Vol. 539 No. 2
11 Mr. Quinn asked the Minister for Finance the position regarding the process for seeking applications for the licence to run the National Lottery; if he has received the report from the evaluation group which he indicated would report to him by the end of May 2001 or the beginning of June 2001; and if he will make a statement on the matter. [19055/01]
The competition for the licence was in two phases. Phase 1 involved inviting applicants who wished to participate in a later separate competitive process for the award of the licence. Three applications were received and deemed suitable to progress to Phase II. For Phase II, the selection process itself, my Department recruited a consultant to assist with the design of the invitation to tender, evaluation of the tenders received and the final selection of the successful tender. On 15 December 2000, the invitation to Apply and Draft Licence was sent to the three applicants. On 28 December 2000, Autotote Lottery Corporation withdrew from the process, followed on January 8 by the withdrawal of Sisal.
An Post National Lottery Company Ltd. submitted an application before the deadline of 28 February 2001. My Department sought and obtained legal advice on the procedure to be followed and it was decided that the sole applicant should be assessed in accordance with the terms of the invitation to Apply and Draft Licence. The application was evaluated by consultants engaged by my Department and presented to the evaluation group in my Department who reported to me on 14 June. The evaluation group considered the consultant's report and, in agreeing with their overall recommendation, have recommended to me that the licence be granted to the applicant, An Post National Lottery Company. Accordingly, I am awarding the next licence to operate the National Lottery to An Post National Lottery Company, subject to certain provisions.
What are those provisions? While the process has been satisfactory in its mechanics and transparency, nonetheless the result is unsatisfactory in so far as it did not manage to produce candidates who stayed with the process for any length of time. The result was the evaluation of only one candidate, who happens to already hold the licence. Clearly there is something wrong if we cannot provoke sufficient interest from the private sector at home or abroad to bid for this licence.
It is a little removed from the general tenor of Deputy McDowell's remarks that he is now encouraging the private sector rather than the State sector.
The Minister would be surprised.
I will let that pass. Perhaps it is his association with Deputy Mitchell that is changing him.
It is a good thing for the State sector to compete with the private sector.
The process was open and transparent. Two other companies joined it and withdrew at a late stage having, I would guess, invested a lot of money in it. It would have cost substantial sums because a great deal of information was gathered by them and they put a large team in place. They decided to withdraw late in the day at a time when most of the costs had been incurred. An Post National Lottery Company Ltd. was the only company left but we still con tinued the process to its conclusion. We had legal advice stating that was the safer course.
The certain provisions referred to relate to a number of issues in the draft licence, which might no longer be relevant given the applicant is a State-owned company and the current licence holder. The provisions are modifications of the draft licence, it being necessary to get a legal sign off before proceeding. One could look at this from the perspective that the An Post National Lottery Company is doing the job so well that the other competitors decided to cut their losses at the stage they did. They did not tell me why they did so.
What was the cost of bringing in consultants to review this process? Why does the Minister continue to use consultants when the Department must have the expertise to assess something like this?
I am interested to know why it took four months for the evaluation group to sign off on the licence it recommended to the Minister. Is the profitability of the company in the operation of the licence one of the conditions being imposed in the award of it?
The Deputy may have put the question regarding consultants to a wide range of Departments during the Estimates debate last week in the committee. There was a definite need to appoint consultants on this occasion as there was such an amount of detailed documentation. I do not have the final figure as to what the bill from the consultants will be but I will get it for the Deputy. The consultants were Deloitte and Touche who were chosen after a competitive tendering process. I assure Deputies that in this case the knowledge would not have been available to my Department or any other as we would not have had the resources available to us. It was a mammoth task as the documentation was very detailed.
Deputy McDowell asked about the companies which pulled out. They incurred a lot of costs in going so far with this as the task was onerous and we needed consultants in this instance.
The profit take?
That is in the terms of the licence and would also have been considered there.
