Tax incentives set to draw investment and tourism to region

The Government plans to use tax incentives and valuable land banks to attract foreign investment and tourism ventures into the Shannon region.

Leo Varadkar, the transport minister, made the claim yesterday while announcing the separation of Shannon Airport from its Dublin management.

He raised the possibility of new tax changes for businesses in the Mid-West while also saying the airport would have a debt-free future.

He told a Shannon Chamber of Commerce event in March that he was considering a model for industries at Shannon based on the International Financial Services Centre.

Shannon Airport will be merged with Shannon Development to form a new entity. Its functions on enterprise and foreign direct investment will be handed back to Enterprise Ireland and the IDA.

Mr Varadkar also hoped to attract new industries such as aircraft refitting and aircraft recycling.

The new body to oversee aviation plans in the Shannon region will benefit from a debt-free future, rents from the lands, and the ability to independently compete for passengers with Dublin and Cork.

This follows news that Shannon Airport’s control will be taken away from the Dublin Airport Authority.

Mr Varadkar said the DAA would be saddled with the estimated €100m debt from Shannon but that this would not affect the authority’s credit rating.

He said there was the possibility of late-night flights at the airport, which could not be catered for in urban airports.

The exact incentives for new business in the region and possibility of attracting new airlines remains to be decided by a steering group, which will report to the Government later in the year.

Aviation companies and clean technologies are understood to be two of the industries interested in moving business to the region.

Several business sectors welcomed the decision to remove Shannon Airport from the DAA and place it in a new body.

The Irish Hotels Federation said the move would allow Shannon to become a “significant tourism hub” for the West of Ireland.

“Enormous potential exists to promote Shannon as a vibrant holiday destination abroad,” said Michael Vaughan, the president of the federation.

Under the plan, responsibility for tourism in the region will be placed with Fáilte Ireland.

New routes could be opened up for the airport, the federation added.

A report published for the Government this year recommended that Shannon create better links with surrounding industrial groups.

The Booz analysis said Shannon had debts of about €100m and incurred extra losses of €8m last year.

It warned that unless Shannon made better use of its landbanks, developed its cargo business further and expanded its US pre-clearance facilities to include cargo, it would continue to need subsidies and passenger traffic would not improve.