Dáil Éireann díospóireacht -
Tuesday, 7 Jul 1992

Removal from Office of Telecom Éireann Chairman: Statements.

Minister for Tourism, Transport and Communications (Mrs. Geoghegan-Quinn)

Judged by any standards Telecom Éireann are one of the biggest companies in the State. With 13,500 employees they are in the top ten employers in the country. With a turnover of £782 million in 1990-91 they had the eighth largest company turnover in the country. With almost 1 million customer lines they are connected to 67 per cent of households in the State. They have 17 subsidiary and related companies covering all aspects of telecommunications ranging from directory publishing, sale of equipment, cable TV, and foreign consultancy. They provide residential security systems, a radio paging service, research and development services, and electronic trading services in addition to their basic telephone and data transmission facilities.

The nub of the issue which we are discussing today is a simple principle. In order to properly conduct the business of a company, whether in the public or the private sector, a chairman must have the support and confidence of his-her board.

The fact of the matter is that the chairman of Telecom lost that confidence. The board of the company, out a sense of unease and tension, formally passed a motion of no confidence in him and made contact with me which ultimately led to my taking the only action I believed was appropriate in order to ensure that the best interests of the company prevail.

The sequence of events was as follows: On 26 June 1992, the company secretary of Telecom Eireann informed me that the members of the Board of Telecom, at a meeting earlier that day, had passed a motion of no confidence in the chairman, Mr. Brendan Hynes.

They requested an early meeting with me to inform me directly of the situation. I could not meet them on Monday or Tuesday of last week, because I was signing a transport agreement in Hungary, so the board agreed to meet me in Galway on last Sunday week, 28 June.

When they met me, the board made it clear to me that this no confidence motion was not a sudden or an easy decision. It had been reached after careful consideration, with great reluctance.

The reluctance and the personal regret resulted from their appreciation of what the chairman was setting out to achieve. They had welcomed the appointment of Mr. Hynes as chairman of Telecom and individually and collectively had given him every assistance possible. Individual members of the board had briefed him on various aspects of telecommunications and he had been given full access to all the information available in Telecom Eireann. They stressed that there was a general desire in the company to assist the chairman in every way in his task of leading the company. He had clearly devoted time and effort to the task. He had become familiar with the strengths and weaknesses of the company in order to identify the policy changes which would allow Telecom Éireann to continue to prosper in the increasingly competitive days ahead.

The problem was not with the former chairman's thinking, the problem was with the former chairman'smodus operandi. The company and the former chairman are not greatly at odds on what has to be done, but they are at odds on how it should be done.

In business terms, there is just no point in having the right objective and the determination to achieve that objective, if you cannot take the board and management of the company along with you. As chairman of a State-sponsored body, there is just no point in having a vision of the future of that company, and submitting documents to the Minister which incorporate that vision, if you have not cleared those documents with the board in advance.

This is really the heart of the matter. It is the board of the company who collectively have overall statutory responsibility for the company — not any officer of the board or of the company: proposals being sent to me from the company must have the approval of the board; no officer of the board can function without the support of the board and the board normally report to me through the chairman or the company secretary. In practice, this means that a chairman must secure board approval for his-her proposals. So, the House can see, the situation facing me last week was very clear.

The board had come to a unanimous decision that they had no confidence in the chairman. It was a situation without parallel in the last 40 years. The board were unequivocal: the chairman must go or they would go. When I sought clarification on why they had so decidedly lost confidence in the chairman, the board identified a number of key factors.

They spoke of the chairman's style of operation at board level, which they regarded as unacceptable. They spoke of his interaction with senior management of the company, which they also regarded as unacceptable. They spoke of a divisiveness created within the board and of loss of morale both within the board and within the company generally.

I could not claim to have been without choices in this situation. I certainly had a choice — in the same way that a person who is between a rock and a hard place has a choice. If I did not seek Mr. Hynes's resignation, the board would, individually or collectively, resign. I listened, took advice, took time to consider this grave matter over a period of almost a week, and on Friday, asked for Mr. Hynes's resignation.

