I welcome representatives of Dublin Chamber of Commerce who wish to make a presentation on the issue of a national conference centre which is of immense interest and importance to business people in Dublin.
National Conference Centre: Presentation.
Ms Áine Maria Mizzoni
I thank the joint committee for welcoming us to this meeting. I will give a brief overview of the document that has been distributed which sets out the business case for an international conference centre in downtown Dublin.
I am the president of Dublin Chamber of Commerce. I am joined by Mr. Clive Brownlee, past president of the chamber of commerce and current chairman of the Dublin Convention Bureau; Mr. Ronan King, deputy vice-president of the chamber of commerce and a director of Howard Holdings; Mr. Niall Geoghegan, director of marketing and sales, Jurys Doyle Group; Ms Terri Cullinane, chairperson, Association of Irish Professional Conference Organisers; Ms Gina Quin, chief executive, Dublin Chamber of Commerce; Aebhric McGibney, director, Dublin Chamber of Commerce; and Mr. Cian Connaughton, manager, Dublin Chamber of Commerce.
We draw to the joint committee's attention what we believe is an important piece of critical national infrastructure. There is a strong political will for this project but no clarity on a timeframe for delivery, little clarity on specification and little or no clarity on the location of an international conference centre which would add €50 million per annum to the economy and sustain more than 3,000 jobs. It would have a significant impact on tourism because it would attract and build high value, not just high volume tourist numbers.
Dublin Chamber of Commerce represents 1,500 businesses of all sizes and sectors in the greater Dublin area and is dismayed at the current situation. We have worked with our membership to put together a vision of Dublin in 2020. It is a vision of a great European city which is competitive and well governed and in which its critical infrastructure hangs together. It is also a knowledge city. An international conference centre would augment the realisation of this vision.
A conference centre could attract an additional 19 major international conferences, bringing in more than 44,000 delegates, which equates to more than 150,000 delegate days. Dublin is currently not considered for international conferences. Business tourism is high yield. The estimated delegate value is more than €1,360 per person, exclusive of air travel. Work carried out recently by Mr. Jim Deegan in the University of Limerick indicates that the multiplier is between 1 and 1.5. This means that every euro brought into the economy has an impact of €1.50.
An international conference centre would attract a greater number of high yield tourists to Ireland and, importantly, reduce the seasonality of tourism by spreading the tourism peak outside of the summer months. Dublin is a ready made international conference destination, apart from the lack of a conference centre. All of the cities that feature in the top 20 listings of conference locations have a combination of the following: high international profile and capital city status; strong performance in the international city breaks market; strong general tourism, social and cultural infrastructure; excellent international and internal transport links; and a strong industrial-academic research base. Dublin possesses all of these characteristics, save an international conference centre. It is the only capital city in Europe that does not have a conference centre.
An international conference centre will also be an effective tool in the attraction of foreign direct investment to the country. It will bring key decision-makers and leaders in research and development to Ireland, providing IDA Ireland and other support agencies with the opportunity to build important strategic relationships. Our submission includes a summary of convention centres around the world and Dublin does not feature in the list.
The Dublin Chamber of Commerce is frustrated and dismayed at the utter failure to deliver this basic piece of critical infrastructure. Our submission document traces ten years of developments relating to commitments made to deliver a conference centre. This activity dates from the mid-1980s. It is interesting to note that in the ten years since 1994, Japan has built 20 conference centres.
In conclusion I reiterate the business case and the prospect of €50 million annually being invested in the economy, the creation of 3,000 jobs and the opportunity to build not just an increase in the volume of tourist business but also an increase in high-value tourism. The Dublin Chamber of Commerce believes that an international conference centre will be a national icon and an important contribution to the knowledge-based society we wish to develop. It would be an opportunity to construct a 21st century building which would be a landmark in a manner like Gandon's Custom House or the Four Courts. It is an opportunity to rejuvenate tourism appeal for Dublin as both a business centre and a sports destination and an opportunity to showcase Dublin's capabilities in trade.
Guarantees on the timescale for the development of the conference centre are very important as also are the building's specifications and its location. In the absence of such guarantees, the Dublin Chamber of Commerce will be unable to build a pipeline of business projects. A three to five year lead-in is required to attract desirable conventions to Dublin. We cannot do that because event organisers and others will not take the risk in the absence of firm commitments and firm project plans that will deliver what we are looking for.
In summary, this project is well within the realm of achievability. There has been political commitment over a sustained period of time but the specifics are lacking. It is an opportunity for a public-private partnership. We believe that significant movement forward would demonstrate agile leadership and government towards delivering a critical piece of national, not just capital city, infrastructure.
