West of Ireland Economy: Discussion with Galway Airport, Údarás na Gaeltachta and Western Development Commission.

Cuirim fáilte roimh Mr. Joe Walsh, managing director, Galway Airport, Mr. Paul Shelly, president, Galway Chamber of Commerce, Ms Louise Leonard, financial controller, Ms Carmel Brennan, deputy president, Galway Chamber of Commerce, An tUasal Pádraig Ó hAoláin, príomhfheidhmeannach, An tUasal Seán Ó Labhraí, leas-príomhfheidhmeannach, agus An tUasal, Séamus MacEochaidh, bainisteoir fiontair agus fostaíochta, Údarás na Gaeltachta, Ms Gillian Buckley acting chief executive and investment manager, Mr. Ian Brannigan, regional development manager, and Ms Pauline White, policy officer, Western Development Commission. I believe that includes all the delegates present. Go raibh maith agat as ucht bhur láithreacht.

I draw attention to the fact that by virtue of section 17(2)(i) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the joint committee. However, if they are directed by it to cease giving evidence in relation to a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person, persons or entity by name or in such a way as to make him, her or it identifiable. Committee members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. That notice is brought to the attention of everybody who appears before the committee and is not exclusive to only the delegates. Mr. Walsh will be aware of that notice from the last day he attended.

I now call Mr. Walsh to address the committee. I have already spoken to him. I thank everybody for forwarding their submissions in advance. The usual format is for delegates to summarise their submissions and their presentations are followed by questions from members. I will allow the three delegates who will make the presentations the opportunity to do so. The most effective format is to have questions and a discussion between members and the delegates. That is the usual formula we use and I hope it will be successful today. I call on Mr. Walsh to proceed.

Mr. Joe Walsh

I thank the Chairman for this opportunity to make a presentation to the committee. I will begin by referring to the background information we submitted. The level of Government support required to run the current operation of Galway is €2.3 million in totality. The Aer Arann examinership process has highlighted the importance of Galway airport as a key stakeholder and the airport awaits the recommendations of the examiner to investor proposals.

The level of Government support has reduced since 2008 by 17% despite a reduction in passenger numbers of the order of 39%. Air traffic movements are 7% up on 2009, which indicates that the decline in passenger numbers is very much linked to the economic climate and is not representative of a decline in aircraft movements.

The impact of the recession throughout 2009 and 2010 has resulted in a reduction in passenger numbers across the aviation sector with Galway Airport being no different in this regard. To counter the loss of revenue from reduced passenger throughput, a cost reduction programme was implemented in 2008 and into 2009. This achieved a reduction of 23% from 2008 to 2009, with a further 5% targeted and forecast for this year to further reduce our overheads. The airport continues to capitalise on all efficiencies associated with the operation of a regional airport. That is one area in which a regional airport like Galway is able to make those decisions and we constantly do that.

I will move on to our key statement, namely, the importance of Galway Airport to the regional economy. Galway has a dynamic vibrant economy. Galway, the driver of the west region economy, with a strong growth over the recent past and its stability in the face of economic crises, has outperformed the rest of the Irish economy. Growth in employment and population in Galway has been considerably above the national average during the past 15 years. Galway is withstanding the recent economic downturn much better than the overall economy. The increase in the unemployment rate in County Galway between June 2009 and 2010 is less than half the national average. The unemployment rate in Galway city has remained unchanged over this period. The dynamics and vibrancy of Galway directly impacts on and has a very positive influence on the wider economic development of the west region.

Turning to specific characteristics of the Galway economy, the industrial composition of the Galway economy is unique among Irish cities in terms of its high technology and its extremely heavy dependence on international markets. The Galway economy is dominated by the internationally traded sector, medical technology, information and communication technologies and international tourism. There is a strong multinational presence in Galway, with some 45 companies employing 10,000 people or more, depending almost exclusively on international markets. There are strong research and development links between industry and Galway's third level institutions, namely, NUIG, GMIT and the Marine Institute, which are internationally networked.

Galway Airport has a critical role in the Galway economy. It is a critical element in the competitiveness of the Galway economy in facilitating access to international markets. Galway Airport is critical transport infrastructure to support the international business, which dominates the Galway economy. It is used primarily for international access. Some 40%, on average, of our passengers are connecting outwards and inwards on associated business trips. Some 82% of the business passengers see the airport as important, very important or essential to their businesses. Galway Airport, with its extensive access to international airports, is a valuable selling point in attracting inward investment to our region. It is fulfilling its critical role in achieving balanced regional development, which is a central plank of national and EU regional policy.

Turning to the efficiency of Galway Airport, it operates in a highly efficient manner. Its long opening hours are essential to achieve the maximum link up with international flights. Galway Airport is driven by the needs of its clients who are primarily connecting to outgoing and incoming international flights — 37%, on average, of all traffic connects onwards and inwards; 52%, on average, of the Dublin traffic connects onwards and inwards. These are recent statistics up to the period June to July of this year. Galway Airport operates 18.25 hours a day to maximise the opportunity for outgoing international flights and to deliver passengers to Galway for the maximum of incoming flights. Galway Airport compares favourably with other similar and bigger regional airports in the UK in terms of unit cost.

With regard to the need for continuing subvention of Galway airport, the long operating day and multiple scheduled flight services essential to the competitiveness of the regional economy results in the cost of provision that necessitates the continuation of the current subvention with current traffic volumes. The current relatively low volume of passengers — 3,500 on average per month, and this is Dublin specific — cannot commercially support the current number of daily Dublin flights. The current flight schedules extending from early morning to late at night are essential if we are to meet the market and trading needs — international connectivity, in particular — of industry in Galway. Current operational hours and associated flight frequency can only be maintained if the current subvention levels are continued. If we are to maintain Galway's competitiveness as an international business location, it is essential that we keep the current flight levels and the associated international access.

On the value for money of the subvention, the continuation of the subvention is justified by the substantial economic returns to the region and Exchequer returns to the State that are generated by the current subvention of Galway Airport. The subvention of Galway air services to maximise access to international destinations and markets represents extremely good value for money. It underpins the international trading business sector, which dominates Galway's economic landscape. The airport is also a critical resource in the continuing attraction of inward investment. The evidence from the analysis suggests that the airport directly contributes €31 million annually to the region. The direct impact of the airport that is associated with maintaining access to international markets is far greater. If the current subvention level constitutes 7.5% of this impact, it is being more than recouped. The elimination of the subvention would significantly curtail current services. Not only would that reduce the region's current income, but it would undermine the attractiveness and competitiveness of Galway as an international business location.

Galway Airport has engaged with the businesses and industries that use its services. Over the past 12 months, representatives of the airport have met key business and industry leaders who employ approximately 15,000 people. The clear message we have heard is that air access and international connectivity are essential for businesses. In my submission, I have listed some of the key industries from which we have met officials. We have met others as well. We have met representatives of Boston Scientific, Medtronic, Hewlett Packard, Creganna, Cisco, BMR, Schneider and the Digital Enterprise Research Institute, for example. The list goes on. There is a significant cluster of businesses within ten minutes of the airport. Our service allows them to get to international markets.

I will summarise the importance of Galway Airport to the regional economy. The airport was developed for business. It has achieved a great deal over the past 26 years. It is a key instrument in the success of the Galway gateway and the associated balanced regional development. Galway Airport's continued operation is critical in sustaining the current levels of business and industry and in attracting new industry to the region. Galway Airport requires Government support of €2.3 million. That represents good value for money when one considers that the airport's direct impact on the region is worth €31 million. Galway Airport is a key employer with 60 direct staff and approximately 120 other airport-based jobs, the combination of which adds €2.1 million to the Exchequer per annum in terms of employee and employer taxes.

Mr. Pádraig Ó hAoláin

Déanfaidh mé an cur i láthair seo i nGaeilge. Táimid an-sásta go bhfuaireamar cuireadh ón gcoiste an cur i láthair seo a dhéanamh. Táimid ag súil leis an seisiún ceisteanna agus freagraí a bheidh againn ar ball. Déanfaidh mé achoimre réasúnta gearr ar na príomhphointí atá againn.

