Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 20 Mar 2002

Vol. 550 No. 4

Written Answers. - Contract Terms.

Alan M. Dukes

Question:

554 Mr. Dukes asked the Minister for Arts, Heritage Gaeltacht and the Islands her views on whether it is appropriate and within the grounds of EU and national law that her Department extended a public contract with a company (details supplied) for seven years while the original contract provided for an extension of five years; and her further views on the fact that this new contract should have gone to public tender. [8416/02]

Alan M. Dukes

Question:

555 Mr. Dukes asked the Minister for Arts, Heritage Gaeltacht and the Islands if the correct legal procedure was employed when her Department extended a contract in 1997 with a company (details supplied) in view of the fact that there were substantial amendments to the terms and conditions of the original contract. [8417/02]

I propose to take Question Nos. 554 and 555 together.

In 1992, a contract was agreed between the Minister for Tourism, Transport and Communications and the company referred to by the Deputy to provide a passenger and cargo ferry service between Galway and the Aran Islands for the five year period from 1 September 1992 to 31 August 1997. The initial annual cost to the Exchequer of this contract was €603,000. However, this was later increased to €698,000 with effect from 19 April 1994 in order to take account of inflation, extra operational costs and the cost of essential equipment required for the service. Included in the aforementioned contract, which was inherited by my Department in 1997, was a clause allowing for its possible extension for a further five year period after 31 August 1997 provided that agreement on this could be reached between the parties to the contract. In this context, officials of my Department, in 1997, entered into negotiations with the company concerned with a view to extending the contract for a further five years. During the course of these negotiations, however, it became clear to my officials that the cost to the Exchequer of an extended contract could be reduced if the extension was to cover a period greater than five years. As a result of this, a seven year extension of the contract was agreed at the considerably reduced annual cost of €603,000.

During the process of renewal of this contract, my Department sought and received the advice of the Chief State Solicitor on the legality of the proposed amendments to same and on any legal requirements there may have been to seek public tenders for the provision of the service. A copy of the draft contract was also sent to the Chief State Solicitor for approval prior to its implementation.
Top
Share