Go raibh maith agat. I have the impression from the submission that the Dublin Chamber of Commerce is trying to sell a concept when in reality the process is already half completed. How up to date is the delegation with the information I received from the Department? In June 2003 the Government agreed in principle to the provision of a national conference centre. In November 2003 the Office of Public Works published a notice inviting expressions of interest. Four submissions were received by the closing date of 21 January 2004. They were evaluated by the assessment panel and three proceeded to the next stage of competition. On 10 December 2004, the next stage of the procurement process was initiated with the issue of tender documentation given to the three short-listed consortia, as the fourth has been unable to or is not interested in pursuing the tender.
The Minister met the Irish Hotels Federation this week. He stated that tenders are well advanced and that a provisional preferred tenderer is expected to be selected by mid-year which will be followed by the awarding of a contract subject to Government approval. As of 7 March the Minister outlined that it was still very much a priority and was on stream. Will the delegation agree that there is progress on the project as opposed to standing still?
Ms Mizzoni
I would agree we are going somewhere but the ultimate destination lacks clarity. My colleague, Mr. King will respond.
Mr. Ronan King
I refer to notes of a meeting with the Minister for Arts, Sport and Tourism on 20 May 2003 which was two weeks before that Government decision was made, in which Clive Brownlee, Gina Quin and I met the Minister. We were assured of the total commitment that massive progress had been made over the previous year, that this was the number one tourism priority of the current Government, that the value-added argument did not need to be won because this was an absolute winner of a project. He gave us an assurance of further discussion in detail. That was two years ago and this debate started 20 years ago. The debate has gone around and it is not a party political issue. We have argued it with various parties in power. There have been feasibility studies and competitions and millions of euro have been wasted on consultancy reports. As Ms Mizzoni said, in the meantime other cities close to home and around the world have gone and done it.
At the time I started as a consultant in tourism, this project was costed at £30 million. The latest figures are €200 million. The cost has escalated. The Dublin Chamber of Commerce, PricewaterhouseCoopers, Peter Bacon and everybody else who has looked at it calculate that the annual revenue foregone is approximately €50 million. Over the last 20 years the equivalent of €1 billion of tourism revenue could have been generated for the country.
The Minister, Deputy O'Donoghue, stated recently in the Dáil that he sympathised with his officials who had to wade through the process that has been created. However, the bottom line is that we expect delivery from our politicians and our civil servants. It is a "no-brainer" of a project. The core message from the Dublin Chamber of Commerce is that if we cannot deliver a project of such specific importance and such measurable impact, then what hope is there for all the other infrastructure projects?
My question remains the same. The procurement process has been initiated and it is down to a specific number of tenderers. We cannot talk about what happened 20 years ago because we must deal with the here and now and we would not start from there if we were starting again. Will the delegation not accept that the process is on the way to delivery?
Mr. King
We hope we are but then we read in the newspapers that politicians regard out of town centres or large function halls built outside Dublin as possibly providing the answer and the money may be diverted in that direction. We do not believe that any other proposals currently being mooted represent an international convention centre. The reason we have shown the committee the visual presentation is to show what international convention centres look like and how they compete for international conference business. A large function hall is not the same.
I welcome the delegation. I have met Mr. Brownlee previously. I have been raising this matter continuously in the Dáil over the past two years and especially recently. I have read the proposals which list the advantages of such a centre being situated in Dublin. Business tourism is worth approximately €40 billion globally and Ireland is capturing only a small percentage of that business. Last year, 3,500 conferences were held throughout the world of which 40 were held in Ireland, probably due to the Irish Presidency. We are very small players in the global market. The convention centre has rejuvenated the city of Birmingham, for example. I believe Barcelona has four major conference centres. For a country that is very modern in many ways, including technology, we are not at the races in conference business.
People attending conferences in Northern Ireland can claim a refund of VAT on hotel accommodation and other charges. This cannot be done in Dublin, which represents a further disadvantage. When I tried to have this matter addressed through the Finance Bill, the Minister advised it would be very difficult to isolate VAT on business tourism as opposed to VAT on other products. We are clearly losing out as a result of such issues. It can be argued that such people would only come to Dublin. However, I believe that people coming to Dublin for a two-day conference might spend the rest of the week travelling around Ireland and, with our regional airport network they would be likely to fly to places such as Kerry, Knock, Sligo or Galway for a few days. If they have a good experience and like the ambience here, the likelihood is that they will return with their families at a later time.
Two bidders remain for the centre. Recently during Question Time the Minister confirmed that one of the bidders had withdrawn. The location is likely to be Alexander Dock or Spencer Dock. Is the chamber of commerce happy with those locations? While the question might be somewhat unfair, do the delegates have a preference for one location? Would the locations have the necessary infrastructure and be suitable sites? I understand planning permission has been granted for a centre in Spencer Dock. Based on the plans, would that centre be big enough? What scale of centre is needed? What segment of the market should we target? I understand the proposal is for a centre accommodating approximately 2,000 delegates. Does the chamber of commerce have any comment on the proposal for Citywest? Could it fulfil the requirements of a conference centre?