Tá Údarás na Gaeltachta uathúil ar bhealach neamhchoitianta mar ghníomhaireacht fhorbartha ar roinnt chúiseanna. Tá 20 comhalta ar an mbord, a bhfuil 17 acu tofa ag an bpobal agus triúr eile ainmnithe ag an Aire gach bliain. Tá trí choiste réigiúnach againn ar bhonn reachtúil nó dlíthiúil. Tá cead acu suas le €350,000 in aghaidh an togra a cheadú in aghaidh na bliana, nuair atá an airgead ar fáil. Chomh maith le sin, tá an t-údarás neamhchoitianta sa mhéid go gcuimsíonn cúraimí an údaráis cúrsaí teanga agus cúrsaí fiontraíochta nó eacnamaiochta. Tá an Ghaeltacht neamhchoitianta mar réigiún forbartha mar go gcuimsíonn sí 16 ceantar neamhcheangailte éagsula, mar aon le sé oileáin, atá scaipthe thar ocht limistéir rialtais áitiúla i seacht gcontae. Tá thart ar 7,500 duine fostaithe go lánaimseartha i gcomhlachtaí a fhaigheann cuidiú on údarás i rith na bliana. Tá an riachtanas maidir le háisíneacht forbartha eacnamaíochta ar leith don Ghaeltacht aitheanta ag gach Rialtas ó 1950 i leith. Tá sé sin tábhachtach mar bhunús ghiniúna fostaíochta agus, ar ndóigh, leis an teanga a chaomhnú.

Dúinne, cuimsítear in iarthar na hÉireann ceantair agus pobail Ghaeltachta i gcontaetha Dhún na nGall, Mhaigh Eo, na Gaillimhe agus Chiarraí, chomh maith le hOileáin Árann, Oileán Thoraigh agus Árainn Mhór. Tá daonra thart ar 83,000 duine sa chuid sin d'iarthar na hÉireann, agus thart ar 6,500 post lánaimseartha as iomlán fostaíochta an údaráis inti. Tá dúshlán ar leith ag baint le cothú na fiontraíochta agus na forbartha sna limistéir seo, de bharr an nádúr scaipthe tíreolaíochta agus an infreastruchtúr easnamhach fisiciúil agus teileachumarsáide atá acu. Ag an am céanna, tá go leor buntáistí agus buanna ag na ceantair seo; ina measc rochtain ar na haerfoirt reigiúnacha i gCarraig Fhinne, i gCnoc Mhuire, i nGaillimh agus i bhFearann Fuar. Mar eolas don choiste, i leis an údarás 49% de na scaireanna in Aerfort Charraig Fhinne. Tá tromlach na scaireanna san aerfort ag triúr príobháideach.

Tá páirceanna agus éastáit gnó forbartha againn ar fud an réigiún, agus cóiríocht ard-chaighdeánach réidh chun seilbhe i roinnt mhaith de na ceantair sin. Tá comhlachtaí rathúla ar nós Largo Foods, RAP, Gairméidí Caomhnaithe, Nuance, Bioniche Pharma, ECC agus Cambus mar ancairí maithe fostaíochta sna ceantracha Gaeltachta agus, lena chois sin, mar theistiméireachtaí rathúla don Ghaeltacht mar láithreán tarraingteach d'fhiontair ardteicneolaiochta. Is fiú a rá gur comhlachtaí rathúla brábúsacha iad an cuid is mó dóibh. Tá siad ag iomaíocht go hidirnáisiúnta le comhlachtaí in aon áit sa tír nó sa domhain. Tá rochtain éasca ar réimsí taighde agus ardoideachais na n-institiúidí triú leibhéal, atá thar a bheith tábhachtach dúinn, ar nós Institiúid Theicneolaíochta Gaillimh — Maigh Eo; Institiúid Theicneolaíochta Leitir Ceanainn; Institiúid Theicneolaíochta Thrá Lí; agus Ollscoil na hEireann, Gaillimh. Tá trí ionad ag acadamh na hollscolaíochta Gaeilge sa Ghaeltacht. Chomh maith le sin, tá chomhcheangal láidir againn le Enterprise Ireland, IDA Ireland agus an Western Development Commission, atá i láthair anseo. Oibrímid go dlúth leis na grúpaí sin chun torthaí a bhaint amach d'iarthar na hÉireann.

Maidir leis an fócas reatha, san aeráid atá againn i láthair na huaire tá béim ar leith á chur ag an údarás ar chosaint na fostaíochta. Déantar é sin trí iarchúram a thabhairt do na gnólachtaí, dlúthchomhoibriú a dhéanamh leis na heagrais Stáit eile agus margaíocht dírithe ar infheistíocht nua ó earnálacha nua — mar atá liostaithe san aighneacht — a aimsiú. Táimid ag díriú ar earnálacha ar nós déantúsaíocht ardteicneolaíochta, earnáil an bhia agus acmhainní nádúrtha. Cé go bhfuil postanna ag sileadh ó chomhlachtaí ar fud an réigiúin, níor dhún ach chomhlacht amháin go hiomlán i rith na bliana seo. Dhún trí chomhlachtaí go hiomlán i 2009. Cé gur cailleadh postanna i líon mór comhlachtaí ar scála beag, ag an am céanna ní raibh aon teipeanna móra ann.

Tá sé soiléir ón shuirbhé eacnamaíochta bliantúil a dhéanann Forfás go bhfuil tionchar suntasach ag Údarás na Gaeltachta ar an nGaeltacht agus ar an eacnamaíocht náisiúnta. Dar leis an suirbhé bliantúil ar thionchar eacnamaíochta, bhí díolacháin iomlán de €834 milliún i 2008 ag cliaint chomhlachtaí an údaráis, €400 milliún arbh díolacháin easportála iad. Bunaítear an suirbhé sin ar 80% de na comhlachtaí, rud is ionann is a rá go bhfuil breis agus €1 billiún de dhíolacháin in aghaidh na bliana ag na comhlachtaí Gaeltachta uilig, €600 milliún arbh díolacháin easportála iad. Is suntasach an méid é sin don eacnamaíocht náisiúnta. I rith na tréimhse céanna, rinne comhlachtaí Gaeltachta €17 milliún d'infheistíocht i dtaighde agus forbairt. Cuireann an straitéis fiontraíochta béim mhór ar mhealladh agus ar fhorbairt chomhlachtaí seirbhíse idirnáisiúnta eolas-bhunaithe. Chomh maith le sin, tá an déantúsaíocht fós beo ag leibhéal ard-scile. Tá fás agus forbairt suntasach tagtha ar an eacnamaíocht chruthaitheach. Tá béim nach beag curtha ag an údarás in imeacht na blianta ar ghnéithe an earnáil chruthaitheach, ar nós na meáin, na healaíona agus acmhainní oidhreachta agus cultúrtha. Tá sin ag teacht chun cinn go mór mar chuid thábhachtach den gheilleagar Ghaeltachta.

Tá 500 post mar sprioc againn don bhliain seo. Sna laethanta a raibh airgead níos fairsinge, bhíodh sprioc náisiúnta againn de 800 post in aghaidh na bliana agus don chuid is mó bhain muid amach leibhéal níos airde ná sin, 900 nó 1,000 post in aghaidh na bliana. Tá spás fiontair á fhorbhairt nó á oiriúnú againn; cuid mhór den bhunús atá againn le poist a chruthú ná spás a bheith ar fáil agus is dúshlán é sin. Tá forbairt agus cur chun cinn trí mhór-thogra tuarasóireachta i nDún na nGall agus i nGaillimh mar spriocanna againn, chomh maith le clár cuimsitheach caomhnaithe fuinnimh agus clár úsáide fuinnimh in-athnuaite á chur i bhfeidhm cheana féin i dtithe an údaráis ar fud na Gaeltachta.

An dúshlán forbartha an rud is tábhachtaí atá le rá agam leis an choiste. Is é an príomh-dhúshlán atá ann in Údarás na Gaeltachta ná na constaicí — easpa soláthar oiriúnacha leathanbhanda ar chostas éifeachtach. Tá an leathanbhanda ar chostas éifeachtach bunúsach don dúshlán a bhaineann le gnóthaí ard-teicneolaíochta a mhealladh go dtí na ceantair réigiúnacha tuaithe chomh maith le ceantar ar bith eile.

