Dáil Éireann debate -
Tuesday, 10 Oct 1995

Vol. 456 No. 6

Report of Task Force on State-Sponsored Bodies: Statements.

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

I welcome this opportunity to place before the Dáil today the facts surrounding a number of important issues which have been brought to the attention of the public in recent weeks. It is unfortunate that some of these issues have been misinterpreted and that my intentions have been misrepresented, but I now intend to set the record straight on both counts.

In my speech today, I will set some events of the past few months in their proper context so this House and the public can clearly see what is important and what is not. I will give details of some questionable activities affecting the sale of assets in the semi-State sector and inform the House about the findings and recommendations of the task force.

When I inherited this portfolio I discovered an airline maintenance company on the brink of collapse, a peat company overwhelmed by debt, a transport company where the staff was totally demoralised, a postal service with no strategic direction—

Mr. Dempsey

On a point of Order, could we please have a copy of the Minister's script? It is a normal courtesy.

Mr. Lowry

That is not my prerogative.

(Interruptions.)

Mr. Lowry

——and electricity and telephone companies which had not been given a clear mandate for the future. I have confronted and tackled these problems in a determined and decisive manner. My policy is to ensure the long term future of these companies by facilitating changed management so that they will be able to grow in an increasingly competitive environment.

The campaign which has been waged against me has been based fundamentally on words I did not use and actions which have been deliberately distorted. It is nothing less than an attempt to drive a wedge between this Government and the State companies under my aegis. This campaign is wrong and it will fail.

I fully support the State sector.

Mr. Dempsey

The Minister had better speak to his own spin doctors.

Mr. Lowry

I want these companies to develop in a viable manner. I want them to realise their full potential for stimulating growth in this economy. I want them to provide good careers and sustainable jobs for the people who work in the sector. Those people, chairmen, board members and notably, staff, through their diligence and endeavours, have contributed enormously to the wealth of this nation.

Dr. Woods

It is only lately the Minister discovered it.

Mr. Lowry

As Minister, I want to increase the competitiveness of the commercial State companies, to improve quality and broaden the range of services available to the consumer and to provide value for money and perhaps, most importantly for the future, to position these sectors strategically so they can deliver superior performance in a future of unprecedented change.

Since I became Minister, this Government has introduced a comprehensive, integrated approach across the whole range of transport, energy and communications. My strategy emphasises competitive pricing, customer focus, performance measurement, forward planning and effective management of change. Within the overall strategy, the issue of good corporate governance and good management practice for the commercial State companies within my remit is central. This includes two areas of particular relevance to us today, procurement and asset disposal.

Best practice in those areas is founded on two key principles; first, to get the best possible value and second, to allow all qualified contenders to compete for business. The two are linked; getting the best value depends on open competition and without competition, we cannot be sure we have got the best value.

This is particularly important in the State sector where enterprises are publicly owned and where there is an extra responsibility to give all those qualified the opportunity to compete. There must not be any room for favouritism or golden circles. This is precisely why for some years now formal guidelines have been laid down for procurement practices.

I remind the House that there has always been a certain amount of scepticism as to whether these principles are being fully applied in the public sector. As recently as last August, Deputy Harney stated on radio that one only has to look at very significant contracts awarded in this State over the past ten or 15 years, and to look at the political association of some of the companies involved, to see that the system is not satisfactory, even though new tendering procedures were introduced for the State sector some years ago. It is interesting that Deputy Harney should have got from her network of contacts exactly the same feeling as I received from those who have indicated to me that they believe a cosy cartel operates in the State sector. Many people feel excluded from State business for reasons other than price and quality.

Contrary to the impression given by the Opposition, I did not dig for any dirt on any file since I took over as Minister, but I regret to advise the House that it was brought to my attention that the two best practice principles which I have outlined have not been fully observed in the recent past in two of the commercial State companies for which I have responsibility.

The following example led directly to my decision to set up the task force to review the controls and procedures governing procurement and sale of assets.

In 1992, following a competitive tendering process. Bord Gáis appointed a firm of architects for a £1.6 million refurbishment of its headquarters at Little Island. The company was subsequently approached by a neighbouring firm in Little Island to sell its existing headquarters there. Bord Gáis agreed to do this in June 1994 and in November 1994, decided to consolidate all its Cork based activities at its existing Albert Road location in the city.

In April this year, the board decided to extend the appointment of the architects originally appointed for the refurbishment of the Little Island premises to undertake the necessary design work relating to Albert Road site. Even though the new project is three times the size of the original project, the board decided to extend the architectual contract without competitive bidding, saying that it did so to meet the timescale set by the prospective purchaser of the Little Island complex. This deal was meant to be concluded by August last.

While I acknowledged that the board's decision of April was broadly in accordance with the guidelines for State bodies on competitive tendering, my clear preference would have been for BGE to have gone to tender for the revised and much expanded project at Albert Road. This project was sufficiently different in scale and nature to warrant such an approach.

On 2 June 1995, I met with the Bord Gáis chairman in the company of the Minister of State at the Department of Transport, Energy and Communications, Deputy Stagg, and made it clear that I was not happy with what had happened. I had also asked my officials to review the Bord Gáis case in the light of the guidelines for State companies. It informed me, after a review, that the guidelines, in fact, were silent on the issue of asset disposal.

It was on 2 June 1995, that I announced publicly my intention to conduct a full review of procurement and tendering in the commercial State companies for which I have responsibility. I ask the House to note that date; it was 2 June 1995. I am pleased that since my meeting with the chairman, Bord Gáis has announced strict new procedures in relation to property disposals, property valuations and property consultancy. Despite the original apparent urgency, the deal has not yet been done for the Little Island property and no decision will be taken by the prospective purchaser until November of this year. This directly contradicts the reasons cited by the board for not putting the architectural contract out to tender in April last. Speed, it seems, is no longer of the essence. In line with my earlier expressed preference for competitive tendering. I have asked the board to review those transactions and notably the continuation of the architectural contract and to report back to me in the matter.

Meanwhile, another disturbing incident was brought to my attention. This matter involved CIE. The specific case I want to look at has to do with the sale of land owned by CIE in Cork and is a vivid illustration of what has been described as a cosy cartel.

I am referring to the sale of CIE-owned land at Horgan's Quay in Cork. The land in question was a strategic three acre site at Horgan's Quay forming part of the Kent Railway Station. It is close to Cork city centre with excellent road frontage. This site has long been regarded as a valuable piece of property and has attracted attention from potential purchasers over a ten year period. CIE's own property consultants advised as recently as May 1994: "this is a very important site which should appreciate substantially in value over the next 20 years".

There were two firm inquiries about the sale of the Horgan's Quay site from the Cork Harbour Commissioners between 1983 and 1993. No deal was done because, according to CIE, the site was considered to be of strategic importance to the company's operations. There were also other inquiries about land at Kent Station from other substantial companies.

On 22 July 1994, just three weeks after Dermot O'Leary was appointed chairman of CIE, Mr. Owen O'Callaghan of O'Callaghan Properties (Ltd) phoned CIE's property manager and said that he was interested in acquiring property at Horgan's Quay. On 13 October, less than three months after this approach, the board of CIE approved the sale of the property to O'Callaghan Properties. Given the ten years of inactivity which had preceded this sale the speed with which this deal was completed is nothing short of remarkable.

Mr. D. Ahern

Like Deputy Coveney's phone call. The Minister has some neck.

Mr. Lowry

The following facts are drawn from a report prepared by accountants Craig Gardner on behalf of CIE and submitted to the company on 28 August this year. It is a report, incidentally, which in my view raises more questions than it answers. The report concludes that there has been no breach of CIE's procedures in relation to the disposal of the Horgan's Quay site. This conclusion clearly raises a major question mark over the effectiveness of the procedures which operated in CIE at the time.

In 1986 the CIE board adopted a policy of more active management of the group's property assets in order to maximise their return to the company. Central to this was the formation of a property sub-committee, chaired by the chairman of CIE and comprising other CIE directors and executives as well as a number of outside property experts. The property sub-committee was very much involved in considering the development of Kent Station. The Craig Gardner report shows that it was mentioned at committee meetings in April and October 1992, in March, April, June, September and November 1993 and in February, March, April, May and July 1994.

However, just three months after the appointment of Mr. Dermot O'Leary as CIE chairman the property was sold without any reference to the property sub-committee for its advice. Mr. O'Leary would have been aware of the role and activities of the property sub-committee. He was, after all, a board member since his appointment by the then Minister, Deputy Brennan. A number of questions arise in relation to the development of this property and its eventual sale in September 1994, to O'Callaghan (Properties) Ltd.

The report shows that a firm of estate agents and valuers retained to provide professional advice in relation to Horgan's Quay recommended in May 1994: "that development proposals for a Joint Venture Development be sought on the basis of an open brief... that this would yield the optimum value of the site and the optimum return over a long term to CIE". They also advised that: "in order to maximise value, it would be necessary to expose the site to the market in a wide ranging manner, emphasising all the benefits". Indeed, they suggested that the site could attract overseas interest. None of this was done. This professional advice was conveniently ignored.

The report shows that CIE did not keep any interest in the Horgan's Quay site even though the estate agents were of the view that the company should: "retain an on-going equity in what is a very important site which should increase substantially in value over the next 20 years". It is clear, given the level of interest in the site and the views of the estate agents, that this property should have been advertised widely with a view to achieving the maximum return for CIE and the taxpayers. This was the stated intention of the CIE board when it decided to adopt a more aggressive attitude towards its property portfolio in 1986.

Instead, as I understand from the Craig Gardner report, on the basis of one phone call, O'Callaghan (Properties) Ltd. found itself on a fast track, unlike other would-be buyers who were shunted off into the sidings. Others who had expressed an interest in the site were ignored.

Mr. D. Ahern

The former Minister, Deputy Coveney, tried that.

Mr. Lowry

Let us look in more detail at the property sub-committee. The report notes that the property sub-committee, "performed a useful oversight role and allowed independent property expertise to be brought to bear in a complex and specialised area". The report shows that the property sub-committee of CIE, at a meeting held on 11 July 1994, considered the development of Cork station and Horgan's Quay to be a category 3 project.

A category 3 project is one which has a long term development time frame. Yet, just 11 days after the meeting and following the approach from O'Callaghan (Properties) Ltd., the project was, without any explanation, catapulted into category 1 status, which means it was to be developed or disposed of within one year. It was sold shortly afterwards without any reference to the property sub-committee.

The report shows that papers prepared for the September 1994 meeting of the property sub-committee indicated that the proposed development of Horgan's Quay was being examined as a joint venture. In late September 1994 the secretary of CIE had to consult with the acting chief executive of CIE in order to get clearance to put the O'Callaghan (Properties) Ltd. proposal before the October board meeting. He did this because it was no longer possible to bring the matter before the property sub-committee as the committee had been disbanded by Dermot O'Leary shortly before this.

Mr. Creed

Who appointed him?

Mr. Lowry

The report shows that the last meeting of the property sub-committee took place on 11 July, just 11 days after Mr. O'Leary was appointed chairman of CIE. No further meetings were ever held, despite papers being prepared for the abandoned September meeting. The report notes that there is no record of the precise date of Mr. O'Leary's decision but concludes that it was in late September.

Mr. O'Leary's decision to disband the property sub-committee was not communicated to the CIE board until its meeting of 2 November 1994. I quote from the relevant CIE board minute: "The Chairman said that he wished to re-appraise the organisational process leading to approval of property transactions by the board. He said the current system was somewhat bureaucratic and over-elaborative". The board then approved a decision which had actually been taken unilaterally by the chairman the previous September.

What was the role of the board? CIE board papers clearly suggest that the board did not know, when presented with and agreeing to the O'Callaghan (Properties) Ltd. proposal on 13 October 1994, that it had not been assessed and recommended by the property sub-committee, the very committee formed to assess deals of this nature. The board could not have known since it did not even know that the property sub-committee had been disbanded.

The report shows that the board of CIE was not advised about the independent valuation of the site and neither was it shown the independent valuer's report.

A memorandum prepared for the October 1994 board meeting of CIE stated, "it is now proposed to develop this land, fronting Horgan's Quay, as a Technology Park in conjunction with O'Callaghan (Properties) Ltd.". Yet, when an agreement to dispose of the site to that company was reached, there was no mention of a joint venture; it was simply sold off.

