THE STATE rejected a proposal to build and operate Dublin's new Convention Centre for almost half the price it eventually cost, it has emerged.
A report by Comptroller & Auditor General (C&AG) revealed that a Government-appointed committee awarded the contract at a cost of €416m, although it received a bid for about €200m less.
Richard Barrett's and Johnny Ronan's Treasury Holdings group won the private partnership contract for the construction and running of Spencer Dock Convention Centre Dublin (SDCCD) after assessors gave it a higher mark than competition.
The company, which is to be bailed out by NAMA, bid €380m for the project in 2007, while rival Anna Livia consortium had made three bids between €203m and €224m, which were rejected.
The annual report also revealed that an independent consultant's report showed the economic benefits of the new centre would not cover its cost over the next 25 years.
The C&AG, John Buckley, pointed out that the Government had estimated that the Dublin building would cost €414m but that that the hefty price would only by compensated by approximately €236m in economic benefits.
In fact, his report noted that a study conducted by consultants employed by Failte Ireland and the Department of Tourism estimated that any expenditure over €321m on the project would not be outweighed by future benefits.
Mr Buckley has advised to change the way bids for public-private partnerships are assessed following his review of the centre contract.
His examination showed that the financial cost of the convention centre only accounted for 20pc of the total mark of rival bids. However, the same criteria represented 30pc of the overall mark that were allocated to the PP project to build the new Criminal Court Complex.
The significant difference between the costs of the various bids for the new Convention Centre is due to a variation in operational costs.
While the rival companies had made similar estimates for the construction of the building, the cost of marketing and running the centre was much higher in the bid proposed by -- and eventually awarded to -- the Treasury Holdings group.
The methodology used to assess the SDCCD project clearly affected bidders ranking, it included 40 marks related to design and construction, 30 to operation and maintenance, 20 to financial considerations and 10 to legal elements.
Mr Buckley has suggested that the value of the public sector benchmark (PSB) -- the maximum sum the Government can afford to spend this type of project -- should be known to bidders in future.