The new Cork School of Music, a constituent part of Cork Institute of Technology, is being procured under the public private partnership model. The CSM provides training in a wide range of musical instruments, musical theory and speech and drama. The school caters for first, second, third and fourth level students, whether they are amateur musicians, music teachers or performers.
The tender for this project was advertised on a European wide basis in June 2000. Following the project launch in July 2000, 12 consortia expressed interest in bidding for the project. Following the presentation of outline proposals the number of bidders was eventually reduced to three. These bidders were issued with an invitation to negotiate in November 2000.
The consortia bids were submitted in February 2001, were subject to detailed evaluation under design and construction, services, financial and legal, by officials of my Department together with specialist advisers. Following this process Jarvis Projects Limited was selected as the preferred bidder in March 2001.
My Department's officials and advisers entered into a period of intense discussion with Jarvis with a view to reaching financial close on the project. During this period Jarvis, under the terms of the project, sought and received planning permission for the project from Cork City Council. However, An Taisce submitted a planning appeal to An Bord Pleanála against the grant of permission. During the period of the appeal, work on the project was suspended and was only resumed after An Bord Pleanála rejected the appeal and granted planning permission for the development in December 2001.
Recently the Department of Finance raised a number of additional issues in respect of the project that my officials have been examining in conjunction with specialist advisers. In addition the question of the involvement of the European Investment Bank is being addressed. Proposals have been tabled whereby the EIB could provide refinancing for the project two years into the operations phase, thus reducing the overall cost of the project. Discussions with both the Department of Finance and the EIB are currently ongoing. In addition, under EU rules, where projects are financed on a deferred payment basis by the private sector the capital value of such projects is a charge on the general Government balance over the construction phase. As the Deputy will be aware, the GGB is the critical measure of what can be accommodated within our obligations under the stability and growth pact of the Maastricht Treaty. A EURSTAT group is currently reviewing the accounting rules on this issue, as will a standing committee being established by my colleague, the Minister for Finance, to advise on the GGB implications of private sector financed projects.
Ultimately the final approval for the CSM will be a matter for the Government and consideration of it will be based on a thorough assessment of affordability of the project in the context of the competing demands on the likely capital funding envelopes and taking into account the issues surrounding the general Government balance. My Department will continue to pursue this matter with the Department of Finance and all other concerned parties with a view to having the matter determined by Government in the very near future.