An account given in the Dail last week by the Minister of State for Agriculture, Mr Noel Davern, as to why the £25 million Western Investment Fund has still not been set up nearly three years after it was first announced has been questioned by EU Commission sources.
The fund, intended to foster enterprise and development in the western region by investing in projects and businesses, was expected to be running by February 1st. This was when the Western Development Commission (WDC), which manages it, was put on a statutory basis.
Instead, the Ballaghaderreen-based WDC learned only in April that Brussels had never been consulted on the fund and could, therefore, not go ahead. Under EU competition rules, schemes which involve State support for businesses must be submitted to Brussels for approval.
Before yesterday, the scheme had still not been submitted to the EU and there could be a further delay of many months.
Meanwhile, the Government has never given a clear explanation why this delay occurred.
The WDC comes under the auspices of the Department of Agriculture and Food, but the Department of Enterprise, Trade and Employment has also been involved as it usually submits business support schemes to Brussels.
The chairman of the WDC, Mr Sean Tighe, said yesterday it was "inexplicable that after three years we are still making an application to Europe".
The issue has also been taken up by Ms Marian Harkin, an Independent candidate in the European Elections in Connacht/Ulster. She said the delay was typical of the lack of priority given to western issues by central government.
The question which the Government has failed to answer is why, when the WDC board was first appointed in January 1997, and work on legislation governing the commission and the investment fund started some months later, Brussels was never consulted until this year.
The Western Development Commission Act was passed through the Dail late last year.
Senior officials in the EU Commission confirmed to The Irish Times yesterday that Brussels should be consulted when the legislation was being drawn up and not afterwards.
"Notification normally occurs when the law is being drafted, at the planning stage. If they do it at the stage after the legislation is passed, then the legislation may have to be suspended while the Commission looks at it," a senior official said.
In response to a question in the Dail on Tuesday last week from Fine Gael's Mr Paul Connaughton, Mr Davern implied that the delay was unavoidable.
Mr Davern said: "It was not appropriate to hold consultations with the European Commission, prior to the passing of the Act, on the question of the aid from the fund being classified as State aid. Given that the fund is Exchequer financed, it would be most likely to be regarded as State aid, and in the circumstances, there would have been little point in pursuing the matter prior to the Western Development Commission taking a definitive decision on the forms of aid to be provided."
He said the WDC "decided at its meeting on April 7th how the fund is to be used, including the forms of aid". However, in information sheets published by the WDC over a year ago and in documentation submitted by the commission to Government when the legislation was being drafted, it was clearly set out how the fund was to be used.
Mr Davern told the Dail that it was still being clarified as to whether the scheme had to be formally submitted to Brussels, and it has now been confirmed that it has to be.
Mr ean Tighe said yesterday that he had been assured that the submission would be made to Brussels by Wednesday of this week at the very latest but this deadline had now been missed.
Mr Connaughton told the Dail he believed that up to 150 projects were waiting for funding. Mr Tighe confirmed that there were "a lot of projects in the pipeline". He added: "But nothing further can be done until such time as we know money can be given out. We can't lead people up the garden path."
The chief executive of the WDC, Mr Liam Scollan, said he believed officials at the Department of Agriculture were now making every effort to have the matter resolved. He said it would be very unfair if the impression was given that the WDC was responsible for the delay.
"It would be very unfortunate and damaging for the western commission if people were to be mislead into believing that it was responsible for the delay. On the contrary, we have urged the approval of this scheme at every opportunity and have always responded very promptly to any request for information from the Department."
He said "a climate of uncertainty" had been created among potential investors because of the delay.
A sum of u £25 million spread over the seven counties covered by the WDC over five years is not a huge amount of money, but there is both anger and bewilderment in the west at the handling of this issue by Government departments.
While there are accusations of a lack of political will, and of ineptitude by officials, there is also a theory that the bungled handling of the matter may have been due to some kind of competition between the Departments of Agriculture and Enterprise, rather than both departments working together to get the money approved for the west as quickly as possible.