Detailed proposal submitted by council; John puts it to CEO
The chief executive of the IDA has told Waterford TD John Deasy that the agency will consider a major re-fit of the former recycling plant in Dungarvan as a base for new industry.
A comprehensive proposal to renovate the vacant Shandon facility was submitted to the agency by senior Waterford and City Council officials last week following contacts between Mr Deasy and the IDA.
He then raised the proposal with IDA chief executive Martin Shanahan when he appeared before the Dáil Public Accounts Committee on Thursday.
The local Fine Gael deputy has held a series of meetings with senior IDA executives over the past number of weeks: namely, chairman Frank Ryan, new South East Regional Manager Anne-Marie Tierney-Le Roux, and the CEO. He also spoke with Enterprise Minister Richard Bruton last week about the proposal.
These discussions included the possibility of an advance factory for Dungarvan. “While there are other factors involved, the availability of suitable buildings, both office and manufacturing units, is critical to try and draw investors away from the likes of Dublin and Cork,” Mr Deasy said.
"Council officials believe that, properly refitted, it would compare favourably with the new building at the IDA Technology Park in Waterford."
Martin Shanahan told him the IDA is “happy to engage” with the local authority. “We will examine that and come back to the council’s chief executive in relation to the proposal he has put forward to see what can be done... and within what timeframe.”
It was announced last week that a five-year, €150 million property investment programme is to be rolled out by the IDA to attract foreign direct investment into the regions — including another new advance technology building for Waterford in 2017.
While positive, “it’s too far away,” Mr Deasy said. And though hopeful that a client company will be secured soon for the just-completed 25,274sq-ft advance technology building in Butlerstown, the Dungarvan TD said a similar ‘turn-key solution’ is needed in the west of the county.
Martin Shanahan said advance facilities are “hugely important for us”, and agreed that the funding made available to the IDA for property investment could “potentially” be used to upgrade suitable facilities such as the one in Dungarvan.
Deputy Deasy believes revamping the 27,000sq-ft plant, “which started life as an advance factory before being adapted to accommodate the Materials Recovery Facility, would make sense. Returning it to its original purpose does seem a logical move at this stage. It needs an internal overhaul and an external upgrade, and the detail of that has been outlined to the IDA.”
He added: “Council officials believe that, properly refitted, it would compare favourably with the new building at the IDA Technology Park in Waterford. Another plus is that it wouldn’t require planning and could become a ready-made facility very quickly. Also, the unit sits on a fully-serviced site of almost 4 acres, with plenty of scope for expansion.”
Cllr Damien Geoghegan, Mayor of the Dungarvan-Lismore District, says “retrofitting the plant for a new industry would make it a very marketable proposition, and hopefully accelerate the delivery of additional employment to the town and the wider west Waterford area. The proposal that’s being looked at would be an ideal fit with the enterprise agencies’ new regional strategy.”
Deputy John Deasy has met IDA chairman Frank Ryan to discuss measures that will assist Waterford and the South East on foot of the agency’s appointment of a new Regional Manager based in the city after a 20-year absence.
“It was a good meeting but it was made clear to me that in some cases companies are ignoring the Regional Aid incentives and are heading to the two largest urban areas in the country, regardless of what financial inducements are available.
“A package of measures will be announced for the regions by the IDA in the next month and I discussed with Mr Ryan specific measures that I felt are necessary for Waterford,” the Fine Gael TD Deasy said.
Having described the removal of the IDA’s South East regional director from Waterford in the mid-nineties as “a disaster”, Deputy Deasy’s efforts to convince government to restore a senior IDA executive to the city culminated in a frank exchange with Enterprise Minister Richard Bruton at the Oireachtas jobs committee last June.
At that meeting Mr Deasy linked the clear decline in Waterford’s fortunes with the establishment of an amalgamated South region, complete with a regional director headquartered in Cork.
That decision, he noted, was made on Richard Bruton’s watch, despite warnings as to what would, and did, happen; resulting in over 80% of all Foreign Direct Investment “going to three particular locations — Cork, Dublin and Galway.”
