Dermot Desmond `certain' IFSC will move in 10 years

Financier Mr Dermot Desmond has said he is "certain" that in 10 years' time the International Financial Services Centre (IFSC) will move, creating major job losses.

Mr Desmond, who is credited with convincing the government in 1987 to back the creation of the centre, made the remark during discussions with the Minister for Finance, Mr McCreevy, and senior officials from three departments.

During the February 1999 meeting to discuss his proposal for a £170 million (€216 million) Ecosphere in George's Dock in the IFSC, Mr Desmond said that with his own company he went to India if he wanted software engineering, because there was very little competition for labour and labour was cheap.

"He said the same will happen with the IFSC," according to Department of Finance minutes of the meeting, which were released under the Freedom of Information Act.

According to the minutes, Mr Desmond said "that in 10 years' time the financial services centre will move out of the docklands area with many job losses - and that he is certain of this. The reason for this is that everything is being driven by technology and multinationals have no loyalty."

The financier said "we must become research-based and we will not be producers any more".

In submissions concerning the proposed aquarium and simulated tropical forest, which were to be housed inside a multi-storey glass pyramid, Mr Desmond was very critical of how the IFSC had been developed.

In a letter to Mr McCreevy in 1998, Mr Desmond said: "This project is about meeting social obligations committed to by previous governments and providing an environment to help Ireland compete in an increasingly competitive market for tourism and industry. The commitment to this area was one of urban renewal, not an office park."

Mr Desmond said the ecosphere would draw tourists to the IFSC and draw the IFSC in as part of Dublin generally. He said it was expensive, but constituted the type of commitment required to create a landmark tourist attraction.

"The ecosphere is intended as a landmark project conveying all that is best about Ireland - a modern and environmentally friendly community."

A commitment by earlier governments to draw people to the IFSC "has not been honoured to date despite the fact that the IFSC generates over a fifth of corporation taxes paid to the State," Mr Desmond said.

"The level of investment by the State has been paltry and has resulted in decreasing standards of development over time, both in the quality of office building and the infrastructure necessary for a vibrant, world-class centre of finance." Contracts with developers cannot be allow to stand indefinitely, he said.

Mr Desmond's proposal, which was rejected last month by Mr McCreevy, four years after it was first made, incorporated use of a listed warehouse, the Stack A building, in the IFSC. The Custom House Docks Development Company Ltd has a contract to develop the building as part of its overall contract to develop the 27-acre phase one part of the IFSC.

Development of the site has been completed, apart from the warehouse, the development of which has been held up, at the request of the Government, in order that the ecosphere proposal could be evaluated. The fact that the Custom House Docks Development Company had this contract, and was considered unlikely to want to give it up, was one of the factors weighing against Government support for the project.

During his meeting with Mr McCreevy and the officials in February 1999, Mr Desmond, who has penthouse offices in the centre, said "in developing the IFSC he wanted it to be a living centre which would not be dead in the evenings and at weekends".

The minutes quote him as saying "that he moved into the centre in 1994 when he was owed £56 million on the project". The document does not explain this reference. Mr Desmond said the original plan for the centre had not been adhered to by the Government, the docklands authority, or others.