Shannon Free Airport Development Company Limited (Amendment) Bill, 1963: Second and Subsequent Stages.

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

The purpose of the Bill is to amend and extend the Shannon Free Airport Development Company Limited Acts, 1959 and 1961.

The Bill is designed to provide for the further financing of the Shannon Free Airport Development Company Ltd. the finances of which are provided at present under the Shannon Free Airport Development Company Ltd. Acts, 1959 and 1961. The main provisions of the Bill are:

(i) to increase from £3 million to £4 million the aggregate of the amounts which the Minister for Finance may subscribe in taking up shares of the company;

(ii) to increase from £1,250,000 to £2 million the aggregate amount of grants, voted annually, which may be made to the company;

(iii) to increase from £400,000 to £2 million the existing statutory limit on repayable advances by the Minister for Finance for housing purposes; and

(iv) to provide for the payment to the company of grants for houses in line with grants normally payable under the Housing Acts and also for the payment of housing subsidies.

Senators will be well aware of the functions of the Shannon Free Airport Development Company which is charged, generally, with promoting the welfare of Shannon Airport, with particular emphasis on the encouragement of commercial, industrial and trading enterprises at the Airport. While the stimulation of passenger and freight traffic through the Airport remains a primary concern of the company, it was realised at an early stage of the company's existence that the greatest scope for its energies lay in the development of the Industrial Estate and the taking advantage of the attractions for industry which already existed at Shannon, namely, freedom from customs restrictions, enjoyment of certain taxation privileges and proximity to an international airport holding a key position between America and Europe.

In order further to encourage the setting up of industries at the airport, factory buildings which may be rented are provided by the company. Factories may also be purchased outright or may be built on sites leased from the company with the aid of grants from the company. Grants are also made available for machinery and for the training of workers. Houses for employees of the Industrial Estate are provided by the company at reasonable rents or to purchase and developed sites are made available for executive-type houses and for speculative building.

The share capital subscribed to the company has been used for the provision of factory buildings and dwelling houses, and associated services, the rents from which go to supplement the company's grants-in-aid. The repayable advances have been used to meet one-half of the expenditure by the company on the provision of housing. The grants-in-aid are applied towards meeting the company's running expenses and providing financial assistance to industries including grants towards factory buildings, new machinery and the training of workers. The finances provided to the company under existing legislation up to 30th June, 1963, were as follows:

Share Capital

£2,910,000

Repayable Advances

400,000

Grant-in-Aid

905,500

Of these amounts, £2,270,000 has been expended on the Industrial Estate, £1,040,000 on the Housing Estate, £492,000 on grants to industrialists and £413,500 on the running expenses of the company. It is now urgently necessary to increase the limits under existing legislation to enable the company to continue to function.

The company was set up a little over four years ago. I think it will be agreed that their record in that short time has been one of considerable achievement. Senators had the opportunity about a year ago of seeing for themselves what has been accomplished on the industrial and housing estates. At 30th June, 1963, 12 factories and six trading enterprises were in operation and a total of 1,698 workers were employed of whom 917 were male and 781 female. This employment has approximately doubled the number of persons employed at the Airport. The output of these factories, practically all of which is exported, includes products as diverse as pianos and floor polishers, electronic equipment and knitwear, diamond drills and radios.

Twenty-six standard factory premises and three smaller premises were completed all but one of which were occupied. Together with a special factory constructed by an industrialist with the aid of a grant from the company, the total area of factory space as at 30th June, 1963, was 509,190 square feet. Eight standard factory premises are under construction giving a total area of factory space when these are completed of 656,940 square feet. Ancillary services including water, sewerage, electricity and a boiler-house have also been provided. Thirty-eight houses and 137 flats have been built and 158 houses are under construction or contracted for. Thirty-five houses and 123 flats are already occupied. A community centre comprising a shop, bank and recreation hall has been provided and four shops are under construction. Arrangements are also in train for the provision of other amenities necessary for a growing population.

Five existing industries are expected to require additional factory premises in the near future and new industries are expected to be set up in the next year with a considerable expansion in employment. Plans are in hand for the construction of six further factory premises. By the middle of 1964, the company's factory building programme is expected to comprise 40 standard factories completed or under construction and three small factories completed, eight warehousing units, a boiler house and a commercial office block. While a certain amount of factory accommodation must be provided in anticipation of actual demand, factories are built on the basis of likely demand and building programmes are sanctioned on this basis. It is, of course, impossible to foresee exactly the extent of future development but the increase in the share capital to £4 million should be sufficient for the time being.