He told Mr Bruton “there needs to be a restructuring with regard to the seniority of IDA staff when it comes to the southeast, and the situation that was in existence in 1996 when you were minister needs to be reinstated.”
In response, the Minister agreed for the first time at that meeting to review the agency’s executive presence in Waterford — having earlier indicated that an additional 35 personnel approved for the IDA would be deployed overseas.
Deputy Deasy also wrote to both Mr Bruton and the IDA to reiterate that redressing the regional investment imbalance in the southeast’s favour needed a priority, management-led approach given the unique economic difficulties here.
“While we’ve seen some positive announcements and an improvement in unemployment levels over the past 18 months, the fact remains that around 2,500 IDA-supported jobs have been lost in Waterford since 2008, with only about a quarter of that number created over the same period,” he said.
“While enticing FDI isn’t easy, changing the trend that’s developed at our expense required, in my view, a senior influential focus and status on the ground, and with this appointment I think we’ve now got that.”
Ms Tierney-Le Roux — most recently IDA European Director and a former regional executive for Waterford — returned to the city in her new role on Monday, with the task of winning investments for this area.
Mr Deasy said: “I am meeting the new manager this week and it’s critical we tie up the people working in in economic development locally with her office and start improving that relationship.”
Minister for Jobs, Enterprise and Innovation, Richard Bruton, has said he will review the IDA’s presence in Waterford after his Fine Gael colleague John Deasy called for a change of strategy and the re-dedication of senior staff to the southeast.
Both attended last Tuesday’s (June 10) Oireachtas jobs committee meeting, at which the Minister took general questions surrounding the proposed redundancies and cost-cutting at Bausch + Lomb.
Raising the issue of inward investment, Deputy Deasy said the situation “changed negatively” for Waterford in 1996 — at a time when Mr Bruton was enterprise minister. That year an internal IDA restructuring saw the agency’s southeast and southwest divisions amalgamated. A new southern regional director was based in Cork — the existing SW headquarters.
“At the time plenty of people, including people within Government, sounded a warning that that was going to have a detrimental effect on the city and county of Waterford, and the southeast,” Mr Deasy said.
He reminded Mr Bruton, “You were the minister at the time those warnings were given. Since then, as it’s turned out, those warnings have proven to be absolutely correct”, with over 80% of all Foreign Direct Investment “going to three particular locations — Cork, Dublin and Galway.”
Referring to the Minister’s approval in February for the appointment of 35 additional IDA staff, Mr Deasy added: “I am of the opinion at this point that there needs to be a restructuring with regard to the seniority of IDA staff when it comes to the southeast, and the situation that was in existence in 1996 when you were minister needs to be reinstated.”
Mr Bruton said: “I take the point there is a lot of criticism but on the issue of where do you put new staff ... we’re seeking to build new opportunities in new geographies and all of those 35 people are being put into overseas locations to try to win new investment.”
“But,” he told Mr Deasy, “obviously the IDA is undergoing a review of its overall strategy and its regional strategy in conjunction with my own Department, and we will look at issues that are raised here in terms of staffing at that level.”
The Minister insisted: “I’m confident the IDA, under my direction, is giving this the necessary attention it deserves ... I believe in time that those site visits and that enhanced effort will deliver results.
“This year again, through the IDA, I funded an advanced facility in Waterford; precisely because I feel we need something different in the regions to respond to the challenges that the IDA have had in getting the necessary regional spread.”
He added, “we’ll be taking a tough look at our regions, how we’re doing things, and how we can do things better. I will be reviewing, in the context of the [IDA] regional strategy, the appropriate realignment of resources to the challenges we meet.”
Waterford TD John Deasy has called on the Government to urgently look at deploying a larger IDA staff to the city, as talks continue concerning the future of the local Bausch + Lomb plant.
In a submission to Jobs Minister Richard Bruton, the Fine Gael Deputy pointed to the extra 35 new IDA Ireland personnel announced by his Department in February.
Since the restructuring of the IDA in the mid-1990s — which amalgamated the agency’s south-east and south-west divisions — the Southern Regional Director has been based in Cork. In the intervening years over 80% of all Foreign Direct Investment has gone to Dublin, Cork, and Galway.
