Irish shipping fleet capacity has grown by almost 70 per cent, and there has been a 17 per cent rise in employment in the Irish international shipping service sector, according to the Irish Maritime Development Office (IMDO).

The IMDO says that the tonnage tax regime introduced two years ago by the Minister for Finance, Mr McCreevy, has had a significant positive influence. The annual average rate of growth in the service sector is running at 5.6 per cent since 2001, after a period of "acute decline" during the 1990s in both Irish fleet size and shore- and sea-based employment, it says.

The European Commission has urged member-states to develop the EU shipping fleet and reduce dependence on non-EU flags, and the IMDO was established under the aegis of the Marine Institute for this purpose. The State now supports a number of specific measures for the international shipping sector, which have been advocated by the Commission to enable European shipping and seafarers to compete with international off-shore jurisdictions.

Buoyed by State support for tonnage tax, Irish ship owners, including Irish Continental Group (ICG) and Arklow Shipping, have spearheaded a "renaissance" in the Irish fleet, the IMDO says.

It estimates a 68 per cent increase in overall capacity, and forecasts further steady growth over the next 12 months.

Arklow Shipping currently has six new vessels on order at shipyards in Europe and Japan, and other smaller niche operators, such as the Mainport Group and North Atlantic Shipping, have all added new vessels and capacity to their respective fleets this year.

MSC, the world's largest container operator, initiated dedicated operations in Ireland this year, employing 20 people.

The IMDO anticipates further development in shore-based employment, generated by international shipping groups who may establish dedicated ship management operations in Ireland as a result of the tonnage tax.

This year, the Bank of Ireland also established a dedicated shipping finance team in Dublin, and a number of other banks in the International Financial Services Centre are also offering funding.

The IMDO says that the construction of the National Maritime College in Cork will position this State as one of the major international locations for training of world-class seafarers.