Seanad Éireann debate -
Wednesday, 18 Nov 1959

Vol. 51 No. 12

Shannon Free Airport Development Company Limited Bill, 1959—Second Stage.

Question proposed: "That the Bill be now read a Second Time."

Minister for Transport and Power (Mr. Childers)

The main purpose of this Bill is to provide the Shannon Free Airport Development Company Limited with the necessary financial resources to enable it to carry on its functions which are the encouragement of transit traffic at the Airport, the development of tourist attractions at and in the vicinity of the Airport and the promotion of freight traffic at the Airport, including, if necessary, the provision of handling services.

The Bill provides for the supply of capital for the company by the Minister for Finance for the purpose of constructing factory premises for renting, including factory space in advance of demand.

The Bill provides also that funds will be made available to the company by way of annual grant-in-aid to cover administrative expenses and to make non-repayable grants for the purpose of encouraging and facilitating the establishment of business at the Airport. Such grants may be made towards the cost of machinery and equipment and the training of workers and in suitable cases towards the cost of construction of premises.

Pending the enactment of this measure, the company's capital requirements up to a limit of £200,000 have been met out of State-guaranteed borrowings. This House approved, in March of this year, an Order adding the name of the company to the Schedule to the State Guarantees Act, 1954, thus enabling the Minister for Finance to guarantee, as to principal and interest, any moneys borrowed by the company within the limit specified. The Minister for Industry and Commerce informed the House at that time that it was considered important to provide the company with access to funds in order that the urgent work of development would not be held up and that legislation to regularise the financial affairs of the company would be introduced. The capital to be subscribed under the Bill will be applied, in the first place, towards the repayment of borrowed moneys and thereafter to investment in projects, such as factory buildings, which are expected to yield long-term benefits in the form of increased traffic and employment at the airport.

The Development Company are rightly placing great emphasis on the importance of industrial activity at Shannon. The development of industry will have a two-fold effect. Firstly, it will ensure the maintenance and extension of employment in the area and, secondly, it will provide new and substantial freight traffic in the volume of goods, both raw materials and finished articles, shipped into and out of the industrial estate.

There is no doubt that in Shannon Airport industrialists have a unique opportunity for developing profitable businesses. Apart from the availability on the spot of regular air transport services, the airport offers a range of attractions and inducements that would be difficult to surpass. The industrial area is customs-free. There is provision for the complete exemption from income tax and corporation profits tax for a period of 25 years on profits derived from exports. The exemption from taxation can also apply to businesses engaged in distribution abroad and the provision of services. The company has already constructed some factory buildings of a standard design for leasing to suitable industrial promoters and it is prepared to contribute towards the cost of factories to individual specification. One manufacturing and one distributing firm have already commenced operations. Four other projects which are in an advanced stage of negotiation are expected to afford employment initially to about 145 persons increasing to 500 over a period of three years. The House will understand that, at the present stage of negotiation, I cannot give greater detail in regard to these proposals.

In the examination of industrial proposals for the airport there is no overlapping of functions between the Development Company and An Foras Tionscal. In the processing of proposals for industries at the airport the services of the Industrial Development Authority are utilised in precisely the same way as for an industrial proposal for another part of the country to be assisted by An Foras Tionscal; and the Industrial Development Authority advises me on the desirability or otherwise of granting a licence to manufacture in each case.

I have dwelt at some length on the company's activities in the industrial sphere, because of the obvious importance of these activities for the future of Shannon. The company is also giving special attention to other ways and means of maintaining the level of activity at the airport. The company aims to secure for Shannon the biggest possible share of the increased passenger and freight traffic which jet aircraft will generate. The company realises, of course, that the operational demand for landings at Shannon will diminish with the progressive improvements in aircraft design and performance and that future operations at the Airport will be increasingly dependent on traffic requirements. In the course of a publicity campaign, undertaken in conjunction with Bord Fáilte Éireann and the Irish air companies, the company has been particularly anxious to focus attention on the duty-free shopping facilities and on the attractions of the South and West of Ireland as tourist centres. This promotional effort is being directed in particular towards the lucrative North American tourist traffic and special emphasis is laid on the merits of short, inclusive coach-tours originating at the Airport. The company has also realised the advantages in having conventions and congresses take place at the Airport and there are prospects that a considerable measure of success will attend their efforts to bring about development along these lines.

The importance of freight traffic to Shannon Airport cannot be sufficiently stressed. I have already adverted to the expectations of the Development Company in regard to the generation of air freight through the establishment of industrial activity. To assist air freight transport operators and to encourage the practice of breaking-down and consolidating air cargo at Shannon a special freight terminal with cargo handling facilities is to be erected at the Airport.

Over the past 12 months, this House has on a number of occasions signified its approval of the measures being adopted to preserve Shannon Airport as the national asset that it is to-day. The Government are determined to do everything possible to maintain and develop Shannon as a major transatlantic airport and they hope that their aims can be realised through the Development Company. The company has a difficult and onerous task ahead of it and I now ask the House to express its confidence in its efforts by giving this Bill a Second Reading.

