Léim ar aghaidh chuig an bpríomhábhar

Dáil Éireann díospóireacht -
Thursday, 16 Feb 1989

Vol. 387 No. 3

Shannon Free Airport Development Company Limited (Amendment) Bill 1988: Second Stage (Resumed).

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

This Bill proposes to extend the responsibilities of the Shannon Free Airport Development Company to include the north Kerry area. I welcome the inclusion of this area in the mid-west region, as it forms a natural part of that region. There also have been close links between the counties of Kerry, Clare and Limerick in the agricultural sector for many years. Since the establishment of the Tarbert-Killimer ferry there have been close links between the Counties of Kerry and Clare. Therefore, I welcome the inclusion of the north Kerry area into the mid-west region. Having said that I am concerned that no provision has been made in the Bill for the making available of additional finance to SFADCo so as to enable them to fulfil their responsibilities in respect of this area. It appears that SFADCo would be expected to carry out these additional duties on the same budget despite the fact that they would have responsibility for an area which has a considerable industrial, agricultural and tourism capacity. I hope the Minister responding to this debate will indicate how he expects SFADCo to extend their budget, to work a miracle and provide a service to an area for which no additional moneys are being delivered.

I am somewhat puzzled by the overall Government strategy on the mid-west region. As previous speakers have said, the mid-west region is a very natural geographic unit. All the counties surrounding the Shannon Estuary — Clare, Limerick, North Tipperary and Kerry — focus on the estuary. At this stage it would do this House good to examine what is going on in that area and around the estuary and which development agencies have responsibility for the development of the mid-west region.

Many people in mid-west are extremely perplexed by the bureaucracy that is being laid on layer by layer. Deputy O'Malley said in his address to the House that we are talking about another Bill coming before the House this evening — the Harbours (Shannon Estuary Development Corporation) Bill concerning another development corporation. It is not clear exactly what they are supposed to be doing. There is an overlapping of responsibilities and areas of jurisdiction and control.

At the beginning of 1988 the present Government thought fit to give responsibility to SFADCo for tourism and for large industry. That process in effect eliminated the IDA and Bord Fáilte from the mid-west region, but let us examine the situation closely. From various discussions I have had with representatives of these various agencies, it seems that SFADCo's responsibility for tourism in the mid-west region is primarily for the product within the region and the promotion of the product within that region, but the responsibility for the overseas promotion for that region lies with Bord Fáilte. If you speak to Bord Fáilte you will get a contrary view — they say they have no responsibility for tourism promotion in the mid-west.

As a result, the tourist industry in the mid-west are extremely concerned that one of the most effective regional tourism boards in the country, Shannonside, were disbanded and scrapped and semi-incorporated into the structure of SFADCo. SFADCo have done a good job promoting their own tourist product in years gone by — the various castles they developed as banquet centres and the folk park in Bunratty — and they operated a very effective tourist attraction in the region. They are now expected to involve themselves in the broader promotion of tourism. A year on, there is still total confusion in the mid-west and within Board Fáilte and SFADCo as to what the respective bodies are about and what their various responsibilities are.

My concern and the concern of the people involved in tourism in the mid-west region is that we will be the losers in the long run, particularly in overseas tourism promotion. I hope the Minister will be able to clear that aspect of SFADCo's responsibility once and for all before this debate is completed. As everybody knows, tourism is a major employer and one of the biggest industries in the mid-west region. We are talking about an extremely attractive tourist region in County Clare, Limerick, North Tipperary and parts of south Offaly. Again there is confusion. I am not clear from the Minister's speech or from the Bill whether this Bill is giving SFADCo responsibility for tourism in north Kerry. As I read it, it does not and the Minister's speech does not suggest SFADCo are getting responsibility for tourism development in north Kerry either. Maybe we could have clarification on that point.

The Government introduced regionalisation in their announcement of seven regions. Because by its very nature the mid-west region is very much a natural region and has been bureaucratically administered for quite a number of years under the auspices of SFADCo. In one sense we are very fortunate to have a structure in place in SFADCo, but we need clarification on many of the issues that arise.

This Bill proposes that responsibility be given for industrial development in north Kerry to SFADCo. Last year the Government gave responsibility for all industries in the mid-west region to SFADCo, thus excluding the IDA from the mid-west region. A great deal of concern was expressed about that at the time, and people are still quite concerned, but not because SFADCo as a body would not be able to do the job. SFADCo have done a very good job in the mid-west and they should be congratulated for the way they developed the Shannon Industrial estate. They have been particularly successful there and they were particularly successful in the development of small industries surrounding the industrial estate and providing ancillary services in the smaller industrial areas to the larger centres in Shannon.

