Adjournment Matters. - Cardinal Healthcare, Longford.

Wednesday, 16 October 2002

Seanad Eireann Debate
Vol. 170 No. 5

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Mr. Bannon: Information on James Bannon  Zoom on James Bannon  I thank the Minister of State for coming here this evening to deal with the need for the Tánaiste and Minister for Enterprise, Trade and Employment to make an urgent statement concerning the decision by Cardinal Health to defer its investment in Longford for at least two years. A positive statement is needed to lift commercial life in Longford and give a much needed economic boost to the entire region.

Following much speculation that a large multinational firm intended to make a substantial investment in Longford, an announcement was made finally by the Tánaiste, Deputy Harney, in December 2000. She declared that the pharma[384]ceutical giant, Cardinal Healthcare, would invest £100 million in Longford in a state-of-the-art European headquarters to house both its manufacturing and technology divisions. It was claimed the project would transform the industrial make-up of County Longford and the surrounding counties.

Construction work on Cardinal Health's headquarters was due to begin in early 2002 and it was hoped to be operational by 2004, creating almost 1,400 jobs by 2006. As part of the agreement with the Tánaiste and Cardinal Health executives, Longford County Council was asked to provide land for the company at a cost of £3.5 million with a view to selling the land at a fixed price. Cardinal Health would immediately carry out an environmental impact study on the effects of this production on the site. Since purchasing the land, Longford County Council has been incurring interest charges of €190,000 per annum. Cardinal Health was to provide a mixture of employment, including IT, packaging services and industrial and manufacturing jobs. It would require a wide skill base and attract migrants back to the county.

Subsequent to the Tánaiste's announcement there has been an increase in construction and planning demands in the county. A significant number of new housing units received planning permission or are currently seeking planning permission. There are currently 2,000 residential units with planning permission or under construction and some awaiting planning permission. The announcement led also to new retail developments such as supermarkets and other retail units throughout the town and county. Planning permission has been approved for a new hotel with a bed capacity of 70while another with a bed capacity of 140 is going through the planning stage. These were regarded as part of the necessary infrastructure required by Cardinal Health.

As everyone knows, several factories in Longford have closed in recent years and employment in the existing factories has fallen. The labour force in the county in 1996 was 12,000, therefore the job losses as a result of the closures and lay-offs in the factories amounted to 6% of the labour force. This is a very large percentage against which the Cardinal Health project would be equivalent to more than 11% of the labour force. Therefore, the employment situation in the county was set to be transformed.

The people of Counties Longford and Roscommon are devastated at the news that the Cardinal Health project is to be deferred for at least two years, despite the Tánaiste and officials from Cardinal Health reaffirming their commitment on several occasions during the past two years that the project was on schedule for a planning application in 2002. We were reassured several times during the election campaign by Deputy Sexton, both in campaign literature and in press statements, that the project was delivered. On the night of Deputy Sexton's election the Tánaiste was satisfied the Cardinal Health project had [385]delivered a Longford seat to the Progressive Democrats.

In the light of these commitments and promises, the news of the deferral comes as a shattering blow to Longford and the surrounding area where it had been anticipated that the project would soon create more than 1,300 jobs. It was a major blow to the local economy where considerable investment has taken place in anticipation of the project. If these promises were made in any other country law suits would be taken against the State for blatant misguidance or the resignation of the Minister who misled the public would be demanded.

At the very least, the Government owes the people of Longford an apology for buying the election with the Cardinal Health project which will not now be delivered within the promised timescale. The Government has cynically exploited for its own political gain the urgent need for investment in Longford. It has undermined the level of confidence generated by the announcement. All our hopes have now been shattered. The people of Longford deserve an official response. There is an expectation that the Tánaiste and Minister for Enterprise, Trade and Employment should issue this response.

