The company behind the city’s jinxed arthouse cinema signed a €4.1 million public works contract with a construction firm without departmental consent, placing taxpayers on the hook for a budget overrun of up to €2 million.
The project has been plagued by setbacks and controversy since work first began on a site donated by Galway City Council at Lower Merchants Road in 2009.
The development of the three-screen cultural cinema has been overseen by Solas Galway Picture Palace Limited, a private company afforded charitable status, with government funding provided through five separate public bodies.
The Galway City Tribune has obtained correspondence between Solas, the Department of Arts, Heritage and the Gaeltacht, and other stakeholders under the Freedom of Information Act; providing a new insight into the chaotic events surrounding the project.
It reveals that Solas signed a binding contract for the completion of the cinema with JJ Rhatigan & Co in March 2012 without seeking the consent of the Department and without having funds in place to cover the cost.
The issue was raised in a letter from then-Minister for Arts, Heritage and the Gaeltacht Jimmy Deenihan to the Solas Chairperson Lelia Doolan on June 21, 2012.
“The Board of Solas did not have this Department’s consent to sign the contract with JJ Rhatigan & Co as it was required to and… funding has not been set aside to cover payments,” wrote Minister Deenihan.
In her response issued the following day, Ms Doolan replied: “I understand and appreciate the points you make. I would, however, wish to reiterate that we acted in good faith in the matter of issuing the binding letter of consent and in going to contract.”
Solas was advised that the Department would refuse to release additional funding of €2.1 million unless the company could demonstrate that it had sufficient resources to bring the project to completion without further recourse to public funds.
Ms Doolan wrote to public representatives in Galway two weeks later, warning them in an email on July 5, 2012 that “to discontinue now will involve the loss of over €4 million of public monies with ancillary consequences”.
The following day, Taoiseach Enda Kenny attended the construction site during a visit to Galway. Ms Doolan wrote to public representatives again later that day, advising them that she had issued a similar warning to Mr Kenny.
“We conveyed to him the urgency of the situation and our belief that . . . were a termination to occur now, the employment, political, financial and legal consequences would be severe and far more costly than finishing the job,” she wrote.
“That €4m of public monies spent and nothing to show for it but a hole in the ground . . . is an unacceptable prospect.”
Ms Doolan noted in her email that the Taoiseach had raised the question of Solas having signed a contract with the construction firm without departmental consent during his visit.
“That canard that we had proceeded without permission may have some shaky legal legs but is morally unsound,” she stated.
Relations with Minister Deenihan appear to have deteriorated in the following months, however, as Ms Doolan described in an email to Solas Project Manager Tracy Geraghty on August 17 how he “flew into a rage” and shouted at her during a telephone conversation.
“He flew into a rage and accused me of misrepresenting him and shouted at length about wanting the work to succeed, his being good enough to take phone calls, never again meeting without an official present etc – no word in edgeways from me was possible,” she wrote.
The same email reveals that the Department had expressed a desire to impose a new project manager representing the funders as early as 2012. This was resisted by Ms Doolan, but project management was ultimately taken over by Galway City Council last year.
She stated in her email that the imposition of a project manager “would be a sticking point for us” and claimed that Solas were “being treated as though we were major transgressors”.
The matter of signing the contract with JJ Rhatigan & Co without consent again arose, with Ms Doolan observing that “they criticised us for going to contract without their approval and yet thought nothing of spending our contracted monies without notifying us”.
The budget for the development of the Picture Palace was originally set at €6.2 million, which was sourced in full from the Department, Galway City Council, the Irish Film Board, the Western Development Commission and the Arts Council.
The original contract for the building project was awarded to Cordil Construction in 2009. However, the company went into receivership in May 2011 and work on the cinema ceased.
Ms Doolan noted in correspondence with public representatives that, at this point, the site was “relatively untouched, the piling for the first stage of building scarcely begun”.
A house neighbouring the construction site was accidentally damaged during this period and Solas agreed to knock and rebuild the residence at a cost of €500,000, which was included in the contract with JJ Rhatigan & Co.
Last August, it was announced that the Department would provide an additional €735,000 for the completion of the project, along with a further investment of €232,000 by Galway City Council.
The correspondence obtained by the Galway City Tribune reveals that the departmental funding was made conditional on Galway City Council assuming responsibility for project management.
Solas indicated that it would provide a comment in relation to the correspondence two weeks ago but had not done so at the time of publication.