COMMITTEE of PUBLIC ACCOUNTS debate -
Tuesday, 23 Oct 2001

Vol. 3 No. 21

2000 Annual Report of the Comptroller and Auditor General and Appropriation Accounts.

Vote 10 - Office of Public Works.

Vote 44 - Flood Relief.

Mr. B. Murphy (Chairman, Office of Public Works) called and examined.

Chairman

We are dealing with the 2000 annual report of the Comptroller and Auditor General for the Office of Public Works and flood relief. The last time representatives of the Office of Public Works appeared before the committee was on 8 March 2001 in respect of the examination of its Vote.

Witnesses should be made aware that they do not enjoy absolute privilege. The attention of members and witnesses is drawn to the fact that, as and 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 the persons identified in the course of the committee's proceedings. These rights include the right to give evidence; the right to produce documents to the committee; the right to appear before the committee, either in person or through a representative; the right to make a written and oral submission; the right to request the committee to direct the attendance of witnesses and the production of documents, and the right to cross-examine witnesses. Notwithstanding this provision I remind members of the long-standing parliamentary practice to the effect that they 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 ask Mr. Murphy to introduce his officials.

Mr. Murphy

I am joined by commissioners Seán Benton and David Byers. I am also joined by Mr. Gerry Doyle who is in charge of the accounts branch in Kilkenny and Mr. Joe Farrell who is the Office of Public Works's accountant.

Chairman

I ask the representative of the Department of Finance to introduce himself.

Mr. Eric Hartmann

I am an official of the public expenditure division which looks after Votes 10 and 44 for the Office of Public Works.

Chairman

Mr. Glavey, will you, please, introduce the accounts?

Mr. Glavey

The Office of Public Works has a duty to ensure buildings under its management comply with statutory requirements regarding the provision of access and facilities for people with disabilities. For new buildings and buildings undergoing major alteration the needs of the disabled can be addressed at the design stage. However, there are many other buildings under Office of Public Works management for which the Office of Public Works has a specific programme to improve facilities for the disabled - the programme examined in paragraph 17 of the Comptroller and Auditor General's report.

In the course of the audit it was noted that, first, the Office of Public Works had surveyed all Government occupied buildings in Dublin to assess the access and facilities provided for the disabled and produced a report on the matter in 1996. Second, the audit noted that £5 million had been provided by the Oireachtas over the period 1996-2000, inclusive, to undertake necessary work. However, just half of the amount provided, £2.5 million, had been spent on projects under the programme. In other words, by end 2000 adaptation work had been completed on 23 buildings, although 122 had been initially identified as needing disabled access. Third, the actual cost per building of work undertaken was significantly greater than originally estimated.

In response to inquiries the Accounting Officer indicated that the programme in question referred only to works, often of a minor nature, such as the provision of ramps and that the design changes and major adaptation works were of much greater significance, both in improving facilities for the disabled and in expenditure terms. He also indicated that the 2001 allocation under the programme of £750,000 would be spent in full. As regards changes in costs, he stated that these should be viewed in the context of tender inflation over the period. He also said that policy and action in future years for disabled access and facilities would be based on a nationwide survey of property managed by the commissioners.

Chairman

As we did not get an opening statement, we will proceed directly to questions from members. I call Deputy Lenihan. We will deal first with the disabled access programme, both paragraphs.

Deputy C. Lenihan

Only half the money was spent in the period 1996-2000.

Mr. Murphy

In fact, the situation is somewhat better than we have set out. The first point is that far more money was spent than appears on the face of it.

Deputy C. Lenihan

It does not cover substantial works, only adaptation and so forth. Is that correct?

Mr. Murphy

That is right. Buildings that require adaptation for disabled access might well be reckoned in some other part of our expenditure.

Deputy C. Lenihan

Do you have a global true figure, rather than the £5 million, of which only half was spent?

Mr. Murphy

The true figure is much larger than that. That is all I can say. It is hard to disentangle the amounts. Let me give you an example. We have just completed the disabled access works in old Leinster House on which we spent close to £1 million.

Deputy C. Lenihan

Just on access.

Mr. Murphy

Just on access in old Leinster House. The works comprise new lifts and various other facilities around the building. In the Office of Public Works building, 51-52 St. Stephen's Green, we had two buildings that were almost impenetrable to anybody with any kind of disability. We have managed to put in place a new unit - a link between the two buildings which gives full public access - at a cost of £2 million. At Farmleigh, even though there was good access on the entry front, we have added disabled access to the garden at a cost of approximately £1 million.

Deputy C. Lenihan

Is it fair to conclude that older buildings tend to be more expensive because significant alterations have to be made?

Mr. Murphy

That is absolutely right. It is not just that they are more expensive, but that the solutions are more difficult. The Office of Public Works building is a good example. It was a link building that provided access between two other buildings. It is not just a question of adapting an older building.

Deputy C. Lenihan

Can you arrive at some sort of percentage for this adaptation programme? The full spend to which you referred seemed to cover 23 buildings out of the 122 surveyed where there was an objective need. Is there a general figure for the adaptation that has occurred in public buildings to which the public has access? I presume you are giving priority to those buildings.

Mr. Murphy

We are. With regard to the 122 buildings you mentioned, we found that 42 were not capable of being put into any kind of shape for general access. There is simply nothing one could do to make them accessible. By the end of this year we will have completed 32 projects to make buildings accessible. We have ten major projects of which accessibility is a part while a further six are in planning. A total of 48 out of the 80 that can be done either have been done or will be done shortly. This does not take account of the allocation for 2002. The programme will run on. At the end of 2002 we will carry out a review of what we have been doing which will give us the basis for the future.

Deputy C. Lenihan

Has the high cost of adaptation as opposed to new build led to a change in attitude in terms of, perhaps, moving people to newer accommodation or cashing out of the older properties? It seems to be a high price to pay. It is a valid price and in line with public policy, but is there a review under way to see where we can shift offices or people from older accommodation that does not lend itself to being made accessible?

Mr. Murphy

It is certainly part of our thinking. When we are relocating people accessibility is one of the criteria we use. I can give an example. O'Connell Bridge House was a particularly difficult building to get around. It has been vacated and the staff relocated in buildings where there is better public access and access for staff. It is one of the criteria. By law all buildings must be accessible. All our new buildings, therefore, are accessible.

Deputy C. Lenihan

Is it the intention to sell the buildings that cannot be made accessible?

Mr. Murphy

In some cases we will try to dispose of them. We can also put them to particular uses, for example, non-public uses. We will get around the matter, either by disposing of the buildings or using them for non-public use.

Deputy C. Lenihan

There are 48 out of 80 projects completed. When do you hope to complete the 80?

Mr. Murphy

We will be working through the coming year when I guess we will have ten more completed. The reason for having the survey is to see where we will be then because, like in the case of O'Connell Bridge House, we might be out of some of the buildings and not have the problem. We have to look at that also.

Deputy C. Lenihan

The expectation is that most public buildings under your control will be accessible within a two or three year timeframe.

Mr. Murphy

We hope that will be the case, yes.

Deputy C. Lenihan

Is there a target date for full accessibility to public buildings under your control?

Mr. Murphy

That is what we are aiming at. I wish to distinguish between the buildings in particular need of treatment and all our buildings. The total number of our buildings is 4,000. I will not prejudge what will come out of our survey. A sum of 122 popped out of the Dublin survey to which Mr. Glavey referred, but I will not say what might pop out of the 4,000.

Deputy C. Lenihan

What is the value of those 4,000 buildings? Is that your full property portfolio?

Mr. Murphy

We use a figure close to £2 billion. There are issues concerning how one values them.

Deputy Bell

Do you agree that, in relation to the subject of Vote 10, the report is one of total failure? In January 1996 122 buildings were identified as being in need of adapting work to make them accessible to the disabled. That work commenced under the programme over four years ago in 1996. The number of buildings completed is 23. If the report concerned a commercial activity, rather than the Office of Public Works, and one read about it in a newspaper, would one not consider it an absolute failure? A total of 122 buildings were identified, yet after four years work only 23 had been completed. We are told that £5.2 million, or £42,800 per building, was spent. This means that work on the vast bulk, three quarters, of the buildings identified by the Office of Public Works either remains uncompleted or has not been started. Perhaps I am reading the report incorrectly.

I remember that on one occasion, as mayor of Drogheda, I went around the town on a wheelchair at the invitation of the local wheelchair association. By the time I had finished I had the daylights scared out of me. None of the public buildings in the town had facilities for the handicapped using wheelchairs. The local authorities then commenced to adapt footpaths and roads as planning permissions were issued. I suggest that the Office of Public Works is adapting new buildings, not necessarily those that, in many cases, have been in place since the inception of the State. It is not breaking down the programme for disabled people on the basis that buildings are totally inadequate for them. No works would have been done in Leinster House were it not for the fact that a Member of the Oireachtas used a wheelchair. Prior to that disabled people could not gain access.

The report is a total failure. The next time representatives of the Office of Public Works come before the committee it should have a better performance record. This would not stand up in the private sector where one would be out of business after a report like this.

Mr. Murphy

The Deputy is quite correct in saying that we identified 122 buildings, of which 42 could not be put right. It was not physically possible to make them accessible. Of the 80 remaining, 48 have been done. The Deputy quoted earlier figures.