When he refused to resign I had no realistic option but to remove him under section 16 (2) (b) of the Postal and Telecommunications Services Act 1983, with the consent of the Minister for Finance. Although he has been removed from office he will continue to be entitiled to receive a fee of £7,500 a year up to and including 28 January 1996.

While we are here today to discuss the removal of Mr. Hynes, there can be no doubt that if I had taken a different decision we would be here today debating the resignation of some or all of the other board members. This is a classic case of the Minister being in a "no win" situation.

I have acted in the best interest of Telecom Éireann, their employees, their customers and the taxpayer. Telecom Éireann have made great strides over the past ten to 12 years and we now have a first-class telecommunications service. They must continue to improve their efficiency and reduce their costs. Charges must be brought closer to those of our major trading partners.

The telecommunications environment, both nationally and internationally, is becoming increasingly competitive. I will take a personal interest in ensuring that Telecom are geared to cope with the competition. I ask those who argue that they have Telecom's interest at heart not to undermine their achievements or hinder them continuing development.

There was some speculation in the media that differences of opinion on privatisation might have contributed to the disagreement between the chairman and the board of the company. I am assured there were no such discussions at the board. Decisions on privatisation are a matter for the Government and not for the board of Telecom Éireann.

I have asked Professor John Scanlan to take over as acting chairman. He will have exactly the same brief as his predecessor. Professor Scanlan is currently professor of electronic engineering in University College, Dublin, and a member of their governing body.

He has been a director of Telecom Éireann since 1984. He, therefore, is closely acquainted with and has a deep understanding of telecommunications in Ireland. At a European level, he is a member of the COST telecommunications group. He is the only Irish Fellow of the prestigious Institute of Electronic and Electrical Engineers of the United States.

I expect him to ensure that the board deal speedily and decisively with the major issues facing the company. Cost containment and, indeed, reduction must be a priority and benefits must be passed on to the customer in the form of real reductions in charges, and to the taxpayer in the form of increases in dividend.

In addition the acting chairman will have a major role in ensuring that the company's control systems are revised and updated as I requested in my letter of 27 March last in order to protect the interest of the shareholder — who is the taxpayer. The board will have to satisfy themselves that they have all the appropriate information to supervise the company properly.

I want to pay tribute to the staff of Telecom Éireann who have made a major contribution to the success of the company by their full co-operation with technological change, changing work practices and cost reductions.

I have every confidence in the board of Telecom Éireann and in their capacity to have the wisdom to put recent events behind them and in their determination to ensure that the company will continue to be successful in facing the increasingly competitive communications environment.

Mr. R. Bruton

This is a sad day for this House. Telecom Éireann should have been the greatest flagship of the State sector, a company capable of delivering high quality service and of earning high profits. They would have been capable of standing as one of the greatest examples of a company emerging from the State sector able to hold their head high, but in the space of just six months we have seen them being plunged into turmoil and confusion. The Government must take primary blame for this position. The Government left Telecom Éireann without a board between December 1991 and April 1992, a crucial period for the company. Members will recall that this company went through a controversial and difficult period following the resignation of their former chairman and to leave that board at sea for a vital period of four months represents serious neglect on the part of the Government. The board still require three appointments, they are currently operating below strength and working from a very narrow base. At present only two members of the board have any practical business experience outside Telecom Éireann. This is not a healthy position for any company.

Members will recall that this position is a direct consequence of a mandate given by the former Minister to the former chairman on how he was to conduct the business. A letter to the former chairman from the Minister made it clear that he wanted the incoming chairman to be involved in the day-to-day operations of the business. That letter stated: "these duties are important and will involve in my view a serious time commitment each week". The mandate requested the former chairman to examine the ability of the company to make strategic plans appropriate to the increasingly competitive environment they faced. He was to play a direct role in the control and assessment of capital expenditure programmes which are now very substantial indeed as the Minister stated in the letter. The former chairman was to actively involve himself in ensuring a performance which resulted in the maintenance and, if possible, improvement of the State's financial returns. That was a mandate, in my view, for very heavy involvement by this company, and it was that mandate which, according to all reports, brought the chairman into conflict with the board. I will return to this point later because many of the issues which the chairman highlighted are substantive and are of concern to the general public.

