03 October 2008
The Welsh Assembly Government failed to monitor the risk that the Wales Millennium Centre would not break even after opening, despite warnings from independent advisers, the Wales Audit Office has ruled.
The WAG had successfully managed the risks during construction of the performing arts centre, as the main funder and guarantor of a loan taken out to complete the project, the auditors found.
However, officials failed to keep sufficient information on the centre once it had opened, becoming aware of its financial problems only two years later, when the WMC reported it was running at a loss and faced a funding crisis.
In 2007, ministers agreed to pay off a £10m loan, which had grown through interest payments to £13.5m, and to increase annual revenue funding from £750,000 to £3.7m.
Auditor general for Wales Jeremy Colman said: 'The centre was a high-risk complex project, and although the public bodies funding it followed good practice in many areas — particularly through joint monitoring — there were some fundamental weaknesses.'
The WMC cost a total of £109.3m to complete.
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