The whole episode raises very serious questions about the commitment of the Government and State agencies in regard to supporting employment opportunities in Longford. What about the promise of the natural gas board? What about the promised delivery of the broadband communications service, the new ESB grid and the long-awaited 24-hour emergency service? There would need to be an emergency during normal hours because there is no 24-hour emergency service in Longford.

It is crucial that the Tánaiste should set up a special task force for the county which will deliver work in tandem with the people and Government agencies to attract significant industrial investment to Longford in the short-term. Longford has major advantages for industry. It is a superb location with good access routes. Land for industrial development is readily available and there is a well educated work force with skilled graduates willing to return to Longford. However, these people must currently leave the county to find decent employment.

There is a compelling case for Longford to be included in any new decentralisation programme drawn up by the Government. The location of a major Government agency and Department in Longford would go a long way to lift the commercial life in the area and give a much needed economic boost to the region.

Minister of State at the Department of Agriculture and Food (Mr. Treacy): Information on Noel Treacy  Zoom on Noel Treacy  Déanaim comhgairdeas ó chroí leis na Seanadóirí a ath-tofadh agus leis na Seanadóirí nua. Déanaim comhgairdeas speisialta leatsa, a Chathaoirligh, as ucht a bheith tofa mar Chathaoirleach ar an tSe[386]anad. Tá meas mór agam ar an dTeach seo agus ar an gcaighdeán ard díospóireachta polaitíochta atá le fáil anseo le blianta fada. Tá mé féin agus mo chomhghleacaithe sa Rialtas ag súil go mbeidh seans againn comhoibriú libh ar feadh cúig bliain, ar a laghad.

I thank the Senator for raising this matter on the Adjournment. I am responding on behalf of my colleague, the Tánaiste and Minister for Enterprise, Trade and Employment, Deputy Harney, who, due to Government commitments and other issues, is unavoidably absent this evening.

Cardinal Health Incorporated announced on 7 October 2002 that it has decided to postpone its proposed investment in a new pharmaceuticals facility in Longford for up to two years due to significant changes in its business priorities following a series of corporate acquisitions in recent times. We are obviously disappointed that this important investment for the Longford area is to be deferred in the short-term. However, we are confident, following discussions with IDA Ireland, that Cardinal Health continues to be strongly committed to the expansion of its business to Ireland. We have been assured that IDA Ireland's commitment to the development of Longford remains solid and focused.

IDA Ireland has already initiated a process in the past six months or so to enhance its business park in Longford town. The agency is also committed to the establishment of a new business and technology park for the town comprising 30 to 40 acres. I understand that both of these developments are well under way and that, with the support of the local authority, a number of potential sites have been identified for the new business park. This park will be a flagship element of local infrastructure designed to attract new investment to Longford.

The Government is committed to balanced regional development and IDA Ireland has put in place a new strategy to attract greenfield investment to the BMW region, including Longford. As part of this strategy IDA Ireland has re-organised its internal structures to drive growth from within the regions. This restructuring has included an allocation of additional staff to its regional offices and an allocation of regional responsibilities to key executives in its headquarters' project divisions.

IDA Ireland has transferred additional posts to Athlone comprising staff from regions, property and health care divisions, bringing the staff complement up to 35. They are located in new offices in the Garrycastle business and technology park. The underlying purpose of the strategy is to work in close partnership with those involved with other State and local resources to create a drive from within the region to pull foreign investment, rather than the current approach of pushing for it from its Dublin headquarters. Other initiatives include a greater focus on marketing of the regions for specific sectors and improvement of marketing material for the regions.

[387]Recent positive developments in Longford include the decision by Donnelly Electronics to establish a manufacturing operation at the former IEC Electronics facility. The company now produces a wide range of electronic displays, sensors and warning systems for the automotive sector, mainly for the export market. Currently, there are 65 people employed and this is expected to increase to approximately 160 people.