Dr. O'Donovan

From any remarks I have made on other Bills which the Minister brought before the House, he will have no reason to believe that if I make a few critical remarks about this Bill, I have not thought the matter over. Everybody will agree, in view of the employment situation and the development which has taken place over the past decade, particularly over the past eight years, when the number of people in employment here has declined by almost 100,000, that any effort of any sort which is made to increase employment deserves to be examined in the most favourable way.

The Minister suggested that at the most this Bill would result in employing over 500 people, at least in the present propositions which he sees developing, and he mentioned 145 as the lowest figure. That does not agree with what he said in the Dáil, when, under pressure, he admitted that since the start of this project, the total employment there is 30, unless I misread the Dáil debate. The total employment as the moment is 30. I do not propose to go through or read out to the House the names of the manufacturing organisations which have been set up. Anybody who read them in the Dáil debate could not but feel that they had no great merits. I think that is a fair way of putting it.

I think the Minister has a point in the latter part of his statement where he referred to Shannon Airport and its duty-free shopping facilities. So long as the Airport continues to be as important as it has been in recent years it deserves to be developed and certainly should show a good return on any investment. However, up to the present—I hope it will be otherwise in the future—the kind of industrial propositions that have been established there do not hold out a great deal of hope for the future.

I should like also to enter one other caveat about this Bill. It relates to the operations of the Minister and his Department. I understand the Minister and his Department have been—if I might use the phrase—butting in in an undesirable way on some of the concerns that have come there, that is to say, trying to dictate to them about the way they should conduct their business. If the Minister wishes to give this concern or project the best chance of success, he will not do it by that kind of interference with concerns in the process of establishing themselves.

I hope that if there has been such interference—and I am informed there has been—the Minister and his Department will have second thoughts amout the matter if they are anxious to establish this kind of business. I think it is the view of both Houses of the Oireachtas and the system that has been established that we do not interfere in the day-to-day working of State companies for which we provide all the capital. If that is so the Department and the Minister should be still more careful not to interfere with private enterprise companies that may come to this development area. Subject to these remarks, as I said at the beginning, I welcome the Bill, but I am doubtful about it as a long-term proposition.

Mr. Barry

I do not want to talk about this from the point of view of what contribution it might make to the national picture of employment. The actual importance of the Airport is so great that anything that can be done to ensure its growth and development must be approved by the House. Some of the proposals that we have heard for this kind of development seem to me to be fantastically ambitious, if I may put it that way. They even seem to be artificial, a sort of lifting ourselves up by our boot straps. I hope the scheme comes off. It is very important for us that the enormous investment the country has made in this Airport should fulfil the promise we all felt it might have. If it does come off, if these projects are successful, no tribute would be too great to pay to those who conceived this development.

I did not gather from the Minister's introductory speech when the figure of 500 employed could reasonably be expected to be reached. Shannon, as we all know, is now at a point of difficulty and I still think that no matter how successful these schemes of minor industries in the district are, the main drive we should make is towards the people and tourism is obviously the most profitable ground for us in regard to Shannon. Nothing we do under this development and no activity on behalf of the people who are responsible for whatever success Shannon has attained up to this can compare with what has been done to the Airport in the past two days by its being overflown by international airlines. I wonder did the Government make any approaches to the labour organisations of the country to ensure that where obvious national injury would be done, it should not be done?

Professor Quinlan

I welcome the Bill in that when any region is in difficulties, it seems to be a wise move to decentralise as far as possible and allow the region to work out its own salvation. I presume that is what this company will try to do in Shannon. I hope they achieve the success we all wish them.

Many of us are somewhat uneasy about some of the new industries that are mooted for Shannon. Perhaps the newspapers do not carry the full story, but I, for one, for instance, have very grave doubts about one of those industries which I think is already there or on the verge of beginning— the chinchilla industry. I should like to know would the Minister be able to give us any assurance in regard to that industry because I think its ultimate development can be nothing better than the multiple system of poultry production.

We are assured that these animals are easy to care for and take very little time to grow. Surely then the future for such an industry can only be in the handling of these in very large lots and it is a question of whether the ultimate reward will be just sufficient to cover set prices, and to meet handling charges. We may be lured into something unprofitable there and that is being done under the Shannon Development Company. It seems all right at this stage where you are selling breeding animals for very high prices, but in a few years the market must be saturated and the animal will be worth very little more than the value of its pelt. I should hate to feel that Shannon in its development might be marred by what will eventually be dubious enterprises. I should like some information from the Minister on that point.

