Committee Reports > List of Committees > Dáil > 1999 > Committee of Public Accounts > Report - Sale of State Land in Glen Ding Co. Wicklow

DÁIL ÉIREANN

COMMITTEE OF PUBLIC ACCOUNTS

REPORT ON THE

Special Report of the Comptroller & Auditor General

Department of Marine and Natural Resources

Sale of State Lands at Glen Ding Co. Wicklow

TABLE OF CONTENTS

ORDERS OF REFERENCE

1.STANDING ORDER AND TERMS OF REFERENCE - FIRST REPORT OF THE STANDING SUB-COMMITTEE ON DÁIL REFORM ON ESTABLISHEMENT OF COMMITTEES IN THE 28th DÁIL

Standing Order 149

“(1) There shall stand established, following the reassembly of the Dáil subsequent to a General Election, a Standing Committee, to be known as the Committee of Public Accounts, to examine and report to the Dáil upon:

(a)the accounts showing the appropriation of the sums granted by the Dáil to meet the public expenditure and such other accounts as they see fit, (not being accounts of persons included in the Second Schedule of the Comptroller and Auditor General (Amendment) Act, 1993) which are audited by the Comptroller and Auditor General and presented to the Dáil, together with any reports by the Comptroller and Auditor General thereon:

Provided that in relation to accounts other than Appropriation Accounts, only accounts for a financial year beginning not earlier than 1 January 1994, shall be examined by the Committee:

(b)the Comptroller and Auditor General’s reports on his or her examinations of economy, efficiency, effectiveness evaluation systems, procedures and practices; and

(c)other reports carried out by the Comptroller and Auditor General under the Act.

(2)The Committee may suggest alterations and improvements in the form of the Estimates submitted to the Dáil.

(3)The Committee may proceed with its examination of an account or a report of the Comptroller and Auditor General at any time after that account or report is presented to Dáil Éireann and

(4)The Committee shall have the following powers:

(a)power to send for persons, papers and records as defined in Standing Order 79;

(b)power to take oral and written evidence as defined in Standing Order 78A(1)

(c)power to engage consultants as defined in Standing Order 78A(8); and

(d)power to travel as defined in Standing Order 78A(9).

(5)Every report which the Committee proposes to make shall, on adoption by the Committee, be laid before the Dáil forthwith whereupon the Committee shall be empowered to print and publish such report together with such related documents as it thinks fit.

(6)The Committee shall present an annual progress report to Dáil Éireann on its activities and plans.

(7)The Committee shall refrain from-

(a)enquiring into in public session, or publishing, confidential information regarding the activities and plans of a Government Department or Office, or of a body which is subject to audit, examination or inspection by the Comptroller and Auditor General, if so requested either by a member of the Government, or the body concerned; and

(b)enquiring into the merits of a policy or policies of the Government or a member of the Government or the merits of the objectives of such policies.

(8)The Committee may, without prejudice to the independence of the Comptroller and Auditor General in determining the work to be carried out by his or her Office or the manner in which it is carried out, in private communication, make such suggestions to the Comptroller and Auditor General regarding that work as it see fit.

(9)The Committee shall consist of twelve members, none of whom shall be a member of the Government or a Minister of State, and four of whom shall constitute a quorum. The Committee shall be constituted so as to be impartially representative of the Dáil”.

Motion setting up the Committee of Public Accounts

14/10/97

“Go ndéanfar de bhun Bhuan-Ordú Uimh. 149 de na Buan-Orduithe i dtaobh Gnó Phoiblí, an Coiste um Chuntais Phoiblí a cheapadh.

That, in pursuance of Standing Order No. 149 of the Standing Orders relative to Public Business, the Committee of Public Accounts be appointed.”

Motion appointing Members of the Committee of Public Accounts

16/10/97

“go ndéanfar na comhaltaí seo a leanas a cheapadh ar an gCoiste um Chuntais Phoiblí:—

that the following members be appointed to the Committee of Public Accounts:—

Deputies Seán Ardagh, Beverly Cooper-Flynn, John Dennehy, Seán Doherty, Bernard J. Durkan, Denis Foley, Thomas Gildea, Conor Lenihan, Pádraig McCormack, Jim Mitchell, Pat Rabbitte and Emmet Stagg”

Motion appointing Deputy Michael Bell in substitution for Deputy Emmet Stagg

20/11/97

“go ndéanfar an Teachta Emmet Stagg a urscaoileadh ón gCoiste um Chuntais Phoiblí agus go gceapfar an Teachta Micheál de Bheil ina ionad;

that Deputy Emmet Stagg be discharged from the Committee of Public Accounts and Deputy Michael Bell be appointed in substitution for him”

Resolution passed by the Dáil on 1 April, 1999.

“Go leasófar Buan-Ordú 149 de Bhuan-Orduithe Dháil Éireann i dtaobh Gnó Phoiblí-

(a)tríd an bhfomhír seo a leanas a chur isteach i ndiaidh fhomhír (b), i mír (4):

‘(bi)an chumhacht chun Fochoisti mar a mhínítear i mBuan-Ordú 78A(3);’, agus

(b)i mír (9), trí ‘agus aon Fhochoiste a cheapfaidh sé’ a chur isteach i ndiaidh ‘an Coiste’ áit a bhfuil sé don dara huair.

That Standing Order 149 of the Standing Orders of Dáil Éireann relative to Public business be amended-

(a)in paragraph (4), by the insertion of the following subparagraph after subparagraph (b):

‘(bi)power to appoint sub-Committees as defined in Standing Order 78A(3);’ and

(b)in paragraph (9), by the insertion of ‘and any sub-Committee which it may appoint’ after ‘Committee’ where it secondly occurs.”

OBSERVATIONS AND RECOMMENDATIONS OF COMMITTEE

The Comptroller and Auditor General was requested in private communication by this Committee to examine the sale of land at Glen Ding, County Wicklow by the former Department of Energy. This arose out of correspondence from Deputy Dick Roche to the Chairman which is included in Appendix 2. The Comptroller and Auditor General acceded to this request. Arising from his examination, he submitted a special report to the Minister for Marine and Natural Resources who presented the report to Dáil Éireann in January 1999 (Pn 6608).

