| Synopsis: |
This report (No. 02/09/10R, ISBN 9780339602885) examines the 14-year history of a major inward investment project, handled by the former Industrial Development Board (IDB). Announced as the biggest single investment ever made in Northern Ireland, the project was promoted by Valence Technology, a US-based company incorporated in 1989. In 1993, IDB offered Valence a package of capital and employment grants of over GBP 27 million, together with a factory investment of almost GBP 5.6 million, to establish a new large-scale manufacturing facility at Mallusk. In return, the company was to invest GBP 147 million in Northern Ireland and create 660 jobs at the plant, by March 1998. The aim was to develop and manufacture batteries using a new, lithium-based technology. However, Valence experienced persistent difficulties, and the anticipated technological breakthrough did not materialise. In 2003, some 10 years after its first contact with IDB, Valence advised Invest NI that it was re-locating its manufacturing operation to China, leaving only a small sales and development facility in Northern Ireland.Invest NI entered into a protracted clawback process which ultimately concluded in July 2007, when it recovered some GBP 5.1 million of the GBP 15 million which it had spent. The Committee reached a number of conclusions and stated it had profound concerns about the way in which the Valence project was handled by IDB. In particular, the widespread nature and extent of the shortcomings, occurring over such an extended period of time, mark the project as one of the most disturbing cases that the Committee has examined. Well-established procedures designed to protect taxpayers' money were repeatedly ignored, and important lessons from earlier failures were not taken on board. There was a worrying lack of transparency on several issues, including gaps in the documentary records, most notably around the acquisition of the factory accommodation. In addition the work of the Board Casework Committee, a key control in the risk management process, was undermined by IDB's over-optimistic and ambiguous submission in support of the project. |