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Seanad Éireann debate -
Wednesday, 21 Sep 2022

Vol. 288 No. 4

Procurement Process for a New Irish Coast Guard Aviation Service: Statements

I welcome the Minister of State back to the House.

I wish to advise the House that I am constrained by procurement law in publicly discussing matters relating to a live procurement process. For that reason, I will not be in a position to disclose any information relating to the procurement specifications or anything that is commercially sensitive or integral to this process. In addition, I reiterate that the Government is acutely aware that all major procurements must be managed in a compliant manner and that, to that end, safeguards are in place to ensure that the process is undertaken in conformity with procurement law. A representative of the Chief State Solicitor's office is a dedicated adviser to the Department's project team for this particular procurement process and is advising on the process for and the preparation of all tender documents, in consultation with the Office of the Attorney General. In addition, a procurement process auditor, with the express task of providing assurance to the Secretary General, as Accounting Officer, on the conduct of the procurement process, has been appointed. The assurances provided by the auditor to date are published on my Department's website.

As I have stated previously in this House, the provision of an effective maritime search and rescue service is critical to Ireland as an island nation with a strong maritime sector. The sector depends on the reliability and professionalism of the Irish Coast Guard and all its component parts, including the Coast Guard aviation service, to offer a service which can deploy at a moment's notice to rescue people in distress and to bring them to a place of safety. The Irish Coast Guard has a distinguished record in delivering search and rescue services and a wide range of other essential aviation services for many decades, including the co-ordination and management, as appropriate, of aviation services delivered by the Air Corps and civil operators.

The next aviation service contract allows the Coast Guard to meet its obligations as prescribed in the national search and rescue, SAR, plan and the national oil and hazardous noxious substances, HNS, contingency plan as well as its capacity to support other State agencies, in particular inland search and rescue support to An Garda Síochána and provision of air ambulance services to the HSE, including day and night support to the island communities.

The issues raised by Senator Craughwell have been comprehensively addressed during previous debates in this House and through direct correspondence with him.

I assure the House that the competition for the next aviation contract will be run in accordance with the public spending code and procurement law. It is imperative that a suitable contract be in place quickly to meet our obligations to protect lives, to support communities and the maritime sector, to deliver on the national search and rescue plan and to provide value-for-money services to the citizen.

May we have a copy of the Minister of State's statement, please?

Does the Minister of State have any copies of her speech?

Are they not there? Sorry. I will-----

Are there any copies outside? No. The Minister of State's office might provide some-----

Yes. We will have them sent to-----

-----for Members while the debate is ongoing. The first spokesperson is Senator Buttimer.

I will share time with Senator Doherty. I thank the Minister of State for being here, commend her on the statement she has made to the House and welcome that we have commenced a formal procurement process for a new Irish Coast Guard aviation service. The tender was amended earlier this year. The procurement process is, as the Minister of State said, commercially sensitive, and I will not stray into that. I understand that the Government is acutely aware of the significance and importance of this contract and this service. I thank the men and women who serve at critical times, on occasion in awful conditions. It is important we recognise that the pre-qualification questionnaire, PQQ, evaluation process has begun. I am only sorry we did not have the base in Cork, but we will not go into that. There are four bases in Ireland.

I thank the Minister of State for being here. We will get our contract signed.

My question does not really relate to any of the intricacies Senator Craughwell has brought up. As the Minister of State will be well aware, Senator Craughwell has been raising this issue and the concerns he has about the contract week in, week out. The one thing that bothers me is not his tenaciousness but the fact that the more he digs the more he uncovers.

What really struck me, as a former Cabinet Minister, is the information that was uncovered and reported on in not only the Business Post but also The Irish Times during the summer that the business case was prepared by a member of staff of the same company that applied for the contract in the last round of the tender. While that is absolutely outrageous, with Chinese whispers and all the excuses that have been given as to how one person in one office did not know what the other office was doing and how we kept them separate so there was no issue, I do take issue with the fact that Cabinet members were presented with the business case without being informed that the same company would potentially and, subsequently, actually apply for the tender. That company did not get the tender, but that is not the point.

