State to stop EC block on €530m investment

THE Government will make an attempt to stop the European Commission from blocking a €530 million investment by US pharmaceutical company in Cork.

The Commission is set to block the IDA from giving a grant, worth around €50 million, to Centocor, which is planning a new facility in Ringaskiddy employing more than 300 people.

Centocor, part of the Johnson & Johnson group, will not press on with the expansion of its Cork business without the aide form the IDA, according to weekend reports.

The company, which is developing medical treatments for a number of diseases, announced in July 2004 that it planned to expand its Irish facility in a major coup for Cork.

The size of the IDA grant is such that it required the approval of the EU’s competition body. It is said to be prepared to block the payment on the grounds that it may distort competition across Europe and it is looking to begin a full investigation of proposal that could last up to 18 months.

It is understood that the Government is preparing to hand over new data on the project in the hope of soothing the EU’s fears.

If the commission does block the grant, it will be the second time in less than year that it has prevented the IDA from providing a multinational company with grant aid.

In March, it blocked the IDA from providing Intel with a €170m grant package to expand its Leixlip facility.

Though Intel went ahead with the project without the financial assistance, the continuing problems with Europe over supporting foreign direct investment could dent Ireland’s image as a place to do business.