Lena chois sin, tá sé deacair againn ár ndóthain spáis a chur ar fáil. In imeacht na mblianta roimhe seo, bhí an t-údarás ag brath cuid mhór ar ioncam ó dhíolachán socmhainní agus ó dhíolachán maoine le cur lena ioncam ón Státchiste. Tá an tóin tithe as sin le cúpla bliain anuas agus fágann sé deacair againn freastal iomlán a dhéanamh ar an spás riachtanach. Tógadh 80% den spás atá againn sna 1970í agus sna 1980í do chomhlachtaí déantúsaíochta traidisiúnta agus tá gá le hinfheistíocht leis sin a thabhairt suas chun dáta do riachtanais an lae inniu.

Laincis eile bunúsach atá ag cur sriain orainn, agus seans gur aisteach leis an choiste seo a chloisteáil, ach tá an líon foirne laghdaithe san údarás ó 113 go dtí 95 le dornán blianta anuas. Tá gá le dórnán beag, triúr nó ceathrar, saineolaithe ardcháilithe a thabhairt isteach ar an bhfoireann chun aghaidh a thabhairt ar an dúshlán fostaíochta sa réimse infheistíochta go háirithe. Tá na duine sin imithe, ní faoin scéim speisialta Rialtais, ach faoin ghnáth-chóras pinsin scoir. Tá mé ag caint ar thriúr nó ar cheathrar eile a thógáil isteach taobh istigh den na treoirlínte.

Ba mhaith liom focal ar leith a rá faoin straitéis 20 bliain don Ghaeilge. Tá athstructúrú beartaithe ar Údarás na Gaeltachta i rith na dá bhliana seo romhainn, de réir mar atá fógraithe ag an Rialtas agus ag an Aire. Táimid ag súil le bheith lán-pháirteach san athstruchtúrú sin. Deirtear linn go bhfuil sin le tarlú taobh istigh den stráitéis 20 bliain don Ghaeilge, atá fíor-riachtanach ó thaobh na Gaeilge de agus criticiúil ó thaobh na Gaeltachta de. Dúradh linn go bhfuil an stráiteis le teacht os comhair an Rialtais roimh dheireadh na bliana. Cé go mbíonn dualgas náisiúnta teanga ag an Rialtas de réir na dréachtstraitéise, tá sé molta go láidir ag an gComhchoiste Oireachtais um Ghnóthaí Tuarasóireachta, Spóirt, Pobail, Comhionannais agus Gaeltachta go mbeadh feidhm fiontair láidir ag an údarás i gcónaí sa straitéis nua. Ba mhaith linn tacaíocht ón gcomhchoiste seo chomh maith do chur chuige na straitéise sin.

Luadh sa doiciméad soláthar airgid a fuair muid ón Státchiste i mbliana, €30 milliún — €11 milliún le hairgead reatha, timpeall €4 milliún do chomharchumann an gheilleagair shóisialta agus eile agus €15 milliún ar airgead caipitil.

Tá mé an-sásta go raibh deis agam féin agus ag mo chomhleacaithe an cur i láthair sin a dhéanamh. Le mo thaobh, tá Seán Ó Labhraí a bhfuil saineolas ar leith aige in athstruchtúrú agus forbairt comhlachtaí agus cúrsaí infheistíochta, agus Séamus Mac Eochaidh a bhfuil saineolas ar leith aige i gcúrsaí infheistíochta agus forbairt gnóthaí.

Ms Gillian Buckley

I thank the committee for the invitation to address it on the development of the economy in the west of Ireland. The WDC is the statutory agency set up to promote the economic and social development of the western region, a region on the periphery of Europe. We have 15 full-time equivalent staff and are based in Ballaghaderreen in County Roscommon, and come under the auspices of the Department of Community, Equality and Gaeltacht Affairs.

The WDC is particularly conscious of the need to foster coordination and to promote the development of our region as set out in our governing legislation. We strive to be innovative and work in collaboration with the public, private and voluntary sectors to focus on the needs of the west at both the strategic and operational level. Our presentation today will offer an overview of the current economic challenges facing the region and outline the priorities for future economic development. We will highlight areas of our own activities that will demonstrate an aspect of the economic potential of our region and areas that we consider as essential to the development of the western economy and that are of direct relevance to the terms of reference of this committee.

The WDC is fully aware of the current strains on the public finances. We offer to the committee an avenue to unlock the economic potential of the western region so the country can benefit from the untapped resources we offer. The country currently faces significant challenges, with the west in particular vulnerable because of its narrow employment base and its heavy reliance on construction, locally traded services and the public sector, especially in rural areas.

Sustaining and creating jobs is the most critical element of turning around our country's economic fortunes. We urgently need to adjust the west's economy to the post-construction boom. The decline in our region's population is almost exclusively in the 15 to 29 year age group. The members of this committee are well aware that the western region has a long legacy of emigration. In 2002, the census showed for the first time since the Famine that the west had increased its population. We do not want to see a return to large scale emigration, we want to offer employment opportunities in our region for our young people.

Education and training offer one of the ways out of our current unemployment crisis. A person in the western region with the junior certificate or lower qualification faces an unemployment rate of 18%; the unemployment rate for a person with a third level qualification is 7%. Rural residents, however, have difficulty accessing education and training services. For example, only 17% of rural residents participate in lifelong learning, as opposed to 27% of urban residents. The cohort of young men with low formal education levels who have become unemployed from construction presents a particular challenge — 35% of all male early school leavers aged 18 to 24 in the region are currently unemployed, more than twice the rate than for those who did not leave school early.

The priority is to make the most of the assets and potential of the region. We must invest in infrastructure and the three Es of enterprise, employment and education, as well as innovation. There are growth areas where the west has or can develop a comparative advantage. It is seen as a global centre of excellence for medical devices, with 15 of the top 20 medical device companies in the world based in the region, employing more than 9,000 people. Our western investment fund in the past five years has invested in 18 indigenous start ups in the medical device and life science area. It can be done.

Food production also presents a job creation opportunity but we must move from primary processing to higher value added food products, with a focus on small-scale, high value niche food.

Tourism currently employs 23,700 people in the region, with 18% of overseas visitors staying there. The west has unique attributes that can attract increased domestic and foreign tourists but we absolutely must develop the rural tourism product to create jobs in our area. International air access and other methods of access are critical to get tourists into the region. The marine is our most under-utilised resource and it has huge wealth-creating potential and employment opportunities covering renewable energy, tourism and leisure, marine food, shipping and transport.

Employment in the caring professions is increasing as the population ages. The western region has a proportionately higher level of older people. This presents the west with the opportunity to become a site of best practice in elder care, with direct care-related employment opportunities. It also provides the opportunity for training and education providers in the area to become leaders in the area. There is significant potential to create jobs in the wider educational sector, in third level and language training, as we have a strong network of third level institutions.

The ICT sector experienced the strongest employment growth in the western regions since 2007, increasing employment by 3,000. While the region has a lower share in these sectors, they have performed better in our region than in the rest of the State since 2007. Skilled staff and networks are critical factors in the growth of this sector.

The green economy is made for the west of Ireland, we have some of the best wind and ocean resources in the world. The potential from wave energy alone could transform Ireland from being a 90% importer of energy to being a net exporter. There are huge opportunities downstream in technology and manufacturing jobs from this capacity to generate renewable energy. The Danish example is often quoted. In the 1970s the Danish Government focused its efforts on wind energy, a sector which now employs 30,000 people and manufactures 60% of the world's wind turbines. Green and creative initiatives will be used as examples of the kind of innovative work done by the Western Development Commission on the ground.

We are currently leading two regional development initiatives which have the potential to create 2,900 jobs, the first of which is a Western Development Commission-led INTERREG project, a bio-energy market stimulation programme for wood and seaweed cultivation pilot programmes. Both seek to exploit in a sustainable manner our region's natural resources, thereby reducing emissions and dependency on imported fossil fuels and creating jobs and wealth in rural areas. The second initiative is Creative West. There are currently 11,000 people directly employed in creative industries, generating sales of almost €530 million per annum. However, only €70 million, or just over 13%, is associated with exports.

