CSID board meets amid growing controversy

Arthur Beesley analyses the 'deep disquiet' surrounding the contract for the national aquatic centre and how it has been compounded by three explanations of events

The Campus and Stadium Ireland Development (CSID) directors met last night amid "deep disquiet" in Government circles that the body signed heads of agreement to operate the national aquatic centre with a shelf company.

The Government is spending €62 million on the prestigious initiative, which is said to be the biggest such development in Europe. Before signalling the green light to the project, its advisers said the management team to operate the centre should have considerable experience of such projects internationally.

But it transpired this week that the majority shareholder in the company which signed the final contract is a property developer and engineer based in Co Kerry, Mr John Moriarty. The company which signed the heads of agreement - Waterworld UK - took only a 5.1 per cent share in the operating firm, Dublin Waterworld.

Quite how Mr Moriarty ended up with the rights to the majority benefits of the contract - and its obligations - is still unclear. This is at the heart of dissatisfaction with CSID among senior politicians and at the highest levels in the Civil Service.

According to several figures familiar with the political scene, the dissatisfaction has been compounded by CSID's three explanations of its actions since The Irish Times queried the status of Waterworld UK last Monday. Two reports were produced for the Minister for Sport, Dr McDaid, and the company issued a long statement to the press on Thursday.

A statement by a spokesman for the Tánaiste, Ms Harney, summed up frustration with CSID at the highest levels of the Government as last night's meeting started. He said: "The Tánaiste's concerns have not been allayed by either of the two reports received to date and in fact they raise more questions than they answer."

With the Fianna Fáil ardfheis under way last night, the Government itself had been the subject of strong Opposition criticism for its decision last January to sanction the final contract with Dublin Waterworld and its partner Rohcon, the building firm.

At the heart of the matter, however, was that the Government felt seriously aggrieved it was never informed by CSID that it knew of Waterworld's status when the heads of agreement were signed.

There is nothing wrong per se when business is done with dormant companies. Indeed, it is a common practice. That CSID's shareholder - i.e. the Government - was not informed, was uncommon. Bear in mind also that serious criticisms were made last year about the experience of those running CSID by consultants to the Government. The broader Abbotstown initiative, dubbed the "Bertie Bowl", is on hold after those consultants, High Point Rendel, estimated its cost at £704 million ($894 million), about twice the £350 million projected by CSID.

In addition, it emerged last night that the company's board was never informed, as an entity, that Waterworld UK was dormant. Registered at a solicitors' firm in London, the company had assets of £4 sterling (€6.49) eight weeks before it entered the bid process in July 2000.

CSID said on Thursday that the operating contract was awarded to a consortium and not a shelf company. But according to informed observers, many questions remained unanswered in its three-page press statement.

Incidentally, the statement is believed to have contained more information than the two reports sent by the company to the Government. Understandably, certain people in Government circles were unhappy.

CSID said the heads of agreement with Waterworld UK would not have proceeded if Anglo Irish Bank had not provided a "guarantee" to the company. It also said Waterworld UK was "closely linked" to and "backed" by a large US company called NBGS International, which apparently has a strong track record in the field.

Yet leaving aside the uncertainty of the exact meaning of "closely linked" and "backed", informed figures pointed out that no attempt was made to explain the role of Mr Moriarty or his fellow shareholders, Mr Kieran Ruttledge and Mr Liam Bohan.

Mr Ruttledge and Mr Bohan were apparently described as "Waterworld UK's representatives in Ireland" during the bid.

It is thought that Mr Moriarty only entered the frame when Anglo Irish Bank gave its "guarantee" to Waterworld UK. By that stage, the company's consortium had already been selected over two other groups of international standing.

Thus did one observer state that the statements this week were "incomplete, inadequate and flawed". Another spoke of "weariness" in Government circles with the information coming from CSID. Observers asked why the Government was never informed of Waterworld UK's status and why it took only a minority stake in Dublin Waterworld.