Regarding overall major industry in the rest of the region, let me be parochial and talk about County Clare. One has to question the effectiveness of SFADCo in the peripheral areas of the mid-west region. In the peripheral areas of County Clare, areas outside the Ennis-Shannon-Limerick axis, there is a great deal left to be desired. In the entire periphery of County Clare — Kilrush to Lahinch to Ballyvaughan over to Tulla, Scarriff and down to Killaloe — very little in the line of new jobs has been created in recent times. The Minister and his predecessor have on many occasions gone public with fantastic figures in relation to the jobs sanctioned, but on closer examination one will find that the number of jobs on the ground and the number of jobs sanctioned vary enormously. The number of jobs cleared by SFADCo and the number of jobs eventually created leave much to be desired. We are told that jobs will be phased in over three, four or five years, but at the end of that time nothing like the number of jobs projected have been created and in some cases there is a stalemate.

Recently I decided to do a spot check. An announcement was made that 65 new jobs were created in a certain factory. These figures were part of an overall figure presented by the Minister of jobs created in the region. In real terms, on the floor of that factory ten jobs were created, but the official figure was 65 jobs. That is just one instance of the propaganda that is emanating from this Government. Recently officials from SFADCo and Clare County Council were unable to announce where the jobs they created were. I do not blame them personally, although they must take some responsibility for it. They were unable to say where on the periphery of County Clare any additional jobs had been created. That is unfortunate. It is more unfortunate that those with responsibility to the House saw fit to go public and produce bogus figures in an effort to con the people into believing that jobs were being created when, in effect, they were not. If one compares the number of jobs supposedly created with the number of redundancies one will see how difficult the argument becomes.

We have been told that last year 73,000 people emigrated. I have no doubt that a substantial number of that figure left the midwest region, and County Clare in particular. In one week alone in a parish not too far away from my home 22 people between the ages of 18 and 23 emigrated. Such occurrences are quite common in rural Ireland. I do not think the Government are facing up to the problem of emigration. The legislation before us will not co-ordinate the work in that region. The Government have divided the country into seven regions for the purpose of gaining from the EC Structural Funds. The Shannon region is an ideal model for the rest of the country but the Government have not given any thought to it. Fianna Fáil Ministers, when in Opposition, complained about layers of bureaucracy being created but they appear to be very anxious now to add further layers of bureaucracy to the system.

There is no doubt that where different State agencies are competing in a region the attitude of divide and conquer will prevail thus weakening existing structures. That is unfortunate and it is happening in our region. Deputy O'Malley drew our attention to advertisements in industrial magazines circulating in North America which were inserted by the IDA and show a map of Ireland with two areas blanked out, Northern Ireland, for which we do not have any industrial responsibility, and the midwest region. Magazines containing those damaging advertisements have been circulating in North America in the last two years. It is time that the Government insisted on them being withdrawn.

It appears that the IDA and SFADCo are competing for industries abroad. While there is that type of competition we do not have much hope of attracting industries here. Other countries with more resources at their disposal and more political clout are competing with us on the world market for industries while we have two agencies fighting against each other. There is a duty on the Government to clear this up. There is no doubt that in the long term competition between the IDA and SFADCo will be to the detriment of the midwest region. I wonder if north Kerry will benefit from the decision to incorporate it in the SFADCo region.

I should like to compliment SFADCo on the tremendous preparatory work they carried out in an effort to establish a financial services centre at Shannon. That work was carried out at the request of the last Government and many commitments were received from interested clients to set up business in such a centre. However, when Fianna Fáil took office there was an announcement that a financial services centre would be established in Dublin and that it would receive full Government backing. The Government have betrayed Shannon and SFADCo. Their action was despicable particularly when one considers the location of Shannon. Some of our finest education institutions are located between Galway and Limerick. It is unfortunate that the Government denied Shannon the opportunity to establish such a centre.

A more serious problem has arisen in recent times and I hope the Minister is in a position to give us details in regard to it when replying. What is the position in regard to the promotion of traffic through Shannon Airport? Originally SFADCo was established to promote greater use of Shannon Airport but it appears that the Government have agreed to permit trans-Atlantic flights to Knock Airport direct. Are they doing a con job on Shannon by saying that such flights going through Iceland is an inter-European affair and not trans-Atlantic? The Government should come clean on this. I do not see much hope for Shannon in the future if the Government continue along that course. I am concerned about the future status of Shannon Airport as the sole trans-Atlantic airport in Irealnd. If that status is taken from Shannon it will be the beginning of the demise of the region. It is not sufficient to say that Iceland is a signatory of the European Aviation Convention. The people of Clare and the midwest want a positive answer from the Government on that question.