The Western Development Commission has been leading the creative sector in our region. We are engaged with EU partners and the NUIG in implementing a programme of export and growth, targeting 2,000 additional jobs. The creative sector is important in its own right and also drives innovation in the wider economy. It is a sector in respect of which the west has an endowment of factor conditions, including quality of life, existing clusters and a lower cost base. However, there are significant deficits to be addressed, including networking, the promotion of the concept of Creative West, the need for cost-effective and suitable workspace, the availability of high-capacity broadband and, fundamentally for the long-term future of the region and country, creativity in education.

Earlier this year, the Western Development Commission produced a short policy briefing entitled Why Care About Regions? A New Approach to Regional Development, of which members have received a copy. Its goal was to examine new thinking on regional policy at international level to determine how it may apply in an Irish context. Lessons from this policy briefing are relevant to all regions, not just the west.

Work done by the OECD shows that regions are the drivers of national economies. They are the focal points for economic development and comparative advantage. If the potential of the lagging regions is not harnessed for the national economy, it is a waste of talent and opportunity and it will reduce overall national economic performance. Regional development is not a zero sum game as growth in one region does not have to be at the expense of another.

The west still requires special intervention to maximise its employment potential and the contribution to the national economy. However, the focus needs to be on place rather than sector, and on investment rather than subsidy. The western region tapped into unused potential during the boom with increased employment and labour force participation. This illustrates that when investment is made and opportunities are created, those opportunities will be taken up. Regions will mobilise their own assets if policy supports conditions for growth. These conditions are the three e's of enterprise, employment and education, and infrastructure and innovation.

Investment in physical infrastructure has always played a predominant role in regional policy. Improvements in infrastructure will generate productivity gains for local businesses and increase the attractiveness of an area for investment and tourism. Access to quality road and rail infrastructure, international air access, broadband communications and energy play a critical role in positioning the west within a modern global economy. In higher-value and more knowledge-based economies, the efficient movement of people and knowledge is essential.

Enterprises located in all regions must have access to infrastructural facilities that are at least on a par with those of their competitors if they are to compete successfully for inward investment and grow indigenous firms. Otherwise, they will be at a competitive disadvantage. Improvements in infrastructure alone are not enough to unlock the west's potential to contribute to the national good.

The OECD found that human capital is more important than infrastructure as a determinant of regional performance. Policies for developing enterprise, employment and education must work together to strengthen the west's human capital. It is critical that there be a strong link between education and training, and enterprises and employment opportunities, both now and well into the future. It is important that the enterprise policy have a strong regional policy development perspective and be cognisant of each region's comparative advantages. If policy is not structured in this manner, it could lead to increased disparities between regions.

The capacity for sustained innovation is a core long-term driver of economic development. Irish innovation policy must support the broad concept of innovation, which not only pertains to newer and improved products and processes but also to new marketing, branding and design methods and new forms of business organisation. Innovation is not just about science and technology as it applies to all types of businesses, not just technology businesses.

Innovation policy must be appropriate to a region's needs. For instance, the western region has a proportion of more traditional industries and services and innovation policy must be relevant to them. It must also ensure that regions such as the west have absorption capacity to adapt innovations. As such, a review of the western region in light of the potential market demand may emerge from the above drivers and the west may be particularly well placed for development of an industry-led innovation hub targeting areas of comparative advantage, as highlighted in our presentation. My colleague, Mr. Ian Brannigan, will address this issue in more detail if required.

Access to finance, particularly venture capital, is a major issue for western SMEs. The importance of venture capital to Ireland's economic recovery is highlighted in the Government's Building Ireland's Smart Economy framework. The western investment fund, WIF, which the Western Development Commission operates, was established to address this funding gap and has been instrumental in growing the west's share of private venture capital from 3% in 1998 to its current level of 10%. However, we have a long way to go to achieve aper capita level. The Western Development Commission’s investment fund addresses this private sector market failure in our region. It invests on a commercial basis and has, to date, revolved and re-invested €6 million. We have invested in a total of 89 enterprises with employment creation potential of 2,500.

In 2009, the WIF received €2.3 million in Exchequer funding. The SMEs it supported paid a total of €6.6 million in payroll taxes to the Exchequer that year, had a total payroll of €27 million and leveraged an additional €18.3 million into the region. In 2010, the WIF received just €492,000 in Exchequer funding, at a time when creating and sustaining jobs have never been more critical. The commission has been informed that it will receive no budget allocation for the WIF from its parent Department in 2011, and that any budget allocation will have to come from the Department of Enterprise, Trade and Innovation. Allocating a budget to the WIF will nurture enterprises and jobs in the western economy. We call on the committee to support such a budget allocation.

The west needs an integrated and tailored regional approach to unlock its potential, thus enabling it to contribute fully to the nation's economic recovery. Investment in infrastructure and human capital development, focus on the broad definition of innovation and building on regional assets and comparative advantage will unleash this potential.

I thank the delegates for attending and making a very comprehensive presentation on the prospect of difficulties at the airport. Given the comprehensive nature of their presentation, they have not left many questions to be asked. However, I have a few nevertheless.

That 40% of passengers are connecting to outward and inward international flights demonstrates the significance of the airport to inward investment, tourism and such key elements. Is most of this percentage likely to pertain to tourism or industry? Do the delegates have any idea? I am not sure that they do but if they could help us with this I would appreciate it very much.

There was quite a significant reduction in passenger numbers, and this coincided with the economic downturn. Would some of the passengers have been associated with the construction industry or were they from a more general cohort? Can the delegates elaborate on this? What, if anything, can be done to try to increase passenger numbers?

What chance is there of any significant development on the western seaboard if its capital, Galway, is to take a significant hit on foot of the diminution of a piece of critical infrastructure? What will be the impact of this on economic prospects, in addition to the impact on the three e's of enterprise, employment and education, and also on infrastructure and innovation, which were alluded to by Ms Buckley?

Mr. Joe Walsh

With regard to connectivity and the figure of 40%, which pertains to outbound and inbound flights, we have been conducting passenger surveys since June 2009. Between 60% and 70% of passengers on the Galway-Dublin route are business-related passengers. The majority are connecting for business reasons. Based on the passenger surveys, it is clear that, in the majority of cases, passenger journeys are both inbound and outbound business-related journeys. A high proportion of that 40% is business related connectivity. The examples we have indicate this to be European, American and Far Eastern connectivity. We have the ability, through Etihad-Aer Arann, to facilitate passengers travelling to places such as Australia, Asia and South Africa. Passengers connect through Dublin with that hook-up. The majority of the traffic is business related, as evidenced from passenger surveys.

These passengers are likely to be key personnel, such as executives of the enterprises involved. Has the delegation had any feedback in regard to their disposition to the west of Ireland or Galway regardless of the service provided through Galway Airport?

Mr. Joe Walsh

I listed in my presentation the key business and industry leaders we met during the past 12 months. It is clear from them that influencers and decision makers are travelling by air into Galway by way of connection from Dublin. It is clear also that without that connectivity into Galway will come the perception that it is difficult to get to Galway. I accept the argument that has been made on a number of occasions, namely, that we have road and rail transport. Unfortunately, this type of influencer and decision maker needs to get into and out of our region or city in the most efficient way possible. We have connectivity to the UK market, in particular London and Manchester. This means executives travelling from Europe, in particular Poland, can get access into Luton and, through our three daily services, into Galway. We have been told by these people that they do not wish to return to the day when it was difficult to get to their plant in Galway. They do not want to take that step backwards.

On the Deputy's final question in regard to difficulty for future growth and development, there is a 72-acre biopharma site located one kilometre from our airport. It is on a strategic corridor for the IDA for the next life science sector to come to Galway. We will want to be in a position to say to people that they can get to Galway in a convenient and efficient way using hub networks. That is what we do.

How much of the drop in traffic is related to the downturn in the construction sector?

