Work is to continue on the development of the Intel plant despite the European Commission's ruling that Government assistance represented illegal State aid.
This was revealed in the Dáil by Minister for Enterprise Micheál Martin, who said he was "extremely disappointed with the outcome of this aid notification".
He added that despite submissions to the commission, and a number of meetings, the Commissioner for Competition indicated that it would not be possible to grant the notified aid to Intel. "However, the work on the project has already commenced at the Leixlip site, and it is my understanding at this time, will continue to plan. For the future, IDA will work with Intel and all our other client companies to ensure that investment in the world's most advanced technologies takes place in Europe and Ireland."
Mr Martin said that under the terms of the commission's framework on regional aid for large investment projects, which came into effect on January 1st, 2004, approval of the grant aid to Intel was required. It had become apparent that the commission was adopting a different interpretation of the framework's provisions to that on which the IDA and his department were relying in proposing to grant the aid.
The Minister expressed concern about "a degree of pre-spinning" before the decision was announced. "It is very important, even when going into a full formal process, that confidentiality is assured to companies in terms of commercially sensitive material they may be asked to submit. The events of the past couple of days would not lend confidence to the process and this is a point I intend to take up with the commission in light of my experiences this week."
Labour spokesman Brendan Howlin said important questions needed to be addressed by the Government.
"This is an important issue for the people of Leixlip and surrounding areas, who were looking forward to the 400 additional jobs at the expanded Intel.
"It is equally important for other parts of the country where people are concerned that their hopes of attracting foreign-based manufacturing industry might be dashed by any wider decision of the EU Commission to prohibit grant aid on the basis that it might constitute an illegal State aid."
He said the Minister should clarify why the department and the IDA came to hold a view on the aid package which was so at variance with the commission that the whole package had to be withdrawn.
"It is important that we know whether this is likely to be a one-off occurrence, or whether there are ongoing implications for the IDA strategy of developing the high-technology sector."
Green Party spokesman Dan Boyle said the decision had enormous implications. "It demands an immediate response for those of us who need to know the future direction of Government industrial policy."