I also hope that in this development of Shannon, where so much emphasis was recently placed by the Minister on the development of air freight, the concessions and facilities given to encourage firms to avail of Shannon for air freight will extend outside the Shannon development area and flow into neighbouring centres such as Galway, Ennis and Tralee and some of the major towns within easy reach of Shannon Airport. Nationally speaking, it must be equally, if not more advantageous, to us to create additional employment in those centres as compared with creating even the same employment at Shannon itself. In those centres, there are facilities and services and all that is required and, consequently, the housing of additional workers is far less expensive than creating what might be a new industrial town at Shannon. We cannot envisage the situation continuing where workers will continue to travel 10 or 15 miles to work daily. If Shannon is developed and factories built around it, other necessary services must follow and eventually what must emerge is a community or town in Shannon or close to it.

It is mentioned in the Bill that the Minister may grant up to £500,000. I presume that when these grants have been exhausted, the Minister in accordance with the Bill has to come before the House again to get authority for further grants. In that case, we shall have an opportunity of reviewing the position of development in the region again.

Finally, I should like to express the hope that the co-operation between An Foras Tionscal and the new authority will be as fruitful and close as the Minister envisages. It would be too bad if any division should come between the two bodies, due to the fact that An Foras Tionscal is prohibited by law from making any grants to enterprises in the Shannon development area.

Mr. Childers

First of all, I should like to deal with Senator O'Donovan's observations. It is true that there are 30 people employed at the moment in the Shannon Airport area in new industries, that there are two factories under construction and that when they go into production there will be a total of 145 employed in those two factories. There are two others and it is eventually anticipated that in the four there will be 500 persons employed. There are at least two other industries envisaged for the area in respect of which negotiations have not been completed. There is also a very large number of inquiries, many of which, I hope, will result in final arrangements for production at the Airport. Naturally, these negotiations take months to complete. I do not think we need be alarmed by the fact that, so far, only two are actually in operation. The effect of the negotiations and of the publicity carried out by the company is cumulative and I think we can have a fair degree of confidence that there will be quite a considerable number of persons employed in the course of the next three or four years.

I have no information about either myself or officers of my Department interfering in the private affairs of the companies considering manufacturing and I am glad to tell Senator O'Donovan that I think he has been misinformed in that matter. I do not want members of the House to think of the Shannon Free Airport industrial development as something freakish or artificially created. Grants and loans are made available in a number of countries for industrial development. The concessions offered by the company, it is agreed, are maximum in character, but nevertheless it is the first airport industrial area in the world, as far as I know, and the great advantage of promoting a factory in the area is that goods can be directly placed upon an airliner coming up to the door of the factory, taxiing on the air-strip in front of the building and taking on goods with a single handling. Goods can be shipped to huge areas of the world by air direct literally from the factory premises.

Looking at the world of the future, it seems to me that that offers considerable hope in the direction of industrial expansion and that the idea is a good one, a modern idea and something in keeping with modern trends. So that, over and above the tax advantages and concessions, the availability of grants, the fact that goods are being produced within a customs-free area, there is also the advantage of the proximity of the Airport which I think should have some considerable effect on the minds of industrialists looking around at a world in which the tariff system is gradually breaking down and finding it convenient to produce goods suitable for transportation by air in the Shannon Airport area.

In regard to the industrial dispute that has taken place, I need only say that I understand Deputy Dillon has asked the Taoiseach to make a statement in the Dáil, and the Taoiseach is making a statement on the general position as far as he can.

Senator Quinlan mentioned the chinchilla industry. It would be undesirable for me to give any details in regard to the position of any industry here in relation to the future, but the chinchilla industry occupies temporary premises. I think we can trust the company to deal sympathetically, and certainly realistically, with the operation of that enterprise in so far as its claims upon the company are concerned. I do not think I need say more about that.

The Government intend that these concessions shall be confined strictly to the Shannon Free Airport area and shall not be extended to other parts of the country where all the grants and other privileges under present Finance Acts and the Undeveloped Areas Act obtain. They think it is essential to maintain these special concessions for the Shannon Airport area.

Senator Quinlan asked what would happen, if there is a measure of success and if we see more and more industries being established and a considerable amount of employment given, in regard to the position of workers who have to travel to their work from some distance. That, of course, will have to be considered by the company. I need hardly say that if the number of persons being employed were to grow very rapidly, then some sort of arrangement for housing them would have to be considered.

Senator Quinlan asked whether the Government would go before the Oireachtas to ask for an extension of the grant powers if the £500,000 were issued, and the answer, of course, is "yes". I should be delighted if the whole of the £500,000, which can be given as a direct grant to the company, were used up in a fruitful manner and that I should have to come before the Dáil and Seanad to extend the grant powers under this Bill.

I thank the Senators for their sympathetic and helpful attitude. I do hope that everybody will realise that this is a new idea and will not think of the Shannon Airport industrial area as a freakish artificial development but as something which I hope and believe has relation to modern industrial trends and modern freight trends. It is because we believe in that development that we are doing the utmost we can to assist in the provision of industries in the area.

Question put and agreed to.

Committee Stage ordered for Wednesday, 25th November, 1959.