The Government should give urgent consideration to the expiry of the tax concessions for the tax-free zone in Shannon in 1990. I have been urging the Government to clarify the position in the interests of industries in that area but they have failed to do so. Many companies are concerned about their future. It is important that companies are made aware of the tax conditions well in advance of the expiry date so that they can take them into account in their forward planning programmes. Industries must plan in advance if they are to survive. If the Government do not outline their proposals in regard to the tax free zone at Shannon shortly I am afraid that a number of industries will move from Shannon and, perhaps, leave the country. I should like to ask the Minister to press the Government for a decision on that.

SFADCo have done a good job in the Shannon industrial zone and have been reasonably successful in the small industries area. However, the people in the peripheral areas of the region are not happy with what is taking place there. North Kerry will now come within the remit of SFADCo, with a highly developed food industry, many tourist facilities and many companies located there, the extent of which the Minister outlined in the course of his remarks today. In recent years SFADCo have been attempting to become more involved in the development of the food processing industry. Despite their attempts on numerous occasions to attract people and companies into the food processing industry in the mid-west they have not been very successful to date. Are the Minister and the Department of Industry and Commerce prepared to give SFADCo any additional assistance in this respect? Despite the fact that the area is largely agricultural, it does afford room for development. It warrants more than attention from the region; perhaps an extra boost from the Department of Industry and Commerce is needed. The Department of Industry and Commerce should devote attention to marketing, research into the types of projects saleable abroad and the development of food processing. The region has potential but, for one reason or another, has not seemed to have grasped the opportunity.

The Minister mentioned that in 1988 SFADCo set themselves an ambitious job creation target of 2,000 new jobs in the mid-west region. He continued to say:

I am glad to say that that target was comfortably exceeded and that the actual outturn for the year was 2,817 new jobs.

The reality is that those are not real jobs on the ground in the mid-west. SFADCo may have sanctioned jobs but they are not available on the ground. I challenge the Minister to say exactly where such jobs are to be found, to state how many people are employed throughout the mid-west region in order to substantiate that figure. This game of engaging in figures concerns me. For example, again in the course of the Minister's remarks, there was reference to 25 new projects having been approved for the region during 1988 and 17 industrial expansions having been approved in the same year. One can justify one's existence by playing around with figures but what is needed are jobs on the ground. There is a tendency in bureaucratic institutions to justify one's existence by throwing around such figures, contending that is all that is required. However, to the public at large, the taxpayer, the unemployed person, the young student or person boarding a 'plane at Shannon such figures wear very thin, knowing there are no jobs to be found on the ground. It is unfortunate that people continue to use these bogus figures.

In turn this inevitably leads to another Minister coming into the House and giving the increased numbers of travellers through airports and seaports in justification of increased tourism facilities. When such figures are analysed one discovers that they represent additional people emigrating. Their relatives travel abroad to visit them because many of their sons, daughters, sisters and brothers are abroad illegally and cannot afford to return. These figures are being used in a most unfair, callous manner.

This Bill will mean that the north Kerry region will now be encompassed within the mid-west. I do not know how fortunate that will be for the north Kerry region. I can be quite emphatic that what is needed in the mid-west region is more jobs on the ground and fewer layers of bureaucracy. I would ask the Minister for Tourism and Transport and the Minister of State at the Department of Industry and Commerce — with responsibility for marketing — present, who expounds some very sound views at times — seriously to consider the various layers of bureaucracy obtaining in the mid-west. One must realise that the provisions of this Bill involve SFADCo, the IDA and Bord Fáilte being eliminated and henceforth, the IDA and Bord Fáilte being in competition abroad with SFADCo in attracting industrialists and tourists to the region. It must be realised that one is talking about another layer of bureaucracy being created under the provisions of the Harbours (Shannon Estuary Development Corporation) Bill, 1988 stipulating similar responsibilities to those contained in this Bill. This will mean there will be a range of competing agencies, which does not augur well for the future. I predict that this will lead to internal jealousies between the personnel of the various agencies involved, one endeavouring to out-manoeuvre the other. In addition, there will be competition between the various Government Departments, senior civil servants and their responsibilities for the region. I predict that the overall effect will be a loss of industrial development and tourism in the region. While these Bills provide a framework, they also carry an inherent danger which is something the Minister should address urgently.

We regularly appear to have some legislative provision with regard to SFADCo before the House. The Harbours (Shannon Estuary Development Corporation) Bill, 1988 will provide an opportunity to devolve responsibility on SFADCo for the overall development of the estuary. I would ask the Minister to discuss this prospect with his colleague, the Minister for the Marine to ascertain how the whole operation can be rationalised with one development agency being responsible for the entire region.

I hope the Minister, in replying, will address these questions which are being continually addressed by the people of the region. Indeed, people are expressing concern about the future of the region being dependent on the Government decision to be taken on this issue.

I am anxious to contribute briefly to this debate as someone who, 30 years ago, was a part-time executive of SFADCo and who has followed the developments of the company since then with great interest. Also, although it will not be relevant to anything I say in this debate, I must declare my interest as a director of a company which is a Shannon company. However, I will not be dealing with that aspect in the course of my remarks.