Housing is provided in parallel with industrial development, of which it is an integral part. Shannon is in a somewhat isolated position and it is essential in order to attract workers who do not reside within convenient reach of the Airport, that a sufficiency of living accommodation at reasonable rents be provided so as to cater for both married and unmarried workers desiring to live adjacent to their work. It is necessary to strike a balance between planning on an over-ambitious scale so that houses might be left unoccupied and on the other hand under-planning to the extent that workers would be discouraged from taking up employment at the Airport because of the lack of suitable accommodation.

Housing is, therefore, provided on a minimum but expandable basis. This means that the schemes are planned to meet the known demand but that they are expandable to meet very quickly new requirements which may arise. The company is careful to keep in line with Governmental and local authority requirements in its planning and construction of houses and its aim is to develop the housing estate in accordance with the best principles of town planning. Because of its isolated position and the need to develop sites and to provide services, the cost of housing at Shannon is relatively high, but contracts are placed by open tendering which ensures that costs are kept at a competitive level.

Expenditure on housing and community services up to 30th June, 1963, provided out of share capital and repayable advances amounted to £1,040,000. Under existing legislation, repayable advances up to a maximum of £400,000 could be made to the company to meet one-half of the expenditure on housing. The Bill provides that all expenditure on the provision of dwellings and community services, including expenditure already defrayed out of share capital, will now be met by way of repayable advances. These advances are repayable over a period of 50 years at the current Exchequer lending rate, this being the basis on which advances are made for local authority housing. With the increase in the limit on repayable advances to £2 million a further £960,000 will be available to meet expenditure on housing after 30th June, 1963. In addition to housing for factory workers, the company provides developed sites for executive-type houses and for speculative building on the basis of the recovery of the full cost of development. As at 30th June, 1963, 20 sites had been provided for executive-type houses. The company are anxious to encourage speculative building at the Airport and are in negotiation with a number of builders in the matter.

The Bill provides for the payment from the Transport and Power Vote of a subsidy in respect of each dwelling or other unit of accommodation constructed by the company. The subsidy is necessary because the rents which it is considered the workers may reasonably be expected to pay fall short of the full economic rents. The economic rents are calculated on the full cost of construction after deduction of the equivalent of the normal housing grants available to private persons under the Housing Acts. In the early years, the subsidy will be relatively high but provision is made in the rental agreements for increases in the rents as wages generally increase thus reducing the amount of the subsidy required. Capital grants equivalent to the grants available to persons under the Housing Acts will also be payable and this is provided for in the Bill. The payment of these grants will be subject to compliance by the company with requirements similar to those laid down by the Housing Acts in the case of grants payable under these Acts.

The Bill also provides for an increase from £1.25 million to £2 million in the aggregate amount of grants payable to the company. These grants provide for the running expenses of the company and also enable the company to pay grants to industrialists for buildings, machinery and the training of workers. Grants paid to the company up to 30th June 1963, amounted to £905,500. In addition, the company received £141,500 by way of rents and other income. £555,000 was used by the company for its running expenses and grants were made to industrialists as follows:

Machinery and equipment

£344,000

Factory premises — —

£85,000

Training of workers —

£63,000

While the company's most fruitful field of operation lies in the development of the industrial estate, it should also be remembered that a primary purpose of the setting up of the company was to stimulate passenger and freight traffic through the Airport. The combined number of transit and terminal passengers using the Airport decreased only slightly in 1962 over 1961 but the company is urgently concerned to secure Shannon's share of the traffic growth on the North Atlantic as well as to attract passengers from Britain and the Continent. The evolution of faster and longer-range aircraft is necessarily having an adverse effect on transit traffic through the Airport but the company has set up a Travel Promotion Department to take advantage of the opportunites which undoubtedly exist for the development of tourist traffic through the Airport.

