Wednesday, 30 January 2019
Saincheisteanna Tráthúla - Topical Issue Debate
I take it that the Minister of State, Deputy O'Donovan, is here to reply to this matter. With the greatest respect, he will not necessarily be aware of the situation but this is the third occasion on which I have raised this as a Topical Issue matter and on which it has selected been for debate. Whatever about not being available on one occasion, on each occasion the Minister, Deputy Madigan, has not been available to come before the House.
That is not good enough. To be honest, it smacks of disrespect and a lack of interest in this project. I know the Minister for Foreign Affairs and Trade, Deputy Coveney, is doing his best and we will get to the issues at play, but Deputy Madigan is the senior Minister in this Department and on three occasions she has failed to come before the House to discuss this very important issue, a crucial issue for Cork and the region. That is not good enough. Whatever about once, to be missing on three occasions is just not good enough.
I will read the Minister of State some of a very lengthy piece about this ongoing saga that was in the Irish Examiner on Monday. The people of Cork are sick and tired of hearing about it. Unfortunately it has been dragging on for years and years, and progress is slow. The following is from the piece by Mr. Eoin English:
It was a few weeks before Christmas when the chief executive of Cork Chamber, addressing their Dublin dinner event, imagined the Cork of 2040 and spoke of his hope of seeing thousands of concert goers flooding into a gig at the venue earmarked for South Main Street. The ripple of laughter through the room at the mention of the stalled project spoke volumes.
Hard to blame the audience for sniggering really given the amount of announcements, assurances and timelines that have come and go since the outline of a new funding deal was agreed in principal almost one year ago, since the sod turning almost three years ago, and since the tender for the initial €20m in state-funding was awarded to developers BAM just over four years ago.
I was at that dinner, and the reaction is described accurately. I do not believe it was malicious or anything like that. It was a resigned sort of laughter, as if to ask "Will we ever see progress on this?", which is the mood that exists. This is a project that has been mooted in one form or another since the late 1990s. It began to take real shape towards the end of the 2000s, and four years ago we were dealing with a concrete proposition which involved public investment. At that stage the cost was expected to be €53 million. It is now expected to be approximately €80 million.
It is now almost three years since the sod-turning. It is now a matter of fact that it was an election stunt, given where we are now. It became clear that there was a need for additional funding for this project. Cork City Council made an application in September 2017 to the Department of Culture, Heritage and the Gaeltacht for an additional €10 million in State funding. That application of September 2017 took a long time to be approved. Strictly speaking it still has not been approved. There was a lot of discussion in the background, or so we were told, trying to iron out difficulties around state aid and so on and seeking the advice of the Attorney General. My understanding from speaking to the city council is that this was an application for state aid, that is, for a grant. There was no indication at any stage beforehand that this was to be a loan. I welcomed the Minister's statement that the Attorney General's advice, given just before Christmas, was that the additional €10 million could be given. Now it appears that €9 million of this will be given as a repayable loan to the developer. Was that the request that came in from the city council? I sincerely doubt it. At what stage did it become clear to the city council that it would be a repayable loan? The city council, which is already under financial pressure, is asking questions about the viability of the project. Everyone in Cork wants this to happen. I do not want it to be suggested that we do not want this to happen, but we need clarity.
I thank Deputy Ó Laoghaire for raising this matter. I apologise on behalf of my colleague, the Minister for Culture, Heritage and the Gaeltacht, Deputy Madigan, who is abroad on official business today. I presume the House will accept her bona fides on that. I am sure there are other avenues the Deputy will use to raise this issue in the House, including by way of parliamentary question. However, I accept his frustrations with the Minister's itinerary. I am sure he accepts that it could not be avoided.
The Cork event centre project consists of the design, construction and operation of a new multifunctional facility in Cork city centre. It will have a capacity of approximately 6,000 persons. This is a project led by Cork City Council with the development company BAM, which was selected by Cork City Council as the preferred tenderer. BAM in turn has engaged international events company Live Nation as the preferred operator. The project is ultimately being developed and managed by the city council. This means that Cork City Council has responsibility for its delivery. In 2013 the Government announced that an Exchequer grant of €10 million would be made available to Cork City Council to assist with the project. In 2015 the grant was increased to €12 million. To date, €1 million has been paid to Cork City Council.
