National bodies to take over Shannon Development role

Shannon Development was yesterday stripped of its remaining enterprise functions in a new reduced mandate announced by Minister for Enterprise, Trade and Employment Micheál Martin

The move is expected to result in further job losses at the company, which is currently seeking to reduce its number to 150 in a bid to address a combined operating deficit of €4.5 million over the past two years.

Siptu general secretary Joe O'Flynn said last night that the Minister's new mandate "spells the death knell for Shannon Development and will be vigorously resisted by workers at the company who are absolutely appalled by the Minister's policy direction. This move undermines Shannon Development and the development of the region in a very significant way."

Under the new arrangement, the existing enterprise support functions carried out by Shannon Development for indigenous and overseas enterprises will be assumed by the national agencies, Enterprise Ireland and the IDA.

Instead, Shannon Development will be given an enhanced, though undefined, regional economic development role, with a specific emphasis on addressing the needs of the less-developed parts of the Shannon region.

The company has successfully lobbied to retain responsibility for its industrial property in the Shannon region, including the Shannon Free Zone, from which it receives an annual gross rental income of €10 million annually.

However, this has come at a price and it is understood that Shannon Development has undertaken to provide €5 million to €6 million per annum to the Shannon Airport Authority in the first five years of its operation.

The Minister confirmed that Shannon Development had also offered to withdraw from certain tourism support activities in its strategy statement, though no decision has yet been made on those proposals.

He said that the company's proposals would see the company "focus on strategic value-added activities that would contribute to the economic development of the region".

In considering a future role for Shannon Development, the Minister said that he had taken on board last year's Enterprise Strategy Group recommendation that Shannon Development should disengage from industrial development activities, which should be carried out by Enterprise Ireland and IDA Ireland.

Mr Martin said that the decision to decentralise Enterprise Ireland to Shannon and the establishment of the new independent Shannon Airport "dictated that the company's role going forward should be reviewed".

However, to date only 49 of the 300 Government employees needed have volunteered to relocate to Shannon's new proposed Enterprise Ireland headquarters.

Mr Martin said the decision was made after widespread consultation.

But Mr O'Flynn said that Minister Martin should either resign or reverse his decision, accusing him of a serious breach of faith with Siptu workers' representatives over making his announcement before consultations were complete.

A Shannon Development statement said that the new mandate "ends a period of uncertainty over the future of the company and provides a framework for the regional economic development role of the company going forward".

However, Clare Fine Gael TD Pat Breen last night described the Minister's new mandate for Shannon Development as "recentralisation in disguise".

A lobbyist on Shannon region issues over the past 30 years, Dermot Walsh, said last night: "The new mandate reduces Shannon Development's role from an integrated development agency to a property management company involved in sub-regional activity."

Shannon Development was founded in 1959.