observations and I again thank the Chairman for giving us the opportunity to appear before the joint committee and make our observations.
