Committee Reports::Report - Review of Shannon Free Airport Development Company Limited::29 April, 1986::Appendix


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Committee Reports > List of Committees > Dáil > 1986 > Committee on Public Expenditure > Report - Review of Shannon Free Airport Development Company Limited

APPENDIX B

Extracts from the Comprehensive Public Expenditure Programme 1985 on the SFADCo programme showing:

1.The Programme Statement

2.Departmental administrative costs of monitoring

3.The breakdown of the Vote as to Current and Capital and detail by activity

Showing in each case the outcome for 1984 and Estimates for 1985.

Vote Other Ref.
	A. Departmental Administrative Costs
40(A1, A3, B1, B2, C1, C2)	(a) Department of Industry, Trade, Commerce and Tourism The Department of Industry, Trade, Commerce and Tourism is responsible for monitoring the activities of the Industrial Development Authority, Shannon Free Airport Development Company Ltd., the National Enterprise Agency, the Irish Film Board and the Irish Productivity Centre, Estimated Departmental administrative costs are as follows:
			1984 outturn £000	1985 estimate £000
	I.D.A.	Pay	99	104
	I.D.A.	Non pay	18	19
	S.F.A.D.Co.	Pay	36	38
	S.F.A.D.Co.	Non-Pay	3	3
	N.E.A.	Pay	12	13
	N.E.A.	Non-Pay	2	2
	Film Board	Pay	2	3
	Film Board	Non-pay	1	1
	I.P.C.	Pay	18	19
	I.P.C.	Non-pay	1	2

C. Shannon Free Airport Development Company Ltd.	1984 outturn	1985 estimate	Change 1985 over 1984
Current
(a) Pay and non-pay administration costs	3,630	3,967	+9
(b) Current promotional activities	5,315	5,302	-
Capital
(a) Grants to industry	2,416	6,000	+148
(b) Building operations	8,192	6,500	-21
Sub-total C	19,553	21,769	+ 11

	C. Shannon Free Airport Development Company Ltd. Current			1984 outturn £000	1985 estimate £000
40(F2) and own resources	(a) Administration		Pay Non-pay	3,131 499	3,411 556
	In 1985, the company will employ a staff of 195, 76 of whom will be involved in property development/management activities, and a further 119 in industrial promotion. Non-pay administrative expenditure covers travelling expenses, office supplies, postal services and related expenditure.
40(F2) and own resources	(b) Current promotional activities
40(F2) and own resources	This relates to development of manufacturing and service industry on the Shannon Industrial Estate and development of small indigenous industry in the Mid West Region.
	Promotion Expenditure			1,355	1,257
	Industrial Estate Expenditure (including maintenance)			1,170	1,167
	Housing Estate Expenditure (including maintenance)			667	570
	Interest on Repayable Advances			1,059	1,093
	House Loans Interest			345	338
	Other Expenditure			719	877
	Capital
40(F3) and own resources	(a) Grants to industry			2,416	6,000
40(F3) and own resources	The company expects to pay grants totalling £6.0m. to industry on the Shannon Industrial Estate in 1985 with the following approximate breakdown by grant category: —
	Manufacturing Industry Grants		80%
	R. & D. Grants		10%
	Service Industry Grants		10%
	Under the terms of the IDA/SFADCo. inter-agency agreement, grants paid by the company in respect of small indigenous industry are recovered in full from the IDA.
Non-voted Exchequer and own resources	(b) Building operations			8,192	6,500
Non-voted Exchequer and own resources	As of 31st December, 1984 the company held approximately 800,000 sq. ft. of small industry The company have under construction 22,000 sq. ft. of small industry units and the estimated expenditure involved is approximately £3.0m in 1985. Work is continuing on the completion of a 40,000 sq. ft. building for food processing. On the Shannon Industrial Estate, the company will not be starting the construction of any advance factories for medium/large industry in 1985. However, work is ongoing on the up-grading of old and vacant buildings for existing and newspace completed, the bulk of which is occupied. companies.
		1984	1985
		£000	£000
	Shannon Free Zone	2,706	2,836
	Medium/Large Industry	582	244
	Small Industry	4,726	3,158
	Shannon Town	178	262