The impact SFADCo have had over that period in the mid-west has not been insignificant. Even at the time when they were responsible only for the development of the airport itself there were certain overflow effects — perhaps not as great in the last ten years — in terms of industries developing in the hinterland of Shannon, in areas like Ennis. As Deputy Taylor-Quinn has said the impact on the hinterland has been less in recent times than it was then, but it did have that effect even when SFADCo was not responsible for anything beyond the airport itself.

The extension of their functions beyond the airport to the mid-west was a good decision. The effect of it has been such as to justify consideration of a similar procedure in relation to other areas. I have favoured all along the development of similar structures in other regions. What is being done today in terms of extending their responsibility to north Kerry and perhaps some other marginal areas is a useful step as, on any reasonable basis of developing a regional structure in Ireland, the hinterland of Shannon and Limerick extends to north Kerry as well as, of course, to Clare, North Tipperary and, as is provided in the Bill, also to south Offaly. The question that arises and which should be addressed in the context of Second Stage of this Bill is whether what is being done here in terms of making SFADCo the regional development organisation for a coherent region, fleshed out to a full genuine hinterland area, should not be repeated elsewhere in the country.

On the question of regional authorities there have been hesitations about such a development for several reasons. One has been an understandable reluctance to see a proliferation of bodies, even bodies which have justified themselves in the pilot case and I would regard Shannon as a pilot case; secondly since our admission to the European Community and adherence to the Rome Treaty, there has been a further argument that the development of a sub-regional structure might, as was felt at the time of our entry and shortly afterwards, prejudice in some way the possibility of our securing and maintaining an adequate share of the Regional Fund. That argument was put quite strongly at the time and it had validity because the original share out of the Regional Fund as it was constituted in 1973-74 was based in an extremely crude way on the population of the areas included. The proposals put forward by Commissioner Thompson at the time, which seemed to be designed to secure maximum benefit for the United Kingdom and in particular for Scotland, were couched in a form which made the population content of a region a crucial factor. Had sub regions been created and had we put forward a claim for four regions in the country like the four Euro constituencies it is possible that, depending on the criterion chosen, Dublin might have been outside that criterion and the total take from the fund would have been less. There was therefore a strong argument for working on the basis of a single region at the time.

It has been argued until quite recently on a different basis that the new structure of the fund is such that, because of the way it will be furnished to us in relation to actual projects, if the country was broken down into regions perhaps projects in Dublin might not benefit. For these reasons there has been a strong tendency to oppose the development of regional structures. Those arguments are no longer valid. The first argument ceased to be valid once the fund was settled in its original form in 1973-74. The other argument that the fund might develop in a different way — quite apart from the population basis of distribution the fund might actually be applied to new projects instead of being simply a transfer of money based on a list of things being done anyway — and that any attempt to break down the country into different regions might lead to the exclusion of Dublin from it never had much validity but perhaps there was some reason for that fear. The fact that that matter is now in the process of being resolved means that argument does not apply either.

However, it is time to look again at the role of SFADCo and the manner in which the company operate and to consider seriously whether, if they have been successful in that region — to an extent that is so — we should not seek to replicate them elsewhere. The argument about proliferation of bodies is of course a strong one but I do not know if it holds up in this instance. If SFADCo in an individual case have proved worthwhile despite some problems of overlapping of functions to which Deputy Madeline Taylor-Quinn has made some reference, it is difficult to see why proliferation is a ground for not having such bodies elsewhere. Either they are an example of an undesirable proliferation in which case we should get rid of them or if that is not the case — I think it is not — and we accept they are doing a useful job, unless there is some compelling argument that no-one has ever produced the argument for having similar bodies elsewhere is very strong and this ought to be considered.

As can be seen in this area it is possible, through a company of this kind who have a local identity and a local role, to develop an area in a coherent way and to provide a focus and a means for development which is quite different from and much more effective than that provided by normal local authorities. Local authorities, for several reasons, in the Irish context are not in a position to do what SFADCo have done. First of all, there are far too many of them and the county is too small a unit for this purpose. The sub-county bodies, district councils and so on, have their own job to do. It is very important that they should be maintained and perhaps more of them created to develop areas which have not got a sufficient structure but they are not on a scale nor are they equipped to undertake the regional development functions. Quite apart from their numbers and their small size and scale their actual structure is not developmental. We have talked for many years about making them developmental and about removing the inhibitions to their carrying out developmental functions but that has not even been done at local level. They are certainly not capable in their present form, or any form we can envisage for some time to come, of carrying out this function at a regional level.

