NRA - Annual Financial Statements (resumed) and Annual Report.

Acting Chairman

We have before us the National Roads Authority and we are dealing with the annual financial statements of 1996 (resumed) and the 1997, 1998 and 1999 reports. Limerick County Council has been invited to attend.

Before I introduce the witnesses and deal with the formalities, I want to make witnesses aware that they do not enjoy absolute privilege. Their attention is drawn to the fact that from 2 August 1998 section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, grants certain rights to persons who are identified in the course of the committee's proceedings. The witnesses have been apprised of those rights.

I welcome the members from the various organisations and I ask Mr. Michael Tobin, chief executive officer of the National Roads Authority, to introduce his officials.

Mr. Tobin

I am accompanied by Mr. Michael Egan, who is head of corporate affairs with the authority, Mr. Eugene O'Connor, head of project management and engineering, and Mr. John Maher, the authority's accountant.

Acting Chairman

Mr. Jimmy Farrelly, Secretary General of the Department of the Environment and Local Government, is also present. I ask him to introduce his officials.

I am accompanied by Mr. Niall Callan, secretary of the roads division of the Department, and Mr. Ian Keating, the financial officer in the Department.

Acting Chairman

Mr. Roibeáid Ó Ceallaigh, county manager of Limerick County Council, is also present. I ask him to introduce his officials.

Mr. Ó Ceallaigh

I am accompanied by Mr. Don O'Sullivan, county engineer, Limerick County Council, and Mr. Oliver Killeen, county finance officer, Limerick County Council.

Acting Chairman

Mr. Ó Ceallaigh, witnesses do not enjoy absolute privilege and section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, applies. Members will recall that we dealt with the 1996 account previously, that we made observations and that a report exists in respect of it. I ask Mr. Purcell to re-introduce the 1996 account and to introduce the 1997, 1998 and 1999 accounts.

Mr. Purcell

The National Roads Authority has been before the committee on a number of occasions arising from matters on its financial statements for 1996 and 1997, in particular in respect of local authorities claiming amounts which were not for mature liabilities but which were based on estimated costs. In later years local authorities also failed to notify and refund proceeds of land sales in a timely manner. These matters were initially brought to my attention through the work of the local government auditors and my review of their reports.

The National Roads Authority has taken corrective action in this respect and has beefed up its internal resources. The authority now has an internal support unit which ensures compliance by local authorities with the conditions governing the payment of grants as defined in the memorandum on national road grants. I note from recent reports that there are still residual problems in that area. One can compliment the internal support unit for detecting these instances of non-compliance, though, on the other hand, that they are still happening some years later is still a matter of concern.

Going on to the later accounts, in particular those which relate to 1999, after I had completed the audit and made my report on the 1999 accounts in early July of this year, I became aware from reports in the media that the authority was meeting the lion's share of a compensation payment to a construction firm, on foot of damages recommended by a conciliator, arising from the failure of Limerick County Council to award a major road improvement contract to the company which offered the lowest suitable tender because of an error in calculating the tender sum. The total amount of the settlement was £3.15 million and the authority, with the approval of both the Department of the Environment and Local Government and the Department of Finance, agreed to pay £2.88 million of this which represents 90% of the total outlay when the county council's estimated legal costs of around £50,000 are taken into account. A sum of £250,000 was potentially available to the county council on foot of insurance cover. The council discharged the full settlement on 7 July of this year, with the NRA reimbursing its 90% share a few days later around 13 July.

The decisions to accept this apportionment of the pay out took into account that the regional design office at Mungret which carried out the tender assessment for the county council in this case, did so under arrangements put in place and promoted by the NRA. Major responsibility at organisational level for the error had been shown to rest with the Mungret office. That office reports to the lead local authority, in this case Limerick County Council, which was responsible for setting it up. I should clarify at this stage that the regional design office approach was piloted in the Mungret office in the early 1990s and has since been extended to around 11 other centres. These offices play an important role in delivering the national roads improvement programme by catering for strategic planning considerations and project management. As Members are aware, the scale of many of these projects now being planned is such that county boundaries are regularly crossed. The Mungret office provides services to Limerick, Clare and Tipperary North County Councils and Limerick Corporation.

Another factor taken into account in the apportionment of the compensation was that the lack of full insurance cover for the regional design office, such as would be carried by private consultants, was arguably something which the NRA should have addressed. All in all, this was a very expensive lesson for the State agencies involved and, ultimately, for the taxpayer. It is to be fervently hoped that it is an isolated case and that the conditions under which the deficiencies that allowed the error to go undetected in the first instance have been subject to urgent remedial action. I know certain action has been taken in this respect and I am sure the chief executive officer of the authority will elaborate on that for the committee.

It well may be that the entire area of tendering arrangements and contract placement for major road projects would merit a comprehensive review, but that is something to be considered by the committee.

Acting Chairman

Does Mr. Tobin wish to make an opening statement?

Before Mr. Tobin does so, will the Comptroller and Auditor General provide a breakdown of how the £3.15 million was discharged?

Mr. Purcell

As I understand it from the documents available to me - I stress that I have no responsibility for the audit of Limerick County Council so I am relying on second-hand documentation in that regard - Limerick County Council paid to the construction firm in question £3.15 million on 7 July this year. Of that, £2.88 million was ultimately met by the Department of the Environment and Local Government because it would put the National Roads Authority in funds to that amount. The balance, as I understand it, would have been available to the county council from the insurance company. However, I think £250,000 was the limit of that cover. There would have been another £50,000 or so in legal costs that would have had to be borne by the council itself. I hope that is clear to the Deputy.

Mr. Tobin

I will address a number of remarks to the early points made by the Comptroller and Auditor General in relation to issues which cropped up during 1996 and 1997 in particular. Since my last appearance before the committee in April 1999, the authority has conducted 31 reviews of local authority road grant claim practices. This compares with seven in 1997 and ten in 1998. We have also modified certain of our procedures and, again, emphasised to local authorities the necessity to comply with grant claim conditions and a highlighted the importance of the certification which they furnish.

The review found that local authorities were generally operating satisfactory accounting systems for claiming national road grants. In cases where breaches of procedures were found and where improvements in accounting administration were warranted, the local authorities concerned took action to implement the authority's recommendations.

Our checking procedures are part of a broader regime of controls applying to local authorities which also include the local government auditor, EU Commission auditors, the EU Court of Auditors and the Department of the Environment and Local Government's audit unit. The Comptroller and Auditor General referred, in the supplement to the audit report in respect of the authority's 1997 accounts, to breaches of payment conditions by four specific local authorities. As indicated in the supplement, the authority obtained refunds of grant payments, where appropriate.

I am satisfied from our investigations that no loss to public funds occurred as a result of the breaches identified. On a point made by the Comptroller and Auditor General, our practice, since we have this additional staff resource of audit technicians, is focused on first visits to local authorities. Bear in mind that, at this stage, we have not managed to carry out audit visits to every local authority. The first visit we had as a matter of practice required our audit technicians to go back to 1994, which is the start-up of the authority. Some breaches are still emerging during that type of audit, but it is also fair to say there are clear indications that, from around the end of 1998, possibly in response to the activities of the committee and the publicity that surrounded our attendance here and so on, there are clear signs of improvements in the level of compliance by local authorities.

Turning to the Adare-Limerick road issue, the National Roads Authority is greatly concerned that failures in the process for checking the tenders in this case resulted in a substantial compensation award against Limerick County Council, which is the road authority for the project, and a significant loss to the Exchequer due to a payment supplementing that from the council's own resources to meet the cost involved.

Could the Chairman give me some guidance? I have copies of my opening statement. Does he wish for them to be circulated?

Acting Chairman

It would be as well, Mr. Tobin, if that can be done. We will put matters on hold while they are distributed. This is an item which will be dealt with at length. We may not complete it today, so it would be essential to have the full statement.

On a point of clarification before Mr. Tobin continues, what is the Comptroller and Auditor General's attitude to the payment by the State of a liability of a local authority? Is there reimbursement?

Acting Chairman

We will follow the normal procedure later. Members will ask questions in turn. Leading today will be Deputies Ardagh and Bell. Has everyone a copy of the statement? Mr. Tobin to conclude, please.

Mr. Tobin

The authority deeply regrets that the error occurred in a key process relating to the implementation of the national road improvement programme and that there should have been such serious consequences for public funds which clearly could have been used to better effect in upgrading the road network. In view of the gravity of the matter, I will set the matter in context and outline in some detail the relationships between the public bodies involved, the tender award process and the compensation award as well as the steps that have been and are being taken by the authority to strengthen procedures and ensure that public funds are not exposed to similar risks in future.

The committee will be aware that, under the Roads Act, 1993, the National Roads Authority is responsible for ensuring the provision of a safe and efficient network of national roads. The Act places a legal obligation on the authority to arrange as far as possible for many of its functions, including project planning and design and construction and maintenance works, to be performed by the relevant local authority. This is provided for in section 19(2) of the Act. The authority generally operated on this basis.

The scale and pace of activity and the size of national road projects have expanded greatly since the establishment of the authority in 1994 with implications for the extent and complexity of work to be delivered by local authorities. Pressures have intensified because of the emphasis on accelerating the planning and delivery of road projects at a time when local authorities are experiencing difficulties in seeking to maintain their staff complements at authorised levels. The trend towards larger projects is set to continue against the background of the conclusions of the national roads needs study which was published in 1998 and the Government's policy and funding commitments for national roads as set out in the National Development Plan 2000-2006.

The authority recognised that the traditional reliance on the in-house resources of individual local authorities could not ensure efficient delivery of an expanded road programme. An alternative approach involving the establishment of national road regional design offices was accordingly developed. The regional design office structure has been actively promoted by the authority as a mechanism to deliver the national roads improvement programme in anticipation of the significant expansion in the roads programme as provided for in the NDP. To illustrate this, expenditure on improvement works over the period 2000-2006 will be £4.4 billion in 1999 prices compared with just under £1.5 billion between 1994 and 1999. The authority moved to augment the four original offices by establishing a further seven offices in the past 12 to 18 months. In addition, the role of the offices has been altered so that the emphasis is now on project management with planning and design work largely carried out on behalf of the offices by consultants.

Local authorities have responded positively to the authority's promotion of the concept of national road regional design offices. Each office caters for a number of local authorities. For example, as the Comptroller and Auditor General said, the Mungret office has served Clare, Limerick and Tipperary North Riding county councils as well as Limerick Corporation. The personnel of the offices are local authority personnel and are formally part of the staff complement of the participating local authorities. The staff concerned are seconded to the lead local authority for each of the regional design offices, and it is that local authority which is primarily responsible for staff matters and day-to-day operations within the design office. These arrangements are underpinned by agreements entered into by the local authorities concerned under section 59 of the Local Government Act, 1955. Salaries and operating costs of the regional design offices are financed in full by the National Roads Authority to the extent to which work relates to national road projects.

The authority, together with senior officials of the participating local authorities, is represented on management committees that oversee at a strategic level the implementation of the work programme of each regional design office. In this way, the authority is in a position to promote alignment of work programmes and the priorities of the national road improvement programme as established under the NDP in operational programmes or, as appropriate, by the authority itself.

Tenders for major road projects are submitted to the client local authority. There is a variety of procedures in place in different local authorities for opening the tenders submitted, for example, at a full meeting of the elected council or in the presence of selected elected members and officials. Regardless of the procedure used, there is a tendency for details of the tender prices to come into the public domain. The tender documentation is then sent for checking, evaluation and recommendation under the supervision of the responsible project engineer in the local authority concerned or by consultants where they are engaged on the project. The process is undertaken to ensure that tenders are in compliance with the rules set down in the instructions to the people who tender for jobs known as CONDOC. The authority and the Department of the Environment and Local Government liaise closely on the operation of CONDOC which is used for civil engineering works in the roads and sanitary services area. For its part, the authority has promulgated CONDOC to local authorities since its establishment in 1994 and insists on its use for national road projects in the interests of consistency in the tendering process.

The checking and evaluation involves completeness of tender documentation, correctness of any arithmetical errors found in the submitted tenders, examination of abnormally low rates and so on. In an open tendering procedure, it is also necessary to establish that the person whose tender is under consideration has the necessary resources and is competent to undertake the works. Project managers within the NRA are closely involved in this process offering advice on precedent, interpretation and so on. Advice may also be sought from other authority personnel, including our senior project managers, contract specialist, or head of project management and engineering. Internally, advice is sometimes taken from the authority's legal advisers, but generally local authorities are encouraged to engage their own advisers when contentious issues are identified.

