This matter concerns a problem in relation to the agreed regulations in respect of the free ports in the designated area in the Cork region of Ringaskiddy. The free port was first mooted in 1983. It was agreed, after discussions with the Government of the day and the task force which was set up by the Government in 1984 that it should be considered. That Bill came before both Houses in 1985 and was finally passed in early 1986.
A problem now arises about the regulations under the Bill. The Free Port Bill provides for the designation of an area in Ringaskiddy, of 30 acres or 60 acres or whatever is needed on the day. I understand that discussions have taken place between groups such as the Cork Harbour Commissioners and other private bodies who have an interest in setting up the free port in Cork. Discussions have also taken place with departmental officials regarding regulations.
As I said, the Bill was passed in early 1986, we are now in the middle of 1987 and still no regulations have been agreed. When you see that, you get a little annoyed. I am not saying all this just because we were the first to push for a free port. I will show the amount of money which has been spent by Governments over a ten year period in the Ringaskiddy area. For instance, there was a water scheme from the Inniscara area in Cork to Ringaskiddy, which was carried out at a cost of about £77 million. The IDA have purchased an area of over 1,000 acres there, and infrastructural facilities such as roads and a deep-water berth have been provided. Enormous pressure was put on the Government of the day to provide this deep-water berth, which was built at a cost of almost £11 million. In 1974-75 facilities were provided for the berthing of ferries. At that time B & I gave a commitment that this would be one of their main ferry ports, but unfortunately, that did not materialise. It was then agreed, because of the position in Cork, particularly in 1982-83, that we would look at the Ringaskiddy deep-water berth area, which was of vital importance and the port and docks area, and to do everything possible to get more shipping and trans-shipping into the Cork region.
In pushing for a free port the emphasis must be on what it would mean to a region like Cork and Kerry. It is over a year and a half since the Bill was passed and no regulations are forthcoming. I realise that discussions have taken place with Departmental officials and the people involved regarding the setting up of the free port, but the information I have is that very few positive discussions have taken place between both bodies.
We endeavoured to ensure that the first free deep water port in Ireland would be recognised as being totally free. Many long arguments took place with the last Government about the type of conditions or regulations we might have. They did not agree at first, for instance, that all products coming into the free zone area should be VAT free; but, after long arguments, this was eventually agreed to. They did not agree on customs charges in the free port area, but this too was agreed to. We then asked if we could get a reduction in the 50 per cent capital gains tax on service areas. That was not agreed to. The reply from the previous Government — and I understand it also came from the Department since the change of Government — was that no consideration could be given to a reduction from 50 per cent to 10 per cent in the capital gains tax because such a concession had been implemented since 1949 in the Shannon area. We recognise the enormous incentives that has meant for Shannon. A lesson has been learned from that. During the past six weeks also discussions have taken place with the Custom House Docks Development Authority in Dublin regarding the new facilities to be provided there.
I understand that the same tax concessions apply in the six free ports in the British Isles — three are working very well — in other words, the reduction to 10 per cent tax on manufacturing and service industries. It has now been agreed that the same 10 per cent, which was not allowed in the free port in Cork, will be allowed to the Custom House Docks Development Authority in Dublin. That shows to me, and to everybody involved in the Cork-Kerry region, that true recognition is not being given to the free port in Cork. Arguments have been made, in particular by the harbour authorities, that anybody setting up a service area in the free zone would not have the same benefits as those other free ports in the British Isles. Therefore the incentive is not there.
Following many discussions the Departmental officials over many months were not prepared to change in any circumstances. The facility which was denied to us has now been provided for the Custom House Docks Development Authority in Dublin — the financial institutions to be set up there would pay only 10 per cent on their gains. I recognise what it means to the Dublin area, but the same facility should be provided in Cork. The impression is that everything in a free port area is free of customs or VAT charges until such time as it leaves the area. We have a situation where the 10 per cent facility prevails in Shannon and it is now to prevail in Dublin. Could I please have an explanation why the same agreement could not be reached in regard to the free port area in Cork? Such a facility would mean that you could say to people setting up in the free zone area: "If you are prepared to establish a service in this area your profits would not be taxed at the same rate as they would anywhere else". We are not saying such people should get the benefit if they were trading with the country itself. For instance, if service work is going on in the designated area and if the industrialist was exporting to Ireland itself, he would have to pay his relevant taxes. There is no gain except when he is re-exporting. In other words, manufacturers in that area get all facilities free — no customs charges, no VAT charges. Anything coming into that area from the mainland of Ireland would be VAT and duty free. That is to the benefit of the person who would be producing there. The same prevails in the Dublin Port and Docks area and in the Shannon area. I am not saying that the Shannon area and the Dublin Port and Docks area should not have it. What I am saying is that if the same facility prevails in the Cork-Kerry region it would have enormous advantages.