An estimated 2,441 IDA Ireland company jobs have been lost in Waterford since 2008, with only around 581 created. There are just four IDA staff responsible for the south-east, all based in the city.
“While the IDA might argue that a director is not needed in every region, and that its preference is for a global spread of staff, the South East is facing unique economic difficulties,” Mr Deasy said.
The IDA is constructing a new advance technology building in Waterford but he feels “an even greater dedication of resources is required” — starting with some of the 35 new approved posts.
Mr Deasy pointed out that last year’s report by DKM economic consultants recommended a number of ‘high-level interventions’ to Government to support the Waterford council amalgamation — including an IDA Regional Director based here to promote FDI.
“I believe it’s imperative that the IDA’s personnel contingent in Waterford is increased and that the level of seniority attached to the Waterford IDA office is reflected at executive management level.”
Also, with new IDA chairman, Frank Ryan, only recently in place and a new CEO, Martin Shanahan, installed this week, Deputy Deasy feels “it’s time that the IDA’s entire strategy when it comes to Waterford city and county was revisited given its lack of success in terms of attracting FDI, ongoing job losses and high unemployment.”
Last week a “disgusted” Mr Deasy requested the Irish Ambassador to the United States to intervene after New York Senator Chuck Schumer revealed he’d directly phoned the CEO of Bausch + Lomb’s parent company Valeant seeking to have Waterford production relocated to Rochester.
Describing it as an “underhand” attempt to “impoverish” Waterford workers, Mr Deasy — a former congressional aide in Washington — contacted Ambassador Anne Anderson, who communicated the Irish Embassy’s concerns to the Democrat Senator’s office.
Irish Embassy contacts U.S. Senator after John registers his disgust at his underhand attempt to take B+L jobs
The Irish Embassy in Washington D.C. contacted a United States senator to raise concerns over his call for more than 1,100 at-risk jobs at Bausch + Lomb in Waterford to be moved to New York.
The Irish Times and Irish Examiner both reported the high-level intervention, made at the request of Waterford Government TD John Deasy.
The Irish Ambassador to the US, Anne Anderson, confirmed in a letter to the Fine Gael Deputy that, at his behest, the Embassy in Washington contacted the New York office of Democrat senator Charles ‘Chuck’ Schumer.
This followed Mr Schumer’s call for jobs at Bausch + Lomb in Waterford – currently the subject of negotiations between management and unions – to be relocated to Rochester, New York, where the company also has an operation.
Ambassador Anderson told Mr Deasy: “The Embassy has been in touch with Senator Schumer’s office to draw attention to the sensitivity of this issue, the ongoing negotiations between management, the employees and their unions, and the concern that these jobs be safeguarded in Ireland.”
Mr Schumer had revealed he had “called the CEO of [parent company] Valeant and urged him to move that work and those jobs to Rochester”.
In a press release to this effect, he also said that, after his phone call with Valeant chief executive J. Michael Pearson, he was “confident that Rochester will have a great shot at adding work and jobs from the potential closure of the Ireland plant”.
However, though Mr Pearson subsequently assured Waterford employees in a memo that Bausch + Lomb was committed to maintaining its presence in the city – provided the company got the €20million in cutbacks it wanted – Deputy Deasy was furious at Senator Schumer’s “sneaky” actions.
In a letter to the Ambassador, Mr Deasy said he found Mr Schumer’s media release “unbelievably distasteful”. Having separately condemned the Senator’s “pathetic” attempt to “impoverish” Irish workers, the Waterford Deputy suggested to the Embassy, “I think the Irish Government should express its disgust as well.”
Mr Deasy, who worked as a congressional aide on Capitol Hill before returning to pursue a career in Irish politics, said that, as a former employee of the Senate, “I never thought that a U.S. senator would act in such an underhand manner.”
He asked the Ambassador, “I would appreciate if you would communicate my disgust at the way he and his office are behaving as it pertains to the Bausch + Lomb workforce in Waterford City.”
