Vol. 574 No. 1
118 Mr. Howlin asked the Minister for Communications, Marine and Natural Resources the circumstances in which, according to the report of the Comptroller and Auditor General, the State is facing a ?12.9 million loss on the deal negotiated with a company (details supplied) regarding the purchase of fibre optic communications links; the steps being taken to recover outstanding moneys; and if he will make a statement on the matter. [24497/03]
The Deputy quotes the Report of the Comptroller and Auditor General 2002 as stating that the State is facing a €12.9 million loss on the deal negotiated with a company (details supplied) regarding the purchase of fibre optic communications links. However, the report actually states there are outstanding debtors totalling €12.9 million and not that the State is facing a loss of this magnitude. Functional responsibility for recovery of these moneys resides with IDA. The current position is that there are three companies, Worldport, Princes Holdings and Metromedia (Global Voice Networks Ltd.), with outstanding debts in respect of contracted capacity resales arising from the international connectivity contract entered into by the IDA in 1999. The State, through the IDA and my Department, continues vigorously to pursue those debts through legal and other actions as necessary.
A debt of approximately €3.14 million is still owed in the Worldport case. There is a parent company guarantee for the full amount of the debt from the US parent company of the contracting entity and, in default of payment, it is the intention to take court proceedings against the parent on foot of that guarantee. A debt of approximately €6.28 million in the Princes Holdings' case was owed at the time of the publication of the report of the Comptroller and Auditor General. The State held a bank bond for €1.587 million of that debt and that has been foreclosed on. Proceedings were issued against Princes Holdings on 3 November claiming the balance of the moneys owing.
A debt of approximately €2.57 million is still owed in the Metromedia (Global Voice Networks Ltd.) case. On 3 November 2003 legal proceedings were issued against the company claiming the moneys owed.
Is it not the bottom line that a sum of almost €13 million is owed to the State, which is almost enough to pay for a stroke in the Minister for Finance's constituency? I read the caustic comments of the Comptroller and Auditor General who severely criticised the Minister's Department on this matter. Is this a classic example of a public private partnership that was created on a wing and a prayer? The State, on behalf of the people, repeatedly bears a significant risk in these arrangements while private operators carry much less risk. Mr. Purcell, the Comptroller and Auditor General stated, "It would have been preferable for the State to have entered a joint project where all risks were shared between the public and private sectors, as originally envisaged." Is that not the way the Department should have proceeded? The funding is ultimately owed to the Department of Enterprise, Trade and Employment through the IDA. Was this not a complete cock up on the part of everybody concerned, which left the State with a €13 million write off?
Significant volumes of expensive cable have been purchased, which is not lit up. How will the infrastructure, on which millions has been spent, be connected?
Deputy Broughan again displays his total ignorance of the telecommunications sector. The Global Crossing contract has linked Ireland to hundreds of cities around the world and has given Ireland the ability to be one of the cheapest, if not the cheapest, telecommunications operators.
Everyone accepts that.
Multinationals will continue to set up in Ireland because it has the best and cheapest connectivity in the world.
If one lives in Dublin.
I asked about the contract.
The Minister totally misses the point.
I have replied regarding the outstanding debts. We are pursuing them.
Give us the details of the contract.
I disagree with the Comptroller and Auditor General's analysis of the contract.
The Minister disagrees with everyone.
This was one of the most important infrastructural projects for Ireland Inc. and it will stand the test of time. Deputy Eamon Ryan stated a number of the fibres are not lit. This is an investment for the future and it will allow Ireland to be at the keen edge of ICT development.
How will the fibres be connected? Answer the question.
The Opposition reacts, we act.
Written Answers follow Adjournment Debate.
