Dáil debates

Wednesday, 9 December 2009

Priority Questions

Harbour Authorities.

1:00 pm

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Question 23: To ask the Minister for Transport if he has received a copy of the Deloitte report into the Shannon Foynes Port Company; if he carried out an internal investigation into alleged irregularities; and if he will make a statement on the matter. [46218/09]

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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In September 2006, Shannon Foynes Port Company initiated an internal investigation into allegations made against two members of the board. This led to a number of related legal disputes and the investigation was suspended on foot of this. In October 2007, a confidential out of court settlement was reached between the parties. This process was very costly for the company.

In December 2006, the company also engaged Deloitte as internal auditors to the company. Deloitte & Touche carried out a corporate governance review of specific transactions and processes. The company subsequently forwarded a copy of the Deloitte report to my Department.

The report is confidential and is not intended for publication. It contained a number of recommendations for improving corporate governance procedures in the company and the board has confirmed that these have been implemented. The confidentiality of the report must be respected. To make public the Deloitte report would achieve little other than to expose the company potentially to further costly legal proceedings relating to the confidential settlement.

I have also received correspondence from third parties regarding alleged historical inappropriate corporate behaviour which I have forwarded to both An Garda Síochána and the Office of the Director of Corporate Enforcement. If any party has evidence of an alleged breach of the law, they should bring such evidence to the attention of An Garda Síochána.

In September 2008, I appointed a new chairperson and five other directors to the board of the company. These new appointments have provided renewed leadership and strategic direction to the company.

My Department continues to closely monitor the company's performance in accordance with normal corporate governance practice.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Is it not a fact that the Minister is a shareholder in this company along with the Minister for Finance and that the findings of the Deloitte report which the Minister has in his possession states that this site of 16.6 acres is the best site in Foynes Harbour and was sold for €2.1 million to the sole bidder? There was no public auction and no competitive tendering. There was no updated valuation of the site. The Deloitte report finds that corporate governance was not fully complied with, despite legal concerns expressed by the port company solicitor and the code of practice on governance of State bodies was not being complied with. Is this not a gross abuse of the powers of individuals in the company who have not complied with the Ethics in Public Office Act or with proper procurement processes? The taxpayer is out of pocket to the tune of at least €10 million with regard to this site. Is the Minister aware that interest in the site was expressed by a company in early 2004? This interest in minuted in internal company e-mails. While it was sold to a single individual for €2.1 million this other company bought it for €12 million two and a half years later, at a massive loss to the taxpayer. What action will the Minister take?

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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As I said in my reply to the Deputy's question, what happened at Shannon Foynes Port Company during the course of this period was the subject of much investigation and the subject of a report by Deloitte. It is obvious that all was not well in the port. Weaknesses in corporate governance were identified by Deloitte. As a result, the chief executive officer resigned and new board members have been appointed. The recommendations made to me and the recommendations regarding corporate governance made by my Department to the company, have all been implemented at this stage. There is no doubt that significant difficulties arose as a result of various legal actions taken which cost the company a lot of money. The situation was far from satisfactory. However, the company must run its own affairs. My responsibility was to ensure that a new board was put in place with a new chairperson. Those matters have been dealt with. I am unable to say any more than that because of the legal situation.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I welcome the fact the Minister has sent the report to the Garda Síochána. However, the fact is that the chief executive officer of this port was the sole receiver of tenders into the hiring of a boat over a two-year period and which cost the port more than €100,000. The chief executive officer granted himself that tender. No tenders were produced from anyone else and no contracts existed. It is a shameful and disgraceful issue. What is the Minister doing to ensure this cannot occur in this company or in any other harbour authority? The best way would be to make all these harbour authority companies accountable to the Comptroller and Auditor General and the Committee of Public Accounts.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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That is not really the solution to everything and the Comptroller and Auditor General is busy enough as it is. These are commercial State companies. This company in particular had difficulties. They were not operated on a commercial basis previously but this has changed by legislation. As long as such companies are left in a situation where they would be bailed out by taxpayers and where they did not have a commercial remit, there will always be such kind of difficulties. It is now up to the directors and the chief executive officer and the internal and external auditors, to ensure these practices are not continued.