By contract SFADCo have carried out this function. By common agreement, whatever individual criticisms there may be on particular points, people who live in that region feel there is a benefit from the existence of SFADCo. Sometimes they may feel that the way in which they have been constrained or the way they have been interacted with or overlapped with by other bodies may have limited their capacity to be as beneficial to the region as might be desirable. Deputy Quinn has suggested that that may be the case. Nonetheless, I do not think anybody in the region would feel that the company should be done away with. The feeling that they are a valuable body with an important developmental role is general and therefore there is a strong case for considering, if they are successful, their replication elsewhere.

As to how many such bodies there should be and what areas they would cover, one could argue that for ever and I have no intention of getting involved in that area. I simply want to make the point that this Bill is before us because the Government feel that SFADCo are doing a useful enough job for it to be worthwhile extending their functions to new areas like north Kerry. If that is the case why should north Kerry have the benefit of such a body and south Kerry not have it or why should one part of Tipperary have the benefit of it and another part not have it? If this is the right kind of body for the development of this region, in the absence of any argument to the contrary — I have never heard any argument to the contrary arising from the experience of SFADCo — the case for considering an extension of this concept to other areas should be looked at.

In any event we ought to look, in the context of such thinking, at the whole question of the structure of regions and the overlapping of regions. Having different regions for different purposes makes no sense whatever. We should once and for all decide what regions we want. There is virtually no reason why they should be different. Of course there might be a case for a health board region being a slightly different shape from a tourist board region because there might be a hospital at the fringe of it and therefore it should be included in the region. You could always argue for one shape of a region against another for a particular purpose but the utility of having a specific structure of regions for all purposes is so great that those arguments do not stand against that.

It is time the Government faced this issue. It has come up in a very acute form because of the question of the Structural Funds. It is obvious that the present arrangement under which the preparation of proposals for this matter is carried out centrally by the Department of Finance, with a very limited input from the regions, is unsatisfactory. I can see that with the existing structure it would have been perhaps difficult to allow for such an input without complications of one kind of other. I can understand arguments of quite a cogent kind being put forward by the Department of Finance stating; "Leave it to us because if you bring in the other bodies there will be a frightful mess there will be an endless number of urban district councils, county councils and so on who will all want more for themselves and there will be no coherent overall view". I do not think that argument is strong enough to water down this regional element in the input into the structural plans to the extent that has been done. That is a matter of particular debate and is not appropriate to this question. The fact that we have had to present our case in this way and prepare it nationally in the Department of Finance because we had not got a regional stucture is a powerful reason for having such a structure.

The existence of SFADCo and the work they have done over more than 30 years demonstrates the kind of structure that can work well. No radical change has been made in the structure over that period. A radical change has been made in the area of their competence and the region they serve but not in the structure of the organisation itself. The fact that successive governments have felt that no radical change was needed suggests very strongly that it is a good structure. It is a body which could have been changed easily. I do not say the argument that Governments do not do something is an argument that nothing ought to be done. Governments suffer from inertia and governments faced with existing structures whether it is county councils or whatever may be very reluctant to make a change. Where there are bodies like SFADCo where the structure could be changed without any great difficulty or any great controversy the fact that it has not been changed does suggest that it has worked pretty well. If it has worked well there and if, as I suggest, similar structures are necessary nationally, then the question of extending this type of concept to other areas ought to be considered.

I thank the many Deputies who contributed so forthrightly and excellently to this debate today. As has already been indicated, the primary purpose of the legislation is to enable the mid west region and more particularly the Shannon estuary area, to be developed as an integrated whole. It is clear that the estuary area is a primary natural resource with potential for the siting of major manufacturing industries requiring maritime locations. The area is capable of accommodating heavy industries such as oil refining, steel melting, pharmaceutical and chemical projects. I am happy that the area could meet the infrastructural and service requirements of such industry without any difficulty. I want to have a quick look at the various points made by Deputies. The region will receive added stimulus from the doubling of the EC Structural Funds which is due to occur over the next five years. In the plan which is being drawn up for the mid-west region the target focus will be on knowledge-based enterprise, resource-based enterprise and the environmental supports necessary for development. I should remind the House that a four-pronged approach is being adopted. Strategies for industry, tourism, rural development and for environmental considerations are being pursued.

In relation to north Kerry specifically SFADCo's immediate plan is to establish a county development centre in Tralee to be staffed by three executives. The role of these executives will be to accelerate the flow of entrepreneurs into the very small firm sectors of manufacturing industry, to support the creation and maintenance of viable jobs in the domestically traded sector of small industry, to promote the establishment of a number of sharply focussed and, I hope, highly visible new tourist products, to develop a number of new projects in the natural resources area based on local raw materials and skills, to improve the urban and rural environment through promoting and participating in specific renewal projects and to develop a cohesive county development plan. They are the broad tasks of the new team for SFADCo in the north Kerry region.