Semi-State bodies — for instance, the Cork Harbour Commissioners — always make the point to the public representatives of the Cork region that they are not getting enough facilities. After a year and a half of no regulations coming forward the situation in Cork is quite serious. We are not committed to saying that the regulations are forthcoming. My understanding is that they are not even nearly ready. Is there any real commitment to saying that they do recognise the free port area? Has anybody any idea of how busy the Liverpool free port area is? Has anybody any idea of the amount of work that has been created as a result? Perhaps I could give an example of what it would mean if the free port area was speedily developed in the Cork region.
We have a once off allocation of £500,000 by the Government for the new ferry service in Cork. If there was a free port area in Cork people coming in by ferry, whether from the Continent or Britain, could purchase in the free zoned area. It would be the same as in Shannon, except that this would be a docks area. People who go to other countries because of the facilities available there could visit the Cork-Kerry region because of the Cork free port facility. That cannot happen without proper conditions and proper regulations. The process is so slow that I cannot understand it. For instance, Departmental officials in early 1986 got a comment from the Minister of the day that we would see certain regulations would be made no later than July or August of last year. That is ten months ago, but the situation has not changed.
The people of Cork and Kerry, and especially the southern region of Cork, put great emphasis on what the free port will mean to the region. We argue for proper infrastructure. We argue whether particular work should or should not continue. An argument is being made as to whether extra money should be allocated for road construction to the Ringaskiddy region and whether extra money should be allocated for the building of tunnels at a cost of £50 million to £60 million. I question seriously whether this should be a priority at this time when all you are looking at in the Ringaskiddy area is a bird sanctuary. Nothing is happening there.
Somebody must take responsibility for the amount of investment over the years. I see no reason why the making of the regulations cannot be speeded up. I see no reason why this area should not get the same type of tax concessions as elsewhere. I see no reason why an explanation is not being given as to why regulations are not forthcoming. Is there a problem with the people setting up the Ringaskiddy free port area? Is there a problem with the Cork Harbour Commissioners and the private sector getting together for the running of the free port? I have no objection to the private sector becoming involved because this should be of great benefit. Money invested by the private and public sectors can be of enormous advantage.
With respect to the Government and previous Governments, we can become a laughing stock over this matter. I make no apologies for saying that I was one of the first to moot this project in 1983, it was pushed by the task force set up by the Government in 1984, agreed in 1985, and yet two years later nothing has happened. That is very slow progress. When we agreed in 1983 to consider the establishment of a free port, Britain had not even considered the idea. But now they have six free ports on their west coast, reaping the benefit of heavy shipping in the western hemisphere. They have now established what we outlined in 1983. Britain had not considered the idea of free ports in 1983 and yet they have already set up free ports and are making money, particularly in Liverpool.
The benefits of a free port to Ireland would be enormous. Imagine building a deep-water berth for shipping amounting to 75,000 tons. It was never heard of before in the south-west region. Tonnage would be redistributed to the European area at no cost to the shipper. What I mean by a free port is that one could trans-ship from one area to other areas. The amount of work involved for the Cork-Kerry region would be enormous. It would also mean that people who would otherwise by-pass this country would holiday here. If there was a free zone here area liners would stop so that people could make purchases. But the way we are going now everybody else will get the benefit, particularly Britain, who were 12 months behind us with this idea. It went through the House of Commons sometime in late 1984 and they are already operating. Why can our regulations not be speeded up?
I fail to understand why the discussions and arguments go on between Departmental officials and people who have an interest in the free port on the type of operation it should be. For instance, no agreement was reached for two months on whether or not there would be VAT at point of entry. How can it be said that goods would not be allowed into a free zone unless VAT was paid at point of entry, that is provided it is going into the mainland? In other words, if one wanted to bring 1,000 televisions into the free zone area the Government of the day, which was the last Government, had decided that VAT should be paid at point of entry. That completely eliminates the free port concept. If one were to bring in 1,000 television sets and take out 100 in one week, one would have to pay for the 100 leaving the free zone area. It took two months to reach agreement with the Departmental officials on that matter. That is ridiculous. At the end of the day they could see what it meant and they agreed. Departmental officials can say that tax concessions have been agreed in Shannon, and understand that the same tax concessions are being agreed in the Dublin region. I have no objection to that because it creates more work and more services for our people, and jobs are very important. But in Cork this is very important, too. Finally, we have 1,000 acres of IDA land which have cost the taxpayers a lot of money. It is now a bird sanctuary and serves no purpose. That is totally irresponsible.