Deputy Bell

Forty eight out of 122.

Mr. Murphy

No, 48 out of a possible 80. We will add to that number in the coming year. I am not saying it is a solution as this is an extremely difficult area.

The Deputy mentioned Leinster House. The Senator to whom he referred was of great help to us in showing what a wheelchair-bound person requires. We consulted deeply with him to adapt the building to his satisfaction.

As regards Drogheda, I can only speak about our own public buildings and will come back to the Deputy as to whether they are compliant.

Deputy Dennehy

I have one question that may be somewhat outside your bailiwick. Is any co-ordinated effort being made to liaise with other bodies, such as local authorities, in trying to put a programme in place? I live very near the primary school in my parish of Togher in Cork. One young student is so badly handicapped that he has to have an electric wheelchair. While a ramp has been provided into the school, there are 11 crossing points between his home and the school, none of which has been adapted for wheelchairs. Because the wheelchair is electric it cannot be lifted due to its weight, with batteries inside. Has any attempt been made to deal with such problems?

My second question is related. I am concerned about the timespan for the 80 jobs. If one was to examine the rest of the country, one would probably find at least as many situations with which to deal. Is there a pattern emerging whereby the Office of Public Works will never complete some of the buildings in question? If one was to turn up another 80 buildings that must be altered, when would you expect the works to happen? Would local builders do them or would there be a centralised effort?

I am particularly interested in the first point because I can see it occurring in other areas also. It seems to be caused by a lack of co-ordination with public authorities.

Mr. Murphy

To take the Deputy's first point, I gave a figure of ten for next year's programme, but the correct figure is 18. By the end of next year we will have 66 of the 80 buildings adapted. I am not certain that the remaining 14 are still extant. We must examine this.

The Deputy also asked how we would deal with a larger number. We have addressed this. All works are now done through a private sector firm, Richard Hurley, which does the designs and brings forward the contracts for us. We are trying to look at new ways of dealing with the matter. In so doing we hope to set an example for local authorities, but to be fair we have not had direct consultations with them. I will take the Deputy's suggestion on board because I think it is worthwhile.

Deputy Dennehy

I was going to suggest that you might take it on yourself to do so. We probably would not have reacted at all if this matter had not been raised by the national association for the disabled and my colleague, Brian Crowley, MEP. You should liaise with the Department of the Environment and Local Government and the Department of Health and Children. I presume the latter is providing wheelchairs. Since you are working at the highest executive level you might be able to get something moving in that regard.

Mr. Murphy

Yes, we certainly will. The Deputy listed some of those involved. The Department of Justice, Equality and Law Reform would also have a major input.

Deputy Dennehy

Of course.

Chairman

In 1992 you commenced your survey which was confined exclusively to buildings in Dublin. You outlined the performance vis-à-vis these buildings. In 2002 you will be commencing a new survey. There has been much legislative momentum in recent years concerning disability. Do you think it was rather remiss of the Office of Public Works not to have attempted a nationwide review long before 2002? You have allowed ten years to elapse since carrying out an initial survey which was restricted to the Dublin area. It is a bit rich that in 2002 you will be doing research to compile a nationwide profile of your buildings.

Mr. Murphy

We should move quickly on this, yes. By and large, the legislation that covers it is the Planning and Development Act, 2000. The building regulations——

Chairman

Leaving legislation aside, we have been talking for a long time about access for people with disabilities. Departments have been talking about having a certain quota of people with disabilities working in their employment. With regard to many of our buildings, regardless of whether they are in public ownership, we are preventing people with disabilities from applying for jobs on the basis that their specific structure is not compatible with requirements. In the context of a personnel profile, people with disabilities are at a serious disadvantage in that their recruitment is bound to condition a human resources department and influence its thinking if a building is not compatible with the requirements of people with disabilities. The Office of Public Works has been remiss with regard to Departments in that something has not happened long before now. If it is commencing its nationwide survey in 2002, is there a finishing date for it? The survey it started in 1992 was concluded in 1996, a four year programme. Does it have the necessary resources to carry out a quick and comprehensive study?

Mr. Murphy

Yes. We are out-sourcing the survey and the necessary resources will be available. The intention is to have the review finished before the end of 2002. You mentioned buildings outside Dublin. We did not do a survey at the time because we were in the business of decentralisation and trying to centralise all the old Government offices in the decentralised offices. These decentralised and centralised offices are compliant. We approached the outside Dublin problem in a more practical and pragmatic way. Kilkenny is a good example. We closed all the old offices and transferred the staff to Hebron Road. Portlaoise is a second example. Dundalk is another, of which I am sure the Chairman is aware. There are many more. I can go through the whole list which includes Sligo and Letterkenny. The idea was that in relation to the 22 buildings we put in place we would close the older buildings and provide full facilities in the new buildings. We did not really see the immediate requirement for this kind of review. We do see it now and will follow up on it.

Chairman

We will leave that programme for now and move to paragraph 18 which relates to the acquisition of the Battle of the Boyne site on which I ask Mr. Glavey to comment.

Mr. Glavey

This paragraph deals with the acquisition of a unique property, the site of the Battle of the Boyne, by the Office of Public Works as a matter of Government policy. The purchase was effected by the direct purchase of 70 acres for £450,000 and the purchase for £7.4 million of the share capital of the company which owned the remaining 450 acres of the site. The purchase of the company was at the behest of the vendor as it resulted in an estimated tax saving of £920,000 for the company shareholders relative to a direct sale of the lands to the Office of Public Works. The acquisition price closely resembled the valuation put on the property by the vendor's agent when account is taken of 65 acres which were subsequently excluded from the acquisition by mutual agreement of the parties.

In response to inquiries the Accounting Officer indicated, first, that purchasing 450 acres directly was never an option available to the commissioners and negotiations were for the purchase of the company. Second, the commissioners' in-house valuers put a value on the property of between £4 million and £7 million. The valuation by the vendor's agent was of no significance to the commissioners. The Accounting Officer also stated that independent consultants subsequently put a valuation of £6.5 million on the property with the specific assumption of a known special purchaser, the State, but without reflecting any additional value which the State might attribute to the acquisition of such a property in the particular circumstances. The Accounting Officer further stated that it was by no means certain that a compulsory purchase order mechanism, had it been available, would have resulted in a different price.

Deputy C. Lenihan

How did the office come to the conclusion that a compulsory purchase order mechanism would not have made much of a difference to the price of the property?

Mr. Murphy

Through our experience of the operation of the mechanism in the local authority area and our various arterial drainage programmes. In my experience, the compulsory purchase route does not yield a better price.

Deputy C. Lenihan

I presume if a purchase is made for a cultural or political purpose, depending on one's viewpoint, there is a constitutional issue about the rights of property.

Mr. Murphy

I did not want to raise that point, but the Deputy is absolutely right. There is a constitutional issue.

Deputy C. Lenihan

In other words, if the office acquires a property for cultural or political reasons, it may involve an interference with the constitutional rights of property.

Mr. Murphy

That is absolutely right. In the area where the compulsory purchase mechanism operates for local authority housing, roads and so on, there is a degree of consent among the population. One might not get the same degree of consent for cultural purchases.

Deputy C. Lenihan

What is the intention in relation to this site? We all agree with the purchase, the price seems to be fair given market comparisons and it was presumably known the State was involved and some premium would have to be paid by it for the property. What component of the price would you regard as a premium? The seller would have known the State was involved, that there was only one interested party that would purchase the property.

Mr. Murphy

In such a case there are two components, two premia to be paid, of which one is the knowledge of a special purchaser, in this case, the State, for which the premium was £500,000 or so.

Deputy C. Lenihan

The sum of £500,000 was added to the price.

Mr. Murphy

That is right.

Chairman

How was that premium arrived at?

Mr. Murphy

The valuation was between £4 million and £7 million. We would have regarded something around £6.5 million to be the price, including the premium. This was confirmed by independent valuers.

Chairman

You talked about a differential of between £6.5 million and £7 million.

Mr. Murphy

No, between £6 million and £6.5 million. This is not an exact science. The valuation falls somewhere into that bracket. That was the outcome of our independent valuation. If we had paid £6.5 million, we would have regarded £500,000 to be a premium for a special purchaser. We paid £7.8 million.

Chairman

The special purchaser being the State.

Mr. Murphy

Yes, but that would be the case for any special purchaser. If it was a neighbour or someone who wanted a site for a particular reason, that person would come under the heading of "special purchaser." The main premium involved relates to our having bought the site in particular circumstances, the ongoing peace talks in the North. We would have regarded ourselves as paying a certain premium for this element also.

Deputy C. Lenihan

Did you put a value on it?

Mr. Murphy

We put something short of £1 million on it at the time.

Deputy C. Lenihan

In other words, the timing of the purchase was a factor. Were it not for the peace process, its success and our desire to show as much good will as possible to the Unionist and loyalist population, if one had been allowed to stall the negotiations for another two or three years, as one would normally be able to do on a major purchase, if there were no other competitive bidders——

Mr. Murphy

That is absolutely right.

Deputy C. Lenihan

That is the basic reason.

Mr. Murphy

We would have been a special purchaser and would still have had to pay that premium, but if we had waited, we might well have been able to hardnose the price down. That was not an option for us.

Deputy C. Lenihan

Buying the company was guided by the procedure of making its sale tax efficient for the seller.

