Unrecovered grants - Taxpayers’ money must be paid back

THE IDA has hard questions to answer in light of today’s revelation that six multinational companies which pulled out of Ireland in the past year have yet to repay their grants.

Nobody gets a cast-iron guarantee that a company which sets up in Ireland is here to stay. But the public has a right to expect that grants would be recovered immediately from hugely profitable multinationals.

The observation has special resonance when a company boasts annual profits of over $2 billion. A case in point concerns hi-tech group Celestica, which arrived in Ireland to a fanfare of trumpets in 1998, receiving a whopping IDA grant of over €3.6 million in the process.

Five years later, having shed 1,000 jobs after the tech bubble burst, the outfit has packed its bags and left. But for reasons yet to be made clear, the company is still holding onto the money it received from the IDA in the form of grant aid.

Overall, last year, 33 IDA-supported companies ceased their Irish operations, having received more than €31m in grants from the Government.

This money was doled out over a number of years after the companies opened their Irish-based operations.

However, more than €20m was kept by firms under deals signed with the IDA.

In the majority of cases, the IDA had drawn up contracts under which the companies were not required to repay any of the State payments they received when they moved to Ireland.

The issue of grant liability does not arise once the company meets its commitments. In the current scenario, however, all but six of the firms which ceased operations in 2003 have repaid all of their grant liabilities.

Much to the IDA’s embarrassment, these revelations follow the criticism for wasting taxpayers’ money on almost 90 empty factories, which the agency continues to rent at an annual cost of more than €2m.

What people find perplexing is that after being dormant for decades, the agency is still renting 34 completely empty facilities and owns another 53 factories which are idle.

To its credit, the IDA has generated tens of thousands of jobs and played a major role in the creation of the Celtic Tiger economy.

But its officials must never forget that grants come from taxpayers’ hard-earned money.

There is an onus on the authority to immediately put measures in place to ensure prompt repayment of taxpayers’ money when a foreign company prematurely decides to pull up stumps and relocate its operations elsewhere in the world.