I move:—
That Seanad Éireann approves the following Order in draft:—
State Guarantees Act, 1954 (Amendment of Schedule) Order, 1959, a copy of which Order in draft has been laid before the House.
State Guarantees Act, 1945 (Amendment of Schedule), Order, 1959—Motion.
The purpose of this Order, the draft of which was approved by An Dáil on the 3rd March, 1959, is to enable the Minister for Finance to guarantee borrowings by the newly-formed Shannon Free Airport Development Co., Ltd. Under the State Guarantees Act, 1954, the Minister for Finance may guarantee, both as to principal and interest, borrowing by a body scheduled to the Act within the limit specified in the Schedule. Section 9 of the Act empowers the Government to add, by Order, a body to the Schedule and to specify the limit within which borrowing by that body may be guaranteed. It is proposed in the draft Order to add the Shannon Free Airport Development Co., Ltd. to the Schedule to the State Guarantees Act, 1954 and to insert the sum of £200,000 as the maximum amount of borrowing by that company which may be guaranteed by the Minister for Finance.
When the Government decided to provide all the facilities necessary to equip Shannon Airport to receive jet aircraft, they had under consideration also other measures to ensure the fullest possible utilisation of the airport and the maintenance of employment there. The advent of the new type jet aircraft with high speed and long range would, it was felt, tend to lower the airport's revenue from transit traffic unless steps were taken to promote and develop the use of the airport otherwise than as a transit stop. Particular attention was paid to the possibility of developing air freight traffic at the airport. The desirability of increasing terminal passenger traffic in order to offset an expected contraction in the airport's transit traffic was also realised and it was felt that this might best be secured through promotional activities directed particularly at the North American tourist trade.
No suitable organisation for undertaking this development work was in existence at that time and the work was of such a nature that it could not be discharged satisfactorily within the framework of departmental organisation. There was no State or semi-State body which could be expected to undertake all the various activities which were required if the aims were to be achieved.
The responsibility for the commercial development of the airport was therefore entrusted to the Comptroller of Sales and Catering who had been primarily responsible for the building up of the airport's restaurant and shopping service into the present major industry with an employment content of almost 600 persons. The comptroller undertook the following additional responsibilities—(a) the development of transit traffic, (b) the development of tourist facilities at or near the airport in order to attract terminal traffic, and (c) the active promotion of freight traffic there. In the carrying out of his new duties the comptroller operated as the Shannon Free Airport Development Authority and was authorised to spend on these development activities up to £50,000 annually out of revenue from the sales and catering service to meet running expenses.
On a review of the initial working of the authority, it became clear that the success of its efforts would depend on the promotion of freight traffic at the airport and the promotion and development of industries within the perimeter of the Free Trade Area. The encouragement of Industries at the airport is a matter requiring special treatment. One of the steps deemed necessary is the provision in advance of actual demand of factory accommodation for renting. This was a matter for the authority. For this reason and from the experience of the authority already acquired in negotiations with interested firms, it became obvious that it was essential to give the authority legal status for the general conduct of its business and in particular for such matters as the leasing or letting of factory premises, the acquisition of rights and physical assets, such as premises and equipment, and the making of contracts and agreements.
With the approval of the Government, the authority was reconstituted on 29th January last as a limited liability company with the title—Shannon Free Airport Development Co. Ltd. The Government also directed the introduction, in due course, of legislation to provide capital for the company by enabling the Minister for Finance to subscribe for shares in it and to provide moneys annually by way of grants-in-aid to enable the company to perform its functions. As negotiations which the company has in hands with prospective manufacturers are well advanced and as it would be harmful to the development scheme generally if the provision of capital for the company had to await the enactment of legislation, the Government decided that, for the purpose of providing the company with capital —in advance of the legislation—the name of the company should be added to the Schedule to the State Guarantees Act, 1954, thus enabling the Minister for Finance to guarantee borrowings by the company.
As I indicated at the outset, the intention is to allow the company to borrow up to £200,000. That money will be used for the construction of factory space for letting at the airport. When the legislation which I mentioned comes before the House it will be seen that provision is being made to ensure that capital subscribed by the Minister for Finance will be applied in the first instance to the repayment of any moneys which the company may borrow on foot of guarantee by the Minister for Finance.
The arrangement now being made is, therefore, purely a provisional arrangement so that the company will not be handicapped owing to lack of funds pending the, enactment of legislation. I must emphasise that the avoidance of delay in bringing into effect the plans of the company to promote activity at the airport is specially important. The changes in the pattern of air traffic over the North Atlantic which have already taken place suggest that the transit traffic on which Shannon depended in the past may diminish—although Shannon had a record year in 1958—and it is essential that vigorous and prompt measures be taken if the level of activity and the employment position at the airport are to be maintained. I am sure, therefore, that the proposed Order which will provide the necessary capital as an interim measure will meet with the approval of the House.
I am sure all of us will welcome any plans that will encourage the development of Shannon Airport. The only point that occurs to me, arising out of the Minister's statement, is that it has been necessary to establish this authority at Shannon Airport. The Minister has said it was not considered possible to do it, apart from establishing the authority, but I do not think he expanded his reasons as to why it was necessary to establish the authority.
At present, we have a whole lot of bodies which, it would appear to me, could do all that it appears it is intended this authority should do. We have Córas Tráchtála which is concerned with expanding our export trade. We have the Industrial Development Authority which is concerned with planning industry in this country. We have the Minister's own Department which has its own aviation section and which seems to be familiar with the different types of problems which this authority would be up against. Then we have Bord Fáilte which is also concerned with the promotion of tourism. I think that is intended to be part of the activity of this authority.