It is incredible that the Minister was not alerted to the friction within the company until after a vote of confidence was taken by the board. It would seem that at the very minimum the Minister should be awere of the conduct by the board of its affairs as their members were newly appointed and the board had commenced operations after a lapse of a long period, particularly at such a vital and sensitive time for the board and the company.

It also seems extraordinary that the Minister did not have any meeting with the outgoing chairman about whose conduct she was so critical in her remarks. The Minister's main criticism of the former chairman, apart from the fact that he had lost the confidence of the board was that he had provided her with documents which incorporated his vision but he had not cleared them with the board in advance. If that was a major issue in the eyes of the Minister she should have gone to the trouble to find out what was behind that state of affairs. The Government and the Minister have not given sufficient attention to the board and their operations and this is one of the reasons the company are in turmoil.

Very serious substantive issues have been raised by the outgoing chairman. He raised the issue on a broad plane of the declining profitability of this company that could by 1994 see their profits fall by almost one-third. He also drew attention to the lack of preparedness of the company for competition which was in line with the mandate he was given by the former Minister. However, a specifc issue of particular concern to this House is his questioning of procedures adopted for presenting capital expenditure proposals to the board of that company. These proposals I understand run to a level of £200 million each year. It would seem that the former chairman's concerns in this matter were not just his concerns and gripes but were backed up by an independent Price Waterhouse consultancy report. There is little mention in the Minister's statement about these apparent defects in procedures by the board. Is the Minister aware of these defects? Has she issued any guidelines to the board as to how they should handle these situations, or are the board to be left in a vacuum in the coming years?

We would like to see Telecom Éireann, a company capable of immense performance, returning to a confident path. Looking to the future I cannot but express unease at a new chairman being appointed today to a board who cannot have the strong base from which to tackle the very serious issues confronting Telecom Éireann. He is being appointed as an interim chairman. That is not the way to confront the serious issues that must be addressed in Telecom Éireann. I can see no sense in awaiting the outcome of the report into the property deals concerning the Johnston Mooney & O'Brien site before appointing a permanent chairman. If it was the Chair's company or my company, which it is, would we postpone recruiting and finding the best person for the job until some controversy was overcome? No; we would say that from today we want to see a chairman with a strong mandate equipping the company for competition and move on from the controversy that they had experienced. The Minister, and the Government, carry considerable responsibility for the problems we heard of today. They have not been diligent in their responsibilities in relation to this company. They left the company rudderless, without a board. The company will face into the future with only an interim chairman. I do not believe this is an acceptable approach by the Government and I ask the Minister to elaborate on the terms of reference being given to the incoming chairman. I should like to be told of his long term role in relation to tackling the serious issues the company must address if they are to return to their proper role and have the people's highest confidence.

Mr. Spring

The Minister has not, in her carefully worded statement, shown much leadership which is badly needed in Telecom Éireann in the wake of the sacking of Mr. Hynes. I would hope when replying she will clarify what she wants and what she is setting out to achieve in Telecom Éireann.

The appointment of Mr. Hynes as chairman of Telecom was a serious error and the Labour Party pointed that out at the time. His track record has been one of active hostility to any concept of public sector enterprise. Obviously one could not dispute his dismissal because of what we know about the man. One might question his appointment in the first instance. It is unfortunate that the person who appointed him is not answering for that today. The judgment of the former Minister for Communications, now the Minister for Education, must be questioned in relation to the appointment of Mr. Hynes some months ago.

