€60m music school start this year unlikely

CONSTRUCTION on the €60 million Cork School of Music is unlikely to begin this year because of financial uncertainties.

Education Minister Noel Dempsey said work should have started last summer, when he announced Government approval for contract negotiations last April.

But Jarvis, the Government’s partners in the Public Private Partnership (PPP), ran into financial difficulty in Britain earlier this summer. As a result, it was decided in July the bank backing Jarvis on the project should be a signatory to the contract.

This is still being considered by the bank in question and Department of Education officials are unable to proceed with contract negotiations in the absence of such agreement.

One source said that, while a decision is likely to be favourable and is due soon, the remaining contract talks could take up to two months after that, meaning work would probably not begin until early 2005.

The development comes as a Comptroller and Auditor General (C&AG) report published yesterday the Department of Education may have underestimated the cost of five schools built as a PPP project by up to 20%.

The pilot project involved the design and construction of five second level schools by Jarvis, which will operate and maintain them for 25 years at a projected cost to the department of €283 million. The schools in Dunmanway and Ballincollig, Co Cork, Shannon, Co Clare, Clones, Co Monaghan and Tubbercurry, Co Sligo, were designed and built in three-and-a-half years, compared to a five-year norm for conventional projects.

The Department of Education was interested in helping principals concentrate more on core functions and less on running buildings, as well as getting ideas on the design of schools and their use outside class hours.

According to the C&AG’s value for money report, the department’s September 2001 cost comparison concluded that procuring and running the schools through the PPP arrangement would result in a 6% saving.

However, when final agreement was reached two months later, analysis suggested the projected cost was between 8% and 13% more than that of the conventional approach.

The report also suggests because PPP schools are 15% bigger than standard, it may have cost implications because of pressure to increase new school sizes.

The report said the full value for money of the project will be determined over 25 years, but an evaluation over the first five years of the contract would be desirable.

A number of the assessments and pitfalls experienced on the schools project have already been integrated into the department’s work on the National Maritime College in Ringaskiddy, Co Cork, due to open to students in the coming weeks.

Green Party finance spokesperson Dan Boyle said the report’s proposal to place an affordability cap on PPPs could remove profit margins that attract private companies. Employers’ group IBEC acknowledged the shortfalls of the PPP process shown in the report but said it took little account of the wider benefits.