Emmet Stagg (Kildare North, Labour)
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I thank the Ceann Comhairle for selecting this issue. I thank the Minister, Deputy Quinn, for coming to the House to deal with it. Piper's Hill is a new all-embracing educational campus just outside Naas in County Kildare. It is organised and operated by Kildare VEC, or more accurately by the chief executive of the VEC, Mr. Seán Ashe. There are many opinions among educationalists and sociologists about the desirability of shoe-horning the wide spectrum of educational provision onto one site. Time will tell if this experiment works well or otherwise. However, I do not want to raise that aspect of the Piper's Hill campus today. Instead, I wish to focus on the extraordinary and unorthodox methods used to raise the funding for the campus.

In his response, perhaps the Minister will give the House details of the sequence of events that led to him being forced last summer to meet a shortfall of over €20 million for this project from funds that had been earmarked for the school summer projects and other schemes. It seems that the chief executive of the VEC, Mr. Ashe, who was the driving force behind the project and the novel model for funding it, decided to sell the old second level VEC school in Naas to Superquinn for €23 million. Superquinn paid a deposit of €2.3 million and was supposed to pay the balance of €21.7 million in February 2010. The chief executive then made the extraordinary and dangerous decision to raise a loan of €21.7 million with Bank of Ireland on the back of the Superquinn deal, which was ultimately not concluded. He did that with the sanction of the Fianna Fáil Minister for Education and Skills, with whom he was closely associated.

When Superquinn failed to come up with the balance of €21.7 million in February 2010, it sought additional time and agreed to pay the interest on the VEC loan. The wheels were now seriously coming off the wagon. The deal was falling asunder. The VEC, the Department and the taxpayer were exposed. The chickens were coming home to roost on an extraordinarily risky venture that was pursued at the end of the madness that was the building boom. By mid-2010, Superquinn was in receivership and the VEC was stuck with a loan which it could not pay and should never have raised in the circumstances.

I understand that the Department of Education and Skills and the taxpayer were obliged to pick up the tab for the total of €21.7 million that was due. It appears that this year's school summer projects and other schemes were jeopardised as a result. Can the Minister give the House an assurance that the type of risk-taking and venture activity that was at the core of this case will no longer be sanctioned by him? Will he introduce the necessary checks and balances on how VECs raise funds for school buildings to ensure the type of fiasco that occurred at Piper's Hill does not happen again?

Ruairi Quinn (Dublin South East, Labour)
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I thank the Deputy for raising this matter and giving me an opportunity to outline to the House the current position in regard to the funding of the Piper's Hill Educational Campus in Naas, County Kildare. As the Deputy is aware, there has been a significant increase in the number of schoolgoing children in the country in recent years. My Department is forecasting that this will increase further in the coming years. Naas is one of the areas identified by the Department as experiencing a rapid growth in demand for new school accommodation. In this context, Kildare VEC took the initiative and developed a new educational campus at Piper's Hill, including a new 1,000-pupil post-primary school building, a physical education hall, a building for Gaelscoil Nás na Ríogh and a headquarters building for the Irish Vocational Education Association. In time, it will be the site of permanent buildings for Naas community national school and St. David's Church of Ireland national school. As the Deputy will be aware, the development of the campus has been highly successful to date. The development of the campus and the provision of additional post-primary school places ensured there was no accommodation crisis in Naas in recent years and all children in the catchment area had a place to go to school.

The development of the Piper's Hill educational campus did not follow the usual model of upfront Exchequer funding from the Department. Instead, the VEC funded the development of the post-primary school, the sports hall and the site infrastructure such as roads, etc. The Department funded the construction of the gaelscoil and the Irish Vocational Education Association headquarters. Kildare VEC funded its element of the project by entering into a contract for the disposal of an existing asset to the Superquinn group. This was done with the approval of the Department and my predecessors as Minister. Under the terms of the arrangement, Superquinn was supposed to acquire the site of the old vocational school on the Limerick Road in Naas, which was not large enough to accommodate a 1,000 pupil school. The VEC borrowed the funds to develop the new school, sports hall and site infrastructure on the strength of this contract for sale.

When the Superquinn group went into receivership last year, it became clear that the contract with the VEC would not be honoured. The VEC was left without the means to pay off its debt with the bank. Rather than allowing the VEC to continue to incur interest on this debt, I decided to make funds available to the VEC to settle the debt with the bank.

The VEC continues to retain the freehold on the old vocational school in Naas that was the subject of the contract for sale. It is being used as a permanent location for Gaelcholáiste Chill Dara, which has been able to vacate its previous rented premises to relocate in Naas, thus eliminating the previous rental bill on that premises and avoiding the need to acquire a greenfield site and develop a new school building for the gaelcholáiste. The VEC also retained the original deposit of 10% that was paid by Superquinn when the contract was signed. This was used as part of the Piper's Hill campus development. While it is regrettable that the original transaction was not completed, the fact remains that two post-primary schools are now located in permanent accommodation, while the Piper's Hill campus is an asset to the town of Naas and a key part of the educational infrastructure of the area.

Emmet Stagg (Kildare North, Labour)
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I thank the Minister for his reply. We already had much of the information he has given us. He did not deal with the essential question I raised. Will he put systems in place to ensure this sort of capitalist venture, whereby money is raised in this way for public schools, is ended? Certain programmes in the Department of Education and Skills were put at serious risk as a result of the collapse of this venture.

Ruairi Quinn (Dublin South East, Labour)
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There are lessons to be learned from what has happened in this case. I thank the Deputy for giving me an opportunity to outline to the House the current position regarding the payment of funds. It would have been preferable if the original sale had gone ahead. In the circumstances in which we now find ourselves, we have to learn from the experience of this case and make sure similar situations do not recur in the future.