Did the Minister for Transport or his predecessor go back to the Cabinet members who sat around the table and ask them if they would have made the decision to accept the business case on which the tender was then procured and created, knowing full well that it was by a member of staff whose organisation was going to apply for the tender? If that had happened around the table when I was there, I certainly would not have made that decision. It is incumbent on us now to go back to the Members who were at the Cabinet table at that time and who made that decision, not knowing that the business case was drafted by an organisation that then would be or could potentially be applying for the tender, and to ask them to review the business case again. That would put paid to the current tender. Given that this agency and this service, which acts on behalf of the State, is so important, however - and we can see how impactful it can be, not least the other weekend with the rescue of the gentleman who got caught in the cave - it is incredibly important that there is absolutely no ambiguity around the awarding of a contract and no sense of suspicion, which has been created in recent months and clearly highlighted by three of our leading newspapers on the back of the information Senator Craughwell has uncovered.

The Minister of State is welcome to the House for this, the third debate I have requested on the procurement process for the next SAR contract. I acknowledge that in the letter of 4 August, signed by the Minister of State and the Minister for Transport, Deputy Eamon Ryan, it is stated that, as Ministers, they are somewhat removed from the day-to-day execution of procurement processes and that they have engaged with their officials to understand and to reply to the issues I have been raising.

Is the Minister of State happy to be subservient to her officials in supporting them in blocking Oireachtas oversight of this procurement? Does she have regard to how taxpayers' money is spent? Is she even the slightest bit concerned that her officials are proceeding with the procurement of Ireland's next SAR service without the in-house aviation expertise the air accident investigation unit, AAIU, recommended following the fatal crash of R116? Is she aware that the UK has just signed a SAR contract for 18 helicopters for 12 bases, including fixed wing and drone support, for a total of £1.6 billion for ten years, whereas her Department's tender currently stands to cost us €1 billion for five helicopters for four bases, and possibly €1.5 billion by the time the contract is signed?

Is she the slightest bit concerned that before the contract is awarded plans are being put in place to circumvent the AAIU recommendation concerning new flight time limitations imposed by the Irish Aviation Authority on SAR operators? The letter of 4 August states that the new regulatory framework underpinning this also allows for any operator, new or existing, to apply for a variation from the maximum flight duty period of 12 hours, which would allow for a full 24-hour crew roster, with the approval of the IAA, subject to the development of fatigue risk management systems by the operator concerned. Has her Department learned nothing from the reckless management of SAR which cost four lives? Is she aware that the UK fleet includes six AW139 helicopters which her advisers rejected without one scrap of empirical evidence to support their opinion? Can she tell the Irish public what experience the advisers her Department is using have in SAR? According to my information, they are not, and never have been, SAR pilots and they are not SAR crew?

Let me turn to the business case and Frazer-Nash. The letter of 4 August dismisses any potential conflict of interest involving Babcock's defence and security group, which may be bidding for Department's Coast Guard SAR contract. It is my understanding that neither she nor the Cabinet were made aware that all companies within the Babcock International Group, including Frazer-Nash, use the same secretariat or that all Babcock companies, including Frazer-Nash, use the same address. Was she or the Cabinet made aware that the directors of Frazer-Nash held directorships in Babcock companies? I have the names here but I will not read them out. One of the directors, however, has 59 directorships in Babcock as well as Frazer-Nash. Another director has 13 directorships in Babcock companies as well as Frazer-Nash, a third has eight directorships in Babcock companies has well as Frazer-Nash, a fourth has two as well as Frazer-Nash, while the final director has one. All five directors of Frazer-Nash are, or were at the time, in some way related to Babcock. Am I correct in my belief that the initial business case when presented to Cabinet did not highlight the connection between Babcock and Frazer-Nash? Were any precautions notified to the Cabinet in the document when it approved it? If not, for what reason was that left out?