Mr. Murphy

I am not sure that the sale was made in a tax efficient manner. The seller still has to pay tax. The question is how much.

Chairman

He could afford it out of a profit of £5 million.

Mr. Murphy

What the vendor makes by way of profit is of no interest to us.

Chairman

It is of interest to the committee on the basis of what the Office of Public Works paid and whether it was compatible with the survey.

Mr. Murphy

If I may say so - this is what we have undertaken - the price we paid was a fair one in the circumstances. The fact that the vendor purchased the site at a good price for himself is not really a matter for us. We bought it in a particular market and at a particular time.

Chairman

Do you not see, objectively, that £5 million was a nice little killing for the vendor, given that he bought it in December 1997 for £2.7 million and sold it in August 2000 for £7.85 million?

Mr. Murphy

The way I would like to put it is that I would like to have bought my own house in 1996, rather than a year later. The change in property prices has been quite remarkable.

Chairman

Would the change have been reflected by such a difference?

Mr. Murphy

I am absolutely sure that it would not have done so. The price paid for the original, which is not really of great interest to us, was influenced by the particular circumstances of the vendor at the time, the Oldbridge estate.

Chairman

Was the Office of Public Works aware in early 1998 that planning permission for a golf club and an hotel on the land had lapsed?

Mr. Murphy

The advice we received on the valuation was that planning permission would be made available if the purchaser applied again.

Chairman

It had lapsed.

Mr. Murphy

It had technically lapsed, but the advice from our advisers was that it was still live.

Deputy C. Lenihan

I am not too interested in the golf club. We are not meant to be party political, but the change from 1996 to 1997 was obviously because Fianna Fáil had come back into power and values were going through the roof.

Chairman

We are not going to be party political.

Deputy C. Lenihan

I know. I am only joking.

Chairman

Any objective person would say that £5 million was a hefty profit to make on the property.

Deputy C. Lenihan

It was a huge appreciation. Mr. Murphy has mentioned a combination of factors and unique circumstances, such as the vendor's knowledge of the Government's desire to purchase the site for the State and changes in the property market. Would he say that the percentage increase is comparable to that in the housing market?

Mr. Murphy

It is comparable, but I would not make such a connection. I only say that it is comparable as an illustration.

Deputy C. Lenihan

There had been comparable percentage rises in the housing market during the same period.

Mr. Murphy

Yes.

Chairman

I would not take housing as a barometer.

Mr. Murphy

No.

Chairman

Land prices are a more suitable barometer, because it was mainly land that was purchased in this case.

Mr. Murphy

It was.

Chairman

The housing market is an unfair barometer to take.

Mr. Murphy

I was not using it as a barometer, but as an example. As a result of the Comptroller and Auditor General's report, I believe in our reassessment of the valuation. The valuers who worked for us on a document that is in the public domain said the value of the property when sold by the Oldbridge estate was considerably higher than the estate received for it. In other words, it was undervalued at £2.7 million. These opinions are reported in the valuation report that we have and that is in the public domain.

Deputy C. Lenihan

What is the plan for the site? Has any work been done there?

Mr. Murphy

The work has started. To use the technical term, the site has been allocated to the Department of Arts, Heritage, Gaeltacht and the Islands, which will develop it as a visitor centre. The Department has asked the Office of Public Works to start design work. The process has, therefore, started.

Deputy C. Lenihan

Is there full consultation with the Orange Order and the loyalist community in the North regarding the development of the site?

Mr. Murphy

I expect so, but I do not have that knowledge. The Department of Arts, Heritage, Gaeltacht and the Islands is dealing with the matter. I do not think we have had contact with the Orange Order yet. No, we have not had contact.

Deputy C. Lenihan

The committee should inquire as to the level of consultation. It is important that there is a strong commitment to consultation with Unionists, loyalists and the Orange Order regarding a priceless property of this kind, if a visitor centre that reflects the importance of the site is to be developed.

Deputy Bell

I am astonished by what I have heard and by the report of the Comptroller and Auditor General. The area under discussion is my patch. I have engaged in fishing, shooting and other activities in the area and know every inch of it. A maximum of £2,000 is paid for an acre of land in the area, even though it is not good agricultural land. It astonishes me that the site cost a total of £7 million.

The first thing I wish to say is that we are dealing with another Howth, another Kerry, as we examined the week before last. The Boyne project will cost the taxpayer an enormous amount of money before it is finished. At the rate it is developing, £20 million of taxpayer's money will be spent on bad agricultural land that is worth less than £2,000 an acre. The Office of Public Works should return to the committee before it enters into a contract on this project and before it spends any more money to tell us whom it is planned to employ and for what purposes.

I have a couple of very important questions. Who are the in-house valuers? Who valued the land at between £4 million and £7 million? By coincidence, their final figure was £6.5 million. How can professional valuers within the Office of Public Works say that the value of the land is between £4 million and £7 million? There is a difference of £3 million between the starting point and the finishing point.

The committee should ask for the chairman to come here to give us the names of the companies involved in the sequence of events. All we have is a report that means nothing. Who made a profit of £6 million on land that is right on my doorstep at the expense of my constituents? I want to know where it started. What was the original price paid for the land? I know the answers, but I want Mr. Murphy to tell the committee. Which company made a profit of £5 million or £6 million? On behalf of the taxpayer whose money is being spent, we should betold.

While I want the development to take place, I do not want it to end up as another Kerry or Howth, costing the taxpayer £20 million or £30 million. Where did it start? How much was the land worth at the start? Who bought the land? Who sold it? The committee wants to be told the sequence of events in order that the public will know.

Chairman

The Deputy's references to "another Kerry" relate to the Jeanie Johnston, a project discussed by the committee two weeks ago.

Mr. Murphy

Speaking of the Jeanie Johnston, the Office of Public Works managed to transport a bronze ship to the UN plaza for £1 million. I mention that in passing.

Chairman

Perhaps the Office of Public Works should have given consultancy advice to the promoters of the Jeanie Johnston.

Deputy Bell

As I was at the original sale, I know the facts.

Mr. Murphy

May I go through them? The original advice given by the office to the Government was that the price would be in the region of £7.5 million. We thought we would get the land for about that price and spent slightly more than that amount. The head of the Office of Public Works valuation office, Martin Connolly, carried out the valuation on behalf of the Office of Public Works. He is a professional valuer. We were confident enough in his valuation not to get a second opinion at the time. Since then, because of the newspaper reports, including one on Sunday, we have gone back, simply to comfort ourselves that we have not done something odd, strange or inadvertent. We got Ernst and Young to organise at arm's length a revaluation by Harrington Bannon. It has reported to us - the committee can have a copy of the report - that the valuation it would have put on it falls within the bounds we set. We set a valuation of £4 million to £7million.

Deputy Bell

That is crazy.

Mr. Murphy

The valuation of £4 million to £7 million reflects, at the lower end, a vendor and a willing purchaser on a good day with no special interest. At the upper end it reflects a special interested party. In the case of the Harrington Bannon revaluation, its bracket was £4.5 million to £6.5 million. We are absolutely happy that our first valuation was as good as they come.

Deputy Bell

I do not like to interrupt when someone is speaking because I do not like to be interrupted, but the last paragraph on page 38 states: "No reliance was placed on the vendor's valuation and it was of no significance as far as the Office of Public Works was concerned." Did the Office of Public Works pay for this or was it the case that professional staff in the Office of Public Works prepared a report and no heedwas paid to it? How much was paid for theadvice?

Mr. Murphy

It refers to the vendor's valuation, that is, McCann's, who were selling the land. We had no part in getting it. They put a higher valuation - £8.5 million - on it. If somebody is selling something and he or she says it is worth £8.5 million, I, personally, do not take any note. I would look at——

Deputy Bell

The Office of Public Works ignored it.

Mr. Murphy

We were ignoring the vendor's pitch. The vendor was looking for £8.5 million. We initially offered £4 million.

Deputy Bell

Whom were they representing?

Mr. Murphy

The vendor was the McCann family.

Deputy Bell

Which McCann family? This should be tied down.

Mr. Murphy

The family involved in Balkan Investment. That is the name of the company.

Deputy Bell

Would they be located in the northern end of the constituency of Louth?

Mr. Murphy

I do not have their address.

Deputy Bell

You are saying the McCann family——

Mr. Murphy

Yes.

Deputy Bell

——but you do not know who they are.

Chairman

I know what the Deputy is asking and the identity of the McCann family is in the public domain.

Deputy Bell

That is the reason I want Mr. Murphy to name them.

Chairman

It is in the public domain.

Deputy Bell

He should identify them. We are in public session and this is a public hearing. Mr. Murphy should identify the people about whom he is talking because we are discussing £8 million of public funds.

Mr. Murphy

I can answer the Deputy.

Deputy C. Lenihan

Are we talking about the banana people?

Chairman

Yes.

Mr. Murphy

It is Fyffes. The Deputy is absolutely right. Regarding the family names, I cannot say this is the full family or anything else, but the directors of Balkan Investment——

Deputy Bell

I thank Mr. Murphy.

Mr. Murphy

This is in the public domain in the Companies Office. They include Carl McCann, David McCann, Mary McCann, Neil Vincent McCann and Patrick McCann.

Deputy Bell

That is what I asked initially.

