Council denies FOI request on 'road to nowhere' controversy due to 'ongoing legal proceedings'

Head of Finance says an €8m loan taken out in connection with the case has been 'redeemed '

Carlow Carlow Carlow

An aerial view of the 'road to nowhere' just outside Carlow Town (CREDIT: Carlow Weather)

A Freedom of Information request by Carlow Live - seeking details on the amount of interest paid by Carlow County Council between 2007 and to date in 2018 on a loan taken out to pay a High Court settlement to Nessleside Builders over the case the company took against the Council over the construction of the Eastern Relief Road - has been refused. 

Carlow Live also sought details on how much was actually borrowed to pay Nessleside Builders and how much is left to be repaid and how much of the actual loan (that isn't interest) has been paid off between 2007 and to date in 2018. 

Carlow County Council denied the request "as the records sought continue to be the subject of legal proceedings". 

In 2007, RTÉ reported that the Commerical Court had been told that Carlow County Council gave orders for a building company to construct a relief road around part of the town, even though it did not own all of the land.

Only after the developer, Nessleside Builders, sued the Council was the matter settled but the road remains unfinished and has been dubbed locally as the "road to nowhere".

However at this month's meeting of Carlow County Council it was revealed that a "significant portion" of the construction costs of the Carlow Eastern Relief Road were funded by the Council from the issue of development contribution credits in the amount of €8.5m.

As part of the agreement reached with the developer, these credits were to be offset against any future development contribution liabilities charged on the issue of approved planning permissions.

Pat Delaney, Head of Finance at the local authority said that the matter was subject to "ongoing litigation" and as such he was limited to how much can be said at a public meeting but that things had "moved along slightly". 

He added that a loan of €8m taken out in connection with the road controversy had been "redeemed" a number of years ago. 

As at December 31 of last year, credits in the amount of €474,000 have been drawn down by the construction company, according to the Audit Committee Report to Council on the 2017 Annual Financial Statement and Local Government Auditors Report.

As reported in the 2016 audit report the Council is involved in "ongoing protracted legal proceedings" taken against it by the main contractor of the construction of the Carlow Eastern Relief Road.

Meanwhile, the audit report found that as much as €800,000 still needed to be set aside in the Council's capital budget for additional works on the "road to nowhere".

The net capital balance at December 31 of 2017 recorded a surplus of €26.9m (2016: €23.7m).

Peter Scully, Audit Committee Chairperson, said: "Despite the overall credit balance on the account, there remained some large deficits on individual schemes that require funding. The largest of these were as follows:

"Athy Road, Barrow Track Inner Relief Road (€2.9m), sportshall at Bagenalstown (€1.6m), land at Barrack Street, Tullow (€1m) and the Carlow Eastern Relief Road additional works (€0.8m)

"The deficits were also highlighted in the 2016 audit report and no progress has been made by the Council during 2017 in reducing the balances arising.

"Management needs to address the funding of these projects."

Chief executive of Carlow County Council, Kathleen Holohan, in a written response said: "The unfunded balances on the 'Athy Road, Barrow Track Inner Relief Road' and 'Carlow Eastern Relief Road Additional Works' are a product of the economic down turn and will be funded in time from development contributions when construction industry output increases.

"The balances on the 'Sportshall at Bagenalstown' and 'Land at Barrack Street, Tullow' will be funded in time through the disposal or development of the related assets.

"Due to financial constraints the Council is currently not in a position to commence funding the deficits through the annual Revenue Budget but this option will be kept under review."

Ms Holohan said: "This matter together with related issues continues to be the subject of legal proceedings."

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