Key papers ‘not handed over’ by department

The Department of Transport has been accused of failing to hand over key documents to the Public Accounts Committee while under investigation for its handling of a flawed and costly legal battle.

The PAC’s chairman, John McGuinness, told the department it was unacceptable that it did not flag the existence of critical documents during hearings on waste at the National Aquatic Centre.

Mr McGuinness said the department’s failure to produce these papers amounted to a “material omission”. He said was not acceptable and was something he wanted answers on.

Mr McGuinness is due to raise the matter again after the PAC received no responses to the questions it raised last month.

However, the department has said in a statement that it has nothing to add to information supplied at previous hearings.

Last year, the PAC published a report on the aquatic centre. This said the Department of Sport, and the National Sports Campus Development Authority, had fundamentally failed in their duty to protect taxpayers’ money in the aquatic centre case.

This came after the State’s ill-advised eight-year legal bid to force a private company, Dublin Waterworld Ltd, to absorb a €10m Vat bill. The cost of the case came to more than €1.3m.

It had already been established that the State bodies ignored the advice of the comptroller and auditor general and the attorney general, who said that the pursuit of DWW should have been dropped.

The Vat charge originally arose from construction of the over-budget aquatic centre in 2002.

The State bodies always maintained that they were working off a professional assessment of Revenue Commissioner guidelines when they demanded that DWW absorb the Vat bill.

DWW went to the Supreme Court to have it declared that it should not have been liable for the Vat because the value of its lease was less than the value of the building.

However, fresh documents have been released by the Information Commissioner. These set out the advice that PricewaterhouseCoopers offered on the Vat issue in 2002 and 2003. In these, PwC correctly said in 2002 that the State body could not pass on the Vat bill to DWW.

However, because this did not suit budget plans, the NSCDA instead looked to apply Revenue Commissioner guidelines which it was told were out of date.

In one email, the NSCDA was told not to share a low estimate the Valuation Office supplied on the aquatic centre with DWW. This was because the low figure undermined the State’s position.

The State needed the lease to be worth more than the €62m construction cost before it could pass the €10m Vat onto DWW.

“The Valuation Office also shows a valuation of the lease of circa €35m which does not suit our requirements [i.e. it is not in excess of the build cost],” it said.

PAC said these documents should have been released to it last year.


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