Batt O'Keeffe
Ceist:29 Mr. B. O'Keeffe asked the Minister for Tourism and Trade the plans, if any, he has to provide funding for the World Equestrian Games. [8088/96]
Ceisteanna—Questions. Oral Answers. - World Equestrian Games.
Noel Dempsey
Ceist:47 Mr. Dempsey asked the Minister for Tourism and Trade the current position regarding the World Equestrian Games; the contacts, if any, he has had with the International Equestrian Federation; whether the State will become liable for the £1.5 million bond signed in connection with these games; and if he will make a statement on the matter. [10246/96]
Trevor Sargent
Ceist:255 Mr. Sargent asked the Minister for Tourism and Trade if he will reinstate the financial support needed to host the 1998 World Equestrian Games in view of the indirect investment and marketing benefits for the Irish blood-stock industry and the tourism industry which would accrue as a result of this event. [10291/96]
Mr. O'Sullivan
I propose to take Questions Nos. 29, 47 and 255 together.
The Minister for Tourism and Trade set out the Government's position on support for the World Equestrian Games when he spoke on an Adjournment debate in this House on 17 April. I think it would be useful in responding to the questions put by Deputies to reiterate some of the main points made in that debate.
The allocation of the World Equestrian Games to Ireland and the organising of those games are matters in the first instance for the Federation Equestre International and World Equestrian Games Limited. The policy of both this and the previous Government has been to encourage and assist the WEG in its work, where appropriate, to ensure commercially successful games that would reflect well on this country in equestrian and general promotional terms. To this end WEG (Ireland) Limited was given, via Bord Fáilte, an initial grant of £250,000 in 1994 to assist with start-up costs, with no commitment to funding in later years. That was made very clear, in writing, by the previous Minister for Tourism and Trade.
However, deterioration in the WEG's financial perspectives became apparent to the Minister in early 1995 when the company confirmed escalation by £6.3 million in projected costs since the successful bid, including its revelation that provision had now to be made for a fee of £4.5 million which it had agreed to pay the FEI for hosting the games.
At meetings in March 1995 with the chairman of the WEG, the Minister made plain his very serious concern at the manner in which the WEG had managed events, underlining the fact that the company had been told repeatedly that the Government would not underwrite the games. On foot of certain assurances from the WEG chairman, including company optimism about prospects for generating up to £6 million in corporate sponsorship which would turn the games into profit, a further grant of £250,000, again with no future funding commitment, was provided by Bord Fáilte.
To allow the WEG retain the games at that point, Bord Fáilte also agreed to guarantee an undertaking, given by the company, to the FEI for payment in respect of hosting the games in this country of not more than £1.5 million from proceeds in 1998. This guarantee is subject to the fulfilment of the terms of the contract governing the granting of the games.
In December 1995 the WEG indicated to the Department that the FEI had still not put a TV strategy in place and that to meet cash flow requirements it would need a further grant of £500,000 in 1996 and a bankable commitment for a similar figure in 1997, otherwise it would be unable to continue trading. Despite repeated indications that commercial sponsorship would be signed up, no contracts had been negotiated. The WEG's only source of funding continued to be the Exchequer and the company was in deficit. The Minister asked the company to reconsider its proposals, examine possible ways of reducing costs and to come up with hard evidence of adequate levels of sponsorship in the light of its £10.9 million cost projections for the event.
In the absence of a satisfactory response to his request from the company, the Minister completed a review of the State's involvement in the games with particular reference to the financial exposure of the Exchequer and the credibility of the figures in the WEG's business plan. He subsequently brought the matter to the attention of the Government following which the WEG was informed on 27 March that it had been decided to cease further State financial support for the games.
While there have been numerous contacts with the WEG since that date, no substantial case has yet been put forward which the Minister believes would warrant a reversal of the Government's decision. The Minister has had no contact with the FEI.
Would it not be a good idea for the Minister to contact the FEI as a matter of urgency? My information is that there may be a sponsor to rescue these games. In those circumstances, will the Minister do the business?
Mr. O'Sullivan
I will convey the Deputy's wishes to the Minister on the basis of his comments regarding sponsorship. If there is a sponsor, we should try to find him.