We first posted on possibility of a Chinese trading hub in Athlone in Nov 2010, noting how the idea for the development managed to achieve some momentum through political networks.  Interestingly, those networks were predominately Fianna Fail-centric and reeked of the ‘Galway tent’ mode of doing business, but are now a lot of less potent.  Yesterday An Bord Pleanala gave planning permission for the first phase of the development – to include three major exhibition halls, nine minor ones and other facilities totalling 102,348sq m (1.1 million sq ft), as well as underground parking for more than 1,300 cars.  There are a number of questions that the proposed development raises.

How big is the development?

Very big.  The site is 337 acres.  An Taisce estimates that development once complete will be 14 times the combined size of Liffey Valley and Blanchardstown shopping centres.  It aims to attract 1.5 million international buyers and visitors annually when fully completed and employ up to 9,000 people.  It would be one of the largest exhibition spaces in Europe.  The main issue with regards to this size will be servicing – adequate utility and transport infrastructure to ensure smooth running; this is feasible with good planning though there are some site issues as discussed below.

Does it align with spatial planning policy?

Yes.  Athlone is a gateway town in the National Spatial Strategy.  This means it is designated as a preferred site for population growth and economic investment.

Will it happen?

The key issues here are finance, political and state backing, other local development, and external competition.  If the project is going to be backed purely by Chinese capital looking for a spatial fix in Europe then the project is solely dependent on that finance being made available to fund the development.  This seems, however, to be unlikely.  Private investment is going to want to leverage finance and resources from the local and national state through in-kind provision of infrastructure and state aid to companies via IDA and others as with other FDI-backed ventures.  The state, and its various agencies then, is going to need to decide whether it wants to provide matching monies to help seed the larger investment.  Clearly local agencies are already backing the project with some resourcing.  The developers are also likely to need other private investors to spread the risk and its not clear if such investors have already signed up or will need to be found.

Beyond the project site itself, as an international trading hub transport infrastructure is going to be key.  Athlone is some distance from the two main international airports, Dublin and Shannon, and the travel to the site by coach/rail is a hindering factor for both the visitors and goods.  The solution proposed locally, as we posted about previously, is the development of an airport near to Athlone.  This has already been granted ‘strategic infrastructure’ status by An Bord Pleanala in Sept 2010.  The same questions about finance and state backing arise with respect to this project, but the two developments do seem co-dependent.

There are other competing locations for such a Chinese trading hub, with other sites being explored in Britain and continental Europe.  It is unlikely that there will be multiple such dedicated sites, so the consortium is going to have to convince investors that Athlone is the best location.

Is it the right location?

Athlone is a gateway town and it would be a fantastic development for the area if it happens.  However, location and particularly transport connections are an issue.  In a European context, Ireland is on the periphery of the continent and is dependent on air/sea for travel.  Whilst other FDI has been able to thrive here with such dependencies, these companies are not solely reliant on massive, daily international flows of visitors and goods.  That’s one of the reasons we do not already have a large, thriving, international exhibition sector. In an Irish context, it would make sense to locate the site nearer to already existing air/sea infrastructure.  The obvious location would be Limerick/Shannon/Ennis where there is already an established international airport and sea port for container shipping.  Clearly this will not suit the Athlone backers, but might be a determinate as to whether investors think the scheme is viable.

In my opinion, the Athlone project is largely a Field of Dreams idea that has managed to gain some momentum.  Whether it materialises into the development envisaged is certainly not assured and there is a long way to go to make the dream a reality.

Rob Kitchin

 

There have been mutterings about a massive Chinese investment into the Athlone area for a few months.  On Saturday the Irish Times carried a piece providing a little more detail about plans for a enormous trading hub on the outskirts of the gateway town.  The hub would act as a site where buyers from all over Europe can sample and order Chinese goods and meet sellers and company representatives without having to travel to and around China.  A kind of permenant Chinese trade fare/expo in Europe. The preliminary design statement details that it will be: “the greatest commercial and trade centre, tour centre, cultural centre, amusement centre and international conference centre in Europe”.  According to the Times, the plans include a convention centre in the style of a Chinese palace, two five-star hotels, apartment complexes, a railway station, two bus terminals, a school, a medical centre, a fire station, a six-hole golf course and a 180m tower topped with a rotating viewing gallery.

Shanghai on Shannon?

What I think is interesting about the piece is not the proposal to create a major new investment into the Athlone area by Chinese entrepreneurs, but the way in which it is being advanced.  As the Times says itself: “the project seems to be advancing stealthily.”  By stealthily it does not mean progressing through the usual enterprise investment channels with IDA, local development boards, etc, but using political networks to build political buy-in and backing at the highest levels.  The potential investors used a local restaurant owner to make contact with local TD Mary O’Rourke, who passed them on to her son, Aengus O’Rourke (president of the local chamber of commerce), who introduced them on to his cousin, Conor Lenihan, who lined up the Taoiseach and local TD and Minister in the DEHLG, Michael Finneran.  Interestingly, a suitable site seems to have been included in September’s local development plan, designating 302 hectaures in the Creggan area as a potential site for a ‘world-class enterprise, innovation and trading hub’.  And yet, anyone who has any contact with the group or is associated with the project were uncontactable or declined to comment.  Hmmmm.

I’ve nothing against the proposal at this stage – I barely know what it consists of given that there seems to be little information beyond a couple of newspaper articles – but it would be a huge step forward if any proposal were to proceed in a transparent way through the proper channels and succeed on its relative merits, rather than progressing along the path of political cronyism. Heaven knows we need investment.  We also need good governance and government.  The two are not incompatible.

Rob Kitchin