Written answers
Tuesday, 25 January 2011
Department of Finance
Consultancy Contracts
8:00 pm
Brian Hayes (Dublin South West, Fine Gael)
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Question 201: To ask the Minister for Finance if he will provide a comprehensive report on a matter (details supplied); and if he will make a statement on the matter. [3703/11]
Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The table sets out the list of payments made in respect of external advice given to my Department since taking office in 2008, including advice provided to my Department through the Financial Regulator, the Central Bank and all agencies under the NTMA umbrella. Office of the Minister for Finance
| Consultant/Firm offering advice | Payment Date | Gross Cost including VAT€ | Brief details of the advice provided |
| Hay Group Ireland, Lr. Mount Street, Dublin 2 | 2008 | 114,344 | Job evaluation of senior posts in the Public Sector |
| Petrus Consulting | 2008 | 4,114 | Evaluation of value for money and policy review on construction procurement reform initiative |
| McCann Fitzgerald | 2008 | 63,024 | To draft conditions of engagement for construction related services and a price variation clause for construction contracts based on a proven cost basis; and draft legal changes resulting from consultation process and training. |
| A&L Goodbody | 2008 | 182,008 | To develop standard conditions of contract for civil engineering and building works projects and associated outline guidance; and draft legal changes resulting from consultation process and training . |
| IPA – Institute of Public Administration | 2008 | 50,000 | Review of the Capacity of the Dept of Finance |
| Ernst & Young | 2008 | 193,901 | Study on the economic and budgetary implications of a CCCTB |
| Arthur Cox | 2008 | 1,628,024 | Legal advice in relation to the Bank Guarantee Scheme, Recapitalisation issues, Nationalisation, the National Asset Management Agency (NAMA), the Eligible Liabilities Guarantee Scheme (ELG), general financial and banking matters. |
| Arthur Cox | 2009 | 4,173,689 | Legal advice in relation to the Bank Guarantee Scheme, Recapitalisation issues, Nationalisation, the National Asset Management Agency (NAMA), the Eligible Liabilities Guarantee Scheme (ELG), general financial and banking matters. |
| Mercer (Ireland) ltd | 2009 | 3,308 | Advice to CIROC in relation to Human Capital. |
| Watson (Wyatt) ltd | 2009 | 7,290 | Advice to CIROC in relation to the Executive Compensation market. |
| Hay Group Ireland Ltd | 2009 | 4,860 | Advice to CIROC in relation to Banking Remuneration. |
| Life Strategies Ltd | 2009 | 32,805 | Parallel Benchmarking pensions. |
| Hay Group Ireland Ltd | 2009 | 215,937 | Review Body on Higher Remuneration benchmarking |
| Pricewaterhouse Coopers | 2010 | 118,580 | Professional Fees in respect of accounting advice on promissory notes |
| Arthur Cox & Co | 2010 | 4,804,884 | Legal advice in respect of guarantees (CIFS & ELG), nationalisation of Anglo Irish Bank, recapitalisations and restructuring plans |
Central Bank and Financial Regulator
The Central Bank and Financial Regulator incurred the following advisory costs:
| Year and total cost | Detail |
| 2008 total cost €4,295,115 | Financial Capability Study consultancy for 2008/09 |
| Loan book analysis and assessment review | |
| Review of trading controls | |
| Consumer tracking research | |
| Report on calculating a consumer rebate | |
| Review of the Life Assurance Disclosure Regulations | |
| Consumer Research for Review of the Intermediary Market | |
| 2009 total cost €778,724 | Review of Business Processes |
| Review of Directors Loans | |
| Review of Banking System pre NAMA (at request of Department of Finance) | |
| 2010 total cost €2,031,423 | Strategic Review of the Credit UnionSector in Ireland (requested by the Minister for Finance) |
| Organisational effectiveness of financial sector regulators/Supervisors | |
| Due Diligence Report (at request of Department of Finance) | |
| Review of NAMA Asset Valuation Methodology |
The Central Bank and Financial Regulator are self-financing institutions. Accordingly the costs incurred are included for information only and do not represent a cost to the taxpayer. The Central Bank has advised my Department that they are not in a position to divulge individual consultant details/costs due to client confidentiality arrangements.
In addition to the above, the following costs were incurred in respect of reports commissioned by the Consumer Panel:
| Year | Amount |
| 2008 | €114,836 |
| 2009 | €4,860 |
| 2010 | €4,599 |
National Treasury Management Agency Group:
| Consultant/Firm offering advice | Gross Cost including VAT | Brief details of the advice provided |
| NTMA | ||
| Merrill Lynch | €7.33m | The NTMA was requested by the Minister for Finance to engage advisers to provide advice on structural issues in financial markets.Total fees paid were €7.3m. Of this amount, €2.4 million was paid in 2008 for advice on structural issues in the financial markets and €4.9 million was paid in 2009 for advice given regarding investment of National Pensions Reserve Fund moneys by way of preference shares in financial institutions. |
| Rothschild | €4.54m | Rothschild was appointed to provide banking advisory services to the Minister for Finance, acting through the NTMA under two separate contracts: 15 September 2009 and 12 July 2010. There is a further final payment of €2 million (ex VAT) due to be paid on the July 2010 contract. |
| Goldman Sachs | €286,360 | Advice in relation to Anglo Irish Bank. There is a further payment of €100,000 (ex VAT and expenses) due on this contract. |
| Peter Bacon | €82,012 | Report on the options for resolving property loan impairments at Irish credit institutions |
| Peter Bacon | €21,870 | Evaluation of a proposal to establish an Irish Residential Property Trust. |
| Arthur Cox | €1,020,190 | Advice from Arthur Cox in relation to legal issues arising in the performance of banking system functions |
| NPRF Commission | ||
| PWC | €1.58m | Due Diligence on the NPRF's investment in Bank of Ireland and AIB Preference Shares |
| Arthur Cox | €1.95m | Due Diligence on the NPRF's investment in Bank of Ireland and AIB Preference Shares |
| Sir Andrew Large | €120,000 | Due Diligence on the NPRF's investment in Bank of Ireland and AIB Preference Shares |
| Arthur Cox | €390,000 | Advice in relation to Bank of Ireland's April 2010 capital raising and in relation to management of preference shareholding in AIB |
| NAMA | ||
| Arthur Cox | €911,250 | Advice in relation to the drafting of the NAMA Act |
* The objectives of the due diligence exercise which the National Pensions Reserve Fund Commission had carried out at the request of the Minister for Finance in respect of Bank of Ireland and Allied Irish Banks plc (AIB) were to form judgements with respect to the probability of each bank's core Tier 1 Capital being above the regulatory minimum at end 2011 and to identify any matters or issues which might be considered of a "red flag" nature.
Sir Andrew Large, former Deputy Governor of the Bank of England, was engaged as a "trusted advisor" on certain aspects of the due diligence process including the judgements to be made in the light of the final reports because of his specialist expertise in the banking area. Sir Andrew also had a significant input into setting the scope of the due diligence exercises and in working with the NTMA in monitoring PwC and Arthur Cox as the due diligence exercises progressed.
It should also be noted that the NPRF received arrangement fees of €60 million (€30 million from each bank) in respect of these transactions.
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