Seanad Éireann díospóireacht -
Thursday, 3 Aug 1961

Vol. 54 No. 17

Shannon Free Airport Development Company Limited (Amendment) Bill, 1961 (Certified Money Bill): Second and Subsequent Stages.

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

Minister for Transport and Power (Mr. Childers)

The main objects of the Bill are:—

(i) to increase from £1,500,000 to £3,000,000 the aggregate amount of the shares in the Shannon Free Airport Development Company Limited which the Minister for Finance may take up;

(ii) to increase from £500,000 to £1,250,000 the aggregate of the grants which may be provided for the company; and

(iii) to provide for the issue by the Minister for Finance of repayable advances to the company to meet one-half of the expenditure by the Company on the provision of dwellings for workers employed on the Industrial Estate established at Shannon Airport. The aggregate amount of advances shall not exceed £400,000.

The Shannon Free Airport Development Company Limited was incorporated as a limited company under the Companies Acts on 28th January, 1959. The main function of the company is to promote the increased use of Shannon Airport for passenger and freight traffic and for tourist, commercial and industrial purposes. To that end, the main activities of the company have been concentrated on attracting industrialists to set up factories in the Customs Free Airport area. Under the provisions of the Finance (Miscellaneous Provisions) Act, 1958, industries established in the Customs Free Airport enjoy certain taxation privileges, in particular, total exemption from income tax and corporation profits tax until 1983 on profits derived from export business. To facilitate prospective industrialists the company has undertaken a factory building programme, and factories can be provided for industrial undertakings at Shannon in the following ways:—

(i) The undertaking may lease a site from the company on which to build its own factory and for this purpose a building grant from the company may he negotiated;

(ii) The company may build a factory to a special design to be leased to the undertaking;

(iii) The undertaking may lease one of the company's standard factories.

As an adjunct to the factory building programme, the company has also undertaken the provision of housing accommodation for a proportion of the workers employed on the Industrial Estate. A scheme of houses and flats, for renting to tenants, is in hands.

The company's main sources of finance are provided under the authority of the Shannon Free Airport Development Company Limited Act, 1959. The Act authorises:—

(i) The Minister for Finance to subscribe for shares in the company up to an aggregate limit of £1,500,000 and

(ii) the provision by way of grant-in-aid voted annually of sums which in the aggregate shall not exceed £500,000.

The capital is being used by the company to acquire revenue-earning assets such as factory buildings and dwellinghouses, the income from which will go to supplement the company's grant income. The grant-in-aid is applied by the company towards meeting its running expenses and providing financial assistance to new industrial undertakings at the Airport. Capital issued to the company up to 30th June, 1961, amounted to £1,358,000 and payments by way of Grant-in-Aid to £402,500. It will be seen that these figures are approaching the existing statutory limits. Accordingly, it is now necessary to increase these limits so that the company may continue its operations. Of the share capital expenditure up to 30th June, 1961, £939,000 was expended on factory buildings and £394,000 on dwellings.

Up to 30th June, 1961, 15 factory bays had been completed together with a special factory of approximately 53,200 square feet constructed by an industrialist with the aid of a grant from the company. Including the special factory mentioned the total area of factory floor space provided as at that date was 285,340 square feet. All the factories are, of course, situated within the Customs Free Airport area. At present five factory bays are under construction. Ancillary services such as water, sewerage, electricity and boilerhouse have also been provided. The company has almost completed 10 houses and a scheme of 137 flats is nearing completion. Plans are in hands for the construction of a further 100 houses.

As at 30th June, 1961, eight factories were in operation in the Industrial Estate and the total number of workers employed was 724. Of these, 64 per cent. are male. A good number of skilled craftsmen have immigrated to Shannon. Among the commodities being manufactured are transistor radios, floor maintenance machinery, knitted jersey fabrics and knitted garments, wire gauze for industrial purposes, precision threaded fasteners and miniature capacitors, pianos and record players and radiograms, tungsten carbide inserts and diamond drilling equipment. All these industries are primarily export industries and are not in competition for the home market with other Irish manufacturers.

The company is in active negotiation with a number of potential industrialists and I am happy to say that there is every reason to be confident that this Estate—the first industrial estate in the world to be situated in an airport—will succeed and will continue to develop. The industries already established have given a very considerable fillip to air freight traffic at the Airport and it is estimated that by 1965 over 5,000 tons of air freight will be generated annually by the factory operations now established or planned at Shannon. It is abundantly clear that industrialists are attracted to the estate by reason of the availability of the convenient air freight facilities.