Once an understanding is reached between the project engineer and the NRA project manager on the specific issues requiring attention or clarification, a tender report prepared by the local authority or the national road regional design office goes to the relevant county engineer for endorsement and recommendation in relation to the award of the contract and is subsequently submitted to the county manager for acceptance and signing of a formal manager's order. The approval of the NRA usually follows quickly given the involvement of authority personnel in the process.

In September 1998, Limerick County Council, with the approval of the authority, entered into a contract with Pat Mulcair civil engineering and building contractors for the construction of a section of the N20/N21 route between Adare and Limerick. The value of the contract as awarded was slightly in excess of £33 million. The award of contract was made on the basis that the Mulcair tender was the most economically advantageous tender submitted. In reaching that conclusion, account was taken of the fact that the firm's tender was the lowest available following correction of mathematical errors in the tenders as received in accordance with standard practice. Arithmetic checks and correction of errors were carried out in the Mungret regional design office. The checking process involved a total of more than 5,200 calculations in respect of each bill of quantities. Each bill contained 899 pages.

When the tenders were initially opened by Limerick County Council, the tender total of SIAC Construction Ltd. was approximately £26,000 lower than Mulcair's based on uncorrected tender amounts. However, during the checking process, it was discovered that an amount entered by Mulcair in respect of flexible surfacing materials on the summary page of a part of the bill of quantities differed from the page total. The error amounted to £40,320 and its correction in the Mungret office had the effect of reducing the Mulcair tender total by that amount, so that Mulcair's tender total became the lowest.

During the period of checking, authority personnel were advising Mungret personnel on particular items as brought to their attention. Mathematical corrections and abnormal rates were discussed and reviewed, including the correction that had the effect of reversing the respective placing of SIAC and Mulcair. Based on the outcome of the checking process the Mungret office prepared a tender assessment report signed by senior office personnel and senior officials in Limerick County Council as the project would be constructed in County Limerick, recommending the award of the contract to Mulcair. The report constituted the basis for the Limerick county manager's decision to award the contract to Mulcair and to seek NRA approval for this.

The authority's consideration of the proposal primarily involved checks to confirm the capacity and competence of the people who tendered to undertake the project, that issues arising in relation to CONDOC had been properly addressed and that, on this basis, the council proposal to award the contract to Mulcair was in order. As a matter of standard practice, the authority relies on arithmetic checks made by local authorities in respect of bills of quantities for the purpose of ranking those who tendered in order of corrected tender totals and consequently does not carry out arithmetic checks itself.

SIAC's tender was lower than Mulcair's, based on the uncorrected tender amounts. In these circumstances the company would have had expectations that its tender would have been accepted. When it became apparent that this was not the case I queried the position. The matter was subject to a meeting with Limerick County Council officials. There was also contact at the time between the company and the authority's senior project manager for the project in relation to the well established practice of correcting mathematical errors found in the submitted tenders.

SIAC's interest in the matter appeared to end at this point. However, in March 1999 SIAC initiated High Court proceedings against Limerick County Council because they were not awarded the contract. SIAC indicated its intention to seek a review of the award process, alleging the council had failed to fully comply with EU Directive 93/37, known as the Works Directive, as amended. Court declarations were sought to the effect that rejection of SIAC's tender was null and void and the award of contract to anyone who tendered other than SIAC was null and void. Among the points relied upon by SIAC in its court action was one alleging that the correction of the bill of quantities was done in a manner not envisaged or provided for by the instructions to people who proposed to tender. SIAC also lodged a claim for damages in the sum of £12.5 million.

In February of this year the authority was notified by Limerick County Council that in the context of its preparation for the High Court proceedings an error was discovered in the Mulcair tender which had gone undetected at the time of the award of contract. The error occurred in part 28 of the bill of quantities which dealt with public lighting. This consists of two sections: section 05 which deals with civil works and section 28 which deals with electrical works. The section 05 total was not carried forward and included in the overall part 28 total thus understating the amount of the Mulcair tender. The amount involved, £42,700, was sufficient to reverse the placing of the Mulcair and SIAC tenders making the latter the lowest. A further independent check of both the SIAC and Mulcair tenders confirmed that the tender totals, as then established, were accurate.

The authority's legal advisers were consulted and the view was given that while SIAC would be unlikely to obtain exemplary damages they would, in all probability be awarded substantial compensation for not having won the contract to which they were entitled. Preliminary calculations undertaken at this stage indicated that an award in the range of £3 million to £4 million would be realistic. The additional cost associated with such a case would be of the order of £500,000. A detailed risk assessment was undertaken independently on behalf of Limerick County Council. The SIAC annual accounts were examined as were trends in profit margins among other factors and the likely compensation was identified as being in the range £1.8 million to £3.8 million. Again, costs could have amounted to an additional £500,000.

Against this background NRA advisers and executive as well as Limerick County Council considered it prudent to have the damages assessed by way of a conciliation procedure conducted by a recognised expert in construction litigation. Such an option had the advantage of being less expensive than recourse to the courts while any emerging recommendation could be rejected by either party if considered unacceptable. A UK construction specialist and Queen's Counsel was appointed as conciliator. The conciliator's recommendation was for the sum of £3.15 million to be paid by Limerick County Council to SIAC Construction Limited, in full and final satisfaction of all its claims in the conciliation and in its High Court action arising out of and/or in any way related to the failure of Limerick County Council to award the Adare to Limerick Contract No. 2 to SIAC.

The amount recommended was determined on the following basis. Under the heading of loss of profit the conciliator concluded that SIAC was entitled to loss of profit as damages for breach of statutory duty. In arriving at the award amount the conciliator used a profit figure of 5.7% on the agreed likely project outturn cost of £43.5 million. Under the heading of overheads the conciliator calculated that a sum of £435,000 should be paid to SIAC to compensate for the contribution which the contract would have made to the company's overheads. In relation to interest the conciliator decided that it was fair and equitable to allow interest at 8% on the total award for loss of profits and overheads. That combined total was £2,914,500 for five months, giving an interest element of £97,150. The period involved took account of the fact that only 20 months of the road contract period had elapsed since the award of the contract and that a contractor would not have begun to generate profit until some time into the work. In relation to legal costs the parties to the conciliation agreed that £100,000 would be paid to SIAC in respect of its legal costs up to the decision to go to conciliation. In relation to other SIAC costs the conciliator awarded £38,350 in respect of the costs of the managing director and a director of SIAC in dealing with the case. He described the award as modest in all the circumstances. The foregoing elements account for the conciliator's total recommended award of £3.15 million. The conciliator decided not to make any award in respect of other elements of SIAC's claims. These concerned loss of profits on the estimated value of contracts which the company would have been in a keener position to price if it had been awarded the Limerick contract, other estimated consequential losses and exemplary damages.

In considering the recommended award the conciliator observed that it was a matter for both parties to have regard to the time and any recoverable costs involved in the event of the matter being pursued through the courts. He concluded that the loser would have to pay costs of at least £1 million. In the context of the costs associated with a continuing High Court action and the conciliator's clear statement that his quantification and recommendation was arrived at by "applying law and logic and not speculation" and that "both sides would be unwise to reject the recommendation" the NRA executive was satisfied that the figure of £3.15 million was reasonable and that it would be unwise for Limerick County Council not to accept it.

Limerick County Council applied to the authority in June of this year for assistance in view of the size of the conciliator's recommended award and taking account of the limited insurance cover held by the council, which amounted to £250,000. The authority considered the position at its board meeting on 20 June of this year. The board accepted the executive's view that the conciliator's recommendation was reasonable in the circumstances and that it would be unwise not to accept it. The authority took into account the opinion of its legal advisers that the award represented more economically advantageous settlement terms than were likely to be available from the courts. Having regard to all the circumstances including the important role of Limerick County Council and the Mungret NRA regional design office in the delivery of the authority's road improvement programme, the establishment and operation of the Mungret office with the support of and ongoing input from the authority, the unprecedented scale and pace of the current national roads programme, the established practice whereby all costs associated with the national roads programme are met in full by the authority, the multiplicity of local authorities involved in and served by the Mungret office, that is Limerick, Clare and Tipperary North Riding county councils and Limerick Corporation, the inadequacy of the insurance cover held by Limerick County Council and by other local authorities generally and the role of the authority in the tender award process in this case, the authority concluded that a contribution of £2.88 million should be made towards the conciliator's recommended settlement of £3.15 million and the county council's costs of about £50,000. The proposed contribution reflected consideration of the totality of the issues involved as outlined.

As the authority's proposed contribution towards the conciliator's award and related costs did not come within the standard remit of subhead C1.1 of the Department's Vote and the funding allocated thereunder to the authority for the improvement of national roads, the approval of the Minister for the Environment and Local Government was sought to the proposed payment. This was conveyed on 4 July 2000 following the issue of Department of Finance sanction the previous day.

The failures in the Adare-Limerick road improvement contract award process by the Mungret office are a matter of serious concern to the authority. The authority has raised the matter with the Limerick county manager given that council's lead role and responsibilities in staffing and operation of that office. The county manager has been asked to address the question of disciplinary or other action which may, in his judgment, be appropriate to the individuals involved in this case having regard to the relevant circumstances and to ensure effective checking procedures are followed in the future. I understand the county manager's investigation is ongoing. Based on the investigation of the tender award process, the authority considers that the failure of the Mungret office to properly check the Mulcair tender can be ascribed to human error.

In the light of the experience in this case, the authority has taken steps and is pursuing other matters to strengthen practices and procedures and to further clarify roles and responsibilities of local authorities, national road regional design offices and the NRA. These measures include the assignment on a full-time basis of a senior project manager within the authority to deal with procurement and contractual matters; clarification and strengthening of procedures used by local authorities in tender checking and award procedures, including attention to competence and previous experience and-or training needs of personnel involved; introduction of independent checks to verify checks of tenders made by local authorities; uniform adoption of electronic rather than manual checks of tenders; accelerated introduction of electronic tendering - the process is being tested and will shortly be piloted on a project on the N5 with a view to adoption as standard practice as soon as possible; greater standardisation of local authority practices regarding any publication of information relating to uncorrected tenders; the putting in place of indemnity cover where services are provided for the authority by local authorities and regional design offices, and the review and clarification of operational arrangements, responsibilities and relationships as between the local authorities involved and between local authorities and the authority in respect of national road regional design offices. The lead local authorities for these offices are working with the authority in this.

I thank you for this opportunity to put the facts on record and to outline the steps taken to avoid further compensation awards in respect of national road contract procedures which could constitute a demand on public funds. I reiterate the authority's sincere regret that failures in the process for checking tenders in this case had such consequences for the Exchequer. We are determined that improvements in procedures will prevent a similar failure in the future. The steps taken and those being pursued will be effective in meeting the challenge presented to the authority and local authorities in this regard.

Acting Chairman

You have given us a lengthy and complex explanation running to nine pages. I am perturbed by this. I have in front of me a notice forwarded to the authority asking that any information requested by the committee or relevant to this meeting, including any opening statements, be supplied by the deadline specified - 2 p.m. yesterday. It will be almost impossible for members to take on board the nine pages of important information supplied——

Absolutely.

Acting Chairman

——which is both detailed and complex and which would have been distributed to members for their perusal and to prepare questions. This is a serious matter. A huge sum of money is involved. Without wishing to anticipate the views and questions of members, in view of the seriousness of the matter the committee will be unable to note the accounts of the NRA today but will adjourn and consider what further action may be necessary when it next meets in private session. We must adhere to our terms of reference. While I appreciate that statements have been produced at committee hearings in the past, this is such a lengthy and complex statement containing important information that it would have been better if the deadline specified - 2 p.m. yesterday - had been adhered to. While I appreciate that a great deal of work has gone into the statement, members will find it almost impossible to take on board all of the relevant information and make judgments today.

I am astounded that a document of this length should be brought forward. Is this a ploy to deceive the committee as we have not received a similar document from Limerick County Council? Will that council introduce a document without warning also? I do not understand why the NRA is batting for the council which is responsible for the contract and should be held accountable.

Acting Chairman

The representatives of Limerick County Council will not make an opening statement. Opening statements will be made by Mr. Tobin and the Secretary General of the Department of the Environment and Local Government who are under examination. It would not be normal to ask the county manager and his officials to make an opening statement.

Will the local authority officials be open to questioning by members of the committee?

Acting Chairman

Yes.

I agree entirely with your comments. This is the most despicable and deplorable situation that I have had to deal with in my 20 years as a Member of Dáil Éireann. To ask us to make judgments on this document presented by Mr. Tobin which effectively means that due to gross incompetence and buck passing between the National Roads Authority and the county council orvice versa millions of pounds of taxpayer’s money has been wasted is, to say the least, to treat the committee with utter contempt.