In accordance with its Orders of Reference, the Committee decided to hold a public examination on the issues raised in the Report and to invite to that examination those persons whom it felt could assist it in its deliberations. (A list of all witnesses examined is at Appendix 2).

Following its examination the Committee was not satisfied on a number of matters, specifically:

•While noting and appreciating the reasons advanced by the Department for not opening the sale to public tender, it did not accept the Department’s explanation as credible, particularly in light of the Minister for Energy’s reply to a Parliamentary Question in October 1988, which stated that it was his intention that when the land was offered for sale it would be by public tender;

•It fails to understand why the other parties who had earlier expressed an interest in the property were not invited to make an offer;

•When making his decision to accept the Roadstone offer, the subsequent Minister was presented with a submission, summarising the facts of the case. This submission made no reference to the commitment given in the Parliamentary Question by his predecessor and the interest by third parties other than Johnston Industries was not communicated to the Minister;

•Considering the size of the property and the sand and gravel reserves it would have been prudent for the Department to have obtained a second opinion or to have sought advice from the Valuation Office in regard to the value of the property.

Arising from this, the Committee decided that it should report to Dáil Éireann on its findings and recommendations as follows:

1.The Committee agrees with the conclusion of the Comptroller and Auditor General that the manner in which the sale was conducted was inappropriate. The Committee proposes that adequate safeguards be put in place in order to avoid a recurrence in any State Department or Agency.

2.The Committee is of the view that in the sale of State properties it is incumbent on all State Departments and Agencies to act in an open and equitable manner at all times.

3.The Committee recommends that, in future, where it is not proposed to dispose of State assets by public tender, or where it is by competitive tendering or by public auction or by other transparent competitive means and where it is not proposed to accept the highest bid, clear reasons for the departure from standard practice should be set out in writing in advance. The recommendation of the Government Contracts Committee should be sought before bringing the matter to the attention of the Government Minister of the Department involved and the Minister for Finance for their approval. Any such submission to the Minister should clearly set out any prior commitments made by him/her (or any predecessor) or on his/her behalf to either House of the Oireachtas or any Committee thereof, or to any interested party.

To this end, the terms of reference of the Government Contracts Committee should be expanded to include such disposal of assets and any such disposal should be subject to rules analogous to those applying to public procurement.

4.Any departure from standard practice should be immediately brought by the Accounting Officer to the attention of the Comptroller and Auditor General in order that he can bring it to the attention of Dáil Éireann and thus to the attention of this Committee if he considers it appropriate to do so.

The Department of Finance should notify all State institutions of these procedures.

REPORT ADOPTED

REPORT ADOPTED BY COMMITTEE:

___________________________

Jim Mitchell T.D.

Chairman

15 April 1999

PROCEEDINGS

DÉARDAOIN 17 MEÁN FÓMHAIR 1998

THURSDAY 17 SEPTEMBER 1998

1.Chruinnigh an Coiste ar 11.05 a.m.

2.Comhaltaí i Láthair:-

Na Teachtaí Mistéal (i gCeannas), Ardachaidh, de Bheil, Ó Duinneacha, Mac Dhurcáin, Ó Foghlú, Ó Luineacháin, Mac Cormaic.

3.Chuaigh an Coiste i suí príobháideach.

Rinne an Coiste breithniú.

4.Athlá.

Chuaigh an Coiste ar athló ar 1.45 p.m. go dtí 11.00 a.m. Dé Céadaoin 23 Meán Fómhair 1998.

1.The Committee met at 11.05 a.m.

2.Members Present:-

Deputies Mitchell (in the Chair), Ardagh, Bell, Dennehy, Durkan, Foley, Lenihan, McCormack.

3.The Committee went into private session.

The Committee deliberated.

4.Adjournment.

The Committee adjourned at 1.45 p.m. until 11.00 a.m. Wednesday 23 September 1998.

DÉARDAOIN 11 FEABHRA 1999

THURSDAY 11 FEBRUARY 1999

1.Chruinnigh an Coiste ar 10.20a.m.

2.Comhaltaí i Láthair:-

Na Teachtaí S. Mistéal (i gCeannas), Ardachaidh, de Bheil, Ó Duinneacha, Ó Dochartaigh, Mac Dhurcáin, Ó Foghlú, Mac Giolla Dé, Ó Luineacháin, Mac Cormaic, Ó Coinín.

3.Chuaigh an Coiste i suí príobháideach.

Rinne an Coiste breithniú.

Chuaigh an Coiste i suí poiblí.

4.Tuarascáil Speisialta ón Ard-Reachtaire Cuntas agus Ciste - Díol Tailte Stáit i nGleann Daingin, Co. Chill Mhantáin.

5.Finnéithe a Ceistíodh:-

T. Ó Cearúil (Ard-Rúnaí Roinn na Mara agus Acmhainní Nádúrtha), S Mac Conluachra (Ard-Rúnaí na Roinne Fiontar Poiblí) S. Puirséal (An tArd-Reachtaire Cuntas agus Ciste).

(Liosta iomlán d’fhinnéithe in Appendix 1)

6.Athlá.

Chuaigh an Coiste ar athló ar 2.50 p.m. go dtí 5.00p.m. Dé Máirt 16 Feabhra, 1999.

1.The Committee met at 10.20a.m.

2.Members Present:-

Deputies J. Mitchell (in the Chair), Ardagh, Bell, Dennehy, Doherty, Durkan, Foley, Gildea, Lenihan, McCormack, Rabbitte.

3.The Committee went into private session.

The Committee deliberated.

The Committee went into public session.

4.Special Report of the Comptroller and Auditor General - the Sale of State Lands at Glen Ding, Co. Wicklow.

5.Witnesses Examined:-

Mr Thomas Carroll (Secretarty General Department of the Marine and Natural Resources) Mr John Loughrey (Secretary General Department Public Enterprise) Mr. J Purcell (Comptroller and Auditor General).

(Full list of witnesses at Appendix 1)

6.Adjournment.

The Committee adjourned at 2.50 p.m. until 5.00p.m. on Tuesday 16 February 1999.

DÉARDAOIN 25 MÁRTA 1999

THURSDAY 25 MARCH 1999

1.Chruinnigh an Coiste ar 10.10a.m.

