Local authorities in Kerry face loan repayments of over £4.5 million following the cancellation of the transatlantic voyage of the Jeanie Johnston replica famine ship yesterday.
The ship, which has been under construction since 1995, was to visit US and Canadian cities on a fund-raising drive this summer.
But the maiden voyage has been cancelled following an inspection by the Department of the Marine. The ship would not be ready before the end of August, too late for the summer tour, the board decided.
The Minister for the Marine, Mr Fahey, expressed "disappointment and regret', but said he was committed to the completion project. The Department has contributed £3.124 million to the project so far.
It is the second time the ship has failed an inspection. The voyage was originally planned to mark the millennium, and its failure had increased costs and meant a loss of earnings. Then in April, one of the ship's major stakeholders, Shannon Development, refused to contribute any extra monies.
A report presented to the Department of the Marine last autumn and obtained under the Freedom of Information Act highlighted concerns about the management of the project. The project was insolvent, the report concluded, and it raised concerns about putting further monies into the project without a major restructuring. However, two months ago, the Department of the Mairne put £2 million into a rescue package. Kerry County Council, with Tralee UDC, guaranteed loans and grants of £1.6 million to Shannon Development and the Department of Arts, Heritage and the Gaeltacht. They have underwritten a £2 million loan from the Bank of Ireland.