Killybegs seeks huge offshore boost for region

A map, right, shows the licences for offshore exploration most of which are closest to Killybegs. Above is an outline of a plan to redevelop the port which local business people believe could revitalise a region threatened periodically with unemployment.

Imagine proposing an ideal local election package and getting no response. A package that could revitalise a region threatened periodically by unemployment - such as the recent job losses at Fruit of the Loom. Imagine, then, the frustration of a group of Donegal business people which wants to ensure its county's future in the next millennium.

But then, the idea hinges on a potential marine resource, and perhaps that explains why it has not quite caught the imagination of the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney. When

Killybegs transformed itself in the late 1980s into the £100 million (€127 million) base for one of Europe's leading supertrawler fleets, there were many east of the Shannon who hardly noticed. Now it wants to copperfasten that success with a £54 million development plan which would allow it to become a shore hub for offshore exploration.

Drawn up by Killybegs Offshore Services (KOS), a local consortium, the plan proposes development of deepwater berthing facilities which would both increase fish landings and provide a base for the drilling companies and other shipping interests.

Enterprise Oil, currently working on the Corrib gas field off Achill Island, has already expressed enthusiasm in using the port as a service base. However, it has said that the existing quayside infrastructure is inadequate. Enterprise Oil has already been embroiled in controversy over its row with SIPTU, which resulted in it withdrawing its main service and operations base from Foynes to the west of Scotland.

However, there is increasing political pressure to ensure that this State gains the maximum value from what has been reported as a substantial gas find 38 miles off the Mayo coast. The field has already been described as "commercial" by leading oil and gas consultants, Wood MacKenzie.

It is estimated that for each job on a rig at sea, there is the potential for up to eight jobs ashore; however, under EU competition law and special tax deals negotiated with the exploration companies, there is no obligation on licence holders to avail of Irish workers, goods or services.

Nevertheless, Forbairt, which has been responsible since 1975 for certification of the Kinsale Head gas field, has developed a business support scheme which involves notifying Irish service companies of opportunities in the oil and gas business. The background to the Killybegs interest can be traced to increasing pressure within the mackerel/horse mackerel fleet. The activities of some of Europe's top pelagic skippers have been under intense scrutiny from the EU for the last couple of years - driven, largely, according to the Killybegs Fishermen's Organisation (KFO) by unfounded and malicious claims and "mafia-style tactics" by other EU member-states, notably the Netherlands.

Market fluctuations and a change in the pattern of movement of the migratory fish have also contributed to uncertainty. Last year, one of the fleet's largest vessels, the Atlantic Challenge was sold, just 18 months after the £10 million ship was delivered by a Norwegian yard.

Almost 60 companies in the port have provided core services to the fishing industry, and among the many success stories has been Barry Electronics, which has fitted navigational and fish-finding equipment in many a wheelhouse.

Mr Barry Sharkey, managing director of the company, is one of the main movers behind Killybegs Offshore Services. Also involved are Mr John Kennedy of Horizon Consultants, Mr Bill Jones and Mr Jim Parkinson of Sinbad Services, Mr Stephen McCahill of Glenard Fish Ltd and Mr Michael Gallagher of Bridport Gundry.

The group believes that the level of expertise in the 24-hour port makes it an ideal location for exploration companies. Proximity to a "patch" that includes the Slyne Trough, Erris Trough, Donegal Basin, Malin Basin and Rockall Trough, makes it an ideal location, the group states. As it is, during the recent oil exploration activity off the west coast serviced through Foynes, Killybegs companies were involved in providing equipment services, technical support and expertise.

The drawback was identified in a Coopers and Lybrand report submitted to the Department of the Marine in late 1996. It highlighted infrastructural deficiencies already hampering the operations of the supertrawler fleet. It said that a minimum investment of £1.3 million was required if the harbour was to function safely. However, the consultants proposed a new 150-metre pier and 120-metre wharf at a cost of £10 million, and possible outer harbour development, including an additional 400 metres of deepwater berthage, at an estimated cost of £17 million.

The Killybegs Fishermen's Organisation (KFO) called on the Minister for the Marine and Natural Resources to implement the recommendations, and threatened to withhold harbour dues of around £500,000 annually if he didn't; in response, the Minister announced £1.5 million for improvement works with a further £200,000 earmarked for surveying the possibility of new berths outside the existing harbour.

An £800,000 site investigation project is now almost completed and indicates plenty of depth for a new pier, but no decisions have been taken on what work will be carried out and how it will be funded.

A feasibility study report commissioned by Killybegs Offshore Services (KOS) says that development costing between £35 million and £40 million, coupled with a tax incentive scheme, could generate 600 long-term jobs for skilled personnel and ensure the prosperity of not only south Donegal, but also all of the north-west including Derry, Leitrim, Sligo and Mayo.

Specifically, it says that some 1,270 metres of deepwater, non-tidal, berthing facilities could handle larger cargo vessels and generate an estimated £3 million to £5 million in annual revenue; supply of goods and services to offshore survey and tender vessels could generate up to £18 million annually; fuel oil bunkering could generate up to £8 million annually; and increased fish landings on foot of improved facilities could safeguard an existing 3,000 jobs in fish processing and allied industries.

The proposal has been sent to various Government Departments, and the most positive response has been from the Minister for the Marine and Natural Resources, Dr Woods. The potential is referred to in the Donegal marine action plan, which was drawn up at a seminar after the Fruit of the Loom debacle.

However, the KOS believes support is required at Cabinet level. It says that vessel owners and fish processors have invested more than £150 million in new projects over the past 10 years without any matching investment from successive governments in the port's infrastructure.

The group believes that the project could be eligible for European regional development funding, given that other ports like Peterhead have benefited. The Killybegs Fishermen's Organisation has expressed its support provided there is no conflict with the fleet.

"Ireland's only source of natural gas at present is in the Kinsale field," the group states. "This field has supplied Ireland's gas requirements for over 20 years and it is estimated that it will run out in the next two to three years." The recent find off the Mayo coast by Enterprise Oil is "three times larger than Kinsale", it says, and it wants Killybegs to be central to the economic spin-off.