The company, on my direction, is concentrating its efforts on the creation of an air freight industrial community and is seeking new industries of a kind likely to make the fullest possible use of the air freight facilities. The examination of inquiries made by industrialists about the Shannon Estate, and the origin of these inquiries, make it quite clear that the great majority of these firms are interested in this aspect. A major advantage in the regular use of air freight is of course that the manufacturers can avoid having to tie up a large proportion of their capital in maintaining large stocks of materials, while the finished goods can be dispatched all over the world in a matter of days—sometimes of hours.

The economic rent of the factories has been calculated on a basis of recovering the capital investment in 40 years together with interest at the rate of 5½ per cent. per annum. An addition of 1 per cent. per annum of the capital cost is also included for the cost of external repairs and maintenance. Some of the factories have been let at the full economic rent, but in some cases the factories have been let at less than economic rents for a limited number of years. It is hoped that at the end of the initial period, all factories will be let at economic rents. The lessees are responsible for rates and internal maintenance.

All the indications are that factories can be leased as soon as they can be built. Apart from the five factory bays now under construction plans are being prepared for the provision of a further 32 factory bays over the next four years. Capital expenditure during the current financial year on the development of the industrial estate is estimated at about £550,000. It is difficult to forecast the probable capital expenditure after that date because this is naturally related to the continuing success of the company's efforts to attract industrialists. If the rate of capital expenditure to date is maintained the increase of £1,500,000 provided for in the Bill would sustain operations for perhaps three to four years.

The Bill also provides for an increase from £500,000 to £1,250,000 in the aggregate amount of the grants which may be made to the company. These grants are to cover the running expenses of the company and to enable the company to do such things as are calculated to encourage the establishment of commercial, industrial and trading enterprises at the Airport. Receipts by the company up to 30th June, 1961, amounted to £422,000, made up of grants-in-aid of £402,000 and £20,000 in other receipts. The company paid out £202,500 in running expenses and £216,000 in grants to industrialists. The latter figure is made up of grants as follows:—

machinery and equipment	£120,000
factory premises	£85,000
training of workers	£11,000.

It emerged at an early stage of the operation of the company that the provision of suitable type housing was an integral part of the industrial development. The Airport is somewhat isolated from existing communities and industrialists already in production and firms about to commence production urged that housing should be provided in the immediate vicinity of the factories for a proportion of the workers. As I have already indicated, expenditure on the provision of housing at the Airport up to 30tht June, 1961 was £394,000. Here again, precise estimation of probable expenditure is difficult because expenditure will, of course, be related to the demand for housing which in turn will depend upon the rate of increase in the number of workers employed in the industrial estate. However, it is estimated that expenditure on housing in the current financial year will be of the order of £580,000. The cost of housing will be met as to one half from the company's share capital, the other half being met by way of repayable advances under this Bill.

These advances will be on the same basis as loans from the local loans fund, both as to rate of interest and repayments. The rents proposed for the housing accommodation are such as to amortise the total capital cost over 35 years including interest at an average rate of about 3½ per cent. per annum. The rent also includes provision for repairs, maintenance, insurance, ground rent, administration and caretaking. The tenants will be liable for rates. After making a most thorough investigation into housing requirements for the industrial estate the company reached the conclusion that, subject to constant re-evaluation, up to one-third of the workers would seek housing accommodation adjacent to their work.

In view of the many factors involved it has, however, been decided to limit the first stage of the housing estate to 250 houses and flats and to have a full reassessment of the housing problem from every aspect before reaching any decision to proceed further. The scheme for the 100 houses now being put in hands will cater for the needs of workers requiring accommodation at lower rents than those which can be charged for the flats now in course of completion. The industrial expansion at the Airport has also led to consideration by local authorities and private interests of house building programmes in adjacent towns and this is a development which I am sure all of us will welcome.

The work being undertaken by the Shannon Free Airport Development Company Ltd. is unique in the Irish economy and is probably without parallel in the economy of any other country. It is an experiment which involves considerable financial risk for the State but from the encouraging progress made so far I am satisfied that the State should continue to finance the operation. The company has shown commendable enterprise, vision and enthusiasm in attracting industrialists to Shannon and I feel that I must take this opportunity of congratulating the directors and staff of the company on the results already achieved.

I recommend the Bill for the approval of the House.

Dr. O'Donovan

This Bill was the subject of considerable criticism in Dáil Éireann, and I think, very justifiably so. If the State attempts to salvage something, nobody can have anything but praise for the effort. Maybe indeed the necessity to salvage the Airport was grossly exaggerated but at any rate when this company had been in operation—it has now been in operation for a few years— and when it was found that no progress whatever was being made in its industrial effort at Shannon Airport, I think instead of presenting proposals involving an increase in expenditure altogether of £2,650,000, it would have been much better if the Government had adopted that over-worked word "pause". In this context, the word "pause" has a great deal more relevance than in certain other financial contexts.