2.Comhaltaí i Láthair:-

Na Teachtaí S. Mistéal (i gCeannas), Ardachaidh, de Bheil, Cooper Ní Fhlionn, Ó Duinneacha, Ó Dochartaigh, Mac Dhurcáin, Ó Foghlú, Mac Giolla Dé, Mac Cormaic.

3.Chuaigh an Coiste i suí príobháideach.

Rinne an Coiste breithniú.

Chuaigh an Coiste i suí poiblí.

4.Dréacht-Tuarascáil maidir leis an Tuarascáil Speisialta ón Ard-Reachtaire Cuntas agus Ciste - Díol Tailte Stáit i nGleann Daingin, Co. Chill Mhantáin.

5.Finnéithe a Ceistíodh:-

T. Ó Cearúil (Ard-Rúnaí, Roinn na Mara agus Acmhainní Nádúrtha), S. Puirséal (An tArd-Reachtaire Cuntas agus Ciste).

(Liosta iomlán d’fhinnéithe in Appendix 1)

6.Athlá.

Chuaigh an Coiste ar athló ar 1.15 p.m. go dtí 10.00 a.m. Déardaoin 1 Aibreán, 1999.

1.The Committee met at 10.10 a.m.

2.Members Present:-

Deputies J. Mitchell (in the Chair), Ardagh, Bell, Cooper-Flynn, Dennehy, Doherty, Durkan, Foley, Gildea, McCormack.

3.The Committee went into private session.

The Committee deliberated.

The Committee went into public session.

4.Draft Report on the Special Report of the Comptroller and Auditor General - the Sale of State Lands at Glen Ding, Co. Wicklow.

5.Witnesses Examined:-

Mr Thomas Carroll (Secretary General, Department of the Marine and Natural Resources) Mr. J Purcell (Comptroller and Auditor General).

(Full list of witnesses at Appendix 1)

6.Adjournment.

The Committee adjourned at 1.15 p.m. until 10.00 a.m. on Thursday 1 April 1999.

DÉARDAOIN 1 AIBREÁN 1999

THURSDAY 1 APRIL 1999

1.Chruinnigh an Coiste ar 10.05a.m.

2.Comhaltaí i Láthair:-

Na Teachtaí S. Mistéal (i gCeannas), Ardachaidh, de Bheil, Ó Duinneacha, Mac Dhurcáin, Ó Foghlú, Ó Luineacháin, Mac Cormaic.

3.Chuaigh an Coiste i suí príobháideach.

Rinne an Coiste breithniú.

4.Dréacht-Tuarascáil maidir leis an Tuarascáil Speisialta ón Ard-Reachtaire Cuntas agus Ciste - Díol Tailte Stáit i nGleann Daingin, Co. Chill Mhantáin.

Chuir an Cathaoirleach an Dréacht Tuarascáil faoi bhráid an Choiste chun a breithnithe.

Aontaíodh an Dréacht Tuarascáil.

Ordaíodh: Tuairisciú don Dáil dá réir sin.

1.The Committee met at 10.05 a.m.

2.Members Present:-

Deputies J. Mitchell (in the Chair), Ardagh, Bell, Dennehy, Durkan, Foley, Lenihan, McCormack.

3.The Committee went into private session.

The Committee deliberated.

4.Draft Report on the Special Report of the Comptroller and Auditor General - the Sale of State Lands at Glen Ding, Co. Wicklow.

The Chairman brought forward the Draft Report for consideration.

Draft Report agreed to.

Ordered: To report to the Dáil accordingly.

MINUTES OF EVIDENCE

COMMITTEE OF PUBLIC ACCOUNTS

Deardaoin, 11 Feabhra, 1999.

Thursday, 11 February, 1999.

The Committee of Public Accounts met at 10 a.m.

MEMBERS PRESENT:

DEPUTY JIM MITCHELL in the Chair.

Mr. J. Purcell (An t-Árd Reachtaire Cuntas agus Ciste) called and examined.

Special Report of the Comptroller and Auditor General - the Sale of State Lands at Glen Ding, County Wicklow.

Chairman: We return to the question of the Comptroller and Auditor General’s special report into the sale of State lands at Glen Ding, County Wicklow, which come under the ownership of the Department of the Marine and Natural Resources. In addition to the Secretary General of the Department and his officials I welcome the former Secretary General of the Department, now Secretary General of the Department of Public Enterprise, Mr. Loughrey, the Wicklow County Manager, Mr. Blaise Treacy and Deputy Roche, who brought this matter to our attention. I also welcome Mr. John Barnett and Mr. Kiaran O’Malley.

Before we proceed witnesses should be made aware that they do not enjoy absolute privilege and should be apprised as follows: Members’ and witnesses’ attention is drawn to the fact that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act grants certain rights to persons who are identified in the course of committees’ proceedings. These rights include the right to give evidence, the right to produce documents to the committee, the right to appear before the committee, either in person or through a representative, the right to make a written and oral submission, the right to request the committee to direct the attendance of witnesses and the production of documents and the right to cross examine witnesses.

For the most part these rights may only be exercised with the consent of the committee. Persons being invited before the committee are made aware of these rights and any persons identified in the course of proceedings who are not present may happen to be made aware of these rights and provided with a transcript with the relevant part of the committee’s proceedings if the committee considers it appropriate in the interests of justice. Notwithstanding this provision in the new legislation, I should remind members of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official, either by name or in such a way as to make him or her identifiable.

I intend to proceed in the following manner. I will ask the Comptroller and Auditor General to introduce his report. I will then ask the Secretary General of the Department if he wishes to make a brief comment on that report. I will then invite the former Secretary General to make a brief comment. At that point, Members will put questions to the current Secretary General and his predecessor. I will then call on Mr. Treacy to comment on behalf of Wicklow County Council and to be available to answer questions regarding aspects of this matter which might relate to the council. We will then take evidence from and ask questions of Mr. O’Malley and Mr. Barnett. We will finally ask questions of Deputy Roche.

Deputy Roche: Does the committee wish me to make a statement?

Chairman: No, that will not be possible. I call on the Comptroller and Auditor General to introduce his report.