Mr. Murphy

If the Deputy wants the full story, that is one set of directors. The Balkan Investment company, as I understand it, holds various investments in trust. Part of that in trust is for Liam Moran and Tim Collins. This is to give the Deputy the full gamut of the people involved.

Chairman

You were confused about the Tim Collins in question. You thought it was the private secretary to the former Minister for the Environment and Local Government, Deputy Howlin.

Mr. Murphy

I have never put that on record.

Chairman

I am just asking you because it is in the newspapers. I am just asking you the question.

Mr. Murphy

I am even more fascinated because that was a chance remark made by somebody within the office that that was so, that we had made that confusion. It was not a confusion. We actually knew Tim Collins, adviser to Deputy Brendan Howlin.

Chairman

It is important that you have a chance to clarify the situation here.

Mr. Murphy

We had no need to. We were not interested in these particular trusts. We were buying from a particular company and that was it as far as we were concerned.

Deputy Bell

Was the Office of Public Works not interested in whether the taxpayer had to pay about £6 million more than the land was worth?

Mr. Murphy

What I have undertaken to the Deputy is that we have not paid a penny more than the land is worth.

Chairman

You are confusing us. An independent valuation indicated that you had probably paid £1.3 million more.

Mr. Murphy

If I may say so, as clearly and forcefully as I can, the independent valuation did not indicate that. The independent valuation gave an upper price of £6.5 million, not taking account of the particular circumstances of the North-South peace talks.

Chairman

Do you agree it is £1.3 million?

Mr. Murphy

Yes, according to that valuation.

Deputy Bell

You have answered the questions very well. We will ask you a few more when the project proceeds further regarding how many other people will rake off money from the taxpayers of the country. This is a rake off - land costing £2,000 an acre will end up costing £1 million an acre for the development.

Mr. Murphy

We will come back to it.

Deputy Dennehy

I am not privy to information regarding the quality of the land, etc, but I understand there may have been a one off chance of buying the site. I have not read much about it, but if it had not been purchased and had gone elsewhere, I am sure there would be a different story. Nevertheless, I wish to return to the mechanism used to buy the land. The Comptroller and Auditor General's report states that there was an estimated tax saving of £920,000 to the vendor because it was bought through the company. Did you say you did not think it would have been a beneficial deal for it in that regard? The Comptroller and Auditor General clearly states there was a tax saving of £920,000. That is almost £1 million.

Mr. Murphy

We do not know the ins and outs of the tax affairs of the company from which we bought it. We only needed a tax clearance certificate from it. If one likes, £920,000 is a theoretical figure. If certain things happened, then £920,000 might have been saved. We have no idea whether they did happen. We know that in buying this particular company, on the face of it - from reading the tax laws - there is still a huge tax bill for the vendor. We have no insight into its dealings with Revenue.

Deputy Dennehy

The committee takes the work of the Comptroller and Auditor General as sacrosanct. His report clearly states that "the mechanism of acquiring the land through the purchase of the company was chosen at the behest of the company's shareholders as it resulted in the tax saving of an estimated £920,000 to them, relative to the tax which would have accrued to them if the lands had been purchased directly from the company by the Office of Public Works." This is a simple statement of fact by our financial-legal adviser.

Mr. Murphy

To answer that equally simply, the land was not for sale on its own. It was the company which was for sale. This is perfectly normal and we consulted with Revenue on it. The land was held by a company, Deep River Limited, which was for sale. In the case of that sale to us, taxes will be levied. I expect the vendor will pay these taxes.

Deputy Dennehy

I do not apportion blame to the Office of Public Works because the option of purchasing the lands was not available. However, I am amazed at Mr. Murphy's reaction to the question. The Comptroller and Auditor General stated there could have been savings and I am amazed that Mr. Murphy questioned that. I appreciate the Office of Public Works did not have the option of buying on the open market but I presume Mr. Murphy will take the Comptroller and Auditor General's word that by using his methodology to purchase there was a saving in tax.

Mr. Murphy

I am sorry to take issue with the Deputy on this. This saving is a theoretical one on the assumption that the land was available to be sold independently of this company but that was not available and the taxes due from the company for the sale are still due. They are quite sizeable.

Deputy Dennehy

Mr. Murphy's argument is fascinating. Normally he is the expert on everything related to public buildings, etc. However, I would like to return to this issue at some stage with the Comptroller and Auditor General to confirm what he stated because the committee will be up to its eyes in trouble if it is dealing with theoretical statements. I acknowledge Mr. Murphy's point that the Office of Public Works could not have made the purchase directly and I do not apportion blame to him or the Office of Public Works.

Deputy M. Ahern

The average price per acre for the 520 acre estate was approximately £15,000. I do not know anything about the quality of land and so on. However, that price would not be excessive where I am from but the average price per acre of the 450 acre estate was approximately £16,500 and the average price for the 70 acre estate was £6,000. Why is there a difference between the average price per acre of those lands?

Mr. Murphy

I cannot tell the Deputy precisely why there should be such a difference between these two. I have always dealt with it as a single valuation, a single transaction. I do not know why there was that particular apportionment. It was from a separate company that we bought the second one. I cannot answer that question. If I can find out I will certainly tell the Deputy.

Chairman

Mr. Murphy, the Oldbridge estate was purchased in November 1997. When was it first indicated to you that this land was available?

Mr. Murphy

In January 1998.

Chairman

Was it purchased in November or December 1997?

Mr. Murphy

No, its purchase was not until 2000.

Chairman

I know when the Office of Public Works purchased it, but I refer to the original purchasers. Did they purchase it in December 1997?

Mr. Murphy

No, I think not. I have spoken to the original owners. They completed the sale in January 1997, the documentation in June 1997 and the completion with the new owners, the McCanns, in December 1997. The purchase process had commenced and agreement was reached in January 1997.

Chairman

I see you have been given a note.

Mr. Murphy

I am sure of my dates. I am looking for the date that we completed, which is not here, but it was early 2000. The formal transfer of the lands and company was effected on 2 August 2000.

Chairman

When did the Office of Public Works receive its first overture that the estate was available?

Mr. Murphy

In January 1998.

Chairman

Who approached the Office of Public Works? Was it the company itself?

Mr. Murphy

It was through the Taoiseach's office that we were approached first. I said February. They approached informally first and we had a formal meeting with the Taoiseach's office on 3 March 1999.

Chairman

When was the special interdepartmental committee put in place?

Mr. Murphy

The first meeting of the interdepartmental committee was on 12 March 1998.

Chairman

Everything happened rapidly at that stage.

Mr. Murphy

Yes, it did.

Chairman

There is a reference to a finder's fee. What does that mean?

Mr. Murphy

The finder's fee had nothing to do with us. That was something on the vendor's side. It has nothing whatsoever to do with us.

Chairman

Did the vendor pay the finder's fee?

Mr. Murphy

We were not involved in any finding or finder.

Chairman

What was the finder seeking?

Mr. Murphy

I have no idea.

Chairman

Was the finder seeking a client?

Mr. Murphy

I cannot even say that. I have had no dealings with a finder at any stage.

Chairman

Surely one would not pay a great deal of money to a finder unless he found something.

Mr. Murphy

One would not pay any money to the finder ever.

Chairman

It is most mysterious.

Mr. Murphy

Not on our side. There was no such approach.

Chairman

Did any finder approach the Office of Public Works to say he had found a project for the office?

Mr. Murphy

No, certainly not.

Chairman

Mr. Murphy, you said earlier that it reverts to another Government Department at this stage. Did any Government Department express reservations about purchasing this land?

Mr. Murphy

No, what has just been whispered to me is the Department of Finance but having worked there myself——

Chairman

Did the Department of Arts, Heritage, Gaeltacht and the Islands express reservations about the purchase of the lands?

Mr. Murphy

The Department of Arts, Heritage, Gaeltacht and the Islands sponsored the Government memorandum along with the Department of Foreign Affairs.

Chairman

Was the Department of Arts, Heritage, Gaeltacht and the Islands fully in favour of the project?

Mr. Murphy

Absolutely and totally. I am reminded that following that Government memorandum the Department of Finance sanctioned the purchase of the land.

Deputy Bell

Was Mr. Murphy directed by anybody to make the purchase? In other words, was he, as chairman, free to make a decision or was he directed to purchase the lands?

Mr. Murphy

The correct answer to that is that the Government asked us to.

Deputy Bell

I did not ask Mr. Murphy whether the Government asked the Office of Public Works. Was he directed to do so? Did he have an option?

Mr. Murphy

The wording is that the Government agreed in principle to the purchase of the lands and to the development of them.

Deputy Bell

So Mr. Murphy was directed to purchase the land.

Mr. Murphy

It was a Government decision. It would not be at any price. The Government would not have included a price in the decision, or limited us.

Deputy Bell

Did Mr. Murphy have the right to say "No, thank you, I am not buying that land because it is too expensive"?

Mr. Murphy

If we had found that for any reason it was too expensive and someone was looking for £20 million or £50 million for it we would have gone back to the Government at that point. However, the Government's decision agreeing in principle to the purchase of the lands and our negotiations following that arriving at a price we thought was fair and reasonable and as much as we needed.

Deputy Bell

Was it a case of the Office of Public Works purchasing the site and doing the best it could on the price?

Mr. Murphy

That is not a way that I would categorise it.