I now turn to the 415-page submission of the Air Corps. The letter of 4 August states that the Air Corps provided its own costings in respect of its hybrid option. It was noted at the time that the Air Corps proposal was reliant on the procurement of at least two additional aircraft. How were a possible two additional aircraft costed? How does one cost that in a business case? Was it two, three or four aircraft? How many aircraft was the Air Corps supposed to be charged to have? The August letter states that the AW139 helicopter type originally proposed by the Air Corps did not meet the requirements of the Coast Guard in terms of payload range and interoperability. I have seen the three-page document produced by Aerossurance Limited which criticises the 415-page Air Corps proposal. Not one scrap of empirical evidence is provided. Nothing is provided to support its view. Can the Minister of State explain how the aircraft that will form one third of the new UK fleet and is in use all over the world in SAR roles did not meet the Irish requirements? What do we know that the rest of the world does not know? Was the submission from Mountain Rescue Ireland in which it stated that it had difficulty with heavy helicopters being unable to land on soft ground in the mountains, as well as the risk in cliff rescue situations of casualties being blown off the cliff due to the downdraft of these heavy helicopters, taken into consideration? I invite her to look at the video made by CHC which refers to the difficulties caused by downdraft and the damage it can do in a rescue situation. Was the question of operating costs considered? It is clear that the AW139 is a much cheaper helicopter to operate than an S-92.

The letter of 4 August states that discussions are ongoing with the Air Corps on SAR. When were the most recent meetings, phone calls, letters or emails on this matter? Does the Minister of State support the Secretary General of her Department when he makes the most outrageous and possibly libellous allegation against the members of the Oireachtas joint committee? He stated in a letter that another source of risk is the possibility that a member of the committee may have a relationship with one of the participants in the competition and might put questions to the Department-----

Might I interject to say that, in the absence of the Secretary General of the Department, I do not think-----

The Minister is responsible for the Secretary General.

The Senator can make a political charge to the Minister but not-----

The Minister is responsible for what is said in her Department.

It should not be directed at him personally.

The Department made these allegations. I need to know if the Ministers stand over that.

Yes. The Minister has political responsibility for the Department.

Who is this civil servant who feels he can treat elected Members of this House in that way? Does the Minister of State accept that the Oireachtas and its joint committees have an oversight and governance role set out in EU Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on procurement, particularly under Article 83?

Finally, in the most recent SAR contract the public was told that we were getting a fleet of new helicopters that would cost €40 million each. We did not get a fleet of new helicopters. We got secondhand helicopters and they were not valued at €40 million each. All I will say to the Minister of State is that I have not heard a comment from her or her Department that has convinced me that we are going the wrong way. The public has a right to know. Why is it that we can never deal with issues of public procurement in a proactive way? This is how we finished up with a children's hospital that was initially costed at €600 million but will probably cost €3 billion. Why are we always looking back, with statements from Departments saying lessons have been learned and they will not let it happen again? Quite frankly, this is a disaster. It should go back. The Cabinet should say to go back and start all over again.

I am covering this matter for Senator Dooley, who is the Fianna Fáil spokesperson on this issue. I am not as familiar with the area as Senator Craughwell or some other Members are but I have been a member of the transport committee for the past year and am somewhat familiar with some of the concerns of Senator Craughwell. I appreciate that the Minister of State is in a position where it is a live procurement process and she feels very much restricted in what she can say. I totally get that. People who are bidding on the process have a right to have a fair hearing and a fair process. There are concerns, however. There are certainly concerns that Senator Craughwell has raised repeatedly and I would like answers for him, and for us all, just to put those concerns to bed one way or the other.

I want answers to the questions. I certainly want an answer on the issue of how much we will allegedly pay for what we are getting compared with what is being paid in other jurisdictions for what they are getting. It may be that we are not comparing like with like, but I do not know if that is the case. I need to see a process that allows me to recognise there is a reason, such as it being 24-hour service, extra services being provided here or the UK's Royal Air Force being a much larger air force than our Air Corps. I do not know. Certainly the very sad event of the R116 tragedy brought into our minds just how important the Coast Guard is and how dangerous a job it does. It is really important that, in as much as the Minister of State, the Secretary General and the Department can, they answer these suggestions, allegations, complaints and issues. They should put the answers out there where they can so do, and say that certain matters are not true or are being misunderstood or misinterpreted.

