A dispute has developed between the IDA and the board of Sligo airport over efforts to attract a major foreign project to the town, with the two bodies disagreeing over where a large advance factory should be located.
A member of the board of Sligo airport has accused the IDA of entering into direct competition with them. The authority, he says, has "pulled the rug from under us". The IDA is going ahead with plans to build a 25,000 sq ft advance factory in the Finisklin Industrial Estate close to the centre of Sligo, where a number of foreign companies are already located. This has angered the airport board, which has its own plans to develop an enterprise park adjacent to the airport terminal in Strandhill, five miles from the town. The aim is to generate income for the loss-making airport.
Mr Joseph McHugh, north west regional manager of the IDA, admitted it was now "a major issue", but said the IDA was basing its decision on feedback from potential investors. "Clients are saying to us that they would prefer to be close to the centre of Sligo rather than being out in Strandhill," Mr McHugh said. The Finisklin site, he believed, would be more marketable.
The aim was to secure for Sligo an investor from the international services sector. A private developer will build the advance factory at Finisklin, and the IDA will market it and guarantee up to two years' rent on the building.
"We are trying to give as much incentive as possible to the developer while also spending a minimum of taxpayers' money," Mr McHugh said. He stressed that the IDA believed the airport was very important to Sligo and wanted to see its future secured. Feelings are currently running high at the airport because plans to develop the enterprise park have run into difficulties, mainly because the government is unable to deliver promised tax incentives because of an EU ruling. The 1997 Finance Act made provision for the designation of enterprise areas immediately adjacent to seven regional airports, including Sligo. It offered incentives such as capital allowances, double rent allowances and rates remission to potential investors.
The scheme, introduced by the previous government and continued by the current administration, only came to the attention of European Commission officials earlier this year through an article in The Irish Times. It was deemed to be in breach of EU directives on the grounds that it was giving Ireland an unfair advantage over other states in attracting investment. The offer of double rent allowance and rates remission had to be withdrawn.
For the board of Sligo North West Airport Company Ltd, which comprises public and private sector representatives, this was a serious setback, as some £200,000 had already been spent developing a 40-acre site.
The county enterprise board contributed £50,000 of this money and a further £50,000 came from the EU Leader programme. The airport board is planning a three-pronged development over the next year and a half which includes an advance 10,000 sq ft information-technology building, a second building comprising five industrial units for small to medium-size indigenous companies, and the sale of sites to private developers.
Mr Jim Lawlor, a member of the airport board, said a consortium of local business people had already been put in place, ready to fund the building of the advance factory. Two weeks ago board members met the Tanaiste and Minister for Enterprise and Employment, Ms Harney, to press for additional support to compensate for the scrapped incentives. The IDA also attended the meeting. The airport board is seeking a loosening of the regulations governing the provision of capital allowances. This would allow it to go ahead with the building, then find an investor and avail of the 100 per cent tax allowance after the cut-off date of December 31st next year. As it currently stands the investor would have to be approved by the government and the EU and be occupying the advance factory by that date.
The board also wants the IDA to actively seek tenants and to agree to pay rent for up to two years.
Mr Lawlor is therefore doubly angry that the IDA will instead be marketing its own building in Finisklin. "They [the IDA] were aware of our plans, but pulled the rug from under us. They are now in direct competition with us," he said.
Mr Lawlor said he did not accept that investors would prefer the Finisklin site. "At Strandhill, they could fly in and walk straight into their building." The development of the enterprise park is seen as crucial to the future of the airport, which last year had an operational deficit of some £54,000.
It is accepted that the current service must be improved. One flight arrives from, and returns to Dublin in the early afternoon. Because it is not possible to leave Sligo early in the morning and return from the capital later in the evening, most business people opt to drive.
The IDA, Mr McHugh said, will try to get tenants for the airport factory if it is built, and will make them aware of any special tax incentives on offer.
For the moment the ball is in Ms Harney's court. She is due to respond to the airport's proposals over the coming weeks. She will also be considering additional requests from the board for £50,000 in grant aid and for the Rural Renewal Scheme, currently going before the EU for approval, to be extended to include two townlands incorporating the airport site.
This makes for another example of the ingenuity that is often brought to the pursuit of grant aid - on the one hand the airport is close enough to a large town to be attractive to investors, and yet sufficiently "rural" to qualify for a Rural Renewal Scheme.