Digital projects' £60m budget `adequate'

The Government has defended its decision to cut the budget for the MediaLabEurope and Dublin Digital Hub projects to £60 million (#76 million) from original estimates of more than £100 million.

"We feel satisfied this is adequate for a project that is looking into the future," the Taoiseach, Mr Ahern, told the Select Committee on Finance and the Public Service.

The projects, which originally started in the Taoiseach's Department, have come under the remit of the Department of Public Enterprise.

"My Department has made a substantial contribution to getting these projects off the ground, as has been the case with other projects in the past. It is appropriate that the relevant line Departments will now take them forward," the Taoiseach said.

He was responding to questions from Labour's Mr Derek McDowell on whether the budget for the MediaLabEurope project was being cut. When asked if the Department of Finance was in favour of the projects, the Taoiseach said it was not opposed to the ventures but was in favour of scaling back the level of property investment by the Government to that needed solely for the digital hub and MediaLabEurope schemes. Part of the original project envisaged a "digital village" surrounding the projects.

The £60 million earmarked by the Government is for property acquisition for the projects. It has already given MediaLabEurope a £28 million grant to acquire its premises in the former Guinness Hopstore.

The Taoiseach said any further property acquisitions should be funded by the private sector rather than the taxpayer.

The slowdown in the technology markets in the past number of months had led to some technology companies reviewing their interest in the MediaLabEurope scheme, he added.

But he said most of the bigger companies were taking a long-term view of their investment in the project.

On the question of funding for Sports Campus Ireland, the Taoiseach said the matter was before a review group. But it was important to invest in sport and recreation at the same time as investing in the infrastructure for business, education and the health service, he added.

"A fraction of 1 per cent is spent on sport," he said. "We're light years behind the modern world."