Mr. Purcell: The report under consideration by the committee today is the result of an examination carried out by me on foot of a request by the committee into the circumstances surrounding the sale of State lands at Glen Ding, County Wicklow, in 1991. The purpose of the examination was to establish whether proper procedures had been followed in conducting the sale and whether the disposal of the land had been effected on the most favourable terms reasonably obtainable. The examination was primarily based upon information contained in the departmental files and did not involve any contact with organisations or persons falling outside my statutory remit. This is in line with my normal approach in such matters. I also received some material from Deputy Roche which I took account of in so far as it was germane to the examination.

The basic conclusion of the report is that while the Department could be considered as having obtained reasonable value for money for the land it did not conduct the sale in a way that ensured all those who expressed an interest in the land were treated in an equitable and transparent manner. The State’s normal way of conducting property sales is by way of public tender competition or auction and either of these options would have met the requirements of openness and fairness.

It is fair to say that real competition generally results in the best price being obtained for an asset. The Department ultimately obtained the price it was seeking and it may claim that the end justifies the means. I am not so sure. At 9.2 of the report Members will see that the accounting officer makes a strong case for this view. Whatever about that, it is clear that the Department’s decision to sell the land without planning permission was appropriate given that its inquiries indicated that, in all likelihood, there would be difficulties with the planning process.

Since the publication of the report there have been a number of questions raised by and through the media in relation to some aspects of it. With the Chairman’s permission I will refer to these as they may impact on the committee’s examination of some of the witnesses here today.

I would first like to emphasise the point made at paragraph 1.4 of the report that the statements attributed in the report to third parties are based solely on the Department’s notes on file. At the time I was drafting the report I had no reason to believe that the contemporaneous words recorded in the Department’s files represented anything other than the factual position. Two main issues arise in this regard. First, the statement at paragraph 5.5 that the Department “should call in for discussion the consultant as advised by Wicklow County Council” has been reportedly challenged by Wicklow County Council on the grounds that it never advised the Department as to the engagement of a consultant. That assertion does not tally with a report on file of a meeting between departmental officials, the Wicklow county engineer and an official from the council’s planning department on 22 June 1988. The report states that, in order to speed up matters, the county engineer suggested that the forest service, which was then part of the Department of Energy, might consider employing an engineering and planning consultant who would have the experience in dealing with such applications and could advise in particular on how best to divide the land into lots.

The second issue concerns the statement at paragraph 6.4 that the Department met with Kiaran O’Malley & Co. Ltd., to discuss the Roadstone offer and was advised that it would be most unlikely that any other party would be able to match that offer and strongly recommended that the sale to Roadstone be pursued. That statement is a summary extract from a report of a meeting on that day between departmental officials and both consultants who are present today. I can read out the full extract if the committee so wishes.

The giving of any such advice has reportedly been denied by Mr. O’Malley. I am not in a position, nor is it my function, to adjudicate on these conflicting accounts. Perhaps the Committee will be able to shed some light on the subject as a result of today’s examination. I can elaborate on my conclusions during the course of the Committee’s consideration of the report if you so wish.

Chairman: I thank Mr. Purcell. Does Mr. Carroll wish to make an opening statement?

Deputy Rabbitte: Before the Chairman proceeds, I wish to clarify a point with the Comptroller and Auditor General. What did he mean by adverting to paragraph 1.4? What was the significance of the point?

Mr. Purcell: That is the comment at the end of paragraph 1.4, which states: “The statements attributed in this report to third parties are based solely on the Department’s notes.” I did not interview third parties because in order to do so, I would need the type of powers which were given to me under the legislation passed before Christmas in relation to the DIRT investigation.

Chairman: I invite Mr. Carroll to make a brief opening statement. I ask him to directly address the question of the apparent conflict of evidence. If the Comptroller and Auditor General’s report is correct - I am sure it is correct - according to the Department’s own notes, it acted on the advice of Mr. O’Malley. However, Mr. O’Malley is reported as having given no such advice.

Mr. Carroll: I will first make a brief opening statement and then deal with the points raised by the Chairman. The Minister for the Marine and Natural Resources, Deputy Woods, indicated in the Dáil on 30 September and again on 4 November last that I, as Accounting Officer, had reviewed the papers on his behalf and advised him that there was no evidence among the papers to suggest that there was any impropriety in this particular case. The Minister indicated that he and the Department would be fully happy to co-operate with any examination that the House or this Committee might want to carry out. My Department co-operated fully with the Comptroller and Auditor General’s office in the compilation of the report which is before the Committee today. As members are aware, the report was laid speedily before the House by the Minister on its receipt from the Comptroller and Auditor General. My response to the report is set out in paragraph 9 and I see no need to elaborate on it at this point in time.

Regarding the conflicts of evidence, as the Comptroller and Auditor General said, his report is based on the contemporaneous records on our files on those matters. I have not consulted with any third party either on this matter, but those are our records and that is what they say. The Comptroller and Auditor General faithfully summarises them.

Regarding Wicklow County Council, the report refers to a note on file which mentions the consultant as advised by Wicklow County Council. The Comptroller and Auditor General refers to a meeting some weeks beforehand with the planning authorities from Wicklow County Council. There is no record on file that a particular consultant was named. There is no record of that at all and there is no name mentioned. In the notes subsequently on file, where an assistant secretary asked an officer to proceed to call in for discussion, there is no name mentioned there either regarding the consultant as advised by Wicklow County Council.

One cannot be sure what exactly happened. A possible inference is that a name was mentioned en marge in the context of the discussions with Wicklow County Council. However, I must stress that we would not suggest whatsoever that Wicklow County Council in some formal considered way put forward a name. My guess is that this name was mentioned in passing in discussions. The Forest Service was going about what looked likely to be a very complex planning application. History has proved that it was very complex. It had not done this type of thing before itself and possibly mentioned this to officers of the county council and names were thrown out of people who might be suitable. That is probably what happened. The Department would not in any way suggest that in any formal way Wicklow County Council put forward a person. That did not happen.

The report refers to the advice given by Mr. O’Malley on whether they should go to tender. There is a contemporaneous record on file of a detailed discussion which took place on various aspects of the proposition. We can deal with that in more detail if the Committee wishes. Our record shows this advice was given, but the decision not to go to tender would not have solely relied on that advice. It was a factor in it and the decision not to go to tender was taken by the Department and not by anybody else. One is not attributing any particular or unique significance to the advice received in that regard. I hope that helps to clarify matters for the Committee. The then Accounting Officer of the Department of Energy, Mr. Loughrey, may wish to amplify those matters.