Mr. Joe Walsh

We have probably seen a reversal of some of that construction traffic. London-Luton is our strongest performing route. It overtook Dublin in 2008 and 2009 and indications are that it will make up 40% of our business in 2010. Some 82% of the respondents to our business surveys identified the UK as a key market. People involved in construction are now travelling to the UK on a weekly basis. These people are able to commute from Galway and bring their skills to projects such as Olympics 2012 and so on. I have no doubt construction traffic was a component of the reduced numbers. However, to quantify it would be difficult.

I welcome the delegations. My question relates to business out of Ireland from Galway Airport. Deputy Morgan asked about connectivity and Mr. Walsh answered that question well. Mr. Walsh stated that the airport receives great support from the industry and commercial sectors in Galway, which is welcome. I am sure it also has the support of the joint committee. What information does Mr. Walsh have in regard to sun holiday travel and returning emigrants, a big issue for the west of Ireland; perhaps even bigger than for other parts of the country? Perhaps when replying to that question Mr. Walsh might also tell the joint committee the position in respect of other airlines and routes.

Mr. Ó hAoláin referred to the function of developing the economy and infrastructure. Tá an-jab á dhéanamh ag Údarás na Gaeltachta. Labhair an tUasal Ó hAoláin faoi chúrsaí oideachais, ealaíne agus cultúir. Cén freagra atá ag Údarás na Gaeltachta don cheist sin? An bhfuil an t-údarás ag cur béime ar chúrsaí eacnamaíochta agus infrastruchtúir?

My final question relates to the western investment fund and is for the delegation from the Western Development Commission. I know that work has been ongoing in supporting many industries. SMEs in particular were mentioned. Perhaps the delegation will give the joint committee an indication of what type of industries are assisted by the Western Development Commission. We are all aware that the SME sector is under a great deal of pressure, in particular from the financial institutions. Is the WDC saying it can provide funding or loans to SMEs? If so, I am interested to hear more about that, if possible.

Mr. Joe Walsh

The figure of 40% is business related traffic across all of our routes at Galway Airport. In respect of Dublin Airport, that percentage increases to approximately 60% to 70%. On average across the routes, 40% of traffic is business related, 30% to 40% is visiting friends and relatives, which is our Irish in London and Manchester returning for visits to friends and family and, between 25% and 30% is leisure. Galway Airport is very much about business. The offering of frequency of flights to places such as London, through Dublin and onwards creates that opportunity for business and the same day traveller.

In terms of new routes, Galway Airport has a short runway, which is well documented. Our vision is to improve on that runway to maximise further opportunity and efficiencies for the type of aircraft we operate. We continually engage with other carriers — carriers previously in Galway Airport — with a view to ensuring that when they kick back into growth and the release of capacity Galway will be well and truly on the radar. It is clear from our discussions with them and from the feedback we get from business and industry that this detail is passed on to future carriers. In time we will again get those opportunities. It is absolutely critical that we have certainty that Galway Airport will be maintained for the next five plus years. If we do not have this certainty we will not get the opportunity for carriers to invest — it takes a great deal of investment to get carriers to come to a region — and bring prosperity to our region. If they cannot see certainty and a policy of support for the regional airport we will be fighting an uphill battle. That is one of the key arguments we have been presenting to date. This is vitally important for us. We continue to explore opportunities and to create hub opportunities. Regional airports feed into major centres and airlines, thus feeding the remainder of the world, which is a key proposition which Galway possesses.

Mr. Pádraig Ó hAoláin

Cuireann Údarás na Gaeltachta béim an-mhór i gcónaí ar infheistíocht i gcúrsaí oideachais ag an tríú leibhéal. Dá bharr seo, tháinig an fás mór ar Acadamh na hOllscolaíochta Gaeilge sna trí ionad atá aige i nGaillimh agus i nDún na nGall. Chomh maith leis sin, tá teagmháil an-mhór againn leis na hinstitiúdaí tríú leibhéal i Leiter Ceanainn agus GMIT agus, ar bhonn níos lú, i dTrá Lí. Tá buntáistí móra ag baint leis sin. Ag an leibhéal áitiúil, tá éileamh agus teacht éasca ar líon mór cúrsaí. Nílimid ag plé leis an acadamh níos mó, tá sin imithe ar aghaidh chuig Roinn eile. Maidir le cúrsaí infrastruchtúir, bhí béim mhór againn i gcónaí ar an ngá a bhí le hinfrastruchtúr.

For as long as I have been with Údarás na Gaeltachta we have been hammering on about the importance of physical and telecommunications infrastructure. While there have been some improvements in the meantime it is currently difficult to attract high quality hi-tech industries to Ireland. Most of the industries we are targeting through new investment marketing initiatives require high speed broadband connectivity. This available in only a small number of areas. Recent advances in the Gaeltacht, most of which were made in the 60% of areas that are serviced by broadband, were done on the basis of an understanding between Údarás na Gaeltachta and the Departments of Communications, Marine and Natural Resources and Community, Equality and Gaeltacht Affairs, as they were then known, under which we were allowed to subsidise the relevant telecoms provider to upgrade the exchanges in certain areas. If we did not provide a subsidy, the provider would not carry out the upgrade. We had to stop doing this seven or eight years ago, at which point improvements in the quality of broadband connectivity practically ceased.

As my colleagues will attest, businesses are still available, both overseas and internally, which are willing to invest and create jobs. However, decisions need to be made in a number of areas on whether to make investments now, notwithstanding the stringent and understandable constraints on us at present. Where there is an obvious return to the Exchequer from such an investment, courageous decisions should be taken, provided a case is proven. With regard to the industries with which we are dealing at present, by virtue of the non-availability of Exchequer funding, we must be much more selective than we used to be. While this is a good thing in itself, there are those who are hesitant to move owing to constraints in the system. These must be addressed.

Ms Gillian Buckley

With regard to the western investment fund and the sectoral investment profile we have, the fund acts like the private sector. It is addressing market failure and has secured approval from the European Commission under state aid and risk capital rules to do this on the basis that the private sector is not operating in the western region with venture capital. The position has improved dramatically since the western investment fund was established. We have had a threefold increase in investment, for which the Western Development Commission has some responsibility. We are, however, only halfway to where we should be on a per capita basis.

The western investment fund is unique and has a broad portfolio. The small and medium enterprise, SME, side is predominantly — approximately 50% to 60% — in what is known as the smart economy, that is, ICT, medical devices and high-tech research and development. We also have a strong presence in tourism, manufacturing and natural resources and a high number of social enterprises and community projects. While these require a small amount of investment capital, they are very important.

Another unique aspect of the western investment fund is that we can make loans as well as providing ordinary and preference share capital. The fund is flexible and can suit the needs of the relevant enterprise. As to the exit mechanism, we become involved in a project on the basis that we want our money back at a profit. Companies are pleased to deal with us on that basis. They know we are in the region, understand their needs and are available to them. As a unit of three staff in the Western Development Commission, the fund is small and flexible.

Another key feature of the western investment fund is the leverage we achieve as a result of our investment. This returns me to my comment about having improved the position regarding private venture capital. To date, for the €31 million provided to us from the Exchequer, we have leveraged another €130 million investment into the region. In other words, for every euro the Exchequer has provided to the Western Investment fund, a further €4 has come into the region from the public and private sectors. In some cases, the fund has been critical to help leverage out other public sector moneys.

While the banking crisis has clearly affected small and medium size businesses in the western region, it has not affected some of our companies because they were never bankable. This is the reason the Western Investment Fund was established in the first instance. High-tech, knowledge based companies do not have cash flow. It takes five, six or ten years for investments to come to fruition. While members will have read about overnight successes, success tends to take ten years.

Our fund is six or seven years into its real life cycle which means it will be two or three years before we will be able to revolve the money. While we have revolved €6 million, we need investment from the Exchequer for at least the three years for which we have state aid approval to continue investing in new enterprises. Funding applications declined in the past year because we have not had new funding.

On infrastructure, I echo Mr. Pádraig Ó hAoláin's comments on broadband. We, in the west, have a real concern about the emergence of a two-speed Ireland in which the major cities have one speed while the rest of us have another speed. All companies, from the self-employed plumber to the global multinational, need the highest quality broadband. This is not a case of Ireland competing with itself. We are competing globally and it is critical that we have the best possible infrastructure in transport, broadband and energy. Energy is a major issue for all SMEs from a cost-competitive point of view, as well as for environmental and other reasons.

