Watchdog criticises music school deal

The Government’s original deal with UK developers to build the Cork School of Music was a bit of a mess, it was claimed today.

The Public Accounts Committee (PAC) accused the Education Department of using the project as a learning exercise in dealing with public-private partnerships (PPPs) and of clashing with the Finance Department on the issue.

The Education Department signed a less expensive contract in September with German building firm, Hochtief Developments Ltd to design, build, finance and operate the school for 25 years at a cost per year of €7.6m from the Government.

But the Dáil’s spending watchdog said in a report today that the original estimate for the school was €12.7m in 1999 but this had spiralled to €60m within five years.

PAC chairman Michael Noonan said the Education Department had originally decided to extend and refurbish the school through a public/private partnership with a British firm.

He explained: “When it went to the market, the original contractors came back and said that extension and refurbishment wasn’t viable and it needed to be a purpose-built building from the ground up.”

“The thing was a bit of a mess. The original estimate was way below what the actual cost would be.”

The Limerick TD also claimed there were conflicts between the departments of Education and Finance on the project.

“It was used as a learning exercise for PPPs,” he added.

“They went into the market without deciding what they could afford and also what the cost would be by conventional construction through the department.”

The new school, which will be built on the site of the existing music school on Union Quay, will accommodate 400 full-time and 2,000 part-time students.

It will also include a 500-seater auditorium for rehearsals and performances, as well as a 100-seater theatre for productions.

The PAC’s fifth interim report on the Education Department’s finances also investigated the School Building Programme.

Mr Noonan added: “One of the things that concerned the committee was that [the British firm] built in a return of 11.5% overall as their profit margin.

“We would regard that as quite high when you regard present interest rates and the capacity of the State to borrow at below market rates.”