Lest anybody might think that I am exaggerating, I should like to point out that the report for the year ending March 31st, 1960, which is the last available report, on page 14 says: "On March 31st, 1960, definite arrangements to begin manufacture had been made with ten overseas firms. Details are given in Table I. Most of these firms will be in production by the end of 1960". Now I do not propose to name the firms but there are in fact eight firms named in Table I appended to the report. That was at 31st March, 1960, and the Minister in Dáil Éireann said at column 1648, Vol. 191, No. 10 that on 30th June, 1961 eight factories were in operation in the Industrial Estate and the total number of workers employed was 724.

I do not want any misapprehension of what I have said to arise. It is apparent from Table 1 which is appended to the report for the year ending 31st March, 1960, that the whole eight were not in operation at that time. The fact is that 15 months afterwards, the Minister comes to both Houses of the Oireachtas, and tells us he is going to build 32 new factories, or something of that order— one of those astronomical figures by comparison with what has been used already. He says: "Apart from the five factory bays now under construction plans are being prepared for the provision of a further 32 factory bays over the next four years"— about four times as many as have been used up to the present. Anything less would not do! Do things in a big way! Up to the present, the provision in the previous Bill, as stated by the Minister, was £1,500,000 for capital and £500,000 gross for grants-in-air. Now it is proposed that there should be £3,000,000 capital, £1,250,000 for grants and £400,000 for the dwellings for workers.

I should also like to draw the attention of the House to the manner in which the moneys given by way of grants-in-aid have been expended up to 30th June, 1961. The Minister told us that out of £422,000, £216,000 was by way of grants, that is to say, moneys given to industrialists, which is explained partly by grants for machinery and equipment and the factories built by some of the firms. There was a sum of £202,000 for running expenses, that is, compared with the grants given, there is an equivalent amount, pound for pound, spent for running expenses. This is an outrageous ratio. It is a matter which is just beyond comment.

The company in its report talks about putting five million kilograms of freight into the air from the Estate. I am glad to say that that has been translated. I am not able to twit the Minister about that, at any rate, for he says in his brief that it is estimated that by 1965 over 5,000 tons of air freight will be generated annually by the factory operations, as compared, I suppose, with a couple of hundred tons at the moment. I cannot twit the Minister for talking about kilograms but I can twit the Minister about some of the exaggerated English he has used towards the end of his brief.

Mr. L'Estrange

That is not new.

Dr. O'Donovan

This is rather good. He is talking about housing. He says:

After making a most thorough investigation into housing requirements for the industrial estate the company reached the conclusion that, subject to constant re-evaluation——

re-evaluation—the word "evaluation" is bad enough without putting in the prefix "re". Just look at it as a word. Of course the Germans are fond of concocting words and I suppose we are going to adopt the German system now. He continues:

—up to one-third of the workers would seek housing accommodation adjacent to their work.

The Minister goes on to say that they have taken a lesser decision and decided to limit the first stage of the housing estate. I have no objection to that. The Minister goes on to say that this is unique in the Irish economy and probably without parallel in the economy of any other country. The financial end is without parallel in any country.

Mr. Childers

So is the project itself.

Dr. O'Donovan

No, it is not.

Mr. Childers

It is completely unique.

Dr. O'Donovan

Is the Minister telling me there are not industrial estates on the verge of airports all over the world?

Mr. Childers

There is just one starting. The Fine Gael Party is divided here as against the Party in the Dáil. There is a different point of view.

Dr. O'Donovan

It is honest of the Minister to say that there has been one just started but the English is exaggerated and there is this exaggeration all along the line in regard to the prospects of this kind of thing. He says:

It is an experiment which involves considerable financial risk for the State but from the encouraging progress made so far I am satisfied that the State should continue to finance the operation.

If the Minister had simply said: "We have considered the project and we have decided to take further risk," it would have been different but he should not hitch it on the other phrase "the encouraging progress made so far." I have demonstrated from the report, and from the Minister's words, that no progress has been made in the past 15 months at all. The number of enterprises are the same and of course with the Common Market looming up, I cannot see that any new people will now inquire about the Estate in the circumstances that will arise. The advantage, of course—and I want to make a personal comment on this aspect—of the arrangement for such companies as have come in is that they are inside the British Commonwealth preference system.