In its tourist promotion activities, the company, of course, co-operates fully with other tourist promotion bodies including Bord Fáilte and the air companies. The success of the local tour arranged for tourists taking in places of scenic and historical interest and culminating in the medieval banquet in the restored Bunratty Castle is an example of what can be achieved by imaginative planning. A further development will be the establishment of a Folk Park in conjunction with the Bunratty Castle project. I myself visited the Folk Park at Arnhem and was so utterly convinced of its national value and attraction to tourists that I suggested a similar development to the Shannon company. I am glad to say that the initial problems have now been solved and that a Folk Park will shortly be added to the attractions of the Shannon region.

The cost will be borne equally by the company, Bord Fáilte and an amenity grant from the Department of Local Government. The park will be operated by the Shannon company in conjunction with Bunratty Castle. This scheme for a very attractive Folk Village in the grounds of Bunratty Castle has been devised with the cooperation and advice of the Folklore Commission. The village will consist of authentic examples of rural dwellings typical of the Shannon region and illustrating the rural way of life in past times—from the early 19th century onwards. In the first stage, the village will comprise a bothán scoir, a cottier's house, a forge, a West Clare farmhouse, a West Kerry fisherman's house and a farmhouse from the Shannon area. These older dwellings are quickly disappearing from the countryside and in preserving examples of them, the Folk Village will represent an historically correct reproduction which will be useful to students of the future as well as being a point of great interest for tourists. The houses will be furnished in the style of the period to which they relate and it is a sign of the remarkable change in the way of life in the country that it is already difficult to obtain examples of the household goods and utensils which were in common use as recently as our own boyhood.

The main objective of the promotion drive is to establish Shannon Airport as the natural gateway for American visitors to the south-western and western areas with all the amenities they offer for mountain, lake and shore scenery, fishing, golfing, hunting and archaeological study. In this connection may I repeat what I have said earlier. Neither the Shannon company, Bord Fáilte nor the national airline alone can promote tourist development at a sufficient pace to offset the inevitable decline of transit traffic at the airport. Regional tourist associations equipped by local authorities and other local interests with promotional funds representing a percentage of tourist spending in the areas can help to create their own image of each tourist area, can stimulate group hotel publicity, encourage group booking, entertain travel writers and agents and can assist in local resort development and in promoting interest in fishing, golf, etc.

I am glad to see that the regional tourist association movement is beginning to progress in the area. Contacts with Americans of Irish origin organised on a regional basis is one example of tourist promotion offering a great potential in the future. Kerry, Limerick, Clare and Galway—the Shannon counties—are competing with regional development competitive promotion work all over Europe.

The growth of terminal freight traffic through the Airport is slow mainly because of the great disparity at present existing between air and surface rates but as air freight costs lessen, it is expected that the volume of air shipments will increase substantially. Nearly one half of the terminal freight generated at Shannon in 1962 was attributable to the Industrial Estate and in the first quarter of this year air freight generated by the Industrial Estate was up by 15 per cent compared with the first quarter of 1962. Three firms at the Airport engage in freight forwarding and consolidation and two other firms in warehousing operations while two American companies of international repute are considering Shannon as a distribution point for their markets in the UK, Europe, Middle East and Africa.

A big expansion in warehousing activities is expected as a result of an extensive campaign publicising the advantages which the Free Airport holds for freight warehousing and distribution. By the provision of warehouse facilities, air cargo is attracted to the Airport for storage and redistribution. Shannon is very well placed as a centre for entrepôt and distribution operations but to develop the Airport's potential in this field it is necessary to provide adequate facilities. Eight warehousing units, each of about 3,500 square feet, are being provided initially by the company with provision for expansion to meet demand. The introduction recently by Pan American Airways of an all cargo Boeing jet freighter service through Shannon linking cities in the United States with important European and Middle East centres should also provide a very considerable fillip to the growth of air freight through the airport while the company are active in endeavouring to secure improved cargo rates, improved services including increased frequencies and speedy clearance at destinations, and the publicising of the facilities available by air.

