Shannon Development signalled its continued strong opposition to a proposal by the Tánaiste to transfer control of the Shannon Free Zone to a new Shannon airport authority yesterday.
It also dismissed a recent recommendation that it should merge with Enterprise Ireland when the State body is decentralised to Shannon in 2008.
The State company described the airport proposal as a "disaster" for Shannon Development and the region and said it had proposed alternatives to the Government, which included a full merger of Shannon Development with a new airport authority.
At the publication of its 2003 annual report, Mr Kevin Thompstone, Shannon Development's chief executive, said the company was in favour of setting up a new airport authority independent of Aer Rianta. But, he said, the proposal to transfer the assets of the Shannon Free Zone to the authority would undermine the ability of Shannon Development to perform a development role for the region or cover its own operating costs.
Earlier this year the Tánaiste proposed transferring control of the zone, which generates a gross rental income of more than €10 million every year for Shannon Development, to the new airport authority to help support it.The proposal followed advice from consultants that the planned break-up of Aer Rianta would raise considerable financial challenges for Shannon Airport.
Shannon Development's financial results show that it reported a deficit on its activities in 2003 before tax of €4.52 million. The agency spent more than €15 million on staff costs, €20.3 million on property and €4 million promoting tourism, according to its annual report. The results also show a pension deficit of €26.9 million at the end of December 2003.
Mr Thompstone said that without the €10 million annual rental income provided by the Shannon Free Zone there would need to be Exchequer subvention to keep Shannon Development afloat.He said Shannon Development was engaged in discussions with a Government working group on the airport proposal and a decision was expected before the end of the year. He also disclosed that Shannon Development had made a number of alternative proposals to fund the airport authority.
He said these ranged from merging the proposed new airport authority and Shannon Development to enabling Shannon Development to provide seed funding for the airport authority.
Shannon Development's chairman, Mr Liam McElligott, said the proposal to transfer the assets from Shannon Development to a new airport authority was a disaster. "It is too valuable a resource not to call it a disaster if it is taken away from this region," he said. "It is disrupting a decision-making capability that has been evolving successfully over the past four-and-a-half decades."
Mr Thompstone also dismissed a recommendation contained within the Enterprise Strategy Group report that Shannon Development should be merged with Enterprise Ireland. "We welcome the overall thrust of the report... but we believe that reference took an overly narrow view of the role of Shannon Development, seeing it only as an enterprise development agency."
