I thank Deputy Deasy for raising this matter of importance to people in the Tramore area. I visited Tramore, and Waterford in general, with Deputy Deasy some months ago and had the opportunity to see Celtworld at first hand.
I feel it necessary to put this tourism project into its proper context. Celtworld in Tramore, County Waterford, was one of several hundred tourism projects which were evaluated by Bord Fáilte and approved for funding by its board under the Operational Programme for Tourism, 1989-93. In fact, both Bord Fáilte and Shannon Development, who administered the programme in the mid-west, were legally contracted under global grant agreements, which were concluded directly with the European Commission, to administer the EU funds available under the programme for private sector led developments such as Celtworld. The agencies' responsibility under these agreements included the appraisal of project grant applications under the programme, and payment of funds to successful applicants.
At the time it was proposed for EU aid, Celtworld was regarded by Bord Fáilte as an innovative project, which would depict Irish mythology and legend through the use of modern technology and audio-visual effects and would help to regenerate the fortunes of Tramore as a tourist resort. I understand from Bord Fáilte that the project cost over £4 million and attracted EU aid for £1.81 million. The balance of funding was provided by the private sector to the tune of almost £1 million, which included moneys raised through the business expansion scheme, by Tramore Fáilte, a subsidiary of the South-East Regional Tourism Organisation (SERTO), who contributed £737,000, and through term loans and leasing arrangements of almost £575,000.
Celtworld Limited was established as a private limited company under the Companies Act with all the major shareholders represented on the board, including Tramore Fáilte, Vectravision and nominees of Kentz Group subsidiaries. The project opened for business in 1992 and within a short time ran into trading difficulties. Bord Fáilte, with the agreement of the company, appointed independent financial consultants to carry out a review of operations. The consultants concluded that, due primarily to a shortfall in the targeted level of BES moneys and in the forecast level of sponsorship, the project had been under-capitalised, and this had been exacerbated by an expensive introductory marketing campaign in 1992.
Overheads were cut down, and in September 1993 Bord Fáilte, through the South-East Regional Tourism Organisation, approved a loan of £313,000 to strengthen the balance sheet and to alleviate ongoing operational difficulties. In return, SERTO had two nominees appointed to the board. Unfortunately, in the year that followed trading did not improve and Bord Fáilte decided to assist with the cost of another financial review in 1994 while continuing to monitor the project closely up to the present day. However, notwithstanding the best efforts of the company, and strong support from Bord Fáilte, the financial performance of Celtworld Limited continued to deteriorate to its present irretrievable position.
I am satisfied that Bord Fáilte has worked hard with this company for some time in an attempt to salvage the project. Yet despite these efforts, the company found itself in the position where recently it decided that the best option available to it was to put the premises up for sale. Bord Fáilte now accepts that Celtworld is not going to successfully trade its way out of its current financial difficulties and is in agreement with the company's decision.
Bord Fáilte has confirmed that a legal deed of covenant with the Celtworld company remains in place and that it will be relied on to the extent possible to ensure that a tourism attraction is reopened on the site. Every effort is accordingly being made to ensure the continuing use of the facility for tourism purposes, in order to help protect the investment which has been made in the premises and maintain its strategic developmental role in the regeneration of the resort.
As Deputy Deasy pointed out, Tramore was chosen as one of 15 areas in maritime counties for special tax status designation. The Deputy can be assured that it is foremost on our list of priorities in this area. However, its present value is likely to be substantially less than the investment made in the facility.
I understand that since the launch in 1990 of the tourism programme 1989-93, the project evaluation and implementation procedures employed by Bord Fáilte and the other tourism agencies have been regularly reviewed, both internally and by external parties such as the European Court of Auditors, to ensure the highest standards in relation to the operation and applications of these procedures.
Deputy Deasy referred to the fact that that no AGM had been held in this case. This was a decision of the directors who knew that Celtworld Limited was in some difficulty. I understand that in respect of the BES investors, of which the Deputy rightly mentioned that 63 were involved with an investment of £230,000, many of these, or at least a number of them, were employees of the Bank of Ireland, Kentz Group subsidiaries and Tramore Fáilte. I understand that their representatives were Bank of Ireland Trustees Limited, a subsidiary of Bank of Ireland who were bankers to Celtsworld Limited. I also understand that the company secretary has informed Bord Fáilte that Bank of Ireland was invited to nominate a director to the board of Celtworld in 1993 but declined the offer.
I regard the failure of Celtworld as unfortunate, both for the many investors in the project and for the tourism interests of Tramore. It is my earnest hope that we will see a tourism facility reopened at the site, and I assure the House and the Deputy that Bord Fáilte will be working with this objective firmly in mind. Already in the Tramore area, as Deputy Deasy is aware, there is intense interest from a major contractor in terms of what could well be a flagship development for these tax status areas. I hope the Celtworld facility will feature, if not in this project then at least in some future project and that its value will not be lost to Tramore or its people.
The Dáil adjourned at 11.35 p.m. until 10.30 a.m. on Wednesday, 4 October 1995.