The document states that the investigation of the Limerick county manager is ongoing. We should notify the Limerick county manager, either directly or through the good offices of the Comptroller and Auditor General, that with due notice we would like him to appear before the committee and to present the documentation that we require in advance to enable us to examine the matter in the greatest of detail in order to establish through whose incompetence this money has been wasted, whether it be the NRA, Limerick County Council or other organisation. I have never seen a document which outlines such incompetence, inefficiency and buck passing between arms of the State, whether it be local authorities or the NRA.

Mr. Tobin has, at least, produced a document which outlines his organisation's interpretation of what has transpired. I formally propose that we terminate further consideration of the total examination of the accounts of the NRA until we have an opportunity in committee to examine the contents of this document and decide the procedure we shall adopt in order to examine this matter.

Acting Chairman

I presume, Deputy Bell, that we will have to consider it in committee. I had anticipated we would complete our work this afternoon but this has created difficulty in terms of the failure to supply the information. I may be incorrect but I presume Mr. Ó Ceallaigh has not had sight of this document before today and has not had time to consider the statement either, but he is here to answer questions should it come up. I ask Deputy Lenihan to be brief because I have to move on to the Secretary General.

I agree with the sentiments expressed by Deputy Bell but we should continue to discuss and question this issue if only for one reason, and it is important that people note this carefully. I do not know the page, because the pages in this statement are not even numbered, but there is an astounding claim in this report that an investigation is under way——

Acting Chairman

No, Deputy, we have a procedure.

——and just after that, it is stated that the authority claims or concludes that human error caused the problem, even though there is an investigation ongoing.

Acting Chairman

Please, Deputy Lenihan. You know the procedure. I understood you wanted to ask about the tabling of the document, not the contents of it. I am moving on to theSecretary General.

Is there anyone present from the Mungret regional centre and is it proposed that somebody should be present? It is too early to draw conclusions but on the face of it, this stinks to high heavens and Deputy Bell's conclusion about incompetence would be a relative relief in the circumstances we are in. We need the relevant personnel from the Mungret centre to be present during the questioning.

Acting Chairman

I am already convinced, without wishing to pre-empt the work of this committee or impose my own wishes on it, that we will certainly have to revisit this matter and that we will ask for others to be present but for the moment we will continue with those present who can answer questions. Does Mr. Farrelly, the Secretary General, wish to make an opening statement?

Mr. Tobin

Chairman, could I respond to your comments in relation to this document not being sent to you in advance?

Acting Chairman

Certainly.

Mr. Tobin

I assure you there was no intention on my part to in any way offend the committee. The information we had was that where the committee asked for some information in advance we should provide it. We were not asked specifically for any information. I want to make a second point.

Acting Chairman

I want to correct that.

Stonewalling.

Acting Chairman

I will read the relevant statement from the letter which was sent to you on 21 July. It states:

Dear Mr. Tobin,

Any information requested by the committee or relevant to the committee, including any opening statements, should also be supplied by the dateline specified above.

That is very clear and, in fairness, easy to understand.

Mr. Tobin

I have a slight difficulty with that, Chairman, because the agenda for this meeting deals with the accounts of the authority for the years 1996, 1997, 1998 and 1999. This issue would have come to be dealt with in the accounts of the authority for the year 2000. In fairness, I heard the chairman of this committee say on radio about a week ago that it was a possibility that this issue would arise and for that reason I prepared a document but it is not part of the accounts for 1999. It will, in effect, come to be dealt with in our accounts for the year 2000.

Acting Chairman

Without wishing to create argument, this is your opening statement. This is what was requested. This is your statement, Mr. Tobin. I did not make it. I will call now on Mr. Farrelly, Secretary General of the Department.

Mr. Tobin

Chairman, if you do not mind, I started with some general opening remarks. I then responded, as I saw it, to a major issue which had been introduced by the Comptroller and Auditor General and which was clearly of major concern to the committee. I was not clear in my mind that this issue would definitively arise here. I make the point again that it is an item which, as I understand it, will come to be dealt with in the authority's account for the year 2000. It was just that my antennae suggested to me that, bearing in mind what the chairman of this committee had said on radio, it was possible the committee would raise this matter. I have taken the precaution to try to be helpful and not to sit here unable to respond. It was my clear understanding that the four years were up to last year and that it would not necessarily be a matter at all.

Acting Chairman

Will you accept, Mr. Tobin, that it would be very difficult to take on board at a meeting like this, nine fairly complex pages all of which are relevant to the subject——

Mr. Tobin

Absolutely. I accept that. I am simply trying to explain the reasons I would not have sent in advance a copy of a statement which I was not sure would necessarily arise.

On a point of order, chairman, can I ask you for the date of the newspaper article? What date was that?

Acting Chairman

It was 19 July.

And what date was the letter sent to Mr. Tobin?

Acting Chairman

It was sent on 21 July.

Surely the connection between the letter and the newspaper article was glaringly obvious to Mr. Tobin and that the whole reason for this meeting was to discuss the Adare-Limerick road. If he could not pick that up, something is wrong in the state of Denmark.

Mr. Tobin

Obviously I picked it up but nevertheless, on a formal basis, the agenda presented for this meeting, which I was required to attend, was to examine the accounts of the authority for a four year period ending in 1999——

This Robert Armstrong is alive and well.

Mr. Tobin

——and this issue will come to book in our accounts for the year 2000. I take the Deputy's point. I was conscious that it was a live issue at the time and I had this statement in reserve in case it was raised here.

Was it only prepared——

Mr. Tobin

It was only finalised yesterday.

On the point made by Deputy Ardagh, Mr. Tobin, as I understand it, was asked by letter to let us have a copy of his opening statement, irrespective of what it was about. That was not furnished.

Acting Chairman

That was the point I was making.

The second point, however, is a more serious one. If Mr. Tobin can sit in this House in all seriousness and feign a belief that this issue was not going to come up this evening, we have an even bigger problem. I would advise him, when he goes home this evening, to rethink his position before he appears before this committee again, because we will not be treated with that kind of disdain and accept that kind of answer.

Acting Chairman

For the third time I now call Mr. Farrelly. Secretary General, would you like to make a comment at this stage?

Thank you, chairman. We have had from the National Roads Authority a detailed presentation of the facts here and I do not intend going back over that. From the viewpoint of the Department of the Environment and Local Government, we share the serious concerns expressed in many quarters at the loss to public funds which has arisen here and about the individual and organisation failures which have contributed to it. I recognise that our agencies have been entrusted with huge amounts of resources by way of funds for investment in infrastructural projects under the national development plan and its predecessors and the Government, your good self and the taxpayers look to us to manage and deliver these projects in an efficient, timely and professional manner.

Looking back to recent times, huge numbers of projects have been carried forward under the national development plan and in the roads area. We recognise that the business environment has become more complex for all sorts of reasons - environmental assessment, public procurement, EU directives, etc. but we must regard a complex operating environment as a challenge to our professionalism and not an excuse for difficulties and situations like this which might arise. On my own behalf and on behalf of the Department, I express our deep disappointment regarding the errors which occurred and which gave rise to this situation. I also give an absolute assurance of our commitment to ensuring that revised systems and procedures will be put in place to ensure a similar error does not occur.

From the early 1990s, particularly arising from the new EU operational situation and EU directives on procurement, the Department of the Environment and Local Government moved to clarify and improve the framework under which civil engineering projects were carried out. Arising from that, the CONDOC system was developed and made available to local authorities through the local government computer service board. The NRA has been actively involved in the process of developing and updating this system. A new version of CONDOC is now about to issue.

The Department of the Environment and Local Government had already commissioned the local government computer services board to develop a computerised tendering and tender evaluation system known as CONVAL. That is in the process of being developed now. To put the record straight, the Oireachtas has by legislation assigned the co-ordination and supervision of the national roads programme to the National Roads Authority. The chief executive in his statement, which I recognise you want time to analyse, has set down in fair detail a range of measures which are now being introduced to deal with the difficulties which have arisen. From an earlier stage when we wrote to the NRA on this, that is the least we would have looked for, that is, to ensure that processes and procedures were immediately reviewed and reassessed and new systems put in place to ensure, in so far as possible, that the type of situation we are now in would not recur.

Also, for some years we in the Department have supported the case for a review of the operations and structures of the NRA. Consultants were brought in to do this and these changes have been introduced and put in place. However, what is critical is that the lessons from the Limerick case must be learned. In addition, in the Department, regretfully, we had to conclude from the position which obtained in June this year when we were formally notified of the Limerick case - we carried out analysis at that time - that what was important was that the least damaging outcome for public funds had to be sought.

Our conclusion at the time, having taken the submission from the NRA, was that what was involved in this £3.1 million was a nugatory payment and a loss to the taxpayer and public funds. At the same time we decided to support the proposal as put to us to seek Department of Finance approval for the payment of the £2.88 million to Limerick County Council. We will see this thing through in so far as public accountability and transparency are concerned. It is a nugatory payment and it is made out of accounts for this year. We will ensure that the appropriate notice is appended to the appropriation accounts for this year and that it is out in the public arena, as it were.

What is important in the case also is that from the time it first came to our knowledge in June, it was publicly outed and there was public awareness of it. There can be no question of sweeping under the carpet a situation like this.

On a point of order, Chairman, Mr. Tobin earlier made the point that he understood we were talking about the accounts for the last available four years and that we were not supposed to be discussing this matter. However, we are effectively doing that. The Secretary General has not referred to the accounts of the NRA except to refer to the document. I propose that we adjourn this issue until we consider this in committee and decide what way we will handle this and that we deal with the business listed for tonight's meeting.

Acting Chairman

Deputy Rabbitte made a fair point that the dogs in the street are dealing with this item. It has been the subject of discussion in the media. If this committee cannot deal with it and comment on it, it is time to fold up the committee.

I beg Deputy Bell's forbearance. There are certain broad matters which Deputy Ardagh and you, Chairman, will bring up that will be valuable, since people have spent resources to come here. Deputy Bell has an important point in terms of Mr. Tobin's response to you, Chairman. Mr. Tobin said he thought he was here to discuss the 1996 to 1999 accounts and that this might come up peripherally. However, if one looks at the statement which was distributed to the committee, the first line refers to the Adare-Limerick road issue.

I am deeply worried about what that portends. The response to you, Chairman, was to the effect that: "This is all a bit of a surprise; I was not prepared for it as it is a peripheral issue. I thought I was here to discuss, and I made elaborate preparatory remarks about, 1996 to 1999". He did not. The first line is about the Adare-Limerick road, the middle section is, to put it in context and the remaining pages are about the Adare-Limerick issue. That deeply worries me. Prior to this, it did not cross my mind that we would hear anything from Mr. Tobin that was not entirely in keeping with his high reputation, frankness and so forth. Why he should have given that response to you and get the inquiry off on this basis deeply troubles me.

Acting Chairman

It is most unusual for the members to interrupt a witness who is making a statement. When the statement is completed I will call on Deputy Ardagh, Deputy Bell and other members. The members can take it from there. At the end of the evening we will make decisions and I anticipate that we will revisit this. Earlier, I referred to section 10 of the compellability of witnesses legislation. We may well call people from the Mungret office and elsewhere but we can decide that down the line.

Chairman, can I ask my question again? I am not trying to make your job awkward but it disturbs me to find that although we are dealing with the NRA accounts for three years, there is, effectively, a delegation from Limerick County Council. Why is there no delegation from Cork, Louth, Kildare or other County Councils? Why should there be a delegation from Limerick County Council dealing with the NRA accounts?

Acting Chairman

I ask Deputy Bell to bear with me. It should be pointed out that the Cork delegation was before the committee when it got a black mark last year. The manager and the previous manager were here. I ask the committee to proceed without interruption. Mr. Farrelly, are you happy with what you have contributed?

I am. It is not my intention to come here and be unhelpful or difficult. I respond to the subject being discussed. My final point is that this has involved unfortunate and costly loss of public funds. As a Department, our determination on this is to intensify action at all levels to ensure procedures are put in place and changes are made to prevent any recurrence of this type of action.

Acting Chairman

I reiterate what Deputy Rabbitte said. I have listened several times to your presentations when dealing with Department issues and you have not hidden behind anything. I made a simple and straightforward point that it is hard to take nine pages on board at a meeting such as this. If every witness before us treated us this way we would not get through any business. You have stood over issues previously and I am sure you will take questions. I intend to stick rigidly to the order of questioners. I call Deputy Ardagh.

I want to ask the Comptroller and Auditor General about SIAC receiving £3.15 million. It is like a lottery win without having to buy a ticket. Is that payment taxable given that it is an award?

Mr. Purcell

I could not say, but I will try to establish that for the Deputy before the next meeting. That is not something which would immediately concern me.