The Minister for Communications spoke of the conflict between the chairman and the board in relation to his style of operation. What are we talking about here? She also referred to his interaction with senior management and the divisiveness created within the board. Perhaps she would clarify those matters. It is quite amazing that the Minister was not informed until recent days of the difficulties which were brewing in the company since Mr. Hynes's appointment. I do not believe it is an occasion for recrimination or for looking at the personality factor. One has to be far more concerned with the future of Telecom, whose importance in the economic life of the country the Minister outlined.

The most important issue facing the company is not the appointment of another temporary chairman but a statement of philosophy from the Minister and the Government on the future of Telecom and what the Government want to achieve. Are we talking about an efficient and profitable public sector company or is it part of the Government's agenda to break up this company and hive it off to the highest bidder? It can be said with a degree of certainty that if this company is put up for sale the highest bidder will not be an Irish interest.

Most of us are aware of the transformation that has taken place in Telecom in the short space of ten years. Many will remember the delays and the long waiting lists for telephones in the seventies and early eighties. Telecom has been dramatically transformed from a loss-making company to a large profit maker and contributor to the Exchequer. We were slow off the starting blocks in the seventies but we have built a very efficient transmission system, almost completely based on digital technology. Ireland is now well placed to exploit advanced technological developments such as the integrated service digital networks. The technological transformation within our telecommunications services has been achieved by Telecom staff and management without any difficulties. The technicians in the service not only taught themselves the new technology but have since then been able to go to other parts of the world to assist in the development of technologies. Staffing levels have been reduced from 18,000 to 13,500. All this has been achieved without difficulty, with consensus between management and the Communication Workers' Union and without a single industrial dispute. That is worth remembering.

It is also important to note that the fundamental policy decisions to invest the necessary funds were made in the early seventies and the then Minister, Conor Cruise O'Brien, played a major role in setting out the future programme for telecommunications.

The Government should clarify for this House, the people and the workforce of Telecom, what they want to achieve. Leadership is urgently required. There is a necessity for a major strategic decision. The Dáil has not had the opportunity of having an input into this. We are more interested in defining the broader issue of the Government's intent in relation to Telecom than engaging in recriminations because of the sacking of the chairman of the company after a short time. The Government must clarify whether they are in favour of an efficient and profitable public sector company remaining in Irish hands. In recent months there has been much speculation about privatisation, making Telecom more efficient and competitive and making it available in the market-place. The Labour Party would oppose that. It is a successful company and has capital and technological investment. That should remain in the hands of the Irish people, of Irish managers and the workforce.

There has been some criticism of Telecom's alleged lack of preparation for the new competitive environment. This ignores the restructuring which has taken place within the company, with the agreement of unions and management. The purpose of the restructuring is to provide multi-disciplinary work teams capable of responding quickly to any customer requirement. We have all seen in recent years the tremendous work to make Telecom competitive.

The Minister has an opportunity when replying to set out clearly Government policy in relation to Telecom. Is Telecom to remain an Irish company or is it to be put on the market place for privatisation? It would be a disaster for Telecom if the Government were to privatise it. Telecom is capable of competing at the highest level on an international basis. The Dáil should be informed on this matter. The Taoiseach promised that he would lead an open Government. If the Government are to carry through on that commitment, this is an opportunity in relation to a very important public sector company which has not had in recent months the leadership that it deserves and has been embroiled in controversy which has had nothing to do with the workforce. By and large it has had to do with the former chairman. There is an onus on the Government to show the workforce at Telecom that they are committed to retaining the company in public ownership.

Perhaps the Minister will clarify whether the newly-appointed temporary chairman has a commitment to public sector enterprise. If not, we are heading towards disaster. It should be a matter of record in this House whether the Minister has discussed with the incoming chairman his commitment to public sector enterprise. Not to be tolerated is the appointment of people to public sector companies who basically do not have the interests of public sector companies at heart. If they are not interested in public sector enterprise and committed to it, they should not be asked to lead in that area.

I would ask the Minister to state as lucidly as possible the Government's intent for Telecom. The workforce of 13,500 people are waiting for an indication that the Minister and the Government are prepared to back the workforce in Telecom in fighting the competition which they will face in the coming decade. They also want an indication that the Government are fully supportive of Telecom's efforts to date.

