Dáil Éireann - Volume 605 - 28 June, 2005
Adjournment Debate. - Port Development.
Mr. J. O’Keeffe Mr. J. O’Keeffe
Mr. J. O’Keeffe:I raise the need for clarification by the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Gallagher, in the context of his replies to Questions Nos. 180 of 17 May, 221 and 222 of 24 May and 247 and 248 of 31 May, of his approval or otherwise of the decision of Dublin Port Company to make a site available without going through the normal tendering process to facilitate a private consortium bidding for the national conference centre contract.
I raise questions and I demand clarification from the Minister of State, arising out of a secret arrangement entered into by Dublin Port Company to provide a site for a private consortium, the Anna Livia Consortium, on which this private consortium has bid for the contract to build the national conference centre.
The Minister for Communications, Marine and Natural Resources is the sole shareholder on behalf of the people for Dublin Port Company. The Anna Livia Consortium is a private consortium comprising Bennett Construction Limited, Kilsaran Concrete Limited and Earlsfort Developments.
This secret deal was arranged without a competitive tendering process and thus fails to comply with public procurement law and policy. Neither does it comply with the code of practice for the governance of State companies. After I raised the issue in the Dáil by way of a parliamentary question, the Minister of State confirmed that his Department had received a letter from Dublin Port Company requesting retrospective approval for its proposals to enter into the arrangement with the consortium in question.
The Minister also confirmed that the proposal of Dublin Port Company provides that in the event of the consortium being successful in its bid for the development of the national conference centre and appropriate planning and other consents being issued in respect of same, Dublin Port Company will make a site available to facilitate the development of the national conference centre together with further and complementary commercial development.
The arrangement entered into by Dublin Port Company, DPC, has been done without a competitive tendering process. No competition has been held by DPC nor have the principles of Irish and EU public procurement law and policy been adhered to.
DPC is a “contracting entity” within the meaning of article 2 of the EU utilities directive and,  as such, it is subject to the public procurement law regime set out in the utilities directive. Furthermore, as a State-owned body, DPC is subject to Government guidelines, the most recent being the national public procurement guidelines of 2004 which update the 1994 green book. The guidelines enshrine the principle that competitive tendering should always be used by any public body in awarding a contract unless exceptional circumstances apply.
In response to Parliamentary Questions Nos. 221 and 222 of 31 May, the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Gallagher, indicated that the Department is concerned to ensure that DPC has complied with “applicable legislation and the code of practice for the governance of State bodies”. The code of practice has specific guidelines on the disposal of assets. Section 5.1 provides that where any property with an anticipated value at or above €70,000 is disposed of, it should be by way of auction or competitive tendering process, except in exceptional circumstances, such as a sale to a charitable body. The method used should be both transparent and likely to achieve a fair market-related price.
In the context of the national conference centre, we are talking of significant sums of money. The ballpark figure for the national conference centre will be in the order of €300 million. Ancillary and complementary developments, depending on the extent, could easily add another €300 million or more to the overall development project. Clearly in the context of such enormous sums of money, there are huge dangers and temptations, which in the context of more modest amounts, have led to the establishment of tribunals.
At a minimum it is essential that any involvement by a State-owned company should be in full compliance with public procurement law and policy. At this stage, it is essential for the Minister of State to clarify the position fully. He should furnish details of the alleged non-binding heads of agreement entered into with the private consortium, including date, terms and full details of the lands involved.
I am talking about land values with full zoning and planning permission, which could be in the order of €20 million or €30 million an acre. Approximately four acres are needed for the national conference centre. The Minister indicated that the arrangement with the private consortium also provided for further or complementary commercial developments. Depending on the extent of such complementary commercial development another four acres could be involved.
Therefore, the lands being made available by Dublin Port Company may have a value of more than €200 million. If the bid of the Anna Livia Consortium for the national conference centre is successful, that private group will end up as the only possible purchaser, thus avoiding the com petitive tendering process. Inquiries and offers for these lands by a number of other parties have been rejected by Dublin Port Company. Therefore, the arrangement between Dublin Port Company and the Anna Livia Consortium has all the hallmarks of a sweetheart deal, possibly of the Galway races tent variety, since the principals on both sides are well known Fianna Fáil supporters.