The statement by Mr. Tobin, notwithstanding how it came about and the previous discussion, is informative and it raises many questions. Who is responsible? I am not looking for a name but for the person's office. Was it the senior engineer or the project engineer or official in Mungret? I do not want the answer that the chief executive or the manager of the council has overall responsibility for his staff. There must be an office with one person responsible for this debacle. That is not highlighted in these nine pages. Can Mr. Tobin tell me what officer was responsible for this?

Mr. Tobin

The Deputy has placed me in a difficult position.

Acting Chairman

I am sorry for interrupting Mr. Tobin, but I remind members of long standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. I am referring to a chief engineer or someone else. I want to be careful about that.

Mr. Tobin

You, Chairman, have taken the words out of my mouth. As I said to the Deputy, he has placed me in an extremely difficult position, leaving aside whether I would be anxious to name someone or otherwise or the issue of whether I have the same protection in terms of immunity. There is an ongoing investigation by the manager in Limerick of all that has occurred there or of whether, in his judgment, disciplinary action should be taken arising from what happened. Subject to what the Chairman may say, I am unable to put forward a name, which can be readily identified.

I accept what Mr. Tobin said. However, there is an identifiable person who would have responsibility for signing off on this contract for the job.

Mr. Tobin

There are people at a variety of levels from the Mungret office to Limerick County Council to the National Roads Authority. We are aware of everyone who has handled this issue, but I am unable to specifically identify by name or office any individual.

It is getting a bit more fudged. A few minutes ago I thought Mr. Tobin was going to say an individual is responsible, but now he is not prepared to say whether it is the NRA, the Mungret office or the county council. He does not seem to know who it is.

Mr. Tobin

A group of people, involving staff of the authority and of Limerick County Council, did a fairly detailed report on the mechanics of this operation and the involvement of various people in aspects of the work. Arising from that, I made a judgment that what happened here was human error. I did not believe then and I do not believe now that there was anything more sinister than that. It was a straightforward human error which occurred in this case. However, there are consequences in terms of its cost to the Exchequer.

Deputy Conor Lenihan suggested that Mr. Tobin's conclusion that it was human error before a full investigation had concluded on the matter seemed unusual. On what did Mr. Tobin base his decision so that he came to the conclusion that it was human error or was it a hunch on his part?

Mr. Tobin

The review we undertook was of all the processes and there are deficiencies in those processes, whether in terms of ensuring that everyone doing a job has the appropriate background experience or otherwise. That is an issue which will form part of the activities of the review by the county manager.

I formed that judgment having seen the report prepared jointly by some of my own staff and staff of Limerick County Council. That judgment has been reinforced by the fact that on two separate occasions I had discussions with one of the directors of SIAC who was directly involved in this. I put directly to that individual that if he was aware of anything which would suggest that something untoward had happened or there was any information which I should, if I had it, transmit to the Gardaí, I was anxious that I would be given those facts. On a second occasion, I again directly asked that same director and another if they were aware of anything that might suggest something more than human error and I got no positive response.

Perhaps I could add slightly to that by referring to a part of the report of the conciliator in which he concludes that, having heard various suggestions, he was left in possession of nothing more than hearsay evidence and rumour to contradict what he clearly regarded as credible explanations for what had happened by those present at the conciliation from Limerick County Council. I made a certain judgment on it. That judgment was reinforced by the two occasions on which I spoke directly and explicitly to directors of SIAC and by the comment made by the conciliator, who happens to be a Queen's Counsel, in relation to the issues involved.

The third paragraph on the second page of the statement says that the staff concerned in the Mungret regional design office are seconded to the lead local authority and it is that local authority which is primarily responsible for staff matters and day to day operations within the design office. The second paragraph on the next page states that once an understanding is reached between the project engineer and the NRA project manager on specific issues it goes to the relevant county manager. Is the project engineer an NRA person?

Mr. Tobin

No. It is a local authority person.

I have no doubt this will go further. As regards the background, Mr. Tobin said the checking process involved more than 5,200 calculations in respect of each bill of quantities and each bill contained 899 pages. How many bills of quantities were——

Mr. Tobin

Eight companies who tendered would have had bills of quantities of that size.

So the calculation would have been 5,200 times eight times 899. Is that correct?

Mr. Tobin

I beg your pardon Deputy, I understand that the five lowest tenders were checked to that level of detail. So you had five by 5,200 calculations.

It is also stated that the authority relies on arithmetic checks being made by the local authorities, so it does not consequently carry out arithmetic checks itself. I presume it will obtain a disk in the future and check the spreadsheet calculations.

Mr. Tobin

The checking done at the regional design office or within the individual local authority will be subject to recheck by an independent consultant. Looking a little bit further into the long-term - I hope it will not be too long - we are testing a system and will pilot it on a project on the N5 to allow electronic tendering to come into play. As a result, the issue of mathematical or arithmetical errors simply should not arise.

They should not arise. I have a great deal of experience with spreadsheets and one can lose a cell or a line very quickly.

With regard to the correction in respect of the conciliation award, it is stated that SIAC, in its court action, alleged that the correction of the bill of quantities was done in a manner not envisaged or provided for by the instructions to people who tendered. What is meant by that?

Mr. Tobin

I cannot provide any elucidation on that in so far as the case did not go to a full hearing at court. The work undertaken in the Mungret design office - leaving aside that in some respects it failed to pick up some errors - was in accordance with what is called for under the CONDOC system.

Mr. Tobin also indicated that the authority's legal advisers were consulted and the view was given that SIAC would be unlikely to have obtained exemplary damages. Preliminary calculations undertaken at this stage indicated that an award in the range of £3 million to £4 million would be realistic. Who made those preliminary calculations?

Mr. Tobin

I understand it would have been an expert adviser in the construction industry area. To give some validity to the view that was expressed there, there is a quite recently decided case in the UK involving a roughly similar level of contract in which the level of award was £4 million. The legal costs have been estimated at £6 million.

The next paragraph states that a detailed risk assessment was undertaken independently on behalf of Limerick County Council. Did the NRA and Limerick County Council employ people of different calibre?

Mr. Tobin

Rather than giving an answer which I may have to come back on - I understand from the Chairman's remarks and those of other Members that we may revisit this - would you allow me to return with a response or convey it to the Clerk to the Committee in a matter of a day or so?

That is fine. With regard to the determination of award, the conciliator used a profit figure of 5.7% on the agreed likely project outturn cost of £43.5 million. Will Mr. Tobin explain how a contract valued at £33 million would have a likely outturn cost of £43.5 million?

Mr. Tobin

During the currency of that contract Limerick County Council also wished to undertake some pipe laying for a water project. That work was also awarded. The value of that would be currently estimated at £4.34 million, so clearly that is added on to the original. Price variation on that contract would be estimated at about £2.5 million and something of the order of £4 million by way of additional work that had emerged, some of it relating to a ground failure during the currency of the contract. Combining those, the Deputy can see where we reach the £43.5 million.

Is that regarded by the contractors, given that they arein situ, as the cream on the contract?

Mr. Tobin

To what is the Deputy referring?

I refer to the extras that are included, the additions to the contract - the extras such as subsidence in the road. I presume that the prices were agreed but that the contractors would not be up against the same competition which would apply in respect of a competitive tendering process.

Mr. Tobin

I presume that Limerick County Council, on the water main issue, would have been satisfied that there were very competitive rates available and, for that reason, extended the contract to include them. The PVC is clearly determined by way of standard rules that are there in the contract as it stands and the variation orders were obviously additional works that had to be ordered in the course of the contract. I cannot state whether the contractor perceived that as cream. However, experience would show, and looking back at the value for money audit the Comptroller would have undertaken, it has not been unusual to see outturn costs running 18% to 20% over tender prices. That would not have been unusual.

That just came to mind because the project is situated in the Adare, Limerick, Golden Vale area.

Does the NRA accept any responsibility for not having examined in detail the insurance cover of local authorities, given that it was the paymaster in respect of these various road projects?

Mr. Tobin

In retrospect, it clearly would have been far better had we got it in place and, as of today, we have it in place. We are in the year 2000 and the system has been in place for 100 years of local government. It has not been the practice for local authorities to have professional indemnity insurance in place. Likewise, I would say - this is not in any way to underscore the issues in question - the task that effectively caused this problem is a very mundane one. It is soul-destroying, as you can imagine, to have to carry out 5,200 calculations. However, individually these are not difficult tasks to undertake.

I inquired about insurance.

Mr. Tobin

I am trying to come to the point. If one was considering, in terms of whether there is a serious risk of a problem cropping up in somebody checking a huge number of calculations, I do not think it would rank high as an area in respect of which one might consider creating insurance. However, we have been wrong in making that assumption.

If there was insurance amounting to £250,000 in place, somebody at some stage thought it wise to create insurance for it.

Mr. Tobin

If he speaks to the committee later, the manager of Limerick County Council will explain the background to that. It was not professional indemnity insurance, it was some general form of insurance that the local authority had against administrative error. That would have been the description for it. It was not the type of insurance we, for example, have now put in place, which is, as we call it, a professional indemnity insurance. It is slightly different.

I will have many questions for the manager. However, in fairness to my colleagues I will leave it at that.

Acting Chairman

I will call Members in the following order: Deputy Bell, Deputy McCormack, Deputy Conor Lenihan, Deputy Gildea and Deputy Rabbitte. Members should make their questions brief or we will not conclude our deliberations on this matter. I am sure we will move on more speedily following Deputy Bell's questions.

We will obviously revisit this issue as we will not conclude our deliberations this evening. Many questions remain unanswered, even following Mr. Tobin's submission, and these must be answered. I came here tonight to examine these accounts and I wanted to ask many questions about them but we have been bypassed in this matter. Given that it is Mr. Tobin's organisation that is before the committee, will he indicate whether he is satisfied that the NRA is not responsible for the mess that occurred in respect of the Limerick bypass?

Mr. Tobin

I would not wash my hands and say we had no involvement. We clearly have, but on the other hand, one has to recognise the level of that involvement. Clearly, we are responsible for the disbursement of very sizeable sums of public money.

That is not the question I asked.

Mr. Tobin

That said, I have no function in relation to the staff of any county council. I have no rights in relation to discipline matters or whatever. One might argue with justification that the authority should ensure that training is in place or the local authority is conscious of the need to make sure the staff are fully competent and that the proper procedures and processes are in place. There is no point in me saying we have no responsibility. We have responsibility, but it is at a certain level.

That is not question I asked. I asked whether Mr. Tobin is satisfied that his organisation, the NRA, has no responsibility for the obvious blunder and mismanagement in the expenditure of taxpayers' money which means compensation must be paid as a result of someone's incompetence. Is Mr. Tobin saying that his organisation does not have any responsibility for that?

Mr. Tobin

The staff in the National Roads Authority who had dealings with this, discharged their functions in a reasonable way. They sought and got assurances that all the various proper procedures had been complied with and accepted what they were being told, that the various checks had been carried out. That being the case, there would have been no reason to recheck at the level of detail that would have been necessary to identify the error in this case. It has not been the tradition in the National Roads Authority and, to the best of my knowledge, neither would it be nor is it the practice within, for example, the Department of the Environment and Local Government to recheck to that level of detail a recommendation to award a contract to a contractor.

I see that the county manager of Limerick County Council is listed although I did not expect that would be the order of the committee procedure. However, as he is present and mentioned in the report, will he indicate to the committee when his investigation will be concluded and when the committee can expect a detailed report from him of his findings from the investigation he is conducting?

Mr. Ó Ceallaigh

Limerick County Council is represented at the specific request of the secretariat. I received a letter inviting us here and a second reminder. That is why we are here and, on that basis, we would not insult or be discourteous to Dáil Éireann and its committees by not turning up.

In relation to this process, Limerick County Council participated in full with the NRA in examining any mistakes that were made. The mistake was made by the contractor in the first instance. Our mistake was we did not see it and that is the reality of life.

In answer to Deputy Bell, I have worked with the NRA and others in the process of preparing a response to the committee. I have, since 1 September, undertaken to adjudicate on whether there was any culpability or blame or other problems associated with this. I have been advised by my law agent to be extremely careful in commenting on this because I have to ensure that people are treated in accordance with the principles of natural justice. That process is going on and I am dealing with that. I see no reason I should not be in a position towards mid to late October to give a straight answer on that issue.

On the general issue, will Mr. Tobin comment on the change in the policy of his organisation regarding motorways, which is contained in the reports, whereby the building line from a motorway of 30 metres has changed to 90 metres? I specifically refer to the serious problem which has arisen with the motorway in counties Louth and Meath where the goalposts have been changed in that the building line has been changed from 30 metres to 90 metres and where the IDA, having bought substantial land adjoining the motorway at substantial cost to the taxpayer, will lose substantial moneys as a result of that decision.

