Tony Killeen (Clare, Fianna Fail)

The Minister for Communications, Marine and Natural Resources, Deputy Dempsey, has asked me to convey his regret that he is unable to be in the Chamber tonight.

Media Lab Europe was formed by an agreement between the State and the Massachusetts Institute of Technology and was in operation since early 2000. It was established to conduct non-directed research in the field of digital media.

The Government invested €35.5 million in start-up capital for MLE. Property was also purchased for MLE to the value of €22.5 million. The property remains in State ownership.

While it is acknowledged that research will generally require State support, the unique aspect of the MLE model, as presented initially to Government, was that it would be self-funding by 2005. However, the financial situation deteriorated significantly in recent times due to MLE being unable to raise the necessary sponsorship and corporate income required and as envisaged in its business plan.

In February 2004, the Government Liaison Committee, made up of Departments with an interest in the MLE operation, wrote to MLE requesting that it undertake a fundamental review of its business model and produce a strategic plan. The board of MLE submitted its strategic plan to the Department on 7 May 2004 which included a request for additional Exchequer funding of €9 million. Following this, extensive efforts were made to agree a restructuring of MLE that would allow it to move forward on a more sustainable basis. This included: detailed independent assessment of MLE's strategic plan and its progress towards achieving its high-level objectives; in-depth discussions with the relevant Departments; in-depth discussions with the research and educational agencies and third level institutions; in-depth discussions with the business and development agencies; direct negotiations with MIT and discussions with MLE.

However, a package acceptable to the Government failed to emerge and the decision was taken that no further Exchequer funding would be provided. On 14 January the board of MLE took the decision to wind down operations. Liquidators are due to be appointed on 1 February. The wind-down of MLE is a matter for the directors of the board of MLE and liquidators in the first instance. However, officials from the Department will liaise with the board and management throughout the winding down process.

Regarding students involved in research at the lab, the Minister for Communications, Marine and Natural Resources, Deputy Dempsey is committed to continuing to fund a number of collaborative projects with Irish universities to conclusion over the next two years. He is currently considering the options for a new research entity at the MLE facilities. Issues to be addressed include the need to secure: greater focus on sustainable research and more directed research in a new business model; better links to Irish universities; improved corporate governance and management.

Considering the importance of digital media in the broader ICT sector, and the need for commitment to research and development in this field, there is a need to make a comprehensive assessment of what model and structures should be put in place as part of a new research entity. It is the Minister's intention, therefore, to initiate a consultation process with third-level institutes, industry, Government agencies and the digital hub in early February to establish what the research focus, structure and objectives of the new entity should be. Drawing on the results of the consultation Government will make decisions regarding the shape of a new research entity.

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