WRITTEN QUESTION E-3778/02

by Patricia McKenna (Verts/ALE) to the Commission

(23 December 2002)

Subject: Drogheda Business Development Centre, Ireland

Further to the Commission's answer of February 2002 to my question E-3325/01(1), in October 2002, the Drogheda Business Development Centre Ltd (DBDC) sold the premises which were originally grant-aided by the EU for an Enterprise Centre, although those grants were later decommitted by the Irish Government. The now seven private owners of the DBDC claim they will not benefit from this sale, even if the net proceeds amount to at least EUR 2 million. Little if any control has been put in place by the State to prevent abuse of these funds, now or in the future. No objection seems to have been raised to the sale, even if prior permission was strictly required under the granting agreement, but was not sought by the DBDC. And all of this despite the fact that these serious issues had been brought to the attention of the Tánaiste, Minister for Finance and Attorney General, in great detail, by myself and others.

Does the Commission feel that this is the correct way to use the generous supports provided by the EU for local development? Can the Commission explain why OLAF has made no serious attempt to investigate these activities, despite being provided with full information on the matter? Can the Commission please explain why the original answer omitted a reference to the fact that the funds had been decommitted, and generally provided little information?

Will the Commission now insist that OLAF investigate?

(1) OJ C 160 E, 4.7.2002, p. 97.

Answer given by Mr Barnier on behalf of the Commission

(30 January 2003)

The project known as the Drogheda Enterprise Centre was initiated in 1995 with a feasibility study by a local group entitled the Enterprise Centre for Drogheda Committee, later known as the Drogheda Business Development Centre (DBDC).

During 1998/1999 public funding for the actual project was made available through the Local Urban and Rural Development Programme with European Regional Development Fund (ERDF) grant aid of EUR 63 500 and through the Interreg II Community Initiative with ERDF grant aid of EUR 158 717.

The premises in fact never became a functioning enterprise centre mainly due to additional costs involved in making it fully operational. This fact was identified in a control report undertaken by the ERDF and Cohesion Fund Control Unit which was established by the national authorities under Commission Regulation (EC) No 2064/97 of 15 October 1997 establishing detailed arrangements for the implementation of Council Regulation (EEC) No 4253/88 as regards the financial control by Member States of operations co-financed by the Structural Funds(1).

As a consequence thereof the Department of Enterprise Trade and Employment decommitted the Community element of the funding and substituted purely national public funding in 2001. The intention was to release the funds for possible use elsewhere. This action ensured that the financial interests of the Community were safeguarded. As no Community funding remained at stake the involvement of the European Anti-Fraud Office was no longer appropriate.

The competent Irish authorities, now solely responsible for the project, informed the Commission that agreement had been reached between the owners of the Centre and the Department, which administered the funding through the Louth County Enterprise Board, that the premises would be sold and the proceeds used to purchase a new enterprise centre with any surplus funds donated to Drogheda Borough Council for the benefit of the people of Drogheda.

The authorities have confirmed that the original premises have been sold and new premises purchased which are now operating as an Enterprise Centre with a number of tenants already in place. The remaining elements of the agreement in relation to the use of surplus funds are in the process of implementation.

(1) OJ L 290, 23.10.1997.