Deputy Lowry spoke of his proposals to establish a number of regional development bodies throughout the country on similar lines to SFADCo. This is a more general issue than the subject matter of today's Bill. Obviously any such decision or strategy would have to be carefully considered because of the very complex if not overlapping nature of that direction. We would have to be very careful about rushing into that kind of structure.

The Shannon mid-west area is unique given the estuary and the well established position of SFADCo. As Deputies are aware, the company has been operating the new remit only since the beginning of 1988. It would be very important to assess the company's performance and experience before we take decisions on any further regional development bodies.

In his contribution Deputy Lowry welcomed the Bill and I appreciate his support for it. I agree with him that the region has many advantages and has great potential. Most Deputies referred to that fact. It is clear that they are extremely proud of the region and are well aware of its many advantages. SFADCo will be working over the next few years to promote the overall economic development of the area which will be supported through the use of the EC Structural Funds. The board of SFADCo are particularly conscious of the need to promote the peripheral areas of the region. That was one of the concerns of Deputy Lowry. SFADCo are also well aware of Deputy Lowry's concern in relation to Tipperary and I have no doubt they will take note of his comments in that regard.

Deputy Lowry also spoke of the necessity to have a submission from Shannon for Structural Funds lodged immediately. I should like to inform the Deputy that all the sub-regional plans dealing with operational programmes will be submitted by the Government together with the national plan in relation to the expanded Structural Funds. We propose to lodge the operational programmes at the same time as the national plan, although strictly speaking it is not necessary for us to submit them at the same time as the national plan. Nevertheless, the Government have decided that the operational programmes should be prepared in order to maximise our uptake of moneys from the fund. These programmes are now being finalised and it is the Government's intention to submit them at the same time as the national plan by the end of March 1989. We are well within that target.

Deputy Lowry referred to the problem of resources for SFADCo. As part of the extension of SFADCo's remit to north Kerry, SFADCo will now control former IDA lands and factories in north Kerry. As a result of this the company will gain additional income of about £60,000 per year. He was concerned about tightening resources while giving SFADCo additional work. I do not think he should be unduly concerned about that. The net reduction in SFADCo's budget in 1989 over 1988 on the operating administrative expenses side was 4 per cent. In previous years SFADCo did extremely well while most other agencies were looking at deeper cutbacks. I do not accept that SFADCo are short of resources in any way to carry out either their existing work or the new work which is being requested of them.

Deputy Cullen spoke of the necessity to avoid overlap or duplication of State agencies. This is something that all of us would want to avoid. I would inform the Deputy that Córas Tráchtála operate in the mid-west region on the same basis as in every other region. That work is not undertaken for them by any other agency. The relationship between the IDA and SFADCo is a matter that came up. There are clear demarcation lines and these have been agreed between SFADCo and the IDA in relation to operational activities. It is important to say that both the IDA and SFADCo have got together and worked out their operational lines of control. If we are tripping over ourselves in this House about the matter — I do not think we are but from listening to some Deputies today I would have got that impression — I can assure the House that SFADCo and the IDA are not finding any difficulty in their day-to-day operations. They are working very closely together.

There are two different messages.

That co-operation takes place in relation to promotion overseas. SFADCo have the advantage and they make full use of the IDA's overseas network of offices. The picture being painted of two headless organisations chasing around the world is not accurate. SFADCo are making full use of IDA offices throughout the world.

What about the IDA advertisement?

If there is any place in the world where the Deputies feel SFADCo can make more use of IDA's facilities I will certainly draw it to their attention. The day-to-day co-operation is working well. Bord Fáilte will continue to retain responsibility for promoting Ireland overseas and for inspection and registration of tourist accommodation. Deputy Taylor-Quinn inquired about the tourist remit of SFADCo in north Kerry. SFADCo will assume responsibility for visitor information services, product development and promotion of north Kerry in the domestic market. However, in order to avoid the overlap which the Deputies are concerned about, Bord Fáilte will continue to promote Ireland overseas. The agencies have worked out their day-to-day operating arrangements and I have had no formal information from SFADCo or the IDA to suggest that they are unhappy with these relationships.

Deputy Kemmy raised the question of the potential for the food industry in the expanded mid-west region. I agree with him that there is substantial and increasing scope for developing the food industry in that area. Other Deputies also raised this point. For example, I hope to see links being explored between Kerry Co-Op Plc and SFADCo's pilot food development programme in the Raheen Road Centre in Limerick. I think Deputy Deenihan also mentioned that facility and I join with him in reminding the public that this is an excellent facility, comprising of modern factory units, and is designed to meet the highest international standards. A link up of the Kerry Co-Op with this excellent research and development facility would be very useful, and I urge that we move in that direction.

