Written answers

Thursday, 30 April 2009

Department of Finance

Consultancy Contracts

5:00 pm

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 82: To ask the Minister for Finance the arrangements relating to the employment of an economist (details supplied) in the context of the bank rescue plan; if they are kept on retainer; if they are paid on a [i]per diem[/i], hourly or other rate; the rate of their fee or remuneration; if they are retained by the National Treasury Management Agency or his Department; the cost to date of their employment; the duration of their contract; when it is due to conclude; and if he will make a statement on the matter. [17249/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The Economist referred to is retained by the NTMA. I am advised by the NTMA that the terms of his contract with the NTMA were agreed on a confidential basis. In the circumstances I am unable to comment further on the issue.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 83: To ask the Minister for Finance the purpose of the retention of a company (details supplied) by his Department; when they were first retained for this purpose; the arrangements set out in the relevant contract; when this contract is due to expire; the rate of remuneration or fees contained in the contract; the amount of remuneration paid in this regard to date; the amount of remuneration currently outstanding; the procurement process that led to the retention of this company; the number of such companies short listed during this procurement process; and if he will make a statement on the matter. [17251/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The company the Deputy refers to is retained by the National Treasury Management Agency (NTMA) and was contracted at my request by the NTMA under the powers set out in the National Treasury Management Agency Act 1990, to assist the Government by providing general, strategic and specific technical advice on the Irish banking sector.

The company was first retained in the final week of September 2008 and the contract is due to expire at the end of June 2009.

As the Deputy is aware, in September 2008 there was severe market dislocation after the collapse of Lehmans and AIG difficulties. Given the strategic importance of retaining an advisor urgently, which was not conflicted, the NTMA procured such an advisor. The NTMA made contact with a number of Investment Banks who declared conflicts and thereby could not be retained.

The fees paid to the company are a flat retainer fee of €2 million with an overall limit of €6 million on any transactions undertaken. These fees do not include VAT and expenses.

The NTMA has advised me that the specific arrangements set out in the company's contract and the amount of remuneration currently outstanding are confidential contractual matters.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 84: To ask the Minister for Finance the purpose of the retention of a company (details supplied) by his Department; when they were first retained for this purpose; the arrangements set out in the relevant contract; when this contract is due to expire; the rate of remuneration or fees contained in the contract; the amount of remuneration paid in this regard to date; the amount of remuneration currently outstanding; the procurement process that led to the retention of this company; the number of such companies short listed during this procurement process; and if he will make a statement on the matter. [17250/09]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The company the Deputy refers to was retained by the Financial Regulator in late 2008 to assist the Financial Regulator with a review of the financial and capital positions of Irish banks and to enable the Financial Regulator to advise the Government on what action needed to be taken. Due to the extreme urgency of this work, and in accordance with Public Procurement Guidelines, the contractual terms were negotiated with the company without advertising the contract.

The work undertaken involved an initial high level assessment of the capital and liquidity levels of the institutions, stress testing of the institutions' loan portfolios over a three year period, and reviewing the valuation of properties held as collateral against the main property loans.

The total fees paid by the Financial Regulator to the company in respect of the work was €3.8 million, which has been completed. These costs will ultimately be charged by the Financial Regulator directly to the relevant institutions.

Further to a request of the Department of Finance under the Credit Institutions (Financial Support) Scheme 2008, the Financial Regulator has asked the company referred to, building on its previous work, to carry out further analysis of certain specified covered institutions. This work is ongoing and the same contractual arrangements will apply.

I understand that the company concerned has also carried out work to assist the National Pension Reserve Fund Commission's due diligence examination of AIB and Bank of Ireland. The NPRFC is an independent body and I cannot comment on the terms of this contract.

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