In the Dáil the Minister said he hoped to make progress with the successful bidder by June or July. Is the chamber of commerce happy that such progress is being made? The Government will clearly be involved in providing funding in the future. Will that be an issue for the sustainability of the project down the road? Will future Government funding be required to cover the centre's running costs?
Ms Mizzoni
I ask Mr. Brownlee to respond initially.
Mr. Clive Brownlee
I thank Deputy Deenihan for his questions. I will respond to the Chairman regarding going back over past experience. The only reason for going back is because there is an overall lack of confidence that it will ever happen. There is pent up frustration and so on. Yes, we are pleased with the process the Chairman has outlined. As my colleague, Mr. Ronan King, has pointed out, even in the past year, 18 months or two years, all dates mentioned have gone back. Our concern would be that the timescales we are now seeing might not be met. Whatever happens in the Dáil and whatever discussions take place with Government, the pressure needs to be maintained. We are on the road now and we need to get a decision in the summer. At a business tourism conference, the Minister stated that the decision would be made by late summer. We have heard that the date might be somewhat later.
On 7 March he said it would be mid-year.
He did not say which year.
Mr. Brownlee
I will need to go back over my notes. It was due by late summer this year. There is that feeling that slippage could occur due to changes, enhancements or reconsidering the tendering process etc. We would like to feel we are now at the end of the road and that a decision will be made this year. We hope builders will be on site very soon and that we will be able to say the conference centre will be ready by the summer of 2008 to allow us to take bookings from then and allow the Dublin Convention Bureau to market the site. Bigger conferences take many years of preparation. Recently we spoke to somebody about a statisticians' conference that may be held in Ireland in 2011, which is already at the planning stage. As our president said, a timeframe is important for us, following which a schedule needs to be published and, as with the management of any project, we need to achieve those time targets.
We need a convention centre in Dublin and obviously Alexander Dock and Spencer Dock are both in Dublin. I will not comment on either of those as they are in the process now. In terms of the scale of the centre and having the main hall for 2,000 people with exhibition areas etc., it seems to be at approximately the right level for our size of city. One concern which we need to watch very carefully is that we should not cut back on the specification. We like to pride ourselves as a world class city and we want our convention centre to be world class. While it may not be the biggest in the world and may not be as big as those in Chicago or Atlanta, it does not need to be as big as those. However, when people come, we want them to say "Wow". The quality needs to be very high.
If the centre at Citywest goes ahead, it would be another addition to the infrastructure and another area we could market. It would meet certain people's needs, which would be fine. However, it does not meet the needs of a capital city convention centre. We should not allow it to change our thinking on the Dublin convention centre. We need that sort of confidence and commitment to a timeframe because of the history.
Ms Terri Cullinane
I am a professional conference organiser and chairperson of the Association of Irish Professional Conference Organisers. We constantly monitor the international conferences that rotate around centres in Europe, which number fewer than 900. For us to bid for a conference, we need to know that we will have a centre. At the moment, there is a perception that Dublin cannot do this business. While we have fantastic hotels, some of which have very big facilities, they still cannot manage the large international association conferences we want to target. Due to this lack of clarity, we cannot even approach the holders of such conferences and suggest they could definitely come to Ireland in 2008, 2011 or even 2014. They will not take a risk. Until we can go back to them with definite dates, we are simply losing business. We need clarity on this point.
Mr. Niall Geoghegan
If one studies recent tourism statistics, one will see that tourism in Ireland has reached stasis — it is stagnant. Visitor numbers are not increasing to any great extent. Hotel capacity, measured by the number of bedrooms, is outpacing demand. The hotel sector has to address a critical issue. Yields, earnings and profitability within it are under threat.
The strategy studies published by Fáilte Ireland and Tourism Ireland have clearly stated tourism strategy has to change. Rather than supporting low cost in-bound tourism, we need to target the high yield tourism sector. No project would be better equipped to deliver high yield tourism, in support of the overall tourism strategy, than the proposed national conference centre. My colleagues have specified the potential yields. Not only would the construction of such a centre solve some of the problems being encountered in the hotels sector, it would also increase the profitability of the industry as a whole. The development of the proposed national conference centre would be in line with the overall strategy.
What about business class flights? Is it not contradictory to claim that we should try to bring high yield business clients to this country, given that we are encouraging low fares on flights coming into Ireland?
Mr. Geoghegan
Yes, that is an issue but the perception of Ireland as a high cost destination is a more important one. There is no point in developing a high cost tourism sector while targeting low yield tourists. There is a mismatch in that regard. We need to develop our strategy in order that we target the high yield sector. Some of us believe the Aer Lingus issue may need to be revisited in the near future.