He added: “I think the Irish Embassy should communicate to Senator Schumer that it would be better if he allowed those negotiations to conclude before issuing any press statements.”
Explaining why he took such offence, Mr Deasy said: “We all fight for our constituencies, but ringing a company CEO to impoverish Irish workers is pathetic. Senator Schumer likes to portray himself as a friend of Ireland. I hope Irish-Americans in New York get to hear about his sneakiness. He has peddled his Schumer visas for Irish people for years. Irish-American voters have just got an insight into how he works.”
Focus new stimulus package and IDA staff on most-deprived regions
Fine Gael TD John Deasy has told the Dáil that the new Ireland Strategic Investment Fund must be aimed at areas worst affected by, not just the recession, but “our evolving two-tier recovery.”
During statements on the Government’s priorities for the year ahead, the Waterford deputy warned that “undue political influence” mustn’t prevent an objective share-out of the €6.8billion stimulus package. “It cannot end up being a political pie, gobbled up by insecure politicians with one eye on a general election,” he said.
Mr Deasy declared that after three years in office, the Government’s strategy to spread jobs to the regions clearly “has not worked ... I have concluded that as long as the headline figures for the country as a whole are positive, the virtual non-existence of regional investment is considered irrelevant. There is almost a sense of resignation about the fact that so much investment – 82% – goes to Cork, Dublin and Galway and so little goes elsewhere.”
Of the 2014 Action Plan for Jobs, other than plans for a few advance manufacturing facilities (one in Waterford), he’d “heard it all before.”
In Waterford, where the unemployment rate remains at around 20%, “a downward trend is still being experienced,” he said. Any improvement in the Live Register figures needed to be seen in the context of the huge number of jobs hemorrhaged locally over the last six years, including multiple business and industry closures in the past 12 months.
Mr Deasy put forward “two specific suggestions” to address the growing geographical disparity in terms of job creation. The first being the new strategic fund, which, matched with private sector investment, could provide a national economic injection of €12–15bn.
“This is the only show in town. It is the only stimulus package the country will see for the next five or six years,” he said, insisting it “must be predominantly and proportionately invested in those parts of the country which have seen the least investment over the last ten to 15 years.”
Given the key aim of “isolating the fund from political interference”, the FG deputy insisted that policy and legislation “must guard against base political tendencies influencing how the stimulus package is divided up.”
Though focusing it on deprived regions is “reasonable logic”, he predicted it “will not make sense to some politicians who see an election on the horizon and a potential lump of money for their own constituencies.”
On the other hand, targeting areas where the economic indicators of decline are at their highest should make sense “to any government which is interested in balanced regional development.”
Mr Deasy sees the new Regional Aid guidelines for 2014–20, which are due to be published by the European Commission in July, as the ideal framework for distributing the ISIF investment.
If moves to direct aid towards those areas that need it most are not considered in forthcoming legislation governing the fund, “I will attempt to amend the Bill at the very least to highlight the scenario I have just painted,” he said.
Given there are “people at the most senior level in the IDA who believe the policy designed to attract foreign direct investment evenly across the State has failed miserably and must be re-engineered immediately”, Deputy Deasy’s second solution focused on the recent authorisation of 35 additional IDA staff.
With Waterford a notable, negative exception in terms of net IDA job creation among Irish cities last year, he looked at where the agency’s existing staff are based — including five in Waterford, 36 in Athlone, and 148 in Dublin.
Deploying the new staff coming on stream into those parts worst affected by the recession and which have seen the least amount of FDI, would be “a good start” in terms of prioritising recovery in the country as a whole, he said.
“You consistently gave assurances that you would try to bring the ARV to the lowest level in Waterford – the Dungarvan level – and you did that."
Additional rates reliefs have been included in the new Local Government Bill after Minister Phil Hogan accepted proposals by Waterford Fine Gael TD John Deasy and Labour Deputy for Dublin Mid West, Robert Dowds.
The Minister was thanked for taking the thrust of two joint-amendments they put forward and incorporating them into the new legislation as it passed through the Dáil on Wednesday. Deputy Deasy said Mr Hogan had been ‘as good as his word’ when it came to reducing commercial rate levels in Waterford.
