All eyes are on Punchestown - but for wrong reasons

Concerns have resurfaced about the nature of State funding for theequestrian centre, writes Liam Reid

Concerns have resurfaced about the nature of State funding for theequestrian centre, writes Liam Reid

The Public Accounts Committee report on Punchestown's agriculture and equestrian event centre has not come at a good time for the Minister for Finance, Mr McCreevy.

The Minister may have been hoping that focus would be on Punchestown for a different reason this week.

The centre, in the heart of the Minister's Kildare North constituency, plays host to his set piece for the European presidency.

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On Friday, finance ministers and delegations from 30 European countries will meet there, along with representatives of the major European financial institutions, including the European Central bank.

Instead the PAC report has yet again put the State's 100 per cent, €14.5 million, funding of the project back into the spotlight.

The controversy has dogged both the Departments of Finance and Agriculture for the last six months following a critical report by the Comptroller and Auditor General (C&AG) into the project. His report found that no proper evaluation had been carried out.

The PAC then held its own hearings, visiting the centre on one occasion, before making its report, the first of its kind in five years.

Concerns first emerged in mid-2002 about the nature of the State funding of the project after Punchestown Racecourse, which is owned by the Kildare Hunt, went to the brink of liquidation.

Its precarious financial position had been discovered by English-born, Wicklow-based businessman, Mr Nick Bullman, and solicitor Mr John Ross, who took over as chairman and vice-chairman of the Punchestown board following concerns about the management of the course. They found that despite nearly €25 million in State funding, loans and grants, including the building of the event centre, the racecourse owed close to €8 million.

In October 2002, the incoming chairman of the PAC, Mr John Perry, announced he intended to ask the C&AG, Mr John Purcell, to examine the centre's funding.

Concern focused on the fact the racecourse had initially applied for a 100 per cent grant of €6.9 million in late 1999, which was agreed in January 2000 by Mr McCreevy. However, just five months later, the racecourse returned with a revised application, where the costs of the project had nearly doubled, to €12.8 million.

This was approved by Mr McCreevy, on the recommendation of his colleague, the Minister for Agriculture, Mr Walsh, within a month, and a letter of offer made in August of that year, stipulating that there should be no additional State money for the project.

However, in September 2001, the racecourse management sought an additional €1.5 million at a meeting with Mr McCreevy in his Naas constituency office. A formal request was made and approved in January 2002. The C&AG's report of last September found there had been no formal evaluation of the grant application by either Department and no proper legal agreement between the racecourse and the State on the centre.

Since that report, the PAC has held a number of hearings into the funding of the event centre, including a visit to Punchestown last November. During these hearings the Department of Agriculture mounted a stout defence. Its secretary general, Mr John Malone, said the centre was a good public project, was needed as a home for agriculture and equestrian events in Ireland, and various parties had been consulted before the decision to fund the centre was made.

Yesterday the PAC rejected this view. It also rejected the Department of Finance's view that it had no role in evaluating specific projects, saying it was "not evident" how the Department ensured that projects were evaluated properly as required under its own guidelines.