Mr. Tobin

The policy to which the Deputy refers is not an NRA policy but rather a policy of the individual planning authorities in the development in their counties. We do not have a requirement. I think it is from a noise point of view and other issues and that it is the local authority planning process which imposes these limitations.

That is the matter I wished to clarify because it appears that the county councils concerned are saying the decision to change the building line from 30 metres from a motorway to 90 metres was as a result of a decision by the National Roads Authority. Is Mr. Tobin saying to me now - I would like this to go on the record because substantial amounts of State funds are involved - that that was a decision taken by Louth and Meath county councils or any other local authority adjoining that motorway?

Mr. Tobin

I am.

In his opening statement Mr. Tobin outlined the different procedures in the examination of tenders. Which procedure was adopted in this case?

Mr. Tobin

The county manager may be able to elaborate if needs be. My understanding is that the by-laws adopted by Limerick County Council in the opening of tenders is such that they are opened in the presence of the entire elected council. I am sorry; I stand corrected. Perhaps the Chairman would allow the county manager to answer.

Mr. Ó Ceallaigh

The practice is that the chairman or a nominated member will be present in the interests of transparency. In my 38 years of local government, that has been the practice all around the country to a varying or greater extent.

Is that in accordance with standing orders?

Mr. Ó Ceallaigh

It is in accordance with the regulations which the council is obliged to consider making after the first meeting after the local elections.

This is a matter of general information. Was Limerick County Council obliged to accept the lowest tender in this case?

Mr. Tobin

The short answer is "yes". The criterion for making the appointment was "most economically advantageous tender". In reality, the items to be considered for that purpose have to be determined and made public in advance. Leaving aside competence and assuming one has a number of people who tender who all have the competence, experience and so on, then price is the determining factor in the award of a contract.

According to what Mr. Tobin said, Limerick County Council was obliged to accept the lowest tender, although that is not always the case.

Mr. Tobin

There is or has been a long-standing practice of inserting a comment like "The local authority need not accept the lowest or any tender". That would provide cover in the event of a local authority or anyone else, for whatever reason, such as lack of funds, deciding to abandon a project. However, in the context of European regulations where one has declared in advance the criteria for selecting a contractor, basically that is saying that, allowing competence, it is the lowest price. To pick another tender would open oneself to the type of situation that has occurred in this case.

So Mr. Tobin is answering "yes" to my question?

Mr. Tobin

Allowing that the person who tendered was competent and assuming he would progress with the project rather than abandon it, yes, they had to accept the lowest tender.

If Mr. Tobin was assured by one director on one occasion and by two on another occasion that they accepted there were no irregularities in the matter, why did compensation have to be paid?

Mr. Tobin

The Deputy may have misunderstood me. I had made a judgment following the report that had been prepared by my staff and staff from Limerick County Council that the difficulty was caused by human error rather than any other malevolent motives or whatever one might wish to call it. Clearly SIAC, disappointed that they had not got the contract, had initiated court action. I was afraid they had suspicions and perhaps some hard fact that might have pointed in the direction of something more sinister. I deliberately put that question to them and made it clear to them that if they had any such information I was only too willing to put that information in the hands of the Garda for investigation. On both occasions I got no positive information which could have been taken as a basis for approaching the Garda. The committee will recall that I also quoted that view from the conciliator who is a Queen's Counsel.

That does not answer my question. If Mr. Tobin was assured by the two directors of SIAC that they had no hard facts to support the suspicions in the matter, why was it necessary to pay such an exorbitant amount of compensation?

Mr. Tobin

We have to take the things separately. Very clearly, as a result of an error in the checking process we ended up believing that one tender was lower than the other and that tender was successful. As a consequence of the court action taken by SIAC, the preparation for defending that action and a recheck on the tenders it emerged that the successful tenderer was not in fact the lowest. That led to a situation where the tenderer who was not successful but who should have been, had some right to compensation. The conciliator put that amount at £3.15 million. I think I have gone through the detail of how that was added up.

When or in what circumstances did SIAC hear about the error?

Mr. Tobin

My opening remarks will have given some clue as to that. I made the point that in the opening of tenders process it is quite common for details of the amount of tenders to become public knowledge. That being the case——

I never knew that was quite common and I have been a member of a local authority for more than 30 years. I never heard tell of it happening in Galway. I have attended the opening of many tenders as a nominated member.

Mr. Tobin

I do not dispute the Deputy's own experience but he may rest assured that it is quite common for the details of the tender levels, although not necessarily a linkage between the individual price and the firm who may have tendered that price, to come into the public domain. That being the case, SIAC would have known where they stood in the batting order. As they saw it, their uncorrected tender was the lowest submitted to Limerick County Council. That led to an expectation that within a couple of weeks someone would be in touch to clarify insurance and any other issues which might arise. When that did not happen they began to ask why not. They were advised that the tender of Mulcair, following all corrections, had emerged as the lowest.

How long was that after the tenders were opened?

Mr. Tobin

I would guess a matter of months.

How long after the tenders were opened was the other company awarded the tender?

Mr. Tobin

The award of tender was on 21 September.

When were the tenders opened?

Mr. Tobin

The tenders were returned on 17 July and were opened on that day. The award was on 21 September.

I accept that the news of the award of the tender might have leaked out but how did SIAC know about the error in the calculations?

Mr. Tobin

SIAC would have been aware that their tender was the lowest submitted before any corrections were made. They would have made an assumption and would have expected to hear from Limerick County Council. In the event, following the correction of the various tenders Mulcair, and not SIAC, were the lowest tenderers. The discussions and finalisation of details were done with Mulcair. Meanwhile SIAC were wondering why they had not been approached.

Would SIAC be merely jumping to conclusions or would they have any hard evidence of an error in the calculation of the tender?

Mr. Tobin

Perhaps I may have misunderstood the Deputy. Obviously a point was reached where the county council had adopted the position that the lowest tenderer was now Mulcair. It subsequently emerged that an error made by Mulcair had not been found which, had it been found would have allowed SIAC to remain the lowest. How did they know that? I am not sure they did. I have no information to suggest that but clearly they were disappointed, having put in the lowest uncorrected tender, and wanted to know why. According to the information I have the case being made in the courts was that they were querying whether the operation of CONDOC had been done in the correct way.

Could the manager throw any light on how SIAC knew about the error?

Mr. Ó Ceallaigh

I would just like to make a point and maybe help the committee. There are two issues here which we have inadvertently got at cross purposes. The first issue was the challenge by SIAC, around July, August or September 1998, to the awarding of the contract to Mulcair. That was awarded to Mulcair, in the council's judgment at the time as being correct after appropriate adjustments and corrections to both tenders. Mistakes were made by the contractors in both cases of varying degrees.

I thought it was not awarded until September.

Mr. Ó Ceallaigh

In September, yes. I apologise to the Deputy. It was awarded on 21 September 1998. SIAC eventually continued the process of challenging that through the High Court into the following year. When we did the work in defence of the council's position taken at the time of awarding the tender in September 1998 - that was nine months or a year later - another error was identified which we had not found: an error made by the contractor but not seen - and should have been seen - by Limerick County Council. There are two different things happening. SIAC took an action in relation to the interpretation of the instructions to tenderers, that is the CONDOC documents. Subsequently, in defence of that, we found the error and informed the NRA. In managing that in conjunction with the court case a statement was issued around 4 July 2000. There is a chronological factor there as well.

New information has now arisen. Do I take it that the other error Mr. Ó Ceallaigh spoke of was in SIAC's calculations?

Mr. Ó Ceallaigh

There were errors in the SIAC bill of quantities as submitted. They were corrected——

Acting Chairman

I recall there were errors in both tenders.

In that case how could SIAC get £4 million if they were making errors as well?

Mr. Ó Ceallaigh

Mr. Tobin, in his statement to the committee, clearly said there was an original adjustment on the Mulcair tender of approximately £40,000. SIAC were not happy with that interpretation by Limerick County Council. We hold we were correct in that interpretation and that went all the way to Brussels at that time. The competition authorities there accepted that Limerick County Council was right in that regard. The process continued against the council in the High Court. In defending that a further check was done and we found this mistake of £42,750 which would have put SIAC in the position of being the most economically advantageous tenderer. However there was a time factor of many months involved in that.

This is getting worse.

This case raises very dangerous issues relating to the role of local authority officials and the NRA. Limerick County Council and the NRA should clarify for the committee that Mulcair Civil Engineering and Building Contractors Limited did not enjoy insider status regarding the award of road contracts by Limerick County Council and the regional design office which covers several counties including the city and county of Limerick, adjacent counties and administrative authorities and regions. I ask for a categorical assurance on this point. I request that the committee be furnished, at a future meeting, with the list of contracts and the price of the awarded contracts given to Mulcair in the past both in the Limerick County Council area and in the adjacent counties to Limerick that are broadly defined as the south-west region. This information is vital because there appears to be some conflict.

I do not understand why Mr. Tobin should confront SIAC directors with a view to discovering whether there was anything inappropriate or corrupt in the tendering process. Surely it was the role of Mr. Tobin, the NRA or the local authority and not that of SIAC, the company that can be depicted as the injured party in this case, to see whether anything should be furnished to the gardaí in terms of investigating any corrupt procedure in the award of public contracts. I do not understand how Mr. Tobin can enter as a defence the suggestion that because a Queen's counsel and two SIAC directors were not of the view that anything corrupt was happening he rested the matter there. I do not know from where these suggestions arose. You referred to and quoted from the conciliator's report on the matter. Clearly he was considering issues such as whether there was a corrupt award of a public contract. He did not pluck that out of thin air. Someone in the NRA, SIAC, Limerick County Council or elsewhere gave the Queen's counsel the idea - he dismissed it as being wrong because it could not be backed up - that there was some form of corruption in the process. That matter must be clarified if not at today's meeting then at a future one. If that reassurance cannot be given, the list of the contracts given to Mulcair must be furnished. I hope the suggestion that it enjoyed most favoured status with Limerick County Council is wrong, particularly for the future of that authority and its officials.

The other matter I wish to have clarified relates to a glaring contradiction in Mr. Tobin's script. If there was a genuine case of human error, as determined by him, why is it now necessary to have a fuller investigation by the county manager and his team and why has the NRA asked the county manager to look specifically at the issue of disciplinary procedures against officials who made a genuine error? That is like the GAA imposing a fine on a player who accidentally dropped the ball in an All-Ireland Final. It is patently ridiculous and amounts to a witch hunt if disciplinary procedures are to be invoked in the case of genuine error.

As regards the script Mr. Tobin presented in defence of what happened, he describes it - it is most strange this issue did not go to Brussels - as standard practice to adjust mathematical errors made by contractors in all circumstances. I am not aware that the imperfections of a tender, a public auction in effect, can be adjusted so that certain players can be favoured by adjusting numbers downwards. I find it difficult to accept that an innocent human error which would adjust one tender below the tender price of another, the process by which the actual material public result can be changed dramatically, is standard practice in the tender and public procurement scene. That is appalling. It is difficult to understand that officials, public or otherwise, would make allowances for incompetence on the part of one tenderer. I understand that neither SIAC nor Mulcair was the lowest economic tender. There was another tender which was £6 million lower than any other but that was thrown out. I am confused as to why SIAC directors should be confronted and asked to provide proof that Limerick County Council officials engaged in malfeasance.

The committee should be reassured that Mulcair did not enjoy the most favoured status as regards the award of contracts in this county and region.

Does Mr. Tobin accept that there is a weakness in the NRA's general approach in that this matter slipped through without coming to its attention?

Mr. Tobin

I would remind the Deputy of my earlier comment that under the Roads Act, 1993, we are required to have the vast bulk of our functions carried out by local authorities. In doing so, we rely on a long established structure of management, engineering advice and so on that is in place in local authorities. The costly and unfortunate error that occurred related to a mundane task. I hope the Deputy would not expect that when the process has gone through all the rungs of a local authority the exercise, in this case of rechecking five tenders involving 5,200 calculations, should be repeated within the NRA. It has not been our practice to do so and my experience is that it is not, nor has it been, the practice within the Department of the Environment and Local Government which would handle similar type tenders on the sanitary services side.

As regards the issues raised by Deputy Lenihan, to my knowledge there is no favouritism regarding the award of contracts. The mechanism for awarding contracts is clearly set out in a variety of European regulations. There are Government guidelines on public procurement and these must be rigorously applied. There is a remedies directive under which anyone aggrieved at failing to win a contract can find out the reasons for that failure. I have no knowledge of anything that would suggest there was favouritism of the type that concerns the Deputy.