There is no reason to believe that the outlook for the future of the Estate is other than bright but we must, of course, combine optimism with prudence. The concept of an Industrial Estate at Shannon was a revolutionary and, therefore, speculative one. That so much has been achieved in such a short time justifies the bold and imaginative experiment undertaken four years ago and I am convinced that it will continue to play its important part in the economy. The financial limits proposed in this Bill are realistic though they may perhaps be a little on the tight side since they represent only the minimum financing which the company will require in the next few years. If I have to come back to the Seanad before that time, I will make no apology as the need for further finances will be a measure of the company's success. In the meantime, it is with confidence that I ask for your approval for this Bill, in giving which you will have expressed your satisfaction with the achievements of the company to date and your confidence in its continued progress. For my own part, I wish to congratulate the Board and management of the company and also the management of the various enterprises in the Estate on the results achieved and to urge them to even greater efforts in the future.

I recommend the Bill for the approval of the Seanad.

What we are doing in this Bill is further financing the Shannon Development Company, which seems to have run into certain difficulties. I sincerely hope that what we are doing today will be successful. I also hope there will be a full investigation and inquiry before the people's money is pledged to any factories. We are giving here a blood transfusion, as it were. I hope more blood will not be needed. I hope the patient will improve immediately and remain in good health in the future.

The Minister, in the course of his speech, stated:

There is no reason to believe that the outlook for the future of the Estate is other than bright but we must, of course, combine optimism with prudence.

I entirely agree with the Minister there. I hope there will be prudence. This morning here a Senator referred to an article which appeared in theIrish Times on 17th of this month. From that it will be seen that many of the companies to which we have subscribed in the past are now running into certain difficulties. As the watchdogs of the taxpayers' money it is our duty to see that, while there is optimism, that optimism is tempered with prudence.

Over the past few years, millions of public money, according to the article, have been sunk in what now look like doubtful propositions. Indeed, there is public disquiet at the amount of public money that has been gambled in some shaky propositions and the amount of money that has had to be voted over the past few years to keep these shaky propositions staggering along. We were told a few years ago that the Verolme enterprise was one of the greatest industries that could be established in this country. Only last week it was in difficulties and we had to vote almost £1 million of the taxpayers' money to keep it going. We sincerely hope this, and all the other projects, will succeed and become viable propositions in the future.

Every one of us, no matter how we may disagree at times on matters political, is interested in the future of our country and in providing employment for our own people here at home. I will not refer to this money as "slush" money, though that was the manner in which the Minister himself in a speech in Kilkenny a number of years ago described the money we were spending at the time on housing. We believed the houses were necessary. We believed the money was well spent. The Minister did not agree. He described the money as "slush" money.

One of the reasons for giving these grants to factories in the Shannon development area was in the hope that these factories would export their products through Shannon Airport. I wonder if the Minister would give us some more information on that aspect. What is happening? I have been informed—I may be wrong; the Minister has more information than I have— that many of these companies are exporting over land and by sea. Is it a fact they are finding it more economical to send their goods by road to Northern Ireland and by sea from there to Britain and elsewhere? Was Oireachtas Éireann not asked to provide money for these companies in order to ensure that they would use air transport from Shannon? Was it not the intention that these companies would help to keep Shannon Airport going? I should like to know is there any clause in their contracts under which they could be asked if possible —I suppose we could not make them —to use Shannon Airport as well. The amount of money being voted in this Bill seems to be a very expensive buttressing of the Shannon Area by the people in present circumstances.

Everyone concerned with this project should be congratulated. We are seeking to build and foster at Shannon a community where no community existed in the past, to have work where no work existed, to build houses where no houses existed, and to bring the people to a place where there were no people in the past, and to enable them to support themselves and live their lives in the houses that are being provided. I wish all that work success. The Irish people have made a great investment of hard-earned money in it. As the Minister has pointed out, almost 2,000 people are employed there, and it provides them with their bread and butter.

Most of us realise that the real danger to the Shannon development area, the Airport and the surrounding area, lies in the struggle to make Dublin the major transatlantic terminal. If that struggle succeeded, Shannon might well be doomed, and all that Irish investment might very well be lost. I believe it is wrong to have everything centred in Dublin. There is too much —and too many—in Dublin already. It has often been said in the past that Dublin is growing too big. The country is beginning to look like a small child with a big head; the head seems to be getting bigger and bigger and he will be brought down in a short time unless something is done to build up the rest of the body. Therefore, I hope this hidden struggle to make Dublin the international terminal does not succeed. Tribute is due to the Government for resisting that struggle for so long. I sincerely hope this project is successful and that it will give employment to many more people in the area.

