WRITTEN QUESTION E-3325/01

by Patricia McKenna (Verts/ALE) to the Commission

(30 November 2001)

Subject: Drogheda Business Development Centre, Ireland

The Drogheda Business Development Centre (DBDC) Ltd was approved for public support from Interreg and other indirect sources of EU funds on the grounds that it would be acquiring a property intended to accommodate a much-needed enterprise centre for the town of Drogheda. It has been the subject of much criticism, both in official reports(1) and in the media, and from official bodies like Enterprise Ireland. Having now acquired the property, the organisation wishes to change its objectives and sell the whole property for a profit in the booming property market, arguing that the proposed centre is neither viable nor necessary. DBDC nevertheless claims that it will provide a centre elsewhere. However, other parties have offered to buy the property or take over the project, so as to complete the centre, but all such efforts have been rebuffed.

DBDC has already returned its grant from Partnership and shows every sign of returning all other grants after the sale, which has now been agreed(2). However, the necessary authorisations for such a sale under the granting agency agreements have not to date been forthcoming. Nevertheless, the result could be a privately owned and controlled property development company holding over IRP 2 million, which would be under no enforceable obligation to provide Drogheda with an enterprise centre. The Irish State would then be forced to test its agreements in court, without any guarantee of success.

Does the Commission agree that it is not the role of public authorities, including the EU, to provide seed capital in the form of grants, which later take the form of returnable loans, with a view to in effect establishing such privately owned and controlled companies. Does the Commission consider it appropriate that bodies managing public funds for public objectives should bind their Directors to absolute secrecy, and use this and other means to exclude the representatives of civil society and all granting agencies from their boards? Is the Commission now willing to advise the Member State to take out an injunction against the sale to prevent abuse of EU funding, and force a return to the objectives of the project?

(1) Operational Programme for Local, Urban and Rural Development 94/99 Control Check report, ERDF & Cohesion Fund, Financial Control Units, Department of Finance, Ireland, February 2001; Also undated ADM Ltd/Partnership summary report.

(2) Page 3, DBDC Financial Statements for 2000: Post Balance Sheet Events. Since year-end, the Directors have entered into a contract to dispose of its premises. The company has also, since year end, returned capital grants to Drogheda Partnership Company Ltd.

Answer given by Mr Barnier on behalf of the Commission

(12 February 2002)

The Drogheda Business Development Centre received European Regional Development Fund (ERDF) support during the 1994-1999 programming period under the Interreg II Community initiative and the local urban and rural development programme.

The failure of the project to become a fully functioning enterprise centre was identified in a control report undertaken by the ERDF and Cohesion Fund control unit which was set up 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).

The Commission will keep in contact with the competent Irish authorities to follow the action being taken and can consider, if appropriate, financial corrections.

(1) OJ L 290, 23.10.1997.