Government funding for the development of the new Lansdowne Road stadium has been suspended pending the resolution of a dispute which centres on a demand that the Irish Rugby Football Union (IRFU) provide security of €20 million in order to safeguard public money advanced to the project during its planning and preparatory stages.
According to internal Football Association of Ireland (FAI) documents seen by The Irish Times, after they were sent in error to the members of the media, the Government has sought the security on the advice of the Chief State Solicitors Office (CSSO).
The CSSO is concerned that the public funding currently being advanced in order to get the scheme under way could be lost if the scheme does not proceed and the IRFU decides to sell the highly valuable site on which the present stadium stands. The IRFU is, in turn, seeking an indemnity for half of the €20 million from the FAI. Both organisations are also being required to provide an additional €500,000 in bridging finance so as to cover the day-to-day operating costs of the development as a result of the funding delay.
In the document, which is the text of FAI chief executive John Delaney's address to tomorrow's meeting of the association's national council, it is stated that there have been "lengthy and protracted discussions between the Department and the CSSO on one side and Arthur Cox Solicitors on behalf of the IRFU and FAI".
Mr Delaney says in his address that "some progress has been made on the issue", but that "difficulties continue to exist". He says that the present position is that the charge would be applied by the Government in the event that the redevelopment project does not go ahead, the stadium is sold, and all of the net proceeds from such a sale are not subsequently used by the IRFU in the construction of an alternative stadium.
Asked about the issue last night, Mr Delaney described the issue "as a paperwork issue," which he said could be resolved "quite quickly". He denied that the project was being delayed in any way by the difficulties and said the €1 million being advanced by the two sporting organisation would be recouped from the Government when the matter is resolved.
In relation to the €10 million indemnity being required of it by the IRFU, its partners in the scheme, he said: "I can't see that we would be exposed to any liability. The chance of the risk crystalising is extremely remote."
The dispute, nevertheless, comes after repeated claims in public by the FAI's leadership that all aspects of the development were proceeding smoothly and to schedule.
The Lansdowne Road Stadium Redevelopment Company, which was established by the two associations as a joint venture to oversee the construction and operation of the new €292 million stadium, recently appointed a project management team and it was intended that an application for planning permission would be submitted by the end of this year.
A little over a year was then being allowed for the planning process to run its course after which construction would begin and it was hoped that the new stadium would be opened during 2009.
Mr Delaney insists that the current difficulties with the Government, which is due to meet around two-thirds of the total costs, has not affected this schedule. However, it is clear that the two associations could not pay the day-to-day costs of the development for any prolonged period of time during which there was continuing uncertainty regarding the provision and delivery of public funding.
The news, however, was not all bad for the FAI with the document containing his proposed speech also revealing that the association expects to generate €3.18 million from the forthcoming World Cup qualifier against France.