Inadequate structures were put in place to monitor the State's investment of €35 million in Media Lab Europe (MLE), which ultimately went into liquidation, according to a report into the project by the Dáil Public Accounts Committee (PAC).
The PAC queried the high level of State investment in the project and the adequacy of the structures that were put in place to ensure the State had a meaningful influence, given the scale of its financial input.
The report acknowledged that while the €35 million price was high, the value obtained in the long term could only be seen in a wider perspective, given that the technology sector was worth €50 billion to the overall economy.
"Many companies which set up in Ireland visited the MLE premises, including Yahoo, Google and others. The founders of Google cited MLE as one of the reasons their company came to Ireland. The sum of €35 million must be placed in the context of overall economic development," said the report.
However, it also pointed out that consultants who examined the project had concluded the laboratory's scientific output could only be described as "dismal," with just 24 publications in international scientific literature.
"A total of 15 refereed papers were produced from 172 person years of research. Assuming MLE was not motivated towards publication of its work, it was difficult to see what alternative path was available or was being pursued by it towards international recognition in the world of science and technology," said the report.
The PAC also quoted a 1999 taskforce report on the proposal to establish MLE which described the project as "dismal", "surprisingly weak" and "mediocre".
In its findings and recommendations, the PAC said that the risks of going ahead with the project were recognised by the Government when making its decision and that the Massachusetts Institute of Technology (MIT) which collaborated in the project, fulfilled all its legal and contractual obligations.
"Whilst information regarding salaries in respect of individual executives and board members of MLE was not forthcoming, figures provided by the liquidator from the audited accounts suggested that average staff and board remuneration was high," said the report.
It recommended that in future new arrangements may be necessary to enable the State to develop research facilities. These should be based on full risk assessment, appropriate corporate governance, detailed monitoring procedures and the availability of information. It also said that in major projects financed by State grants, payments should be linked to the achievement of performance targets and the State's partners should be required to underpin their participation with appropriate financial contributions.
In a statement last night, MIT welcomed the PAC report, saying: "It confirmed that MIT had fulfilled all of its commitments to the Government and MLE, both legal and otherwise, and continues to believe that the Government was visionary in pursuing Media Lab Europe."
It said that MIT had assisted the PAC by providing three submissions that answered questions and provided information on all matters relating to MLE.
"MIT also requested the liquidator of MLE to co-operate with the Comptroller and Auditor General and the PAC in providing requested information concerning MLE, to the fullest extent permissible by law."
It added that the technology market downturn in 2000 and 2001 had a profoundly negative effect on MLE at a crucial, early stage in its development.
"While it did not realise its potential in such an economic environment, MLE was a highly innovative and worthwhile initiative that yielded clear benefits for Ireland's continuing progress as a leader in the technology marketplace."
