Dáil Éireann díospóireacht -
Wednesday, 26 Jan 2005

Vol. 596 No. 1

Adjournment Debate.

Media Lab Europe.

Mr. Broughan

I propose to share time with my colleague Deputy Upton.

It is very important that the Dáil is given a very full report on the closing of Media Lab Europe which occurred on 14 January last — it will be liquidated on 1 February — and on the failure of the negotiations between the MIT and the Government regarding additional funding and sponsorship for the project. It must be said that 14 January was a sad day that saw the closure of the anchor tenant in the digital village in the Liberties. Only last autumn Media Lab Europe employed more than 70 people, which was reduced to 45 people more recently. It is very important that we commiserate tonight with those workers who have tragically lost their important jobs. I hope any new similar project in the digital hub will ensure they are employed.

Earlier today I asked the Taoiseach whether he had any regrets at the manner in which Media Lab Europe had folded, the manner in which it was established and the lack of support and attention he, as the progenitor, along with the Minister for Foreign Affairs, Deputy Dermot Ahern, and the Minister of State, Deputy Noel Treacy, had given it. Media Lab Europe was perhaps one of the Taoiseach's two pet projects, Abbotstown being the other one. It was very much the minor project and the Taoiseach certainly took his eye off the ball.

It is right that the Comptroller and Auditor General and the Committee of Public Accounts should examine the €35 million that has been spent by the State on Media Lab Europe. Even though Ms Carla Lillington, our most distinguished high-tech writer, says that the net amount may be only €8 million, we should examine it closely. The IT downturn certainly damaged the planned structure of private corporate sponsorship. Corporate sponsorship which had been expected to run at €10 million a year was only running at one fifth of that and our media lab had to compete with the media lab in Boston. Furthermore, the aims of Media Lab Europe were never very clear. If we compare the Liberties with districts in Seoul and Kuala Lumpur, our ambition for the Liberties was far smaller compared to that of other countries.

It was not clear whether Media Lab Europe had a commercial mandate and or just an academic one, and it could not issue academic qualifications. It is also regrettable that the two local universities, DIT and Trinity College, were not involved in the project, and it is regrettable that there was such a large turnover of leadership. In only four years we had Nicholas Negroponte, Rudi Burger, Ken Haase and Simon Jones and each left with a huge golden handshake. This was not helpful in ensuring this was a successful, sustainable project.

I accept that it was a unique venture and played a very important role regarding the road we are travelling to becoming a technological civilisation. I note that luminaries such as Larry Page and Sergei Bryn of Google visited it along with many others in recent times and that it raised €11 million in work with other universities abroad.

Two Ministers are responsible. The Minister for the Environment, Heritage and Local Government, Deputy Dempsey and the Minister for Foreign Affairs, Deputy Dermot Ahern, did not give the issue the attention it deserves. I welcome Deputy Dempsey's belated announcement and I hope we will have a full debate in the House on the issues to which I have briefly alluded.

Dr. Upton

I thank Deputy Broughan for giving me the opportunity to speak for a few minutes on this. I spoke on the digital hub Bill when it was going through the House and was very enthusiastic about it at that time. I represent the constituency where it is located and clearly I had a particular interest that everything about it would be successful and productive.

It is with great regret that almost five years later — because this was opened in July 2000, the taxpayer, unfortunately being €35 million worse off — we see it coming to an end or at least this part of it.

In late 2004 the Minister flagged a number of concerns about it. Among them was the need for a greater focus on research interests in it, that there was need for better links to Irish universities, that stricter financial control and a limit on financial exposure was required and that improved corporate governance and management was important. All of these issues did not arise overnight. I wonder why they were not identified sooner, why there was not some action taken on them and why we had to wait until there was so much money wasted effectively.

I see this as a mini "Bertie Bowl". It was one of his great flagship projects and one that has flopped. The major concern has to be for those people whose jobs have been lost because of the failure of this project and for the area, that there will be something to replace that tenant in the digital hub area and to take over the responsibilities and roles albeit in a different form and with some new project. It is very important that the area is sustained, that the jobs are sustained and that account will be taken of the people who have suffered from this. As my colleague has said a full report on this is important and should be brought before this House.