Deputy Bell

The man on the street would say that was the way it was done.

Mr. Murphy

The Government agrees with the principle. It is up to us as professionals buying land to get the best deal.

Deputy Bell

That is exactly what I said. Mr. Murphy is using different words.

Chairman

Did you ever say to the Government that it was a bad idea?

Mr. Murphy

We have always given advice to the Government as clearly as needs be.

Chairman

Always or rarely?

Mr. Murphy

Always.

Deputy M. Ahern

Did Mr. Murphy say it was a good idea?

Mr. Murphy

I do not have my briefing note so I cannot tell the committee precisely what we said to Government at that point.

Chairman

It would be interesting if you had your briefing note.

Deputy C. Lenihan

It is important that the context is correct. I am talking in the context of the Government of the day instructing the Office of Public Works, for political and other reasons, to buy a property if the price is right. However, one would have to think twice if the price was excessive. The Office of Public Works was under instructions to buy for a broader strategic political purpose rather than for the taxpayer's purpose. Is that the net effect of the circumstances surrounding the payment of the £1.5 million premium? The sum of £500,000 is for a particular circumstance and the balance for a special purchase. Does that £1.5 million reflect the pressure to buy and sell? Does it reflect the political requirement that the land would not fall into the wrong hands? Was there an innate pressure because, given the development of politics and relations on the island, the Government did not want the land to fall into the hands of neo-Nazis, for example? Stranger things have happened in the Orange movement. I presume there was a lot of pressure because of the fear that the land could fall into the wrong hands and would, therefore, be out of the Government's control.

Mr. Murphy

That point was not raised during our discussions. The Deputy's central point is right, namely, there is no doubt that the Government felt under pressure to acquire this property in the particular circumstances of the North-South talks.

Deputy C. Lenihan

Did that put pressure on the negotiations? Was there pressure to complete the purchase within a maximum period?

Mr. Murphy

I am not sure it was bound by that. As the Deputy knows, the North-South talks were a mosaic of various items. This was a peripheral item, although important to the Government.

Deputy Bell

My colleague has taken up my original question. It appears clear, as it was before this discussion started, that the Government of the day instructed the Office of Public Works to purchase the site, with which I do not have a problem. However, the landowners were aware of that instruction to the Office of Public Works and, therefore, were in a position to ask for the telephone number figure for the site. Is that correct?

Mr. Murphy

It is true the vendor would have known the Government was interested in the site. The job we have to do in the Office of Public Works is to ensure that despite this, we get a fair price. Within that context, we must still ensure the line is held as far as the taxpayer is concerned. Our advice, before the Government agreed to it in principle, was that in these circumstances we would hope to get it for £7.5 million. We got it for £7.8 million and regarded that as a good day's work.

Deputy Bell

I am going to wake up and think I was in a dream where the price of land can increase from £2,000 an acre to that type of money. I wish I was lucky to have such a site.

Deputy C. Lenihan

Is it the case that once the instruction or the decision in principle was taken and conveyed to the Office of Public Works further contact was not made by any Minister about the sale?

Mr. Murphy

None whatsoever.

Deputy C. Lenihan

Perhaps you can clarify if the negotiations with the vendors about the price were conducted by the Office of Public Works.

Mr. Murphy

It was conducted entirely by us. It is the way the Office of Public Works is set up. There are three commissioners and we have our full number. There are particular Acts which cover our activities and separate us from Ministers in the precise detail of negotiation, whether it is for purchasing land or a building contract.

Deputy C. Lenihan

There was no political or ministerial involvement at any level in the detailed commercial discussions or negotiations.

Mr. Murphy

None whatsoever.

Deputy C. Lenihan

I thank Mr. Murphy.

Chairman

Have you any further questions, Deputy Bell?

Deputy Bell

We have enough information now to establish the point we were trying to make that the taxpayer is being conned.

Chairman

Do you agree with that, Mr. Murphy?

Mr. Murphy

I do not.

Chairman

Are members happy with the level of detail we have received? Mr. Murphy said he forgot his briefing notes.

Mr. M. Ahern

Planning permission was mentioned at the beginning. Was planning permission for a golf course granted when the original buyers purchased the land?

Mr. Murphy

Planning permission was received in 1991 or 1992. I cannot be absolutely sure whether it was still in place on the date that Oldbridge Estates sold to Deep River Limited. It probably was, but, as in the advice to us, I am sure that anybody advising would say that having been given, the possibility of planning permission being renewed was a certainty. It was for a golf course, hotel and residential units.

Deputy M. Ahern

Will you give us a note on the reason for the difference in the sale prices?

Mr. Murphy

The simplest thing would be to circulate the Harrington Bannon report.

Chairman

That would be fine. The company was bought out to save capital gains tax for the client selling the property.

Mr. Murphy

I did not say that.

Chairman

I am saying it. You had to buy the company.

Mr. Murphy

We had to buy the company because it was for sale. The land came with the company.

Chairman

Yes.

Mr. Murphy

The vendors still have to pay tax.

Chairman

If they still have to pay tax, should you have bought the land directly from the vendors?

Mr. Murphy

I cannot go into the tax details. I do not know enough about the vendors' company. Detaching the land from the companies would have involved a double tax hit on them. That is as far as I know it.

Chairman

Was the Department of Finance happy with that practice or did it regard it as an unorthodox practice in order to avoid paying tax?

Mr. Murphy

The Department of Finance was happy to approve the purchase by us through a company. It is not the only property we have bought in this way.

Chairman

You have bought other shelf type companies——

Mr. Murphy

We have.

Chairman

——and bought out the companies to save the vendor paying tax.

Mr. Murphy

No. The vendor still has to pay tax on the transaction.

Chairman

The vendor still has to pay tax. Surely there is a motive in doing it for the vendor in order to save tax.

Mr. Murphy

I am absolutely sure the vendors are trying to maximise whatever return they want to get from their set of companies.

Chairman

I know.

Mr. Murphy

That would be perfectly normal. There is nothing untoward. We checked with the Revenue Commissioners at various stages to ensure we were doing the right thing and they did not have a problem with what was being done.

Chairman

Perhaps we will ask the Revenue Commissioners that question at a future date when they come before the committee. We have discussed offshore accounts and accounts in the Cayman Islands and other locations outside the country. It strikes me as an unorthodox practice, but, according to you, it is an acceptable one which has been done on many occasions.

Mr. Murphy

It has.

Chairman

The committee seems to be on a learning curve all the time. Do members feel we should conclude the Vote?

Deputy Bell

The Revenue Commissioners should be asked to come in and answer questions about revenue matters. The other Department involved should also be asked to come in to discuss company law and answer questions on this subject matter

Chairman

I understand the Revenue Commissioners are precluded from discussing specific situations.

Deputy Dennehy

There is one other slight reservation. We are also precluded from discussing policy issues. For numerous reasons outlined by Deputy C. Lenihan, it is clear there was a decision to purchase this site while it was available. If it had not been purchased, there would have been another hue and cry. It is a policy decision so I am concerned that we do not stray into that area. I am concerned about the savings of £962,000. However, the decision to purchase was a policy decision and we are precluded from delving into it.

Chairman

I fully recognise what the Deputy is saying and that is why we were trying to be diplomatic and discreet in the presentation of our questions. However, we have learned much in the process.

Deputy Dennehy

We have learned how to sell land. I would like a progress report on two issues we discussed in the past. The first is the State property portfolio. How value was assessed and so on seemed to be a shambles for years. How is the reconstruction of this issue progressing? The second is the flood relief programme. It was topical last year when Fermoy and half the country was flooded. What progress are we making in these two areas?

Mr. Murphy

Two things are happening regarding the valuation of public buildings. First, a commercial valuation is being carried out on these buildings. The other issue, on which we touched earlier, is that this involves a certain philosophy and we have not come to a conclusion on how we should deal with this issue. Our valuations in the appropriation accounts are on the basis of replacement value. It is the old compensation Acts basis for valuation.

However, there are arguments as to why certain properties should be valued at zero because they are of no, if you like, commercial value - they cannot be sold on. These would include Government Buildings, Leinster House and Dublin Castle. There are other questions regarding heritage type buildings and how one values them. We are debating this issue.

We have set out accounting principles which the Deputy may have seen. Under these principles we might be valuing some of our buildings at zero. However, we will take advice from our valuation people when we get to that point.

Deputy Dennehy

The State has a massive landbank. We have CIE back lots, hospital properties and other people are doing work outside the Office of Public Works. Thanks be to God the health services are changing quickly in terms of buying and selling. Our system is archaic and is based in the Dark Ages. I subscribe to the idea of zero valuation on, perhaps not the Rock of Cashel, but Leinster House, for example. It should be dealt with immediately. These properties cannot be sold and can be included as a separate note. However, we should get our act together regarding the other properties. How long will this commercial body take to carry out this process?

Mr. Murphy

I hope we will get this done during the coming year. The valuation we have on these buildings, other than the historic and non-saleable buildings, is on a reasonable enough basis, namely, the replacement valuation. This is one basis for valuing property. We will have a commercial valuation carried out on our buildings.

We do not have a landbank, as described by the Deputy, for local authorities and CIE. One of the problems the Office of Public Works has is that it does not have spare property. Through our management of the building maintenance service and the Government Supplies Agency we are managing to free up property. We provided a site for the National Archives in Bishop Street with a valuation of about £25 million by reducing the warehousing capacity of the Government Supplies Agency.

