Wednesday, 30 May 2001
Dáil Eireann Debate
When I reported to the House on this matter on 4 April last, I indicated that the allocation of funds for the purchase of specific, core properties for MediaLabEurope and the wider Digital Hub projects would be agreed shortly.
Since then, consideration of development proposals submitted by Digital Media District Limited has been brought to a conclusion. On foot of this, the Government has agreed a capital allocation of up to £58 million by the end of next year  for the project. This is broken down between £39 million this year and £19 million next year for the purchase of core properties, including premises for MediaLabEurope. Current funding amounting to £2 million per annum has been approved for the operating expenses of Digital Media District Limited to end 2003. A total of £200,200 has been expended on the Digital Hub project to date and £14 million of the £28 million in start up capital allocated to the MediaLabEurope project has been spent to date, in line with the agreement between the Government and MediaLabEurope.
On 4 April I also referred in the House to the involvement of the private sector in the development of certain aspects of the project and it has since been agreed that private sector investment will be encouraged.
The board of DMD Limited has been requested to prepare a development strategy for the Digital Hub to the period ending December 2003. Work on legislation to place DMD Limited on a statutory footing has also been proceeding and the legislation will be brought before the Dáil as soon as possible.
As I said in the House on 14 February, a priority for DMD Limited in the start up phase is consultation with the local community. This remains a key priority for the Digital Hub team and it is being undertaken in the context of Dublin Corporation's integrated area plan for the Liberties-Coombe area. As part of the consultation process, a presentation was made by DMD Limited to local representatives at a meeting of the local area committee for south central Dublin, a sub-committee of Dublin City Council recently.
Now that the preliminary stages of developing the project have been completed, responsibility for the Digital Hub – and MediaLabEurope – has been transferred to the Minister for Public Enterprise who will oversee its future development and introduce the legislation placing DMD Limited on a statutory footing. The Government made an order on Tuesday last transferring responsibility for DMD Limited to the Minister for Public Enterprise with effect from that date. The transfer process will also be dealt with in the context of the approval by the Dáil of the Revised Estimates for 2001.
The current membership of the board of Digital Media District Limited which was approved by the Government in April 2000 is as follows: Paddy Teahon, executive chairperson; Dan Flinter, chief executive officer, Enterprise Ireland; Don Thornhill, chairman, Higher Education Authority; John Fitzgerald, Dublin City Manager; Paul Kavanagh, businessman; Paul McGuinness, Principle Management Limited; Peter Cassells, general secretary, Irish Congress of Trade Unions and Jackie Harrison, director of enterprise, IBEC.
Mr. Noonan: Serious relevant information was withheld by the Government in relation to Campus Ireland and only came to light on foot of a  request under the Freedom of Information Act which showed that the estimate of the cost, as estimated by the Department of Finance, was significantly in excess of what was revealed to the House by the Minister of Tourism, Sport and Recreation. Will the Taoiseach inform the House if there are similar conflicts with the Department of Finance, within Government or between Departments in respect of the projected cost of the Digital Media District project?
The Taoiseach: The Department of Finance has been very much the driver of this project and it has been involved all the way. The money it has allocated to buy core properties is in addition to the £28 million that was given. The Department indicated the properties to be bought and where the investment is to be made. This is the first allocation it has given to the project, so it is very much one that has been cleared by it. The administration costs I gave in my reply are not large and they have also been cleared by the Department.
The Department has also insisted that reviews of the project must be carried out in mid-2002 and at the end of 2003. The review to be carried out next year is to ensure the properties have been bought and the one to be carried out in 2003 is to examine some of the other plans for the Digital Hub to ascertain the stage they are at and how the private sector is faring in those areas. The company would probably hope that by that stage the private sector would have taken up some of the initiatives, but that remains to be seen. The company would probably also like if the State would assist if it was required to. Other than that, I do not think there are any other outstanding matters.
MediaLabEurope is already up and running and the allocation of this money and the clearance of these issues will allow work on the wider Digital Hub to proceed and all concerned are anxious for that to go ahead.
Mr. Noonan: Can the Taoiseach confirm that the executive chairman and the management services company appointed to oversee the Campus Ireland project are also the executive chairman and management services company appointed to this project? Will he inform the House of the precise remuneration arrangements put in place for Mr. Patrick Teahon, the executive chairman? Are we to take it that the consultancy fee arrangement for the Magahy company for this project is along the lines of that agreed for Campus Ireland?
The Taoiseach: With regard to the figure for Mr. Paddy Teahon, the figure of £200,200 is broken down between £183,200 for the executive service team and £17,000 to cover Mr. Teahon's salary and expenses up to December 2000. There is no overlap between the executive service team for Stadium Ireland and the Digital Hub apart from Magahy and Company who provided the  director of the executive service team. The business services, PriceWaterhouseCoopers and the other people in the consortium are different.
