Written Answers Nos. 41-44
42. Deputy Éamon Ó Cuív asked the Minister for Public Expenditure and Reform the discussions he has had with the Valuation Office in respect of valuing for commercial rates purposes assets to be transferred to any new State organisation when these assets are not currently subject to commercial rates; and if he will make a statement on the matter. [2824/13]
View answerThe Commissioner of Valuation is independent in the exercise of his duties under the Valuation Act 2001. Under the provisions of that Act, commercial and industrial properties occupied by the State may be entered on the valuation list but are not rateable. If such properties entered on the valuation list are transferred by the State to another body, public or private, they become effective for rates purposes immediately. As the valuations are already on the valuation list, there is no need for the Valuation Office to revisit those valuations. If rateable properties are not on the valuation list, Local Authorities may apply to the Commissioner under Section 27 of the Valuation Act and the Commissioner will schedule their valuation.
43. Deputy Aengus Ó Snodaigh asked the Minister for Public Expenditure and Reform if his attention has been drawn to underbidding by companies awarded public procurement contracts. [3063/13]
View answerThe procurement of public contracts should be conducted in an open, objective and transparent manner and the principles of all EU and national public procurement rules should be adhered to. A tender which might be regarded as abnormally low or below cost may not be rejected without investigation and consideration of the relevant elements that gave rise to a particularly low bid. Such elements might include an innovative technical solution or exceptionally favourable conditions available to the tenderer. The tenderer should be given the opportunity to explain the basis of the tender. Under Article 55 of 2004/18/EC; the EU Directive governing public procurement, contracting authorities are obliged to consider the constituent elements of a tender before it may reject a tender on the basis that it is abnormally low. Having carried out an investigation on the constituent elements of the tender, should it consider the tender to be abnormally low, the contracting authority may reject the tender but is not obliged to.
There is an acknowledgement that the construction industry has seen the greatest decline in activity and with it the highest rise in unemployment of all sectors in the economy. The collapse in construction output from the high and unsustainable level of almost 25% of GNP (€39 billion) in 2006 to just 7% of GNP in 2011 (€8.7 billion) has been accompanied by intense competition resulting in a reduction of tender prices across the construction sector. When investigating what may appear to be an abnormally low tender for a public works contract, contracting authorities must take into consideration the possibility that a contractor may be obtaining more favourable terms from suppliers and subcontractors than rival tenderers. There is little scope for manoeuvre on labour costs since, under the public works contracts, contractors are required to pay workers covered by the Registered Employment Agreements the rates and additional costs set out in those agreements. However, more efficient methods of working to reduce labour costs cannot be ruled out in assessing a tender. Notwithstanding this, there is nothing to prevent firms from performing a contract at a loss, providing the contracting authority has satisfied itself that the contractor has the financial capacity to absorb that loss.
44. Deputy Brendan Smith asked the Minister for Public Expenditure and Reform if he expects to be the shareholder on behalf of the State for any new commercial semi-State entities or State companies; and if he will make a statement on the matter. [2828/13]
View answerCommercial semi-State companies are generally established with two Ministers holding shares or capital stock on behalf of the Government – the relevant Minister with responsibility for the sector in which the company is operating and the Minister for Public Expenditure and Reform, who is the Minister with overall responsibility for the commercial State sector. This position notwithstanding, the appropriate ownership structure to be used for any new commercial semi-State entity or State company will be a matter for consideration at the appropriate time, on a case by case basis, having regard to the functions the entity is to perform and the most appropriate structure to achieve this. EU or other legislative provisions governing the ownership of such entities (such as, for example, EU provisions on ownership unbundling in the energy sector) or other relevant factors, and also the type of structure that would best facilitate any plans for the future development or expansion of the entity, will also be taken into account. The final ownership structure to be used in any particular instance will be the one that best achieves the Government's objectives while protecting the public interest.
