Mr Denis O'Brien, the former Esat Telecom chairman, has emerged as one of the backers of a new £25 million (#32 million) fishing venture along with Mr Philip Lynch, the managing director of IAWS. The two businessmen have availed of a little-known tax incentive scheme and invested in two new "super long liners" based in Killybegs, Co Donegal.
The recently launched vessels - the Avro Chieftain and its sister ship the Avro Viking - are the largest boats in the Irish whitefish fleet. Mr Brendan McGrath, the Waterford-based fisherman and businessman behind the project, declined to comment on the identity of his backers yesterday. It is understood that a group of private investors, including the two businessmen, put up in the region of £8 million of the total £25 million cost of the project. The remaining finance was raised by the principals, including Mr McGrath, who owns six other vessels including the Avro Warrior, formerly the largest boat in the Irish fleet.
Under the fleet renewal scheme, introduced in the 1998 Finance Act, investors can write off their investment in certain types of new fishing vessel against other income at their top rate of tax. Half of the investment can be written off in the first year after the investment.
The scheme is similar to the better known ones designed to encourage investment in hotels and multistorey car parks. It is administered by Bord Iascaigh Mhara, the sea fisheries development agency.
The two 885 ton boats were built in Norway specifically for long-lining. It is a relatively new fishing technology in the Irish context but will allow the boats fish inside EU waters for fish that are not covered by EU quotas.
The ships are 52 metres in length and have space for up to 29 crew. The catch is processed and frozen on board, enabling the vessels to remain at sea for up to four weeks at a stretch.
The vessels fish by laying out a "longline" with over 65,000 baited hooks which will then be hauled into the ship through a "moon pool" or opening in its bottom.
The use of different sized hooks and baits in long lining enables the boats to target specific fish species that are not restricted by EU quotas. The technique is also considered to have less of an impact on fish stock because it minimises the number of quota fish caught be accident.
The Minister for the Marine, Mr Fahey, said yesterday that the tax-based scheme had succeeded in its purpose of attracting private investors into the fishing industry. "Because of the image of the industry as one that is in decline, it has not got the exposure it deserves," he said.
Mr Fahey will shortly unveil an extended fleet renewal scheme as part of the Department of the Marine's programme under the National Development Plan. The tax incentive scheme was extended in this year's Finance Bill with a number of new restrictions limiting the involvement of groups of private investors.