Minister of State at the Department of Enterprise, Trade and Employment (Mr. Killeen)

The Minister for Communications, Marine and Natural Resources, Deputy Dempsey, has asked me to convey his regret that he is unable to be in the Chamber tonight.

Media Lab Europe was formed by an agreement between the State and the Massachusetts Institute of Technology and was in operation since early 2000. It was established to conduct non-directed research in the field of digital media.

The Government invested €35.5 million in start-up capital for MLE. Property was also purchased for MLE to the value of €22.5 million. The property remains in State ownership.

While it is acknowledged that research will generally require State support, the unique aspect of the MLE model, as presented initially to Government, was that it would be self-funding by 2005. However, the financial situation deteriorated significantly in recent times due to MLE being unable to raise the necessary sponsorship and corporate income required and as envisaged in its business plan.

In February 2004, the Government Liaison Committee, made up of Departments with an interest in the MLE operation, wrote to MLE requesting that it undertake a fundamental review of its business model and produce a strategic plan. The board of MLE submitted its strategic plan to the Department on 7 May 2004 which included a request for additional Exchequer funding of €9 million. Following this, extensive efforts were made to agree a restructuring of MLE that would allow it to move forward on a more sustainable basis. This included: detailed independent assessment of MLE's strategic plan and its progress towards achieving its high-level objectives; in-depth discussions with the relevant Departments; in-depth discussions with the research and educational agencies and third level institutions; in-depth discussions with the business and development agencies; direct negotiations with MIT and discussions with MLE.

However, a package acceptable to the Government failed to emerge and the decision was taken that no further Exchequer funding would be provided. On 14 January the board of MLE took the decision to wind down operations. Liquidators are due to be appointed on 1 February. The wind-down of MLE is a matter for the directors of the board of MLE and liquidators in the first instance. However, officials from the Department will liaise with the board and management throughout the winding down process.

Regarding students involved in research at the lab, the Minister for Communications, Marine and Natural Resources, Deputy Dempsey is committed to continuing to fund a number of collaborative projects with Irish universities to conclusion over the next two years. He is currently considering the options for a new research entity at the MLE facilities. Issues to be addressed include the need to secure: greater focus on sustainable research and more directed research in a new business model; better links to Irish universities; improved corporate governance and management.

Considering the importance of digital media in the broader ICT sector, and the need for commitment to research and development in this field, there is a need to make a comprehensive assessment of what model and structures should be put in place as part of a new research entity. It is the Minister's intention, therefore, to initiate a consultation process with third-level institutes, industry, Government agencies and the digital hub in early February to establish what the research focus, structure and objectives of the new entity should be. Drawing on the results of the consultation Government will make decisions regarding the shape of a new research entity.

Job Losses.

Mr. McGinley

I thank the Chair for allowing me to raise this important matter on the Adjournment. Last week's announcement by Donegal Parian China that its factory in Ballyshannon is to close with a loss of 44 full-time and ten part-time jobs is a severe blow not alone to Ballyshannon but to all of County Donegal. Parian China has been producing ceramic ware in Ballyshannon for more than 23 years and has been looked upon as a flagship company within the county. Donegal Parian China is a nationally and internationally recognised brand name and has given County Donegal a worldwide profile. Not only does it provide valuable employment in the area but the factory attracted thousands of visitors annually to its impressive showrooms in Ballyshannon. With the imminent closure of the factory all of this is gone and will deal another body blow to the economy of Ballyshannon and the morale of its inhabitants. This is the latest in a long litany of job losses in Ballyshannon and south Donegal. Some years ago Donegal Rubber Company closed with the loss of 100 jobs that have never been replaced. A task force was promised at that time but we still await its establishment. In recent years, Rogan's international fishing fly company closed with the loss of 15 highly skilled jobs. The ESB has reduced its workforce in Ballyshannon from a peak of 200 to 40 employees. The long-established Donegal Democrat that was synonymous with Ballyshannon for many years has been relocated in other parts of Donegal. All these jobs have been lost but not even one industrial replacement job has been created there in the past ten years. One can justifiably say that so far as industrial jobs are concerned, Ballyshannon is a virtual wasteland. To add insult to injury the Parian China jobs are going to Belleek, four miles across the Border into County Fermanagh. This must be an eloquent testament to how the employment environment has deteriorated in the county, even compared to Northern Ireland.

