Dáil Éireann Debate, Wednesday - 21 November 2012
6. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform the position regarding the tendering process for the national lottery licence; the date on which a decision will be made; and if he will make a statement on the matter. [51432/12]
Amharc ar fhreagraOn 4 April 2012, I announced that the Government had decided to hold a competition for the next national lottery licence and that the licence will be for a 20-year period. Since April, my Department has carried out a considerable amount of preparatory work for the competition. It will be necessary to revise the National Lottery Act 1986. The Government has approved the general scheme of the National Lottery Bill 2012. The general scheme has been sent to the Office of the Parliamentary Counsel to the Government. It is my intention to seek Government approval for the Bill in the current session and, subject to Government approval, the Bill will be published shortly afterwards. In tandem with the publication of the Bill, I will set out a scheduled timeline regarding the competitive process for the next licence.
A key concern citizens have is that given the national lottery is, to some extent, a licence to print money, it may be a classic case of selling off the family silver. The lottery has raised approximately €4 billion for good causes and yet in media reports, the Minister seems to be talking about an up-front free for 20 years of only €400 million to €600 million. Is that any kind of a decent deal for the people?
Is the Minister taking the right approach? Would some sort of annual licensing or some sort of seven-year up-front licensing have been a better approach? Is the 20 years set in stone? Why is it 20 years? Camelot in the UK operated on a seven year licence and it got an extension. An Post operated on a ten year licence and it also got an extension.
Why has there been such a delay? We were expecting the legislation on this last month and now we are talking about June 2013. Has the Minister had discussions with any of the major operators we are familiar with in Europe, such as Camelot or Lottomatica, the Tatts group or the other large operators, some of which we are involved with in the euro millions scheme?
In the context of An Post, has the Minister has any consultations or discussion with the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, given that the future of An Post is so difficult because of the evolution of e-mail, web-based mail and so on? Has the Minister discussed the matter with An Post? Has he looked back over the experience An Post has had over 25 years in very successfully raising €800 million per annum?
Does the Minister have a baseline figure in his mind which any prospective tenderer would have to be prepared to give to the State? Would it be the current 30% plus for An Post or will the Minister go with Camelot's approach of 28%? Is this set in stone? Is the Minister embarked on the right course or is this a bad deal for Ireland?
I will answer the Deputy's last question first. It is not a bad deal for Ireland. I would not do it if it was not a good deal for Ireland. There were a few misconceptions in the Deputy's long set of questions. He talked about the up-front fee which I expect to use to build the national children's hospital and he set that against the good causes. The good causes money is separate and the total volume of money for good causes provided by the national lottery last year was 30.5% of total take. I would put that into the base Act - it cannot be less than that going forward. We cannot get less than that and I would hope we would get more than that. In terms of the €4 billion the Deputy spoke about, we will at least get that in the coming years as long as the volume of turnover for the lotto is maintained. Some of the franchisees were concerned. I told them I would maintain in law their 6% stake. Many small shops and so on depend on it. This is good all around.
The Deputy asked me if I had discussed it with other operators. I have not discussed it with Camelot. I am not interested in involving myself in the process. I set up protocols and I published them as soon as I made the decision and brought my proposals to Government so that I would not be involved in the allocation process at all. I am obliged by European law to tender for this licence. One cannot just award a licence like this.
The only issue is what is the best value for it. I have been told a 20 year licence will maximise the value, because there is a very significant input into software and computing technology involved in this. The longer the lifeline one gives to ensure one gets value for that, the better and more attractive the proposition becomes and the more money one can get up-front for the State, and God knows right now the State needs capital for these purposes. I will be obliged to revise the legislation and we will have a full and open discussion on it.
The Deputy asked if I had discussed it with the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte. This was a whole of Government decision, so obviously every member of Government had full involvement in it. As I said previously, although I do not know because I have excluded myself from the licensing award process, I would be surprised if An Post was not one of the tenderers for this. It might see this as a stand-alone or as a proposition for which it might bid.
What kind of fee will Davy Corporate Finance earn from this? Have any potential operators been excluded at this stage? Will Davy Corporate Finance meet operators during any tendering process? Could people in the Department or in An Post not have independently carried out this e-tendering process? We have had grave problems with the e-tender website in a number of other tendering matters and some tenders seem to be like the fourth secret of Fatima. The Minister knows about one competition and prospective bidders trying to get information.
The period of 20 years referred to is a long time. I am coming to the end of my 20th year as a Member of this House. It is a long time and the House has changed incredibly. The Minister of State, Deputy Hayes, might even be leader of Fine Gael by the time this-----
Deputy Broughan might be leader of the Labour Party.
Hopefully, although sooner rather than later.
You might even do better.
What is the deal for Davy Corporate Finance?
I have already answered that question in response to a priority question. There are conditions in the Davy contract in terms of timelines and things to be fulfilled. The payment will be dependent on those being achieved. I have said I will give a full account of what is paid once the tendering process is completed by the middle of next year.
I have tried to exclude myself, so I have not discussed this process with An Post or anybody else. I should be at arms length from it. I simply want the design of it to be robust, want good value for the Irish taxpayer and want the process to give us money up-front in the short term and at a time when we are desperately short of capital to get people back to work in construction and to build a national children's hospital for the children of Ireland on which we can look back with pride not only in 20 years time but, hopefully, in 40 or 50 years time and say that this Dáil at this time did one magnificent thing, that is, to provide a flagship world-class hospital for the children of Ireland. That is important.