I will give the chronicle of events regarding the issue of whether there was anything more sinister than human error involved. The first occurrence was that staff from the authority and from Limerick County Council undertook a review of all the events, who did what, how it was done and so on. That was prepared and I obtained it. I made a judgment at the time that it was human error. That was it. In the course of arbitration and conciliation and in his report the conciliator refers to suspicions raised by SIAC in relation to malfeasance and other, if you like, more highly legal definitions. Suspicions were raised at that forum by SIAC. It was incumbent on me when I next met a director of that company to ask them directly if they had information which I should have and which if I had, I would put in the hands of the Garda Síochána. I got nothing positive as a result of that request. I subsequently met the same director and another director and again pursued that question. I was right to make that request, that if there was anything of substance available to them, it should be brought forward and given to us so that it could be put into the appropriate hands for investigation. Our own investigations, then concluded, led me to a judgment that this was simple human error, no more.

The issue of adjusting tenders is of long standing and arises from the fact that - again, in compliance with Government procurement policy - our contracts are referred to as remeasurable contracts. There is a bill of quantities with a range of items and in which the estimated quantities required to deliver the project are set out. A contractor is required to enter the rates they propose to charge for each individual item, multiply these, tot the figures on each page and carry them forward to summaries and so on. Since one is going to pay for the actual quantities incorporated into the job, multiplied by the rate quoted by the contractor, if they have made errors, one has to check that they have got the bottom line correct. If somebody has made an error, it may well be the case that one could inadvertently assume that the price is so many thousands less than it actually is, if you pay them at that moment for the actual quantities set out in the bill. It is, therefore, standard practice and part of CONDOC instructions to tenderers - a document of reasonable long standing produced with our co-operation and that of the Department of the Environment and Local Government - it is long established practice that that is the way to deal with tenders when received. All the mathematics are checked and if there are errors, they are corrected without reference to the tenderer. The resulting tender total emerging from that exercise is used from that point on for the purposes of ranking the tenders.

That brings me back to a point raised by another Deputy. There are two hurdles to the appointment of a contractor, one being the issue of capability, experience and so on. Perhaps I should apologise in the sense that we deliberately did not mention the fact that there was another tender which was lower than the other two, but a judgment was made, which it is fair to say the contractor accepted, on the basis of track record. The size of job involved was beyond what one would wish that contractor to take on at this time. We tried not to confuse the issue by referring to it, but the Deputy is correct, it was an issue. Leaving that aside, one has two hurdles. First, one must determine if those tendering have the necessary competence, expertise, experience and staff and thereafter look at the lowest price among those who have the necessary competence, capability and experience.

Do you agree that it should not be the responsibility of SIAC directors to identify irregularities, but that of the organisation which held ultimate responsibility, namely, the NRA?

Mr. Tobin

It is not the responsibility of any private contractor to become the policeman of the system. The system should work correctly and every effort is made to ensure it does. In this instance it went badly wrong. That is acknowledged and I make no bones about it. It should not have happened. We got it wrong. That said, we have taken certain steps to strengthen the arrangements in place by providing, for example, for the external rechecking of all tenders and making progress towards electronic tenders which should, theoretically at least, rule out the type of mathematical error which led to the issues cropping up here. It is not the task of any contractor to do this. The assumption is that the systems in place are such that tenders will be handled, evaluated and dealt with in a transparent and fair way.

This is a very good and intelligible document in so far as it goes. I have been completely thrown off my stride. I am bemused and puzzled by Mr. Tobin's response to the Acting Chairman's proper question. He sought to say that he did not think this issue would come up, but when one reads the document again it is exclusively devoted to it. I need to think about the implications of this because I do not understand the point. In respect of the accuracy of the document, has the word "Limited" been left out in the reference on page 3 to Pat Mulcair, civil engineering and building contractors?

Mr. Tobin

It has. I can check precisely when it happened. Up to a certain point, possibly six to 12 months ago, Pat Mulcair, civil engineering and building contractors, was a sole trader.

A contract worth £30 million was being conducted by a sole trader.

Mr. Tobin

Yes. He was bonded in the normal way. There was security, therefore, in the event of failure. As a contractor, he had demonstrated a background of capability of delivering contracts of this size. He had, for example, constructed the Portlaoise bypass.

Has the authority sanctioned contracts of this size with any other sole trader?

Mr. Tobin

I am not aware of any other sole trader operating in this area.

Is that not a bit odd?

Mr. Tobin

I do not know.

Mr. Tobin

No.

Will you check for us if it still has this status——

Mr. Tobin

It does not. In the last six to 12 months - I am not sure when - it has become a limited company.

Since the award of this contract.

Mr. Tobin

Yes.

To return to Deputy Ardagh's question about the increase from £33 million to £43 million, you gave two different explanations. You explained it first in terms of add-ons, but when he pursued you, you said that it would not be unusual to have an 18% to 20% overrun. Which is it?

Mr. Tobin

Let me explain the additions to the starting point of £33.5 million. For convenience - call it what you will - and to avoid having to reopen the road soon after its completion, Limerick County Council extended the contract to incorporate the laying of waterpipes as part of a water project. The value of this work is about £4.34 million. Price variation on that contract is estimated at about £2.5 million. Additional work arising under the contract is valued at in the order of £4 million.

Surely that is an entirely separate contract.

Mr. Tobin

It is an extension of the same contract.

If so, why was it not included in what was put out to tender?

Mr. Tobin

Because we were not aware of it at the time. Again I can only guess - perhaps the county manager can help - but my suspicion is that at the time the contract was advertised the necessary funds were not available for the sanitary area.

If, in building a house, I have a surface water problem, surely the surface water provision would be included in the contract to build.

Mr. Tobin

There is a misunderstanding. They were laying pipes as part of a main water supply scheme.

What did that have to do with the road project? I am entirely open to being persuaded that it is economic, efficient and desirable that it should be done at the same time, but why was it not included in the tender specifications?

Mr. Tobin

I suspect - perhaps the county manager will elucidate on this - that at the time the tender documents for the road project were being put together and advertised they did not have the necessary sanction to progress the water scheme. I can only surmise.

Acting Chairman

Will Mr. Ó Ceallaigh confirm if that is correct?

Mr. Ó Ceallaigh

The reality is that the road project was envisaged prior to 1998. In the meantime, various considerations were being given to how best to upgrade the water supply for Limerick city and the environs. Many options were considered and by late 1999 it seemed the most favourable option was to bring the supply along the new road that is being built, which is a totally new road in a green situation. Indeed, I recognise the strength of the Department of the Environment and Local Government in helping us to make that decision because it was a unique opportunity to do a job very cheaply. It would have cost a lot more at a later stage to lay it in the new road. It would have been folly of the first order, and I am sure Deputy Rabbitte would accept that point. It was not envisaged, however, at the time the contract was prepared because that knowledge was not available at that point in time.

That is perfectly sensible but, until we get to the bottom of Deputy Lenihan's question about whether favoured status was conferred here, it adds to the confusion surrounding this matter. You get the tender for £33 million and end up with a job for £43 million, even though you should not have got it in the first place. It is confusing.

Can we go back to the tendering process and to Deputy McCormack's questions? Would Mr. Tobin agree that the tendering process seems to be critical to the Committee being able to understand this?

Mr. Tobin

Yes.

If we look at Mr. Tobin's page - whatever it is, he wrote it in such a hurry last night that he forgot to number them but it is on the second page. It states:

Tenders for major road projects are submitted to the client local authority. There are a variety of procedures in place ...... for opening the tenders ..... for example, a full meeting of the elected council.

Will Mr. Tobin tell me again what the process actually adopted here was?

Mr. Tobin

Again I hope I am not repeating what the manager said. By way of background, each local authority, at its first meeting following a local election, is required to draw up regulations or by-laws on how tenders are to be opened. In this case my understanding is that a member of the council and some staff of the council were present on that occasion. The tenders were opened and obviously the bottom line price for each tender would have been noted.

Yes. Mr. Tobin agrees that it is critical but he said earlier, in reply to a question from Deputy McCormack, that it was opened before the entire elected council.

Mr. Tobin

A mistake on my part.

Of course, and we all make mistakes but the interesting thing is that Mr. Tobin investigated this and formed the judgment that it was human error but he does not actually know how the tenders were opened. Is that not right?

Mr. Tobin

Clearly in this case I misled myself in thinking that in the case of Limerick, this was the procedure when in fact it was not.

On the point in the report that details of the tender prices come into the public domain, Mr. Tobin states that regardless of the procedure used, there is a tendency for details of the tender prices to come into the public domain. Interested parties get the nod from somewhere or other. The grapevine works, is that what Mr. Tobin is saying to the committee?

Mr. Tobin

In general that is the case. In this specific case, again as part of the requirements or regulations in Limerick County Council, each member was notified of the names and amounts of the tenders submitted but leaving that aside - I would not make an issue of that - there is a grapevine system that operates and people become aware.

I can understand that. The second paragraph states that the tender document is then sent for checking. Four or five were singled out and one was dismissed, presumably for reasons of capacity of performance, so Mr. Tobin was dealing with four or five - I cannot recall the number. Why is the checking not done before they are opened and the word goes around that A, B or C company got it?

Mr. Tobin

Please excuse me. I do not wish in any way appear to be giving the Deputy a smart answer but how can we check the tender until we open the envelope, which is the first process of which we spoke? At a meeting which was attended by an elected member and an official, the envelopes were literally opened revealing within a tender document and a bottom line price.

I understand that.

Mr. Tobin

On the amount of checking, in the context of somebody wishing that this were done on the spot, we are talking about, in each case, an 899 page document with 5,200 calculations in it.

Mr. Tobin

In practical terms, to contemplate that exercise being done, while everybody is locked in before anybody moves, would be unrealistic.

I agree with what Deputy McCormack said. In my own local authority it is done differently as well. I just want to understand this. Is Mr. Tobin saying that all that actually happens at this stage of the process is that the envelopes are opened, the bottom line is looked at and it is assumed by someone around the table who sees the bottom line that the bottom line is successful?

Mr. Tobin

It may well be assumed, yes.

In this case it clearly was assumed.

Mr. Tobin

No, I do not necessarily think so, Deputy. To take this a step forward, the Deputy has accepted that, be it the grapevine or whatever, people would be aware, first, of their own bid. They then get knowledge of the other bids and realise that on the basis of the bids made they are now - if you are SIAC at that point - in second place. Word then emanates that a tenderer is no longer in the running because of this issue of previous experience or whatever. They now know that the bid, as submitted by them, is the lowest in the race on the basis of an uncorrected amount. This is how one finds that——

There are quite a number of projects in Mr. Tobin's recent reports that we are considering. Does this problem of the bottom line being inaccurately calculated happen from time to time?

Mr. Tobin

Almost invariably.

And in this case the officials of the local authority, or Mungret, take it upon themselves when they are doing the checking process to point out that on page 69 it is calculated improperly?

Mr. Tobin

No. They point out to nobody. They are required to undertake this exercise without any reference to the tenderers. They simply go through them line by line, page by page. Has the tenderer multiplied the thousand units by the £1.50 price per unit they put in and have they got the right answer?

And who do they report that to?

Mr. Tobin

That would form part of the eventual report that goes through the various lines of command, finds its way eventually to the manager to sign off a formal order accepting the tender and in turn requesting approval from the NRA.

Who does the report go to in the first instance?

Mr. Tobin

Again, I would not be——

Mr. Ó Ceallaigh, who did the report go to in this case in the first instance?

Mr. Tobin

I presume it would come to him through the county engineer.

Mr. Ó Ceallaigh

The report would go to the project engineer, to the county engineer and to me.

Right. And that happened in this case?

Mr. Ó Ceallaigh

That happened in this case. Could I help the members in relation to the earlier question that Deputy Rabbitte raised? Since 1985, Limerick County Council has a very open policy regarding tenders and the regulations, which have been sanctioned by the Minister for the Environment, state that they have to be opened in the presence of the secretary and a member of the council for very obvious reasons - so that there is no element of collusion. Subsequent to that being done and all the information being opened, and bearing in mind that there were 899 pages in eight bills of quantity so one can imagine the mass of paper that had to be carefully opened, they were initialled by the secretary and by the member of the council who was present, chairman of the——

Does it have to be the chairman?

Mr. Ó Ceallaigh

Not always. It depends who is available.

Who was available this time?

Mr. Ó Ceallaigh

Tenders are often urgent in the context of getting major works done; anybody would appreciate that. Their practice is, and has been, that they would be opened in that way. In another local authority I worked for they were opened in the presence of all the urban councillors on a given night. It varies, and the reality——

Can Mr. Ó Ceallaigh recall if it was the chairman in this case?