Shannon Free Airport Development Company Limited

Shannon Development was incorporated as a private limited company under the Companies Acts in 1959. State finance is provided under the Shannon Free Airport Development Company Act, 1959 and subsequent amendment acts. The company is responsible for industrial development at the Shannon Free Zone and for the development of small indigenous industries in the Mid-West Region (comprising Clare, Limerick, Tipperary North Riding) and in West and South West Offaly. SFADCo have also been assigned by the Government to conduct a pilot project on the development of the food processing sector. SFADCo will develop and test initiatives and programmes which, if successful, will be applied on a national basis.

At Shannon, the company’s industrial development remit applies to the area within the legally defined Shannon Free Zone, encompassing the Industrial Estate and the Airport. The company aids enterprises at Shannon under its own legislation. Outside Shannon, assistance is given to small indigenous enterprises in the Mid-West and West and South West Offaly under an inter-agency agreement with the IDA. The company has local field offices in each county and in Limerick City.

Policy priorities for 1985 are as follows:

Job Creation — Building on the solid base of new projects and expansions in existing firms approved over the last 3 years, the company will be striving to maximise the number of new jobs to be created; and strengthening the performances of, and maintaining employment in, many other firms through field officer aftercare, management services and training support.

Technology — putting small industry at the forefront of new technology through the Innovation Centre, the Micro-electronics Application Centre and their linkages with field offices, business services advisors and IDA regional offices throughout the country.

Exports — in co-operation with CTT, Shannon Development plans to develop a strong export orientation amongst Mid-West small firms, increasing the number of first time exporters and strengthening regional supports for exporters. In 1985 the company will assist 40 new companies to export.

Activities may be grouped into three categories viz: the Small Indigenous Industry programme (including food industry development), the Shannon Industry programme and Traffic Development (Tourism). Tourism promotion activity is contained in programme 18.

Small Indigenous Industry Programme

The company operates the following services in the development of small indigenous enterprises:

—Grants (fixed asset grants, research and development grants, enterprise development grants, feasibility study grants and training grants);

—Business Advisory Services (provision of advice and practical help on a diagnostic basis to the owner-managers of small firms over a range of key business activities);

—Innc on Centre (provision of comprehensive product development services with a strong emphasis on high technology projects);

—Training (management training for starting a new business or managing at existing enterprise) and entrepreneurship training (a concept new to this country)

—Buildings (sites, enterprise centres, new or converted buildings for small industry)

The job approval target for 1985 is 1,400. It is hoped that 600 actual jobs will be created in 1985. In 1984, 583 jobs were created.

In 1984 £3.7m worth of import substitution business was generated. A target of £4n has been set for 1985.

In the period 1985 to 1987, Shannon Development plans to increase the number of small businesses from 500 to 800.

Shannon Industry Programme

The company’s Shannon Industry Programme operates as follows:

—Negotiable capital grants of up to 50% of fixed assets;

—Training grants of up to 100%;

—Research and development grants of up to 50%;

—Buildings (factories and offices) and sites for industry;

—Promotion of the 10% corporation tax rate for new service industry establishing at Shannon whose activities contribute to the development of the Airport.

The quality of the investment attracted to Shannon, particularly in recent years, has been high. The emphasis has been on attracting companies which in particular:

—manufacture and market advanced industrial and consumer products for worldwide markets;

—are totally integrated at Shannon (encompassing local control of production research and development, marketing, training, etc.);

—are Irish managed;

—contribute to the overall development of Shannon including air passenger and freight development.

In addition to manufacturing, a major programme of attracting international service projects continues to be operated and has been intensified in the past two years.

Priority sectors which are actively sought for location at Shannon include engineering advanced electronics, electro-mechanical, healthcare, aerospace, avionics and other airport-related sectors, and a wide range of international services.

Grant cost per manufacturing job created and sustained is as follows:

Shannon Industry	1980-1984 — £13,800
Small Indigenous Industry	1982-1984 — £5,400

Grants include capital and non-capital grants at current prices. Jobs created and lost are not included but all grant payments are included. About 10% of the jobs are in the skilled manual category.