I join my colleagues in welcoming the delegation, particularly as I am the only representative of Dublin on this side of the room.
We do not have regional tourism.
It is a pleasure to attend a meeting at which the members of the joint committee are agreed on the matter under discussion. I am delighted that the proposed national conference centre is seen by everyone as a vital element of national infrastructure. I was particularly interested to hear that there was the political will for this project. However, I wonder what the problem is in this regard because it seems to be a "no-brainer".
I do not doubt that the conference centre is the missing link in the national tourism product. Such a centre should be an integral part of a modern capital city. I welcome Mr. Brownlee's comment about the "wow" factor. We should develop a centre that would stand out, not only among international conference centres but also as part of the architecture and infrastructure of Dublin.
I share the delegation's view that the facilities at City West do not provide a solution and should not be seen as a possible alternative to the development of a national conference centre. Some may be examining such a possibility for a range of reasons I will not discuss. It is not and should not be an issue.
The delegation's presentation was timely. I wonder what has caused the delays to date. The delegation acknowledged that there was that political will. Does it think this has been a recent development? Could we be charitable by saying there has been a bureaucratic hold-up? What has caused the delay? What can we do? Public representatives should work with the interested parties to ensure the difficulties are overcome and highlighted, if necessary, in order that the proposed national conference centre can be delivered.
I welcome the delegation. I wish Ms Mizzoni well as president of Dublin Chamber of Commerce. Unlike Deputy Glennon, I do not come from Dublin but I do have a history of involvement with chambers of commerce. As a former president of Boyle Chamber of Commerce, I understand how important it is to lobby. We have a fine site in Lough Key Forest Park.
I understand it is important to inform politicians of the seriousness of this matter. Dublin Chamber of Commerce represents 1,500 companies of all sizes and cannot, therefore, be ignored. Ten years on, it is shocking that there is no sign of a national conference centre. The members of the joint committee are aware that there is a public will and commitment to the development of such a centre but, unfortunately, there has been a great deal of bungling.
The representatives of Dublin Chamber of Commerce said they appreciated the clear commitment to the conference centre but were not willing to dwell on the rationale behind the Government's decision to develop an international conference centre in the city centre. Do they favour or oppose the location of a conference centre in the city centre? Would Dublin Chamber of Commerce prefer the centre to be developed on a particular site? Various interests such as Departments and other organisations are in favour of a conference centre. I would like to know whether the chamber of commerce has decided on a preferred site. Its member companies know best as a result of their experiences during their travels around the world. Which site in Dublin does it favour? As public representatives, what can we do to highlight this issue and fast-track the development of the proposed national conference centre?
I appreciate that Dublin Chamber of Commerce would like certainty in this regard. I am shocked, therefore, that more progress has not been made. The proposal should have been pursued to a much greater extent by now. I do not want to play politics but it should be mentioned that responsibility for the lack of progress lies with the Government.
I am glad the Senator is not playing politics.
I welcome the members of the delegation. I compliment the group on being so representative and effective. It is obvious that its members have their fingers on the commercial pulse of Dublin and are familiar with the city's commercial potential. I echo what Deputy Glennon said by asking the delegation to outline the exact nature of the problem. We might not receive a full answer to that question at this forum as it might be a more suitable issue for discussion behind closed doors.
I agree that there is a need for a state-of-the-art conference centre that could compete with any other such centre in the world. It is essential not only because it might attract business to the country but also as a reflection of this country's international economic status. If we cannot put in place a facility of this nature, we will have failed in a big way. I recall the debate that took place when it was proposed to spend €20 million on the development of Government Buildings. Some said it would be a waste of money. Having accompanied visiting delegations to Government Buildings on many occasions, I have noticed that there is a "wow" factor, as Mr. Brownlee said. I always felt particularly proud, not in an empty sense, on such occasions. We developed business contacts following the development of Government Buildings.
While my next question is a little mischievous, I do not intend it to be provocative. Is Dublin the right location for a national conference centre? I would have thought counties Kerry, Roscommon and Donegal would compete for it. I am not necessarily calling for it to be sited in County Tipperary. My comments are intended to be helpful. I was a member of a sub-committee when Dublin sought to host the Olympics Games and infrastructure was always the fundamental consideration.
I come from Cashel which is a hub for a certain type of tourism. There is a view abroad that Dublin is becoming saturated at the expense of the rest of the country. It is widely believed it is benefiting at the expense of many parts of the country. Shannon Airport representatives will make the same argument, as I am sure my colleague from the west would confirm. Given that the proposal is for a national conference centre, people may have to be convinced as to what is in it for the rest of the country. I accept that Ireland's image would benefit and acknowledge that arguments can be made about siting the centre in the capital city. However, the Government put a significant decentralisation policy on the table and one must wonder if another element falls to be resolved.
