Údarás na Gaeltachta was warned in a confidential report about providing grant aid to a quarry which it subsequently emerged was outside the Gaeltacht area. Liam Reid reports.
The quarry, at Ballinahaille, near Moycullen, Co Galway, was awarded grant aid of nearly €70,000 in December 1998, despite the fact that it was not in the Gaeltacht. The grant was used to lease a stone-crushing machine.
The quarry, which has no planning permission, is now at the centre of a planning row, and is the subject of a threatened legal action against Ireland by the European Commission.
It has now emerged that, three months before the grant was awarded, an expert report warned about providing grant aid to quarries, and suggested the owners should find private investment instead.
The report in September 1998, drawn up at the request of Údarás by experts at Enterprise Ireland, examined business opportunities for stone quarrying in the Connemara area.
It found that the quarry, known locally as Welby's quarry and owned by M&M Caireal Teo, was one of the only quarries in the area with significant potential for expansion.
The report warned Údarás that "caution is advised in grant aiding capital investments for aggregate producers because of the effect it has on market forces".
It warned that such grant aid could distort the market and demoralise competition, and that it was practice outside the Gaeltacht not to grant aid to quarrying or concrete businesses.
The report did say "an exception might be considered" in the case of M&M Caireal Teo.
However, it said that "a better approach to a grant would be for the company to seek an outside investor". This approach "could be the best in the long run, as it could enhance the possibility of the development of other ancillary services".
The Enterprise Ireland report also advised Údarás that the indications from the planning authority Galway County Council were that the expansion of a quarry development needed planning permission.
Údarás has since defended its decision not to seek a repayment of the grant after it emerged the quarry was outside the Gaeltacht.
In the grant application, the address of the quarry was given as Baile Dóite, whereas it was actually located in the neighbouring townland of Ballinahaille. Údarás said that, given the terrain of the area, the mistake was "understandable and innocuous".
Údarás said that it was also aware of planning issues regarding the quarry, but that that was a matter for the relevant planning authority, Galway County Council. The council found that the quarry did not require planning permission because it is "exempt" under planning laws, as there had been a quarry there before 1963.
The council was also one of the biggest customers of the quarry, with stone from Welby's quarry used for a major road upgrade scheme between Galway city and Oughterard.
In 2002, An Bord Pleanála overturned this ruling and found that the quarry did need planning permission. Galway County Council was then obliged to take enforcement proceedings, which have effectively stalled after the quarry owners lodged a High Court challenge last year.
In July, the European Commission issued a letter of formal notice to the Government over unauthorised quarry developments that have expanded without planning permission.