As regards the buildings maintenance service, we may well be able to yield another site with a similar value. However, we do not hold land. We have a site near the Four Courts on which development will shortly commence for the——

Deputy Dennehy

Who places the valuation on the property? If it is Killarney Hospital with 50 or 100 acres previously used for mental therapy for clients or patients, as they were then called, who will assess the value of such a property? I appreciate that the Valuation Office will give a price for which the Office of Public Works will look, but I thought this was the Office of Public Works's bailiwick.

Mr. Murphy

Oddly enough the Valuation Office is not part of the Office of Public Works. I would personally suggest that it should be, but that is another day's work. However, it is not.

Chairman

If it was it would put a different valuation on the Boyne site.

Mr. Murphy

We have our own valuation unit, but we use a combination of valuations carried out by our own valuers and private sector commercial valuers. In some cases we would have one check the other.

Deputy Dennehy

Is much progress being made with the flood relief programme? It is lucky it is a month or two too early for bad weather, except for the flooding which took place in Cork city last week for which we cannot blame the Office of Public Works.

Mr. Murphy

Dealing with the Atlantic is a little beyond our capacity. I have a long list of work completed and at the construction stage.

Deputy Dennehy

Chairman, can the list be circulated? Mr. Benton was very obliging last year and supplied quite an amount of information.

An excellent job was done on this building and I am not one of those who constantly criticise it. However, the front door collapsed last week. What is the explanation for that incident?

Mr. Murphy

There is no explanation; it simply should not have collapsed. It is within its guarantee period.

Deputy Dennehy

That means the specification was not high enough. In such circumstances, no matter how tough glass is, it will collapse if it shudders. That is what happened.

Mr. Murphy

I was being polite to the Deputy. We suspect the reason for the breakage was that we added, at the request of Members, a motor to the door which it was not designed for the first day.

Deputy Dennehy

That motor was only added because the door was jamming on the floor and could not be pushed. Smaller Members found it more difficult than others, but that was the reason for it. Apart from the air conditioning system, this is one of the few faults. However, 99.9% of the work is excellent.

Mr. Murphy

The door was the standard specification, but I cannot give the Deputy a clear explanation for the fact that it fell apart.

Deputy Dennehy

It was very dangerous.

Mr. Murphy

The only thing I can say is that we will put it right.

Deputy Dennehy

I would put down a marker as this involves public health and safety. This is a dangerous situation. Anyone with a basic knowledge of the material used, the shape and the stress on the material, would have seen this coming. This is one of the few issues to which I would draw attention, but I would wish to see the work carried out to a safer standard.

Mr. Murphy

I fully accept that, Deputy.

Deputy M. Ahern

Fermoy and Mallow in my constituency of which the Office of Public Works is well aware experience severe flooding every year. I understand there are plans to try and alleviate this problem. Is there any progress regarding these plans?

Mr. Murphy

Fermoy and Mallow are on our list and we have placed advertisements in the Official Journal inviting submissions for full engineering consultancy. The submissions are being received and assessed by the Office of Public Works as we speak. This is the first step in looking at that.

Deputy Durkan

Speaking of flooding, what about the flooding that took place in the House? I would have thought that a minor detail such as insurance against flooding in a new building would have been of primary concern.

Mr. Murphy

Most of the flooding the Deputy mentions was in old Leinster House. It was a blockage in one of the old internal pipes. Some of the flooding - actually, it was not flooding but wetting - occurred because windows in the atrium had not been closed. I think we are going to commission motors for these windows, which may help. However, it was certainly possible on that day to have had the windows manually closed.

Deputy Durkan

As I understand it, the flooding got into the lift shafts. That hardly came in the windows.

Mr. Murphy

Some water came in through a door on the first floor and got into the lift shaft. It did not cause damage. For safety reasons, the lift was stopped for some time at that stage. That is all. These are things that can be looked after by housekeeping locally and we will help out with any automatic procedures that we can put in place. The main flooding, however, was in old Leinster House.

Deputy Durkan

I have an office in the new Leinster House, LH 2000, and there was considerable evidence of flooding in that area as well. In August there was strong evidence of rain damage in the bowels of the building.

Mr. Murphy

Certainly not in the bowels of this particular building; none that I know of, Deputy. If there is evidence of flooding, we will certainly look at it but I do not know of any now.

Deputy Durkan

Chairman, we should seek a full report on the flooding that has taken place to date, where it has taken place and what was the cause. Maybe that could be brought to the committee's attention in the not too distant future. Would that be possible?

Mr. Murphy

I have no problem with that, Deputy. It is the subject of a parliamentary question as we speak.

Deputy Dennehy

If Deputy Durkan will allow me to interrupt, can I draw Mr. Murphy's attention to another obvious hazard? When one enters through the front door in wet weather, the area for about 20 feet beyond the door is very slippery. Once the floor gets wet it is desperately treacherous. In fact, the staff have had to use towels. Some type of carpeting will be required for 20 feet at least. If the floor becomes even slightly damp, it is like a skating rink.

Mr. Murphy

I accept that.

Deputy Durkan

It is a skid pan to get people in proper shape in preparation for the election. A sum of £468,000 was provided for hydrometric and hydrological investigations and monitoring and there was an outturn of £422,000. Is that correct?

Mr. Murphy

Yes.

Deputy Durkan

What do hydrometric and hydrological investigations and monitoring entail?

Mr. Murphy

We have a hydrological hydrometric section that measures river flow, river heights and so on and provides that information to local authorities. It does so in conjunction with the Environmental Protection Agency, who do some river measurement also, and the ESB carries out river measurement on the Shannon. The three bodies provide the information that local authorities need——

Deputy Durkan

Is that throughout the country?

Mr. Murphy

Yes.

Deputy Durkan

What does the local authority do when it gets this information from your Department? If, for example, a river has been rising steadily for the last three or four days or hours, what happens?

Mr. Murphy

It is up to the local authority to take whatever action it sees fit. One action it can take is to get in touch with us and talk to us if there is a flood problem. We will do what we can for the authority.

Deputy Durkan

During last November's famous and well documented floods in areas in my constituency, three or four days passed before there was any sign of a response. The first 48 hours passed with a deafening silence from all quarters. What procedure was followed then and what changes are likely to take place, given the hydrological and hydrometric investigations and monitoring which take place at a cost £422,000?

Mr. Murphy

The initial response to any flooding is a matter for the local authority. The Office of Public Works is involved only to the extent that a scheme for relief of flooding has to be put in place. However, we are not involved in the initial response to a flood.

Deputy Durkan

So the important work you do is alert the local authority to the possibility of flooding in the event of certain action not being taken. Is that correct?

Mr. Murphy

We certainly tell them what is the state of their local rivers. We will go a step beyond that now. We are doing a flood event map which is starting now and which will show for the last 100 or 200 years - as many years as we can include - where floods have happened. This will inform the local authorities of where the danger areas are. We cannot predict floods but we can certainly tell people where land is liable to flood.

Deputy Durkan

If lands have flooded repeatedly for the last eight or ten years, it could be assumed that in the event of a major flood those lands would flood again unless serious efforts are made to carry out drainage work. A sum of £10 million was provided for drainage and localised flood relief, design and construction works in the Estimates but only £4 million was spent. Surely the flooding we experienced a year ago would at least have warranted spending the moneys provided.

Mr. Murphy

You are right. The new projects that we have in hand have been slower to get going than we expected. However, our Kilkenny flood relief scheme is on site now. As it goes forward, we will certainly spend far more than we have here. There will not be savings in future.

Deputy Durkan

There will not be savings.

Mr. Murphy

Certainly not.

Deputy Durkan

Not of this magnitude, I hope. Less than half the money provided was spent.

Mr. Murphy

Again, in my experience with the start up of any capital project cycle of this kind, it takes a couple of years to get the cycle started. With Kilkenny on site, Clonmel going to exhibition before the end of the year and Carrick-on-Suir on site also, we will certainly, without showing our hand to the Department of Finance official at this meeting, be looking for more than the £10 million listed.

Deputy Durkan

I hope you get it because only one of a number of the flash points in my constituency is even mentioned in the final report. The problematic area stretches far beyond those points. From replies to parliamentary questions I am aware of certain action that has been taken in the meantime. I am equally aware that no action was taken about a number of flooding flashpoints. That is what worries me most of all given that more than half the budget under this heading has been left over in the 12 months to 31 December 2000.

Mr. Murphy

Within that question the Deputy did not mention the name of Hazelhatch.

Deputy Durkan

I recognise it.

Mr. Murphy

The works started in summer and are due for completion before the end of the year.

Deputy Durkan

I hope they are satisfactory. I do not wish to go on other than to emphasise that point which should be borne in mind. It is very frustrating for Members of the Oireachtas or local authority members to refer repeatedly to something that has recurred regularly, in 1986, 1992, 1994, 1995, 1996, 1999 and 2000. It goes on forever. Bad enough as that is, the credibility of public representatives would wear very thin after a little more of it. I strongly urge that whatever is needed in that area should be dealt with. We must remember that flooding is caused by something; it either happens all the time, in which case it is part of a natural flood plain, or it happens because of some impediment in the drainage system that should be addressed. There are more impediments than ever before due to a lack of attention to the basic elements of arterial drainage.