I thank Deputy Deenihan for his very generous welcome for the Bill and compliment him on his work in this area in the past. He has taken a very positive attitude. Mind you, he did list all the advantages of north Kerry, except perhaps a long list of All Ireland medals that are in the region. Deputy Deenihan also asked for a SFADCo presence in Listowel as well as in Tralee, and he wanted the tourist offices in the area upgraded. I will certainly bring Deputy Deenihan's views to the attention of the company. As far as Counties Offaly and Tipperary are concerned, there is one regional office in each of these counties and I have already spoken about the placing of an office in Tralee.

Deputy Carey referred to the cost per job. There is an official measure of cost per job sustained, and this is calculated by referring new jobs created and still in existence during the period 1980-87 to all grants paid over a similar period. The cost per job was £26,483 for Shannon free zone companies. The IDA's figure for medium and large industries is £25,111. In the case of small industries the cost per job for SFADCo is £6,552 and the corresponding IDA figure is £11,129.

Deputy Carey asked about the legislation regarding the percentage tax rate for international financial services centres. I presume that the Deputy is referring to legislation promised to give effect to the EC Directive on UCITS. Regulations are now being prepared to give effect to this directive which as Deputies know, must be implemented before October, and this is being handled by the Department of Industry and Commerce. I want to make it clear, because this point has come up again and again in the debate, that the incentives applying to the financial services centre and Shannon are broadly the same. Both apply a basic régime of 10 per cent tax for projects setting up in their areas. Moreover, the Dublin financial services centre is confined to attracting only companies providing financial services as defined in the 1987 Finance Act. In the case of Shannon, both manufacturing and service companies qualify for the 10 per cent tax rate, and of course Shannon can offer a 10 per cent tax rate for all services of an international nature.

Virtually every Deputy who spoke today raised this point and it is important that I reiterate the Government's policy to ensure that Shannon is not placed at any competitive disadvantage, vis-à-vis the new financial services centre, for promoting financial services projects. The Government's commitment to Shannon remains as strong as it always has been.

Deputy Carey referred to the need to reduce staffing. Perhaps I am being unfair to him but I understood him to feel strongly about what he regarded as excess staff in SFADCo. If I misunderstood, I am sure he will understand. However, the figures show that staffing levels have been reduced as follows, notwithstanding additional functions — at the end of 1986 225 to the present level of 204.

Deputy Deenihan and Deputy O'Malley went into some detail about the Ballylongford site. As part of the decision to give responsibility for north Kerry to SFADCo, all IDA lands and factories in the area will be transferred to SFADCo. The Ballylongford site, which is over 604 acres, will now transfer to SFADCo and it will be up to SFADCo to decide what to do with those lands. I should tell the House that contrary to what has been said by Deputy O'Malley, I understand they intend keeping it. The IDA originally put up for sale 500 of the 604 acres, and I understand they intended to retain the best site of over 100 acres. They believed this was enough to accommodate two petro-chemical refinery developments. I am glad to have this opportunity to clear up this point.

Deputy Taylor-Quinn and other Deputies referred to the tax position post-1990. The Government have already secured the agreement of the EC Commission for service companies operating in the Shannon free zone which are currently zero tax rated to transfer to the 10 per cent rate in 1990. There is a difficulty for service companies employing more than 50 people, as the agreement of the EC Commission is at present restricted to companies employing fewer than 50 people. While this affects a very small number of companies, I accept that it has a strategic effect on a number of significant companies. The Government are very much aware of this problem and we are exploring possible solutions with the Commission. I thank the Deputies for raising this matter and I fully understand their concern. The Government fully understand the problem and are exploring possible solutions. Deputies will be aware that this is a complex area and not given to ready solutions.

Deputy Taylor-Quinn questioned the validity of the figure of 2,817 jobs announced by the Minister for Industry and Commerce, Deputy R. Burke, as being the outturn for the mid-west region in 1988. I understand that Deputy Taylor-Quinn complimented SFADCo on their peformance and stood behind their work. These figures came from them. I take it that they are equally good at figures as they are at providing the other services which the Deputy lauds.

I complimented them on their performance in certain areas.

Does the Deputy accept their figures?

SFADCo's figures are based on the results of a detailed survey undertaken by telephone at the end of 1988. The figure of 2,817 does not refer to jobs promised but specifically to jobs actually on the ground. SFADCo executives picked up the telephone, conducted a survey with firms in the region at the end of 1988, and when they did their sums it came to 2,817. After jobs lost were taken into account there was a net addition of 1,000 industrial jobs in the region in 1988. If the Deputy has any further concern about those figures I will explain them, but I reject completely the Deputy's suggestion that the figures are bogus. They were arrived at quite reputably. On reflection the Deputy might not apply that terminology to those figures.

Some members of the board would concur with me.

The SFADCo people——

Deputy Taylor-Quinn is not expected to reply now.

