Category: Corporate

The Dublin Waterworld case continues:

Limerick businessman Pat Mulcair is gaining enormous tax advantages, amounting to some €2.8 million a year in tax reliefs, arising from “funding arrangements” put in place for the €62 million National Aquatic Centre, the High Court was told yesterday.

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John Moriarty, a director of DWL, said yesterday he was reluctant to give certain documents about those funding arrangements to CSID because he had concerns those documents would be leaked to the media. He had previously given financial details to CSID and matters had appeared in the media. He did not want “purely commercial matters” between himself and Mr Mulcair appearing in the press. Certain documents were provided to CSID but, he agreed, other documents were not.

He denied a suggestion by CSID’s senior counsel, Denis McDonald, that CSID was not told of the precise arrangements involving Mr Mulcair because this would leave the State company in a difficult position in that the arrangement involved enormous tax benefits for a private citizen. Mr McDonald said the capital allowances available for a corporate tenant such as DWL would be a lot less than those available for an individual such as Mr Mulcair.

Mr Moriarty said he had revealed Mr Mulcair’s involvement in the project on February 20th, 2003, and the funding arrangement involving Mr Mulcair was revealed on April 15th, 2003. He had brought Mr Mulcair’s representative to the lease signing.

He said the proposed funding arrangements for the centre did not prejudice CSID in any way and the whole purpose of the funding arrangements agreed with Mr Muclair was to bring money into the aquatic centre project.

Mr Moriarty said Mr Mulcair had since 2003 provided some €1.8 million to the aquatic centre in money paid to an assets repair account used to pay repair and energy costs arising from defects in the building.

The response to a question on a recent edition of Question & Answers drew some interesting replies. The question was: ‘What is the panel’s reaction to job cuts at Irish Ferries?â€?

Before commenting on the answers, it will be useful to outline what Irish Ferries are planning. They are in the process of re-registering their fleet under “Flags of Convenience’. This means they will no longer be subject to Irish or EU labour laws. Recruitment of staff is to be handed over to an outside source thus allowing Irish Ferries to claim that they are not responsible for pay or working conditions.

When Irish Ferries were recently found to have “employed’ Filipino, workers for 1 Euro per hour they tried to absolve themselves by claiming that they had no responsibility for the pay and conditions of these workers. If Irish Ferries are allowed to get away with implementing their plan, their crews will lose all the established entitlements like minimum wage, holidays and working time directives. In effect, Irish Ferries will be operating a modern form of slave labour.

Here’s how the panel answered the question. Jim Power, Chief Economist at Friends First felt that the plan was reasonable because the company’s finances were coming under pressure from increased competition, especially low cost air fares.

Dick Roche, Minister for the Environment agreed with the opinion of Jim Power adding that Irish Ferries must be protected as it was a vital national industry. Most surprising of all, however, was the reply of John Waters. It’s the way of the world…increasing competition…workers coming from other economies…lower wages…it’s something we are going to have to get used to.

The question that immediately springs to mind is: Would any of these gentlemen be happy if they were forced to choose between losing their jobs or agreeing to work for three Euros per hour on twelve hour shifts without the protection of labour laws? The only thing that can be said in their defence is that none of them seemed to understand the full implications of what Irish Ferries are planning to do.

John Waters, a man who likes to portray himself as a crusader for the down trodden, seemed particularly confused and I got the distinct impression that he was merely mouthing the sentiments of the previous speaker. He really should have pleaded ignorance on the matter thus safeguarding his credibility.

Marian Harkin, Independent TD and MEP was also on the panel and strongly disagreed with Irish Ferries policy. As an articulate, intelligent and honest politician, Ms. Harkin is a rare gem on the Irish political scene.

The NAC story continues to escalate, Bertie’s baby is a disaster. There is something distinctly iffy going on, and the whole truth may never come out. The SBP reported Sunday that the Center may cost upwards of €20 million to repair. Dublin Waterworld sound like a very strange organisation indeed.

Despite repeated claims that the pools in the centre were leaking “like a sieve”, it is understood that in the examination yesterday the only leaks detected were in piping in the centre. Such piping is the responsibility of Dublin Waterworld.

This examination also contradicted a report for Dublin Waterworld by engineering firm Malachy Walsh & Partners which found evidence of leaks from cracks in the pools.

While cracks were found yesterday, these were said to be dry. Such cracks were also described as a normal offshoot from the construction process. The examination also found no evidence that the building was at risk from subsidence.

Rohcon’s spokesman declined to comment on the examination, stating only that a full statement would be issued when the examination was complete.

CSID chief executive Donagh Morgan also declined to comment on the findings.

“They’re in the process of conducting investigations into the alleged defects that have been published in the media and CSID look forward to the completion of those investigations,” he said.

Minister for Sport John O’Donoghue said yesterday that the centre was not “a shambles” and added that he supported CSID’s legal action. “The impression has been created that there is some kind of a shambles of a building up in Dublin falling down and leaking 5,000 gallons of water every now and then. This is to my knowledge untrue.”

And Bertie has been on the defensive for his pet project:

He acknowledged that the aquatic centre was a “pet project” of his. “Indeed, I am proud to claim that it is such.” The Government’s motivation was to provide a 50-metre pool and to provide a location for the Special Olympics aquatic events. “The project was delivered on time and on budget,” he insisted to Opposition heckling and laughter.

The Taoiseach was responding to Fine Gael leader Enda Kenny who described the “debacle” of the centre as an “apt metaphor for the Fianna Fail/Progressive Democrat Government – massive costs to the public, a so-called state-of-the-art attraction that is all splash, with fake waves, the roof blown off and leaking like a sieve”.

Mr Kenny claimed that the Taoiseach as the sole promoter and shareholder of the project “is personally responsible for the huge failures that have been exposed”.

He asked the Taoiseach to confirm that the aquatic centre “is leaking water at the rate of five million litres per month and that a consultants’ report has found that the original roof structure was substandard, suggesting that either corners were cut or plans were washed away at construction stage”.

Mr Ahern said he was “very sad to see the Opposition aligning themselves with the company that CSID has take to court and acting as its mouthpiece in the House today.

“Deputies appear to have no compunction about making public statements on matters before the court.”

He said he and the Government were not at all happy with Dublin Waterworld, which runs the centre. The company had “done a very good job in Killarney in the Kerry operation but it has not done a good job in this case”.

CSID had taken the company to court for breaches of the lease agreement, including failure to pay rent, to provide audited accounts, failure to pay insurance on the building and to establish a sinking fund.

A dispute over whether the company had to pay more than €10 million in VAT was referred to arbitration and a dispute over repair and maintenance had been referred to an architect for determination.

Mr Ahern said the Minister for Sport had described the capital expenditure on the centre as value for money “and I fully agree with him”.

When Mr Kenny asked who was responsible for the roof being blown off the building, the Taoiseach replied: “The wind”. He said: “I am hugely powerful but I do not organise that”.

The Fine Gael leader said that the same wind blew over a lot of other roofs at the same time and “none of those blew off”, but Mr Ahern said the freak storm in January this year damaged a large number of buildings in the area, uprooted 200-year-old trees and hit the centre.

“Our primary concern at all times must be to protect the taxpayers’ investment and that is what we are doing.”