Much has been made of the fact that O'Callaghan (Properties) Ltd. paid £200,000 an acre for land which was valued at £150,000 an acre — a total of £602,000 for the 3.01 acres sold. The property may have sold for more but we will never know.

Mr. D. Ahern

How much less?

Mr. Lowry

CIE was in possession of what it had been advised by its professional advisers was a prime property likely to attract wide interest if advertised for sale nationally and overseas. It ties itself into a shut-out deal and sold the property on the basis of just one offer. How many Deputies would sell their own house on that basis, never mind a commercial property of strategic significance?

Mr. D. Ahern

They would if they received a good price.

Mrs. O'Rourke

Like the Minister sold his own company.

Mr. D. Ahern

We are not talking about a house.

Mr. Lowry

The report shows that the heads of agreement approved by the CIE board in October 1994 provided that £50,000 was payable within 21 days of the property being made available by CIE, £200,000 was payable within one month following the granting of planning permission for the proposed development, £160,000 was payable 12 months after the date of the grant of planning permission and £192,600 was payable two years after the date of receipt of planning permission. Any Opposition Deputy who would sell their house in those circumstances would be rapidly homeless.

Some 12 months after the board of CIE approved this sale, the company has not received one penny for this land. Contrary to what appeared in the newspapers last week, no contracts have been executed — nothing has been paid by O'Callaghan (Properties) Ltd.

Mr. B. O'Keeffe

Does it have the deeds?

Mr. Lowry

In effect, here is a State company, strapped for cash, bank rolling a significant element of a project for a private developer. The effort of these curiously generous terms would be to reduce the real value of the price paid. Allowing for the cost of money and the risk element involved, CIE's proceeds will be much less than the nominal amount paid.

Further, the heads of agreement on the sale approved by the CIE board gave the purchaser an open-ended option to buy adjoining CIE property at a price to be agreed. The original professional advice had suggested that any such option should be for three years only. Instead, the option in the heads of agreement was open-ended, increasing the value of the option to the buyer, again at the expense of CIE, which would effectively have lost control of that adjoining property.

In light of the facts I have outlined, I have today written to the chairman of CIE inviting the board to review its earlier decision on the Horgan's Quay site and to report back to me within a couple of weeks.

My statement to the House will be followed by a question and answer session and I note that Fianna Fáil have four Deputies lined up against me, who, I understand, are the party's best and brightest. Before the day is over, it would be helpful to the House if we could learn the answers from the Fianna Fáil front bench to the following questions. Does it unreservedly endorse the CIE handling of the Horgan's Quay site? Would it regard this as a model of behaviour for the State sector? Does Fianna Fáil endorse the exclusion of all except one bidder from the sale? Does Fianna Fáil endorse a payment arrangement with long deferred instalments with CIE in effect committing to hand over the property without a penny being paid? Does it endorse the granting of an open-ended option at an unspecified price over valuable adjoining lands? Does it endorse the rejection of the independent valuer's advice that the site should be exposed to the market in the widest possible fashion? Does it endorse the bypassing and disbandment by the chairman of the property subcommittee, which included independent property experts? Does it endorse the decision not to advertise the site and not even to seek a bid from particular parties which had expressed an interest in the property over the years?

(Interruptions.)

Mr. Lowry

The fundamental question is this: does Fianna Fáil wish to endorse and stand over the role of the then chairman of CIE, who, as chairman both of the board and of the property subcommittee, oversaw each step in this unhappy saga?

Mr. Dempsey

This is about the Minister's actions.

Mr. Lowry

Are these the standards Fianna Fáil wishes to set for us all? Last April I asked Mr. O'Leary to resign as chairman of CIE. Shortly after this two events took place. First, five Fianna Fáil appointed non-executive directors of CIE attempted to engineer a coup designed to reverse my appointment of Mr. Eamon Walsh as the new chairman of the company. A meeting held by this group of dissidents was attended by the former chairman, Mr. O'Leary. As is now well known, that attempt to undermine me proved to be a complete and utter failure.

Secondly, I received reports of questionable expenditure on foreign travel at CIE during Mr. O'Leary's period as chairman. I heard Mr. O'Leary say on television recently that foreign travel he has undertaken during his chairmanship had been of enormous benefit to CIE. He also stated that the trips in which he had been involved had a total cost of £32,000. I draw the House's attention to the comments of the present chairman of CIE who, having investigated these trips, concluded that they were of no value to the company and that the amount spent on them was not £32,000 as claimed but £54,258.

One of these trips involved a businessman, Mr. Ambrose Kelly, who at public expense travelled as a guest of Mr. O'Leary from New York to Florida in November 1994. This is the same Mr. Kelly who in 1993 and 1994 submitted a proposal to CIE on the development of its property at Kent Station in Cork and who on 15 September 1994 acted on behalf of O'Callaghan (Properties) Ltd. in negotiating this extraordinary deal with CIE on the purchase of the Horgan's Quay site. The events at Horgan's Quay were first brought to my attention on 21 June this year. A few weeks earlier, on 27 May, other members of the Government and I had begun to receive letters making serious claims about certain individuals.

Mr. B. O'Keeffe

Were they signed?

Mr. Lowry

The allegations in these letters fell into three categories. In the first instance there were a small number of claims directly related to State companies for which I have responsibility and these could easily be checked. Secondly, there were allegations which were clearly wrong or contained information of a non-specific nature and, therefore, could not be checked. Thirdly, there were a number of allegations of wrong doing, some of a criminal nature, touching on various aspects of public life which could only be checked out by the Garda Síochána. These letters contained allegations of fraud, abuse of procedures, the existence of cartels, forgery, bribery, failure to comply with warrants issued by the courts, abuse of public funds, attempted interference with planning applications and other possible non-criminal breaches of good practice in the State sector.

I would like every Member to consider my position. I was a Minister of the Government in receipt of information which alleged serious abuses and malpractices. I could have filed away the letters or even, as has been suggested, consigned them to the bin. I can imagine the reaction in the House and elsewhere if it was discovered that I had ignored allegations of wrong doing in the State sector just because they came from an unknown source. Given the serious nature of the allegations, I would have been failing in my duties if I had taken the easy option of doing nothing.

One of the letters claimed that a surveillance operation had been arranged to investigate my commerical and private life as well as those of two of the most senior executives in CIE. Clearly, I had no way of knowing whether the allegation of surveillance was true or whether, as the writer suggested, this was an attempt to intimidate me and senior management in CIE. A few days later, following consultation with the Taoiseach, I passed the letters onto the Garda. This decision was perfectly reasonable and I would expect a Minister from any other party to act in the same way if faced with a similar dilemma. In fact, not alerting the Garda to the possibility of criminal offences would have been a dereliction by me of my duty. Since my Department was in a position to investigate only a small number of claims made in the letters, it was clearly best left to the Garda to decide what further inquiries, if any, could usefully be carried out.

The measured manner in which I approached this allegation of surveillance and the fact that I left it to the Garda to decide what action, if any, should be taken makes me wonder why I was accused of sparking a "major security alert". Nothing could be further from the truth.

Mr. D. Ahern

Public relations.

Mr. Lowry

I welcome this opportunity to put it on the record that I had, and still have, reasonable grounds to be concerned that a surveillance operation was put in place. I say this for four reasons. First, there were the letters. The earlier letters, which included the allegations of surveillance, included other claims which turned out to be correct. Second, security sources confirmed independently to journalists that approaches had been made to put me under surveillance. On 6 August last a report in the Sunday Tribune stated:

A reliable private security source has told the Sunday Tribune that he was approached to spy on Mr. Lowry the security source did not take the contract which eventually went to another firm that carried out the surveillance.

Mr. Cowen

The lowest tender.

Mr. Andrews

Dúirt bean liom go ndúirt bean leí.

Mr. Lowry

On 20 August last an article in the Sunday Business Post stated:

Another private security firm told the Sunday Business Post that they had been approached three weeks ago by two sets of senior political people to discuss the possibility of mounting surveillance on Lowry.

Mr. D. Ahern

Is the Minister quoting from Sam Smyth, by any chance?

Mr. Lowry

Third, the chief executive of CIE, Mr. Michael McDonnell, believes he was under surveillance. Before I mentioned the matter to the Taoiseach. Mr. McDonnell had reported his personal concerns to the Department of Justice. Fourth, I received independent evidence from a reliable journalistic source who, without any prompting from me, was able to provide information on meetings I held, the names of people I met, the locations of those meetings and other information known only to a few people, information which had been supplied to this source by a third party. I leave it up to those with open minds to decide whether it was reasonable for me to be concerned that surveillance was taking place. I am confident that the general public will accept that I had reasonable grounds for my suspicions, that I acted in good faith at all times and that my actions were responsible and soundly based.

Three sets of High Court proceedings were instituted against me by individuals claiming defamation for libel and slander. These court proceedings were prompted by media reports linking particular individuals to the surveillance issue. Against this background, I sought senior counsel's advice as to how I should deal with further media and other queries relating to the surveillance issue. Senior counsel has advised that by virtue of the High Court proceedings which had been instituted against me all matters within the scope of these proceedings are now sub judice and that it would be inappropriate, therefore, to discuss further in public any such matters pending the outcome of these proceedings.

Mr. Callely

Who was the senior counsel?

Mr. D. Ahern

Did they change the Minister's mind?

Mr. Lowry

Senior counsel has also pointed out that there are well established precedents and rulings of the Chair of this House for dealing with this type of issue.

Mr. Dempsey

The Minister is not up to date as we changed that in 1993.

Mr. Lowry

On the basis of this advice, therefore, I do not propose to name any individuals in relation to this matter.

Mr. O'Dea

Surprise, surprise.

Mr. Lowry

If this was an attempt to intimidate me it failed.

Mr. O'Dea

The Minister is a tough man.

Mr. Lowry

If this was an attempt to destabilise me and the new management team at CIE it failed. If this was an attempt to get me to dilute or to abandon my overall strategy for my Department it failed.

Mr. H. Byrne

Why did the Minister run away?

(Interruptions.)

Mr. D. Ahern

All the Minister has is reports.

An Ceann Comhairle

Let us hear the Minister without interruption.

Mr. Lowry

I now wish to address the issue which I believe is of prime importance to every Deputy in the House, that we must have a State sector which is beyond reproach.

Mr. E. O'Keeffe

That has always been the case.

Mr. Lowry

The commercial State companies for which I have responsibility are very important parts of the economic infrastructure and they play a critical role in the State. There has never been a root and branch examination of the controls in operation in these companies and I considered such a review long overdue. I regarded this as important in its own right so as to ensure that the controls in place were adequate and also to give me some idea as to the changes which were necessary to enable the commercial State companies to be in a position to operate in the increasingly competitive market in which they now find themselves.

Given the number of companies which had to be examined it is sheer and utter nonsense to suggest that the task force could have carried out it work without the assistance of a consultancy firm. Will anyone honestly claim that a once-off fee of £150,000 is too much to pay to ensure that a turnover of £4 billion a year is fully protected.

Mr. Dempsey

It is too much when one could have got it for half that.

(Interruptions.)

Mr. Lowry

A saving of even 1 per cent in the turnover of these companies would translate into savings of £40 million every year. Interestingly, even Deputy Brennan, who has consistently criticised the task force, admitted during an unguarded moment in a radio interview that he had no problem in reviewing existing guidelines. He stated: "I do welcome the thrust of looking at how you can upgrade and improve the guidelines, that is important".

Mr. S. Brennan

We are agreed on that.

Mr. Lowry

The task force was given the following terms of reference: to review the procedures which applied in the ten commercial State companies under the aegis of the Department of Transport, Energy and Communications in relation to capital investment, procurement of goods and services, disposal of assets, internal audit and corporate governance with a view of preventing potential fraud and achieving value for money.

It should be clear that the whole thrust of the task force was not to rake over the past, never mind to engage in what some Opposition Deputies have mischievously called "witch hunts".

Mr. D. Ahern

It should have asked the employees.

Mr. Lowry

It was designed to protect the reputation, assets and resources of State companies, assets and resources upon which the jobs of people in those companies depend. I have a right and duty as Minister to protect those assets and resources and to take whatever steps are necessary towards that end. That is what I did when I established the task force.