I regret to say I had a very sad experience in connection with that subject, when I attempted to help some people who wanted to start a boot factory at Listowel to manufacture high-class Italian shoes. The Industrial Development Authority told us if we started this, we would jeopardise the market in Britain for the existing Irish boot and shoe industry. Apparently with the change of Government, the Industrial Development Authority changed their minds, or their minds were changed for them —I do not know which. Both approaches cannot be correct. The necessary money was subscribed for the shoe factory in Listowel and it was shot down by the Industrial Development Authority. Apparently their influence on this project, unless there was something else in it, was less than it was on that particular project in 1956. I am glad to say that great credit was due to the people of Listowel who were organising it. Those who subscribed money got all of it back except a few pounds which were required for expenses for the formation of the company. That was a completely different outlook in the I.D.A. from the outlook at that time. Again, when the Minister speaks, we have this exaggeration in the reference to exemption from income tax and corporation profits tax until 1983, that is to say, 22 years ahead. I do not think that either the Minister or I will be much concerned with Parliamentary matters in 1983.

Professor Hayes

That is a very pessimistic outlook.

Dr. O'Donovan

It is not pessimistic; I am merely trying to get realism into this discussion.

Éamon Ó Ciosáin

It is good to plan in time.

Dr. O'Donovan

At any rate, we can get a laugh out of it. What does the Minister mean by saying that these are primarily export industries? I take it that it means that if we take the piano manufacturing company, there being no other company as far as I know manufacturing pianos here, it is allowed to sell them in the home market where they do not compete with any existing firm. I should like just to be clear about that.

There is provision in the original Act and in this Bill also for interest on advances. Quite frankly, on the figures shown up to the present and the figures given by the Minister in his brief as regards the result of this company's operations, I do not see any possibility whatever of the company paying interest on advances.

If we analyse the position, approximately £2,000,000 has been spent and there are 700 people employed. That would make a figure of almost £3,000 per worker put into employment, which would be a very much larger figure for this kind of small industry, but it would not be quite fair to the project. It has been doing other work, for example, the kind of work that is referred to at page 10 of the report for the period ended 31st March, 1960.

Its work in the field of amenity development is exemplified by its encouragement of the Shannon Shamrock Inn project, its agreement to manage and operate Bunratty Castle....

My only comment on that would be that it was Lord Gort who went to the trouble of originating and developing Bunratty Castle, and the management and operation of it cannot cost the Shannon Free Airport Development Company a lot of money anyway. I could wish that some of its other operations were at least as little costly as that.

The report also mentions "its participation with the Irish Tourist Association in the provision of a new tourist inquiry office in Limerick." I am one of those people who believe that a particular institution or organisation should be engaged in a limited sphere of activities. If the Government have the feeling that the Irish Tourist Association should open a new tourist inquiry office in the city of Limerick, the financing of that project, if the Irish Tourist Association have not got enough moneys already, should be done, and it would be proper financial procedure, by means of an increase in the annual grant to the Irish Tourist Association.

The Minister and some members of the House may think that I am too harsh about this project. Only a few days ago, a big bunch of ambassadors were taken down to be shown over this project. I do not think the time of ambassadors is so valuable that it matters a great deal what they spend a couple of days doing, but I do think that they might, at least, have been taken down there by internal transport rather than by flying them down on planes which are wanted for other purposes at the height of the tourist season and at the period of maximum operation of the Aer Lingus fleet. The very fact that these men whose normal duty scatters them all over the world were taken down to this place at this time does vindicate my opinion that there is something further required to justify the expenditure up to the present.

This Bill was not opposed in Dáil Éireann. It is an enabling measure and as usual with these measures nowadays from the Government, it has millions of extra pounds in it. It does not matter a great deal really about the Bill itself except as showing an attitude of mind. We have had the Minister in this House with three or four other Bills of a similar sort, by far the most important of which was the Electricity Bill, which I criticised at very considerable length. As regards this Bill, the attitude adopted in the other House is the correct one, that this kind of legislation is not necessary at this time, since quite obviously the company has not reached the limit of the available authorisations yet, and there is no reason why it should not have waited until the general election was over, as, in strict propriety, it should have waited.

As regards my point that there is no immedate need for this Bill, might I point out that by statutory instrument No. 49 of 1959, the Shannon Free Airport Development Company Ltd. was added to the Schedule to the State Guarantees Act. The Minister for Finance by that Order was authorised to guarantee the company up to £200,000, but by an Order made on the 28th April, 1961, by the Taoiseach under the State Guarantees Act, the Shannon Free Airport Development Company was, with other companies, removed from the Schedule. In those circumstances, first of all I want to ask two questions. The Minister may not be able to answer them and if he cannot, I can quite understand it.