Mr. Ó Ceallaigh

I can get back to you on that point, Chairman, but I cannot recall off-hand. I was not present. It is a point of information that would be available on checking. There is no question about that.

The secretary was present, and who was acting for Mr. Ó Ceallaigh?

Mr. Ó Ceallaigh

I would not be at it. I would not be obliged to be there.

So who was the senior council person present?

Mr. Ó Ceallaigh

The county secretary would be the senior person, or his deputy if he was not available, who would be deputy/secretary on the day.

Did the county secretary get a copy of the report when it ultimately came as corrected?

Mr. Ó Ceallaigh

It is not a function of the county secretary. The county secretary's function is to discharge the opening of the tenders in accordance with the tender regulations. They were passed on to the engineering section.

I am just curious.

Mr. Ó Ceallaigh

I appreciate the point.

I am just curious in the sense that he was the senior person present when the tenders were opened and——

Mr. Ó Ceallaigh

There is no capacity there for anybody to process or assess that volume of tenders in any moment of time. It would take many days, if not weeks in some cases, of assessment and checking.

Right. If there were questions of capacity to perform in terms of the lowest tender, he probably went away thinking that SIAC was the lowest tender.

Mr. Ó Ceallaigh

I do not know if the county secretary went away thinking anything but I should point out that we are obliged under the tender regulations to notify the councillors, all 28 on the council, that the tenders are in, the name of the tenderer and the amount. They may have made assumptions or other people who got copies of that document.

And that was done in writing?

Mr. Ó Ceallaigh

That is always done in writing.

How soon were the councillors advised that an error had been made and that the result was different?

Mr. Ó Ceallaigh

As I pointed out, there are two errors. The first error was adjusted in the context of the normal processing or assessing in accordance with the instructions for tenders. Subsequently, or a year later when the error——

Let us stay with the first error. We did not know about the second error until court action had been initiated. Mr. Ó Ceallaigh will have to learn to be patient with those of us who do not know as much as him. We have a long way to go on this yet, so relax. Let us return to the first error. When were the elected members told about the first error?

Mr. Ó Ceallaigh

To answer your question honestly, it would not be practice or necessary for the councillors to be informed because it is a confidential process. The technical officials are assessing tenders and they are precluded from conveying that confidential information to anybody. As Mr. Tobin said, they make the appropriate adjustments to the tenders where corrections are needed in accordance with the rules.

However, you had already informed the councillors in writing that you had received X tenders and the amount was on the other side of the page. Is that not right?

Mr. Ó Ceallaigh

That is correct.

When it turned out that those figures were calculated wrongly, at least in one case known to you then, were they advised of that?

Mr. Ó Ceallaigh

It is not as simple as that; it never is. There were five tenders, five bills of quantities looked at. There were many corrections made. As I said to the committee, Limerick County Council did not see the mistake made in this case by the tender. We spotted a lot of others, some worth only perhaps a shilling or 5p in current money.

I presume that normally this would not make any difference. Why it makes a difference here is that they were within an ass's roar of each other. Presumably, the councillors went away thinking that the Adare section would be built and that SIAC appeared to be getting the job. When did you disabuse the councillors of that and tell them that they had got it wrong?

Mr. Ó Ceallaigh

There is a caveat in the letter which goes to the councillors. It says that the figures are uncorrected and will be subject to change and corrections on assessment of the tender.

So they were not advised. They did not get an update.

Mr. Ó Ceallaigh

They got an update when the tender was signed by the manager accepting the contract.

How long later?

Mr. Ó Ceallaigh

Approximately two months.

In September?

Mr. Ó Ceallaigh

Yes, approximately.

And the tenders were opened in July?

Mr. Ó Ceallaigh

Yes.

You managed to find the error in Mulcair's tender documents but the error in the SIAC documents did not come to light until court action was initiated.

Mr. Tobin

I think you are wrong. Perhaps the best way to express what happened would be to say that errors were found both in the SIAC tender and in the Mulcair tender. In the case of the Mulcair tender, one error in the tender was not discovered. Others were but one was not.

However, the one that was discovered was the one that brought it below SIAC.

Mr. Tobin

There was one very sizeable error discovered——

This was the £26,000?

Mr. Tobin

No, it was approximately £40,000. Let me check my figures.

SIAC was initially £26,000 below Mulcair but the £40,000 error brought Mulcair below SIAC.

Mr. Tobin

Now you have it.

I did not know there was an error in the SIAC documents uncovered at this time. Was there?

Mr. Tobin

There were some corrections made to the tender submitted by SIAC before we reached bottom line status, yes.

How did that affect the £26,000 gap?

Mr. Tobin

We are talking here in figures as corrected, if you like.

So when everything was reconciled - your document could be read as saying that these were the only two errors - the figure changed and Mulcair was bottom.

Mr. Tobin

That is correct. We are dealing now with where all the corrections had been made in the SIAC document. We are talking about one significant error that was discovered in the Mulcair document which had the effect of taking their bid from being somewhat higher than the SIAC bid to being below the SIAC bid.

What was the order of the errors discovered on the SIAC document?

Mr. Tobin

The corrected amount of the SIAC document was £33,161,503.26 and the uncorrected amount was £33,160,710.84. It was very little, a few hundred pounds in the overall amount, without knowing if there were some ups and downs. The overall impact was about £800.

So it was pretty negligible?

Mr. Tobin

It was. The final corrected version was £33,161,503.

After you were threatened with legal action you found an error in the Mulcair tender. How big was the error?

Mr. Tobin

It was £42,700.

Similar but entirely separate from the £40,000——

Mr. Tobin

Yes, quite unrelated but, by coincidence, not unduly different an amount.

Is it not a little unusual, Mr. Tobin——

Mr. Tobin

Can I add that a similar error was made in the correction of the tender that subsequently was dismissed in terms of not having adequate previous experience.

Whatever about the original error being made, is it not a little unusual that after going through the checking process and it being the subject of contention in the ether and so forth, it was not until legal action was initiated that you discovered the Mulcair error?

Mr. Tobin

You could say that. One point that must be made, however, is that once the contract had been signed - the date was 21 September - the line had been drawn, in effect. There was no way back. There was an issue where we had a tenderer who should have got the work but did not. At that point we were exposed or the public purse was exposed.

Who made the ultimate call, Mr. Ó Ceallaigh? Who said, "That is it; it is Mulcair's job. Bring me the fountain pen"?

Mr. Ó Ceallaigh

This point was alluded to by Mr. Tobin earlier. I also pointed out that as manager for a local authority, I have the statutory responsibility for dealing with any issue that is actionable in any way, whether because of discipline or otherwise, so I must be very careful. I am not trying to avoid the question but in this process there are a number of people involved in checking and reporting ultimately to the county manager. There is a partnership between ourselves and the NRA. As the NRA has said they did not and probably do not have the capacity to get involved in checking every contract in the country in mathematical terms. There were a number of people involved in the checking and our technical people——

I understand that. The checkers had done their work for good or ill, accurately or otherwise, at this stage. It had left the realm of mere checkers. I am trying to find out who said, "That looks okay to me, we will sign on the dotted line".

Mr. Ó Ceallaigh

In the interest of accuracy, I would like to correct a point which I am sure was not meant to be wrong. The people who were checking were not mere checkers. They were either engineers or civil engineering technicians with a competency in assessing the rates in the process and in working out the figures we have talked about. They would report in a normal instance to a senior executive engineer who would report to and tell the project engineer that the process of checking was done.

As I said, there was a mistake; there was human error. There is no question about that. That process would be taken in good faith by the county engineer of the day and handed to me and I would accept the process. I will stand over that process. There is no way that a county manager or county engineer could indulge or be able to do all the checks. There is a process for it. I am sure the Deputy appreciates that.

Of course. We would not have county managers doing that. The people who compiled the report sent it up the line.

Mr. Ó Ceallaigh

Yes.

They did not call the shots after that. Mr. Ó Ceallaigh was back from holidays at this stage and the county secretary had washed his hands off it. The county engineer was, perhaps, in Brittany. Where did it go when it went up the line? Who made the decision?

Mr. Ó Ceallaigh

The decision was made on the basis of correcting the mistakes. We thought we had found all the errors made by the contractors, leading to Mulcair being the most economically advantageous tender. As the meeting has already learned, there was a lower tender. I do not want to go into the fact why that person was not considered. Mr. Tobin has answered that and it is a sensitive issue for any tenderer at that point in time in their development. The process evaluates itself against the rules which are there and are required to be public. We followed those rules and they were the lowest. Having regard to the tenderer being competent, available for the job and his background, all things being equal, he was the lowest in price by a mistake.

We want to finish at a reasonable time tonight. I am not interested in the person who was discounted or in the basis on which the decision was made; one presumes the best. I am trying to find out who made the decision. Did the county engineer go to Mr. Ó Ceallaigh and say, "The Adare job is finished"? Did Mr. Ó Ceallaigh call the shots or did a senior executive engineer decide it? Who made the decision?

Mr. Ó Ceallaigh

In the interest of safeguarding public money, there are a number of checks and balances in the system.

I know that but they did not work.

Mr. Ó Ceallaigh

Ultimately they worked because we admitted the mistake when we found it. I want to bear that in mind.

Is Mr. Ó Ceallaigh suggesting it should have been covered up?

Mr. Ó Ceallaigh

Some questions have been raised here to which I must return on behalf of the staff of Limerick County Council and the council at a later date.

Acting Chairman

I reassure you we will return to this issue as well.

Mr. Ó Ceallaigh

I appreciate that.

Acting Chairman

Approximately £3 million of taxpayers' money is involved and has been given away. I do not want any rows.

On a point of information, I have not received an answer to the questions I addressed to the council. I got answers from Mr. Tobin but I did not get any answers from the county manager to the substantial issues I raised. He is only responding now because Deputy Rabbitte raised them. I would like an answer.

Acting Chairman

I want to be fair to Mr. Ó Ceallaigh who has come before us for the first time and is trying to answer questions. Perhaps he is not used to being interrupted in the middle of trying to give answers. We will take one question at a time.

I asked questions.

Acting Chairman

Deputy Rabbitte is in possession and he is getting some answers. Deputy Conor Lenihan can come back in later.

I am seeking answers to questions I asked.

Acting Chairman

We will try to get them later but not in the middle of Deputy Rabbitte's questioning.

I do not want to interrupt but perhaps you, Chairman, could indicate how long this meeting will last. We have already been here for four hours.

Acting Chairman

It should be obvious that the final speaker is in possession. I may speak for two or three minutes and then we will decide what to do. Deputy Rabbitte is in possession and he should be allowed to finish. We may not be satisfied with the answers but Mr. Ó Ceallaigh must be allowed to answer uninterrupted.

Mr. Ó Ceallaigh

Thank you, Chairman. The questions are not unreasonable and I do not have a problem with them. There is a process by which checking is done and an assessment and evaluation is carried out of tenders, irrespective of whether it is this tender or another one. The final process is that the county engineer, as the council's chief technical officer, makes a recommendation to the county manager, who will have knowledge of the process and will be aware that an evaluation is going on, and he will accept or reject the county engineer's recommendation. The process is open. There are people at various levels checking that process and signing off on it. I cannot fly in the face of the reality of the tender in this case being the lowest economic tender. However, it is on a report from the county engineer. When I accept that, I forward it to the NRA or other Departments for their approval or sanction as required. That is the process.

I am not asking Mr. Ó Ceallaigh to fly in the face of anything. I am only trying to find out who made the decision. Mr. Ó Ceallaigh is telling me the county engineer recommended to him that he should go for the lowest tender as he in good faith thought it was. Is that the position for the record?

Mr. Ó Ceallaigh

That is correct.

Mr. Tobin

It may be of help to repeat a couple of sentences from the remarks I made at the early part of this debate. Based on the outcome of the checking process, the Mungret office prepared a tender assessment report, signed by senior office personnel and senior officials in Limerick County Council, as the project would be constructed in County Limerick, recommending the award of the contract to Mulcair. The report constituted the basis for the Limerick county manager's decision to award the contract to Mulcair and to seek NRA approval in that regard. I hope that is of some assistance to the process.

It is, Mr. Tobin. How was the second error discovered?

Mr. Ó Ceallaigh

The second error was discovered during the process - I have alluded to it already, if I did not say it directly - of preparing the council's defence against the claim made by SIAC in the initial tender assessment. The bills of quantities and the rates were inserted at that stage on a spreadsheet for the purpose of putting them in electronic form and checking them. The error showed up during that process many months later.

Can Mr. Ó Ceallaigh help the committee in explaining why that error was not uncovered in the earlier checking?

