Waterworld UK was dropped from a major project last year after it was selected to operate the Irish aquatic centre, writes Arthur Beesley.
Disquirt surrounds the award of the contract to operate the national aquatic centre, the first part of the "Bertie Bowl" initiative set up to build a worldclass sports campus at Abbotstown, west Dublin. The centre will be Europe's largest, but many questions remain unanswered about the selection of the dormant company which signed heads of agreement to operate the $62 million pool.
Campus and Stadium Ireland Development's executive chairman, Mr Paddy Teahon, has robustly defended his actions. But with the Government awaiting a final report into the affair by the Attorney General, Mr Michael McDowell SC, there was no certainty last night that Mr Teahon would be appointed chairman when the position is split and posts of full-time chief executive and chairperson are filled.
These have been anxious days for the former secretary general of the Department of An Taoiseach, who came to the project with a long and distinguished record of success in the public service. He has spent many hours in the past fortnight explaining himself.
The centre will be completed at the end of the year, in time for the 2003 Special Olympic Games. While the project was initially conceived as a public-private partnership, with a significant investment from the private sector, that did not materialise. All but about $635,000 of the €62 million will be paid by the State.
The contract to build and operate the centre was signed by a consortium comprising the building firm Rohcon and Dublin Waterworld, a company controlled by a Kerry property developer and engineer, Mr John Moriarty. S&P Architects were involved at the bid stage although its contract is separate. It is unclear who brought the consortium together, but S&P Architects have stated to The Irish Times that it has worked for the directors of Dublin Waterworld and its associate Waterworld UK "on various projects over the last 10 years".
Mr Teahon's difficulty is that Dublin Waterworld did not seek the contract in the first instance. Rather it was the associate entity, Waterworld UK, which successfully tendered for the contract, signed heads of agreement and then took only a 5 per cent stake in Dublin Waterworld. Rohcon had joined the consortium when Waterworld UK's original partner, the Dutch group Multi-Development Corporation NV, withdrew.
Waterworld UK is dormant. Registered at a solicitors' office in London, its directors sought to dissolve the company last month. Despite being informed of the company's status, Mr Teahon did not pass this information on to the assessment panel which judged the tenders. Neither did Mr Teahon inform the Government of this matter, nor indeed the CSID board, as an entity.
For this, he has apologised, stating that he regretted not using the word "dormant" in relation to the company.
The matter has significance because the Government was to be told that the management team given the contract should be able to demonstrate a significant track record of operating centres of a similar scale internationally.
Mr Moriarty's other partners in Dublin Waterworld are involved in the "aquatic" business, but at small-scale projects: Mr Kieran Ruttledge is chief executive of the Tralee Aquadome and Mr Liam Bohan is a former international swimmer who is general manager of Tralee Regional Sport and Leisure Centre.
Mr Ruttledge and Mr Bohan were apparently cited at the bid stage as Waterworld UK's "representatives in Ireland". Mr Moriarty, Mr Ruttledge and Mr Bohan appear to have had no beneficial ownership of the Waterworld UK, whose £4 share capital was held by Ealing Trading Corp, an entity registered in the British Virgin Islands. Thus Waterworld UK essentially divested its obligtations and its rights to the benefits of the contract to an entirely separate entity.
This - and not Waterworld UK's dormancy - is the central issue alongside Mr Teahon's "inadequate" communication with his co-directors and CSID's owner, the Government.
As it happens, Waterworld UK's only other activity was related to plans to build a similar aquatic centre at Southport, north of Liverpool. The company won a competition to run the project. However, it was dropped last year by the local authority, Sefton Council, because it "had not been able to complete the necessary legal documentation".
In a statement last October, the authority added: "Council officers also believed that the company was having difficulties in meeting with the council's financial requirements."
This was eight months after Waterworld UK signed heads of agreement with CSID. Yet the company's funding difficulty was already apparent, according to Mr Teahon.
He told the public accounts committee yesterday that Waterworld UK "wasn't able to convince" its partner, NBGS International, to provide a final financial guarantee. With its dormancy in mind, Waterworld UK appears to have relied heavily on the reputation of NBGS, which operates large waterparks in the US. It did not come up trumps with the money. With Dublin Waterworld's directors attributing its ownership of the contract to "internal agreements" between the directors, Mr Teahon's explanation was the first indication of what happened.
Still, the chairman of the Commissioners of Public Works (OPW), Mr Barry Murphy, said such a development would have been sufficient to eliminate the consortium. Instead, however, Waterworld UK relied on a letter of comfort from Anglo Irish Bank against assets worth £3 million held by Mr Moriarty. How Mr Moriarty entered the process is unclear. It was apparently legal for him to do so even when rival bidders were eliminated.
Mr Murphy said, however, that such a development would not be tolerated if the OPW had been managing the project.