Wasteful overspending which may have cost the State tens of millions of euro is criticised in the latest report by the Dáil's Public Accounts Committee (Pac) which examines business deals and projects by State agencies, writes Liam Reid, Political Reporter
A report by the committee, to be published next week, will include criticisms of a deal to provide high-speed internet capacity to Ireland where the Industrial Development Authority (IDA) was forced to wipe €20 million off its value after the dotcom bubble burst.
Other projects highlighted in the report include the purchase of the 450-acre Battle of the Boyne site for €2 million more than it may have normally been worth.
The report examines a computer project at the Forestry Service which cost nearly three times its original €5 million estimate and took more than six years to complete. The 66-page report is the latest by the committee to focus attention on overspending and potential waste on State projects.
The report, in draft form, arose out of the committee's hearings from October 2003 to June 2004.
The costliest project dealt with in the report relates to the decision in 1999 by the Government to invest €77.5 million in a deal with Global Crossing to provide an underwater cable to improve the availability of broadband connectivity.
Major businesses were highlighting the lack of access to such infrastructure at the time, and a series of telecoms companies signed up to buy capacity on the new network. By the time it came into operation in 2002, there had been a slump, and many companies refused to honour their contracts.
The report commends the Government for the decision, but highlights the fact that, as of late 2003, there was €11 million in debts outstanding. The IDA, which oversees the project, had written €20 million off the market value of the remaining capacity, reducing it to €2 million.
The report recommends that, in future infrastructure deals, the State should try to ensure that private business partners share the risk.
The IDA has recovered some debts and sold more capacity on the network. It has consistently maintained it has been a key factor in creating conditions to attract large internet-based firms to Ireland.
The purchase of the 450-acre Battle of the Boyne site is also highlighted. It was bought in 2000 for €9.4 million, through the purchase of a firm called Deepriver Ltd.
The main beneficiaries of the sale were the family of Neil McCann of Fyffe's fruit importers and businessman Tim Collins, a friend of Taoiseach Bertie Ahern. The price was more than double what they paid when they bought the site in late 1997 for €3.43 million.
The report finds that the State paid €2 million more than the site might normally have been worth because of the State being the purchaser and the circumstances of its desire to buy it as a mark of its commitment to peace and reconciliation in the wake of the Good Friday agreement.