There were lessons to be learned for all State-funded projects from the escalating costs of building the replica Famine ship, Jeanie Johnson, a new analysis of the controversial venture has found.
State agencies failed to control the costs or to undertake sufficient appraisals of the project, the report said.
The report commissioned by the Department of Communications, Marine and Natural Resources recalls that the original feasibility study budget was of the order of € 5.6 million.
However, it said the total cost of the project was approximately € 15.5 million.
The report, written by former secretary general of the Department of Finance, Mr Seán Cromien, and by the accountants Chapman Flood Mazaars, makes a number of recommendations. Among them are the need for relevant expertise in project teams, a consistent approach to project appraisal guidelines and a proper co-ordination where more than one State agency is involved in funding.
It was welcomed yesterday by the Minister for Communications, Marine and Natural Resources, Mr Ahern, who said it identified serious lessons which must be learned from a public funding viewpoint.
He urged the putting in place of robust structures which would ensure that adequate appraisal of projects was carried out before they were approved for grant funding.
The report stated that the project was funded from a number of sources both within the public sector and through corporate and other voluntary donations.
The total State sector support provided to date, including guarantees provided by Kerry County Council and Tralee Town Council, was approximately € 12.2 million. In 1995 also, an application was made to the Department of Arts, Heritage and the Gaeltacht for funding under the Cultural Development Initiatives Scheme. An award of IR£ 750,000 (€ 952,300) was approved by the Minister in 1996.
"We understand that a formal appraisal of the likely success of the project was not carried out prior to the award of any of these amounts," the report stated.
The decision to make such awards without completing a formal appraisal of the cost-benefit profile and likely outcome of the project had significance for the subsequent progress of the project, it said.
The report stated: "The decisions by Shannon Development and the Department of the Arts, Culture and the Gaeltacht to award funding to the project committed State support without detailed appraisal of the likely success of the project."
The report listed the main weaknesses of the project. It found that the project was not properly planned at the outset and was not effectively controlled.
In particular, the project did not implement cost controls. The appraisal carried out on the project by stakeholders varied in scale and approach. The appraisals carried out did not address the fundamental risks in the project plan.
The report recommended that availability of relevant expertise and experience be specifically addressed and evidenced in all project plans submitted for State support.
The Department of Finance "Guidelines for the Appraisal and Management of Capital Expenditure Proposals in the Public Sector" should be applied by all funding authorities when appraising project applications.
Kerry County Manager, Mr Martin Nolan, yesterday defended the council's involvement in the project but said there were lessons to be learned.