Chairman: Who made the contemporaneous notes? What official of the Department made them?

Mr. Carroll: There are two notes. One is the note with contains the phrase the consultant as advised by Wicklow County Council. That was made by an assistant secretary on file.

Chairman: Is that assistant secretary still working in the Department?

Mr. Carroll: Unfortunately, he died suddenly soon afterwards.

Chairman: And the second note?

Mr. Carroll: The second note was a note of a meeting-----

Chairman: With Mr. O’Malley?

Mr. Carroll: -----with Mr. O’Malley which was attended also by Mr. Barnett. It also included an assistant secretary, a principal officer and a higher executive officer.

Chairman: Are those officials still working in the Department?

Mr. Carroll: None of those officials are working in the Department.

Chairman: Are they still working in the Civil Service?

Mr. Carroll: Two are retired for many years and one is now an officer in another Department - not the Department of Energy or the Department of the Marine and Natural Resources. In the Forestry Division of the Department of the Marine and Natural Resources as it stands, apart from some clerical staff, there are no serving officers who had any involvement in this file.

Chairman: The Department is depending on the written records.

Mr. Carroll: Yes. They are the only records we have.

Chairman: Does Mr. Loughrey wish to make a brief opening statement?

Mr. John Loughrey, Secretary General, Department of Public Enterprise, called and examined.

Mr. Loughrey: I did not intend to do so, but I am present to help the Committee in every way possible. I do not have a long statement in mind. As Accounting Officer at the time, I have two concerns. One is that we are working on the basis of a very measured and professional report produced by the Comptroller and Auditor General of which I could agree with 99 per cent. The 1 per cent with which one would take issue could be the subject of some discussion.

My second concern is that there are issues outside the Comptroller and Auditor General’s report, one of which concerns me in particular as Accounting Officer. This is the idea that somehow the price obtained or paid by Roadstone was only a fraction.

Figures have been mentioned in the Dáil and the media which are multiples of the price that was obtained. The litany includes £70 million, £57 million and £48 million. As Accounting Officer I take that very seriously. The valuation clearly is important to me as Accounting Officer and, obviously, to the Civil Service. The two issues that greatly concern me are the process, which was commented on by the Comptroller and Auditor General in his report, and the valuation.

Deputy Durkan: Will you expand further about the 1 per cent of the Comptroller and Auditor General’s report with which you disagree?

Mr. Loughrey: I did not see what the Secretary-General of the Department of the Marine and Natural Resources wrote in advance. There is no collusion between Secretaries-General. However, I agree with his comments. The nub of the problem, as I see it, for the Comptroller and Auditor General is that the process was inappropriate. I do not wish to get into a discussion about what is meant by appropriateness but I agree with the thrust of his remarks.

Deputy Durkan: What about the 1 per cent with which you disagree?

Mr. Loughrey: I will come to that. I do not mean to appear contentious. When dealing with the disposal or procurement of property, it is only in a grave exception that one would move away from a tendering process. I and the Department were operating with the guidelines that applied at the time. There are only four sentences in the Government guidelines introduced in the mid 1980s regarding Government contract procedures. The opening two lines are quite specific. They say: “These are the guidelines in the award of contracts, including disposals”. The second line is repeated in different ways in every updating of Government contracts: “However, under no circumstances should this document be regarded as being legally binding on public contracting authorities”. In short, there is a common sense let out clause in that there can be exceptional circumstances. Otherwise it would be mandatory.

When it comes to the disposal of property there are only three sentences. Once again, the guidelines state that one should go through competitive tendering by auction and the property should be sold to the highest bidder. However, if it is proposed to deviate from this general principle, the Department of Finance should be consulted beforehand. That is what the Department of Energy and Forestry did at the time.

Deputy Durkan: Did you consult the Department of Finance?

Mr. Loughrey: Naturally. We made our own judgment call but we would have consulted the Department of Finance.

Deputy Durkan: According to the Comptroller and Auditor General’s report the guidelines issued by the Department of Finance regarding the awarding of contracts state that the disposal or letting of property should be dealt with by competitive tendering or by public auction. This approach provides a mechanism, it continues, which is both transparent and is likely to achieve a fair price.

The Department departed from that procedure.

Mr. Loughrey: Yes.

Deputy Durkan: Did the Department seek the approval of the Department of Finance in so doing?

Mr. Loughrey: Absolutely. The quotation to which you refer did not obtain at the time. I do not mean to make it a debating point but it is still something I agree with, then and now. We made a measured submission to the Department of Finance.

Deputy Durkan: In that submission did you make the case that tendering or public auction was not necessary or that the proposed disposal procedures were appropriate to the situation?

Mr. Loughrey: The latter. We contended that in these exceptional cases a deviation should be considered. We believed that had we gone into any ring fenced or open tendering system there would have been only downsides for the taxpayer and no upside. That was our driving fixation.

Deputy Durkan: That is not the point. Having regard to the guidelines and the procedures to be followed, you proceeded in a fashion which was not in accordance with them.

Mr. Loughrey: That was permitted in the guidelines.

Deputy Durkan: I am aware of that and of the fact that they are guidelines. You then qualified your proposed procedure in a submission to the Department of Finance. Did that Department raise any queries?

Mr. Loughrey: The Department of Finance would have been made aware of the evolution of this file; obviously, there are informal contacts. In the formal submission, it did not raise any queries and we got clear sanction to go ahead on the basis as proposed.

Deputy Durkan: Who in your Department made the decision? Obviously the Accounting Officer has ultimate responsibility but who advised the Department that this procedure was better? If anybody in this Chamber was asked about how one should dispose of a property, for example, the answer would be that the fair, equitable and transparent system would be public auction or tender, provided the tenders were open to a certain amount of scrutiny. Why depart from that?

Mr. Loughrey: I would contend that when one is selling property there is always room for a private treaty sale if the vendor believes that the price obtained would be better.

Deputy Durkan: That is true. It is common for a public auction to take place followed by a sale by private treaty. Why did that not take place in this case? It would have given the Department an indication of the potential publicly appraised value of the property. Then it would have been open to the Department to negotiate a private sale if necessary.

