Bernard Durkan (Kildare North, Fine Gael)
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Question 296: To ask the Minister for Defence the number of cash transport escorts provided by the Defence Forces in the past 12 months; the costs involved and the degree to which the Exchequer was reimbursed by the financial institutions; and if he will make a statement on the matter. [32229/05]

Willie O'Dea (Limerick East, Fianna Fail)
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An annual contribution of €2.86 million has been paid by the banks to my Department in respect of the provision of cash escorts. That figure was set by the Department of Finance in the 1995 budget and has not been altered since. The contribution from the banks was designed to cover in part the total costs to the State of providing cash escorts. At that time, the contribution covered approximately 72% of the total cost arising to the Defence Forces. The costs are calculated on the following basis. Pay accounts for about 54% of the total costs of providing cash escorts. The non-pay costs include security duty allowance, subsistence, transport and aerial surveillance costs.

The breakdown of those costs, on average is as follows: security duty allowance, 7%; subsistence, 8%; transport, 28%; aerial surveillance, 3%. Based on annual costings by the Department, the relative level of the contribution had fallen in real terms over the years to the situation where it was covering only 43% of the total costs.

As the Deputy may be aware, I had several discussions with the Irish Bankers' Federation, IBF, regarding the matter earlier this year, with a view to increasing the level of contribution by the banks in respect of the costs incurred by the Department in the provision of cash escorts. Following detailed and intensive discussions between officials of the IBF, the member banks and the Department, a detailed formal agreement was signed on 11 May 2005.

This agreement, which is for a five-year period, provides that the banks will pay the total actual costs incurred by the Defence Forces in the provision of cash escorts. Costs in respect of each 12-month period to the end of December will be paid the following year on or before 1 June. That is to allow for the compilation of returns from the brigades and allocation of costs following the year end. The total number of cash escorts provided by the Defence Forces for 2004 was 2,425, and the total cost in that regard was €7.5 million.

The first payment under the new system will be made in June 2006. I have, at the bank's request, agreed to defer the first payment to that date to meet the bank's budgeting and accounting timeframe. In return for my agreement to that deferral, a transitional payment of €1 million, payable before the end of 2005, was negotiated as part of the overall agreement. Therefore, in 2005, the banks will make their annual payment of €2.86 million plus the additional €1 million, making a total contribution of €3.86 million. The costs for the banks in any future year will be determined by the actual costs incurred by the Defence Forces in the provision of the cash escorts in the previous year and thus are not available at this time. The payments by the banks will be made directly to my Department.

We have now agreed a very open and transparent system for agreeing the costs in respect of the Defence Forces, and that should stand the test of time. The agreement resolves the issue of the banks' contribution in respect of cash escort costs for the foreseeable future.