Tony Killeen (Clare, Fianna Fail)

Gabhaim buíochas leis an Teachta as an t-ábhar tábhachtach seo a chur os ár gcomhair anocht. I understand that the company in question has contracts with Ballymun Regeneration Limited, South Dublin County Council and Dublin City Council for the construction of a number of local authority housing schemes. The schemes for Ballymun Regeneration Limited involved are Sillogue, phase 3B, where 58 units are due for completion in December 2005 at a budget cost of €8.8 million, and Poppintree, phase 5B, where 90 units are due for completion at the end of the year at a cost of €15.1 million. The scheme for South Dublin County Council involved is Fortunestown with 112 units and a community facility at a cost of €20.3 million, and the involved scheme for Dublin City Council is Poplar Row, phase 2, with 69 new units and 56 units refurbished at a cost of €17.177 million.

I am advised by the Department of the Environment, Heritage and Local Government that neither they nor the local authorities concerned had any prior knowledge or difficulties with the payment of suppliers or sub-contractors by the company referred to. Having checked the matter with the local authorities, they have indicated that all claims owed to the company concerned are fully up to date. In the light of recent reports, Ballymun Regeneration Limited has sought to contact the company to ascertain the extent to which suppliers and sub-contractors working on the regeneration project are owed money, the amount involved, if any, and its proposals to address the matter. While the issue of payment of suppliers or sub-contractors is a matter for the companies involved in the first instance, the local authorities will maintain a watching brief to see if and how this matter is resolved.

The Deputy has also referred to the general issue of prompt payment of bills by public and private sector organisations and I am happy to clarify the legal position in that respect. In general, this area is governed by the provisions of the European Communities (Late Payment in Commercial Transactions) Regulations 2002, which came into force as SI 388 of 2002. These regulations, which gave effect to a European Union directive on late payment in commercial transactions, came into effect in Ireland on 7 August 2002 and apply to commercial transactions in both the public and private sectors.

The regulations provide essentially that penalty interest will become payable if payments for transactions between undertakings are not met within 30 days, unless otherwise specified in a contract or agreement. A payment is regarded as late when 30 days have elapsed unless an alternative payment period is specified in an agreed contract. In the case of an agreed contract, payment is regarded as late if the payment period exceeds the date or end of the period for payment specified in the contract. Where the contract does not specify a payment period, a default payment period of 30 days will apply. This 30-day payment period begins on the date of receipt by the purchaser of an invoice for payment or the date of receipt of the goods or services where the date of receipt of the invoice is uncertain or the purchaser receives the invoice before the delivery of the goods or services in question. In cases where the parties have agreed a procedure for acceptance or verification of the goods or services, the 30-day payment period starts after this process has been completed.

The interest rate specified in the regulations for late payment is the European Central Bank, ECB, rate plus seven percentage points. However parties to a contract may, if they wish, agree an alternative interest rate. Compensation may be claimed for the recovery costs of the debt, if such costs arise, and the basis on which this may be done is also laid down in the regulations.

See this speech in context