Mr. McCartan

This is the second occasion within twelve months on which the chairman of Telecom Éireann has left office in the most controversial of circumstances. Irrespective of the factors which led to the removal from office of Mr. Hynes, this development is unfortunate and is likely to lead to further disruption in the affairs of the company.

Telecom Éireann is not just one of our most successful, but also one of our most important State companies. It has over 13,000 employees and provides telecommunication services to every business in the country and the great majority of private homes. An efficient, well-run telecommunications service is essential for the proper development of manufacturing and service industries, for tourism, for the media, for farming — for virtually every area of social, commercial and business life. We all have a stake in the continued successful development of Telecom Éireann.

Employees of Telecom Éireann had hoped that the appointment of a new chairman last January would have marked the ending of an unfortunate phase in the history of the company and the opening of a new era where directors and staff could get down to tackling the problems the company faced and ensure the continued successful development of the company and its expansion into new areas of enterprise.

Unfortunately the appointment of Mr. Hynes seems to have had the opposite effect, plunging the company into a period of internal strife and creating a series of clashes between the chairman and the rest of the board and the chairman and senior management. This was the last thing that Telecom needed.

It is now clear that the appointment of Mr. Hynes was a mistake and that the mandate which he believed was given to him by the then Minister for Communications, Deputy Brennan, compounded the error. Traditionally the role of the boards of semi-State companies has been a general, supervisory one, and the day-to-day management of the company has been left to the full-time company executives. Those appointed to the board were generally people who had some experience of the area of activity of the company involved, and their expertise was used to guide the company and to supervise the overall business strategy.

This is a formula which has generally worked fairly well, but was a procedure which was ignored by the former Minister Deputy Brennan, when he appointed Mr. Hynes. First, Mr. Hynes had no particular experience of the telecommunications area, and secondly he clearly believed that he had a mandate from Minister Brennan, to operate a very direct, hands-on policy, which would allow him to be involved in the day-to-day decision-making of the company. This was a recipe for trouble. No company can operate with two chief executives; yet that is effectively what Telecom has had since January last, and the problem rests specifically with the Minister for communications of the day, Deputy Brennan. It is also curious to recall the great troubles suffered by RTE for similar reasons while the same Minister was at the helm.

It is, I believe, unprecedented for the board of a semi-State company to pass a vote of no confidence — unanimously or otherwise — in its chairman, and the fact that this happened in Telecom is a clear indication of the depth of the divisions that existed there. The no-confidence motion was virtually unanimous and there is no indication that management or workers disagreed with the motion. Either Mr. Hynes was out of step with everyone, or everyone else was out of step except Mr. Hayes.

My understanding is that the performance of Mr. Hynes as Chairman of Telecom contrasts starkly with the glowing accounts of his management and administrative abilities which were heavily promoted in some of the Sunday newspapers. My information is that his handling of board meetings was inadequate — to put it mildly. Even on a simple level, meetings did not start on time. Agendas were not adhered to, contradictory decisions were taken by the chairman. Most seriously budgets had not been adopted on time, and the whole atmosphere of uncertainty and indecision was being felt at all levels of the company and was hitting morale badly.

Mr. Hynes has been very critical of the managment of Telecom and has publicly accused them of being "reluctant to accept the need for change". Interestingly the former Chairman of Telecom, Mr. Smurfit, went out of his way, on his departure from the company, to pay tribute to the qualities of the company's management. It has to be said that under the current management and workforce the performance of Telecom has been turned around, especially since it was freed from direct Civil Service control over ten years ago.

From a position of losses of £83 million in 1983-84, they delivered profits of £94 million in 1990-91 and are expected to return an even higher level of £115 million next year. There are few privately owned companies who could boast such a record. Revenue per worker has risen from £34,000 in 1987 to £56,000 in 1991. While once a new customer might have had to wait years for connections, most applications for new phones are now dealt with within a matter of weeks. All of this was achieved while staff numbers were coming down from a maximum of around 18,000 to their present level of about 13,000. It was also done without any significant industrial disputes. Clearly something was being done right.