The Dáil and the public are entitled to an explanation for the fact that Dublin Port Company has dealt exclusively with one private consortium in respect of this matter and has failed to give an opportunity to others to tender or to be considered for any such arrangement. The Dáil and the public are also entitled to know why Dublin Port Company sought ministerial approval for the arrangement only after the heads of agreement had been completed and the matter had been raised in the Dáil by me.
At this stage, the Dáil and the public are also entitled to full clarification from the Minister as to whether he approves of the activities of Dublin Port Company on this issue. Failure to provide full clarification will certainly fuel speculation as to the real reason for this secret deal and as to how the parties involved hoped to justify such an extraordinary arrangement.
Mr. Gallagher Mr. Gallagher
Mr. Gallagher:I thank Deputy Jim O’Keeffe for providing me with this opportunity to report to the House on the background and current position regarding the matter of Dublin Port Company and the Anna Livia Consortium which is one of the candidates for the provision of a national conference centre. The Office of Public Works has provided my Department with an information note on some key events in the procurement process for the national conference centre and it is appropriate to refer to some of these key events by way of background.
In June 2003, the Government agreed in principle to the provision of a national conference centre. To facilitate and oversee the process, the Government authorised the Minister for Arts, Sport and Tourism to set up a steering group to include the Chairman of the Office of Public Works and senior representatives of the Department of Finance and Fáilte Ireland. The group was to be chaired by the Secretary General at the Department of Arts, Sport and Tourism and was to be supported, as necessary, by professional expertise, including the National Development Finance Agency.
In November 2003, the steering group approved the placing of advertisements by the Office of Public Works seeking expressions of interest for the provision of a conference centre on a design, build, finance, operate and maintain basis. Responses to the advertisements were received from four candidates in January 2004. Subsequently, tenders from two of these candidates, including the Anna Livia Consortium, were  received by the Office of Public Works and are currently being assessed.
On 22 March 2005, the Department received a press query by e-mail regarding the use of land in the ownership of Dublin Port Company in connection with a proposal for the national conference centre. On 23 March, the Department requested Dublin Port Company to provide it with relevant information regarding the proposal. On 1 April, Dublin Port Company replied to the Department stating that it was facilitating a consortium in a tendering process for the national conference centre. On 1 April, the Department requested the company to provide a note setting out the involvement of the company in and implications for the company of the consortium’s proposal and a clear statement of what was meant by the company facilitating the consortium.
On 7 April, the company replied, stating that it has been facilitating one of the consortia bidding for the national conference centre in so far as it has consented to the inclusion of a site in the ownership of the company in the submission of the consortium to the Office of Public Works as being potentially a suitable site for the national conference centre. The company stated that it had entered into non-binding heads of agreement with the consortium, that it had not concluded a formal contract with the consortium and that it had not concluded an agreement for the disposal of company assets or to provide access to those assets in favour of any third party.
The principal issue at stake from the point of view of the Department is compliance by the company with the applicable legislation and the code of practice for the governance of State bodies. The primary responsibility for compliance rests with the company. In this regard, the company has confirmed to the Department that it is adhering to the code of practice. In my reply to Question No. 180 on 17 May, I stated that, based on the information provided to the Department, I had no reason at that time to request further information from the company regarding this matter.
On 18 May, the Department received a letter from Dublin Port Company requesting ministerial approval for its proposal to enter into an arrangement with a consortium as detailed in draft heads of terms attached to the letter. The company states that, in essence, the proposal provides that, in the event that the consortium is successful in its bid for the development of the national conference centre and appropriate planning and other consents issue in respect of the national conference centre, Dublin Port Company will make available a site to facilitate the development of the national conference centre, together with further and complementary commercial development.
The Department has had a number of consultations with the Department of Finance regarding the application of the code of practice and the legislative provisions relevant to the particular case presented to it by Dublin Port Company. In  this context, the two Departments have agreed that it is necessary to seek the advice of the Attorney General on the matter, in particular regarding the process applicable to the proposal by Dublin Port Company to make available to the Anna Livia Consortium a site to facilitate the development of the national conference centre together with further and complementary commercial development. I assure the Deputy there is no question of a sweetheart deal. He can be assured this will be dealt with in an open and transparent manner.
Mr. J. O’Keeffe Mr. J. O’Keeffe
Mr. J. O’Keeffe:It was not initially.
Dáil Éireann 605 Adjournment Debate. Port Development.