The Ulster Canal 13: an investment opportunity?

On 26 January 2011 the Clones Regeneration Partnership (whose Project Coordinator is funded by the Department of Community, Equality and Gaeltacht Affairs, which is pushing the Clones Canal) held an “information seminar exploring opportunities arising from the arrival of the Ulster Canal to Clones”.

The Clones Canal Campaign

Here is a brief update on aspects of the Clones Campaign.

The information seminar programme included these events:

11.30: Introduction and summary by Brian Morgan, Chairman of the Clones Regeneration Partnership

11.35: Presentation by Damien Brennan, Failte Ireland Business Development Manager, East & Midlands Region, providing “an understanding of the new Failte Ireland Lakelands and Inland Waterways Strategic Plan”

11.50: Presentation by Brian Cassells, Past President of the Inland Waterways Association of Ireland, to “identify how the development of the canal system and marina infrastructure in Cavan, Leitrim and Fermanagh has benefited local businesses and communities” and how “local Clones people can maximise the opportunities from a similar new marina facility in Clones”

12.05: Identification of the canal route options provided by Nigel Russell from Waterways Ireland and an update on progress of the Erne to Clones Canal section

12.20: Launch of the new Clones Regeneration Partnership website by Gerry Darby, Project Co ordinator, with a focus on how the website, blog and Facebook address will update local people on the progress of the canal connection

12.35: Open panel question and answer session with focus on future opportunities that are available to Clones people, resulting from the arrival of the canal and marina facility

12.55: Summary by Brian Morgan, Chairman of the Clones Regeneration Partnership

The website is up and running and there is a blog associated with it, where the thoughts of Chairman Brian can be published. Unfortunately the Comments section doesn’t seem to work, so it’s not possible to discuss any of the dicta. There are twitter and facebook things as well, so the Clones dudes are obviously down with da kidz in da hood.

Chairman Brian wants the Clones Canal to be an election issue and Past President Brian (Cassells, of the Inland Waterways Association of Ireland) wrote an article for the Northern Standard with much the same message. Happily, the Standard’s comments facility does work. However, reports on the wireless (at least on 2RN, which I gather the younger generation now call Athlone), suggest that the Clones Canal is not an election issue.

Investment opportunity for Ireland

The proponents of the Clones Canal tend not to pay too much attention to the evidence contained in the many studies of the project. That inattention is no doubt accidental rather than deliberate, but it is unfortunate, because the evidence suggests that the canal would be a very poor investment for the Irish taxpayer.

The proponents rely instead on vague generalities — and on the amazing success of the Shannon–Erne Waterway in spreading wealth, happiness and free beer to all the surroundings areas. Brian Cassells, in the Northern Standard article, said:

The phenomenal success of the Shannon/Erne waterway is largely down to the far sighted vision of the late Charles Haughey who had the dream of what has become an enormous tourist success.

I have argued that the success of the SEW is often over-stated and that much of the prosperity of the region is attributable to the businesses set up by Sean Quinn.

But there is another point that the Clones Canal’s fans overlook. According to askaboutireland.ie

The £30 million funding [for the Shannon–Erne Waterway] came mainly from the European Union Regional Development Fund, the International Fund for Ireland and the E.S.B.

I have not been able to find any exact breakdown of who contributed how much, but it does seem that some large proportion of the costs was not paid by the taxpayers of either Ireland or Northern Ireland. So the return they got, on whatever capital they did invest, was at a much higher rate than it would have been on the full cost.

This time, though, that’s not going to apply. The days of free Euroloot are over, and I haven’t heard that either the IFI or the ESB will be contributing. Now, if we want money, we’ll be borrowing it via the IMF and the European institutions.

But maybe the good people in Craggy Island are relying on winning the lottery?

By the way, shouldn’t the Dormant Accounts Board have produced a new Disbursement Plan by now?

Investment opportunity for Clones citizens

Just in case some technical difficulty delays the appearance of my comment on the Clones blog, let me give potential investors some thoughts here. (For the full story on the Ulster Canal, start here.)

1. I don’t believe the canal will ever get beyond Clones (if it even gets that far).

2. I don’t believe a short stub of a canal is enough to attract many visitors from overseas.

3. I don’t believe there is scope for a marina (that is, a private harbour where people pay fees to keep their boats, as opposed to a public harbour where visitng boats can moor for a few days) in Clones. Anyone keeping a boat there would face the same two-and-a-half-hour trip down the canal at the start of every trip and the same two-and-a-half-hour trip back up the canal at the end of every trip. I can’t see many people wanting to do that.

4. While official reports suggest a fleet of three hire boats on the canal, I don’t think that would be viable. The Irish hire-boat fleet is getting smaller as demand declines and a very small fleet of three boats would not provide a living. If such a fleet were to be set up, it would be better at the Lough Erne end of the canal, providing a choice of routes. Two Irish hire-firms, one on the Erne and one on the Shannon, cooperated to offer Shannon–Erne waterways holidays; they are no longer in the business.

5. A trip boat (they’re expensive to run, with the Department of Transport’s demands to be satisfied) would attract visitors for up to three years. By then everyone for miles around will have had a trip, demand will fall off and the boat will have to be sold (at a loss). There is not a single commercial trip boat on any Irish canal outside Dublin: several started up, including two on the Shannon–Erne Waterway (see the Sliabh-an-Iarainn Sunset and the Gertie towards the bottom of this page), but they are no longer with us. And here are two small day-boats, which were hired out from Ballinamore.

Former day-hire boats at Ballinamore

6. Again, in the first few years, many private boats will make the trip to Clones, but after that business will fall off. And many of the Erne-based boats are unsuitable for the canal anyway: they seem to have difficulty in travelling slowly.

This is just a quick overview; for a more extensive analysis, read my full account starting here. Several of my pages focus on the poor value the proposal represents for the taxpayer; others speculate about the continued unwillingness of the Department of Community, Equality and Gaeltacht Affairs to say where the money is going to come from. If you’re a potential investor, you may be most interested in this page, about the expected benefits. (And if you have any evidence that counters my view, by all means make a Comment.)

Some waterways enthusiasts will tell you how the Shannon–Erne Waterway was of great benefit to its area, but I am not aware of any serious economic research on the subject. Any economic analysis of increased prosperity along the SEW would have to subtract the amount of prosperity attributable to the operations of Sean Quinn. I think that the Lough Allen Canal is a better comparator: it’s closer in length, it too is a cul-de-sac — and just over 300 boats seem to make it all the way up each year.

So if you find people telling you that you should invest in canal-related businesses, ask them if they’ll lend you the money, without security.

Envoi

I’ll just note that I feel sorry for the good people of Clones: they have been misled by the campaign, conducted by the Department of Community, Equality and Gaeltacht Affairs, to impose a bit of northsouthery on Northern Ireland.

From the point of view of Clones folk, spending €35 million on a canal to Clones may make sense. The canal itself is likely to be pretty well useless, but the pubs of the area are likely to benefit from the beer money of the construction workers. That, though, doesn’t mean that this is a good deal for the Irish taxpayer: in fact it’s a rotten deal.

 

 

 

2 responses to “The Ulster Canal 13: an investment opportunity?

  1. Brian, ref your last paragraph; have you considered how much of the expenditure would be spent on wages and then converted into beer; and how much tax would thus flow back immediately to the exchequer? Cheers, Alun

  2. Alun: the problem is they’d all go to Asda and Wetherspoons in Enniskillen …. bjg

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