I am not as much of a conspiracy theorist as some people but I am not suggesting there are not questions to be answered. There are answers that I would like to hear. Senators Doherty, Buttimer and all of us would like to hear answers to various questions that have been raised, even if it is just to say that there is nothing to see here. The longer we hear that we cannot talk about or see something, the more that leads to people having less confidence in the process. We are overpaying for a service. It is a vital service but we do not want to be paying multiples of what we need to pay for it because that money is then not available for all the other services we need to provide. I thank Senator Craughwell for continually raising the issue. He knows more about it and is more involved, over a longer period, in it. He is not doing it for the good of his health or just for the sake of it. He has genuine concerns and inasmuch as a Department can answer those concerns, it should. There are rules about procurement processes and contracts and so on. I am not making specific reference to this particular procurement process but there are things that possibly could be addressed in a wider sense regarding what we are looking for and what was the background to it. I do not suggest that anything bad is going on here but the most important thing is that we can nail it by saying there is nothing wrong here, we have shown it, articulated the points made in greater detail and answered on every question as much as we can. I thank Senator Craughwell for putting this down as an item for discussion and I thank the Minister of State for her response.

I appreciate the difficult position the Minister of State is in. We have been on the transport committee and have had back and forth with the Department about whether we could meet its representatives in private, in public, or at all, or whether the meetings would be minuted or not. All these various topics have being discussed. We are all looking for as much transparency as we can get for the benefit of everybody but most importantly for the benefit of the users of the service and the taxpayers who are ultimately paying for the services. We want the best service we can get at the best value. It is important we understand why our contract appears to be much more expensive than others. That is not about this particular bidding process but there may be reasons our process and contract seem to be much dearer than the other one. Maybe we are getting many more services in our contract but I do not know that and that is what we need to know. We need to understand what is being asked for of the contract and the contractor, whoever they are, who ultimately does this. I get that there is not an enormous field of people who are able to provide these services. It is a relatively small number of people who have the wherewithal to provide this contract. I appreciate in some of these global, multinational companies that there are many directors who are directors of other companies. I am not saying that any of them are sitting around talking. There are usually Chinese walls in companies to make sure stuff does not happen but we need to nail all that down and show the public, Senator Craughwell and anyone else who is watching and is concerned about it, that we have done everything we can do as a State to meet international best practice.

I thank Senator Craughwell for arranging this debate. He probably knows the subject much better than most of us but he is raising very serious concerns that warrant further scrutiny and explanations. I cannot help but note the fact that this is a discussion about the privatisation of an essential public service. It seems the Government parties will never get their heads around the fact that privatisation is a failed project. We are in the middle of an energy crisis. The carving up of the ESB into EirGrid, ESB Networks and Electric Ireland has proven disastrous and is preventing us now from delivering for households. We went from having the lowest cost of energy to the highest cost of energy by privatising our electricity sector. Bord Gáis Energy, a subsidiary of the British-owned Centrica, was also privatised. Its operating profits surged by 74% in the first half of this year but we cannot recoup them because it was sold off in 2013. We sold off Aer Lingus, our airline, and look at the disaster we are seeing now in terms of the service it is offering to customers. I could go on. It is very clear that the Government today has not learned the lessons of previous Governments when it looks at privatising yet another public service. A service such as the Coast Guard is fundamental to any State and to see that being privatised is a disgrace. Sinn Féin believes in public services and public ownership for the public good. Apart from the fact that we always sell off our assets and our State silver in privatisation, we also do not seem to learn any lessons from the procurement processes of large projects. The children's hospital has been cited as one such example where there is a bottomless pit of public money. Sinn Féin representatives have spoken in the House on many occasions on ways to improve the procurement process; not only in terms of having better oversight and transparency, but also around having a social element to it and ensuring it is not just the lowest cost bidder that gets the tender. When we are tendering out to procurement using public money, the communities in those areas should benefit. We should not just look at the profit line but should take other factors into account as well.

Senator Craughwell is right to raise the issue around the Secretary General declining to appear before the Oireachtas joint committee. In setting out his reasoning, the Secretary General emphasised the importance of ensuring that tendering companies are treated equally and in a transparent, proportionate, manner. It is hard to fathom how somebody can come to the mental gymnastics required to say that appearing before a Oireachtas joint committee would jeopardise transparency. With all due respect, it is some feat of mental gymnastics to use that excuse. The Oireachtas joint committee has an important role in the governance and oversight of procurement. The EU directive quoted by the Secretary General, namely, EU Directive 2014/24/EU, which was used to defend not appearing before the committee publically is very clear about the function of oversight. I do not know whether it was a mistake in using that directive as justification or they were hoping that people would not actually read the directive. It states that where monitoring authorities or structures, such as the Oireachtas joint committee, are informed of or investigate information on specific violations or problems that "they shall be empowered to indicate those problems to national auditing authorities, courts or tribunals or other appropriate authorities or structures, such as the ombudsman, national parliaments or committees thereof". Either the directive was not read or it was deliberately misrepresented. The State has made several blunders recently in terms of procurement. The emergency electricity generation also failed to deliver because of the procurement process. Very serious questions have been raised and we deserve to have answers when we are spending public money, especially on something as important as the Coast Guard service.

