Noel Dempsey (Meath, Fianna Fail)

I propose to take Questions Nos. 64 and 65 together.

Media Lab Europe, MLE, 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-directive 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. The Government has met all its contractual obligations arising from the venture.

While it is acknowledged that research will generally require State support, the uniqueness 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's being unable to raise the necessary sponsorship and corporate income required, as envisaged in its business plan. In February 2004, the Government liaison committee, comprising Departments with an interest in the MLE operation, wrote to the board of MLE requesting it to undertake a fundamental review of its business model and produce a strategic plan. The board submitted its strategic plan to the Department on 7 May 2004 and it included a request for additional Exchequer funding of €9 million over three years.

Following this review, there were extensive efforts to agree a restructuring plan for MLE that would allow it to move forward on a sustainable basis. These included detailed independent assessment of MLE's strategic plan and its progress towards achieving its high-level objectives; discussions with the relevant Departments; discussions with the research and educational agencies and third-level institutions; discussions with the business and development agencies; direct negotiations with MIT and discussions with the board and executive of MLE. However, a package acceptable to the Government failed to emerge and the decision was taken that no further Exchequer funding would be provided. The board of MLE took the decision to wind down operations.

I am considering the options for a new research entity at the MLE facilities. Issues being addressed include the need to secure the following: greater focus on sustainable research and more directive research in a new business model; better links to Irish universities and third level institutions generally; improved corporate governance in accordance with general guidelines for State bodies and effective management.

Considering the importance of the ICT sector to the Irish economy, the significance 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 my intention, therefore, to initiate a consultation process with third level institutes, industry, Government agencies, the private sector and the digital hub 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. It is envisaged there will be an open tendering process for any new entity to be established on the site and that Irish third-level institutes and universities will be eligible to apply.

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