ENTERPRISE Minister Richard Bruton has pledged that legislation will be published in the coming weeks to lift the restriction on the IDA attracting foreign investment to the Shannon Free Zone.
The industrial estate - where the vast majority of the 7,700-strong workforce are in multinationals - has been the fiefdom of Shannon Development for a quarter century. But a package of reforms that includes the dismantling of Shannon Development is now well underway.
Under Government plans announced in May, the indigenous and foriegn direct investment job creation functions of Shannon Development are to be respectively transferred to Enterprise Ireland and the IDA. The agency’s land assets are to be merged over time into a new commercial state enterprise responsible for Shannon Airport - independent of the DAA.
The Industrial Development Act 1986 currently prevents the IDA and Enterprise Ireland from seeking to nurture new business in the Shannon Free Zone but Minister Bruton has announced that that is about to change.
“As previously stated, this Government is committed to securing a bright future for the Shannon region. This week we have decided to make swift legislative change to ensure that Enterprise Ireland and IDA can, as soon as possible, start delivering enterprise support services in the Shannon Free Zone. This represents a step along the road to creating a new future for Shannon. Much important work remains to be done and that work is continuing. I am convinced that with the right reforms properly implemented, that a bright future can be delivered, and Government will continue to work hard to ensure that happens,” the minister stated.
Draft legislation to give effect to the Government’s new direction for the Free Zone will be published by December and this is expected to be passed in the Oireachtas early in 2013.
Shannon Development’s annual report for 2011 detailed that there was a net loss of 174 jobs at the Shannon Free Zone over the 12 months. But chief executive Dr Vincent Cunnane stressed that the job losses were accounted for mainly through downsizing rather than company closures. He described the efforts made by Shannon Development to keep companies in the Mid-West long term.
“A lot of efforts over the last number of years have gone into making sure those companies survive, helping them on their R&D, helping them on their training, getting those grants into them and helping them make the hard decisions they’ve to make. When a company is still here, there are opportunities for it to get back on its feet and expand and with expansion will come jobs. But if you lose a company, the opportunity is lost forever essentially,” he said.
On the plus side, 406 new jobs were created at the Shannon Free Zone in 2011. This included a significant announcement by Zagg - which makes accessories for phones and tablet computers - which has the potential to create up to 300 jobs locally.
And Shannon Development is also encouraged by the performance of Irish companies based at the Free Zone. Employment in indigenous firms increased by over 10% from 949 to 1,045 over the course of 2011.