Dáil debates

Wednesday, 26 January 2005

8:00 pm

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
Link to this: Individually | In context

I propose to share time with my colleague Deputy Upton.

It is very important that the Dáil is given a very full report on the closing of Media Lab Europe which occurred on 14 January last — it will be liquidated on 1 February — and on the failure of the negotiations between the MIT and the Government regarding additional funding and sponsorship for the project. It must be said that 14 January was a sad day that saw the closure of the anchor tenant in the digital village in the Liberties. Only last autumn Media Lab Europe employed more than 70 people, which was reduced to 45 people more recently. It is very important that we commiserate tonight with those workers who have tragically lost their important jobs. I hope any new similar project in the digital hub will ensure they are employed.

Earlier today I asked the Taoiseach whether he had any regrets at the manner in which Media Lab Europe had folded, the manner in which it was established and the lack of support and attention he, as the progenitor, along with the Minister for Foreign Affairs, Deputy Dermot Ahern, and the Minister of State, Deputy Noel Treacy, had given it. Media Lab Europe was perhaps one of the Taoiseach's two pet projects, Abbotstown being the other one. It was very much the minor project and the Taoiseach certainly took his eye off the ball.

It is right that the Comptroller and Auditor General and the Committee of Public Accounts should examine the €35 million that has been spent by the State on Media Lab Europe. Even though Ms Carla Lillington, our most distinguished high-tech writer, says that the net amount may be only €8 million, we should examine it closely. The IT downturn certainly damaged the planned structure of private corporate sponsorship. Corporate sponsorship which had been expected to run at €10 million a year was only running at one fifth of that and our media lab had to compete with the media lab in Boston. Furthermore, the aims of Media Lab Europe were never very clear. If we compare the Liberties with districts in Seoul and Kuala Lumpur, our ambition for the Liberties was far smaller compared to that of other countries.

It was not clear whether Media Lab Europe had a commercial mandate and or just an academic one, and it could not issue academic qualifications. It is also regrettable that the two local universities, DIT and Trinity College, were not involved in the project, and it is regrettable that there was such a large turnover of leadership. In only four years we had Nicholas Negroponte, Rudi Burger, Ken Haase and Simon Jones and each left with a huge golden handshake. This was not helpful in ensuring this was a successful, sustainable project.

I accept that it was a unique venture and played a very important role regarding the road we are travelling to becoming a technological civilisation. I note that luminaries such as Larry Page and Sergei Bryn of Google visited it along with many others in recent times and that it raised €11 million in work with other universities abroad.

Two Ministers are responsible. The Minister for the Environment, Heritage and Local Government, Deputy Dempsey and the Minister for Foreign Affairs, Deputy Dermot Ahern, did not give the issue the attention it deserves. I welcome Deputy Dempsey's belated announcement and I hope we will have a full debate in the House on the issues to which I have briefly alluded.

Photo of Mary UptonMary Upton (Dublin South Central, Labour)
Link to this: Individually | In context

I thank Deputy Broughan for giving me the opportunity to speak for a few minutes on this. I spoke on the digital hub Bill when it was going through the House and was very enthusiastic about it at that time. I represent the constituency where it is located and clearly I had a particular interest that everything about it would be successful and productive.

It is with great regret that almost five years later — because this was opened in July 2000, the taxpayer, unfortunately being €35 million worse off — we see it coming to an end or at least this part of it.

In late 2004 the Minister flagged a number of concerns about it. Among them was the need for a greater focus on research interests in it, that there was need for better links to Irish universities, that stricter financial control and a limit on financial exposure was required and that improved corporate governance and management was important. All of these issues did not arise overnight. I wonder why they were not identified sooner, why there was not some action taken on them and why we had to wait until there was so much money wasted effectively.

I see this as a mini "Bertie Bowl". It was one of his great flagship projects and one that has flopped. The major concern has to be for those people whose jobs have been lost because of the failure of this project and for the area, that there will be something to replace that tenant in the digital hub area and to take over the responsibilities and roles albeit in a different form and with some new project. It is very important that the area is sustained, that the jobs are sustained and that account will be taken of the people who have suffered from this. As my colleague has said a full report on this is important and should be brought before this House.

Photo of Tony KilleenTony Killeen (Clare, Fianna Fail)
Link to this: Individually | In context

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.