I welcome this Bill with great enthusiasm because we believe this project is well worth support. In the introduction to the annual report of the Shannon Development Company for last year, it is stated:

...the company set about its task of maintaining and developing Shannon as a major international airport by undertaking activities designed to stimulate passenger and freight traffic and to create additional employment.

It went on:

Industrial development at Shannon is making a major contribution to the national economy in a region where such development is of vital importance. It is providing employment for significant numbers of our people at reasonable cost to the public purse, in an environment where modern industrial skills and techniques are applied for the purpose of manufacturing goods for export with resulting benefit to the country's foreign trade and balance of payments position.

I was very glad to hear the statement by Senator L'Estrange that he wishes the project every success. I commend him for his statesmanlike approach to the matter. I was very glad also to hear the Minister's reference to the decision of Pan American Airways to route their jet freighters through Shannon. That, to my mind, is one of the most encouraging signs that people who know what they are doing in the world of business have confidence in the future of Shannon Airport and its Industrial Estate. I understand the Pan American Company are now using the Airport as a transshipment point for Britain, Southern Europe and the Middle East. They are operating eight flights a week through Shannon.

It is interesting to note the statement made recently by their Irish manager, Mr. Con McGovern. When he referred to that project, he said that most European air terminals are so congested that delays in loading and unloading are inevitable. His company consider the prospects of operating through Shannon are very good in view of the free industrial zone and the warehouse facilities which could easily be expanded. He emphasised that this new development reflects the serious interest Pan American Airways have in Shannon, with which they have been in contact for 26 years.

When the Minister mentioned the Pan American decision to route their big jet freighters to Shannon, I could not help thinking with pleasure of the early days when Pan American blazed the trail across the Atlantic with their Clipper service to Foynes. In the early days, they were one of the first props of Shannon Airport. I am glad to say we are now beginning to appreciate the efforts which have been made to develop this great project. We are seeing the fruits of the work which the company have put into it since the beginning.

It is good to know also that when the company started in 1959 there were 83,000 terminal passengers at Shannon. Last year they numbered over 180,000. The factories in the Industrial Estate are rapidly expanding their freight, and I hope, as Senator L'Estrange said, an endeavour will be made to induce any companies producing freight to avail of the air freight facilities rather than overland and motor transport.

The Minister told us the amount of employment given in the Industrial Estate, and I was glad to read in a recent newspaper article that wages and salaries in Shannon have risen from £962,000 in 1959, to £2,300,000 last year. That increase of £1,300,000 is a good sign of progress. Another sign of the confidence which business people have in the future of the Airport and the industrial zone, is the fact that in the Shannon region five first-class hotels have recently been opened. When business people put their money into concerns of that nature, in what might be described as an isolated part of the country, to my mind, that is a sign of their belief in its future.

The Minister referred to the new warehouse project. It is well to remember that when they are finished, something like 100,000 square feet of warehousing space will be available to American manufacturers, who undoubtedly will give serious consideration to the advantage they would gain from using Shannon not only as a storage point, but as a transshipment point to the European Common Market area or the European Free Trade area.

One other point that struck me as being of some consequence was the fact that Shannon's importance as a freight centre is best shown by the fact that it occupies seventh place in a total of 17 European airports. The Irish people can be proud of the fact that in that great Airport, and the Industrial Estate, there are facilities which will go to make it a hive of industry in the future.

Senators will remember, I am sure with pleasure, the visit we paid, at the invitation of the companies down there, to Shannon and its industrial zone last year. I am sure they were impressed, as I was, by the business like efficiency of the factories which have gone into production, and by the businesslike efficiency in the housing schemes which were then in course of progress. I am glad to know the housing project continues, and that it will be extended as occasion demands. This is in every way a desirable Bill and I am confident the Seanad will expedite its passage.

We must all be very pleased to see a development of this kind in the west of Ireland where there is so much running down of population in towns and villages. Therefore, anything that can be done to back up a project like that at Shannon Airport must have support from all of us. Anybody who has seen it must be pleased at the way this scheme has been planned. When the first idea did not seem to materialise, we were all naturally apprehensive as to where we would go from there. However, it does seem there is every possibility of creating a new town with a modern form of life.