First of all, I should like to ask how it is that the company has ceased to require a guarantee of these sums up to £200,000 and is at the same time now being provided with advances under Section 4 of this Bill of up to £400,000 for housing? If the Minister has not the information in this kind of territory, it is not of great importance. When you are faced with a proposal to spend a sum of £2? millions, whether something has been properly attended to technically does not matter a great deal. The Government, by pushing ahead in this fashion with these projects with the one hand, at a time when they have written to the headquarters of the EEC at Brussels, with the other hand are showing that they are looking in two directions at the one time. We all know very well that that is an undesirable state of affairs in economic planning.

The original Bill was enacted in 1959. In two years, we have the Minister back here again. It is not necessary that he should be back again in two years. We had this yesterday with another Bill. But, quite apart from my opinion, that it is not necessary that he should be back here again in two years, if it were necessary for him to be back here again in two years it would show extremely bad planning, indeed. To talk about the year 1983 in that context is the height of absurdity.

Mr. Donegan

The Minister defined the main function of the Shannon Free Airport Development Company in his opening speech on this matter in the Dáil. I quote from column 1647 of the Official Report, Volume 191, No. 10:

The main function of the company is to promote the increased use of Shannon Airport for passenger and freight traffic and for tourist, commercial and industrial purposes.

As I understand it, it was not exactly that. It was an effort to employ the people who would be disemployed if Shannon were overflown by many planes and at the same time to protect our capital investment in Shannon. It was an excellent project. The return of the Minister for more money today gives us an opportunity to discuss how that project has been proceeded with and to what effect—whether, in fact, there might be a better way to reach an end which was of itself good, necessary and proper.

In the same speech the Minister tells us at the end of column 1648:

As at 30th June, 1961, eight factories were in operation in the Industrial Estate and the total number of workers employed was 724.

As I understand it, somewhere between £3,000 per worker was spent to achieve that present state of affairs. I do not regard that as an excessive sum. The old figure used to be £1,000 per worker. There is not the slightest doubt about it that the present figure in industry is, on the average, over £2,000 so that the figure portrayed in the Minister's statement has not got anything wrong with it on the basis of capital investment.

If it were true, if we were satisfied that the capital investment was wise, that the employment would continue and would be of a nature which would give ancillary employment in the production of raw materials for these industries in the country, if they are factories which completely remove the opportunity of providing ancillary employment in other parts of the country then that indeed is a disability in the measure we are discussing today. The Minister will hold all the share capital. He now wants to increase it from £1½ million to £3 million. We are putting in for another £1½ million and he asked for £1¼ million to be given in grants-in-aid at the maximum rate of £500,000 a year. Our experience in this House and in the other House has always been that these maxima become minima. So you may take it that when this Bill passes today and goes back to the Dáil the position will be that the Government will be putting in another £1½ million and that, for the next two years, they will put in £500,000 each year in grants-in-aid as distinct from extra share capital

At this stage, we must take a long look at the whole project to see where it has got us and to see where we are going. It is at this stage that I find myself departing from the Minister. Before we treat the matter in a general way, I should like to say, on the question of houses, that perhaps it is a good thing the Minister has decided that only one-third of the workers eventually employed there, if employment continues, will want to live at the Airport. The point was made in the Dáil—it seemed a very human point but I think it is a very real one—that nobody wants to live at an airport. It reminded me of the old song about the railroad track in the middle of the house. I could not imagine anything worse than living in an airport. The figure of one-third probably represents the people who cannot find accommodation elsewhere. The people who cannot afford houses will never be re-housed by any local authority nearby because under the regulations governing re-housing the position is that persons in good houses, no matter where they are, do not get other houses. Therefore, it is perhaps wise that we are proceeding on the basis that one worker in three will require re-housing.

At the same time, I feel the figure is false inasmuch as we are proceeding on the basis that we shall have a greatly increased number of workers. I have the greatest trepidation as to whether we shall have such. We must examine the setting-up of Shannon Free Airport. As far as I can see, apart from the Shannon Free Airport Development Company Act, there were two other Acts of Parliament which affected it. One was the Finance (Miscellaneous Provisions) Act, 1958 and I want to refer to Part II, Section 3. I do not think there is any point in quoting the entire section. The Minister will accept my word that in this section certain trading operations in an airport are exempted from taxation. Those trading operations would extend to any normal industrial operation. More important still, when one considers the situation today, in the Customs Free Airport (Amendment) Act, 1958, Section 9 (1) we read:

The Minister may, subject to such conditions as he may, with the consent of the Minister for Finance, impose, permit goods to be brought

(a) directly into the airport from outside the State, or

(b) into the airport from another part of the State without payment of any duty of customs or excise which may be chargeable thereon

for sale by retail within the airport either for shipment as aircraft stores or to persons leaving or outside the State.