Enterprise Ireland is also working closely with its client companies and regional partners in developing and sustaining businesses in the area, enhancing the business environment, encouraging new start-up companies with strong growth potential and assisting Dublin based companies to locate their business expansions in the BMW region. A good example of this is Century Homes, the innovative manufacturer of timber-frame housing which commenced in Longford two years ago and which has already expanded its advance factory. The company continues to grow, as evidenced by current recruitment advertisements in the local press.

Under the Enterprise Ireland Community Enterprise Scheme, 2002, two approvals were made in County Longford. In this regard, Longford County Enterprise Board received €330,500 in management and capital grants and Lough Ree Area Development Society Ltd. received €13,000 in feasibility grants. Also, two new peat-powered ESB stations costing €450 million are planned for both Lanesboro and Shannonbridge. I understand that site works have already reached an advanced stage and the completion dates for both plants are October 2004 and January 2005 respectively. This investment will see ESB capacity in the two plants increase from 210 MW to 250 MW.

Senator Bannon raised a number of key issues. He spoke of a Government agency being decentralised to Longford. As part of the Government led by former Deputy Albert Reynolds, I was pleased to be able to ensure that we decentralised a major office to Longford town. The Senator will agree that, when Mr. Reynolds was Taoiseach, Longford was certainly the centre of political opportunity in this country, from which the town has benefited.

I was pleased to serve in the Department of Enterprise, Trade and Employment, which worked very closely with all the development agencies, including IDA Ireland, and I assure the Senator that the Tánaiste, the Department and IDA Ireland are very confident that Cardinal Healthcare will locate in Longford over the next two years. I am confident that the measures I outlined, which are currently being adopted by the industrial development agencies, as well as the continuing commitment of the Government to regional development, will bring further positive results to Longford.

[388]Senator Bannon spoke about a gas connection. If there is an industrial requirement for gas to go to Longford, and it warrants a certain quantity of gas, there will be no problem regarding BGE responding to ensure it is a commercially viable proposal. If it is commercially viable and if the requirement exists, the gas connection will be made and that will enhance opportunity for the residential sector to tap into the gas as well. However, it is not possible to take it to Longford and leave it there waiting for somebody to tap into. We must have a requirement for gas from the industrial sector to justify the huge capital investment involved. If proposals come forward, the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, and Bord Gáis Éireann will be only too delighted to respond to them.

I trust this will give Senator Bannon some comfort and he should be assured that the BMW region, including Longford, will get more than its due share of whatever opportunities are presented over the lifetime of the Government.

Mr. Bannon: Information on James Bannon  Zoom on James Bannon  There is nothing new in the statement of the Minister of State. The Tánaiste should grant special status to Longford to introduce a scheme to assist start-up industries in the county because, since the Cardinal Healthcare project was announced two years ago, we have had no inward investment in our town. That is the problem—

An Cathaoirleach: Information on Rory Kiely  Zoom on Rory Kiely  The Senator is allowed just one brief question.

Mr. Bannon: Information on James Bannon  Zoom on James Bannon  Will the Tánaiste grant special status to Longford to introduce a scheme to assist start-up industries because it has been ignored since the Cardinal Healthcare announcement? No major industries have been attracted into the county to look at—

An Cathaoirleach: Information on Rory Kiely  Zoom on Rory Kiely  The Senator cannot make a statement.

Mr. Treacy: Information on Noel Treacy  Zoom on Noel Treacy  The previous Government gave special status to Longford on two occasions. It was given status in terms of urban renewal, which accorded special status for development in the greater Longford area. We have given special status to the BMW region, resulting in the highest priority rating possible to create the biggest incentive to locate a company in that area. That is one of the reasons Cardinal Healthcare decided to go there.

I do not know what other status we can give, but if an imaginative proposal comes forward either from Longford County Council, Longford County Enterprise Board or some statutory body in the functional area of Longford, both the Tánaiste and the Minister for Finance will give it due consideration. Special status exists and the [389]incentives are at their maximum to attract investment to the area.

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