Vol. 562 No. 3
8 Mr. Boyle asked the Minister for Education and Science the impact he considers the delay in permitting the new Cork School of Music building project to advance from plans to an actual building will have on music in general and on the Cork area in particular. [5887/03]
58 Mr. Coveney asked the Minister for Education and Science the reason for the delay in the Cork School of Music building project; and if his attention has been drawn to the fact that much of the existing building has been evacuated in anticipation of demolition to allow the project to progress. [5789/03]
71 Mr. Coveney asked the Minister for Education and Science when he intends to proceed with the provision of the Cork School of Music building project. [5790/03]
90 Mr. Sherlock asked the Minister for Education and Science when it is intended to provide the funding required to permit the new Cork School of Music building project to advance from the planning stage to actual construction, especially having regard to the problems being faced by the school and the need for the new building to be available by 2005 when Cork will be the European City of Culture; and if he will make a statement on the matter. [5837/03]
I propose to take Questions Nos. 8, 58, 71 and 90 together.
In deference to the strictures on time, I gave a similar reply to an earlier question.
I thank the Minister for not repeating himself. The Government has a moral obligation to ensure this project goes ahead with full funding from the Exchequer, if necessary. With regard to the difficulties that have arisen, there are historical factors involving the company concerned whereby contracts were exchanged and there was confusion between the State and the company regarding whether it would be paid in sterling or euro. The company has been strongly criticised by a British Government audit commission in regard to a private finance initiative in the provision of schools.
I put it to the Minister that the public private partnership approach to developing this type of infrastructure is falling around his ears, that it was a wheeze invented by the Government to pretend it was not borrowing, and that EUROSTAT has seen through it. The Government should present these projects more honestly and pay for them from the public Exchequer.
The Government pays, whether through public private partnership or the Exchequer. In other words, taxpayers pay. The Government has an obligation to ensure they get full value for their money. In regard to the suggestion that public private partnership is a wheeze invented by the Government, this is probably one of the last governments in Europe to enter into public private partnerships. There are PFIs and various other manifestations in other countries.
They failed.
The Deputy cannot have it both ways. I will not, nor can I, take €60 million out of my first and second level budget to provide for the Cork School of Music, which is what I would have to do unless we sort out the EUROSTAT problem. I will not do so. Deputies would not support this, worthy as the project in Cork is.
The Minister could borrow.
I cannot borrow. I am confined under the Maastricht treaty guidelines. If I could borrow, I would be able to use the PPP process.
In relation to the Maritime College, the Minister explained that the risks to the private sector were greater, and that in terms of the Cork college, the transfer of risk was different. Will he explain the difference and elaborate on how he sees other building projects for schools being affected? Is all the risk to be carried by the public sector? Is that the reason they are caught under the EUROSTAT ruling?
The difference is that in respect of the Maritime College, there is a real transfer of risk to the private sector in that the private sector must depend for pay-back partly from the Exchequer and partly from fees and so on because, as well as catering for our own students and the Navy, it is a commercially run college which will also be used by foreign countries. There is, therefore, a transfer of risk. In respect of schools projects, there is no transfer of risk. I stress this is the EUROSTAT ruling, with which I do not agree. Because of IT, expenditure on schools projects is treated as borrowing for the purposes of the Maastricht treaty criteria. I do not agree with this. Neither does the Department of Finance. However, until the ruling is changed, we must operate within those rules. If they are not changed, the effect from the point view of schools will be that while we could go ahead with PPP projects, the money would have to come from my Exchequer provision as a lump sum. To take an example, if I wanted to build five or six schools at a cost of €60 million over the period of the PPP, I would have to provide that €60 million from my Exchequer Estimate. That is the difficulty.
The European City of Culture 2005 is as important to Cork as next year's Presidency of the European Union is to the Government. If the Government can find €50 million or so for a jet next year, can it not find money in some budget for Cork? I cannot understand the reason that funding cannot be found. Surely, within the entire Government process of using capital, the money could be found. It is crucial to Cork in terms of the European City of Culture 2005.
