Batt O'Keeffe
Question:908 Mr. B. O'Keeffe asked the Minister for Transport, Energy and Communications the cost to the taxpayer of the Price Waterhouse Report on Bord na Móna. [14940/96]
Written Answers. - Bord na Móna.
Batt O'Keeffe
Question:909 Mr. B. O'Keeffe asked the Minister for Transport, Energy and Communications the reason he did not involve himself in the current dispute between the Chairman and Chief Executive of Bord na Móna. [14941/96]
Seamus Brennan
Question:915 Mr. S. Brennan asked the Minister for Transport, Energy and Communications the nature and extent of the third study into the pay and conditions of the Chief Executive of Bórd na Móna; the cost involved; and the name of the consultants involved. [15193/96]
Dermot Ahern
Question:921 Mr. D. Ahern asked the Minister for Transport, Energy and Communications the contacts, if any, he or officials from his Department had with the Chairman and/or the Board of Bord na Móna in connection with the negotiations regarding the resignation settlement of the former Chief Executive Officer; and if he will make a statement on the matter. [15408/96]
Dermot Ahern
Question:925 Mr. D. Ahern asked the Minister for Transport, Energy and Communications if he will publish all the correspondence which passed between himself, the Secretary of his Department and his Department and Mr. Pat Dineen, Chairman of Bord na Móna and the former Chief Executive Officer, Mr. Eddie O Connor in the spirit of openness, transparency and accountability; if he will also produce the terms of appointment between his Department and Bord na Móna with Mr. Pat Dineen; and if he will make a statement on the matter. [15551/96]
Robert Molloy
Question:928 Mr. Molloy asked the Minister for Transport, Energy and Communications whether he approved the redundancy package offered to the former Managing Director of Bord na Móna; if he will give details of the package and an estimate of the gross cost; and if he will make a statement on the matter. [15627/96]
I propose to take Questions Nos. 908, 909, 915, 921, 925 and 928 together.
The matters arising from the questions have been addressed already in the Adjournment on 20 June 1996, the reply to a series of previous Dáil Questions on 2 July 1996 and in the statements at the session of the Oireachtas Joint Committee on State-Sponsored Bodies on 18 July 1996. However, it may be helpful to the Deputies who put down these questions if I reiterate the responses already made.
The process of bringing this affair to a resolution was unavoidably protracted. Public comment or moves by me or the Government to bring an earlier resolution of the affair would have led to accusations of political interference and frustrating the normal exercise of due process. I, and the Government, were obliged in the circumstances to observe a discreet silence to allow the Bord na Móna inquiry to take its natural course in order to enable the board to assemble all of the relevant facts and at the same time to provide every opportunity to the former Managing Director to respond to the issues raised in relation to his remuneration package.
As soon as its inquiries had been completed, the board — with the exception of the former managing director — concluded that there had been a breach of the Government pay guidelines. This conclusion was conveyed formally to me and, at this stage, I and the Government acted decisively to bring this matter to a conclusion.
On 9 July 1996 Dr. O'Connor was suspended by the Government, on full pay and benefits, pending a full review and early report by a third party of the corporate governance issues arising from the managing director's remuneration package.
However, the need for this review — by Mr. Frank Clarke, SC, — was removed by the resolution of the matter by mutual agreement between the parties on 12 July 1996 and the resignation of the former managing director. During the course of the negotiations leading to the resolution of this matter, the chairman of Bord na Móna was obviously kept informed of developments as a matter of necessity and professional courtesy. The Price Waterhouse Report was commissioned by Bord na Móna. The cost is a matter for the board and will not be a charge on the taxpayer. Recent correspondence between my Department and the former managing director of Bord na Móna touched on his suspension and related matters and it would not be appropriate to make that correspondence public.
The mandate given to Mr. Pat Dineen on his appointment as chairman on 13 September 1995, was clearly outlined by me to the Oireachtas Committee and is now a matter of public record. The mandate given to the chairman was a clear extension of the mandate already given to the previous chairman and was highly supportive of the company. The principal elements of the mandate were the need for concentration by the board on its core activities; the need for reductions in the group HQ overhead costs; concern at the board's involvement in wind energy research, and a reiteration of the Government's support for the company as demonstrated by the decision to inject £120 million of equity into the company and by the Government's full support for the construction of a new 120MW peat station.
The only other correspondence with the chairman — other than the incoming chairman's formal letter of appointment and the policy guidance outlined above — was a request from the secretary of my Department for a complete understanding of the managing director's remuneration package following the submission to him of the interim report on this matter which had been commissioned by the board and a letter from me to the chairman seeking a response to 13 questions about various aspects of the former managing director's remuneration package. A general request to all chairpersons about Government pay guidelines had been issued separately by me to all the State Companies for which I am responsible. This was not, of course, directed specifically at Bord na Móna.
Naturally there are day-to-day operational contacts between the Department and Bord na Móna. As all this correspondence and related contacts, in aggregate, would touch on matters which are, or could be, commercially sensitive. I do not propose publishing this correspondence.
I was not involved, nor did I involve the Government, in the matter of the managing director's remuneration package until the board of Bord na Móna came to a determination of the matter in recent weeks. I then took immediate action to ensure the matter was resolved, fairly and speedily, so as to allow the company to focus on its business problems.
Details of the settlement with the former managing director were provided to the Oireachtas Joint Committee on State-Sponsored Bodies on 18 July 1996. Dr. O'Connor was already entitled to preserved pension benefits and lump sum from his previous service with ESB and Bord na Móna to a value of £290,000. This figure should, logically, be deducted from the gross pension calculation to arrive at the additional cost involved. When this is done, the extra element of Dr. O'Connor's pension settlement is worth £424,000. This pension is based on his ESB and Bord na Móna pension schemes with ten added years. Such an arrangement is in line with public sector norms and has precedents going back for some time. Exit packages offered to and accepted by senior public servants under previous Administrations have included ten extra years of notional service for pension purposes.
In addition, Dr. O'Connor will receive a severance payment, a bonus due in respect of last year, his already agreed VHI payment and a contribution towards his legal costs. In aggregate, these come to £148,000 giving the total estimated additional cost of the package of £570,000. This is the agreed money element of the package.
The settlement also takes account of contested claims made by both the board and Dr. O'Connor. The board contends that amounts were owing to it by Dr. O'Connor in respect of cash advances, unvouched expenditure and personal expenses together with claims for reimbursement by Dr. O'Connor of a tax settlement already made by the company in respect of Dr. O'Connor's package and possible future liabilities which might arise with Revenue. Dr. O'Connor, in turn also claimed and contended that the proceeds of a bond amounting to £90,000 is owing to him. In full and final settlement, the parties have agreed that these amounts will be offset against one another without either side admitting liability.
The settlement between Dr. O'Connor and Bord na Móna received the formal approval of the Government on 17 July 1996. The resolution of this matter now allows the board, management and workforce in Bord na Móna to focus their attention once again on normal business and to concentrate all their energies on the many challenges facing the company.