As I understand it, the idea behind the introduction of industries here was that persons could manufacture goods on the raw materials of which we did not impose an import duty and could then export them as coming from the Republic of Ireland and the Republic of Ireland has always had and can be sure of economic membership of the British Commonwealth. In other words, we could send all goods manufactured in the Shannon Free Airport Development Area to Britain or to Commonwealth countries, avail of our preferential rate of duty and not charge duty ourselves on the raw materials coming into our country.

So that, as I see it, this whole project is based on imports from abroad and exports from the Airport without having left the factory site itself for production. One might almost term it, in its first birth, a panic measure because there was at that time the feeling that Shannon might be constantly overflown. It seems obvious now that Shannon, for economic reasons, will not be overflown but, at that time, it did seem as if it would. Therefore, we must look at these industries, if they are to proceed on present customs provisions both here and in the British Commonwealth, as industries which will tend to be those which import their raw materials and export them again. As far as we are concerned, the total good in employment that can be got from the activities of this company is situated in the company itself. The ancillary employment of which I spoke will not be forthcoming in other parts of the country.

There is also the undesirable fact that people might use the Shannon Free Airport Development Company site for the purpose of bringing in goods which are easily processed and easily assembled. There is the joke in the new list of factories licensed last year in Dublin, the factory producing ballpoint pens. That is an exaggeration. It is something that is more in keeping with music halls than this Assembly. If people can bring in the raw materials for goods and easily and quickly assemble them here, with a minimum of Irish labour, at the Shannon Free Airport site, they can, under the present provisions, avail of Commonwealth preference. The list given by the Minister at column 1649 of the Official Report tends to show us that that sort of thing has been happening up to date. It is undesirable.

Let me quote the entire list: transistor radios, floor maintenance machinery, knitted jersey fabrics and knitted garments, wire gauze for industrial purposes, precision threaded fasteners and miniature capacitors, pianos and record players and radiograms, tungsten carbide inserts and diamond drilling equipment. In my opinion, it might well be that transistor radios, precision threaded fasteners and miniature capacitors, record players and radiograms, tungsten carbide inserts and diamond drilling equipment could all come into the category of goods which could come in here either slightly broken down or in such a way that they could be quickly assembled in order to avail of the Commonwealth preference.

We must view the activities of this company in the light of exactly what good it does upon its own site and not in the light of a general increase in our economy from the normal industrial operations that one hopes would bring employment not only within their confines but all over the country.

The receipts of the company as quoted by the Minister are £422,000, which includes two figures—ordinary receipts of £20,000 and grants-in-aid from the Government of £402,000, so that the ordinary trading receipts are so small as to mean that the company has not really got going at all. It is, perhaps, a little hard on my part to take the line I am taking, but at the same time it appears from an ordinary examination of the figures set up before us in the extremely out of date last report and accounts dated 31st March, 1960, and the figures provided by the Minister, that, as Senator O'Donovan said, there is no hope of the repayment of capital. I would not be as hard as he has been and say there is no hope of the repayment of interest but I would say that there is very little hope of the repayment of interest. In subsection (3) of Section 7 there is provision relating to the nonpayment of these very necessary matters as far as the ordinary businessman is concerned.

What will be the position of the Shannon Free Airport Company if we enter the Common Market under the present provisions of the Rome Treaty? If we did, the position would be that we would be here indulging in a comic opera. The position is that under the Rome Treaty there would be absolute freedom of movement for goods within the British Isles and the Six countries. There would be a delay of some years. Naturally, that delay will give a certain term of life to the present set up of the Shannon Free Airport Development site. Having examined these industries, it is quite clear that they all came here because they were industries that could so easily assemble the raw materials they brought in under the provisions of the Act of 1958 free of duty and were then available for Commonwealth preference.

The position would be that those industries which are mostly based in Europe would, if they had factories in Europe, be in as good a position without manufacturing at Shannon. In the second place, those industries, which had factories based outside Europe, whether they were subsidiaries of Japanese factories or American factories, could no longer bring into the Shannon Free Development Area free of duty the raw materials which they meant to process or broken down parts which they meant to assemble on that site in order to get that free economic access to Europe. That would be barred to them.