By standing still we are going backwards. When one sees a good road, one realises how bad our other roads are. They did not look so bad when we did not have anything to compare them with. New infrastructure shows up old infrastructure and makes it more difficult to do business because it creates a perception that the region is backward. We do not want such a message to go out. Our region has the highest calibre of personnel and its educational level is phenomenal. We have ambition and want to have infrastructure to support it.

Not being a member of the joint committee, I appreciate being allowed to attend. I welcome the delegations. One cannot overstate the importance of Galway Airport to Galway city and county and the wider region. It is essential for multinational companies located in the region.

The west requires special intervention. What is the average cost of creating one new job through the efforts of the Western Development Commission or Údarás na Gaeltachta relative to the costs of creating a job through Enterprise Ireland, the IDA or other agencies elsewhere in the country? These figures would enable us to see the value for money achieved through job creation efforts in the west.

As the presentation provided by Mr. Walsh and Mr. Ó hAoláin highlights, the west has not suffered job losses and company failures to the same extent as other parts of the country. This is solely due to the nature of employment in the region where high-tech jobs are widespread.

On the subvention of approximately €2.5 million sought by Galway Airport, when one sees that the airport makes a direct contribution to the State coffers of €2.1 million through taxes and so forth, one wonders why there is any hesitation on the part of Government to provide the funding requested. I hope the joint committee will emphasise the importance of this matter to the Government. It should offer wholehearted support to efforts to maintain the position of Galway Airport.

Recognising that aviation is in difficultly, could other carriers be encouraged to locate operations in Galway Airport if it was made clear that the airport would receive long-term support? The obvious area for further development at the airport would be in developing the runway. The associated investment probably would be substantial . Apart from public sources, have private investors indicated recently that this project has potential and that they would support it in the event of its being undertaken?

On the airport, I note that passenger numbers in 2007 were in excess of 300,000, while 103,000 passengers have passed through to date in 2010. It is obvious that the cost of fares has led to some airlines getting the lion's share of short-haul traffic, attention and support. The budget on which Galway Airport operates and the airlines that use it are subvented and supported. Have airlines such as Ryanair ever made an approach to use Galway Airport as a base? Competition always will lead to a greater reduction in overall costs but I refer to airlines such as Ryanair coming in and out. I understand that some carriers which service Galway at present and which operate between Ireland and Britain use the same airports as Ryanair and that this might cause duplication. However, the point is that in all airports to which Ryanair has gone and has supported, be they on the Continent or elsewhere, the passenger numbers have increased dramatically. I do not know whether this is an option in Galway as some other factors, such as the size of the aircraft used by Ryanair and so on, may hinder such a development.

Do Údarás na Gaeltachta and the Western Development Commission have comparable costs for the job creation and support activities they have undertaken down the years in the west of Ireland with the IDA and Enterprise Ireland? I seek information from Údarás na Gaeltachta as I am unsure whether it considers the most natural industry on the west coast of Ireland, from Donegal through Galway and right down to Kerry, to be the fishing industry. Although it is natural and indigenous to the area, I am unsure whether Údarás na Gaeltachta lays major emphasis on it. I understand the authority has a huge input across manufacturing, the high-technology sector and so on but the presentation by the Western Development Commission mentioned three major areas with regard to the high-value niche within the food industry and the potential in the fishing industry in this regard.

I will conclude on this point and apologise to the Chairman for tagging it on. Other Departments, such as the Department of the Environment, Heritage and Local Government, are restricting shellfish farming in County Galway, which is one of the highest value opportunities within the fishing industry in Ireland. I refer in particular to the periphery of Galway Bay, where the aforementioned Department has put up every obstacle against the development of that industry. Has Údarás na Gaeltachta in the past or does it intend in the future to support that industry?

Mr. Joe Walsh

I thank the Chairman and Deputy Burke for their questions. I will pick up on a number of them and will refer to my colleague, Mr. Paul Shelly, president of the chamber of commerce and board director, in respect of a couple of points on the investment side. I will make one point regarding the reference to employment. It is well-known that airports are economic drivers for employment. The medical devices sector is one of the strongest in the Galway region and every person employed within it has an employment multiplier of 0.7 of another person. This is significant and the companies concerned have confirmed to us that access is of critical importance. That is an interesting point I wished to make on the job front.

On the question of carriers, while we continue to meet carriers, only a limited number of carriers can use Galway Airport because of its runway length. Such carriers have the turboprop or jet options and although Galway has a jet capability, its runway length certainly is a factor at present. Some carriers are interested and we continue to discuss opportunities with them. These opportunities pertain to linking in to hubs because that is what we believe our regional airport does well, namely, feeding into international hubs that then open up global access points for those leaving the west and, more importantly, for businesses and industries that wish to get into the west. Such discussions are ongoing and they are likely to result in opportunities for us. This belief is founded on Galway Airport's status as a highly efficient, effective and customer-focused operation and we have received such feedback directly from our current carriers. These include Aer Arann, which obviously is a highly important carrier within Ireland and to Galway in particular. Moreover, the advent of Aer Lingus Regional is highly important for Ireland as a whole in terms of access and is a model that works. We certainly are focusing on similar models that work because we seek a sustainable opportunity for Galway to get further access into hubs.

As for passenger numbers, Deputy Burke cited a figure of 307,000 in 2007, which was our busiest year. Our total estimated number of passengers for this year is approximately 160,000. While this undoubtedly constitutes a significant reduction, we have experienced a reduction in routes as a consequence of the consolidation of aviation during that three-year period. However, having spoken to a number of carriers, they undoubtedly have capacity to develop and wish to do so. The various carriers have development plans. We are very much on their radar and continue to provide them with the information that is essential for them to make a decision to come to Galway. In addition, I refer to our engagement with agencies such as the IDA, Enterprise Ireland and Fáilte Ireland to help us to get them to Galway.

On Deputy Burke's question regarding Ryanair, our airport has a highly efficient model and in respect of development, we have invested more than €12 million in our facilities to date. For our future development, we will look for sustainable opportunities and whether that is a Ryanair model or something else, I note we have a niche market at present. We have carriers that can come into Ireland and can compete. We have seen this at a number of airports and we offer that opportunity. It is a niche model and we do not necessarily have the head-to-head competition that one sees at some other airports and consequently, one does not see other carriers coming into our country. However, we have other carriers on our agenda.

On the investment side, I will refer to the president of Galway Chamber of Commerce and board director, Mr. Paul Shelly.

Mr. Paul Shelly

In response to Deputy Burke's question regarding investment, Galway Airport probably was one of the first public private partnerships, whereby Galway businesses came together to invest in and buy the airport, which over time and with Government investment, has developed into a substantial airport. When passenger numbers were at 309,000 a couple of years ago, our aspirations were for half a million passengers within a couple of years and were we to lengthen the runway or do anything else, the belief was that we could reach 1 million passengers within a short period. Although times have changed, neither the desire of business to have an airport nor its willingness to invest in the airport have changed and we have looked at same over time. The banks have been extremely helpful and extremely good to the airport, which has been to our advantage. During the depths of the present recession, I note that Manx2 came in and now operates routes from Galway to Belfast and Cork and we are constantly looking for new opportunities. Galway Airport is not now, nor will it ever be, in competition with Knock or Shannon. As the third city in Ireland, people expect Galway to be served by a good road, a rail route and an airport.

Following on from our surveys and the discussions we held with business interests, we met Mr. Barry O'Leary from IDA Ireland a couple of weeks ago and he stated that "If businesses want an airport, we want an airport". Businesses want an airport. In the context of future investment, we cannot be left in a position where any Government would not decide on a budget for the airport for several years. If we work within that budget, we will succeed. However, we cannot be left in a position where we do not know until the end of the year what might be our subvention.

