Dáil debates

Wednesday, 2 May 2012

1:00 pm

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Question 5: To ask the Minister for Communications; Energy and Natural Resources the position regarding the awarding of contracts by State companies to overseas firms; and if he will make a statement on the matter. [21704/12]

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)
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The awarding of contracts by State companies under the aegis of my Department is an operational matter for the individual companies in the first instance. I have no function in this regard. The code of practice for the governance of State bodies sets out clear procurement requirements. It is the responsibility of boards to satisfy themselves that these requirements are adhered to.

EU directives and national regulations impose legal obligations on public bodies in regard to advertising and the use of objective tendering procedures for awarding contracts above certain value thresholds. Even in the case of procurement which might not be subject to the full scope of EU directives such as certain non-priority services or service concessions, the European Commission and the European Court of Justice have ruled that EU treaty principles must be observed.

The implementation of national and European procurement requirements is an important element in the achievement of value for money in the State sector. Boards of State companies are obliged to ensure there is an appropriate focus on good practice in purchasing and that procedures are in place to ensure compliance with procurement policy and guidelines. More generally, public procurement legislation in the European Union is aimed at creating a common market by ensuring free movement of goods, persons, services and capital and promoting effective competition in the internal market. The essential treaty principles include non–discrimination, equal treatment, transparency, mutual recognition, proportionality, freedom to provide service and freedom of establishment. There is a strongly implied requirement to publicise contracts of significant value to a degree which allows parties in other member states the opportunity to express an interest or submit tenders.

Information on procurement policy and general guidance on procurement matters is published by the national public procurement policy unit. This can be viewed or downloaded from the national public procurement website.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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I previously raised the issue of the awarding of a contract to Bord Gáis. I received a report from Bord Gáis and a letter from the Minister this morning on the issue. I thank him for his response, but my concerns remain. The wider point is that large lucrative contracts in several State companies have been awarded to firms overseas. I have no doubt that this will lead to significant job losses and the closure of long-standing Irish businesses dependant on these contracts. Does the Minister agree that there ought to be preferential treatment for Irish companies applying for these contracts? The current policy is definitely mitigating against the Government's stated objective of utilising existing public companies to maximise job creation opportunities. It does not make sense, therefore, that a big company should take over resources from State companies and brings in its own personnel. The consequence of such actions is that the dole queues are being added to.

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)
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I have raised with Bord Gáis more than once the matters raised by the Deputy in the House. This has caused the company to communicate directly with him. On the wider issue he raises, the fact remains that we are a member of the European Union. To do what he asks would run contrary to the law. Therefore, we cannot do what he suggests in terms of procurement. Even if any of the companies was minded to do it, it would not be free to do what he requests. Irish companies would suffer if this were to happen because they, too, are contending for and winning contracts outside Ireland. This includes State companies such as the ESB and Bord na Móna which are very successful in this area and have built a very interesting talent bank in engineering and other skills. Within EU law on freedom of movement it is not possible to restrict recruitment by such contractors to within this jurisdiction only.

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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I accept what the Minister is saying, but in the case I raised with him on two occasions and brought to the attention of the House about a company awarded a contract, I pointed to the past actions of the company and the convictions against it outside the State, yet it does not appear to have brought about a situation where it could be deemed unfit to carry out the contract awarded.

3:00 pm

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)
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The Deputy is in possession of as much information as I am. This is a giant international company the services of which were procured in the normal way by Bord Gáis Éireann.

Bord Gáis Éireann has gone to considerable difficulty to persuade Deputy Ferris and myself that it did everything above board, which is not to say some of the matters Deputy Ferris brought to my attention are, and were, not of the utmost gravity. Most of the events happened some time ago. This is a giant multinational company and the service Bord Gáis Éireann was recruiting does not relate to the same territory, personnel or anything like that. Bord Gáis Éireann is convinced the company in question is professionally well equipped, has done a good job and was procured in accordance with procurement guidelines.