The position in Ballyshannon is a reflection of the serious unemployment problem throughout Donegal. How can the Minister and the Government justify an unemployment rate of 16% in Donegal compared to a national average of approximately 4%? This Government and its predecessor have boasted about the 300,000 to 400,000 new jobs created by the Celtic tiger economy. While I cannot deny these estimates how many of these jobs have gone to Donegal or to Ballyshannon? Donegal has lost more jobs during the years of boom than were created within the county.

Our textile industry in the county has been decimated. One need only mention Fruit of the Loom which closed its centres in Buncrana, Milford, Raphoe and Dungloe, Comer Yarns, in Gweedore industrial estate in my parish, Nenagh Models and Herdsman in the Finn Valley and many others. These jobs have gone from Donegal and have been relocated in other parts of Europe and the world. Is it any wonder that our unemployment rate in Donegal is four times the national average? What has happened in Ballyshannon is a reflection of what is happening throughout County Donegal. Our traditional industries are also in crisis. The fishing industry is at a low ebb. Killybegs is a ghost town. Having visited the town last Monday with our spokesman on the marine, Deputy Perry, we encountered at first hand the serious position there. In previous years one could expect from 1,500 to 2,000 to be employed in onshore processing facilities at this time of year. Currently there are approximately 100 employed there, which is a catastrophic decrease, a wipeout.

We have task forces, reports and plans for many years. What we have not had in Donegal is the provision of new jobs. It is a terrible indictment that only 4% of graduates of the Institute of Technology in Letterkenny obtain employment within the county. This cannot be allowed to continue. I ask the Minister and the Minister of State to come to Ballyshannon and Donegal as soon as possible to see for themselves the seriousness of the position. I ask the Minister to direct his energies and the energies of all the agencies, including IDA, Údarás na Gaeltachta, Forbairt Ireland and others to set annual employment targets for Donegal. Only with such a radical and planned approach can the crisis be addressed. The fight back should commence immediately in Ballyshannon and should spread throughout the rest of the county without further delay.

Mr. Killeen

I thank Deputy McGinley for raising this matter on the Adjournment.

The announcement by the company that it is to close its Donegal Parian China facility is most disappointing and particularly devastating for the workers and families directly affected.

I understand the decision to close is due to a reduction in product demand. However, I am also advised that the company is to consolidate its production in its existing Beleek facility and that some 15 of the 54 Donegal employees may be offered employment in Beleek.

The role of FÁS, the State training agency, will be particularly important in assisting those who are to lose their jobs. FÁS will provide advice and training opportunities for the Parian China workforce. FÁS will make its full range of services available to the workers, which will include top level agreement with the company on responsibilities and actions; intensive interviews, individually and-or in groups, with affected workers that will outline the range of supports and services available; preparation of a "skills analysis report" by FÁS based on identified workers' needs and local opportunities; referral by FÁS of affected workers to jobs, training courses or other options; establishment by FÁS of special or customised training courses where necessary; and ongoing support and action to keep redundant workers in touch with the labour market. In addition to the foregoing, Enterprise Ireland is also providing information and support for those who might wish to start their own businesses.

On 2 December 2004 my colleague, the Minister for Enterprise, Trade and Employment, Deputy Martin, visited North Donegal and met with a number of groups and companies. He undertook this visit in recognition of the relatively difficult employment situation in Donegal. It is his intention, in the very near future, to visit south Donegal and meet with local interest groups to discuss the employment position.

The IDA is actively marketing all areas of Donegal for new investment and jobs and has invested significant moneys in developing a business park to international standards in Letterkenny. In Ballyshannon, the IDA has obtained planning permission for a new facility and a significant amount of site development work has been recently completed. Also in Ballyshannon, Enterprise Ireland has recently partnered with the local community development company, Erne Enterprise, to develop new high quality enterprise space. Enterprise Ireland is providing €300,000 in support to this new 10,000 square foot enterprise centre.

While the IDA and Enterprise Ireland continue to work with their existing company client base to encourage them to grow, the Donegal County Enterprise Board continues to be active in helping new and existing micro-enterprises in the county. I assure the Deputy that tackling the difficulties in Donegal is a priority for the Government and the Minister for Enterprise, Trade and Employment, Deputy Martin, a point which he has also reiterated to the State development agencies operating in Donegal.