While I do not call for the centre to be sited outside Dublin, the matter must be considered and confronted. It would be positive if it could be demonstrated that business would flow from the centre to other parts of the country. These issues must be confronted in the context of the significant sums involved and the demands from each part of the country for a slice of the cake. While my contribution may appear mischievous, I speak from experience when I note these questions require answers. People believe their areas are not being developed to the same extent as cities, especially Dublin.
There are two members offering, one bid from Shannon and one from County Donegal.
I welcome the delegation which I compliment on the very professional presentation it has made. I thought it would have been unnecessary to make the case at this stage. Some 30 years ago the solution proposed was put forward as the way to resolve problems at Shannon Airport. The expectation at the time was that the national conference centre would be located there due to the international airport and the need to enhance tourism in the mid-west. When the decision was made to opt for Dublin, we in Shannon supported it fully. I speak for most of the people in the mid-west when I say we endorse the project and wish to see it proceed.
I am not sure Mr. Geoghegan's observation on the static state of tourism was correct. Current circumstances are the result of a view that the Irish tourism product is overpriced. The static state of the industry is related predominantly to the commodity price structure. Even if the centre was provided next week, I am not certain it would make a significant difference, although it would have an impact.
The delegates represent Dublin Chamber of Commerce, a very important body in the city. Why have private developers failed to come together to provide a facility? I do not wish to be negative but given the expensive facilities and the significant sums of money available in Dublin, why does the chamber of commerce require the Government to get involved? Why do private investors not make provision for it? If there is to be a public private partnership, where is the private element? We have not heard much about it.
The delegation should not be misled. I endorse the project fully and I am anxious for the joint committee to invite the Minister to explain the reason it cannot be expedited. It is important to provide the centre soon. As Senator Ó Murchú said, if it can be demonstrated to members that the centre would have an impact on less developed parts of the country, especially the west, we will be very supportive in helping to get the Dublin stage of the development under way. I hope a further centre would be provided at Shannon at a later stage.
I see we have moved to the idea of a phased conference centre.
I welcome the delegation. The document submitted makes for very interesting reading as it provides conference centre statistics on a worldwide basis. Germany, one of the original Community member states, has 36 conference centres dotted around it. There are three in Berlin alone with a capacity of 16,000 seats. Greece which became a member state at the same time as Ireland has 13 centres. Portugal and Spain which also joined with Ireland have 11 and 36 centres, respectively. We have two, of which one, the RDS, is not felt to be up to scratch while the other, Dublin Castle, lacks capacity. Finland which joined the European Union in 1995 has nine centres, while the United Kingdom has 41. If we were to be a little facetious, we could claim an interest in the Waterfront Hall in Belfast with its 2,235-seat capacity.
Dublin Chamber of Commerce has identified a need and is very interested in its parochial dimensions. As a Donegal man, I believe there is a need for a large-scale conference centre in Dublin. I attended an event on Saturday, Donegal Person of the Year, which had to accommodate 1,000 people. While I acknowledge that the function involved a meal rather than a conference, the Burlington Hotel was not able to cope with the numbers involved. Dublin does not have adequate capacity to host significant events.
We are not discussing the parochial problem of a stand-alone conference centre for Dublin. Spain provides a perfect example of what I mean. I travelled to Tenerife for a conference and with other delegates took a connecting flight from Madrid which did not entail any hassle. The conference centre we attended is very successful. To be parochial, although there are airports in Derry and Carrickfinn, there is no reason to regionalise and decentralise the conference centre concept. If a centre in Dublin can attract high value clients who are prepared to spend money, the economic benefits will be felt nationally.
Mr. Geoghegan opened the debate to take in the status of tourism. While there is a national problem, tourism in the north west has been in the doldrums for seven to eight years. We have suffered from tourism decline. I have never advocated the style of tourism popular at the Cliffs of Moher and the Ring of Kerry where people are packed onto a bus and a location is bombarded on the basis of numbers. There is a case to be made for discussing the conference centre idea in a wider context. If we aim to provide a high value product, we must put the necessary infrastructure in place. I will certainly advocate doing so, whether in Dublin or on a regional basis. The number of parliamentary questions Deputy Deenihan has tabled on the conference centre project is evidence that the Fine Gael Party will not be found wanting in supporting the proposal. While the joint committee is not intended to be political, we are discussing a political issue which will require political will to resolve. It is important to move forward.
Incentives have been provided at the Waterfront Hall, including VAT return arrangements. In the context of subsidies or otherwise, will the delegation outline the wider economic benefits of providing a 7,000 seat conference centre in Dublin?
Ms Mizzoni
A number of inter-related questions have been asked. Mr. McGibney will first respond to the question on how the choice of Dublin as the location for a conference centre fits with the regional development strategy and the Government's commitment to decentralisation.
