Dáil debates

Wednesday, 9 December 2009

Other Questions

Railway Procurement Processes.

3:00 pm

Photo of Michael D HigginsMichael D Higgins (Galway West, Labour)
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Question 28: To ask the Minister for Transport the action he has taken following the publication of the CIE commissioned Baker Tilly Ryan Glennon report on alleged irregularities in the procurement process at Irish Rail; if he has received reports he requested on major procurements at Irish Rail; his views on further measures to invigilate auditing practices at commercial semi-State transport bodies; and if he will make a statement on the matter. [45862/09]

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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Following receipt of the report referred to by the Deputy, I discussed the matter with the chairman of CIE on 22 October and expressed my concern to him on the weaknesses identified and the fact that neither I nor my Department had been informed. The chairman briefed me on the background to the report and indicated that the actual loss was limited to €2.6 million. He informed me that certain staff members had been sacked, that some cases had been referred to the Garda and that most of the recommendations in the report have now been implemented.

I also sought a full report from the board of CIE on the circumstances giving rise to the Baker Tilly Ryan Glennon report, the extent to which progress has been made in implementing the recommendations in the report and the measures being taken to ensure adequate controls in expenditure areas not covered by the report. I expect to receive that comprehensive report shortly. The CIE board has been asked to address areas of expenditure not covered in the Baker Tilly Ryan Glennon report. In the meantime the chairman and the CEOs of the CIE companies have confirmed that the CIE companies are adhering to national and EU procurement rules and to their own internal procurement policies and procedures.

I will, in light of the report from the board, consider any necessary action on my part, including the need to put in place additional measures beyond those in the code of practice for the governance of State bodies relating to procurement and auditing practices in CIE.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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We had a lengthy discussion on the matter at the Oireachtas Joint Committee on Transport and we intend to conduct a deeper investigation. Could the Minister confirm, first, whether the total figure for losses discovered in the Baker Tilly Ryan Glennon report amounted to €2.4 million, or whether it could have been a much higher figure, as calculated by Senator Shane Ross, of perhaps €8.5 million? Were there other losses of up to €8.5 million on foot of malfeasance in the company?

Second, in regard to our previous discussion on Question Time, the Minister indicated he would request the reports on the ten largest procurements of Irish Rail during Transport 21 and its predecessor. Will he make the information on those procurements available to the Dáil and the transport committee?

The net result of the criminal misbehaviour in terms of the selling off of equipment belonging to CIE and Irish Rail was that three people left the company. The manager, Mr. Fearn, referred to contacts with the Garda Síochána in that regard . Has the Minister made any further investigations?

I noted recently that a senior engineer of Irish Rail received an award of €190,000 from the Equality Tribunal, the largest payment in the history of the tribunal. Another senior engineer is also pursuing a case at the Employment Appeals Tribunal, and there are allegations that another senior manager is currently suspended. Is the Minister aware of whether that is the case, if that suspension has taken place and if difficulties exist with senior management? I invite the Minister to comment on that.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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The assurance I have received from the company is that the loss was limited to €2.6 million. I am aware of the speculation on a higher amount, which I have been informed was based on earlier drafts of the Baker Tilly Ryan Glennon report. It is precisely because I wished to ascertain the full facts in that regard that I asked the chairman and the board to provide me with a full report to cover not just what was in the Baker Tilly Ryan Glennon report, but the other areas to which reference has been made. I am being specific about the information I have received regarding the loss being €2.6 million, because I do not wish to be accused later of misleading the Dáil.

I am not aware of whether Deputy O'Dowd-----

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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Question No. 36.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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I am aware there was a delay but we got the ten-----

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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I got the information on the ten largest procurements last night. I thank the Minister.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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I will make that information available to Deputy Broughan as well.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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I thank the Minister.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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On the other matter raised by the Deputy, the Equality Tribunal award is nothing to do with misappropriation. It is a totally unrelated matter that is being dealt with directly by the company itself.

The information available to me currently is that two or three persons were sacked, cases were referred to the Garda by CIE and the report is being implemented. When that is updated, I will inform the Deputy.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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The point is that €325 million is paid annually in a subsidy to CIE by the taxpayer. The Baker Tilly Ryan Glennon report refers specifically to another annual internal audit report, which outlines that further significant breaches were found in areas outside the scope of that report, including significant non-compliance in the chief mechanical engineer's department. In an effort to get to the bottom of that and to provide accountability to the Dáil and to the taxpayer, will the Minister seek a copy of that report because CIE has refused to give it to me? I ask the Minister in Question No. 36 to seek that copy-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Deputy should not pre-empt a question.

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)
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It refers to the Baker Tilly Ryan Glennon report. I am surprised it was not taken with this question. The key point is that there are further and other abuses going on within CIE and it is refusing to give us the facts. I ask that the Minister would insist on getting them on our behalf.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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I have asked the board for a full report, not just on the Baker Tilly Ryan Glennon report, which was the immediate focus of the question, but also in general terms in regard to procurement. I have asked the chairman and the board that the report would be made available to me. There is no doubt that the report will go to the board as it addresses all of the issues that would be of concern, especially in the area of procurement.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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Is the Minister aware of the suspension of any member of senior management in recent times?

I wish to make a final point on the previous question. Why did the Minister derogate Irish Rail from the European directive on consumer and passenger rights, which it appears-----

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That is outside the scope of this question.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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The Minister would probably like to answer it.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Whether he would like to or not, we must stay within the Standing Order.

Photo of Tommy BroughanTommy Broughan (Dublin North East, Labour)
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He decided not to join up for another five years. He joined the aviation one.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I call an t-Aire for a brief relevant reply.

Photo of Noel DempseyNoel Dempsey (Meath West, Fianna Fail)
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I am aware of a recent suspension in senior management in CIÉ.