It is time to abandon the €15.5 million Jeanie Johnston replica famine project, Mr Martin Nolan, the Kerry county manager will tell councillors on Monday when they meet to discuss the ship's future.
The ship has cost more than four times its original estimate, most of it State money, with around €6 million underwritten by Kerry County Council and Tralee UDC and given in direct monies. It is understood that the deficit on the ship is around €5 million.
However, continuing to support the ship would "place a substantial burden on the council into the future on an ongoing basis", Mr Nolan stated in a report circulated to councillors this week.
The ship is now worth just €1.5 million, according to the report. If the council withdraws its support the ship is likely to be sold off.
Mr Jim Finucane, chairman of the Jeanie Johnston Company, has appealed to creditors to stay on board and said everything would be done over the next few days to resolve the situation.
The Jeanie Johnston was set to sail in January to North America where it had huge earning potential, he said.
"In conjunction with the Northern Ireland Tourist Board the voyage was to have reignited the North American market. This has come as a huge surprise to us. After achieving success in Cobh and Fenit in the sea trials, now we have an asset people can see. This ship will not realise its potential until it goes to the US and Canada." He thought there was "a huge opportunity to have the ship designated as a sail-training vessel on a North-South basis".
Earlier this year the council undertook to take over and operate the Jeanie Johnston as a visitor attraction for a year, provided Government departments waived charges on the project, the ship was completed, the shipyard at Blennerville was sold and the councillors gave final approval.
Expected State support for taking over the project has not materialised and no one has stepped forward to support the project financially, Mr Nolan said.
In February last year, when the council first indicated it would take over the project, it had hoped that State bodies would waive charges on the ship. However, both the Department of Arts, Culture and the Gaeltacht and Shannon Development have insisted on their grants being secured by way of charges amounting to more than €2 million, Mr Nolan said.
As well, the sale of the shipyard at Blennerville has not been completed and it is unlikely to make as much as had been expected.
Along with committing considerable staff resources to the issue, Mr Nolan said the council had been advised by three consultants. In March "it was made clear that one of the major tasks facing the council was to develop an exit strategy before year's end.
"Despite inquiries with various State and other parties and private individuals who have expressed an interest, it has not been possible to identify a source of substantial funding to operate the vessel."
Mr Brendan Cronin, a Kerry councillor, said he was very concerned about the financial implications, and he feared that it might be too late now to avoid serious cutbacks in council services to pay back the debt already incurred. Mr Cronin was the only councillor to consistently vote against underwriting millions in loans and grants for the project.
The Minister for Defence, Mr Smith, told the Dáil yesterday that the Jeanie Johnston was now entitled to a Loadline Certificate required to go to sea.
He told Fine Gael TD, Mr Jimmy Deenihan, who raised the issue, that the former Department of the Marine had allocated €3,968,750 for completing the vessel and €462,015 remained to be drawn down. He said Asgard II had annual funding of €825,000 (Lottery grant and trainee fees), while operating the Jeanie Johnston as a sail-training vessel would cost more than €1 million a year.