The State body managing the Digital Hub project in the Liberties has scrapped a three-year-long tender to appoint a firm to develop the €250 million project.
The decision was taken last week by the Digital Hub Development Agency (DHDA), which is currently working on alternative development proposals for the flagship Government initiative.
The failure of the proposed public private partnership model will further delay the Government's plan to transform a nine acre site in Dublin into a hub for digital media firms.
This strategy was drawn up in 1999 but is already running at least two years behind schedule due to the difficulty of concluding a development deal with a private firm.
Manor Park Homes, the preferred bidder for the project, has already been told that the developer project has concluded without success. Two other bidders, Pierse Contracting and Earlsfort Centre Developments and Hub Developments (Dublin), should have received a letter yesterday.
A Digital Hub spokesman confirmed last night the developer competition had now concluded.
"We had broad agreement with a preferred bidder for the contract but a final agreement could not be reached on certain specific issues," he said.
Management of the DHDA is due to meet the Minister for Communications, Noel Dempsey, shortly to discuss the decision.
One of the sticking points in negotiations was a clause that would have enabled the developer to attract non-digital media firms to the site after five years, if the Digital Hub had not attracted a full complement of companies.
The Government has already spent about €70 million developing about two of the nine acres. Almost 50 companies are located at the Digital Hub employing 400 people and there is now a shortage of space for firms wishing to locate at it. However, the Digital Hub has had its share of setbacks. Earlier this year the Government closed Medialab Europe, a research institute on the site. The first tenant on the site, Education Multimedia Group, ceased trading a few months after setting up operations at the centre.
The decision by DHDA to drop the public private partnership model for developing the Digital Hub will raise further questions for the Government over its commitment to these types of projects.
In 2004, the Comptroller and Auditor General studied a pilot scheme where British firm Jarvis was contracted to build five primary schools. It found that the project could cost 13 per cent more than if built by the State.
Meanwhile, a separate Government plan for a public private partnership to set up a National Conference Centre in Dublin has still not been delivered 15 years after first being proposed. Last month the Michael McNamara group said it had withdrawn from the competition, leaving just two contenders in the race.
