Shannon Development rejects proposal

Shannon Development yesterday came out fighting against a proposal by its shareholder, the Tánaiste, Ms Harney, to transfer the control of the Shannon Free Zone to the new Shannon airport authority.

Breaking the company's silence on the issue, Shannon Development chairman Mr Liam McElligott described the Government's proposal yesterday as "flawed". He warned that, if implemented, "it would seriously undermine our capability to play a meaningful role in regional development".

Since the Department of Enterprise, Trade and Employment confirmed that such a proposal is being actively considered, business leaders and unions in the Shannon region have expressed serious concern over the move.

The director of the Mid-West Regional Authority, Mr Tom Kirby, yesterday joined the chorus of opposition to the move. He said: "There has been no research, no discussion and no consultation around this proposal."

The estimated €6 million in annual rent generated from the Free Zone - which contains the largest cluster of US investment in Ireland - would be lost by Shannon Development and would help the new airport authority survive.

Stating that the proposal would have serious implications for Shannon Development and for the wider region, Mr McElligott said: "It is not a sustainable option to transfer significant activities and substantial assets out of Shannon Development, and have the organisation continue to fulfil its regional development mandate."

He added: "The regional and national interest would be better served by a solution that delivered a strong airport and a strong regional development body working in tandem for the good of the region."

Established in 1959 with a mandate to promote the Shannon region through industrial and tourist-related development, Shannon Development today employs 275 people.

Together with the decentralisation of Enterprise Ireland to Shannon, the proposal to transfer the control of the Shannon Free Zone is seen as a real threat to Shannon Development's survival. The company's workforce, through SIPTU, has already stated that such a move would result in the closure of the development agency.

As part of a company offensive to retain its status, Shannon Development has circulated a briefing note to company CEOs in the Shannon region.

In the note seen by The Irish Times, it claims that the proposed transfer of the control of the Shannon Free Zone "is a short-term solution that may help one organisation by undermining another and will eliminate our capability to play a meaningful role in regional development".