Shannon to forge its own path

AFTER eight years, Shannon Airport will no longer be under the control of the Dublin Airport Authority as it is to be combined with Shannon Development to form a new entity.
Government Ministers Leo Varadkar and Richard Bruton announced the creation of the new entity on Wednesday, which will have a commercial mandate and be publicly owned. Shannon Development will lose some of its key functions under the move.
The new entity will have no nett debt (Shannon Airport had been carrying a debt of approximately €100 million) but it will lose Aer Rianta International, which was developed in Shannon and is hugely lucrative.
The Minister’s statement said the entity, “will have a clear mandate, working closely with the IDA and Enterprise Ireland to develop the potential of the aviation sector and will explore other opportunities with those agencies for further prospective investments in the region”.
As part of the restructuring, Shannon Development, which has been a huge factor in the development of industry in the Mid-West, will see its roles in relation to indigenous enterprise and foreign direct investment go to Enterprise Ireland and the IDA.
According to the Government statement, the new entity “will continue to support the property needs of IDA/EI clients in the area”.
It also states that Shannon Development’s tourism functions will transfer to Fáilte Ireland but says the “best positioning of the successful Shannon Heritage operation within the State sector will also be considered as part of the deliberations in the months ahead”. 
Shannon Heritage is a subsidiary of Shannon Development and its attractions include Bunratty and Knappogue Castles.
The statement acknowledged a lot of work has to be done on the formation of the new body. “The ministers will establish a steering group to determine the most effective organisational structure of the new entity, develop an implementation strategy for the new body and a plan setting out how the entity will help to achieve strong regional development, while ensuring the highest standard of support for enterprises in the region. The group’s guiding principle will be the future development of the Shannon area.
“The steering group will, in particular, assess the feasibility of creating an international aviation centre of excellence centred on Shannon Airport. The steering group may establish sub groups to assist in this work.”
The DAA took over responsibility for Shannon in 2004 as a temporary measure but as the economic outlook worsened, as it did dramatically, moves to separate them were put on the long finger. There has been much criticism of the DAA’s role in Shannon, particularly in recent years as passenger numbers nose-dived. It was frequently claimed that the DAA was choking Shannon and that independence was an absolute necessity. On the other side, some pointed out  the DAA was covering Shannon’s losses (estimated at €8 million last year) and that the airport couldn’t survive without this support.
Shannon Development started life as the Shannon Free Airport Development Company back in 1959 and while it has been involved in bringing many companies to the Mid-West, the last few years have been very difficult. Its annual report for 2010 showed it had recorded a deficit of €16,578,000, although the impairment of property assets and depreciation was responsible for nearly €14 million of that.
Minister Varadkar claimed the announcement is what is best for Shannon and the Mid-West. “This is a significant step in developing the aviation sector in Ireland and securing the future of Shannon Airport. It heralds a new era for the Shannon Region.
“I firmly believe that this is the best way forward for both Shannon Airport, Shannon Development and the Mid-West region. We want to recapture the pioneering spirit of the people who gave us the airport and the Shannon Free Zone concept, so that we can provide exciting and innovative opportunities that benefit business, tourism and job creation in the region and across the country. Our task now is to develop these proposals in more detail.”
Minister Bruton also made some big claims. “This announcement represents a new start for jobs and enterprise in the Shannon region. In developing our proposals, we were always focused on delivering the best possible outcomes for enterprise development and job creation in the region. By combining, into a new entity, a strong, independent Shannon Airport Authority with the extensive property holdings, expertise and experience of Shannon Development, we can focus the State’s resources on developing a strong aviation industry in the area.
“Today’s announcement is an important start but more work remains to be done to deliver on the potential of this proposal and we will press forward immediately with the necessary work. I am convinced that, with the right commitment from Government and hard work from all stakeholders, we can create new businesses, new jobs and a new future for the Shannon region.”
Both Shannon Development and the DAA released statements in the aftermath of the Government announcement. “In accordance with its legislative mandate, DAA will work actively with the steering group that has been announced so that the Government’s decision in relation to the separation of Shannon can be implemented,” the DAA stated.
A spokesperson for Shannon Development said, “Shannon Development welcomes the certainty regarding the future of Shannon Airport and the confirmation of its separation from the Dublin Airport Authority. There is still a lot of detail to be worked out around the new structure and operation of the new entity, but today’s announcement is undoubtedly a major step towards creating a new entity which will act as a catalyst for growth for the wider region in the years to come.
“There are implications for Shannon Development’s longstanding economic development operations, but at this early stage, it is difficult to assess the implications of the proposed restructuring and the company will be taking time to reflect on the announcement. To this end, Shannon Development will work closely with the various Government departments concerned to get clarification for staff and clients around the decision as soon as possible.”

Key dates for Shannon Development

1959: Shannon Development established by the Irish Government.
1960: World’s first Industrial Free Zone established by Shannon Development next to Shannon Airport.
1961: Shannon Development commences the development of Ireland’s first planned town.
1963: First medieval castle banquets staged by Shannon Development at Bunratty, a concept later extended to Knappogue and Dunguaire Castles.
1972: Shannon Development assists in the foundation of the University of Limerick.
1978: Shannon Development undertakes first national pilot programme for the development of small and medium enterprises.
1980: Innovation Centre for indigenous high-tech firms opened by Shannon Development in Limerick, one of Europe’s first business innovation centres.
1986: Establishment of a tourism subsidiary company, Shannon Heritage Ltd, to manage its range of eight visitor attractions and four evening entertainments.
1991: Kilrush Marina, a 120-berth state-of-the-art marina created by Shannon Development, opens.
2002: Opening of €200 million Doonbeg Golf Resort, which was initiated and supported by Shannon Development.
2005: Opening of Shannon Development’s Information Age Park in Ennis.
2008: Approval received from An Bord Pleanála for a major Liquefied Natural Gas facility at Shannon Development’s Kerry Deepwater Zone.
2010: Official hand over to Enet of Shannon Development’s broadband company, Shannon Broadband Ltd, of eight Metropolitan Area Networks, developed in eight towns in response to the need to make connectivity a reality.
2012: (February) Chinese Vice President Xi Jinping visits its head office for a briefing.
2012: (May) Ministers Leo Varadkar and Richard Bruton announce the decision to bring the Airport and Shannon Development together to form a new entity. Shannon Development’s functions in relation to indigenous enterprise and foreign direct investment will transfer to Enterprise Ireland and the IDA respectively. The tourism functions of Shannon Development, including Regional Tourism Offices, are set to transfer to Fáilte Ireland.