Mr. Aehbric McGibney
I return the compliment and thank the Chairman for giving us the opportunity to debate this issue. We hope the joint committee's voice will be added to ours in impressing upon the Minister and the rest of the Cabinet the need to provide clarity on the delivery and specifications of a conference centre.
A number of important points have been raised. I did not want to complicate the presentation by linking it with questions around VAT, access to airports and a range of other issues which would fit together to make the experience of visiting Dublin and Ireland more comprehensive and valuable from the point of view of the economy and tourism. I support the view that we have a wider set of infrastructural questions to address.
If a conference centre becomes available to visitors to Dublin, we will need to package links to opportunities elsewhere in the country. The empirical evidence of business tourism is that business visitors sometimes arrive a day or two early and stay for a day or two afterwards and that a number will return after their experience and visit other parts of the country. Evidence demonstrates that a conference centre would have economic benefits for the wider economy rather than the city of Dublin only. Obviously, visitors would come for the conference centre but many would take the opportunity to travel around. It is a question of making the inward experience a positive one, ideally by facilitating block booking of seats and having a link to an airport with significant capacity. This would probably require the construction of a second terminal and, possibly, a rail link to the city centre.
On the question of a site, we would prefer not to comment on individual projects simply because it would be inappropriate to choose one company over another, given that they may be part of a wider group, for example, a member of the Dublin Chamber of Commerce.
My question was whether the site should be located in the city centre or the suburbs.
Mr. McGibney
Nevertheless, I can provide a set of criteria which fit in for a conference centre. For example, it needs to be located in a city centre location. One of the criteria used to assess the importance of a conference centre in qualitative indicator surveys is the ability to skip an afternoon session of a seminar and nip out to have a look around. Our criteria are a city centre location, timeliness of delivery, specification of delivery and world class quality. The guide to conference centres I circulated indicates the range and quality of facilities available. We have appended some cover pages on a number of centres, including the Hong Kong centre which the Taoiseach and members of a recent Irish delegation visited during their stay in China.
While this message may come across as somewhat negative, we are trying to be positive about the opportunity for civic pride and to have a great community space which can be utilised. It could leverage off the association conferences into corporate conferences in order that, for example, if Microsoft decided to hold its annual meeting in Dublin, we could facilitate that level of business. As I stated, we have reproduced at the end of the paper some examples of the scale and quality of infrastructure possible if we put our minds to it.
Ms Mizzoni
I ask Mr. King to comment on the reason the private sector has not proceeded to build a conference centre, given that it would be such a positive development and an important piece of critical infrastructure, and why we are asking for a not insignificant public contribution to the project.
Mr. King
My answer is simple. A convention centre is a big hall, regardless of whether one wants to accommodate 100 or 10,000 people. If one wishes to organise a political meeting, how much will one pay for it? One will not pay €10,000 for one night, even if that is the cost, although one may be willing to pay for hotel accommodation and taxi or airline fares. The mistake made in our evaluation during the years was that it attempted to transfer the total risk in providing an item of national infrastructure to the private sector which refused to buy into the idea. The idea that the private sector would design, build and operate a project and take total trading risk was not sustainable. The private sector held competitions, paid consultants and made lovely presentations, some of which I helped prepare. When one carried out a financial evaluation, as opposed to an econometric assessment measuring added value and other factors, it transpired that one could not get a return on an outlay of €50 million or €200 million by renting out the hall.
A conference centre is national infrastructure. The tax take would derive from the money spent by visitors on the operators, including hoteliers, taxi operators and others, who would benefit from the centre. The fundamental reason it has not been built to date is that the private sector will not buy into assuming all the risk. Private companies may make wonderful presentations on financial engineering and so forth but the figures do not add up. Along the way we wasted €33 million in EU funds provided under an operational programme which could have subvented the project. The fundamental position is that, regardless of whether we like it, a conference centre must involve a substantial financial contribution from the taxpayer.
The other night I attended a meeting with the Minister for Finance, Deputy Cowen, during which I spoke to a Dublin solicitor, Mr. Frank Murphy, who reminded me of a wonderful vision to build a house, designed exactly on the principles of the White House in Washington, adjacent to Shannon Airport. I worked on this project ten or 15 years ago. Although it had a great deal going for it, it did not stack up because investors would not buy into it. Mr. Murphy lost €2 million and nearly went bust when he paid off all his consultants, architects and so forth.
As an island, Ireland needs an international convention centre and has the infrastucture to support one. Such a centre would provide a large amount of upstream and downstream income. It has been argued it would not bring people to the Ring of Kerry. I visit the Ring of Kerry every year and love the area. I tell everyone with whom I am involved professionally and otherwise to visit counties Kerry and Donegal if they want to see the real Ireland. However, people will not travel en masse to these areas because the logistics do not work.