Mr. Loughrey: We considered all aspects. If we did follow that line it would have given cover to civil servants, if I may use a colloquial phrase. However, we were seeking the best price for the taxpayer. If a public auction or even a limited auction system failed, there is no way we could have got that price from Roadstone. We had to decide, and it is a fine judgment call-----

Deputy Durkan: What is meant by failed?

Mr. Loughrey: If we had either a ring fenced or targeted trade sale that involved a few firms - it was known in the trade so to speak - or if it was advertised in the normal way for public auction and it produced a price which was significantly lower than the indicative price Roadstone was prepared to pay, our negotiating position would have been gone and the taxpayer would have had to pick up the tab.

Deputy Durkan: The Comptroller and Auditor General’s report states that from when the process of selling the vending property commenced, the Department stated on numerous occasions that the sale would be by public tender. In reply to a parliamentary question on 20 October 1988, the Minister for Energy said it was the intention that when the sandpit in question was offered for sale tenders would be invited by public tender competition and would be advertised in the national press. What happened to change that given that it was in a reply to a parliamentary question, which is the most serious commitment a Department can give to the House?

Mr. Loughrey: I agree that it was a solemn commitment. Of course, it was the intention. The Department had been in the business of disposing of odd pieces of property over time. We never deviated from a commitment. By definition our response would be that it would be done by a transparent system.

Deputy Durkan: Were you aware of the reply to the parliamentary question when you deviated from it?

Mr. Loughrey: Absolutely.

Deputy Durkan: So you had regard to the reply to the parliamentary question. However, notwithstanding that reply which is a serious commitment given by the Minister in the House, you still deviated.

Mr. Loughrey: There was a deviation because the circumstances that were thrown up two years later in 1990 and the practical circumstances were such that we believed that this was the best way to get value for money for the Exchequer. One would not do that lightly.

Deputy Durkan: However, the Minister gave an indication to the House on numerous occasions that the only procedure for the sale of the property would be through public tender. Is it not a serious breach of procedure that, following the Minister giving a commitment to the House, somebody decides otherwise? Did the Minister remind the Department that he had given a commitment to the House and that this course of action was at variance with the reply?

Mr. Loughrey: Ministerial policy is ministerial policy until it is set aside. The Minister who gave that commitment was the former Deputy Burke. The next Minister was Deputy Smith and, at the time the decision was made, the Minister was Deputy Molloy. I do not disagree with the Deputy. It is an extremely serious commitment which would not be set aside lightly.

Deputy Durkan: Is it normal practice for a Department, notwithstanding changes in ministerial or senior departmental personnel? Has it ever occurred before?

Taking into account the existence of a reply to a parliamentary question stating specific procedures, how often would it have happened that the Department changed its mind without informing the House or publicly indicating its intention to change its procedures?

Mr. Loughrey: Very rarely, I suspect.

Deputy Durkan: Can Mr. Loughrey not recall a similar occurrence?

Mr. Loughrey: I cannot recall one myself, but that is going on limited experience.

Deputy Durkan: What happens when a Department decides to “hang out” someone who has previously given a commitment in the House?

Mr. Loughrey: I understand exactly-----

Deputy Durkan: Is Mr. Loughrey aware of the seriousness of that?

Mr. Loughrey: I am aware of its seriousness. In terms of how best the sale could be positioned for returns for the taxpayer and the Exchequer, a position was taken, recommended to the Minister with the pros and cons set out and the Minister acted impeccably on advice.

Deputy Durkan: What advice?

Mr. Loughrey: The advice set out the pros and cons of a negotiated private treaty sale vis-à-vis an open tendering competition.

Deputy Durkan: From whom did that advice to the Minister come?

Mr. Loughrey: From the Department, and I signed off on it.

Deputy Durkan: From officials in the Department?

Mr. Loughrey: Yes, and the ultimate responsibility is mine.

Deputy Durkan: Did Mr. Loughrey counter-check or cross-check the strength of that advice, given the previous commitments given by the Minister in the House and the seriousness of deviating from the Minister’s intention?

Mr. Loughrey: It is clear from the file that this matter was considered over approximately nine months to see if we would deviate from the intention to seek planning permission either for ourselves or for an open tender. The matter was taken seriously and discussed, and the evidence in the file shows that the pros and cons of the situation were set out. A final decision was taken as to how we could best position ourselves for a greater return.

Deputy Durkan: Was each person who had, to Mr. Lourghrey’s knowledge, expressed an interest in the property given an opportunity of making a tender?

Mr. Loughrey: The answer is no.

Deputy Durkan: Why?

Mr. Loughrey: Well, once again-----

Deputy Durkan: Mr. Loughrey keeps referring to this advice.

Mr. Loughrey: I am not referring to any advice. I never mentioned the advice.

Deputy Durkan: Mr. Loughrey mentioned advice as to-----

Chairman: Let us pause for a moment. Was it known to the Department at this stage that a number of people were interested in this land?

Mr. Loughrey: Yes, it was.

Chairman: If you were trying to maximise the value of the land for the Department and you felt private treaty was the better option in the circumstances than public tender, why were there no private negotiations with the different interests to see if a better price could be had?

Mr. Loughrey: That is a fair question but the judgment call at the time was that, if we undertook that process, the trade would get to know and, if that happened, we reckoned there was only down side on the indicative offer from Roadstone.

Deputy Durkan: Paragraph 8.1 of the report of the Comptroller and Auditor General states:

The papers reviewed during the course of the examination indicate that the civil servants involved in the sale process made judgments on the basis of the information and advice available at the time and that Ministers acted at all times in accordance with Departmental advice.

Reference is repeatedly made to advice.

Mr. Loughrey: Yes.

Deputy Durkan: Somehow, somewhere, someone must have found sufficient, compelling information or inspiration to the effect that it was deemed appropriate to disregard a commitment previously made to the House. I regard it as a serious deviation from procedure and something which needs to be followed up at a later stage because it is the most serious breach of procedure I have dealt with as a Member of the Committee over the past years. What was this compelling advice that seemed to be generated from within the ambit of the Department? Was any advice sought from outside, as was previously suggested and subsequently denied?