The task force was not set up to root out so called corruption in the State sector. I have never mentioned the word "corruption" and I challenge any Deputy on the Opposition benches to prove otherwise. The task force did not, as claimed by Deputy Brennan, investigate 3,000 contracts entered into by State companies. The only contract examined in detail was Horgan's Quay and this was carried out by Craig Gardner, CIE's auditors, in a totally different capacity. Rather the emphasis of the task force was a positive one. It was one of seeing what procedures were in operation in companies and then suggesting what improvements could be made to them and the general guidelines applicable to commercial companies for which I have responsibility. This was done as part of my overall strategy for preparing these companies for the future. I am pleased to report that in this respect the task force has been hugely successful and I thank the members of the task force, and all those who co-operated with it in their work.

The value of the task force is obvious when one considers it has made 31 recommendations for changes in procedures and in the current guidelines. These recommendations quite rightly strike the correct balance between providing flexibility to the commercial companies and at the same time providing the accountability required of State companies. I fully agree with the recommendations of the task force and I will seek to implement them immediately.

I will elaborate on some of them. In the area of procurement the full rigours of tenderng procedures, as specified in the Public Procurement Rules, will apply to all commercial State bodies under my aegis. These will cover public advertising, receipt and opening of tenders, evaluation of tenders, awarding of contracts, informing unsuccessful tenderers and cost overruns. They will also cover annual updatings of suppliers lists.

Each company will be required to have fully documented procedures covering procurement. Board approval will be required for all contracts in excess of the revised thresholds where no competitive tendering takes place. The board will be made aware annually of the number and value of contracts with suppliers which, in cumulative terms, exceeded threshold levels. Each tender advertisement will include a statement warning that improper influence will not be allowed. All rollover contracts and contracts for a duration of more than one year will require board approval. The significance of this particular recommendation has already been proven in CIE where examination of a rollover contract led to increased revenue of £2 million a year from one contract. In the area of threshold levels, above which competitive tendering is required, the task force has recommended a doubling of existing levels and I endorse this proposal.

Regarding the disposal of assets the guidelines will be amended to include a provision that the disposal of assets should be by way of competitive tender, public auction or private treaty after public advertising. Exceptional circumstances will require board approval.

I will not deal with the internal audit. I want to highlight the fact that some of the key recommendations of the task force relate to corporate governance, the manner in which companies are directed from the top. The governance of the State companies is an area of profound importance which has not been criticially reviewed since the era of Seán Lemass, when many of these companies were set up. In 1959 he set out an admirable governance framework for State companies which has survived almost intact to this day. This governance framework needs to be transformed to cater for the type of environment in which these companies now operate.

First class corporate governance is central to the smooth and efficient running of the commercial State sector and I firmly believe that the key forum for accountability for commercial State companies must be their boards of directors. I am making changes to invest these boards with the authority and the necessary flexibility to operate in the increasingly competitive environments in which they find themselves. I want to be able to devolve sufficient authority to the boards and to trust them to get on with the job.

It is essential that the State's commercial companies be provided with boards of directors who are capable of effectively overseeing the companies as they prepare to enter a new and more competitive environment. The task force has made seven key recommendations in respect of the corporate governance of the State's commercial companies. I accept these recommendations in principle and will take action along the lines indicated. I will shortly bring to Government proposals in this area.

Some of the issues that I have dealt with are specifically addressed in the Ethics Act, passed last July. This new approach will send out a very clear message that appointment to a State board is a major responsibility rather than mere recognition of past service. It will, for the first time, put these appointments into proper perspective and ensure that on the one hand the State companies get the boards to which they are entitled and on the other hand that individual directors know what their jobs involves.

If these companies are to grow and flourish in the emerging more competitive environment, they must be provided with a management framework which is world class.

My actions to date indicate my overriding concern for the dedicated public service staff in the State companies for which I am responsible. I want to help in the process that will maximise opportunities for continuing employment, and indeed to create such opportunities where possible.

I want certain unmistakable messages to go out from this House this afternoon. I want those who have thrown every diversionary tactic they know into this debate over the summer to understand that I will not be diverted from the path I have outlined.

(Interruptions.)

Mr. Lowry

Those who have been throwing the parliamentary equivalent of the smoke bomb into this debate need to know that the smoke will be cleared once and for all from this area of public life. I want the many first class semi-State companies to know that the review carried out is fair, reasonable and even-handed and that they can continue to expect that sort of treatment for as long as I am Minister.

Mr. Callely

When will we see a copy of it?

Mr. Lowry

I want those who do or who hope to do business with the semi-State sector to have confidence that merit and value for money are the criteria which apply on every occasion upon which a semi-State company goes into the marketplace to do business.

Mr. Callely

They have lost confidence in the Minister.

Mr. E. O'Keeffe

He undermined them.

Mr. Lowry

I want those who conveyed concern to me about the way in which some public business was allocated to know that their concerns have been addressed in a fair and straightforward way. I want the many dedicated people who work in the semi-State sector, directors, managers and notably staff, to have confidence that the resources for their companies will be used on every occasion to best effect.

Mr. O'Keeffe

They have lost confidence in the Minister.

Mr. D. Ahern

He blew it.

Mr. Lowry

Most of all I want the taxpayer to know that the review I carried out has produced real results and that the procedures now in place will give the public the confidence and reassurance they are entitled to expect in the way in which State companies do business.

I want to thank all my colleagues in Government for their unswerving support in this important undertaking and in particular to thank my Government colleagues in the Labour Party and Democratic Left and my party colleagues.

Mr. D. Ahern

The Minister is grovelling to Dick because he did not ask for his head.

Mr. Lowry

I want the public to know that vigilance, one of the most important obligations I have as Minister, will be maintained on their behalf so that they and this House can have renewed confidence in public enterprise and the manner in which it is conducted on behalf of all of us.

Mr. D. Ahern

The politicians opposite should look to its cosy cartel.

Mr. S. Brennan

The speech we have just heard is a humiliating climb-down. The main allegations of the Minister, Deputy Lowry, are unsubstantiated.

Mr. Rabbitte

Did you renounce O'Leary?

Mr. S. Brennan

The speech leaves most questions unanswered. It falls disgracefully short of his promise to tell all to Members of Dáil Éireann. For three months the country has been convulsed by fantastic claims from the Minister and his army of expensive consultants.

Mr. Durkan

Who appointed O'Leary?

Mr. S. Brennan

These claims of cosy cartels, fraud, white collar crime and surveillance dragged in the Garda, the Taoiseach's office, the Tánaiste, the Minister for Justice, the Attorney General and the Minister, Deputy De Rossa. One would think at times that the very security of the State was at risk. Much of what the Minister has told us is totally irrelevant to the reason for this debate today. There is room for improvement in procedures. There is some merit in considering——

Mr. Rabbitte

If you had been Minister for much longer, there would be no State property left.

(Interruptions.)

An Ceann Comhairle

Let us hear the Deputy in possession.

Mr. S. Brennan

There is some merit in considering how we might continue to improve the expertise available to companies. There is always room for updated guidelines and better procedures but they are not the reason we are here today. This consultant junkie Minister is presenting these items today as a diversionary tactic to try to avoid justifying the serious allegations he made during the summer.

I am aware that the task force report, of which the Minister is about to release a summary, contains the following gems: control ethos in each of the companies is very strong; the companies generally have good detailed procedures for the disposal of assets; the commercial semi-State companies stand up to scrutiny — in many cases the system in place is far better than in most publicly quoted companies. In particular, the task force report states that the ethos of the companies is strongly focused on principles of control and integrity. It goes on to state that it does not make commercial sense to burden companies with items with which their competitors do not have to deal. It is further of the opinion that these procedures provide assurances that assets are fully safeguarded and the risk of fraud is minimised.

Mr. Durkan

They will be minimised now.

Mr. S. Brennan

I put it to the Minister that this task force report states what Fianna Fáil and this country always believed.

(Interruptions.)

Mr. S. Brennan

It states that the semi-State companies have integrity and honesty and are clean. Fianna Fáil will stand up for them at any time.

A Deputy

Tell us about Florida.

Mr. S. Brennan

These are Irish companies employing Irish people who are taxpayers. The Minister's task force report states that these companies have integrity and we on this side of the House second that. I call on the Minister to release the full task force report so that we can see what took place.

Mr. Allen

Tell us about O'Leary.

Mr. S. Brennan

Last December the Minister received his seal of office from the President. These were heady days for an ambitious man. He came from the Opposition backbenches where he laboured on behalf of his party and took over a major ministerial post. The winning of an office of State would be just the beginning. This was a Minister who would make a real impact. In his Department, history would start the day the man from Tipperary took over. Nothing happened before that.

Mr. Rabbitte

Not much happened when the Deputy was Minister.

Mr. S. Brennan

All his predecessors would be laggards and knaves. They would all be Lilliputians on the shoulders of this Gulliver. That is what would happen.

Minister Lowry's personal hopes took a leap forward when he got a letter on 16 July 1995 which appeared to give him information with which to attack Fianna Fáil, three private businessmen known to be Fianna Fáil supporters and the operations of some semi-State companies. This letter appeared to have been written by someone who had previously written to the Minister of State, Deputy Hugh Coveney. The sender of the letter to Deputy Coveney had supplied a false address and clearly could not be trusted by the Minister, Deputy Lowry, or anybody else. The Minister totally ignored his responsibility to check this matter out and that is where the matter began. He apparently preferred to believe that letter's contents rather than adopt a sensible course of action such as throwing it in the bin.

To launch a major public attack on three people and on semi-State companies based on information provided in anonymous letters was an extraordinary decision.

Mr. Rabbitte

That is untrue.

Mr. S. Brennan

The Minister Lowry public relations programme took off following that as a result of a briefing which appeared in the Sunday Independent. This resulted in a dramatic front page story in the Sunday Independent on 30 July 1995. Among other allegations, that article contained the following allegations attributed to the Minister: “Minister Lowry is under surveillance by criminal elements attempting to prevent a clampdown on the semi-State sector”.

Mr. Allen

They probably are.

Mr. S. Brennan

The article continued: "Dublin businessmen with criminal connections are spying on the Minister and senior executives of State companies". As anticipated, that newspaper report sparked some favourable press comments to support the Minister. When the Minister's concerns were communicated to the Garda later that week there was no evidence to support the existence of any surveillance. The Minister, buoyed up no doubt by widespread praise in some parts of the newspapers, and not wishing to lose face, launched further allegations to maintain his popularity after the Garda showed no interest. As he did this, he also tried to subtly change the focus of further press interest by announcing his first red herring — the establishment of a task force which would sort out the cosy cartels. The Minister made additional allegations on 9 August reported in The Irish Times on 10 August, to the effect that Mr. Eamon Walsh and Mr. Michael McDonnell had been spied upon.

Mr. Rabbitte

This is like "What It Says In The Papers". The Deputy is out of date.

Mr. S. Brennan

The Minister, Deputy Lowry, has claimed that efforts by him to smash a cosy cartel in the semi-State sector led to sinister surveillance operations. He has also confirmed he had asked CIE to look into the Horgan's Quay site, and I will refer to that in a moment.

The result of this additional set of allegations was widespread laudatory articles and editorials supporting the Minister. He was now faced with the problem of trying to feed his growing hunger for favourable headlines with no facts at his disposal.

Mr. S. Barrett

Who wrote this for the Deputy?

Mr. S. Brennan

However, this did not stop the man from Tipperary. He simply selected any old evidence that came his way which suited his personal and rather vindictive plans to round up the usual suspects, and he is doing that again today. What the Minister did not understand, however, was that while the newspapers sometimes accept what Ministers tell them as being accurate, they want Ministers to support those allegations. By mid-August newspapers had begun to suspect that the Minister had sold them a pup. Instead of responding to press questions or requests to attend or provide information to Dáil committees, the publicity conscious Minister became shy and retiring, an instant recluse. The Minister could not face the music. He ran away, first on hastily arranged holidays and then on business trips. He also refused to attend Dáil committee meetings or to furnish documents to the Dáil committees. We have waited many weeks for the Minister to account publicly for his actions.

I want to refer now to the Horgan's Quay site about which the Minister made a great fuss.

(Interruptions.)