The first change the TDs sought and secured was in respect of a planned rates refund mechanism for vacant premises. In taking their arguments on board, the Minister is to give discretion to elected councillors right across the country to allow owner/occupiers who can’t secure tenants a full rates rebate – not a maximum of 50% as the Bill originally proposed (and which is currently applied in Dublin, Cork and Limerick).
Deputy Deasy said: “The Minister accepted there are areas where there is little or no demand for commercial premises. Councillors will now have the authority to tailor vacancy refunds – from 100% down to zero – to best suit the economic circumstances in particular counties or specific municipal districts.
“While I understand how some local authority officials would have seen a need to have a deterrent to people holding onto sites, to have a blanket 50% rebate would have been madness in this economic climate.
“There is a two-tier economy in this country. In some areas, like my own homeplace of Dungarvan, it’s not a matter of choice. In many parts of Ireland owners simply can’t get tenants for commercial premises. And enabling this to be implemented on a district level will allow for the differences between rural and urban areas.”
Work of Waterford Chambers acknowledged in Dáil
The Deputies – who are colleagues on the Dáil Public Accounts Committee – also proposed an amendment dealing with the issue of outstanding rates charges being passed on to new occupiers; something the Minister was anxious about as well.
“He accepted that maintaining the status quo could give rise to an unfair burden on businesses seeking to expand, relocate or start up. In some cases the arrears on a particular premises were holding up the sale,” Mr Deasy said.
“In dealing with and introducing a reasonable variation of our amendment, he is giving city and county managers the authority to write off arrears owed by previous occupiers – meaning property that may otherwise have remained vacant can now be re-let.”
Deputy Deasy said the Minister had lived up to his word in their interactions on commercial rates over the past year. “You consistently gave assurances that you would try to bring the ARV to the lowest level in Waterford – the Dungarvan level – and you did that.
“I’d like to thank you for following through on what you said you would do... I was keeping a close eye on this situation for the past year. But you were consistent with regard to the issue, and it’s turned out to be, in the case of the city, a really excellent result when you consider ratepayers there received a reduction of 20%.”
While county rates were reduced by 5%, some people felt it unfair that the Dungarvan ARV level should remain as is. But “for the most part the feedback I’ve been getting is that they expected it to go up,” Mr Deasy said.
He told Minister Hogan: “I think it’s worth acknowledging the direction that you gave. And everyone’s taking credit for it in Waterford – councillors, officials – but you were consistent”.
This included putting more money into Waterford’s Local Government Fund allocation with a direction that it be used to reduce the rates level locally.
From the floor, Deputy Deasy also said he wanted to acknowledge “the work of Waterford City Chamber of Commerce – Nora Widger and Nick Donnelly – and Dungarvan & West Waterford Chamber of Commerce – Jenny Beresford and Collette Bannon – on this issue.”
Fine Gael TD John Deasy and Labour Deputy Robert Dowds – both members of the Dáil Public Accounts Committee – are working on proposed changes to new legislation which would allow commercial rates increases to be spread out over a number of years, and alter the planned rates refund mechanism for vacant premises.
The Local Government Bill 2013 was published by Environment Minister Phil Hogan last week, setting down a legislative framework for the new local authority structures being introduced next summer.
One aspect of the Bill relates to how councils deal with commercial rates. However, Deputies Deasy and Dowds – a TD for Dublin Mid-West – are concerned that it doesn‟t take the current Valuation Office review of rental values, nor local economic circumstances, into account.
Consequently, they are planning to submit joint amendments to the Bill when it goes to report stage in the Dáil in the coming weeks.
Mr Deasy said: “For the past number of months I've been highlighting the potentially crippling impact the current revaluation process underway in Waterford – and parts of Dublin – would have. It particularly affects the retail sector, where most businesses locally are facing a significant upward adjustment of their rates bill; a hike of up to 300% in some cases.”
While the Bill provides for phasing in the effects of rates “harmonisation” – i.e. where different local authority areas with different Annual Rateable Valuations will be merged – the proposed legislation doesn't factor in the damaging impact a sudden revaluation hike would have.
