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Dáil Éireann díospóireacht -
Tuesday, 10 Nov 1998

Vol. 496 No. 3

Adjournment Debate. - National Conference Centre.

I raise this matter to give the Minister for Tourism, Sport and Recreation an opportunity to make a statement to the Dáil regarding the uncertainty surrounding the future of the National Conference Centre because of the European Union's reluctance to fund the docklands development. Since the worrying reports surfaced regarding problems with European Union funding, the National Conference Centre problem has worsened with further reports of divisions deepening between the company developing the conference centre and the State body charged with redeveloping Dublin docks and the fears that the project may not go ahead if the dispute is unresolved.

The Sunday Business Post reported on 8 November that the Spencer Dock Development Company may not proceed with the project unless a planning dispute with the Dublin Docklands Development Authority is resolved quickly. Mr. Richard Barrett of the Spencer Dock Development Company was quoted as saying that he would be lodging complaints about the Dublin Dockland Development Authority's handling of the project with the Minister for Finance, the Comptroller and Auditor General, as well as the Committee for Public Accounts on Monday last. I understand that those complaints have been lodged. He is quoted as saying that the future of the centre was now in serious jeopardy because the Dublin Docklands Development Authority had refused to confirm that it will not object to the granting of planning permission for site preparation work, a permission granted by Dublin Corporation last month. He described the situation as completely disastrous and gave the opinion that nobody could do business with the Authority. He also said that they were impeding development in the docklands when they are supposed to be promoting it.

An allegation has been made by Spencer Dock Development Company that the Dublin Dockland Development Authority had asked for a £50 million payment in return for speedy planning permission for the conference centre. If the situation is not resolved and an objection is launched, a further four months delay could elapse before a decision on the site works appeal is given. If that delay occurs, the £25 million funding from the European Union may be lost and that would sound the death knell for the whole project as the centre must be completed by December 2000 to qualify for these funds.

As I said, the dispute between the Spencer Dockland Development Company and the Dublin Dockland Development Authority is one issue but the threat that the European Commission will block tax concessions which were to benefit the site of the planned conference centre project is another issue. Allied to this are media suggestions that senior civil servants within the Department of Finance are unconvinced that the project is commercially viable.

I know the Minister is in the United States, but it is important that the Minister of State makes a statement of clarification assuring us that the Minister is adopting a hands on approach and that he has called together the different parties to ensure that no fatal delays arise in the development of the project.

The current tender procedure for development, with financial assistance from the European Union, of a National Conference Centre announced by the Government in July of last year was organised by Bord Fáilte. Bord Fáilte conducted the procedure under the aegis of the independent management board for product development which adjudicates on applications for assistance under the cofunded tourism operational programme. The procedure was run under the terms of EU Council Directive 93/37/EEC.

Full tender submissions were received from five consortia and that submitted by Spencer Dock International Convention Centre Limited to develop the project at a site in Dublin docklands was recommended for forwarding by Government to Brussels. The Operational Programme requires that decisions on grant applications of this size must be made with the agreement of the Government and the EU Commission on foot of a cost benefit analysis. The cost benefit analysis, undertaken by independent consultants, was favourable towards the project and, on 16 September, the Government agreed to the making of a submission to the European Commission recommending formal approval for a 33 million ecu grant towards the cost of developing the project. This submission was forwarded to the Commission on 28 September where it is currently under examination. The Commission's response is now awaited. In relation to taxation matters, I am advised by my colleague, the Minister for Finance, that he has indicated on several occasions recently that there have been difficulties in securing European Commission approval for various tax incentive schemes. The origin of our present problems with the EU Commission in this area goes back to May 1997 after a media report about the extension of the enterprise areas tax reliefs by the previous Government to Knock Airport in the 1997 Finance Act.

As regards the Custom House docks area in Dublin, the State Aids Directorate of the EU Commission was formally notified in January of proposals to give the same tax reliefs to a 12 acre extension to this Dublin docklands area. The tax reliefs involved were accelerated capital allowances for the construction and refurbishment of commercial buildings, double-rent relief for ten years for the lessees of these buildings and rates remission on a sliding scale for ten years. Despite several meetings since January between the Department of Finance and the relevant EU officials no EU approval has yet been received for these proposals.

It transpired during the course of the year that the EU Commission was regarding the double rent relief and the rates remission as operating aids and contending that these two reliefs should, in general, no longer apply for new projects for ten years because Ireland has moved from a country coming under Article 92(3)(a) of the EU treaties to one coming under Article 92(3)(c) as a result of the recent significant improvement in the Irish economy. Article 92(3) states that the following may be considered to be compatible with the common market:

(a) aid to promote the economic development of areas where the standard of living is abnormally low or where there is serious under employment, and

(c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest.

The State Aids Directorate interprets these provisions in accordance with its own guidelines and with European court decisions and in the context of recent relevant economic data for the areas involved. More favourable State aid rules apply to a 92(3)(a) area than to a 92(3)(c) area.

Will the Minister of State respond to the other situation?

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