Mr. Seán Ó Labhraí

The Deputy inquired with regard to the comparison between the cost per job in Údarás-assisted companies and IDA Ireland and Enterprise Ireland. The grant cost per job is approximately €12,400 in the Údarás area. This is broadly comparable with the cost incurred by Enterprise Ireland and IDA Ireland. However, I do not believe this provides the full picture and it is probably not a very good measure. A much better measure of the impact of our grant-aid programmes is the €1 billion in sales and the €500 million to €600 million in exports to which they give rise and the fact that they have provided employment for 7,500 people. We estimate that the annual direct return to the Exchequer to which these programmes give rise is more than €60 million. The programmes are very good value for money for the Government.

Ms Gillian Buckley

I echo Mr. Ó Labhraí's comments. The instruments of measurement that are being used at present are so blunt, they do not do anyone justice. We need to consider the question of value for money, that is, the bang one gets for one's buck. The instruments to which I refer are so blunt that there is no comparison on the salary level of the job being created. We carried out an analysis across our companies and the tax take showed exactly where the high salaries obtain. Our largest employers are paying the least amount in payroll taxes because the people they employ are on something near the minimum wage, whereas companies in the medical devices sector are paying extremely high salaries and, as a result, making high returns to the Exchequer. A blunt, cost-per-job measurement lacks the subtlety required to illustrate the position in this regard.

Under EU rules, the west is allowed to have higher levels of assistance. While this remains the position, we should maximise our level of take-up to create as many jobs as possible in the region. The WDC investment fund was ahead of its time in the context of investment structures. With the advent of repayable finance, these structures are now the flavour of the month. However, grant aid is still required. The companies we represent continue to require an element of, for want of a better description, "free" money to invest, establish operations and expand.

To return to the bluntness of the instruments of measurement — I am sure this is also the case for Údarás — many of the companies we support, particularly those in the high-tech sector, carry out their own research, development, sales and marketing. However, they outsource the manufacturing of products to other companies. The resultant jobs are being created downstream but they are not being counted in our statistics. These are extremely important jobs. In the medical devices sector, there are numerous instances of companies not wanting to become involved in investment at this level. There is a company within our region which specialises in the subcontracting of manufacturing. It is, therefore, a virtual circle and is creating employment.

Mr. Seán Ó Labhraí

I did not respond to Deputy Burke's point regarding the fishing industry. While we are not directly involved with that industry — which is the responsibility of the Department of Agriculture, Fisheries and Food and Bord Iascaigh Mhara — we support aquaculture, which is fish farming and which relates to shellfish and finfish. We also support the processing of the wild catch. Up to 500 people are employed, on a part-time and full-time basis, in that sector in the Gaeltacht.

I welcome our guests and thank them for their comprehensive presentation. Many of the questions I wanted to pose have already been asked.

The important thing to remember is that we are not just discussing an airport, we are concerned with the survival of a region. The airport is the gateway to the business centre and the surrounding region and the fact that it contributes more than €30 million to that region is worth bearing in mind. It is worth noting that employees pay some €2.1 million in direct contributions and that only €2.3 million in Government support is being sought for the airport. If one merely concentrates on the sums, it is obvious that the case makes itself. It would, therefore, be a false economy if the airport were not given support at this critical juncture. It is obvious that the airport pays for itself many times over. Our guests have made their case and I fully support it.

Deputy McCormack has summed the position up very well.

The main question I wished to ask related to broadband. However, our guests have already provided an adequate response in this regard. The initiative our guests took with regard to upgrading broadband services in some areas is an example to enterprise boards in other counties, which could adopt a similar approach. Broadband is a major issue nationally. This issue is being addressed but not to the satisfaction of those who live in rural communities. The roll-out of broadband can facilitate the development of cottage industries. There are people who drive to work in Galway who could, with access to broadband, remain at home and do their work and look after their children there.

This is an all-party committee. All members support the case of Galway Airport. There is no doubt that the subvention must remain in place. What are our guests views on the smaller airports that have been developed in various regions? Should we focus solely on Galway or should we also focus on other airports? That might not be a fair question to put to our guests but I would like to hear their opinions on it.

One of the members of the board is a member of Galway Chamber of Commerce. How much of a hindrance to development in the western region have planning issues proven to be? What is the attitude of local authorities in the region to development? Are they co-operative in that regard?

Mr. Joe Walsh

In various submissions to the Department in the past three to four years, we have highlighted the fact that a clearly defined aviation policy is required. Such a policy must detail the requirements relating to air access to the island of Ireland. The current policy is lightweight in nature and focuses on the three State airports. A "poor cousin" approach is taken to Galway in the context of supporting that. A policy for regional airports must be drawn up.

Galway Airport offers a unique proposition, particularly in light of its close proximity key road and rail infrastructure and also key industrial estates, such as those at Parkmore East and West, Ballybritt, Ballybane and Mervue, at which there is a combination of commercial and Government involvement through IDA Ireland and Enterprise Ireland. We understand the value for money review that will be used to decide the future of regional airports has now gone forward to Cabinet. I would like to think that review has taken into consideration all the benefits that all of the regional airports offer to their respective economies and that Galway will be adequately addressed in that regard. One of the points constantly raised is the question as to whether we have too many airports. We have one of the highest patterns of travelling by air in Europe. In the EU 27 we rank third after Cyprus and Greece. That is not a surprise given that Ireland is an island. The majority of our traffic is across water and by air. We need that infrastructure.

I will provide the committee with one more statistic, published by the World Economic Forum for 2007-08. On a scale of 1 to 7 for the importance of international air transport, Ireland scores 5.4. Some other countries with high scores are Germany, 6.9; the Netherlands, 6.9; France, 6.6; and the UK, 6.2. When we look at those countries in the EU 27, we certainly do not want to reduce our offering for air access to the island of Ireland given the current challenging economic environment.

From a planning perspective, I will pass on to my colleague to pick up on the county and city support.

Mr. Paul Shelly

Galway Airport was built approximately 30 years ago with the help of the city and county planners. An industrialist named Ernst Steiner built a runway across the road from his factory which had more than 100 employees. He built it close to the industrial heartland of Galway city and county and nothing has changed. As recently as July 2010 an economic business case for services at Galway Airport was prepared by Galway County Council. However, Galway County Council and Galway City Council at manager and executive level, which includes Údarás na Gaeltachta and the Western Development Commission, realise it is essential for the regional development of the Galway region. They see it as very much part of their brief to ensure that the development plan for the city and county encompasses Galway Airport and any expansion that is necessary. I give great credit to the city and county councils.

Pádraig Ó hAoláin

Tá an dá aerfort — Gaillimh agus Carraig Fhinne — fíor-thábhachtach mar phointí margaíochta don údarás agus dos na comhlachtaí go léir a bhfuil baint againn leo. I mentioned that Údarás na Gaeltachta is a 49% shareholder in Donegal Airport at Carrickfinn. Donegal is still more disadvantaged in access owing to lack of road and rail network. Galway Airport plays a major marketing role in our efforts to sell the Gaeltachta na Gaillimhe, Mhaigh Eo agus Dhún na nGall to potential investors as my colleagues who are dealing with the challenge of attracting investment into the area will attest to. Air access is a very important part of the overall requirements that businesses seek. A number of companies established in our areas that are successful, profitable and operating internationally are included in the portfolio of companies that require access through Galway Airport, west and east.

Seán Ó Labhraí

Now that the services between Shannon Airport and North America have been cut back, it is very important that people in the Galway region and in the Galway Gaeltacht have access through Galway Airport to Dublin Airport which now has the concentration of services to North America.

I agree with Deputy McCormack that the case is quite clear. From a strategic point of view Galway Airport is essential to the region. Obviously I have environmental concerns about air transport in general. However, maintaining the airport is crucial for the continued development of industry in Galway. If the Minister is considering dropping the PSO, we need to consider imaginative ways to keep things going. However, it should be the Government's clear intent to get behind Galway Airport and the other regional airports to ensure we have a strategic infrastructure to allow those regions to develop.

There are two passengers who are very important to Galway Airport — the chief executives in Medtronic and Boston Scientific. An airport is not simply about the number of people who travel to and from it; it is about strategic infrastructure. That is the only strong case we have in these difficult times. Obviously passenger numbers in coming years will be greatly reduced. We will face at least four years of very stringent cutbacks, which is clear to everyone around this table. It will be tough and everybody will need to give a bit, but we need to be imaginative as to how to put it together.

