Hotel gets €800,000 rent for music school

OVER €800,000 is being paid annually by the Department of Education to a Cork City hotel, one of more than a dozen premises being used as alternative accommodation by the Cork School of Music, the annual report of the Office of the Comptroller and Auditor General 2002 states.

The report has stressed that the existing school was vacated before a definitive approval was given to proceed with the plan to build a new school, “because the existing premises of the Cork School of Music were and are clearly deficient and would inevitably have had to be evacuated by the school”.

On June 1, 1999, the Government approved a pilot programme of Public Private Partnership (PPP) projects, including projects in the education sector. On foot of this decision, the Department of Education sought and received the approval of the Department of Finance for the provision of five post-primary schools and the extension of the Cork School of Music under PPP arrangements. The extension of Cork School of Music was estimated at the time to cost €12.7 million.

The Cork School of Music project was recommended by the Cork Institute of Technology (CIT) following a report prepared by a Review Group established in 1999 to examine the existing and future needs of the school. At that time the school was operating from its main building and 16 other premises in the city, and the project was intended to remedy this. The original estimated cost of the CIT proposal was €13.33m.

The Cork School of Music PPP project was launched in July 2000. Three proposals were short-listed. Each recommended the demolition of the existing building and its replacement by a modern facility.

In July 2001, the department sought the approval of the Department of Finance to award the contract to the preferred bidder.

The Finance Department replied on July 30 with concerns and in particular asking that the Value for Money Comparator (VFMC) be recalculated.

The anticipated cost of the project to design, build, maintain and operate the school over a 25-year term was €200m. A second VFMC was sent to the Finance Department in April 2002 following a meeting between the departments in December 2001.

The Finance Department, in a letter dated July 25, 2002, indicated it could not recommend to its minister that the project should be approved.

A leasing agreement with the owner of the former hotel was concluded for an initial two-year term at a quarterly rental of €200,000. Additional upgrading costs totalling €80,000 approximately were incurred in relocating to the rented premises. The lease was renewed in July 2003 for a further two years at a quarterly rental of €202,000.