Tynwald will be asked this week to approve a £1.6m grant for the refurbishment of the ageing Meat Plant.
The refurbishment will be accompanied by proposals for a four-year government subsidy which will reduce each year as the plant moves towards becoming more sustainable.
It is intended the refurbishment will extend the life of the facility until at least the end of 2029 and as a result a new 15-year lease has been signed between the Department of Infrastructure and Isle of Man Meats, providing rental income of £1.8m.
The government-owned abattoir is now 18 years old. Its boiler plant is in extremely poor condition and needs replacement as does the refrigeration plant.
‘It is unlikely the plant can continue to function much longer without urgent work to the boiler and refrigeration plants,’ an explanatory memorandum to Tynwald members states.
‘Without the proposed improvements, it is unsure how long the plant can effectively operate. The works will provide a new life for an important Manx facility and will provide a good, efficient working environment for the next 15 years and preserve a facility which was originally provided by government at a cost of £6.5m to meet the demands of the Manx food industry.’
Tynwald will be told the opportunity will be taken as part of the refurbishment to reduce energy costs by about £50,000 a year, incorporate heat reclamation from the refrigeration plant, and improve operating costs by changing the conveyor lines. Harvesting of rainwater could save £20,000 per annum, the Department of Environment Food and Agriculture report says.
The proposed improvements will result in a net saving of around £25,000 per year and reduce the subvention required by at least £105,000 per annum.
Subvention payments have been agreed at £610,000 for 2014, £480,000 for 2015 and £380,000 for 2016, which will be funded from the Agricultural Development Fund, using funds placed there in 2007/2008 to deal with the imminent loss of the EU red meat derogation.
The report to Tnywald states it is currently unclear if the Meat Plant will require further subvention - but that transitional subsidy payments should be considered in the context of overall agricultural support effectively capped by the introduction of the Countryside Care Scheme.
Described as an ‘essential link in a self-reliant Manx food chain’, the loss of the Meat Plant would result in an extra 200-plus articulated lorries per year exporting livestock and extra lorries bringing in meat, says the DEFA report. It says the volume of live exports peaked in 2011, but reduced in 2012 and 2013 and is now 21 per cent lower.
Tesco stopped selling Manx meat for a time after it raised concerns about auditing standards and the physical state of the abattoir.