Mr. Loughrey: Of course, is the answer.

Deputy Durkan: Of course what?

Mr. Loughrey: Of course there was both advice from inside and third party advice from the consultants. The responsibility for decisions rests with the Department. Outside advisers do not take decisions. The Department is solely responsible. That said, one element in our final judgment was the advice from reputable consultants who worked with us on the case.

Deputy Durkan: Were they from outside the Department?

Mr. Loughrey: Yes.

Chairman: Do you mean Mr. Barnett and Mr. O’Malley?

Mr. Loughrey: Yes.

Deputy Durkan: Did they advise the Department it was appropriate and prudent to dispose of the property without going to public tender?

Mr. Loughrey: It is a little more subtle than that and the file shows that.

Deputy Durkan: Tenders and auctions are not subtle matters.

Chairman: This is a key question.

Mr. Loughrey: It is. Both gentlemen can speak for themselves and I have not had the pleasure of meeting either Mr. Barnett or Mr. O’Malley before. They were grouped together. Mr. Barnett was employed to deal with the key valuation issue and Mr. O’Malley gave general advice on our approach to planning, how we should go about it and how best to position the property for sale. Mr. O’Malley gave advice in his original letter that we should opt for a form of open competitive tendering.

Deputy Durkan: The Minister also said that in the House.

Chairman: I want you to answer this fully and without interruption, Mr. Loughrey. Please proceed.

Mr. Loughrey: Mr. O’Malley and others were pushing an open door because Departments almost invariably opt for some form of competitive tendering, be it for procurement or disposal. No one protested at that stage and that is incontrovertible.

Chairman: I wish to clarify this. Did you say Mr. O’Malley in a letter recommended public sale?

Mr. Loughrey: Yes.

Chairman: How then does it appear in the file as reported by the Comptroller and Auditor General that Mr. O’Malley advised otherwise?

Mr. Loughrey: Subsequently, when Mr. O’Malley undertook his professional work, it became clear to him and his considered advice was that planning permission would be very difficult to obtain.

Deputy Bell: On a point of order, Chairman, Mr. O’Malley is the one to answer that question. I do not believe it should be answered on his behalf.

Chairman: I accept Deputy Bell’s point, but we want Mr. Loughrey’s view on record to see if there is any conflict with that of Mr. O’Malley who will be called soon. Did Mr. O’Malley initially recommend in writing sale by public tender but subsequently change his advice?

Mr. Loughrey: That telescopes into one sentence a number of months of interaction and professional work on Mr. O’Malley’s part. I understand that and it is perfectly logical. Mr. O’Malley can speak for himself on this matter. Departments were exempt from planning permission at the time and we had no experience in obtaining planning permission, so his advice would have been very important to us. As I understand from the file - I have not met the man before, it became clear to Mr. O’Malley that planning permission would be problematic. In those circumstances, there was a change in the Department’s attitude. However, that was not all predicated on Mr. O’Malley’s advice. At a critical meeting recorded as Thursday, 18 October-----

Chairman: What year?

Mr. Loughrey: The date is Thursday, 18 October 1990. Those present were Mr. O’Malley, Mr. Barnett and the full senior team from the Department, from Assistant Secretary down. The largest single block paragraph deals with disposal of property and it cites Mr. O’Malley on a number of opinions. It is a same day note which was subsequently circulated to everyone at the meeting. No one put on record that they had a different view. Clearly, Mr. O’Malley’s recollection may be different and that must be respected.

Chairman: Would it be possible for you to read the relevant extracts from that into the record?

Mr. Loughrey: I will do that.

Deputy Durkan: Were all the people at that meeting advised of the diverse interests in the property?

Mr. Loughrey: I cannot put that -----

Deputy Durkan: That is an important question.

Mr. Loughrey: Advised is another thing, but certainly a number of people from the file at that meeting would have been aware of the -----

Deputy Durkan: Chairman, I must come back to this again. It is imperative we get a correct answer to this question. A decision was made following the meeting of Thursday, 18 October 1990 based on information given or exchanged at that meeting.

Mr. Loughrey: Yes.

Deputy Durkan: Were all the parties at that meeting aware of interest expressed in the property by more than one person?

Mr. Loughrey: Yes, they were.

Deputy Durkan: They were all aware of it.

Mr. Loughrey: They would have all been aware of it.

Deputy Durkan: Are you sure of that?

Mr. Loughrey: To the extent that I can be sure. Not being at the meeting, none of ------

Deputy Durkan: Are there any contemporaneous notes to that effect?

Mr. Loughrey: Implicit in the file and in the file notes, there would have been an awareness - perhaps not of all the potential applicants - that there would have been expressions of interest from others as well as Roadstone.

Chairman: Will you read the extracts which indicate the advice it is purported to have been given by Mr. O’Malley?

Mr. Loughrey: It is quite short and will not take too long. It reads:

3.Disposal of Property.

The question of how best to dispose of the property was then discussed. Mr. O’Malley doubted if many would be interested if it was let out to public tender without planning permission. Apart from Roadstone, he could not see anyone bidding more than £400,000 for the area. [Although he used the word “area”, I presume he meant acreage.] Roadstone might offer £600,000. When told of the offer received from Roadstone he strongly advised negotiating sale of the reserve to that company. Roadstone had the optimum chance of getting planning permission. The property, without the timber, was valued at £1.25m with planning permission and if we were able to get that amount for it, lock, stock and barrel, without planning permission, we should take it. The part of their offer which depended on planning permission could be long drawn out and he advised that we should try and get Roadstone to drop this component. Acceptance of their offer on a two instalment basis might be an incentive to the company.

Deputy Durkan: That is your report of the proceedings of that meeting.

Mr. Loughrey: That is a same day contemporaneous note circulated to senior officials at the time.

Deputy Durkan: Based on notes.

Mr. Loughrey: Absolutely.

Deputy Durkan: You have fairly accurate notes of everything which took place in relation to the sale of the property at all times - as accurate as those notes.

Mr. Loughrey: Absolutely.

Deputy Durkan: At all times throughout the stages.

Mr. Loughrey: I cannot guarantee at all times. Civil servants keep notes and for the most part that would be the standard accepted.