Mr. Rabbitte

What did Dermot say about it?

Mr. S. Brennan

In his contribution the Minister quoted the following facts drawn from a report prepared by Craig Gardner: "The report concludes that there was no breach of CIE procedures in relation to the disposal of the Horgan's Quay site". He further stated: "Much has been made of the fact that O'Callaghan Properties paid £200,000 an acre for land which was valued at £150,000 an acre".

Proinsias De Rossa

They paid nothing for it.

Mr. S. Brennan

Were they not stupid to pay £200,000 an acre for land valued at £150,000? If the Minister regards that as bad business, it is a very slim case indeed.

(Interruptions.)

An Ceann Comhairle

The interruptions must cease.

Mr. S. Brennan

According to the Minister, they paid over the odds for it——

Mr. Allen

They did not pay over the odds for it.

Mr. S. Brennan

——and it was proved by the Craig Gardner report. The deal was done, they could go and collect their money.

Mrs. Owen

Not even the price of a bus ticket.

Mr. Rabbitte

Like a site on the Internet, it was free.

Mr. S. Brennan

The Minister further stated: "The board then approved a decision which had actually been taken unilaterally by the chairman the previous September". The full board approved the decision, not a subcommittee.

(Interruptions.)

Mr. S. Brennan

In regard to that site, if the Minister chooses to stop the sale of any site in CIE — and he has had seven months to do it — it is his job to pick up a telephone and organise it. He does not have to spend £150,000 to do it.

Mr. Rabbitte

That is a new guideline.

Mr. Durkan

That is the way Deputy Brennan would have done it.

Mr. S. Brennan

In regard to the Horgan's Quay site, the Minister accuses CIE of undue haste and of not talking to a subcommittee but the Minister would not come before a subcommittee of the Dáil. He comes in here today and tells us that a subcommittee of a CIE board, comprising of a couple of non-executive directors, is somehow the be all and end all. The board approved the sale on two occasions and a subcommittee is not needed.

(Interruptions.)

Mr. S. Brennan

When I and my predecessors had the honour of sitting in the Minister's place, Deputy Cowen, Deputy Máire Geoghegan-Quinn, other Fianna Fáil Ministers and I had to deal with many difficult questions in State companies.

Mr. Allen

Who appointed Mr. O'Leary?

Mr. S. Brennan

We did not resort to private or public abuse of anyone to do our jobs. We need no lectures today from a Minister on how to behave as members of a Government. The Minister's frantic posturing for nice notices in the newspapers has now been replaced by bluster and a bullying inability to admit mistakes. Public policy to achieve long term goals can best be served by discussion, not by megaphone management and name calling semi-State companies. The Minister became intoxicated by the initial success of his PR activities over the last ten months. He has moved from being a new boy in the block to being the bully in the Government in less than one year.

During the summer I drew attention to the fact that although the Minister for Transport, Energy and Communications, Deputy Lowry, had threatened to go through the semi-State companies like a dose of salts he had done almost nothing since he took office. The semi-State companies continued with the policies of Deputies Máire Geoghegan-Quinn, Brian Cowen and me. The Minister took no action other than the most minimal follow-on of our policies. No major issues, which the last Government had begun to address, have been tackled effectively since the Minister came to office.

The Minister has had no effect except to increase uncertainty and anger among the members of our semi-State companies. The latest example of this was last Friday when the Minister said they should stick to their knitting, having led the ESB and Bord na Móna to believe they could apply for mobile phone licences and so on. Having invited these applications he told them, on second thoughts, to stick to their knitting, that is this week's policy on semi-State companies; next week we will have another.

This debate is not about policies of the semi-State companies. That is for another day and I look forward to it. To discuss that today would be to fall into the Minister's trap of discussing the future of semi-State companies. What we want to talk about today is surveillance, cosy cartels and those allegations of white collar crime attributed to the Minister. That is what today's debate is about.

Is it any surprise then that the boards, the management and the employees of our semi-State companies have never had less of an idea what the sponsoring Minister or Department had in mind? While the Minister spends his energy convincing the world that for the first time in his Department there is a clear thinking, decisive Minister, the reality is that he is the sole author of chaos, confusion and uncertainty in all of the companies to which he is supposed to show leadership, not rapping them on the knuckles like a school teacher. Fianna Fáil designed and built the social partnership model which has helped this country move forward. The Minister is setting out to wreck that work. The seriousness of the position of the semi-State companies was highlighted by Bill Attley's comments last week when he said that Minister Lowry's hamfisted handling of the semi-State companies could result in serious industrial unrest.

Minister for Health (Mr. Noonan,

Limerick-East): He said worse about the Deputy's party.

Mr. S. Brennan

The semi-State sector has made an enormous contribution since the foundation of the State. These companies have provided thousands of good jobs on which whole families in Ireland have been reared. Unfailingly, they provided essential services to the economy. The companies have shown enterprise throughout their history. The Minister for Transport, Energy and Communications, Deputy Lowry, has tarnished the public service and caused enormous anger among the thousands of workers in the semi-State companies with his allegations of cartels and fraud. His trawl through the files of semi-State companies for venial sins and mis-demeanours has created enormous resentment and has devastated morale in these companies.

(Interruptions.)

Mr. S. Brennan

The Minister's private passion for personal publicity has undermined the discharge of his proper ministerial priorities. A man cannot indulge his ego and do his job well at the same time.

A third red herring mentioned in the newspapers recently is that we are supposed to have a commission to advise on the suitability of the nominees to semi-State companies. Since coming to office, this Government has made 527 appointments and now it wants a commission to look at future appointments. What about the past appointments?

A Deputy

Do you hear who is talking?

Mr. Rabbitte

The Government of which the Deputy was a member made 550 appointments before it left office.

Mr. S. Brennan

The Minister's fourth red herring has been to announce today the new tendering procedures for semi-State companies. He has some nerve and is trying to divert the House and the people he has defamed from forcing him to present evidence today of his allegations of surveillance and so on. The Minister has failed totally to provide any evidence whatsoever to support even a single allegation.

Mr. Rabbitte

The Deputy wrote that script before he heard the Minister.

Mr. S. Brennan

He has not even given a good reason for initiating his public attack on 30 July on the three businessmen whom he subsequently, I believe, named in off the record briefings. Does he seriously expect the Dáil to believe that these newspaper reports were based on anything other than the direct briefing of the press by his agents? That is where it came from. Whatever the merits of the commission, they will not be debated here today.

A Deputy

What commission?

Mr. S. Brennan

The Minister knows what I am talking about. We will debate those on another occasion. It is a diversionary tactic, just like the inspired leak at the weekend about the Ericsson contract. What a timely, obliging anonymous letter writer we have here. He or she comes up to meet the deadlines of the Sunday newspapers and suddenly there is a new scandal, the Ericsson contract. The Minister did not mention this in his speech because there were nine bids. It was above board. It was professionally done. It was vetted by a committee and that is the reason it is not referred to in the Minister's speech. I am surprised the Minister did not say here today, to clear Ericsson and the people who dealt with it, that there was no truth whatsoever in that allegation at the weekend.

Mr. Rabbitte

The Minister never referred to this.

Mr. Durkan

Is the Deputy suggesting it was a rarity?

An Ceann Comhairle

Order, there is a time limit to this debate. Interruptions should cease.

Mr. S. Brennan

The Minister talked about trips. I am sure he could get a bigger figure for trips if he spoke with some of his Government colleagues. Perhaps the Tánaiste could tell him a thing or two about trips. The facts given by the Minister in his contribution in regard to trips are not accurate according to my inquiries. If the Minister wishes to talk about expenses at CIE, will he confirm that Mr. O'Leary's salary, as chairman of CIE was £7,500——

Mr. Rabbitte

That was not half enough for the work he did.

Mr. S. Brennan

——while the salary of the new appointee is £84,000? Do not tell us about trips. Now we have two people at the head of CIE receiving £84,000 each.

(Interruptions.)

Mr. S. Brennan

So much for cutting down. The issue in question today is not whether our semi-State companies need review or tightening up or whether new guidelines are needed. Fianna Fáil tightened up those regulations in 1992. Deputies Máire Geoghegan-Quinn, Brian Cowen and I systematically tightened up those guidelines year in year out. It is not enough for the Minister to say that suddenly he will tighten up the guidelines. That is not what the Minister should do.

Mr. Durkan

The Deputy should never have looked for this debate.

Mr. S. Brennan

The most shameful aspect of this whole affair was——

Mr. Dempsey

He had to go away on holiday in July.

An Ceann Comhairle

The Deputy might help his colleague to be heard.

Mr. S. Brennan

——when the Minister went into hiding. When all of this hit the headlines and when the questions were being answered the Minister, at taxpayers' expense, decided to call retrospectively for evidence and to vanish. In the meantime those whom he had maligned by inference, the Fianna Fáil Party and others had to continue to bear rumours and suspicions while the Minister vanished on business and holidays. How much did this investigation into the sale of one site in Cork approved by the board cost? It cost £150,000, but his officials could have given him that information if he wanted it.

We now return to the question of whether the Minister was under surveillance and, if so, by whom. Most fair-minded observers now accept that the Minister was not the victim of a murky plot either by shadowy figures in the semi-State sector or the Fianna Fáil Party. Is the Minister still sticking to that story? The time has come for the cool clean hero, as he has been branded, to answer that question. The most charitable explanation of the Minister's actions is that he simply acted foolishly and should now seek a fool's pardon. Even at this late stage he has the opportunity to salvage something from the mess by issuing an ungrudging unequivocal apology to all those thousands of people who have been wronged by his briefings and innuendo.

Mr. Rabbitte

The Deputy will never displace Johnnie Cochran.

Mr. S. Brennan

The Minister also made fools of his colleagues. His claims were supported in the strongest possible fashion by the Taoiseach, the Tánaiste, the Leader of Democratic Left, the Minister for Justice and the Minister for Health. A spokesperson for the Taoiseach said he was satisfied that it was of grave concern. As it was coming from the Taoiseach's office, we were entitled to take it seriously. The Minister for Justice also swallowed the surveillance story and ordered the Garda inquiry. When the Garda Síochána completed their inquiries, did the Minister for Justice, Deputy Owen, pursue her colleague for the additional information which he promised he would give her? The answer is "no" and he did not provide it to the Garda Síochána. On 16 August, a spokesperson for Deputy De Rossa said that he, Deputy De Rossa, was quite happy with the way Deputy Lowry handled the situation. The Tánaiste, who had also been briefed by the Minister for Transport, Energy and Communications, said he had good reason to believe that he was under surveillance and Deputy Lowry, of course, had his full support. Is it any wonder that the Minister's colleagues today are deeply embarrassed?

Fianna Fáil did not start the sorry saga, the Minister did. Since the Minister came to office, he has spent his time briefing, leaking and shin-kicking his political opponents. As a man with leadership potential he believed he could make his career by manufacturing intrigue. He knew that Fine Gael needed a new hero after years of being in the doldrums. He believed he could restore pride to Fine Gael by using his ministerial office to smear Fianna Fáil by spreading the fog of innuendo, the old Fine Gael story. After all it was surely the way to move up the ranks of the Fine Gael Party — you simply had to smear Fianna Fáil. Fianna Fáil has had enough and it will not take any more.

(Interruptions.)

There was a time in this House when Ministers had honour and did not engage in muckraking. My party greatly resents being linked by Deputy Lowry to alleged spying. He has failed to justify that smear. He has not apologised to anybody else for the damage done by his allegations, damage to individual families, damage to reputations and to public staff. The Minister should think of cleaning up his own act.

The Minister is volatile, inexperienced and ambitious. He cares little for the language he uses and how it hurts ordinary families. His response today is deeply disappointing. He has irreparably damaged his relationship with semi-State companies. He has lost the trust of the State companies, he has lost the trust of the Irish people and that trust cannot be rebuilt.

I deliberately refrained all summer, in spite of questioning, from seeking this Minister's resignation, waiting to hear his story. Having heard it today, it is full of side issues, diversionary tactics, red herrings and smokescreens. My party believes the Minister has no choice but to do the honourable thing and resign from this Government immediately.