The Taoiseach: It was initially agreed on a month by month basis. The contract negotiations for the executive services team were conducted by Digital Media District Limited. The fee structure provided for payments on a fixed sum basis from November 2000 to March 2001, inclusive, and after that on the basis of a percentage of the development costs. The discussions on this with the Department have not concluded and are still evolving. That is mainly for two reasons, one, to ascertain the likely development costs, which have been only cleared by the Department of Finance and, two, to examine how precisely they would structure it. There is no agreement at this stage on how the fee will be structured. It may end up like Stadium Campus Ireland, but there is no agreement on that yet.
The Taoiseach: Not as far as I know. I do not have the terms of his contract. In the case of Stadium Campus Ireland, he is in receipt of an allowance which allows for a car, but I do not think it is linked to the Digital Media District project.
Mr. Quinn: I understand from what the Taoiseach has said that the legislation to put this body on a statutory footing will be drafted in the Department Enterprise, Trade and Employment, therefore, we will not see it for a couple of years given the Department's legislative work load.
Mr. Quinn: The Taoiseach knows we will not have the legislation this year. The Minister of State is smiling because he knows exactly what he must do in the time available. We will not see the legislation for this body which has been allocated substantial amounts of capital and is effectively unaccountable in this House other than through the Minister for Enterprise, Trade and Employment when she comes here. Given that the body will not be on a statutory footing, will the Taoiseach agree that because of the substantial sums of money being made available to the body, the company should come in here and be accountable to the Oireachtas through the relevant committee of this House? I presume the normal convention will prevail in respect of retired civil servants employed by the Government following their retirement whereby any salaries accumulated on foot of new employment contracts would be netted from their pension entitlements. While Mr. Teahon has given a great service to this country over many years of dedicated public service, is it correct that like all other public servants who have taken on additional assignments following retirement, the net value of his remuneration would be equivalent to his pension entitlements in the first instance?
The Taoiseach: On the first question, the company has already reported to a Dáil committee and I have answered questions on the estimate figure. I have already made it clear that the company is answerable to a Dáil committee about which there is no difficulty.
In regard to Mr. Teahon, I understand the rule is that taking into account pension and whatever other work one can get, a person is not entitled to receive more than he received when working, which applies in this instance.
Mr. Noonan: Arising from the Taoiseach's reply, it is true that while the protocol is that a retired civil servant is not customarily entitled to earn more than he earned while working in the sum of payments plus pension, the reason a car allowance is being provided is to stay within that limit. By providing a car allowance, the Taoiseach is clearly in breach of the protocol to which he has referred.
The Taoiseach: I would need to look at the breakdown of the figures. However, as I understand it, the protocol is that taking the pension and what one earns by way of salary, one cannot receive more than one earned. I presume in relation to expenses, looking at the figure for last year – Mr. Teahon has worked on the project since 1999 – his full remuneration in monetary terms last year was £17,000. Obviously he is also in receipt of money for Stadium Campus Ireland, which I do not think creates a difficulty. There is no secret in regard to these details.
Mr. Noonan: Is it not a fact that the sum of pension, plus Campus Ireland, plus this project  would take Mr. Teahon to well in excess of the protocol to which the Taoiseach referred and that the arrangement was made to provide him with a car allowance rather than salary so that the Taoiseach could state here that he is within the protocol, when he is not?
The Taoiseach: I do not have the Campus Ireland figure. However, I am prepared to make the figures available. If the figure was the same, including the pension, it would seem that between his pension, salary and expenses, he would still be on that figure. However, I have no difficulty making the figures available. I believe he still will not be over the figure.
Dr. Upton: The original prediction was that approximately 7,000 jobs would be created in this area and approximately 2,500 new apartments built. Is the Taoiseach confident these numbers will materialise? Is he happy with the level of response by the local residents to the questionnaire circulated to them or does there need to be a more proactive consultation with them?
The Taoiseach: On the jobs issue, I hope the figures will materialise. There is enormous interest in the area as a location for Internet, multimedia, information, communications and technologies industries. The Department of Finance believes many of the buildings the State could have bought should be bought by the private sector. Perhaps this is the case because the private sector has been active in the area. I understand relevant industries, not just developers, have an interest in the area. As MediaLabEurope, the flagship of the hub, moves on, in addition to anticipated private sector investment and refurbishment works, it certainly should help. To reach these figures will take time because it will depend on what types of industries come into the area.
As far as the local residents are concerned, the corporation is involved in the redevelopment of the whole area. What is happening in relation to the Digital Hub will take place in conjunction with this redevelopment to try to ensure the corporation's plan for the Liberties-Coombe, together with the Rapid programme and the enormous amounts of money the corporation will spend to develop the area, will help to create a new model for urban regeneration and development. This will generate employment in the area and result in the provision of accommodation for residents and businesses. I understand contacts with representatives of the local community are continuing and there was a meeting last week. I believe the response to the questionnaires and  the contact with schools and other individuals in the community has been very helpful and that they have agreed a means of working together. Like the Financial Services Centre, one of the main priorities is to try to help the local residents in regard to education and relevant training. It is important that local residents get an opportunity to receive an education and have an opportunity to work in the industry. I have made my views in that regard very clear, as has the company. The Massachusetts Institute of Technology, which has a great deal of experience in this area, is adamant it will play its part in achieving this goal.
