Dáil Éireann debate -
Thursday, 3 Nov 1994

Vol. 446 No. 7

Adjournment Debate. - Semi-State Bodies Property Disposal Procedures.

Mr. E. Kenny

I thank you, Sir, for the opportunity to raise this matter on the Adjournment. It was brought to my attention by Deputy Allen in the context of the predecessor of the present Minister for Transport, Energy and Communication, Deputy Cowen, who introduced a ministerial policy directive to all State bodies in 1992. It arises specifically from the sale last month of a railway yard by CIE at Horgan's Quay in Cork. It would appear that valuable yard was sold privately by CIE to a developer despite an obligation on the company to sell by tender or auction. I would like the Minister to deal with four specific points and I thank him for coming into the House to reply to this matter.

Why did CIE sell a site comprising railway tracks and platforms when the 1950 and 1987 Transport Acts explicitly state that such track can only be sold to adjacent landowners or by public auction or tender? Why did CIE ignore the 1992 guidelines for State bodies which explicitly state that competitive tendering should be normal procedure in State bodies, save in exceptional circumstances? It is not good enough for an anonymous CIE spokesman to say that those guidelines only apply to the purchase of goods by State companies. The principle is always the same, namely, that State companies should get maximum value for taxpayers' money whether buying or selling property or other goods.

What, if any, was the Taoiseach's personal involvement in that deal? I understand that a local Fianna Fáil Deputy is on record as praising the Taoiseach's hands-on approach to the sale. What does that mean? If the Taoiseach was involved in the sale that would amount to political interference and if he was not involved the Fianna Fáil Deputy concerned, who commended the Taoiseach's hands-on approach, should deny any such involvement and clarify the position.

As CIE knew that at least two developers were interested in acquiring that site why was one of those excluded from tendering or not told the site was on the market? As the Minister is aware, if two potential buyers emerge when selling one's home the best price will be obtained through auction or tender. Why did CIE ignore basic common and commercial sense in regard to that sale? There has been a cloud of confusion over the sale of that CIE yard and I would like the Minister to deal with the specific points I raised.

Minister for Transport, Energy and Communications (Mr. Cowen)

The guidelines to which the Deputy referred were issued to all commercial semiState bodies by their respective Ministers in the course of 1992. The guidelines include a requirement that each body confirm to the relevant Minister, on an annual basis, that they are being fully implemented. I have received the necessary assurances from the chairman of CIE in this regard.

The guidelines deal generally with the proper conduct of the business of commercial State bodies and the proper control of functions exercised by the boards of such bodies. While the guidelines deal specifically with competitive tendering procedures to be followed by State bodies when placing significant contracts for construction work and for the purchase of goods and services, as opposed to the disposal of assets by State bodies, the general thrust of the guidelines makes it clear that in all of their commercial dealings, these bodies are expected to follow procedures which will optimise the interests of the shareholder, in other words, the taxpayer.

In relation to the property to which the Deputy referred, perhaps I should first indicate the statutory position. In the case of land which becomes surplus to requirements as a direct result of the formal process of abandonment of railway lines, there are specific procedures laid down in the Transport Acts for the disposal of such land. However, the property in question at Kent Railway Station in Cork does not fall into that category. More generally, the position is that under the Transport Acts, the board of CIE may dispose, whether absolutely or for a term of years or for any lesser period, of any property which in the opinion of the board is not required by it for the discharge of its duties. In other words, disposal of property is a matter for the board of the CIE Group and not the Minister for Transport, Energy and Communications.

I have been assured by CIE that from its point of view all appropriate steps to ensure optimisation of the realisable value of assets have been followed in the case of the property in Cork. My Department is currently in contact with the CIE Group on the details of those steps.

The Dáil adjourned at 5 p.m. until 2.30 p.m. on Tuesday, 15 November 1994.