The European Commission looks set to block a €50 million grant package for a €530 million pharmaceutical investment in Cork.
Centocor, a subsidiary of the US pharmaceutical giant Johnson and Johnson, said yesterday it would not expand its Cork plant until it got a final decision on payment of an IDA grant pledged by the Government in July 2004.
The grant, part of an IDA package used to attract the firm to Cork, is the subject of a lengthy review by the European Commission. It is investigating concerns that the aid may distort competition within the EU, and is considering whether to begin an in-depth investigation into the flagship project.
The Government has sought an extension of the deadline for the decision to avoid a formal investigation that could take another 18 months to complete.
In addition to threatening the Centocor project, the investigation would create further uncertainty about the IDA's ability to offer grants to attract investment.
Earlier this year the commission blocked a proposed €170 million IDA grant to the technology firm Intel, creating a rift between the commission and the Government.
Christopher Molineaux, Centocor's vice-president of corporate communications, said yesterday the firm was concerned about the delay in payment of the grant.
"This has taken a lot longer than we had hoped. It is now time for us to consider future expansion of the Cork site. The idea of an indefinite delay to the grant aid may jeopardise that expansion. We need to have the outstanding issues resolved."
He said Centocor was always looking at other sites in which to invest, but insisted the firm was committed at this stage to building its current plant in Cork, which will employ up to 330 people over five years.
Mr Molineaux was responding to confirmation that the Government had recently requested an "indefinite extension" of the deadline of the commission's initial review.
It is understood that the Government asked for the deadline extension at a meeting last month with the commission to enable it to provide new information that may assuage EU concerns about the Centocor project.
It is amassing market-share data on Centocor's monoclonal antibody drugs, which are used to treat arthritis and skin diseases, in an attempt to address the concerns expressed by the commission.
The commission is reviewing whether the proposed multimillion euro State aid package will damage competition in the market for the drugs that Centocor makes.
Mr Molineaux refused to give details of the scale of the future investment planned by Centocor.