Mr. Molloy

On behalf of the Progressive Democrats Party may I state that the Minister's revelations in regard to the decision-making process affecting the sale of a site by CIE at Horgan's Quay, Cork and his reference to the appointment of architects by Bord Gáis are considered to be serious matters that warrant the action the Minister has indicated to the House he has taken in regard to Bord Gáis and CIE.

If one wants to put the debate into context, one has to go back to the events during the summer recess and the statements made by the Minister to the media, statements that were fed to the media by sources attributed to be close to the Minister. We had a long saga of media articles throughout the summer recess in which serious allegations were made that an elaborate cosy cartel existed in the State sector and certain well placed political friends of a particular political party were in a position to obtain contracts for the gain of their company. To be quite honest I had expected the Minister to come forward with the detail of the contracts that had been awarded to the members of the cosy cartel. All we have heard from the Minister, unfortunately, is more details of two cases that have been in the public arena for some time. That does not justify the hype and accusations that have been flying in the media during the past three to four months.

I think politics is debased by the allegations and counter allegations we have heard and which the public has been fed through the media during that period. I can remember quite distinctly during the course of the Cork by-election issuing statements questioning the then Government, the Fianna Fáil and Labour parties, on the sale of Horgan's Quay site by CIE. The Minister has the Fianna Fáil Party on the mat but the Labour Party were members of the Government during the time of the by-election and they were being asked to explain the rumours that were rife in Cork on the manner of disposal of these lands. I do not recall a Labour Party spokesperson coming forward on local radio or in the print media to justify its inactivity on the matter. The issue was raised by Fine Gael Deputies shortly after Deputy Lowry became Minister in December 1994.

The Minister's speech contains some contradictions. I understood he fired Mr. O'Leary, the chairman of CIE, on 25 April, but now he says he did not know about these matters until 21 June 1995. It is difficult to know where the truth lies or why the Minister would indicate that he knew nothing about the Horgan's Quay sale until 21 June when he now cites that as the reason he fired Mr. O'Leary.

In the Dáil on 17 May I asked the Minister to state his reasons for removing Mr. O'Leary from the board of CIE, to say what severance or other special payments were offered or agreed, and if he would make a statement. In supplementary questions I asked the Minister if in his discussions with Mr. O'Leary he had criticised any decisions he had made as chairman of CIE, alleged impropriety on Mr. O'Leary's part, or made any allegations to the outgoing chairman regarding the making of decisions where there may have been a vested interest. In reply the Minister explained that the change in the chairman's role from part-time to new full time executive chairman was being made in the context of the reorganisation of CIE and that the Government's decision did not reflect in any way on the chairman's fitness for office or conduct within office. There is a contradiction between what the Minister told the House today and what he told the House on 17 May. I only draw these matters to the Minister's attention because far too much time, energy and taxpayers' money have already been expended on seeking to justify the spin-doctoring of the summer months when allegations were made in a sweeping, all-encompassing way that practically every semi-State company was being nobbled for the profit of people who were closely connected politically, and that this cosy cartel was reaching enormous proportions and was of serious consequence. Yet today, after waiting months for the Minister's explanation, all we have heard is a rehash of two cases that have been in the public arena for many months, and the Minister's statements as to when he found out about it are contradictory.

Deputies

Hear, hear.

Mr. Molloy

Some of the Cork Fine Gael Deputies told us that they approached the Minister about this issue shortly after his appointment. How then could he only have found out about the matter on 21 June?

The proposals relating to the tightening up of procedures for granting contracts in public and semi-State companies are very welcome. Regarding the other proposals mentioned by the Minister concerning the appointment of people to State boards, we are not told whether that is Government policy or merely a recommendation of the task force.

There is no doubt that over the past four months the Minister has dominated the media. Scarcely a week went by but he was not on the front page of our newspapers with allegations and counter allegations which were becoming more bizarre by the day. Indeed the whole saga of anonymous tip-offs, clandestine meetings and undercover surveillance read more like a cloak-and-dagger episode in a second-rate spy thriller than the workings of a modern Government. This fiasco has damaged the Minister. It has damaged the Department and the Government's ability to manage the companies in the State sector, and the handling of it has damaged politics.

Deputies

Hear, hear.

Mr. Molloy

Transport, Energy and Communications is arguably the second most important Ministry — the Minister is in charge of the Department with responsibility for telecommunications, postal services, bus and rail transport, airports, aviation, electricity, oil, gas and peat development, as well as overseeing the operations of the State-owned companies which operate these sectors. He has a key role to play in industrial development. By promoting competition in key areas, such as telecommunications, electricity and aviation, the Minister can do a great deal to boost the competitiveness of Irish industry and encourage job creation. However, the Minister made a "show biz" style entrance to his Department earlier this year and, with the spin-doctors working in top gear, every newspaper was full of stories about how he would blaze a reforming trail through the semi-State sector. The Progressive Democrats would have welcomed a major reform of the semi-State sector and would have supported the Minister enthusiastically in such an endeavour, but, unfortunately, the reforming package did not materialise. We had indications today of some changes in regard to procurement guidelines and appointments to State bodies, but we do not know when they will be implemented. The Minister has allowed himself to be distracted from his task. He has become preoccupied with political point scoring and protecting himself from imaginary pursuers. He had very little to say about the surveillance today, but much to say about it during the summer months. For the past several months the Minister's eye has been well and truly off the ball, and public policy has suffered as a result.

It seems we no longer have any coherent policy regarding the management of the State sector. There is considerable confusion about the strategic direction of the State-owned companies, virtually all of which fall within the Minister's remit. Does anyone understand, for instance, what is happening regarding the new mobile phone licences? It is stated Government policy to promote competition in telecommunications, and mobile' phone licences provide an opportunity to put this policy into practice. However, virtually the entire semi-State sector, most of which is in the Minister's stable, now seems to be bidding for the licence. Bord na Móna, RTE and CIE are all trying to get involved in consortiums of one kind or another to spend public money competing with Telecom Éireann. The Minister, Deputy Lowry, who has responsibility not just for Telecom Éireann but for national telecommunications policy generally, seems quite content to preside over this state of affairs. We shall soon have a ludicrous situation whereby the Minister, as effective controlling shareholder in virtually all the State companies, is not just competing with himself but trying to regulate himself as well.

Confusion also abounds in the area of electricity policy. We need to introduce competition to benefit both private and industrial consumers. We are, in effect, being directed to do so by the European Union. A key aspect of any competitive arrangements that might be put in place is the role of the power procurer, the authority which will be responsible for buying electricity from ESB generating stations and other suppliers. No great understanding of electricity markets is required to know that the power procurer must be independent and capable of operating a transparent price policy. However, this Minister wants the power procurer to be a fully owned subsidiary of the ESB which already dominates electricity generation here. Under the Minister's proposals the ESB would effectively be buying electricity from itself. It is difficult to see how such a move would do anything to introduce an element of competition into a sector where it is badly needed. Incidentally, the Minister might also like to confirm a press report that a firm of American consultants had to be paid £5 million to tell us that the ESB was over-manned to the tune of 2,000 staff. It says little for management skills in the public sector if outside consultants are needed to point out home truths like that. I understand the Department of Transport, Energy and Communications appointed consultants NERA, Arthur Anderson and, in my own time, Coopers & Lybrand. The ESB appointed its consultants, McKinseys, so that it could compete with the Minister's proposals. Prior to that the ESB drew up its own corporate development plan. This means there are five different proposals for the future development of the ESB. Who is paying for all this?

This consultancy spree is costing taxpayers millions of pounds. In the leadup to this debate consultants have been paid approximately £150,000. I have enough problems in my constituency without people from Tipperary telephoning me to complain about the state of footpaths there and stating that a great deal of work could be done with the £150,000 their representative is spending on employing consultants for this purpose. They do not know that not merely was £150,000 spent on consultants employed to examine the problems in semi-State companies, but millions of pounds and one consultants' report is in conflict with another. The Minister is so consumed with his problems that he has effectively abdicated much of his responsibilities for State companies and the Labour Party is driving the agenda on that front. It is interesting to note the recent appointment of a prominent Labour Party supporter to the key position of deputy chairman of the ESB, an appointment supposedly in the Minister's gift. One wonders what policy lies behind that appointment.

The Minister also failed to indicate a view on the ESB's continuing presence in the electrical retailing business. There is no rationale for the ESB's involvement in this business and as a State supported monopoly it has an unfair competitive advantage over private sector operators. Despite the difficulties experienced by electrical retailers, the Minister does not appear to have any views on levelling the playing field in this area. Similarly, it is difficult to see the logic of the Minister's position in regard to Telecom Éireann.

The Progressive Democrats favour the privatisation of Telecom Éireann from the point of view of introducing competition and, once the company has made a good start at sorting out its cost base, that should happen. The taxpayer would reap the maximum reward by floating a highly profitable company on the Stock Exchange. Telecom Éireann would then have independent access to any capital it requires to fund its future development. In contrast, the Minister is obsessed with the need for a strategic partner for Telecom Éireann that would be sold a stake in the company before its cost problems are dealt with properly. In two or three years' time the partner would be in a position to take full control of the company and the taxpayer would be the loser. Well managed companies do not necessarily need strategic partners, the technology or expertise they require can be brought on the open market.

I fear the Minister's plans for Telecom Éireann are aimed, not so much at promoting competition and generating value for the taxpayer, but at satisfying the political needs of the Labour Party and the public service unions, a real cosy cartel. There is an urgent need to restore coherence to policy so far as State companies are concerned. For several months the Minister has obviously had his mind on other matters and it is beginning to show. It is not satisfactory that he should allow himself to be effectively rubbished in the media by senior managers in some of our State companies. The Minister is supposed to be the controlling shareholder of these companies, a position he holds in trust for all our people.

We need a clear and coherent policy for the governance of our semi-State companies. We need a clear commitment to the creation of real competition in areas such as electricity and telecommunications. Instead, we are likely to get an administrative fudge, reflecting the ideological contradictions inherent in the competition of this rainbow Government. The Minister's policy in this area appears to be grudging and minimalist, designed to satisfy the requirements of European Union directives while making the least possible progress towards increased competition.

The Department of Transport, Energy and Communications is one of the most important Departments in the economic sphere. It is much too important to be run on a part-time basis by somebody closeted away with hired guns from the public relations industry and engaged in a long drawn out political slagging match through the public print. Instead of chasing private eyes, perhaps the Minister should try to privatise or at least show some evidence that he knows what is going on in terms of Government policy on the semi-State sector generally.

An Ceann Comhairle

We now proceed to questions to the Minister which will be brought to a conclusion within one hour. I remind Members that the usual rules governing supplementary questions apply to this question and answer session.

Mr. Andrews

A number of questions arise from the Minister's statement. Does he stand over his story that the surveillance was linked directly to three businessmen and resulted directly from his work in the semi-State sector? The answer to that should be simply "yes" or "no". The Minister failed to justify his many strange and unsubstantiated allegations today and during the summer months. His series of allegations and counter-allegations were extremely tedious and included cosy cartels, surveillance, white collar crime and spurious charges against the semi-State sector. As the Minister's statement failed to substantiate many of the claims he made, will he consider his position?

Mr. Lowry

Fianna Fáil should first examine its position——

Mr. N. Treacy

The Minister should answer "yes" or "no".

(Interruptions.)

Mr. Lowry

——and the disgraceful role it played in bringing the semi-State sector into disrepute during the summer months, using that sector to gain political advantage.

A Deputy

The Minister did that on his tod.

Mr. H. Byrne

The Minister should answer the question.

Mr. Lowry

I was asked to come in here and answer questions and I am happy to do that.

Mr. Callely

The Minister was asked a specific question.

Mr. Allen

We are not in a court room.

Mr. Lowry

A number of questions were raised in the statements made and I want to avail of this opportunity to answer them. I will take them in the order in which they were asked.

Mr. M. McDowell

On a point of order, the order of the House is that the Minister answers questions and does not reply to speeches until the last five minutes of the debate. He will not get away with a shambolic approach to this debate.

An Leas-Cheann Comhairle

Thank you, Deputy.

Mr. M. McDowell

On a point of order, is it in order for the Minister to reply to the speeches instead of answering questions?

An Leas-Cheann Comhairle

The order of the House is that time will be allocated at a later stage for answering questions raised in the statements. The Minister will now answer the questions put to him.

