Athenry’s fate foreshadowed

Data centre
(Image: Stockfresh)

Poor planning process experience leaves the bitter issue of regional imbalance in FDI projects

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Billy

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10 May 2018 | 0

Three years after Apple’s announcement of plans to build a 166,000 square metre data centre in Athenry, the company has finally pulled the plug. In a statement, Apple said: “Despite our best efforts, delays in the approval process have forced us to make other plans and we will not be able to move forward with the data centre.”

When you consider that a similar data centre in Denmark, which was part of the same announcement, was up and running on schedule at the end of last year, it’s hard to blame the company for its decision. It was only back in November last year that the Irish High Court appeared to bring an end to the interminable planning appeals process by refusing to allow objectors to take their case to the Court of Appeal.

“Now it looks as if Denmark will get two data centres and Ireland will get none. Not forgetting the €1.7bn that Ireland won’t be getting half of either”

Damage done
By that time, the damage had been done. As I noted back in November, the announcement of plans for a second data centre in Denmark was a cause for concern because it suggested Apple was already retreating from the prospect of trying to build one in Athenry. I felt it was a real danger because at the original announcement of the Irish and Danish data centres, there was no indication of plans for further facilities at either location.

It’s hard not to escape the conclusion that Apple had already decided it wasn‘t worth the hassle going ahead with the Athenry project. And you can see why. Even if Apple had started building the Athenry data centre back in November last year, it would have only become operational at the same time as its second data centre in Denmark. And that’s assuming there were no further delays to the Irish data centre.

Who needs the stress?

In a supreme irony, Apple’s retreat from Athenry came just two days after Google revealed it had started work on a €150 million expansion to its existing site in south county Dublin, reaffirming that Dublin was a key site in its European data centre family and would host many of its cloud-based services.

Online services
For those not in the know, when Apple announced plans to invest €1.7bn in data centres in Athenry and Viborg in February 2015, they were intended to power its online services, such as the iTunes Store, the App Store, iMessage, Maps and Siri. Now it looks as if Denmark will get two data centres and Ireland will get none. Not forgetting the €1.7bn that Ireland won’t be getting half of either.

If a recent report from Copenhagen Economics is to be believed, Athenry is not just losing out on €850m. It claims the data centre sector is a significant contributor to economies where facilities are sited. Martin Thelle, managing partner, Copenhagen Economics, argues that data centres are “the equivalent of steam engines in the Industrial Revolution”.

According to Copenhagen Economics, data centres bring direct and indirect benefits, promote economic growth locally, support the community and could also attract further investment.

For example, it suggested the Google facility had provided a €350 million direct investment in construction and operations between 2011 and 2017, contributed €400 million to Ireland’s GDP and created an average of 700 jobs a year, directly and indirectly.

And despite the good news for Google and south county Dublin, that’s the other sad part of this story. No one would argue that Ireland suffers from a lack of investment in Dublin and its environs. The imbalance between Dublin and the rest of the country in terms of investment and jobs is glaring and becoming more marked all the time. The executive summary for Ireland 2040 Our Plan, launched early last year, acknowledged that Ireland depends more on its capital city than other comparator countries and that Dublin accounted for 40% of the national population and 49% of economic output.

Regional struggle
It’s also true that for all the fine words – such as Heather Humphreys TD, Minister for Business, Enterprise and Innovation claiming Galway has “shown impressive FDI-driven employment growth since 2011” – the IDA struggles to attract businesses to locations outside Dublin. Martin Shanahan, CEO of the IDA, admitted last year that it was “extremely challenging” to attract foreign companies to rural areas. No wonder 94% of unoccupied IDA properties are outside Dublin.

Against that backdrop, losing out on a significant investment in Athenry is a shocking state of affairs. Still, given the interminable saga over the granting of planning permission for the Apple data centre, perhaps it’s no wonder.

 

 

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