Bernard Allen (Cork North Central, Fine Gael)
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I am glad of the opportunity to raise this matter. At the outset, I declare an interest in that my three daughters attended the Cork School of Music, and one still attends as a student. I suppose, therefore, I have a personal interest in the matter. I welcome the Minister for Education and Science, Deputy Hanafin. I hope it is the start of good habits whereby Ministers answer matters raised. Too often we see Ministers with no relevance to the area in question coming in to give standard answers. I welcome what I hope is the start of a new practice.

Before the general election in 2002, and long before that, we were promised by the then Minister for Education and Science a new Cork School of Music. Again in March of this year, that promise was repeated. It is no coincidence that it was just a matter of months before the local government and European Parliament elections. Three Ministers later, we are still waiting for the school. The recent disclosures regarding the future of Jarvis, the company involved in the public private partnership, are alarming. The announcement was made after a protracted five year battle by staff, local representatives and members of the public who correctly recognised the need for a new Cork School of Music. The project was to be the first purpose-built school of music in the country, to be operated by Jarvis Projects as a public private partnership for 25 years, and was similar to other projects undertaken between Jarvis and the Department involving five schools.

Last week the Comptroller and Auditor General expressed reservations regarding difficulties with the public private partnership. I do not have the time to highlight the core issues of concern expressed by the Comptroller. Last July I understand the Cabinet was briefed about serious financial difficulties threatening the future of Jarvis. According to newspapers, Jarvis was in negotiations with its banks to reorganise its €287 million debt — Jarvis shares have fallen by 90% in the past 12 months.

In the UK, I am told, Jarvis has £4 billion sterling worth of public private partnership contracts and is responsible for managing approximately 100 schools. Newspaper reports have warned that if Jarvis were in serious financial difficulties, it could leave the schools involved in considerable difficulty. Again, Jarvis has issued four profit warnings in recent months.

The Comptroller and Auditor General has expressed concern at the manner in which the project has been managed to date. The decision by the Department to choose Jarvis as a preferred bidder before the affordability of the project had been established left the State open to claims for compensation if the project did not go ahead. Jarvis is due to build nine schools in Scotland but a number have fallen through and have cost Jarvis the contract worth almost €250 million.

After all the uncertainty and the promises, I am simply looking for a clear-cut statement from the Minister on the situation. I hope she will clear up the uncertainty about the construction of the Cork School of Music. I was in the school with the Fine Gael Party leader, Deputy Kenny, and I was appalled by the substandard conditions. I hope the Minister will make a clear-cut statement about the situation. Cork will celebrate its role as European city of culture next year and at this stage our hopes of having the school built to mark the year of culture have evaporated.

I am looking for a statement from the Minister on the current situation and a guarantee that if the arrangements with Jarvis fall through, this school will be built using Exchequer funding. The country is awash with money. The Government owes it to the people of Cork to fulfil promises made before general and Europe Parliament elections. If this school were located in Dublin, it would have been built long ago. I ask the Minister, on her first night as Minister answering an Adjournment debate, to give Cork the school for which it has waited so long. The students and staff deserve it.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Ba mhaith liom mo bhuíochas a ghabháil leis an Teachta as ucht an ábhar tábhachtach seo a ardú sa Teach agus guím gach rath ar a thriúir iníon atá ag déanamh ceoil ins an choláiste. This is an important issue. As Deputy Allen is aware, the Government decided last July that the Department of Education and Science should finalise contractual negotiations with Jarvis Projects Limited with a view to commencing construction of the new Cork School of Music public private partnership project. Around the time of the decision, it became apparent that there was some uncertainty about the company's financial position and the Government stipulated that before the contact could be signed, the Department must first be completely satisfied of Jarvis's legal and financial viability in being able to undertake and complete the contract. The Government required two specific measures to be undertaken by my Department before the contract could be entered into with Jarvis. The first measure is in regard to obtaining legal and financial advice on the viability of Jarvis and the second issue was to refer the draft contract terms in regard to debt repayment in the proposed contract to the National Development Finance Agency for consideration.

The first issue is being examined by my Department's specialist advisers to the project. In addition, the Department's officials and its advisers are in regular contact with Jarvis and are monitoring closely the present financial issues surrounding the company. In regard to the debt repayment terms, my Department supplied all the relevant information available to date to the National Development Finance Agency and has been in close contact with the senior staff of the agency regarding the matter. Late last week the agency gave its initial advice and that is now being examined in the Department.

Clearly, my Department cannot proceed to financial close unless there is a clear indication from Jarvis Projects that it has the necessary financial backing from its funders and that it is in a position to sign the contract. In this regard, I understand that the issues and discussions between Jarvis and its bank surrounding funding of the project are almost complete and that a decision is imminent. All indications are that the decision is likely to be positive.

As Deputy Allen has suggested, I make it absolutely clear that the Government is committed to the Cork School of Music project. Once the appropriate financial backing for the project is secured by Jarvis and approved by my Department, our advisers will be instructed to expedite completion of the documents in conjunction with the National Development Finance Agency to allow the contract to be signed as soon as possible. I thank the Deputy for raising this matter and I look forward to opening the new building.