Mr. Lowry

In response to Deputy Andrews's first questions, I made it clear in my statement that, on the advice of senior counsel, it would be entirely inappropriate for me to answer specific questions in respect of the involvement of those responsible for putting me under surveillance.

Mr. Andrews

What about the names?

Mr. Lowry

In response to the Deputy's second question, I believed then and I believe now that I had and still have sufficient grounds and reasons for the actions I took in regard to the surveillance.

Mr. O'Donoghue

In accordance with the rules of the House, will the Minister answer the specific question put to him? The question he was asked, but failed to answer by hiding behind High Court proceedings, was whether he believed the surveillance was linked to his role as Minister. In this context I will read out the Standing Order of the House behind which he appears to be hiding.

Mr. Lowry

The Deputy need not read it out. I believe the surveillance on me was connected with my duties as Minister and I do not have reason to believe anything else.

Mr. O'Donoghue

Does the Minister believe the surveillance was carried out at the behest of three businessmen?

Mr. Lowry

I already clearly outlined that I received advice from my senior counsel.

Mr. Lawlor

It is a pity the Minister was not advised sooner.

Mr. Lowry

During the past six weeks I have been accused of not being available for public comment. That is correct; I was not available because I was advised by my senior counsel, on receipt of three High Court writs, that the appropriate action to take in the circumstances was not to make any further comment on that aspect of the matter. I do not intend to prejudice the case against me in the High Court by referring to the people who were responsible for putting me under surveillance.

Mr. O'Donoghue

The Minister is refusing to answer the question. Mr. Denis Coughlan wrote in The Irish Times of 10 August——

An Leas-Cheann Comhairle

There should be no quotations during Question Time, Deputy.

Mr. O'Donoghue

This is relevant.

An Leas-Cheann Comhairle

Questions, please.

Mr. O'Donoghue

I must predicate the question on the following quotation:

As for the employment by three Fianna Fáil businessmen of a firm of private investigators to keep the Minister under surveillance, Mr. Lowry felt they had "something going for themselves" within the semi state sector and had targeted him because he was determined to "clean it up"... The three men were "out of control".

Is the Minister now withdrawing that allegation?

Mr. Lowry

I have already told the Deputies in explicit terms that I am not in a position to give him the answer he wants. As a legal person, he understands the full implications of what I said.

Mr. O'Donoghue

I am asking for a ruling on the sub judice rule as it is applied in this House. Standing Orders Relative to Public Business state:

Subject always to the right of Dáil Éireann to legislate on any matter and the guidelines drawn up by the Committee on Procedure and Privileges from time to time and unless otherwise precluded under Standing Orders, a Member should not be prevented from raising in the House any matter of general public importance, even where court proceedings have been initiated.

The only proviso is that a matter may not be raised where it relates to a case where notice has been served that it is to be heard before a jury or is then being heard before a jury. The position is that no notice of trial has been served in this case. In those circumstances it is incumbent on the Minister to answer direct questions about a matter of public importance. He has no right to refuse to answer.

Mr. Rabbitte

The action is against the Minister.

An Leas-Cheann Comhairle

The Chair has no control over the answers of Minister.

Mr. Martin

You have.

Mr. O'Donoghue

On a point of order, Standing Orders must be enforced by the Chair. The Minister is not entitled to hide behind a rule which does not exist. Why is he doing so?

An Leas-Cheann Comhairle

There is no need for repetition, Deputy.

Mr. Lowry

The Opposition wish to ask me hundreds of questions. In my opening address I advised the House that senior counsel had given me advice——

Mr. Cowen

Senior counsel does not organise Standing Orders or have a say in this House.

Mr. Lowry

The cross-examination Deputy O'Donoghue wishes to engage in can take place in the High Court where I will vigorously defend my position.

Mr. Cowen

On a point of order, when the Minister refused to appear before a Dáil sub-committee — he was basically saying that he would appear before the Dáil when it suited him and at his own time — I pointed out that a dangerous precedent was being set whereby a Minister was determining for this House when and in what manner he would be held accountable to it.

When court proceedings were initiated against Members of this House in the past the previous Government modified the sub judice rule to avoid the charade whereby a Minister could seek to hide behind the fact that proceedings had been instituted. It is only where a notice of trial has been issued and where a trial is being heard before a jury that a Minister can claim this protection.

I do not care if 20 senior counsel have advised the Minister, based on their understanding of the old rules of this House the Minister cannot decide when and in what manner he will be held accountable to it. He will be held accountable under Standing Orders which Deputy O'Donoghue has outlined and should now answer the question.

Mr. Allen

The Chair is being lectured.

An Leas-Cheann Comhairle

By way of clarification, Deputy Cowen is correct; the sub judice rule has been relaxed since April 1993, but notwithstanding that, the Chair cannot force a Minister to reply to a question.

Mr. Cowen

The Minister is refusing to reply. Why?

Mr. Lowry

I appreciate the efforts of Deputy Cowen who has legal training to be of assistance to me in legal matters——

Mr. Cowen

For openness and frankness.

Mr. Lowry

——but I prefer to take my own legal advice.

Mr. Cowen

The Minister cannot do so in this House.

Mrs. Doyle

He can.

(Interruptions.)

Mr. Lowry

I have taken the advice of senior counsel. Deputies, particularly Deputy Cowen and Deputy O'Donoghue, will be aware that the High Court writs have been served on me in my capacity as Minister and on a personal basis. I have a right to vindicate myself in court and I intend to do so.

Mr. Cowen

The Minister has absolute privilege here.

Mr. Lowry

I have not taken anyone to court. Writs have been served on me. I intend to preserve my personal integrity when the matter is dealt with in court. I have an entitlement as an individual to defend my position vigorously.

(Interruptions.)

Mr. Molloy

Why did the Minister inform the House on 17 May that the removal of Mr. O'Leary as chairman of CIE in accordance with the Government's decision had nothing to do with his fitness for office or conduct in office?

Mr. Lowry

The Government's decision to remove Mr. O'Leary as chairman of CIE was based on the report I had received on the future requirements of the company. It was patently obvious that the management structure needed to be strengthened. The Government made a decision to appoint a full-time chairman with the necessary professional skills that could be put to use on a daily basis in the interests of implementing Government policy.

I acknowledge that the Progressive Democrats have made constructive arguments. They have made criticisms, but these have been valid and they are entitled to answers. For that reason I am anxious to answer the question.

Neither I nor the Government knew at the time of any irregularities in CIE. Neither I nor my Department had any investigation carried out. Inquiries were made by the board and incoming chairman of CIE. He requested the board to appoint consultants to conduct an investigation into the Horgan's Quay site. Deputy Brennan mentioned that this cost £150,000, but, as usual, he was inaccurate. The acutal cost of that report to CIE was £10,000.

Mr. O'Dea

In view of the Minister's refusal to answer questions put to him by Deputy O'Donoghue I remind him of a report written by Deaglán de Bréadún in The Irish Times on 18 August in which he is quoted as saying that while he was constrained by legal considerations from making any further comment to the media about his allegations of surveillance he would answer all questions when the Dáil convened. Is the Minister going back on that?

Mr. Rabbitte

Ask him one.

Mr. Lowry

As soon as I am asked a question I can answer I will answer it.

Mr. E. O'Keeffe

Does the Minister know the answers?

Mr. Callely

It is a poor show.

Mr. N. Treacy

There are shadows behind the Minister.

Mr. E. Ryan

We did not ask the right questions?

Mr. Lowry

I presume the Deputy wants to hear the background to the surveillance.

(Interruptions.)

Mr. Lowry

I received a letter on 1 July which alleged I had been placed under surveillance because of my work as a Minister. As information in previous letters proved to be accurate I was concerned about that allegation and brought my concerns to the attention of the Taoiseach. There was nothing dramatic about that intervention. It was a simple discussion with the Taoiseach during the course of other political matters. I informed him I had these letters and a letter claiming I was under surveillance. He correctly advised me to give them to the investigative authority, the Garda.

Mr. E. Ryan

What did they do with them?

Mr. Lowry

That was on the 25th. That evening I made contact with the Minister for Justice and asked her to make some official in the Garda office available to me to take receipt of the documentation. The Minister pointed out that this was not the first she heard of it. Mr. Michael McDonnell, chief executive of CIE, met with the Secretary of the Department of Justice to convey his strong feelings about the fact that he felt he was under surveillance. I have been accused of all kinds of things regarding the media. I wish to make it abundantly clear that I did not release the story of surveillance to the media. On the Tuesday after I received the letter I was approached by a journalist outside the restaurant in this House. He asked me about the story and I told him it was only a claim, it probably was not factual and he should not print it. I asked him to desist from doing so. On Saturday of that week I was contacted by a journalist from the Sunday Independent. I refused to co-operate with the publication of the story and told him I did not wish it to get into the public domain. I told him that the matter was being dealt with by the appropriate authority, the Garda.

Mr. Cowen

Did the Minister speak to him?

Mr. Lowry

Neither I nor anyone associated with me released that story or approved it.

Mr. Cowen

Did the Minister speak to him?

Mr. Lowry

I did not know then but I know now that the letter, and the detail of the surveillance, was in wider circulation.

Mr. Cowen

Did the Minister speak to the journalist?

Mr. E. Byrne

In his statement the Minister referred to substantial expenditure on travel incurred by the former chairman of CIE which has been described by the current chairman as being of no value to the company. Can the Minister give us further information on the nature of the trips and people who were involved? Can he explain how such large expenditure was incurred by the former chairman?

Mrs. O'Rourke

A plant.

Mr. Callely

How does the Deputy know it was large?

(Interruptions.)

Mr. Barrett

Any more threats?

Mr. Lowry

I referred to this matter in the course of my speech. If my Department refers to something in public I expect people would accept that the figures furnished are accurate. The claim that the foreign travel cost £32,000 is not factual. It cost £54,256.

Mr. S. Brennan

The Minister said £58,000 earlier.

Mr. Lowry

It included two visits to the United States——

Mr. S. Brennan

It included officials.

Mr. Lowry

——as well as long haul trips to Africa and Australia.

Mr. S. Brennan

As the previous chairman did.

Mr. Rabbitte

Was the Deputy with him?

Mr. Lowry

In South Africa the chairman had one official meeting; in Australia, which is a long distance to travel, he had no official meeting. That trip revolved around golf and sight-seeing and there was a trip to the wine district.

A Deputy

Very nice.

Mr. S. Brennan

Even Deputy Rabbitte goes on wine tasting trips.

Mr. Rabbitte

And pays for his trips.

Mr. Lowry

On one of those trips Mr. O'Leary, who was then chairman of a semi-State company, availed of the opportunity, obviously by coincidence, to visit a Fianna Fáil fund-raising event in New York. One of the trips also included a flight to Miami where Mr. O'Leary was accompanied, at the taxpayers' expense, by his guest, Mr. Ambrose Kelly.

Mr. S. Brennan

For which CIE did not pay.

Mr. Lowry

This type of wasteful expenditure cannot be justified. In a company such as CIE where the new chief executive stated in the past few weeks that staff should not be expected to work in conditions which would be unacceptable in Calcutta——

Mr. S. Brennan

Ask the Tánaiste about trips.

Mr. Lowry

Imagine the demoralisation in that company when staff see this kind of wasteful expenditure.

Mr. B. Allen

Was it during the World Cup?

Mr. Lowry

These extensive trips included using limousines and entertainment such as theatre, golf and various outings. On the second trip to New York they went out to open a new office for the second time. It had been opened previously by the then Taoiseach, Deputy Reynolds.

Mr. Rabbitte

There was probably a back entrance.

Mr. Cowen

Wrong again.

Mr. Dempsey

It is still costing £18,000 less than the new chairman's salary.

Mr. Lowry

I want to put this in perspective.

Mr. Callely

Be careful with those notes.

(Interruptions.)

Mr. Lowry

The notes are perfect. During the course of the defence for these elaborate trips it was stated clearly that he was invited out there some way or other, that it was a necessary part of his function and was to generate additional business and revenue. I made inquiries since this statement was made and I have in my possession a letter from CIE Tours International. I will read the important parts of it. I can say with certainty that the initiative and request or instruction for all of these four trips did not come from them but from Mr. Kennedy of CIE. I did not suggest or require that any of the trips would be undertaken.

Dr. Woods

The Minister should have those people here to answer.