The latest financial projections provided by Cork City Council to the Department of Culture, Heritage and the Gaeltacht indicate a significant increase in the original cost of the project compared to when the project tender was issued in December 2014. The estimated cost at that point was €50 million. The cost is now estimated at around €80 million. A significant part of this increase is accounted for by the redesign of the facility since the original tender to allow for a large increase in the capacity of the venue. In light of this cost increase, Cork City Council wrote to the Department of Culture, Heritage and the Gaeltacht seeking €10 million in additional funding for the project from the Exchequer. This would bring the Exchequer contribution to €22 million and total public funding to €30 million.
Following detailed consideration and in light of the additional works which are now required for the Cork event centre, the Department of Culture, Heritage and the Gaeltacht considers that in accordance with public procurement rules the total public funding for the project may be increased by €10 million to €30 million. This will be made up of grant aid of €21 million and a repayable loan of €9 million. The Department of Culture, Heritage and the Gaeltacht has confirmed that it wrote to Cork City Council on 21 December 2018 about the provision of additional public funding for the development of the Cork event centre. Furthermore, the Minister has been informed that officials of the Department of Culture, Heritage and the Gaeltacht met with Cork City Council officials earlier this month to discuss all aspects around the public funding elements of the project. There are complex legal, state aid and match-funding issues involved in this project and it is important that sufficient time is allowed for these important matters to be resolved satisfactorily. The Government is confident that this is happening. Cork City Council is now reviewing the potential additional funding by the Department of Culture, Heritage and the Gaeltacht and has stated that it will formally respond to the Department on this matter shortly.
The Cork event centre is a Government commitment and it underlines the Government’s commitment to culture. The new centre will provide a substantial addition to the cultural offering in Cork city and county when it is complete. The development of a major new event centre in Cork city centre is very much in line with what the Government is seeking to achieve in terms of balanced regional development and sustainable urban development under project Ireland 2040. The important thing is to ensure that the project is delivered in accordance with the relevant legal and value-for-money requirements. The Minister understands that officials in her Department are in regular contact with the relevant stakeholders, including Cork City Council and the Department of Public Expenditure and Reform, with a view to progressing the project as a matter of urgency.
I accept the Minister of State's explanation but I find it difficult to accept it for the other two occasions. At some stage or other the Minister should be willing to address this issue in the House. As an aside I note that along with the national children's hospital this shows that there is a serious problem with tendering, or so it appears to me. It seems to be practically impossible to hold people to the tender application that is initially made.
I asked a specific question. Was it the case that the application which came in from Cork City Council in September 2017 was a request for a grant? That is not my understanding of it. What the Minister of State read out refers to public funding for the project being increased. As part of that, it refers to a repayable loan of €9 million. At what stage was it first broached with Cork City Council that this would be a loan that the city would have to repay as opposed to a grant? As I said, the city is currently in the process of a very complex and potentially expensive transition and expansion. It was discussed at the last meeting of the city council. The head of planning said that the city council is now looking at the implications of the Department's letter and its impact on the viability of the project. I repeat that I want this to succeed on this site and I think it will be of great value to Cork. When the announcement was made I welcomed the fact that the Attorney General had cleared additional funding. However, there is a lack of clarity here and it is once again undermining confidence in this process.
Additionally, I note that freedom of information requests made by journalists are not being acceded to. I ask for those freedom of information requests to be granted. If there are commercially sensitive details, let them be redacted. There should be transparency here.
I have a number of questions. Was it an application for a loan? If not, at what stage was the idea of a loan broached with the city council? Did it agree to it? The Lord Mayor, Councillor Mick Finn, has asked for round-table talks with all stakeholders. Will the Department participate in those talks?
The reason the price and the tendering costs have increased is because there is a redesign and I presume that redesign is as a result of the city council's own engagement in it. I assume no one would suggest now that it should be redesigned backwards and that somehow money should be taken out of the project.
On the specifics of the tender, I am in the Department of Public Expenditure and Reform. Nobody-----
-----is suggesting that a coach and four should be driven through tendering requirements. The Minister also outlined in the response to the House that discussions have taken place between her Department and the city council.
All representatives of the Cork city and county area, including my colleagues in government, the Minister of State, Deputy Stanton, who is present, the Tánaiste, the Minister, Deputy Creed, and others, are very anxious that this will go ahead. It is not only a project for Cork; it is a project for Munster. As a Limerick person, I am anxious that it happens as well. The Minister, through her engagement with Cork City Council, has proven her commitment to the project. If the Deputy has other specific questions, as I said at the outset-----
As I said at the outset, and I am sure the Deputy appreciates that I am deputising for the Minister, who is out of the country, if he has other questions they could be raised by way of written or oral parliamentary question.