Vol. 454 No. 5
1 Mrs. O'Rourke asked the Minister for Enterprise and Employment the outlook for job retention and expansion in Shannon Aerospace in view of the recent announcement that the necessary work will not be devolved from Germany to Ireland until 1998 and that the European Commission is to investigate the latest promised investment. [11048/95]
The decision by the Government, on the recommendation of Shannon Development, to approve grant support of IR£12 million to Shannon Aerospace for restructuring its operations was based on the implementation by the company of a viable business plan.
As the House is already aware, the restructuring is designed to secure the future of the company, safeguard existing employment of about 700 highly skilled workers and is projected to result in an increase in employment to 855 by the end of the decade.
The company's restructuring plan also involves large scale private investment, strengthened marketing and technical back-up support and future workload commitment. In this context, it includes substantial workload commitment by the shareholders, including Lufthansa, over the next two years as well as over the following years to the end of the decade.
The workload commitment, with projected business from the third party market and the grant and other elements of the support package, should ensure the future of the company which is recognised as being among the most efficient in Europe in the aircraft maintenance sector. Shannon Development is finalising the necessary legal documents with Shannon Aerospace and the shareholders which embody the commercial terms agreed by the parties.
As regards the Deputy's reference to the European Commission's investigation of the promised investment, the Commission sought details from the Irish authorities about the proposed aid to Shannon Aerospace to assess the aid in relation to Articles 92 and 93 of the EC Treaty which deal with State aids. This information was forwarded recently to the Commission and it was indicated that the aid was being provided under Ireland's approved existing framework of regional aids to industry. I am confident that the Commission's assessment will not adversely impact on the project.
Will the Minister comment on newspaper reports that the transfer of overhaul work on the Lufthansa fleet will not take place until 1998 leaving Shannon Aerospace with 18 months' uncertainty about its flow of work? I understand that the money will be given in two tranches. Will the Minister give the money in view of the statement made by Lufthansa? If so, when? Why did the Minister fail to answer Question No. 109 in which I asked about the claw-back based on definite employment targets? Why is the Minister keeping that secret to himself and Shannon Aerospace? If taxpayers' money is used the public is entitled to that information.
The reports in the newspapers are inaccurate. Lufthansa has committed work in 1996 and 1997, not just in 1998. The money will be paid, if and when the final legal documents are agreed, in four phases this year and next year. There are clear claw-back terms related to the job target of 855. It is not common practice to give the details of contractual arrangements between SFADCo and any company in answer to parliamentary questions. This matter is confidential.
While it may be confidential, public money will be given to a private company and the public have a right to know the performance targets of any firm in receipt of a State grant. The Minister thought it a good idea a year ago to publish firms' job performance targets. It is not good enough to say it is a private matter when public moneys are involved. The Minister said the newspaper reports are wrong. It was reported in The Irish Times, Irish Independent and The Cork Examiner. Why did the Minister's office not correct those reports?
There are clear job performance targets. Current employment is 700 and the job target is 855. The claw-back arrangement relates to the 855 jobs. Claw-backs form part of the IDA and SFADCo agreements. If a company does not achieve its targets the Government claws back moneys which have been advanced. It is inaccurate to say there is not any commitment to a workload in the following two years. I am clarifying that for the Deputy.
It is not a matter of clarifying it for me. These reports were made five weeks ago and I find it odd that the matter was not clarified. The original job target at Shannon Aerospace was 1,050. Was there a claw-back attendant on earlier grants and has it been exercised?
No. Part of the agreement, in the light of the business circumstances of the industry which changed considerably in recent years, was to revise the target to the present one of 855. The employment projection was revised downwards and the claw-back clause relates to the present job target of 855.