Mr. Cowen

This is outrageous.

Mr. Lowry

He went on to say that all of the trips were non-revenue and were dealt with outside the normal method of dealing with passengers. The amount of management time and energy taken up in putting the arrangements together was enormous and totally unproductive in that no revenue was added. In fact, the reverse was the case.

Mr. Cowen

We will go on to something of substance.

Mr. Barrett

These are things the Deputy does not want to hear.

Mr. Cowen

I have a right to speak and ask questions. If the Minister can answer my questions I will be happy.

An Leas-Cheann Comhairle

The Deputy without interruption.

Mr. Cowen

The Minister made much play about cosy cartels getting the lion's share of the business. The expenditure of semi-State companies is of the order of £2.6 billion per year. The Minister spoke about people at the heart of the cartel getting the lion's share of the business. He never disowned newspaper reports of meetings with him or briefings by him. When setting up the task force the Minister is reported in the newspapers as saying the surveillance was an attempt to stop his clampdown on corruption in the semi-State sector. Those are the Minister's words. He can pussyfoot in the House all he likes, but nobody other than he mentioned surveillance. The Minister has produced no evidence and he continues to refuse to answer a simple question as to whether he still thinks he was under surveillance. He claims the surveillance came about as a result of the work he was doing at that time — clamping down on corruption in the semi-State sector.

An Leas-Cheann Comhairle

A question to the Minister, Deputy.

Mr. Cowen

He spoke about it being evident that there was a cosy cartel in the semi-State sector.

In relation to the details of the Horgan's Quay site, the Minister used the analogy of buying and selling a house. If I had a house which had been falling into disrepair over ten years and somebody offered me £157,000 more than a subsequent independent valuation, I would be inclined to sell the House.

(Interruptions.)

Mr. Cowen

I want to ask the Minister specifically——

An Leas-Cheann Comhairle

Let us hear the question.

Mr. Creed

The Deputy has not asked a question.

Mr. Cowen

The Minister attaches such importance to the Horgan's Quay site but can he explain why the vetting of that contract was held up by two reviews, one in the Department and another by Craig Gardner which started in August? Why was it that last Friday the lessee acquired the contract from CIE to sign? Did the Minister ever buy a house or put a deposit on a house before signing a contract? Was it not the Minister who vetted the contract? The contract has been passed and has gone to the lessee and the Minister is getting £157,000 more for it than his predecessors were offered in the last ten years. Is that a fact?

Mr. Lowry

No reasonable person could dispute the fact that the information I have laid before the House——

Mr. Cowen

Answer the question.

Mr. E. O'Keeffe

Answer the question.

Mr. Lowry

The Deputy asked two questions and I will take them in the order in which they were asked. The first question related to cosy cartels.

Mr. Cowen

The lion's share.

Mr. Lowry

The Deputy or any reasonable person in the House would accept the information I have placed before the House is compelling evidence——

Mr. Cowen

No, not at all.

Mr. Lowry

——of the existence of a cosy cartel.

Mr. B. Ahern

Rubbish.

Mr. D. Ahern

There are only cosy cartels in Cork.

Mr. Lowry

That sums up the whole problem as far as Fianna Fáil is concerned. That is the type of culture it accepts; I do not.

An Leas-Cheann Comhairle

Order please.

Mr. Cowen

The Minister is doing nothing. His culture is criticising everybody.

Mr. Lowry

In this instance the names of a small number of people of similar political outlook kept cropping up in regard to questionable activities.

Mr. Cowen

Why did the Minister pass the contract?

An Leas-Cheann Comhairle

Let us hear the reply. Other Deputies are offering and I want to facilitate them.

Mr. Lowry

Here we have the same people travelling the world at the expense of the taxpayer — friends on a cruise at the taxpayers' expense.

Mr. Cowen

That can be explained too.

Mr. Lowry

These are the same people who are at the heart of one of the most questionable property deals ever in the history of this State. That is the reality.

Mr. Cowen

Who turned around CIE Tours after five years?

Minister of State at the Department of Finance (Mrs. Doyle)

Down in Australia?

Mr. Lowry

This was not just a cosy cartel. This was a sweetheart deal and I am sure the Deputy knows what that involves.

Mr. Cowen

Why did the Minister send the contract last Friday?

An Leas-Cheann Comhairle

Allow the Minister to finish.

Mr. Lowry

The Deputy should relax. He will get the answer.

Mr. Cowen

The Minister is not giving me the answer.

Mr. Lowry

Give me a chance. I am sure the Deputy would like the problems and key weaknesses with regard to Horgan's Quay outlined again.

Mr. Cowen

No, I want the Minister to tell me——

Mr. Lowry

We received two firm inquiries——

Mr. Cowen

There is no contract in existence.

Mr. Lowry

If the Deputy is not interested——

(Interruptions.)

Minister for Defence (Mr. Barrett)

That is good ground for the Deputy to defend himself.

Mr. S. Brennan

Craig Gardner had it.

An Leas-Cheann Comhairle

Deputies on both sides are preventing the reply being heard.

Mr. Lowry

The Deputy is obviously not interested in hearing the chronology of events. The position is that, as of now, I have asked the chairman and board of CIE to review it.

Mr. Cowen

The Minister had it for the last 12 months.

Mr. Lowry

I had not.

Mr. Cowen

He had.

Mr. Lowry

No legal documents have been executed. The draft CIE documents are now based on an original intent and CIE sent it without my knowledge——

Mr. Cowan

The Minister is really in charge.

Mr. Lowry

——and I have now informed the board and executive of CIE that they should review this matter. Furthermore, the campaign of misinformation——

(Interruptions.)

An Leas-Cheann Comhairle

——Deputies on both sides are repeatedly preventing the Minister from replying. Time is passing and this is a restricted debate. Many Deputies are offering.

Mr. Lowry

In respect of the Horgan's Quay site, I have asked the board and executive of CIE to review it as a matter of urgency. Reports which appeared recently in the newspaper in respect of this contract are totally inaccurate.

Mr. Cowen

The Minister had it for 12 months.

Mr. Molloy

Was the Minister involved in the Cork by-election last year on behalf of the Fine Gael Party as its director of elections? Did the Fine Gael Party, under his direction, issue a statement calling for an inquiry into the Horgan's Quay site sale/CIE affair? Did the Minister of State, Deputy Bernard Allen, approach the Minister shortly after his appointment as Minister with regard to the Horgan's Quay affair, as he stated publicly? Why is the reason given by the Minister in his contribution today for removing Mr. O'Leary from office different from the reason he gave to the Dáil on 17 May?

Mr. Lowry

I campaigned during that by-election and I had a most successful campaign with Deputy Hugh Coveney. I heard the stories and rumours; I heard numerous people, especially business people in Cork, casting serious doubts; I recall it being referred to as "the by-election jobs" in respect of this particular project.

Mr. M. McDowell

What did the Minister do about it?

Mr. Cowen

What about the Greystones light rail project?

Mr. Lowry

I also recall listening to the local radio station and hearing Deputy Micheál Martin complimenting the then Taoiseach, Deputy Albert Reynolds, for his involvement in bringing about the campaign.

Mr. Martin

That is not true.

Mrs. Doyle

It is true. I can give the Deputy chapter and verse if he wishes.

Mr. M. McDowell

What did the Minister do about it between December and June?

Mr. Molloy

Those are the gaps in the Minister's statement.

Mr. Lowry

When I became Minister I was not aware at that stage of any difficulty with regard to Horgan's Quay other than what I and others had heard in Cork. When I became aware of a problem in respect of this project——

Mr. Molloy

I had heard of them.

Mr. Lowry

——I asked the new chairman, as one of his priorities, to look at this particular arrangement. He immediately took action on my request. He appointed consultants——

Mr. M. McDowell

That was after April.

Mr. Molloy

The Minister's story does not stand up.

Mr. Lowry

The consultants recently reported and I am giving the House details of the report.

Mr. M. McDowell

There are four months missing in the Minister's explanation.

The Taoiseach

Who was the chairman at that time?

Mr. O'Donoghue

I ask the Minister to reply to the original question about surveillance by speaking in his own defence, within the rules of the House, and in no way prejudicing any case which might be before the High Court. Since the Minister has refused to answer the initial question, perhaps he would answer this one in the interests of openness, accountability and transparency. Why did the Garda not treat the Minister's complaint of surveillance seriously and what precisely did the Garda say to him? If there was criminality involved, would he not have expected the Garda to have followed up his complaints in relation to surveillance and taken them seriously?

Mr. Lowry

When I met the Garda I simply did what anyone would do in the circumstances. I handed over all of the correspondence I had, including the letter which alleged surveillance. I gave no specific instruction or direction. As far as I was concerned, they were the professionals, they were the appropriate authority and it was for them to make a decision on the contents of the letters.

Mr. O'Donoghue

Did that not undermine the Minister's confidence as regards his belief that he was being followed, in his capacity as Minister, by sinister forces?

Mr. Lowry

My confidence has never been undermined then or now. The details of the letters were a matter for the Garda. I gave no direction or instruction. When I handed over the letters I asked the Garda to make inquiries in respect of the contents of the letters. That was the only discussion we had.

(Interruptions.)

An Leas-Cheann Comhairle

Deputy O'Donoghue has had a lot of time. I am calling Deputy Flanagan.

Mr. D. Ahern

On a point of order, we asked for a one hour question and answer session. Deputy Flanagan and Deputy Byrne are blatantly flying in the face of the commitment I was given in relation to this question and answer session and of the procedures of this House, and we see it for what it is.

(Interruptions.)

Mr. Flanagan

As an elected Member of this Assembly I deeply resent the outrageous insinuation of Deputies opposite. As an elected Member of this House I have rights and privileges. In the course of the Minister's shocking revelations of the Horgan's Quay saga this afternoon, he made reference on a number of occasions, as did Deputy Molloy and others, to the interest of Mr. Dermot O'Leary in this matter. I ask the Minister to indicate the number of boards to which Mr. O'Leary was appointed, when, for what duration and by whom.

(Interruptions.)

An Leas-Cheann Comhairle

The Minister to reply. We are wasting precious time.

Mr. Lowry

It is a matter of public record that Mr. O'Leary was appointed to seven State companies by three Fianna Fáil Ministers — Deputies Brennan, Cowen and Geoghegan-Quinn. He was the chairman of CIE, Bus Éireann, Bus Atha Cliath, Iarnród Éireann, Aer Rianta, Aer Rianta International, and the Great Southern Hotels Group.

(Interruptions.)

Mr. Lowry

I have been asked a question and I am anxious to answer it. The reality is——

(Interruptions.)

Mr. Lowry

May I answer the question?

An Leas-Cheann Comhairle

Let us hear the Minister's reply, please. I want to get on to Deputy Brennan's question.

Mr. Lowry

It is obvious from that that Mr. O'Leary, who is a very prominent member of the party, highly regarded, was rewarded in this fashion by these seven appointments.

Mr. S. Brennan

I have two questions and I would like straight answers to them. Is the Minister aware that in this debate, he is apparently maligning an individual who cannot be here? Is he aware that that person has stated that the CIE Tours part of the trips brought £5 million worth of business to Doyle's Hotels and £4 million to Jury's? Is he aware that Mr. Paul Conlon went on similar trips, and there was nothing wrong with those trips? Is he further aware that many aspects of these trips and many of the flights were paid for privately? The Minister has not answered my question as to why he is paying £84,000 to his appointee and he paid Mr. O'Leary £7,000.

My second question is an important one and the Minister should pick his words very carefully when he answers it. Did the Minister, in private conversations with members of the media and or with third parties, name the three individuals whom he suspected organised surveillance? There is a straight yes or no answer to that. He either mentioned their names to the media, which led to the speculation, or he did not.

An Ceann Comhairle

May I advise the House, before the Minister intervenes, that question time will end at 7.05 p.m. I therefore invite Members to utilise the time as equitably as possible.

Minister for Defence and the Marine (Mr. S. Barrett)

Is a journalist reporting private conversations to Deputy Brennan now?

Mr. S. Brennan

That is what is in the papers.

(Interruptions.)

An Ceann Comhairle

Minister Barrett's intervention is quite unhelpful at this time.