It is a question of what, in fact, should be done. I honestly believe— I do not think the Minister will admit it—that the Government have been, as Senator O'Donovan pointed out, pausing about the whole thing for the past eight months. The Government have been in a dilemma and finally they decided at a most inopportune moment to go ahead.

The only question about this Bill we are passing today is that it is permissive legislation. My hope and wish is that the Government and the Minister will watch the situation because it is so tragically easy to throw £2,000,000, in the shape of £1,500,000, as share and investment, and £500,000 grant-in-aid, into a project which might find itself completely cancelled out when we know the terms under which the British Isles will enter the European Economic Community.

There are a few matters of detail that I should like to refer to and one is in relation to an industry the details of which I shall not mention for obvious reasons. I refer to the chinchilla breeding industry which has now ceased to function. The chinchilla breeding industry was based on the purchase by customers in this country and outside it of pairs of breeding chinchillas. The position was that there was an absolute guarantee as to the success of the breeding operation and there was provision for the issue of further animals if it were not a success. The price at which these animals were sold was, in fact— ludicrous though it be—150 times the value of the fur, so the whole thing was a chain hanky operation. So long as you could get enough people to start breeding chinchillas, you could keep it going and make huge sums, but when people stopped taking them, that was the end of the chain hanky and it became a huge and shabby failure. I hesitate to use another word because I do not like to say anything about an enterprise that has failed.

It recalls to my mind another case in which the Minister for External Affairs and I were implicated in 1955 in Louth when the same thing was going on in the breeding of tulip bulbs. When both he and I proceeded to the Minister for Justice, somebody was left in the country whose permit was withdrawn. The reason given by the Department of Justice was that it was a chain hanky operation. To the political disgrace, if you like, of the then Minister for Finance and myself, the thing blew up in our faces. Within 18 months the thing blew up and lots of people did not get paid.

The Minister in charge of such a development as the Shannon Free Airport where such extraordinary measures are taken to attract industries should be ultra-conservative, ultra-careful, to see that there are not any undesirable results from the arrival of such industries. The world is a large place and it takes all sorts to make it up. What may at first sight seem to be an extremely logical and proper effort to employ labour and make a profit may not in fact be that at all.

It is a pity that we are discussing this legislation at all because when we discuss it, our responsibility and duty is to view it in the light of the expenditure of public money and the return the country may have. The expenditure we have been discussing here is of great magnitude and not one word has been said by the Minister in charge to date about the effect of the European Economic Community, if it impinges on the operation of the company. I should like him before he leaves the Seanad to talk to us about the Shannon Free Airport Company and tell us why, as Senator O'Donovan pointed out, there seems to have been a pause since March, 1960. He should tell us also why this Bill was not delayed until such time as we had up-to-date accounts, because after all, if a businessman who runs a company were to go to his bank manager to seek overdraft accommodation, would he go in August, 1961, with March, 1960 accounts? If he did what would he get? I compare the two Houses of the Oireachtas with the bank manager because the bank manager is the custodian of the bank's money, the money owned by the depositors, and we in the Oireachtas must look on ourselves as the custodians of the people's money. Therefore, I am sorry that this legislation has come before us as it did. I hope the Minister will now address himself to the Shannon Free Airport and the Common Market and tell us as much more as he can about the present financial situation, instead of leaving us completely in the dark.

Professor Quinlan

When this Shannon Free Airport Development Company Bill came before us just two years ago, many of us expressed grave doubts as to the feasibility of what was proposed. At that time, we were derided as defeatists and all the rest. Personally, I exposed at that time the chinchilla company and the chain hanky on which it depended. It was the type of industry that should not for one moment have been considered in a practical development such as that at Shannon Airport especially when State funds were involved. This time the bill is for almost £3,000,000. I know it is highly unpopular to say a word against giving away free money, that I should not try to prevent giving free money to the poor people of Clare or wherever it is. That would be all very well if the free money came as manna from heaven but it comes from the taxpayers here, and besides we are all only too acutely aware of the many other parts of our national life which call for whatever we can give them from the taxpayers. The attitude towards many of these, particularly education, is parsimonious and in stark contrast to the policy adopted regarding industry and especially regarding the Shannon development.

The Minister says that the company was set up solely to promote the increased use of Shannon Airport for passenger and freight traffic. The only connection with these industries is freight and the target held out is that, by 1965, after we have spent this additional sum of almost £3,000,000 air freight will increase by 5,000 tons per annum. Five thousand tons seem an enormous amount but what is the cost of air freight? Between here and the European mainland, it costs for small weights 9d. or 10d. per lb. If you level it out at a shilling a lb.— which is too high—the total value of the air freight will be a mere £500,000 and that is not all profit. In fact, the accounts of the air company show that if you make a few per cent. profit on that, you are doing mighty well. In the context in which we find ourselves facing free competition, we cannot expect that it is our airline which will gather all the fruits. I think our main hope is that this legislation is permissive and our main wish for the future is that there will be far greater study and far more detailed examination of this project before any appreciable amount of this money is spent on it.

