Thursday, 16 June 2005
National Aquatic Centre.
Question 1: To ask the Minister for Arts, Sport and Tourism if the problems between a company (details supplied) and the Campus and Stadium Ireland Development Limited regarding the National Aquatic Centre, have been resolved; if this company will continue to run and manage the centre; and if he will make a statement on the matter. [20408/05]
Legal proceedings have been taken by Campus and Stadium Ireland Development Limited in the commercial court against Dublin Waterworld for breaches of the lease on the National Aquatic Centre. As this issue relates to proceedings before the commercial court at present, it would be inappropriate for me to make any further comment or statement on these matters.
However, I take this opportunity to indicate my disappointment that Campus and Stadium Ireland Development Limited has been left with no option but to instigate these proceedings to ensure compliance with the obligations of the lease on the National Aquatic Centre. I had no part in the awarding of the contract for the operation of the National Aquatic Centre, the contract for which was placed prior to my appointment as Minister for Arts, Sport and Tourism. The awarding authority was CSID and the contract was signed early in 2002. The award of the contract for the National Aquatic Centre was the subject of an investigation by the Attorney General in March 2002 and the report was discussed at meetings of the Committee of Public Accounts during that month. However, as soon as it was brought to my attention that the lease obligations were not being fulfilled, I decided that legal proceedings should be initiated and fully support the course of action taken by CSID in my role as shareholder of the company.
In developing the National Aquatic Centre at Abbotstown, the State undertook a very worthwhile and necessary investment. The capital expenditure of €62 million excluding VAT on the provision of the facility represents money very well spent. In addition, €3 million was spent on the original sports campus project on site preparation and surveys of the land at Abbotstown. This work has already proved very useful in the preparation of a development control plan for the site and will be further drawn upon when work on the wider campus concept begins. This is the total capital sum spent in connection with the development of the sporting facilities at Abbotstown. The notion that €200 million was wasted is simply nonsense. The National Aquatic Centre has been fully operational since 20 May when extensive repair work to the roof was completed, following the storm damage that occurred on 1 January 2005.
What lease obligations were not fulfilled by Dublin Waterworld? How did the €10 million VAT liability arise? Why does Dublin Waterworld have to pay this liability? Is the Minister satisfied this VAT was owed?
One of the reasons Dublin Waterworld refused to pay rent was because it claimed the building was defective. It has forwarded a number of defects in the building to Campus Stadium Ireland Development Limited. The company had sought in the past to have these defects corrected and it refused to pay rent until the issue was resolved. The rent money was held in a fund and now some of this money is being paid. Can the Minister clarify that the building was defective in some aspects? Who supervised the design and construction of the centre on behalf of the Government? Who signed off on the design and construction of the roof on behalf of the Government? The judge in the case made reference to Dublin Waterworld not being a substantial company. Why did CSID sign a contract with such a company at that time? Did Dublin Waterworld fulfil all the criteria? Were the proper procedures followed through? It seems Dublin Waterworld won the competition set out by the Department.
I am limited in what I can say because there are matters before the commercial court. I am advised that it would be inappropriate to make any comment which might prejudice the outcome of a matter which is sub judice. CSID has instituted proceedings against Dublin Waterworld Limited, which is due to the failure of Dublin Waterworld to fulfil fundamental obligations of its lease. These have included the failure to pay rent and insurance, failure to provide audited accounts, failure to provide to establish a sinking fund, failure to agree a capital maintenance programme, as well as failure to discharge a VAT bill on the lease of over €10 million. Following repeated requests for payment, CSID began legal action against Dublin Waterworld to seek redress.
There is a sum of €10, 254,600 due on the grant of the lease. The issue has been referred by the court to Mr. Dermot O'Brien, deputy president of the Institute for Taxation, for arbitration under clause 10 of the lease. My view on the repair work is that the taxpayer should not be asked to foot the bill for any repairs carried out to the National Aquatic Centre. These are issues of liability between various parties. The Government rejects any liability for damage to the aquatic centre. All of these issues must be resolved in proceedings which are taking place in different fora.
The usual contracting parties normally find that differences arise in the interpretation of contracts and these issues are resolved by the courts or by arbitration. I await the outcome of the proceedings and I have little else to add.
Until the proceedings are determined, the provisions of the lease will continue to apply. As I already said, the National Aquatic Centre re-opened for business on 20 May 2005.