Vol. 562 No. 3
4 Mr. Stanton asked the Minister for Education and Science the progress which has been made regarding the provision of a new building for the School of Music in Cork; when he expects the building to commence; and he if will make a statement on the matter. [5969/03]
The new Cork School of Music, a constituent part of Cork Institute of Technology, is being procured under the public private partnership model. The CSM provides training in a wide range of musical instruments, musical theory and speech and drama. The school caters for first, second, third and fourth level students, whether they are amateur musicians, music teachers or performers.
The tender for this project was advertised on a European wide basis in June 2000. Following the project launch in July 2000, 12 consortia expressed interest in bidding for the project. Following the presentation of outline proposals the number of bidders was eventually reduced to three. These bidders were issued with an invitation to negotiate in November 2000.
The consortia bids were submitted in February 2001, were subject to detailed evaluation under design and construction, services, financial and legal, by officials of my Department together with specialist advisers. Following this process Jarvis Projects Limited was selected as the preferred bidder in March 2001.
My Department's officials and advisers entered into a period of intense discussion with Jarvis with a view to reaching financial close on the project. During this period Jarvis, under the terms of the project, sought and received planning permission for the project from Cork City Council. However, An Taisce submitted a planning appeal to An Bord Pleanála against the grant of permission. During the period of the appeal, work on the project was suspended and was only resumed after An Bord Pleanála rejected the appeal and granted planning permission for the development in December 2001.
Recently the Department of Finance raised a number of additional issues in respect of the project that my officials have been examining in conjunction with specialist advisers. In addition the question of the involvement of the European Investment Bank is being addressed. Proposals have been tabled whereby the EIB could provide refinancing for the project two years into the operations phase, thus reducing the overall cost of the project. Discussions with both the Department of Finance and the EIB are currently ongoing. In addition, under EU rules, where projects are financed on a deferred payment basis by the private sector the capital value of such projects is a charge on the general Government balance over the construction phase. As the Deputy will be aware, the GGB is the critical measure of what can be accommodated within our obligations under the stability and growth pact of the Maastricht Treaty. A EURSTAT group is currently reviewing the accounting rules on this issue, as will a standing committee being established by my colleague, the Minister for Finance, to advise on the GGB implications of private sector financed projects.
Ultimately the final approval for the CSM will be a matter for the Government and consideration of it will be based on a thorough assessment of affordability of the project in the context of the competing demands on the likely capital funding envelopes and taking into account the issues surrounding the general Government balance. My Department will continue to pursue this matter with the Department of Finance and all other concerned parties with a view to having the matter determined by Government in the very near future.
The Minister said the Department of Finance raised a number of additional issues. What are those issues and how recently were they raised? Is the Minister aware of the importance of this project to the southern half of the country given that Cork will be European City of Culture in 2005? Is he aware that if the project does not proceed Jarvis is entitled to recoup its costs from the State which, I understand, would be in the region of €12 million? Will the Minister answer the question I asked, when will the project start? Will he explain why there was no problem signing a contract for the Maritime College recently for €51 million, but all of a sudden there is a problem with the Cork School of Music?
What is the involvement with the European Investment Bank and will the Minister agree it has no problem in financing such a project if necessary? Does he realise that 3,000 students who are trying to learn music are discommoded in all parts of Cork city and that he runs the risk of a teachers' strike if this project does not go ahead? What kind of mess is the Government presiding over? How did we get to this position? Everything was fine until a few months ago and suddenly there are problems. The Minister must give answers. Someone has to be accountable for this awful mess. Will the Minister agree that if this project goes belly-up the whole PPP enterprise will be at risk?
The issues the Department of Finance raised were issues regarding changes in the project and the consequential cost increases that were involved . I am aware of the importance of the project to Cork, particularly in light of the City of Culture award for Cork in 2005. I am aware that Jarvis Projects Limited indicated that if the project does not go ahead it may take legal action. That is within its rights if it wishes to pursue that avenue. I cannot give the Deputy any more information as to when the project will start because I do not know when the current discussions will finish. There is a distinct difference between the Maritime College and this college which relates to the other issue I mentioned in relation to EUROSTAT. The Maritime College involves a substantial transfer of risk to the private sector and that does not affect our GGB whereas there is no substantial transfer of risk involved, according to EUROSTAT rules, with this project. We are contesting the EUROSTAT ruling and we have set up a committee. A committee has also been set up in Europe in relation to it because this has caused difficulties not only for us but for a number of other countries in Europe.
There is no problem with the European Investment Bank which is also involved with the Maritime college. The necessary legal discussions regarding refinancing part of this are taking place. I realise there are 3,000 students and many lecturers who are in about 17 different locations in Cork. The project is a worthy one but as with every other project it can only proceed if the money is available and if these issues are resolved. Certainly if we can resolve the EUROSTAT issue, that will happen sooner rather than later.
This whole system is ludicrous. This is a major issue and it can happen. A bidding consortium should be put together, with experts from A & L Goodbody.
I ask Deputy Stanton to resume his seat.
This is ridiculous.
The Deputy knows the rules in relation to these questions.
The rules should be changed.
I have appealed on many occasions to Deputies. I have explained to them that the purpose of Question Time is to elicit information from the Minister. Three Deputies today took over two minutes to ask questions and make statements and the Minister was left with just one minute to respond to the Deputy.
The Dáil was suspended a half an hour ago.
Yes. We are already three minutes over time on four questions.
It is no wonder people are not voting.
The Deputy knows the way to make changes. The Chair will be only too delighted if he brings in a Standing Order with which every Deputy is happy, and the Chair will implement it.
