Thursday, 29 April 2004
Dáil Eireann Debate
3. Dr. Cowley asked the Minister for the Environment, Heritage and Local Government if his attention has been drawn to the fact that an essential all-weather tourism project on Achill Island is being denied funding of €818,123 under the NDP operational programme for tourism due to his and his Department’s failure to allow Mayo County Council to underwrite operational losses on the project for a ten-year period; if he will immediately take steps to give sanction to Mayo County Council to allow this essential tourism project to proceed, due to the severe problems in the Achill area, with hotels closing due to the lack of an all-weather tourism product; and if he will make a statement on the matter. [12366/04]
Minister of State at the Department of the Environment, Heritage and Local Government (Mr. Gallagher): The provision of an operational guarantee for any project is a matter for consideration in the first instance by the local authority concerned and my Department has received no approach from Mayo County Council in regard to this project. However, in order to be of assistance, my Department has ascertained that the county council has decided not to provide an operational guarantee for this project. This decision is entirely a matter for the local authority and the question of sanction by my Department has not arisen in this case.
Dr. Cowley: I thank the Minister of State for his answer. I am gutted about this. I know it is not the Minister of State’s problem. I really asked the question to find out whether the Minister had any responsibility in this matter because I was not receiving straight answers from the local authority.
I come from the west, from an area that is on its knees. A number of hotels have closed recently because there is no all-weather facility — there is nothing to keep people in the area. This is a project under Fáilte Ireland and the national operational programme for tourism, which could cost €1.38 million. People have gone into the bank and obtained personal loans to give to the group interest-free so they may build this facility. All that was needed was for the local authority to underwrite the project. It is projected to show a profit from year one.
Dr. Cowley: How can the local authority justify not backing this project when its profit is projected to rise from €23,314 in the first year to €116,443 by year five? There are questions to be answered by the local authority, particularly the county manager. The project is being developed by a not-for-profit organisation. Local people have got together and formed a company in their own time, putting in €5,000 each. I have personally gone to the bank and obtained a loan at my own expense to give to the company, to be repaid at zero interest when it can do so. The company has €308,000 and somebody else is providing the other half.
Dr. Cowley: Is there any way the Department of the Environment, Heritage and Local Government can put pressure on the local authority to ensure it does its statutory duty and allows for people to come and stay in Achill even though it is raining? Otherwise they will not stay. We need this all-weather centre. More than €50,000 has been spent in studies to show this is feasible. The project has been going on since 2000. To be refused by the local authority, which is supposed to be encouraging such projects, is a scandal. I hope the Minister of State will investigate this.
Mr. Gallagher: The Deputy has acknowledged that the Minister has no role here. The decision to provide operational guarantees for this or any project is a matter, in the first instance, for the local authority without any reference to the Department. The Department has no knowledge of this proposal but when the matter was raised we made some inquiries. We understand the project was approved for a grant by Fáilte Ireland, as Deputy Cowley suggested, subject to the local authority agreeing to underwrite any operational losses the project might incur in ten years. According to Deputy Cowley’s information, there are no projected losses at all but a net profit of €23,000 in the first year.
Local authorities generally have concerns about giving operational guarantees to any project that is not under its direct control. The local authority must make decisions with regard to its own policies, financial position and assessment of individual needs. The manager and the council should be the best people to judge this. There has been much focus on the principle of local authorities funding operational losses since the Jeanie Johnston. I understand that some time ago in Tralee there was the possibility that staff would need to be laid off because of losses. The Deputy will also recall that around that time, following a report on the Jeanie Johnston which was prepared by the former Secretary General of the Department of Finance, Mr. Seán Cromien, and the consultants Mazars, the Department of Finance wrote to every Department explaining that the report was critical of the practice of public bodies seeking and obtaining guarantees from other public bodies as a means of passing off some of the risks inherent in funding decisions.
I empathise with Deputy Cowley. I represented the island to which he referred during my time as an MEP. It has a serious unemployment problem and is very much dependent on tourism. However, this is totally outside my control.
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