asked the Minister for Industry, Trade, Commerce and Tourism the reason the Government did not sanction the IDA deal on the Hyster Corporation for Limerick; and if he will make a statement on the matter.
Written Answers. - Limerick Industrial Project.
106.
Under the Industrial Development Acts all projects requiring substantial grant-aid from the Exchequer in respect of an industrial project must be submitted by the IDA to the Government for approval. This is quite understandable as it is the Government who at the end of the day must account for the expenditure of many millions of pounds of taxpayers money.
Following on negotiations between the IDA and the Hyster Corporation, the Government in June 1984 considered proposals for grant assistance for a project involving an "all makes parts" venture to manufacture a wide range of parts for forklift trucks and other handling equipment. The proposal involved was very expensive in terms of Exchequer costs and would have resulted in a very high grant cost per job. It was recognised that there was a very considerable risk attaching to the project because its success depended to a large degree on the company's ability to establish itself in a market, "all makes" spare parts, which it had not hitherto serviced and in which there was considerable competition. In view of this high cost and the relative degree of risk attached to the project, the Government was concerned that the Exchequer was being asked to contribute a disproportionately large share for the financing requirements, compared to the contribution that the promoters themselves were prepared to make.
In all these circumstances, the Government indicated to the IDA that it would be prepared to approve grant assistance for the project only on the basis of an increased upfront cash contribution from the company as evidence of their confidence in the project's success. The Government considered that in view of the high Exchequer cost and the disproportionately high degree of risk that the State was being asked to bear, such an approach was totally justified.
It should also be clearly understood that the expected employment figures mentioned in public debate would only arise in the event of the project being a complete success and then only after a period of ten years. In the earlier years of the project and during the period in which the State's investment would be most at risk, the employment projected would be at a very much lower level.