I found Ms Buckley's comments very interesting in referring to the potential of the region in terms of the smart economy and the green economy. While there is great focus on cutbacks, this committee should concentrate on the other side of the balance sheet. We need to be bold and innovative and we need to take serious risks. In the early years of the State, projects such as Ardnacrusha were put in place and I would like to see such projects in the areas of renewable energy in the west of Ireland. We need to start thinking big rather than small.

Deputy Burke spoke about the fishing industry. One of the worst things we ever did was to sign up to the Common Fisheries Policy leading to billions of euros worth of fish being taken from Irish waters every year. Given that 16% of Europe's fishing waters are owned by this country it is incredibly sad that only 500 fishing industry jobs are being sustained in the Gaeltacht area. We need to look strategically at the fishing industry. There are great horticulture opportunities in the west of Ireland which are not being considered at the moment leading to import substitution. I believe in forestry and the Government has a strategic plan to increase the level of forestry substantially for which the west of Ireland is very suitable.

The key point for Galway Airport is to hold on to the industries we have and supplement the medical devices industry. I understand the country generates €80 billion from manufacturing at the moment, which is mainly from multinational corporations. If one of the major companies in Galway were to close as a result of just being petty about the airport, we would be doing ourselves an enormous disservice.

I have been told that the Irish language is worth €130 million to the Galway region alone. I would be interested to know the figure for the entire country. We cannot underestimate the financial value of the Irish language to the west of Ireland and I would like to hear the delegates' comments on that. Ms Buckley has made the point that by standing still we are going backwards. It is not good enough to say we are trying to preserve what we have. We must look at bold and innovative projects. If we try to hold what we have, we will go backwards. We must up our game and if we do that, the west of Ireland could be one of the richest areas in Europe in years to come.

Mr. Pádraig Ó hAoláin

Maidir le cúrsaí Gaeilge, rinneadh pointe an-tábhachtach nuair a ardaíodh an cheist faoi chostas in aghaidh an phoist agus go bhfuil sé níos tábhachtaí díriú isteach ar an luach a bhaineann leis an infheistíocht a dhéanaimid, agus an luach atá ag na comhlachtaí a tógadh níos luaithe. Ní ritheann sé le daoine go bhfuil luach €1 billiún do chomhlachtaí Gaeltachta atá ag feidhmiú sa Ghaeltacht agus go bhfuil luach €600 milliún de sin mar easpórtáil agus an fhostaíocht a bhaineann leo, agus go bhfuil breisluach ag an bpobal agus ag an Státchiste as sin.

Luadh an luach a bhaineann le cathair na Gaillimhe. Tá suirbhé eolaíochta déanta ar sin agus an chéad €30 milliún atá luaite leis an chathair, is buntáiste breise sochair sin a éiríonn as caiteachas Gaeilge de bharr na ngníomhachta atá ar siúl. Níl mé cinnte cad é an figiúr náisiúnta — tá sé ollmhór — ach is tábhachtach an pointe sin: go bhféachaimid ar an luach breise don náisiún, don phobal, don Státchiste agus do shochaí na hÉireann trí chéile as an infheistíocht i gcúrsaí Gaeilge agus Gaeltachta.

Ms Gillian Buckley

This meeting is focused on enterprise, employment and innovation and the west of Ireland can deliver all of those. We are lagging at present but the WDC's vision is that we can be one of the leading regions of the world. We have the resources of the future but we need the investment, vision and bravery to bring them to the fore. Infrastructure is needed but that will only create the level playing field, investment in people and the exploitation of our resources will transform the region and the national economy. Developing the regions will enhance the national economy and the OECD supports that idea.

The western region has suffered unemployment like the rest of the country. Galway city has been more resilient, particularly because of the medical device industry, but the west has suffered. We now have under employment for the first time since the early 1990s. People have gone back to the farm and have lost substantial income. Dependence on spousal, supplementary income has become normal again with the west of Ireland suffering from unemployment.

We are aware of the significant disadvantages and difficulties facing the west. There are opportunities as well and it is important that we see the counterbalance. We wanted to hear from employers and employees in Galway, Mayo, Clare and down the western seaboard. The challenge is enormous but the strength of conviction displayed by the organisations today will overcome it. It is essential for the country that these problems are overcome. The island as a whole remains a viable economic unit where people can work and live in any part, not just the eastern seaboard. I live in the midlands, in the BMW region, so I am aware of the problems.

I compliment the Western Development Commission, which promotes economic and social development from Donegal to Clare and beyond. This committee has done a great deal of work on rural development. I remind Senator Ó Brolcháin of that because we have visited towns in Munster and Leinster, bringing back the opinions of people in them and putting them before the Minister. In 2011 we should consider visiting towns in the Senator's area as well. We also have a project in hand concerning small, sustainable energy projects in rural areas. We hope to complete that in the near future.

Tá cúram ar leith ag Údarás na Gaeltachta chun an Ghaeilge agus an Ghaeltacht a chosaint agus a stiúradh. Is tábhachtach an aidhm í seo mar ní mhairfidh aon phobal gan gheilleagar láidir chun na daoine atá ann a fhostú agus a choimeád san áit. Pobal tábhachtacht iad pobal na Gaeltachta. Bíonn siad i gcónaí faoi bhrú chun ár saol agus ár gcultúr Gaeilge a choimeád beo. An rud is práinní ná na comhlachtaí beaga dúchasacha atá lonnaithe sa Ghaeltachta a chosaint. Tá gach ceann acu ag soláthar post in áiteanna éagsúla. Ní minic a thagann na comhlachtaí móra domhanda go dtí an Ghaeltacht agus mar sin ní mór dúinn dul ar aghaidh as ar stuaim féin. Tá na scileanna ann agus an taithí ach caithfimid na daoine óga, oilte a choimeád ina gceantar dúchais.

Galway Airport is essential to the development of the western region. It provides easy access to and from the western area and I am always arguing the importance of Abbeyshrule Airport in Longford-Westmeath. I am interested because of that and it is imperative that Galway Airport remains as a functioning airport serving the commercial and other needs of Galway and its environs.

I propose the following motions to the committee:

that the committee calls upon the Minister for Finance to ensure that adequate funding is provided on a multiannual basis to sustain the operation of Galway Airport as an integral and vital support for the community of the west of Ireland; that the committee calls on the Minister for Community, Equality and Gaeltacht Affairs to ensure that Údarás na Gaeltachta maintains its primary role as the Government agency that oversees and directs investment into Gaeltacht areas; and

that the committee calls upon the Minister for Finance and the Minister for Enterprise, Trade and Innovation to provide adequate finance to sustain the work of the Western Development Commission in maintaining the development of SMEs within its region, particularly to provide a grant for 2011, which appears to be uncertain at this point.

Are the motions agreed? Agreed. Those will be forwarded to the relevant Ministers.

There is no doubt that the Galway effort will meet the Government value for money review and far surpass it.

That we agree these motions indicates our view. It is a "no brainer".

Deputy McCormack is right that the delegates have made the case but there are two reports, one of them published by this committee last week on the agrifood sector that clearly flagged the lack of regionally balanced development, and another, "Awakening the West", produced by Senator Pearse Doherty, that also talks about critical infrastructure. There is a body of evidence to support the case made today.

We will certainly furnish to the Minister the report we published last week. The Horizon 2020 strategy of the IDA aims to attract 50% of 150,000 jobs to areas outside Dublin and Cork so it would be incongruous not to have the regionalism of the airports recognised in attaining that objective. The case has proved itself, our questions were just to tease out some points.

Gabhaim buíochas do Mr. Walsh, Mr. Shelley, Ms Leonard agus Ms Brennan, don Uasal Ó hAoláin, don Uasal Ó Labhraí agus don Uasal Mac Eochaidh, do Ms Buckley, Mr. Brannigan and Ms White. I thank them for coming today. Tháinig siad anseo inniu agus chuir siad fianaise os ár gcomhair. Bhí sé an-suimiúil agus tá súil agam go n-éistfidh an Rialtas leis na moltaí a rinneadh.

The joint committee adjourned at 1.50 p.m. until Tuesday, 12 October 2010.