The reason we set up the National Development Finance Agency was to try to come up with various ways of raising finance. The Government agreed its budget and Estimates. It has agreed with the European Union the growth and stability pact. We must stay within those criteria. That means making choices on expenditure. The choices are already made for this year and, unfortunately, cannot be changed.
It does not make sense to ordinary people.
The growth and stability pact and the EUROSTAT rules have been in place for quite some time. Did the Government sleepwalk into the situation in which it now finds itself? Is it not true that the bidding committee set up comprises officials from the Department of Education and Science, that officials from the Department of Finance were involved from the outset, as were A & L Goodbody, Solicitors and Farrell Grant Sparks, and that special acquisition advisers were involved in the bidding committee for a number of years? Why is it that it is only now that this is arising? Why was this not spotted months or even years ago when this first started?
Is it also true that under a PPP, the first payment is made only when the handing-over takes place? In this case that will be some time in 2005. Has the operator, Jarvis, requested a meeting with the Minister, and has the Minister any intention of meeting the operator to explain this situation? Is there now a risk that the site could be taken over as a derelict site by Cork City Council and be lost? Does the Minister not realise how important this is to the students and the whole culture of the southern part of Ireland when as a result of the European City of Culture 2005, the focus of Europe will be on Cork? This was to have been the gem in the crown, and it will not go ahead. Why has the Minister sleepwalked into this?
I do not recall saying this project would not go ahead. I would not like the Deputy to go away with that notion. It is a question of how we can proceed with it and when. In relation to the Deputy's question as to whether we sleepwalked into this, PPPs have been place throughout Europe in various guises for many years. They have operated, for example, in relation to Portugal's roads programme. There were PFIs in the United Kingdom and so on. No problems were raised by EUROSTAT until very recently. If it had not raised this issue as a result of a query from the CSO, this project would have gone ahead on the same basis as every other PPP in other countries in Europe. Once the question was raised, EUROSTAT made a ruling. We must either comply with or try to change it. We are trying to change it. I do not agree with it as I believe it is incorrect. However, we must operate within the rules unless they are changed. That is what we intend to do.
I support the Minister in his endeavours to get this project off the ground as soon as possible. There is a deadline in relation to the European City of Culture 2005. On a number of occasions the Minister mentioned the transfer of risk. To what type of risk was EUROSTAT referring? Will the Minister explain to the House exactly what these risks are?
My understanding is that EUROSTAT is stating there is no transfer of risk to the private sector because it is providing the project and guaranteed payment from the State. That, as far as EUROSTAT is concerned – I emphasise that is its view, not ours – is the equivalent of Government borrowing and must form part of the GGB. We disagree. A risk would be involved if money was being recouped under a PPP project, such as the Cork School of Music, by charging higher fees to the students of the college. I presume that those involved would argue that the matter could be dealt with off the balance sheet. That is my best attempt at deciphering what they are saying.
I welcome the Minister's concern in relation to the building programme. Parents, students and teachers who have come together in the group, Teagascoirí agus Tuismuitheoirí le Chéile, have been looking for a meeting with the Minister for some time. I asked him a parliamentary question about the matter, which is relevant to this debate as it relates to the building programme. The Minister's reply did not say whether he would meet the group. I contacted his office during the past two weeks to clarify the matter. Perhaps the Minister will take this opportunity to tell the House whether he will meet the organisation, which is representative of many people who are concerned about the facilities in 160 schools.
The matter is not strictly relevant.
It is a different issue.
It is strictly relevant because it relates to the Department's building programme.
If the Deputy puts down a question about the matter, I will answer it.
The question before the House is about a different project.
We are talking about the Cork School of Music.
I suggest Deputy Crowe table a question on the matter.
I have asked a question about it.