In particular, I am amazed at this grandiose idea of building almost a city at the Airport. The justification given by the Minister in the Dáil on July 25, at column 1650, was:

The Airport is somewhat isolated from existing communities and industrialists already in production and firms about to commence production urged that housing should be provided in the immediate vicinity of the factory for a proportion of the workers.

One would think that Shannon Free Airport was in wild Indian country, whereas in fact it is 12 miles from Limerick, and about the same distance or maybe 14 miles from Ennis and considerably less from Sixmilebridge. Seeing that we are now taking the plunge into the European Common Market, beginning to broaden our horizons and taking the large scale view of industry and of distances, we might regard Shannon Airport as a suburb of Limerick or Ennis, whichever you wish to call it. With the splendid road available between Limerick and Shannon, it should scarcely involve more than 20 or 25 minutes bus travel. In those countries we will compete with in the Common Market, in Britain, Germany or France, workers in industrial areas would consider that they were living with the job, if they had to travel for only 20 minutes. In fact a worker in New York would consider that he was quite well off if he was within an hour's journey of his office, so that as a start we should scrap this idea of a residential area there.

Consider everything that goes to make up a residential area. We need schools, primary and secondary, and we might even need a vocational school. We need churches and hospitals. Where do we stop? All these are available in superabundance in the adjoining city of Limerick and in Ennis. I hope the first sign of realism will be a recognition of these areas. Again, we find that the taxpayers' money is being shovelled out to subsidise these residences. The Minister stated that the average cost of a dwelling for the workers is £2,800 and that it is proposed in the coming year to spend £580,000 on housing. That works out at even more than £2,800 per house. Half of this amount is to be provided by way of free grant to the company and the rent to be charged to the workers is to be £7 a week.

That does not seem to hang together. I cannot see workers in the industries listed here being capable of paying £7 a week for these houses. I do not see why the taxpayer should be called on to pay £1,400 per house, for the pleasure of letting workers live closer to the jet aircraft flying overhead. They say you get accustomed to the noise and even that it puts babies to sleep. That may be why they want to live there. The money is to come back at 3½ per cent. per annum, spread over 30 years. With our continuous inflation, we must realise that the spreading of the money over such a long period will mean that it will really never come back because the interest paid in the intervening period will scarcely make up for the depreciation in real value of the sum in that period. Consequently, the whole project does not seem to make sense.

There is the essence there of a scheme that could make sense, provided the neighbouring regions are properly utilised. If the primary purpose of the company is to get air freight, surely in the future the main source of air freight from this country will be, we hope, fresh agricultural produce flown out to the large centres of population in Europe and, as we hope, at a later stage, even to America? If that is to be the case, then obviously the company should look outwards much more. Some of the money being spent would be far better spent in helping to subsidise some of the other companies, although I do not like to use the word "subsidise". A friend told me of a very promising meat industry in Limerick which was just beaten for the European markets because the cost per lb. of air freight from Shannon was a 1d. or 2d. more than would pay them in prevailing market conditions. I take it that he and his company would give far better value to the nation for any surplus money we have than the subsidising of residences around the Airport.

The future of this project, and the spending of this £3,000,000 which we are voting to-day, is so completely and intimately tied up with the European Economic Community that we should pause here more than at any stage of our industrial effort and see precisely how it is to fare in the future before we commit large sums of State money. As an extra reason why this money should be given the Minister stated at column 1649 of the Official Report:

All these industries are primarily export industries and are not in competition for the home market with other Irish manufacturers.

Obviously, anybody reading the Treaty of Rome will see that that can no longer hold. We cannot exclude them from the Irish market. Likewise the attractions of a customs free zone will no longer hold when the countries in the European Economic Community form the union. Consequently, this is a project on which we should go slowly and evaluate before we take the policy of throwing good money after bad, as it were.

The Airport will stand on its own feet as an important commercial and industrial enterprise in Western Europe. As an important transit and passenger and air freight terminal, it has its future, but before we begin building up new towns, let us concentrate on developing the towns and cities we have. There is room enough to build there for the next 50 years before we start planning new townships. If we are after air freight, let us reach out to the whole hinterland at Shannon and do not let us limit ourselves to the confines of the airport town itself.

Debate adjourned.