Education, access and telecommunications are key determinants in why a modern multinational company chooses to locate in this State. Because of this, industrial and business development has been concentrated in the more developed East and South in recent years while that part of the State roughly north of a line from Galway to Dublin has fallen behind. The Coalition Government's decision to opt for regionalisation was taken in response to that situation and the Midlands, Border and West regions are now categorised as Objective 1 areas and stand to attract premium grants under EU structural funding. They will secure 40 per cent capital aid, compared to 20 per cent in transition areas and 10 per cent to 12 per cent in the developed areas of Dublin, Cork and Galway where infrastructure is already under pressure.
Industrial and business grants will not, in themselves, halt the relative decline of Objective 1 regions. The availability of a skilled and educated workforce; the quality of road, rail and air transport and the standard of the telecommunications and electricity infrastructure will combine to decide whether modern industry will locate in those areas. A considerable amount of work has been done on the education front, with third-level technical and regional colleges producing highly skilled graduates. A rapid expansion of the broadband fibre optic network is taking place, with 1,000 km of cable being laid. But the transport system in Objective I regions is of poor quality and a question mark hangs over the ability of the ESB to deliver on electricity demands.
The Government's six-year national plan, to be published next month, is expected to pay special attention to deprived regions. Increased spending on roads - and the construction of new motorways, rather than by-passes - is said to feature prominently. The plan is also likely to nominate certain towns, such as Athlone, Mullingar , Castlebar, Sligo and Letterkenny, as growth nodules. A medium-term review by the Economic and Social Research Institute recognised that high-technology activity was likely to continue to cluster about large centres of population. But, it said, policy should ensure that "the more remote geographic areas continue to be facilitated in their efforts to link into these urban growth poles through the development of physical infrastructure and the identification of sectors that can thrive in non-urban environments."
In that regard, the supply of quality, high-voltage electricity to peripheral areas is a cause for concern. Planning delays over the erection of pylons in the Sligo and Leitrim area has meant that the IDA has been unable to market Letterkenny as a location for major industry in recent years. A similar situation in Cork has meant that industrial demand may not be met next year. And delays in planning permission for new power plants in the Dublin region could slow economic development and threaten supplies from next year. The Minister for the Environment, Mr Dempsey, has promised legislation to address these bottlenecks but delays are inevitable.
The IDA has adopted an industrial policy designed to double the level of foreign-owned investment in Objective 1 regions over the next six years. For that to happen, the Government will have to devote a great deal of money to upgrading roads and the electricity and telecommunications network. This will be the last chance for the neglected border, midland and west regions to benefit significantly under EU structural funds. The Government has an obligation to provide them with maximum support under the National Development Plan