Almost one third of the land area held by the IDA and Shannon Development in 1996 was not required because it was in the wrong place or was unlikely to be used in the foreseeable future, according to the Comptroller and Auditor General's report.

It also said the two agencies had too much land in some locations and too little in others.

Among the unwanted land areas identified was Shannon Development's site at Ballylongford, Co Kerry, acquired between 1978 to 1981 at a cost of £4.5 million. The agency has carried out an analysis of the potential uses for the site, comprising 245 hectares of undeveloped land, and concluded it could be used for projects in the bulk commodities sector but that, for the foreseeable future, that market is already well supplied with land.

More than 80 per cent of the site is now let on conacre, generating an income of £25,000 a year. The rest has been planted with trees.

Shannon Development has conceded that, if it were to dispose of the land, it would be unlikely to recover the original investment since the current cost of agricultural land is around £5,000 to £7,500 a hectare.

The report found that prices paid for land acquired by the agencies in 1995 and 1996 were reasonable compared to market rates. When selling land in the same period, prices achieved by the agencies were strong relative to market rates.

In relation to factory use, the proportion of unoccupied IDA factory space rose from 13 per cent in December 1996 to 18 per cent last June. In the same period, the proportion of factory space unoccupied fell from 23 per cent to 15 per cent for Shannon Development and from 16 per cent to 14 per cent for Udaras na Gaeltachta. The average proportion of factory space occupied for all agencies in June 1998 was 84 per cent.