The Government has dropped its bid to get substantial grant aid for computer giant Intel's €1.6 billion Fab 24 investment sanctioned by the European Commission.
The Minister for Enterprise, Trade and Employment, Micheál Martin, said the decision was taken in agreement with Intel and the IDA.
He said the decision had been taken in view of the pending Commission decision to open a formal inquiry into the notification, which could take up to 18 months to complete. He said he had indications from the Commission that the aid would not be approved at the end of that process.
This means that it will not now be possible to grant the notified aid to Intel. However, he said that work has already commenced at the Leixlip site, and said it was his understanding at this time, that the firm will continue with the investment.
Mr Martin said he was disappointed with the outcome.
'This is an excellent project which will create new jobs and will generate significant benefits for the local economy. As such, I would have thought it is precisely the type of project that EU Regional Aid provisions, which, of course, we are fully entitled to avail of, were intended to encourage,' the Minister said.
He said that Ireland was the only location in the EU considered by Intel for this investment. 'Had Ireland not succeeding in winning the project, it would have been lost to the EU,' he added.
Intel at present employ over 5,000 people in its Irish operations and since 1989 the company and the Government have invested €5 billion in the Leixlip operation.
Fine Gael Spokesperson Phil Hogan TD, said today that the Government's decision to withdraw the proposed grant to Intel for could have serious implications for Ireland's industrial policy.
He said that the provision of grant aid is a cornerstone of the IDA's strategy for attracting inward investment and the Government decision to withdraw this grant, could have serious implications for future job creation projects.
Hogan called on Minister Martin to indicate if there are any other major projects in the pipeline which may be affected by this decision and the steps he is taking to ensure that the Commission's negative view on this application will not extend to other investments.