Maximising the use of time is vital for convention-goers. On average, Americans take ten days paid leave per annum and use attendance at conventions as part of their leisure time. They are not prepared to allocate one day of travel time each way for a three day convention.
The argument during the years has been parochial. The supporting infrastructure is in place. While the Dublin Chamber of Commerce is a vested interest, it is not myopic or blind to the benefits which would flow elsewhere. One can satisfy the market in conventions. People talk about Microsoft. I was in New Orleans about ten years ago and I could not understand why I could not get a hotel room. There were 33,000 Microsoft dealers in New Orleans that day for the Microsoft convention. We do not want that business and could not support it. At the other end of the scale one has the meetings market. There are meetings, conferences and conventions. We need to pitch our offering. We do not believe we can support a 6,000 or 7,000 seat centre and we have not asked for it. We are seeking a capacity of 2,000 or 3,000.
We believe the conference centre should be located in downtown Dublin. We have been looking at the matter for 15 years. That is not to say, as Mr. Brownlee said, that the Citywest development, if it goes ahead, is not part of a desirable infrastructure. Yes, it is. It can support local and international meetings.
If we are pitching for business in the international marketplace, we need to put money on the table. Ms Cullinane can elaborate on this matter. If Amsterdam seeks the statisticians meeting in 2011, it will come with €200,000 in its back pocket to put that business on the table. That €200,000 is money well spent in terms of the return that comes back to them. This is not just about the big hall we are going to rent, it is about the whole infrastructure that goes behind it. We need marketing resources. There will be an ongoing commitment from both the public and private sectors but the returns will be significant. We are playing for €50 million a year. In the past 20 years we have lost €1 billion. We lost €33 million of European Union funds that should have been put into a conference centre. That is the frustration we are trying to reflect. We are not making money by prevaricating. If we believe in it, let us do it.
Ms Mizzoni
There are two related questions that I would like to ask Mr. Brownlee and Ms Cullinane to address. The first relates to the problem or hold-up and our specific concerns, and the second relates to what the politicians can do to help support this aim.
Ms Gina Quin
I am delighted to be here. My colleagues have put forward eloquently our reasons for wanting to see this happen. I would like to add to what Mr. King said, that if one looks at the world experience of conference centres, they are strongly supported by governments for exactly the reasons he outlined, the tax take and the employment opportunities that such conferences can bring. There are also additional benefits to the economy and infrastructure.
If we look back at Ireland's EU Presidency last year and the strain we were under, even in Dublin, in terms of accommodating that as a major event, committee members will realise how much we need this kind of facility within the city. Senator McHugh outlined statistics for the number of convention centres in other countries. It may well be that Ireland can sustain more than one convention centre. We believe the first one should be in the capital city because that is where the international traffic is, and the international airport with the most traffic coming through it. We believe the whole of the country would gain the most benefit from a Dublin-based convention centre in the first instance.
The question was asked as to what we consider to be the hold-up. Let us not go back into the annals of history in the past 20 or 30 years or argue about whether it is ten, 20 or 30 years. We know this concept has been around for a long time. Even if we look at the very recent programme of action we have had on this process, the Minister has twice announced delays in the process since he received the expressions of interest in January.
The main reason put forward for that has been the delay in the public private partnership process. The process is seen as an overly complex one. A significant investment has been made by private companies in putting bids together under public private partnerships. If this process is too complex we must simplify it. It is not rocket science. We have to make this an accessible process if the private sector is to put its money into taking a risk.
Any private operator who puts his or her bid forward is making an enormous investment in the first instance. It might take up to €1 million to put a bid forward with no guarantee that there will be any return on that. It is not just this conference centre that is put at risk by the PPP process being seen as overly complex, overly expensive and extended in terms of timeframe, it is every piece of infrastructure for which we might want to attract private investment. We all know that PPPs are an essential part of moving forward and addressing some of the infrastructural deficit that exists.
We would like the PPP process to be looked at and simplified and for that to be communicated effectively to the private sector in a way that can help it to help the Government and future Governments to deliver on infrastructure. With regard to what the politicians and Senators and Deputies here can do to help us, this all comes back to the Minister's office.
As my colleagues have said, what is absolutely critical is that we have an irrefutable deadline for delivery of this project. Unlike other pieces of infrastructure, we all know the day the port tunnel opens, trucks, cars and buses will use it. However, the day the conference centre opens, unless there is a stream of business that has been developed three and four years in advance, there will not be anything in there. The worst thing we could have is a conference centre where people are rattling around it with nothing to do for 12, 18, 24 or 36 months while we try to generate the business interest.
Unless we can give the confidence to people like Ms Cullinane and her colleagues in the conference organising market that there is a deadline which will be delivered on, we will not be able to get the confidence of the organisations that are booking their conferences three, five and ten years in advance throughout Europe and the rest of the world. Apart from the specification and getting the process right, the absolute priority is to get a deadline that will be delivered on and that the Minister will commit to making sure this will happen.