Deputy Dowds said: “Even though the Valuation Amendment Bill has been introduced in the Oireachtas and provides for a new system of self-assessment of commercial rates, there needs to be a provision which allows for regular reviews on a statutory basis so that businesses can budget accordingly.”
Mr Deasy added: “What we are looking at is a way of giving councils powers whereby the elected members can decide to allow businesses whose rates bill is being increased as a result of revaluation to spread the 'hit' over a number of years.
“The Bill as published would abolish the refund regime entitling owners of vacant commercial properties to a 100% refund of their commercial rates liability in certain parts of the country. In many cases businesses would not be able to afford that refund regime changing in any respect.
“Once the Minister has given his response in this week‟s second stage debate, we will consider how best amendments might be framed to ease the burden on businesses as much as possible.”
When the Public Accounts Committee recently called Frank Ryan, the chief executive of Enterprise Ireland, I took the opportunity to ask him about its position on university-led indigenous job creation.
I began by noting that Mr Brendan Murphy, the president of Cork Institute of Technology, said last summer that creating a vibrant technological university sector is the most important significant recommendation in the national strategy for higher education to 2030.
Mr Murphy highlighted how higher education can make a major contribution to the development of indigenous enterprise by pointing to CIT's association with Enterprise Ireland in operating the Genesis programme, which has resulted in 200 start-up companies, over €100 million in investment and the creation of almost 2,500 jobs.
The HEA and the Department of Education and Skills are adjudicating on applications for the creation of more technological universities, including the joint application for just such a designation by Waterford and Carlow ITs. "If that is where Mr. Ryan thinks the emphasis should be, what role does Enterprise Ireland, with the Department and the HEA, play to deliver on that?" I wondered, saying "the creation of these technological universities is important when it results in such figures."
Mr Ryan said in reply: "We have a long history of working directly with universities and the institutes of technology which we see as an engine of growth in their regions. It is not Enterprise Ireland's responsibility to direct Government policy. We are required to implement it."
I RAISED the increasing concentration of IDA-supported jobs in Dublin, Cork and Galway on the floor of the Dáil last Thursday afternoon.
I tabled the topic on foot of last week’s comments by IDA Ireland chief executive Barry O’Leary who maintained that, even with EU Regional Aid incentives, it’s becoming increasingly difficult to convince companies to invest outside of these three cities (see separate post).
I described the annual announcement as to where IDA-backed foreign direct investment went the previous year as entirely predictable; noting NUI Maynooth research that shows as many as 82% of overseas jobs created in the past six years have gone to the aforementioned urban centres.
Minister of State for Small Business, John Perry — standing in for Enterprise minister Richard Bruton, who was attending a special Cabinet meeting on jobs — said he appreciated my concerns.
However, his response largely focused on defending Ireland’s need for regional aid, rather than correcting what’s wrong with the skewed policies currently in place.
I stressed that the existing EU regional aid guidelines clearly aren’t working, and haven’t been for some time — wondering why the Government hadn’t sought to have them amended already.
The Department of Enterprise is preparing a submission to the European Commission on drawing up new aid guidelines for the post-2013 period. I said the obvious question for Minister Bruton is how is he going to incentivise companies to locate in the regions that need investment most?
Having come to the conclusion that very little thought is being given to the issue, I feel the IDA is quite content to announce yearly job creation totals for Ireland Incorporated and leave it at that — without tackling the massive disparity in where these jobs are based.
As an example of how lopsided this regional imbalance has become, I pointed out that the southeast — unlike the Border/Midlands/West (BMW) region — doesn’t qualify for the highest levels of investment aid. This is despite having almost 19% unemployment, according to the latest CSO figures.
I said to John Perry that the Minister and the Taoiseach need to start thinking about where IDA-sponsored jobs are being created and where they’re not being created — and called on them to redraw the regional aid map to target unemployment blackspots like Waterford.
*READ WHAT JOHN HAD TO SAY IN FULL, AND THE MINISTER'S REPLY, HERE