Deputy Bell

The nearest flooding area to me was the River Nanny in Duleek, County Meath, on the southern side of Drogheda, on which a large amount of money had to be spent. I was amazed that Meath County Council granted substantial planning permission to build houses on the bank of a river which, it was well known, was going to flood. I pass the area on my way to and from Leinster House. I know the Office of Public Works did a very good job because I had to pass through the floods many times. How come, however, there is no co-ordination between the Office of Public Works and local authorities in granting planning permission to build houses on land that they know in advance will flood? Millions of pounds then have to be spent in rectifying it. The solution would be, initially, to refuse planning permission until the flooding problem is dealt with by the county council or, better still, by the developer who will make a profit from building the houses. The company concerned should make a contribution to the Office of Public Works and the county council in order to provide for the necessary development work to stop flooding before planning permission is granted.

Mr. Murphy

I fully agree with the Deputy on that point. We do not have a power of direction or sanction on local authorities in this matter with which we deal through information provided by the hydrometric section and flood event mapping. It is then down to the local authority, but I share the Deputy's dismay. Deputy Durkan also said the number of obstacles appearing in flood plains with full planning permission is quite remarkable.

In the past week our hydrometric section received the ISO 9000 award. It is the first technical, professional section within the public service to receive it. It follows the ISO received by the project management section within the Office of Public Works, which was also the first administrative unit within the public service to get such an award. I simply mention it in passing.

Deputy Durkan

While I congratulate your department, I hope the award does not float away.

Deputy Bell

Does Mr. Murphy's department have a list of priority rivers that overflow at particular times when it rains for a few days or week? Does he have a priority list which indicates that the River Lee will flood at location X at such and such a time every year? If so, why can he not work out a programme to deal with such flooding? The flooding in Clonmel continued for years before something was done about it. Will Mr. Murphy present the committee with such a priority list? Whether the work is done by the Office of Public Works or tendered out to private contractors, the money should be spent on eliminating those flashpoint areas.

Mr. Murphy

I have no problem, Chairman, in giving you, not just the worklist and the projects coming up, but also our full priority list which I will circulate.

Deputy Bell

I would be thankful for that. If we received such a list, we would be able to monitor the progress, or lack of it, that the Office of Public Works is making.

Mr. Murphy

Progress, I hope.

Deputy Bell

Progress.

Deputy C. Lenihan

On page 75, section 17 refers to new works, alterations and additions, that is, new buildings and major items of expenditure. The asylum seekers programme had a provisional estimate of £51,400,000, but the actual outturn was £12 million. What is the reason for such a huge disparity? Are we building less accommodation or have the numbers abated?

Mr. Murphy

Would the Deputy bear with me for one moment?

Deputy C. Lenihan

Sure.

Mr. Murphy

It was for new works. In fact, the work we did during the year was essentially on mobile homes, prefabricated units, and some alterations to accommodation that the Department of Justice, Equality and Law Reform took on. We did not go into the building end of things during the year. We provided accommodation in a different way.

Deputy C. Lenihan

When you say that accommodation was provided in a different way, can you explain what you mean? Are we talking about Mosney?

Mr. Murphy

Mosney was certainly one. We did some minor work at Mosney which was rented rather than buying or building anything.

Deputy C. Lenihan

Prefabricated units are being put in place.

Mr. Murphy

Absolutely.

Deputy C. Lenihan

If the figure is £51 million versus £12 million, was the original intention that there would be newly built accommodation?

Mr. Murphy

Prefabricated accommodation was the initial intention. I am told that the amounts are much higher than the £12 million quoted by the Deputy.

Deputy C. Lenihan

Right.

Mr. Murphy

The total amount comes under the purchasing heading. We bought things like mobile homes and sites. That comes to £22 million.

Deputy C. Lenihan

You add another £10 million for purchases to the figure of £12 million. Is that right?

Mr. Murphy

Yes, absolutely right.

Deputy C. Lenihan

That is for purchasing the physical prefabricated building.

Mr. Murphy

Yes, exactly that.

Deputy C. Lenihan

Of what does the figure of £12 million reflect the cost?

Mr. Murphy

Refurbishment and fitting out.

Deputy C. Lenihan

It also refers to "new works."

Mr. Murphy

The figure of £12 million accounts for a combination of the refurbishment of existing or rented accommodation and the purchase of mobile homes in Magee Barracks, Kildare for 400 asylum seekers; in Ballymullen, Tralee, for 200, and in Athlone where we have capacity for 400.

Deputy C. Lenihan

That accounts for the figure of £12 million. Is the additional £10 million for site purchase or rental?

Mr. Murphy

It is for site and mobile home purchase.

Deputy C. Lenihan

Are we saying that the barracks solution, with mobile homes or impermanent prefabricated accommodation, has obviated the need for fresh concrete construction of some kind?

Mr. Murphy

Yes.

Deputy C. Lenihan

In other words, you are suggesting a saving on the Estimate.

Mr. Murphy

I would not call it a saving in that sense. The Government's aim was to provide a certain number of spaces and we were provided with funds initially to allow us to provide them in the best possible way. The Government would not have left us short. We have managed to provide these spaces, but in a slightly different way from our original intentions.

Deputy C. Lenihan

Has the requirement been met?

Mr. Murphy

Yes.

Deputy C. Lenihan

Over a two year period.

Mr. Murphy

Yes, but it is a growing requirement. It is not one that is static.

Deputy C. Lenihan

The difference between the outturn and the Estimate does not reflect the increased arrival of immigrants or declining numbers.

Mr. Murphy

No. It simply reflects the method of provision of accommodation. We are getting bed spaces for around £15,000 in the manner in which we are doing it now whereas if we were doing it through building or a stronger form of prefabrication, we would be talking double that price.

Deputy C. Lenihan

You said this is an ongoing need. Is it expected that next year it will be a figure greater than the £12 million outturn or——

Mr. Murphy

I hope not. We will take a different tack again next year and may lease sites in future. In other words, instead of trying to buy a site, put mobile homes on it and then get somebody to run it, next year we will go for a full leasing arrangement whereby the person leasing the site to us will provide the site, buildings and services. There is one site of this type at Balseskin, County Dublin, which is in progress.

Deputy C. Lenihan

What would have been the alternative? Hard buildings or——

Mr. Murphy

We were thinking of some form of prefabricated buildings or buying buildings. We spent money on purchasing. I confused the Deputy with the sums of £12 million and £22 million. The figure of £12 million was for the three sites with mobile homes and fit-outs. We spent £22 million on the purchases of new buildings, the Parnell West Hotel——

Deputy C. Lenihan

On what?

Mr. Murphy

The Parnell West Hotel.

Deputy C. Lenihan

The total cost to the State, in building terms, of the refugee-asylum seeker programme is £34 million.

Mr. Murphy

The Deputy is correct, £34 million.

Deputy C. Lenihan

There are no additional costs in the books not reflected in that figure.

Mr. Murphy

There are. These are Office of Public Works figures. The Department of Justice, Equality and Law Reform would have its set of figures.

Deputy C. Lenihan

When I say set of figures, this is the full cost of the physical accommodation——

Mr. Murphy

No. The Department of Justice, Equality and Law Reform would have to pay rent for various accommodation.

Deputy C. Lenihan

It would rent directly. Does the Department go through the office in respect of this?

Mr. Murphy

We vet the accommodation under certain headings, but do not deal with it, nor do we pay for it.

Chairman

That could also be substantial, could it not?

Mr. Murphy

It could be very substantial, yes.

Deputy C. Lenihan

Is there any way you could provide us with that information or co-ordinate with the other Departments involved to get a final figure for the cost of the accommodation? I know it is not his responsibility in a sense——

Mr. Murphy

If that question was routed through the Department of Justice, Equality and Law Reform and its agency, the RIA, we would be more than happy to put our piece into it and give the committee the full picture because in speaking to us here, it is getting only part of it.

Deputy C. Lenihan

Yes.

Chairman

We will have representatives of the Department of Justice, Equality and Law Reform in here early in the new year when we can request that information.

Deputy C. Lenihan

Could we request it in advance to ascertain the accommodation costs?

Chairman

We can.

Deputy Rabbitte

Apologies, Chairman, I was attending other meetings. I want to ask two questions and ask the Chairman to stop me if they have been asked already. I want to ask about the refurbishment and so on of Garda stations and the figure provided for this. Does it include the station at Tallaght? All politics is local.

Mr. Murphy

Yes. The refurbishment of Tallaght Garda Station is at planning stage.

Deputy Rabbitte

It has been at planning stage for about five years. It will be some plan.

Mr. Murphy

The giving of priority, the spending of money and the doing of projects, is at the behest of the Department of Justice, Equality and Law Reform. We have a liaison committee with the Department which, along with the Garda housing officer, dictates the pace of work at the various stations.

Deputy Rabbitte

When we ask the Department of Justice, Equality and Law Reform about this it states the Office of Public Works's ability to deliver dictates the pace of the work. It is a cause of some worry that the divisional status allocated to Tallaght Garda station cannot be implemented because we cannot house gardaí. It is, effectively, a substation of Crumlin Garda station. The superintendent cannot take up residence in Tallaght. This is a serious matter.