I can hear the Minister saying: "This particular place is removed from Dublin where all these authorities are centralised." I still do not understand why it is not possible to direct these activities from Dublin in the same way as tourism or industry, and so forth, are developed in other parts of the country.
We seem to have fallen a victim to the notion that in order to make progress we must establish statutory bodies. Apparently the Minister intends to introduce legislation to constitute this new authority into some form of statutory body and to give it greater authority than it has at the present time. I do not say that I have any particular objection to that. I am wondering whether a new statutory body is necessary in this case when we already have so many organisations, all of which have, in one way or another, activities relating to the activity this authority will be concerned with in the future.
The Minister says there ought to be no delay in passing this motion and I am sure the House will not delay it. If the Minister is of opinion that it is necessary that this Order should be passed, I would have no intention of asking anybody to delay it.
Earlier to-day I congratulated the Minister and, incidentally, we congratulated ourselves, on the success of Bord na Móna, which certain critics predicted would go up the spout. I wish to congratulate the Minister on the motion which he brings before us now and on the fact that the rabbits are not gathering round Rineanna as predicted by some critics. We are to have a chinchilla farm down there now. That may be some consolation to the member of the Oireachtas who predicted that Rineanna would be a rabbit run in the future.
I should also like to congratulate the Minister on the fact that he has taken time by the forelock and provided for the satisfactory re-forming of these runways to suit the planes of the future. Jet planes are coming in even at present.
There is a point of criticism which I should like to bring to the Minister's notice. I have been in the airport on four occasions. On two occasions I was in the reception hall, which an emigrant enters in order to cross the Atlantic. On the occasion of my second visit there, which was last year, I was very perturbed by the fact that the place was not anything like what I anticipated it should be. I presume and I hope that provision is being made through the present development authority of the port for the provision of a more satisfactory reception hall for emigrants.
An Leas-Chathaoirleach
I do not think that will be dealt with under this Order.
I understood it would be, because we are planning the development of the port generally, apart from runways. If it is not, well and good but, if it is, it is a renovation of the port and I should like this place to be included because it certainly requires improvement.
When we were dealing with the Undeveloped Areas Bill a year or two ago, I urged on the Minister that in those areas more positive action might be taken in the provision of factory space. I instanced what happened in Northern Ireland where, in their efforts to encourage industry, they provided the factory space. I am glad that in the Shannon Development Area it is intended to take that positive action in providing factory space so as to encourage the people to set up distribution centres and manufacturing centres in the free airport sector. I very much welcome the motion and trust that the work being put in hand will be very successful.
I want to join in the approval of the action being taken under this Order. Because Senator O'Quigley made a slight criticism in regard to the way this should be done, I want to point out that we should not like it to be taken that there was any opposition to what is being done under this Order.
The development of Shannon Airport and Dublin Airport and a lot of these things should not be a matter of one Party pulling against another and of one side saying: "We did this" and the other side saying, "We did that." There are some matters on which, obviously, we are all in general agreement.
There is a danger that larger and faster aircraft may overfly Shannon with passenger traffic. In view of all our commitments there, in view of all the money invested there and all the people employed, we should make some provision for the future in order to try to get the best out of the money we have invested there and to do our best for the people employed there. Freight traffic comes to mind in that connection. There was a good debate on the matter in the Dáil. Everybody there approved the action to be taken at Shannon in order to develop air freight traffic. There is a very good future for such traffic there. There will always be plenty of traffic for slower moving aircraft. They will be cheaper at all times in the foreseeable future than the fast jet planes, which will be very expensive to run. For that reason, we fully approve and I fully approve of the proposal in this Order to provide the necessary capital for the Air Development Authority to function and to set up the necessary equipment at Shannon to handle this traffic.
Arising out of Senator O'Quigley's observations, Shannon Airport is at present administered by the Department of Industry and Commerce. It is not a very satisfactory arrangement. It was never intended that it should be permanent. My idea, when we started the construction of the airport, was that it would be handed over for management, as Dublin Airport was handed over for management, by Air Rianta, when the permanent buildings there had been completed. They were never started and the existing building arrangement is, I think, quite satisfactory. At some stage we will have to consider how the management of the airport can best be carried out in future because the conduct of what is in practice a commercial concern in many of its aspects by the Department of Industry and Commerce is not the best method. Certainly, when we considered how an effective campaign could be organised for the purpose of expanding activity at the airport, whether tourist, freight or transit traffic, it was felt that it could not be done by a section of the Department of Industry and Commerce but by somebody with a fairly free hand closely associated with the management of the airport. That is why the original development authority was set up.
I had not contemplated that anything in the nature of a statutory company would be required. We found it was difficult for the authority to work satisfactorily when it had no legal status. I do not agree that the problem that exists there could be handled by all the existing organisations. Each one would have some function there. Some of them would be handicapped by the limitation of their statutory powers in carrying out the particular drive we contemplated. That is why there is separate organisation. Arrangements have been made to ensure that there will be no lack of liaison between the new company and the existing boards. The chairman is, in fact, also the chairman of Bord Fáilte. That is one sphere where close integration of activities might be profitable to both. There is an officer of the Department on the board. Arrangements in relation to the work of the Industrial Development Authority include the submission to the Industrial Development Authority of proposals relating to industrial activity in the airport. I have appointed them as my advisers in relation to the issue of licences. In that way, the overlapping of activities has been very largely eliminated. I will not say there is no possibility of it but, in so far as it is possible to eliminate it, that has been done.
Question put and agreed to.