The jobs figure is 2,817 as shown in a survey undertaken by SFADCo.

Deputy Taylor-Quinn spoke at length about the future of Shannon Airport and transatlantic traffic. This is not a matter for the Department of Industry and Commerce but I will refer her concern and that of other Deputies to the Minister for Tourism and Transport, who will no doubt deal with it when he has an opportunity to do so. The Deputy need have no fear about the future of Shannon Airport.

Deputy O'Malley castigated the Government and the Bill. The Government were castigated for not having a major industrial debate arising from this Bill and for not addressing major issues of industrial policy. We cannot have a major industrial policy debate when all we are trying to do is to include an area of north Kerry in the SFADCo region. We are not in any way reluctant to discuss industrial policy. We have done so on many occasions in this House and will do so again. Our industrial policy and strategy has been clearly set out by the Minister for Industry and Commerce and it is a pragmatic and sensible policy.

It is in contradiction with the other Bill this evening.

The Bill is taking north Kerry into an existing structure. What that has to do with any other Bill I fail to see.

The Minister does not believe that for one minute.

North Kerry is being taken into the SFADCo region. If Deputies feel that that should not be done they will say so. Deputies have not said that. My point in responding to Deputy O'Malley is that there are other times for major debates on industrial policy. This is a very specific Bill.

Deputy O'Malley spoke about a crisis in State agencies. I do not accept that there is a crisis. The Deputy is right in that there is always a certain amount of rivalry between agencies. No doubt many future Ministers will experience institutional rivalry. There are two choices in relation to overlap, one either manages it or merges everything into a mega agency for everything, which does away with overlap in that one has a nice neat organisation which deals with everything. In this instance we chose to try to manage overlap. I rebut the suggestion that there is any crisis of morale in State agencies. It might have been better had Deputy O'Malley said that there is intense competiton for international projects. That has increased significantly over the past number of years. Many countries are vying for a small number of international projects. The agencies find that in competing for these projects when they occasionally do not get what they have perhaps set their heart on, morale suffers but that is certainly not a crisis or anything near a crisis.

Wait until the Minister sees what changes will occur in the next six months.

I reject the suggestion that there is any crisis in State agencies. The agencies are working to a programme and they are getting results. The agencies have to operate in the international environment. They have to go after the the projects and they are quite good at that. Ordinary day-to-day rivalries are sometimes not that unhealthy. Certainly rivalries in politics often means that the little extra competition can bring out the best in people.

The Minister voted against it yesterday.

The Deputy need not worry once the agencies work out where the demarcation line is. SFADCo and the IDA have worked out that relationship so there is not really a difficulty.

They are not saying that and the Minister knows it. Two different stories are emanating.

I am saying today.

The Minister is a brave man.

I have no documentation nor have the Deputies shown any documentation by way of letters or speeeches from SFADCo or the IDA which suggest that they have not a day-to-day working relationship which is working quite well.

They are afraid to open their mouths publicly.

In all the talk about overlap and duplication I did not hear the Deputies say that SFADCo was not needed.

I said that it could be a model for the development of infrastructure.

The Deputies do not want overlap everywhere else. They want SFADCo and the IDA to exist side by side, a concept which is working and is working well. If the Deputies are really serious when talking about duplication and overlap perhaps they would have the courage to say what is the logical outcome of their suggestion. The Deputies have not done that; they have preferred wrongly to condemn a proliferation of agencies.


The Clare Deputies particularly mentioned a proliferation of agencies a number of times. The Deputies did not mention the agencies they would like to do without. That perhaps has something to do with local politics.

I rebut the suggestion made by Deputy Taylor-Quinn that the Government were betraying Shannon with the new financial centre. The same arrangements are there and I reiterated the Government's commitment to the Shannon region and to the various concessions that we can have there on a practical basis.

Deputy Mac Giolla worried about people leaving State agencies. That is not objectionable as there are arrangments to ensure the proper handling of all proposals for financial assistance from the IDA. All proposals have to meet certain specified criteria set out in legislation and detailed guidelines laid down by the authority. Each proposal has to be approved by an independent board or a committee in the case of projects involving a significant amount of financial support requiring Government approval.

I thank Deputy FitzGerald for his valuable insights into the possible future direction of our regional authorities. I will certainly ensure that they are fully considered by the Minister for Industry and Commerce. I thank all the Deputies for their contributions and I reiterate that this Bill is not a major policy decision on industrial strategy but simply a measure extending SFADCo's remit to north Kerry. That is what is at stake here and not the whole future of industrial policy. There will be another time to debate that.

Question put and agreed to.

When is it proposed to take Committee Stage?

It is proposed to take Committee Stage on Tuesday, 21 February 1989 with the agreement of the Whips.

Committee Stage ordered for Tuesday, 21 February 1989 subject to the agreement of the Whips.