What is obviously wrong with the towns in the west of Ireland—and the further you go from Dublin the more apparent it is—is that the towns offer no incentive to the younger people to stay and to live in them. One thing that has made an improvement in villages and towns throughout the country is the Tidy Towns Scheme. That in itself has made these places look brighter and better. They are being painted and being modernised but not fast enough to retain the younger element of population.

I have often expressed the view, on the question of industrial development, that it was a mistake to try to establish industries here, there and everywhere. That sort of fragmentation of industrial development has no economic future, no real attraction. It can only be done through subsidies and all sorts of artificial means. In Shannon, there is the proper kind of development. It is a development where there is a concentration of labour, a concentration of skilled workers and of social life.

The difficulty about isolated development is that if a single industry is established, people are trained for that industry. It costs a lot to train them but when they get a skill, they go to the more populous areas where they will have social life and will be well paid for their skill. Unfortunately in the past that has meant Dublin, Cork, Limerick or England. I should like to see more Shannons and I hope that in the future we shall have them.

Another point I was very pleased to see in the Minister's statement was in relation to the development of the Folk Park. That is a splendid idea. The Minister says there is one in Holland. There is also a well-known development of this kind in Barcelona in Spain where all the Spanish industries and all the Spanish forms of country life can be seen. All the local industries are enabled to show their goods and sell them to visitors from all over the world. Not only is the Folk Park a good idea but the castle at Bunratty is a cultural development of the highest quality, in spite of the carping criticism one hears from people from time to time who do not know what they are talking about.

I should like to see a similar development near Dublin. The folk life of Ireland has its sad side, the mud cabins, and so on but there was a good folk life in Ireland and it is the good things that should be projected into view. Anybody who passes into or out of Leinster House cannot but see the regular flow of people who go into our museum, but the museum, owing to lack of space, can show only certain objects such as the Celtic arts of the middle ages. There is scope for showing the folk life of Ireland of the 19th and particularly the 20th century, the transition period after the Treaty before the advent of modern living, modern bathrooms and so on, which is very good but the other side of Irish life should be shown as part of our heritage. I commend the Minister for establishing this Folk Park in Bunratty. I hope the example of Shannon will be followed and that we shall have strong pockets of industry in other parts of the country as well. I have pleasure in supporting this Bill.

I should like to thank Senator L'Estrange, Senator McGuire and Senator Ó Maoláin for the very helpful way in which they spoke. It is a great delight to me to be able to present this Bill in an atmosphere of encouragement to the development of Shannon Airport. I can be truthful in my views on the Shannon Estate when I say the total all-in cost of the Shannon Estate calculated by any method and related to the number of workers employed is not excessive and is not extravagant in comparison with other industries established elsewhere. The subsidies we have to pay when compared with subsidies provided by local authorities in the neighbouring district are not excessive. Some of the most famous and well-established companies in the world have chosen Shannon for their factories and that is an excellent advertisement in itself. Therefore, we can be reasonably optimistic about the future of the Shannon Industrial Estate.

In regard to freight, Shannon Free Airport Development Company cannot insist on industries established there making use solely of their freight service. They now have got to the stage when they can be reasonably selective as between the different firms which apply for factory space, and they are trying to select the type of firm, the nature of whose industry makes it economic to export by air freight, light engineering industries, industries where, from the point of view of damage to goods, the high cost of raw materials transported over long distances, air freight is dictated. The only figure I can give Senator L'Estrange is that roughly 50 per cent of the goods produced at the Shannon Industrial Estate are exported by air.

The big competitor in this regard is the container, and the development of the container in regard to Irish traffic is comparatively recent for various reasons. All I can say is that if one looks at the general development of air traffic all over the world, air freight and air passenger traffic have become more and more competitive with surface facilities, and so we can look forward to the growth of air freight traffic at the Airport as new knowledge finds ways of making air transport more economical.

Senator McGuire spoke of the necessity of brightening the towns of Ireland. I am glad he mentioned the Tidy Towns Scheme. We hope the Folk Park will be attractive to people. I should like to see other examples of folk villages elsewhere in the country. I trust the Folk Village at Bunratty and the new Folk Museum at the Royal Hospital will together be able to show some of our heritage. I think I have answered all the questions put to me. Once again, I thank the House for their very favourable attitude.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.