Mr. Murphy

There is no doubt that there is good potential on the Tallaght site, which we would like to exploit. It is disingenuous of the Department of Justice, Equality and Law Reform to state our delivery rate has a bearing on it. We spend every penny of it's allocation, and more, according to its requirements. If there is anything that can be done to ensure the Tallaght site is exploited to its potential, we will do it.

Deputy Rabbitte

Chairman, I do not want to labour the point, but Mr. Murphy is right. It is an immensely valuable site and appears it could be developed in a fashion that produces revenue as well cost the State money. I would be obliged if he would talk to the Department of Justice, Equality and Law Reform about it.

May I ask about the outturn for Abbotstown, the relocation of the Department of Agriculture, Food and Rural Development? Was there any provision in the Estimates for this?

Mr. Murphy

Abbotstown comes within subhead E in the ordinary way, that is, new works and buildings. We did not put anything in at the start of the year. We spent £2.5 million on planning and development plans during 2000.

Deputy Rabbitte

A total of £2.5 million.

Mr. Murphy

Yes.

Deputy Rabbitte

Who bears the cost of the relocation? Is it the Department of Agriculture, Food and Rural Development?

Mr. Murphy

No, we will bear the cost from the Office of Public Works Vote for physical facilities at Backweston.

Deputy Rabbitte

What do you estimate that will turn out to be?

Mr. Murphy

Let me be very careful. The cost of the relocation of the State laboratory and offices of the Department of Agriculture, Food and Rural Development is £157 million.

Chairman

£157 million?

Mr. Murphy

£157 million, yes.

Chairman

That is the cost of having to relocate.

Mr. Murphy

I think the word "relocate" is a misnomer. I do not know if Deputies have been to Abbotstown to see the laboratories there. The frank fact of the matter is that instead of laboratories, we have something that would not qualify for accreditation in any country in the world as the facilities are not of the standard required. The idea of the Backweston relocation is to provide a standard of laboratory for our agriculture industry that will have world accreditation attached. We simply do not have that at present.

Deputy Rabbitte

Is the estimate of £157 million related to the construction and provision of the physical plant? Does it include the purchase cost of the land?

Mr. Murphy

It does not include the purchase cost of the land. We are using part of the old Backweston farm, where seed testing was carried out by the Department of Agriculture, Food and Rural Development.

Deputy Rabbitte

Will the expenditure for this year bear the brunt of that, or was it borne last year?

Mr. Murphy

Building work at Backweston will start in 2002 and will continue for about three years. We are in the planning stage at the moment. Planning permission has been received for the development and approval has been received from the Department of Finance to go to tender, which will happen in the next four or five weeks.

Deputy Rabbitte

Can Mr. Murphy refresh my memory? Was a new building constructed in Abbotstown a few years ago to provide some of the facilities that have been mentioned?

Mr. Murphy

For many years, ad hoc work has been carried out in patches at Abbotstown. One of the patching jobs was under way when the decision to relocate was made. The cost of stopping that job was about £800,000.

Deputy Rabbitte

It cost £800,000 to stop it.

Mr. Murphy

Yes.

Deputy Rabbitte

Does that mean that £800,000 had been spent on it?

Mr. Murphy

I apologise for the correction, but the figure may have been around £600,000, which represented the cost of bringing a contract to an end in Abbotstown.

Deputy Rabbitte

I do not suppose that it is in his domain, but does Mr. Murphy agree that the Department of Agriculture, Food and Rural Development did not demonstrate the best planning and foresight when it put up buildings at great cost, only for them to have to be taken down?

Mr. Murphy

While planning and foresight were not apparent, what has come out of this is the prospect that our laboratories will match an international standard.

Deputy Rabbitte

When will the main bill be paid for Farmleigh, which is a different kind of laboratory? I think provision was made for £6 million in the Estimate, but a cost of only £3.5 million was incurred.

Mr. Murphy

Most of the bills for Farmleigh will be paid this year. The main contract there was for £14.72 million, but the project did not cost that much. In addition to the main contract, other work was carried out in the grounds of Farmleigh for £2 million.

Deputy Rabbitte

Finally, may I ask about the health and safety programme? While £2.5 million was provided, less than £1 million was expended. Can Mr. Murphy remind us what the health and safety programme is? Does it relate to the physical conduct of the work of the office?

Mr. Murphy

No. The main element we are dealing with under health and safety at the moment is the asbestos removal programme. It is a health and safety programme, relevant to the whole Civil Service. We are also working for the Department of Education and Science on schools, a programme that has started in the past year and which will progress for another four years. The Office of Public Works is surveying properties known or likely to contain asbestos. Asbestos will be removed from such properties first. We will progress onto less likely buildings, such as post-1980 buildings, where, in theory, there should not be asbestos. Some of the expenditure involved is quite minor. The bill for schools was just under £7 million at the end of last year. The Office of Public Works has spent just over £1.7 million on Government offices and so on.

Deputy Rabbitte

Can I take it from the provision that greater expenditure was anticipated?

Mr. Murphy

I must check my figures. The Office of Public Works had anticipated greater expenditure. Less money than expected is being taken from the Office of Public Works Vote and more is being taken from the Vote of the Department of Education and Science.

Deputy Rabbitte

Was there not a problem in Leinster House?

Mr. Murphy

There was indeed. It is a problem we keep coming across. We thought we had removed asbestos from Leinster House in 1986, but when we came to do some work on Leinster House 2000 and on the older building we found that the work had not been done to the certified standard. We had to work to remove asbestos again. The Office of Public Works believes that Leinster House is now free of asbestos.

Deputy Rabbitte

It is not free of other possible contagions, however.

Mr. Murphy

I cannot comment on that.

Chairman

Before we leave this matter, may I ask Mr. Murphy when the Office of Public Works became aware of the dangers of asbestos, including the likely health problems of asbestosis?

Mr. Murphy

I do not want to be inaccurate on this matter. I would prefer to return to my files to be absolutely clear on the dates. There are court cases on the matter at the moment. I can communicate the dates to Deputies at a later date.

Chairman

The reason I ask is because an Office of Public Works information briefing on the dangers of asbestos was first held in August 1999. Accordingly, I wonder if the Office of Public Works first became aware of the dangers around that time. A settlement of £58,000 was recently made with a person who came into contact with asbestos in the basement of Leinster House. The case was recently publicised in the newspapers. Has there been a quantification of the level of exposure vis-à-vis asbestos? How many people are likely to have been exposed to asbestos?

Mr. Murphy

The Office of Public Works has examined the matter. It was aware of the dangers before the date that was mentioned, hence the type of work we were undertaking in Leinster House and elsewhere to remove asbestos, the dangers of which have been more emphasised in recent years. I would not like to speculate on the exposure of the State, but already 35 claims have been initiated against us. We have settled six cases so far. The oddity of this is that the awards and settlements, by and large, have been given, not on the basis of any illness proved, but on the basis of anger and anxiety.

Another figure that might be of use to the committee is that of the buildings we have surveyed so far, the earlier buildings and the ones likely to have asbestos, 30% have turned out to have asbestos in them.

Chairman

You mentioned the Department of Education and Science. I realise we are discussing people who probably work in various Government buildings, etc, and their level of exposure. Would there have been a level of exposure to pupils attending the schools if there is such priority with regard to asbestos in educational establishments?

Mr. Murphy

We would put schools first, yes.

Chairman

I accept that entirely. My point is that in putting it first, there was a recognition that there was a specific problem.

Mr. Murphy

Yes.

Chairman

If a person in the basement of Leinster House is exposed to the risk of asbestosis, would there be any risk to pupils in educational establishments where the Office of Public Works would be extracting asbestos?

Mr. Murphy

My answer is "No," not in the same way. The basement of Leinster House had loose asbestos in it at the time. Most of the asbestos in schools is locked into tiles, such as floor and roof tiles. It does not become in any way dangerous until something happens to it.

Chairman

You are aware that in many cases in the past, such as in housing, asbestos was specified as a fire retardant

Mr. Murphy

Absolutely.

Chairman

I think it is even in my garage.

Mr. Murphy

Kitchens and cookers had it.

Chairman

Thank you. The committee has exhausted Votes 10 and 44 both of which we will leave open on the basis that Mr. Murphy has promised to furnish details of flood relief works. The committee would also like to discuss Vote 10 regarding the Boyne Valley project. I am not pre-empting what will emerge, but it would give us a chance to discuss it in private and come back to the issue, if necessary, before closing it at a later date.

A commitment was given vis-à-vis works in Leinster House that a comprehensive survey of snags relating to the project would be carried out. As several members mentioned it today, we will give the Office of Public Works some time to consider what remedial action should be taken. One concern I have about the committee using this room is that often more than one body is due to appear at a session. It disturbs me that delegations often wait outside because it is more private rather than use the waiting room which is very small and claustrophobic. People can also hear what is happening in the committee room. Matters such as this still need attention in terms of creating a sound barrier, etc.

I thank Mr. Murphy and members of the committee for their contributions. The committee will not resume as scheduled next Tuesday, but on Thursday, 1 November 2001 at 1 p.m. when we will discuss the 2000 annual report of the Comptroller and Auditor General and Appropriation Accounts for the Department of Social, Community and Family Affairs.

The witnesses withdrew.

The committee adjourned at 4.25 p.m. until1 p.m. on Thursday, 1 November 2001.