1996/99
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Optimism of EU about-turn on Knock zoning crux
11 March 1998
COMMISSIONER INVOLVED IN TALKS TO RESOLVE CONTROVERSY
By Tom Kelly
There were renewed hopes last night (Tuesday) of an EU about turn on the Knock Airport designation controversy.
A rescue package is being put in place to save a multi-million pounds master plan for an area of Mayo labelled the Black Triangle.'
Castlebar-based Dail Deputy Beverley Cooper Flynn has been involved in sensitive behind-the scenes negotiations to help clear the way for the establishment of a distribution and warehouse facility at Knock Airport by Texas-based company, Alliance International.
The scale of the proposal is understood to be enormous' with huge spin-offs for the local economy in terms of job creation and infra structural investment.
Said Ms. Cooper Flynn:'I am confident the necessary amendment will be made in the 1998 Finance Bill to incorporate freight forwarding within the definition of designated companies at Knock Airport.'
In a two-page statement, she made a blunt reference to the election promises made by the outgoing Government last year in regard to a freight bonanza for Knock.
She said:'Attempts to create a tax-free sone at Knock has led to a cul-de-sac from where there is no return.
The tax designation had been played by Fine Gael as a trump card in the run up to the election in an effort to save the party's face in Mayo.
It was heralded as a miracle stroke. But what now emerges is that the so-called tax designation was never researched, never thought out and never cleared for the appropriated EU approval.'
Ms. Cooper Flynn said the public was entitled to know the tax position in relation to the promises made for Knock, and to have the facts clearly stated for them. 'In relation to the ongoing speculation over whether or not a U.S. consortium is to set up a massive freight operation on the back of tax designation incentives, the facts are as follows. 'One, the outgoing Government, in the 1997 Finance Act, decided to grant Enterprise Area Status to areas immediately adjacent to several regional airports including Knock. The announcement was made without consultation with, or the approval of, the EU Commission, without which tax relief status cannot be given in the first place. 'Two, under the legislation, designation is given only for individual projects which meet the qualifying conditions as laid down by Brussles.
In order words, designation does not apply to an area, as such. Designation is given on a once-off basis to qualifying companies within the geographical area, each one of which is considered on its individual merits.
Three, up to today's date, according to Department of Finance records, there is no application now nor has there ever been, for a qualifying project to set up operation in the Knock Airport area. 'Four, under EU Community Law, special rules apply to the transport sector. One of these rules is that transport-based projects are specifically excluded from consideration under tax-free operation.'
The Deputy said it followed that if a Knock Airport freight operation was to be brought under the tax designation umbrella, it would be necessary to persuade the Department of Finance to change the definition of Designated Companies' to include services in the course of furtherance of a business of freight forwarding and the provision of logistical services in relation to such business.'
That is why I want to balance the facts as I have stated with my party's commitment to seek the way forward. It cannot be forgotten that Knock Airport was the creation of a Fianna Fail Government.
I have spoken with the Minister of Finance and persuaded him to include an amendment to the 1998 Finance Bill which will incorporate freight forwarding within the definition of designated companies.
Our EU Commissioner in Brussles is to carry out high level negotiations to try and ensure that this amendment receives EU approval, 'The Fianna Fail Government will stop at nothing to make Knock Airport a success story which can bring hue economic benefit to the region.'
Connaught Telegraph - News & Sport - March 1998