Mr. Lowry

To answer the first part of the question, I have already read into the record an extract from an official letter from CIE Tours which states specifically and clearly — I am sure the Deputy does not doubt the veracity of that letter or the person who wrote it — that:

...all of these trips were non-revenue, were dealt with outside our normal method of dealing. The amount of management time and energy taken up just putting the arrangements together was enormous and totally unproductive in that no revenue was added, in fact, the reverse was quite the case.

The answer to the second question is that fundamental to this whole affair is the fact that I attempted to ensure that this story was not published; and I have outlined how I did it. I succeeded initially. When the story did surface it was presented in a cautious way as no more than a claim of surveillance. The strategy of my office which applied to all my advisers — my PR people have been accused of other things here today — was to play down the story and we did spend a considerable period of time keeping it under control.

Deputies must also remember — this is the fundamental point — that the story originated outside my Department, so there is no truth in the suggestion that either myself or my advisers promoted it. We now know that these letters were widely circulated to politicians and to journalists before any story was ever published.

(Interruptions.)

An Ceann Comhairle

Questions have been asked, let us listen to the Minister's reply.

Mr. Lowry

Before any story was published, one journalist said he had received two unsigned letters making allegations about business people and claiming that CIE executives and I were under surveillance. My advisers did not deny the existence of the letters, the fact they had been sent to the Garda for consideration or that they had been drawn to the Taoiseach's attention. Two journalists have confirmed in print and on radio that I made very stringent efforts to stop the publication of the stories.

Mr. S. Brennan

Did the Minister mention the three names to the journalists?

Mr. Lowry

I will not leave this House with a pall over my public relations team. They acted fairly and honourably with the media and everyone else in this regard. The type of allegation the Deputy is making now he made publicly in a statement against my PR team. If he continues to make those allegations, he will need to do what he did on 20 September when his legal people wrote to my communications team saying that in the circumstances of the current controversy, their client wished to state that nothing released by the party press office was intended to defame and in so far as it caused any distress or embarrassment to Bill O'Herlihy, their client very much regretted it and no statement would be issued by the Fianna Fáil press office impugning the integrity of O'Herlihy Publications.

(Interruptions.)

Mr. Lowry

I already pointed out that, for policy reasons, we appointed a full-time executive chairman of CIE. Mr. Eamon Walsh, in his capacity as chairman, has——

Mrs. O'Rourke

Who appointed him?

Mr. Lowry

——already made very significant progress in turning around that company. That is acknowledged by management and employees who feel they have leadership and guidance which is necessary for the future of the company.

Mr. Dempsey

The reason for this debate is that the Minister made allegations of a cosy cartel in the semi-State sector.

Mr. Connor

And proved it.

Mr. Dempsey

I want to ask him under the privilege of this House to name the cosy cartel operating in the semi-State sector——

Mr. Barrett

Ask Deputy Brennan.

Mr. Dempsey

——which he alleges has cornered millions of pounds annually — three businessmen were allegedly at the centre of it — this cartel, as the Minister announced in The Cork Examiner on 10 August 1995, which has frozen out other business people and tied up business deals. Will the Minister tell the House if the only evidence he has is the Horgan's Quay site in Cork? Will he publish the full report of the task force and not only the recommendations he has selectively mentioned today?

Mr. Lowry

I am happy to inform the Deputy that the full report of the task force is already in circulation. In respect of cosy cartels, I have already indicated to the House where I saw a cosy cartel in operation. The Deputy quoted The Cork Examiner and I am glad it has a wide readership in County Meath. On 10 August I was quoted correctly in The Cork Examiner following an interview in my office with Mark Hennessy of that newspaper. He wrote: “Insisting that he was not alleging widescale semi-State corruption, the Minister declared that ‘it is more the case that the system is flexible enough to allow few people to manipulate affairs to their advantage’.”. There has been a gross distortion of what I said and comments have been attributed to me which I never made. It is not my intention to attempt to justify comments which have been put into the public arena for mischievous reasons and for political advantage by Deputy Brennan and others.

(Interruptions.)

Mr. M. McDowell

I would like to follow on from Deputy Molloy's question. If the Minister was aware in November-December 1994 and January this year of a controversy in relation to Horgan's Quay and if he called for an inquiry in the course of the Cork by-election into this matter, what did he do when he was Minister between December 1994 and June 1995 in pursuance of this matter? Did he ever ask the then chairman of CIE, Mr. O'Leary, to account for himself in this regard? Did he make any inquiries of CIE about this matter or ask for an explanation until he had removed Mr. O'Leary from the chairmanship? Is it the case that one of the reasons that actuated his removal of Mr. O'Leary from the chairmanship was that he wanted to get to the bottom of the Horgan's Quay controversy?

Minister of State at the Department of Enterprise and Employment (Mr. Rabbitte)

It is like asking Bart Simpson if he was bold.

Mr. Lowry

Yes, I was aware of the rumours. When I appointed a new chairman at the end of April, I gave him an instruction in respect of the policy the Government wished implemented in the company which meant restructuring, strengthening management, lifting the morale of the workforce and generally giving a sense of direction to the company.

Mr. M. McDowell

Will the Minister answer the question?

Mr. Lowry

During my initial discussions with the new chairman, I asked him——

Mr. M. McDowell

I asked about the old chairman.

Mr. Lowry

——as a priority to examine the Horgan's Quay site.

Mr. M. McDowell

Did the Minister ever ask the old chairman?

Mr. Lowry

I felt that was the appropriate form of action to take.

(Interruptions.)

Ms F. Fitzgerald

I believe that the taxpayer, tired of scandals like passports for sale, an expensive beef tribunal and EU fines because of malpractice, supports what the Minister is doing today. He has no apology to make for insisting on higher standards. As regards the CIE boardroom revolt in July where certain confidential information was leaked to the media, was this an orchestrated revolt organised out of concern for CIE or an attempt to destabilise the new management of the company?

Mr. S. Brennan

Let us cut it short; it is a Fianna Fáil plot.

(Interruptions.)

Mr. Lowry

Deputy Brennan would be well able to answer this because he was involved in the orchestration of this attempt. The reason the attempted coup failed was that Deputy Brennan was involved.

Mr. S. Brennan

A well known Fianna Fáil plot.

Mr. Barrett

Where did the Deputy hold the meeting?

Mr. B. O'Keeffe

Did the Minister attempt to mislead the House in his speech when he said that 12 months after the board of CIE agreed the sale of the Horgan's Quay Site, no money has been passed? However, there were two reviews in the interim period and the contract was only presented to O'Callaghan Properties last week.

Did he, in trying to support the argument in his speech, indicate an openended agreement? The Minister selected material from paragraph 16 of the heads of agreement of the sale approved by CIE and failed to inform this House that there were conditions pertaining to it and the contract to be signed. He particularly omitted to tell the House there was to be an agreement at a price to be negotiated but more importantly, in the event of the land becoming available and not being required for operational purposes. I hope the Minister will rectify that by giving the full details to this House and not try to mislead us in this manner.

Mr. Lowry

Payment of a deposit is normal in any transaction. For 12 months, a strategic public property has effectively been in the ownership of a private developer without a penny passing hands. Will the Deputy stand over that?

Mr. B. O'Keeffe

There was no contract.

(Interruptions.)

Mr. Lowry

The report shows that the heads of agreement approved by the CIE board in October 1994 provided that £50,000 was payable within 21 days of the property being made available by CIE, £200,000 was payable within a month, £160,000 after 12 months and £192,600 after two years. Any Member in this House could make a career as a property developer if those generous terms were made available to them.

Mr. S. Brennan

How could they pay?

Mr. Cowen

Much controversy has been generated by this Minister about consideration being paid for a site in Cork city. I refer the Minister to another site in Killarney, owned by Bus Éireann. Will the Minister confirm or deny that upon meeting Mr. Matson from a company called——

Mr. Rabbitte

Florida Enterprises.

Mr. Cowen

——European Market Outlets, at his direction, Bus Éireann is to transfer its operations from that existing commercially important site beside the train station to an alternative site being offered by European Market Outlets at the proposed development, which is a less advantageous site? Can the Minister also confirm or deny that Bus Éireann wishes to retain that site and that no consideration was paid by that company to Bus Éireann in compensation for his direction, which was arbitrarily given, to insist upon that site being available to those developers? Can he further confirm that when he makes so much noise about a site for which was paid £157,000 over the odds, he arbitrarily involved himself in the day-to-day operations of Bus Éireann on that matter, flying in the face of the Moriarty report and the Government's task force report adopted by the Government?

Mr. Lowry

The site in question was the subject of intense negotiation and consultation between my Department and CIE. It was the subject of numerous representations by numerous public representatives in the area. The matter was——

Mr. Cowen

The Minister involved himself against the better judgment of Bus Éireann and got no consideration.

An Ceann Comhairle

Deputy Cowen, if you put a question to the Minister, you should be courteous enough to listen to the reply.

Mr. Lowry

The answer is simple. All due procedures were followed in this case. It was the subject of discussion between my Department, Bus Éireann and the people who wish to purchase it.

(Interruptions.)

Mr. O'Dea

The Minister's central allegation related to surveillance. However, after 50 minutes of farce, he has produced no tangible evidence of this. The only evidence he has produced to support that outrageous allegation are anonymous letters, backed up by statements from unnamed people quoting other unnamed people and of course, his infamous sixth sense. Since the Minister has produced no verifiable evidence of surveillance, he should consider his position. The Minister said in his speech that he wants to clear away the smoke. Will he publish these anonymous letters or will he continue to hide behind legal advice he got from his senior counsel?

Mr. Lowry

I have already outlined the detail and chronology of events in respect of the surveillance issue. As regards the letters in my possession, I had, and have, reasonable grounds for my statements, as outlined to the House today. Everything I did was in good faith. I acted properly and responsibly in this matter and I am satisfied that the points I made today are justified.

(Interruptions.)

An Ceann Comhairle

The Minister may now give his five minute reply to the overall debate on this subject.

Mr. Lowry

I thank the Deputies who contributed to the debate.

(Interruptions.)

An Ceann Comhairle

The Minister only has five minutes to reply.

Mr. O'Keeffe

On a point of order——

(Interruptions.)

An Ceann Comhairle

I will not hear you, Deputy O'Keeffe. Resume your seat. The Minister has only five minutes to reply.

(Interruptions.)

An Ceann Comhairle

If some Members feel they cannot listen to the Minister's reply, there are many exits from this Chamber. I would advise them to take one before they are forced to take one.

(Interruptions.)

A Deputy

The Minister is no Johnny Cochrane.

Mr. S. Brennan

He is not O.J. Simpson either.

(Interruptions.)

An Ceann Comhairle

If the House does not want to hear the Minister's reply, we should go on to other business.

Mr. Lowry

I welcome the opportunity to speak today. I have oulined my case, answered the questions put to me——

An Ceann Comhairle

If a debate of this nature is to end up as a shouting match, we shall have to look again at this procedure. I do not like it.

(Interruptions.)

Mr. D. Ahern

The Government will not follow procedures.

Mr. Lowry

I have outlined my position. I have justified the comments I made——

Mr. H. Byrne

To whom?

Mr. Lowry

——and I have answered the questions put to me.

Dr. Woods

The Minister did not answer the questions.

Mr. Lowry

I rest my case.

Mr. Callely

The Minister's case is a shambles.

Mr. Cullen

The Minister did not set up his rumour machine to do that.

(Interruptions.)

Mr. Lowry

I want to get on with the real purpose of a Minister with my portfolio which is to manage the fundamental and radical change necessary to prepare our semi-State companies for a new working environment, to ensure that they are capable of operating within that environment, that they have a viable future, that the positions of those working within the semi-State sector are protected and that the semi-State sector makes a positive contribution towards making our economy competitive.

It is obvious that the case put forward by Fianna Fáil had only one purpose — to undermine me as Minister——

(Interruptions.)

Mr. Lowry

——in the hope of finding even a slight chink in the solidarity of this Government.

Mrs. O'Rourke

The Government has no chink — it is glued together.

Mr. Lowry

Fianna Fáil has failed and failed miserably. The next time——

Mr. O'Donoghue

The Minister will know better.

(Interruptions.)

Mr. Lowry

——Deputy Smith or somebody from Tipperary tells you that Lowry is a soft touch, pick a different issue.