Notwithstanding anything in Standing Orders, given that all the time for spokespersons has not been used up and we have 20 minutes, I propose that we allow Senator Cummins some time to speak.

Is the Leader proposing that notwithstanding the Order of the Seanad today that Senators, other than group spokespersons, may contribute to statements on the procurement process for a new Irish Coast Guard aviation service and that the contribution of any such Senator shall not exceed five minutes?

I thought the Leader was just referring to Senator Cummins, and that would have been fine.

Is that the Leader's proposal?

Is that agreed? Agreed.

I thank the Leas-Chathaoirleach and the Leader for facilitating me with a chance to speak.

I thank the Minister of State for her attendance in Waterford for the official sod-turning of the €5.3 million Irish Coast Guard station in Bunmahon. There are synergies there between the old elements of the Coast Guard service, particularly Rescue 117, which was based at Waterford Airport, the South Eastern Mountain Rescue and our ground crews across all of the bases in Waterford. It is very important that we provide them with the best of equipment and facilities and obviously this new station is going to be hugely important in that respect.

When I spoke on this particular issue last January, I said that I did not share the downbeat assessment that the base in Waterford would be lost.

It was unfortunate at that time, in January, that Senator Craughwell took to Twitter, stating:

I see the tender is out. Clearly, one station is not being renewed. I expect Waterford is gone.

It caused a great deal of unnecessary distress within my own community in Waterford and the entire south-east region. I put on record my thanks to the Minister of State, Deputy Hildegarde Naughton, and Government for moving to clear up the uncertainty that was put out there in the public domain in relation to the base at Waterford and the excellent service provided by all of crew members. The Minister of State visited Waterford Airport only prior to the summer recess where she awarded winchperson, Sarah Courtney, a bravery medal for her excellent work along with the crews based out of Waterford Airport.

I do not envy the Minister of State her job. She has a difficult task in overseeing what is a highly commercially-sensitive process. I wish the Minister of State well in that respect. Some of the points that Senator Horkan referenced, in terms of whether we are comparing apples with apples and oranges with oranges, like with like, are relevant here. No doubt the Minister of State will steer the course in this process that will ensure that the best service possible is provided to the people who need it most and that that service will be available night or day, 24/7, 365 days of the year. That is what we should not forget. While value for money, of course, is very important for the State, fundamentally what is most important here is that we have a service of excellent quality that is able to rescue people in their hour of need.

The service that is provided across the four bases currently, Sligo, Shannon, Waterford and Dublin, is second to none. I want to put on record my thanks to all of the service personnel in those bases for their excellent service. I have no doubt that they will continue that over the next number of years.

I thank Senator Cummins. Certainly, the Senator deserves ten out of ten for tenacity. Well done, congratulations.

I note a number of issues raised today were previously addressed before this House under the Seanad Private Members' motion on 28 May 2021 and under a Private Members' motion and Government counter-motion on 2 February 2022.

I would like to assure the House that this process is being undertaken in line with the Government decision of 27 July 2021 and with EU procurement law, most notably, European Union (Award of Public Authority Contracts) Regulation 2016, SI 284/2016.

There is no basis to support calls for Government to suspend or further delay the process. Furthermore, if the procurement does not continue, the Government will be in breach of public procurement law when the current contract expires. Moreover, lives could be put at risk if Government allows the current contract to expire without a replacement contractor being appointed.

An independent external process auditor is continually reviewing the conduct of the process on an ongoing basis. Assurance statements provided by the independent external process auditor to the Secretary General of my Department are published on the Department's website.

I reiterate that it is imperative that a suitable contract be in place quickly to meet our obligations to protect lives, to support communities and the maritime sector to deliver on the national search and rescue plan and to provide value for money services to citizens.

It is rather easy to just write off what has been said.

Sitting suspended at 6.14 p.m. and resumed at 6.34 p.m.