This is not to say that there is any room for complacency on the part of Telecom management. They cannot afford to take their eye off the ball or their ear from the ground. The company face significant challenges and problems in the future. Deregulation, increasing competition and rapid advances in technology are all issues which will have to be faced up to. But there are also opportunities — there is scope for expansion by Telecom in the domestic telecommunications area as well as the international market where its expertise is well acknowledged.

It is hard to believe that the whole Hynes affair was not linked to demands which we have heard time and time again from avaricious private interests for the privatisation of Telecom. Right wing commentators and politicians seem to consider it somehow immoral and unacceptable that a State company should be making profits. It is fine for State-owned companies to make losses, but as soon as they begin to turn in a profit, then they should be handed over to the private sector. The previous chairman of Telecom made no secret of his belief that the company should be privatised. The then Minister for Communications, Deputy Brennan, is one of the ideological champions of privatisation and it is asking a lot to accept that this was not a factor in the appointment of Mr. Hynes. The preoccupation of the new chairman with securing huge reductions in staff numbers — even at a time when we are approaching 300,000 on the dole queues — seems to have been designed to make the company an even more attractive target for privatisation. Mr. Hynes's record with Tara mines speaks eloquently of his capacity to chop workers' jobs, in which company alone he reduced, over a period, the workforce from 7,000 to below 2,000.

We have seen the ugly side of privatisation in the series of scandals arising from the sale of the Irish Sugar Company, and we must avoid sending Telecom on the same road. A popular myth exists that a privately owned telephone company would be automatically more efficient. However, the experience has been in Britain that the telephone service has not improved and thus most people found it made little if any difference.

Given the experience with the last two chairmen it is now surely time to appoint somebody as chairman of the company who has some commitment to the public service ethic and who does not see his role as simply preparing the way for privatisation.

In this regard I welcome the announcement of the Minister today informing the House that an acting chairman has been appointed. Given the qualifications she has outlined of Professor Scanlan I wonder why in January the then Minister for Communications could not have looked to him as a very suitable and well qualified person with expertise in the area. It needs to be explained why a miner was dug up from Tara and brought in to run Telecom when such expertise already existed on the board. I also have to ask why we have an acting chairperson? Why is there not an announcement in the House today of the appointment to the company of a full-time chairperson who will get in there and work and restore morale to Telecom which they clearly deserve in clear and unambiguous leadership. Can the Minister advise me by what arrangement does the person whom she has summarily dismissed stand to gain the sum of £7,000-plus per annum, which is far inexcess of what a single person on the dole will get and of whom there are hundreds of thousands. After spending no more than five or six months working in a company that led to his summary dismissal it seems a rather extraordinary small twist in this arrangement and affair.

Given the excellent performance of Telecom and the fact that they are now paying a substantial annual dividend to the Exchequer there is less case than ever for privatisation. A clear statement from the Minister that the company will not be privatised is necessary to restore morale in Telecom and allow the workforce to be confident that the sacrifices they have made will not have the result of adding to the profit of speculators and no one else.

Minister for Tourism, Transport and Communications (Mrs. Geoghegan-Quinn)

Tá mé buíoch as ucht an méid a bhí le rá ag an triúr Teachta a ghlac páirt sa díospóireacht seo.

I should like to deal with a number of the issues raised. First of all, I hope Deputy Bruton was not in any way suggesting that Mr. Harold O'Sullivan, as acting chairman of the company in an interim period had in some way not carried out his duties efficiently and effectively and absolutely in confirmation of the mandate laid down by a full-time chairman of the company.

Mr. S. Barrett

Why was he not appointed chairman if he was so good?