Mr. Ó Ceallaigh

I will help the committee as always to the best of my ability. The mistake was made by the contractor. I am not trying to push blame on anyone; I am only stating a fact. The form of rates, approximately 900 pages, was filled in by the contractor. A mistake was made when a total at the end of a page which should have been carried forward, as set out accurately by Mr. Tobin, was not carried forward to the summary page. It was not seen by the contractor, by our staff or by the lowest tenderer who was excluded. As already pointed out by Mr. Tobin, he made a mistake. The form is circulated in some of the documentation. Section 05 - drainage and service ducts - the £42,000 should have been carried forward but someone misread it as a title head as distinct from being a summary of another page. It was as simple and unbelievable as that, but that is what happened. As the county engineer has reminded me, it happened in two tenders and it was not seen by us in the checking process.

It happened in two tenders.

Mr. Ó Ceallaigh

The lowest tenderer made the same mistake. It did not enter into his equation as there were other issues which had be to dealt with.

The person who was discarded?

Mr. Ó Ceallaigh

Yes.

When the council was confronted with SIAC threatening legal action, it went through all the documents with a fine comb in order to be able to defend its position.

Mr. Ó Ceallaigh

Essentially, that is correct.

It then came to light in that context.

Mr. Ó Ceallaigh

Yes, and as Mr. Tobin's report stated, I was informed of that problem. I vividly remember the day, it was 25 January, and I informed the NRA some two weeks later. As it happened, I was leaving on a personal holiday that week and I asked for the legal people to advise me of the issues before I contacted the NRA to know if I really did have a problem. I accept that I did have a problem.

Has the contractor in question done other work for Limerick County Council or Limerick Corporation?

Mr. Ó Ceallaigh

I have no clue about Limerick Corporation. I presume he has. I have been there four years and I would not remember all the contractors before that.

Has he done other work during Mr. Ó Ceallaigh's time?

Mr. Ó Ceallaigh

He did one other contract, the Douradoyle link road which, essentially, was part of the overall framework. We had to advance that process because of the Dell contract - there was a major extension at Dell coming on-stream. I will say this much about Limerick County Council, we delivered that before time for Dell. It is no harm to say that on the record on a day like today.

Was there an add-on on that contract?

Mr. Ó Ceallaigh

No, it was an element brought forward from the contract.

Is it correct that the officers employed at Mungret are, in the main, professional technical people seconded from the local authority?

Mr. Ó Ceallaigh

From various local authorities.

In the region?

Mr. Ó Ceallaigh

In the region, yes. There is a shared responsibility having regard to doing work on various——

And who is in charge?

Mr. Ó Ceallaigh

The project engineer is in charge.

To whom does he report?

Mr. Ó Ceallaigh

He reports to me, technically. I am not an engineer, as the Chairman will appreciate, so he reports to the county engineer. Ultimately, through the process of the managerial system, he reports to the county manager of the day.

Therefore, a kind of quango that reports to Limerick County Council?

Mr. Ó Ceallaigh

It is a very efficient way that has been in place for 11 years in County Limerick. As I already pointed out, Limerick County Council piloted this arrangement when, perhaps, there was not as much money available to do work, only planned work, and it has been quite successful. It has been copied, as I understand it, at 11 or 14 centres throughout the country.

The idea was that a corpus of professional technical people would be brought together. Does a hands-off arrangement exist or do these people work with the local authority? Do they consult senior executive engineers in the local authority?

Mr. Ó Ceallaigh

In practical terms, there are five segments, as it were, each responsible for the work in a particular county. In other words, there are engineers almost dedicated to Limerick County Council, Clare County Council, Limerick Corporation or Tipperary North Riding County Council. They are divided among the responsibilities there. The county engineer of each county maintains a very close and direct relationship with the project engineer and with the senior engineering staff carrying out work in his county. As Mr. Tobin mentioned in his document - I appreciate people have not had an opportunity to read it - there are project teams, including the county manager, involved in each major project to consider the issues, monitor progress and achieve the desired effect which is these public utilities.

Do they have a role in the design of projects?

Mr. Ó Ceallaigh

The design office?

Mr. Ó Ceallaigh

Yes.

So they do not merely monitor and control, they actually do the design work. If the local authority states that works on an eight kilometre stretch of road must be carried out, the design work is farmed out to the design office. Is that correct?

Mr. Ó Ceallaigh

We wish we could. Historically, however, we had to obtain approval from the NRA before any section of the design team commenced work on these projects because there was a financial liability attached to planning work. The principal function has been to design road works but, in recent times - again this is alluded to clearly by Mr. Tobin in his document - more and more road works are being done in major tranches as part of projects costing £200 million plus. Consultants are being utilised to deal with those projects and the council, through the regional design office, will monitor and supervise the outcome of the work of these consultants.

To some extent, the Limerick regional design office at Mungret has been the consultancy for these road jobs up to now. However, its role is changing and evolving to meet the challenge set down by the national plan at present.

Presumably if we were going to seek outside experts to carry out the engineering and building work it would be far more sensible to have a major contract rather than itsy bitsy contracts crossing counties here and there.

Mr. Ó Ceallaigh

Absolutely. To put it in context, if this mistake was made by a consultant checking tenders, which would be his function, he would have the problem that you and I have today.

I was not clear about the answer to Deputy Lenihan's query - this is probably proper to Mr. Tobin - that it is normal for in-house staff to make corrections to the tender documents of private builders who submitted them in the first instance. Do the staff make such corrections without informing a tenderer that they made a real cock-up and that a massive error has been corrected?

Mr. Tobin

What would happen is that arithmetical errors are corrected without reference to the tenderer. At that point, if a tenderer is perceived to be in contention, they are advised of what has happened to their tender and their bottom line price, etc., and they are asked if they wish to allow their tender to be further considered for the work.

When Mr. Tobin refers to a mistake, do I understand he is referring to an arithmetical mistake and that an estimation of cubic feet might be changed from seven to six?

Mr. Tobin

No. Purely arithmetical errors are changed, nothing else. We check if that contractor or tenderer multiplied his £5 by the 1,000 units and wrote down £5,000 in the right spot and whether he did that in respect of all 5,200 calculations and carried forward the sub-totals from each page. That is the only check, nothing else is changed.

Does the investigation Mr. Ó Ceallaigh is carrying out refer to the staff at Mungret or to these people and the staff of his local authority?

Mr. Ó Ceallaigh

The staff at Mungret are employed by Limerick County Council in so far as they are employed on Limerick County Council jobs. There are other people there who are staff of other local authorities, working together collectively as a team, to deliver these projects. The NRA raised the issue of disciplinary or other action that might be required on my part in regard to this particular mistake. That process relates solely to the officers in Mungret who are employed by Limerick County Council. There were no officers of any other local authority involved in the process. I am the responsible officer in that regard.

Having regard to the legal advice - of which I am aware and in respect of which the House is concerned - I must ensure that no injustice is done to anybody and protect people's rights. That process is ongoing. As already stated, I am optimistic that I will be able, by late October, to make a quasi-judicial but honest decision on the issues of concern here.

Acting Chairman

Before we make a decision on what further action to take in this area, I wish to put forward a number of observations, one request and a proposal. To use political terminology, I find it amazing, given that a court case of such magnitude was pending, that a full recount was not carried out and that people waited to find the second error until the case was due to come to court. However, I have no wish to return to the old system of local government where every housing scheme was checked three or four times by a local authority.

In light of the fact that it now appears commonplace to find and not find errors, allowing for the billions of extra pounds of expenditure, bearing in mind the changes being brought about by EU regulations and in respect of tendering practice, I will be asking if there is a need for a change in the procedures adopted. Mr. Tobin referred to a number of such changes earlier.

As a result of previous problems highlighted by the committee, changes have taken place, particularly within the Department of the Environment and Local Government. If we accept that there will always be errors in tenders and, in this instance, that human error has cost the Exchequer so much money, it is obvious that change is needed, particularly in view of the fact that a compensation culture has come into existence.

Those are my observations. My request is that I would ask Mr. Tobin and Mr. Farrelly to supply the committee with a list of the changes that have taken place to avoid any repetition of this totally unacceptable situation. Mr. Tobin referred to some of these earlier but I would like to obtain them in writing in order that we can consider them with the C omptroller and Aauditor General to see if they will remove the possibility of a repetition of this problem.

What has been spelled out clearly is that errors happen repeatedly, tenders are leaked and publicised to members and they are freely available. Mistakes happen and it now appears that, in the case of human error, the Exchequer can be liable for massive amounts of money. The EU introduced regulations of which some were aware and others were not. Perhaps we could have that list within two to three weeks when we will consider and work on this.

As I said at the outset following Mr. Tobin's contribution, given the serious nature of the matters raised separate to the four annual reports, it is obvious the committee cannot conclude its business. We will adjourn the issue and consider any further action we need to take within our terms of reference at the private session of our next meeting if that is acceptable to members. Is that acceptable, Deputy Lenihan?

I would have thought that any request for an answer or documentation made by a member of the committee would be either answered verbally or responded to in writing.

Acting Chairman

Perhaps the Deputy would repeat the question.

I received no such commitment from either the NRA or Limerick County Council.

Acting Chairman

What was the question, Deputy?

I requested various pieces of information about the number of contracts the Pat Mulcair building contractor, sole trader, company or whatever, has won not just in Limerick but also outside it in the area covered by the famous Mungret based multidenominational group or whatever one wishes to call it. I want information on that specifically.

I would also like a specific reassurance from either Mr. Tobin or Mr. Ó Ceallaigh or both that there is no suggestion of corrupt procedures. The suspicions raised by the SIAC executive suggested there was malfeasance.

I also asked a question, which received no answer, if there were other instances involving Mulcair in previous awards of contracts by Limerick County Council where it was not the lowest but was the successful tender.

Acting Chairman

We will ask for a written response to those as far as it is possible. At 9.15 p.m. hunger, thirst and fatigue have set in.

Mr. Ó Ceallaigh

I wish to make one point, lest it is not on the record, that Limerick County Council shares the same concern that everyone here doesvis-à-vis this mistake. I assure the committee that there is not a scintilla of evidence of corrupt procedures. I do not want to leave that on the record. If I did not answer that question from the Deputy, I apologise for that. On the mid-west, I will get that information. I do not have it, obviously.

Acting Chairman

I thank Mr. Ó Ceallaigh for that. Mr. Tobin dealt extensively with the question of corruption as he saw it. He was asked why he bothered going through that procedure. He certainly outlined it in that case and I accept Mr. Ó Ceallaigh's point about not leaving it on the record. I ask that the information on the contracts requested be supplied. It may emerge that there are one or two other questions which were overlooked, but we will have the transcript and I am sure Mr. Tobin will as well.

Mr. Tobin

I seek clarification. My remit is quite limited in that it deals only with national roads. The Mulcair company works not only on national roads. It may well be involved in contracts on non-national roads. It is certainly involved from time to time on the sanitary services side. I can certainly undertake to seek out the information and have no difficulty in doing so as far as national roads are concerned. Is Deputy clear about what precisely he seeks? Is it national road contracts?

I am utterly clear.

Acting Chairman

I ask for Mr. Farrelly to say something because he would have contact with all other schemes, infrastructure and spending. Does the Mungret office only deal with roads?

Mr. Ó Ceallaigh

National roads.

Acting Chairman

I think Deputy Lenihan is seeking any contract for national roads which came from the Mungret office. Would it be possible, Mr. Farrelly, to obtain a list of other contracts with which this contractor was involved?

What catchment office?

Acting Chairman

Deputy Lenihan mentioned the Mungret office but that only deals with roads.

Perhaps the Chairman can interpret what I say and set himself up as being my interpreter. I will make it clear. I want to know what contracts the company won from Mr. Tobin in his role in the NRA and the county manager who is responsible for the non-national roads in his area, and also the contracts for non-national roads that perhaps have been drawn up by the design team but cover other counties in the region.

Acting Chairman

Mr. Ó Ceallaigh has offered to supply that information and Mr. Tobin will cover the NRA aspect. Do I have the agreement of the committee on the adjournment of this item? Agreed.

The next meeting of the Committee of Public Accounts will be held on Thursday, 5 October 2000 at 10 a.m. in room G2 in Kildare House. In the public session we will deal with the reports on the value for money examination of local development initiatives and on the value for money examination on the driver testing service which is the responsibility of the Department of the Environment and Local Government.

I thank all the witnesses on behalf of my colleagues and myself. It has been a long session. I trust they will accept that few people could stand over what has happened and say it should not be fully investigated. We must do everything we possibly can to avoid a recurrence. If it takes another five hours the next time, please God we will arrive at a satisfactory conclusion.

The witnesses withdrew.

The Committee adjourned at 9.17 p.m. until 10 a.m. on Thursday, 5 October 2000.