Dr. Upton: In relation to education and training aspects, what third level colleges have been invited to participate or are currently actively engaged in the process? Will any of the institutes of technology, particularly the Dublin Institute of Technology, have any role to play?
The Taoiseach: Trinity College and other colleges will be involved. Dublin Institute of Technology is probably the most suitable because it is already close to the community and has helped in the development of the area. The Higher Education Authority and the enterprise and skills sections of the IDA are also involved.
Mr. Noonan: Given the downturn in the US economy, particularly in the IT sector, is there concern that the scope of the project to attract research funds from American companies has been diminished? The possibility of such companies locating in the digital media district is also narrowing. Is it true that Mr. Paul Kavanagh, a member of the board, recently claimed credit for the project?
The Taoiseach: Many have claimed credit but I hope their activity proves it to be correct because much of this is futuristic. For this reason it also seems to answer the first question. While the ICT companies may slow down this year it is felt that the work involved in this research will not suffer. It involves new aspects of work. It is extremely important to high tech industry that it develops these aspects. As most of the ICT companies are tightening their budgets and allocations this year there could be some short-term ups and downs but those who will drive this work are research graduates, scientists and others specialising in the area. The feeling is that the people involved will not be affected by short-term ups and downs because their work is for the longer term.
Mr. Broughan: I am glad the Taoiseach spoke about the need for consultation. In the early stages of the project some of the people from the south east inner city woke up to find they were living in the village quarter. There were signs all around indicating where this was and neither they nor the local authority had had any input. The Taoiseach mentioned the IFSC where the por tents, given the fact that the locals seem to have been locked out of the place for many years, would not seem to be so good. Intense co-operation and consultation with the local authority and community are critical if the project is to be a success.
The Taoiseach: I agree with the Deputy. I have first-hand experience of the time it took to develop those contacts in the International Financial Services Centre from which much can be learned. With young people in schools it took all of 14 years before it had an impact. I often wondered if I would ever see dealers and stockbrokers coming from the local community but two of the best and highest paid are locals. It has taken 14 years to reach this stage and it is now feeding down through the system. If a project is helped from primary school level it will not be long before people pass through the six years of second level and three or four years of third level, just a decade. There are many jobs along the ranks and it makes sense that people in the local community will, if given encouragement, have the chance to fill them. I have emphasised this from the start and from early on the board sent out flyers in the area and met the residents with whom it has co-operated closely. It has also met the public representatives, most recently last week. This is useful and as properties come on stream and are developed in the next few years there will be a real opportunity for people in the Liberties and Coombe area to become involved.
Mr. Quinn: This is the last time that we will be able to ask the Taoiseach questions about this matter for which responsibility will now be vested, as we heard, in the Minister for Public Enterprise. Does the Taoiseach agree that the experience in the IFSC was that there was little or no engagement with local community groups because there was no legal mandate on the Custom House docklands development authority to actually engage on a structured basis? Bearing in mind that the area is located in his constituency, it was only when specific legislative obligations were written in that the development authority engaged in the kind of community support programmes with which his colleague, the Minister of State at the Department of Tourism, Sport and Recreation, Deputy Eoin Ryan, would be more than familiar. The Taoiseach referred to the heads of the Bill having been agreed. Do they make specific reference to the necessity of the company in question, which presumably will become a semi-State company, to have a legislative obligation to engage in community development with local people in addition to its other obligations in respect of research and development and the advancement of communications in the electronic sphere?
The Taoiseach: The Deputy asked me that question many months ago. At that stage I undertook to look at aspects of the Custom House  docklands development authority legislation to try to work out similar provisions as they have worked extremely well and played a big part in the Custom House dockslands development authority in the general area and training programme. I have asked that a similar head be included in this legislation.
The Taoiseach: I understand it is. Some of the local Deputies asked me to meet some local groups. It was pointed out to me by people involved in the education area that much of the project involved science and technological subjects and academic studies. As a result employment opportunities would initially, perhaps for a decade, have to be found in other areas. I asked the draft team to look at this particularly. I have also asked that the draft take into account that they cannot just say they cannot find a scientist or technologist. They must take local involvement into account through some other employment. I can see how easy it would be to get out of a commitment. That is what happened in the early years of the International Financial Services Centre when excuses were found for employing anybody except a local.
Mr. Noonan: What progress has been made in transferring and vesting the principal properties in the company? Who are the beneficial owners of the properties in question and how much money has been or will be invested in the acquisition of properties?
The Taoiseach: The Office of Public Works will hold the properties which it will purchase on behalf of the State. There is provision that they can be sold on to the private sector at the market value. The State wants to get the project up and running and does not want to hold on to the properties forever.
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