Mr. Brownlee
I endorse what Ms Quin said. The mid-2008 deadline is a bit like the train from Dublin to Killarney, it stops at Kildare, Portlaoise, Thurles, Limerick Junction and so on. Those milestones are particularly important. I hope it will not be a case of "Are you right there Michael, are you right?" from Percy French. It took us 20 years to get the train to start but it has started with this process. The process ends in Kildare and then we will sign the building contracts by Portlaoise etc. We want a timetable. We want politicians of all parties to be concerned about this, to lobby and raise issues in support of the project and its timescale. It should not be a case of saying, "Oh my God, it is not hitting the mid-2008 deadline." If at an early stage there is a delay we should raise the issue and find out the cause for it so that we can address the problem.
One of the most recent convention centres to be completed is the one in Capetown which has received high praise. I believe it is of a similar size to the one proposed in Dublin. That centre is doing even better than expected. In addition to the money that is spent in the centre itself, delegates and visitors stay in hotels around Capetown and a number of delegates stay on in South Africa after the convention. Market surveys show that one in every four international conference delegates attending a convention in Capetown return to South Africa for a holiday, which will result in an additional annual 2 million tourist days by 2007.
The Dublin Convention Bureau's advertisement invites people to come to Dublin for the convention and it provides tourism material for the whole country. We believe it is a truly national venture.
Ms Mizzoni
There are two last related questions to which I will ask Mr. Geoghegan to respond. They are the questions about the tourism strategy for the island of Ireland and, in particular, a contention that a core issue in regard to that is an overpriced product. I know Mr. Geoghegan will thank me for that last point.
Mr. Geoghegan
At the risk of being self-serving, I must state that if one considers the evidence for the perception that Ireland offers an overpriced product, one will note that the airlines, including Ryanair and Aer Lingus, have done their bit to reduce access costs to Dublin and Ireland in general. There is no issue on that score. Similarly, in the hotels sector which informs my perspective yields have decreased in recent years. If yields have decreased, it is the case, ipso facto, that rates have been declining in the sector.
Mr. Geoghegan must be joking.
Mr. Geoghegan
Those are the facts.
Will Mr. Geoghegan compare hotel rates in Cape Town and Dublin?
Mr. Geoghegan
My point is that yields in the hotel industry in recent years have declined. I refer to the rates we have paid for rooms.
They have declined.
Mr. Geoghegan
They have.
Mr. Geoghegan must be joking.
For the information of both the members of the chamber of commerce and the joint committee, we will be proceeding to a module on tourism focusing on regional disparities, costs and products. We would probably need to spend a day considering this issue. We will be considering the module between now and the summer. We will, therefore, have sufficient opportunity to address the matter. We may reinvite the delegates under a different context.
Mr. Geoghegan
I accept that there are issues associated with food and beverage costs, possibly involving hotels, as well as general transaction costs.
Ms Mizzoni
I thank the joint committee for giving us the opportunity to present our views. We very much welcome its insight and engagement in the debate. Business tourism is vital to the nation. A downtown city centre conference facility is essential to supporting that market. There is a clear and unambiguous case for an international conference centre in the city centre. We will need simpler, more accessible public private partnerships to build critical infrastructure, including the international conference centre.
Professional conference organisers such as Ms Cullinane need clarity and certainty in respect of projects such that a pipeline can be built given that a period of several years will be required to do so. The experience to date regarding the national conference centre has been poor but we are optimistic that the tendering process will deliver a world class, competitive international conference centre for the city that will inspire civic pride and firmly establish Dublin and the rest of Ireland as places to do business, visit and enjoy.
I welcome the engagement of the joint committee and hope its members will add their voice to ours in impressing upon the Government the importance of certainty in the delivery of an international conference centre.
The joint committee accepts that a national conference centre would not only be good in itself it might also be a spur for regional development. It must be supported by the support services the delegates offer.
I once attended a conference in Durban, South Africa. The conference centre was fantastic. We travelled to it by bus from where we were staying in Pietermaritzburg. I acknowledge that in our case support services must be provided. The ability to travel to a conference centre from where one is staying is very important.
The joint committee will continue to press the Minister on the issue. Public private partnerships in the provision of roads are flying. The public private partnership for the Cork School of Music stalled because of funding. I do not believe it involved a national question but that external issues had to be resolved.
The joint committee will have to establish whether the issue in hand can be simplified at national level or whether European support is required. There is a need to maintain the pressure regarding the timeframe and not cut the specifications. We have heard what the delegates have said and appreciate that they have taken the time to attend to press their case. We will continue to help them to press the case because we regard it as a common goal.
The joint committee adjourned at 11.25 a.m. sine die.