Mrs. Geoghegan-Quinn

I reject the Deputy's allegation that the Government have not given due care and consideration to the board of this company. From the very beginning of the setting up of this company in 1984 the staff and the board have received the support and confidence of each of the Governments in all of the intervening periods since. The company — as Deputy Spring and Deputy McCartan have made clear and as I said in my first intervention — have made enormous strides under great difficulty over those years. The staff have been asked to adapt to changing work practices. All the changes which have brought the company, of which we can all be proud, a State company, to their present stage, have taken place — as Deputy Spring rightly pointed out — without any dispute within the company by staff members. That is something of which we must all be appreciative, and we must all give support to the company staff who ensured that the changes took place on that basis.

I hope Deputy Bruton is not saying that the present board members of the company are not capable of carrying out the recommendations of the Price Waterhouse report when there was a query about the appointment of Professor John Scanlan as acting chairman of the board. First of all, it would have been imprudent of me to rush into the appointment of a full-time chairman at this stage in the middle of a controversy of this sort, and Deputy McCartan would probably appreciate that.

Therefore, it was important for me, as Minister, to appoint a person as acting chairman who would have had an impeccable record as a member of the board of the company. I hope Deputy Bruton is not suggesting that Professor Scanlan, with his impeccable pedigree and wealth of experience, not just on the Irish telecommunications scene, but also on the European and United States scene, is not suitable for the job. There is no more experienced member of the board of Telecom Éireann than Professor Scanlan.

Deputy Bruton indicated that I stated in my speech that a full time chairman of the board would not be appointed until the report into the Telecom site was finalised. I did not say that in my speech today. I do not intend that to be the case and I did not state that at any time since the events of last Friday week. However, it is important that I consider in great detail the appointment of a full time chairman of the company. I am sure Deputy Bruton is not suggesting that the Minister should be concerned or involved in the day-to-day operational matters of Telecom Éireann. That is a matter for the management and board of the company.

Deputy Spring accused me of not showing much leadership and said it was time to spell out the philosophy of the Government in relation to the company. What do I want Telecom to be? I want them to be efficient and able to meet the challenges that intense national and international competition will bring. I want them to reduce their costs to their customers and I believe Members on all sides of the House agree with that. I want them to be able to meet their customer demands immediately.

Mr. McCartan

Does the Minister want them to be public or private?

Mrs. Geoghegan-Quinn

I want them to be able to change work practices as they have in the past and as their staff have insisted they must continue in the future. I do not believe any shareholder in a private company would have acted differently in this regard. The company have changed substantially since they were founded and they and their staff accept that they must change even further.

Deputy Spring asked if the new chairman had the interests of public sector enterprise at heart. His record since 1984, and indeed as a member of the interim board prior to that, shows the tremendous commitment Professor Scanlan has had to Telecom Éireann. The 13,500 employees of the company have my full backing and confidence in being able to prepare the company for the intense they face.

The former chairman of the company was not an executive chairman and, therefore, should not have been involved in the day-to-day administrative work which, in the normal course of events would be carried out by the chief executive and senior management of the company. Telecom Éireann have made major strides, the management and staff showed what they can deliver in the eighties. I am confident that they can deliver even more in the nineties. There are challenges and opportunities ahead for the company and I want to ensure that they are fit and able to meet those challenges and address those opportunities.

Privatisation was not a factor in the board coming to their decision on Friday week——

Mr. Spring

Was it on the agenda?

Mrs. Geoghegan-Quinn

——nor, indeed, has privatisation of Telecom been considered by the Government.

Mr. McCartan

What is the Minister's view?

Mrs. Geoghegan-Quinn

Deputy McCartan questioned the payment of £7,500 every year until 1996. I do not imagine the Deputy is suggesting that I could ignore or welch on contractual obligations under statute and which are part of the contract entered into with the former chairman at the beginning of February.

Mr. S. Barrett

By the present Government.

Mrs. Geoghegan-Quinn

The Government and I have the greatest confidence in the management and staff of Telecom Éireann. I have confidence in the board of the company to implement the necessary decisions to enable the company meet customer demands quickly, to expand and ensure the obligations, challenges and opportunities that lie ahead for a healthy and successful company such as Telecom Éireann.