Deputy Durkan: What you are saying is that on the basis of a consultants report - I am not saying this is right or wrong - it was deemed advisable at that meeting to disregard the departmental guidelines as laid down by the Department of Finance and the commitment made by the Minister in the House.

Mr. Loughrey: I accept the seriousness of disregarding a commitment made in the House and what you are saying. However, the Department of Finance guidelines are not prescriptive and provide for exceptional cases, so as regards disregarding them, I could not accept that.

Deputy Durkan: You accept you disregarded the commitment made by the Minister by way of a reply to a Parliamentary Question.

Mr. Loughrey: Not lightly.

Deputy Durkan: Not lightly, but still done. It has been established that this type of thing does not normally happen. Have you ever known anything like that to happen before?

Mr. Loughrey: I could not put my hand on my heart and say it does not happen, but I am not aware of anything personally.

Deputy Durkan: Did the Minister of the day express any concern to you as an official when it became obvious that there was a deviation from an already publicly indicated procedure by of a Parliamentary Question?

Mr. Loughrey: From memory, the file notes - I can check them - do not show that Mr. Molloy was advised that Mr. Burke had given such a parliamentary reply. I am open to correction on that, but my memory of it is that the four submissions made to the then Minister, Mr. Molloy, did not refer to the Parliamentary Question tabled two years earlier.

Deputy Durkan: I challenge that on the basis that the procedure in all such occasions is that the entire file is brought to the Minister, including replies to Parliamentary Questions and notes. Was that procedure followed in that case?

Mr. Loughrey: No.

Deputy Durkan: Why not?

Mr. Loughrey: I am sorry Deputy but I do not necessarily agree with that. The Deputy will know from his own experience that busy Ministers cannot take voluminous files. It is the civil servants’ duty to summarise it and bring out the salient points to make sure the Minister makes the best informed decision, whether they agree with the civil servants or not. The full file is seldom -----

Chairman: In this case, the then Minister, Mr. Molloy, was not appraised in the summary of the fact that a parliamentary commitment had been given by one of his predecessors.

Mr. Loughrey: That is correct.

Deputy Durkan: Who so decided?

Mr. Loughrey: I do not believe it was a conscious decision. Much water had gone under this bridge over two years and during the tenure of two Ministers. I agree with your assessment, but I am trying to explain exactly how it would have happened.

Deputy Durkan: Are you aware of the practice whereby if a file is brought to a Minister and a decision is required by him or her which will involve a change of policy or a change in a commitment given by a Minister previously, a file is appended to the file or a series of salient matters to which the Minister should have regard before making a decision?

Mr. Loughrey: Yes, I am.

Deputy Durkan: Was that practice followed by your Department at that time?

Mr. Loughrey: There was an omission to the extent that the submission then made to the then Minister, Mr. Molloy, did not refer to the Parliamentary Question tabled two years and two months earlier.

Deputy Durkan: Would it be normal practice to omit from a file very important information such as that?

Mr. Loughrey: Deputy, I am trying to find a practical explanation. I am not hiding behind this at all and, as Accounting Officer, I was totally responsible. Departments are living organisms and depend on the file and good records but they also depend on a continuity of memory. Those involved for the most part went to Coillte, a semi-State body. I do not offer that to in any way play down the seriousness of what you are saying. Over two years later with no continuity in terms of the direct players, that is what happened.

Deputy Foley: As regards the meeting of 18 October 1990, a decision was made at that meeting to sell the property to Roadstone. Is that right?

Mr. Loughrey: That is a fair inference to draw but the elements were put in place at that meeting which would lead to that decision. A formal decision was not made. The notes of the meeting say that after some discussion it was agreed that we should supply Roadstone -this applies to anybody, whether selling a house or a heifer- with a figure of £1.5 million for the property with the view to induce them to increase their present offer up to £1.25 million without any planning permission. Basically, for practical purposes, an indicative decision was taken or the way forward was taken but there would have been no formal decisions until the Minister decided, and he did not so decide for some time.

Deputy Foley: Were your notes available to the Comptroller and Auditor General when he compiled the report?

Mr. Loughrey: Of course. Warts and all and sins or not, everything was given to the Comptroller and Auditor General.

Deputy Foley: Did you have discussions with Mr. Carroll prior to preparing this report?

Mr. Loughrey: I spoke to Mr. Carroll but I want to do away with the idea that his response was influenced in some way by what I said. His response was entirely his own although I, of course, spoke to him.

Deputy Foley: Mr Brendan Johnson, according to appendix B of the Comptroller and Auditor General’s report, showed an interest in these properties from a very early stage and he continued to show that interest. You made this decision on 18 October 1990. A total of 24 letters passed to and from Mr. Johnson in 1990. Was he not informed at that stage that a decision had been made to dispose of the property to Roadstone for £1.5 million?

Mr. Loughrey: There was continuous interaction with Mr. Johnson which ultimately culminated with him making his offer, his “best shot”. If the strategy was to say the taxpayer would be best served by a single discreet negotiated settlement with Roadstone, we were not advertising it. At all stages when Mr. Johnson indicated he would make a meaningful offer, we were more than happy to see him in the Department.

The Committee suspended and resumed at 12.45 p.m.

Deputy Foley: Is it correct that the correspondence with Mr. Johnson continued up to January 1991? If the decision to deal with Roadstone was made on 18 October why did the correspondence with Mr. Johnson continue up to January 1991?

Mr. Loughrey: The Deputy is correct. That is what is recorded. However I believe the decision was finally taken on 20 December. Mr. Johnson’s solicitors felt the process was not entirely satisfactory. The letter of 8 January refers to that. The effective decision was taken just before Christmas. However the Deputy is correct. Mr. Johnson had a sustained interest in the property going back at least one year.

Deputy Foley: Was Mr. Johnson informed of the meeting on 18 October when it was decided to dispose of the property to Roadstone.

Mr. Loughrey: No, he was not. Roadstone was not informed either. That would have given away our negotiating position. Nobody was told until we fine-tuned our negotiating position.

Deputy Foley: Procedures were laid down by the Department of Finance with regard to the disposal of property. Why were they not adhered to with regard to public tender?

Mr. Loughrey: That is the fundamental question. I agree with the Deputy. Almost invariably we complied in full with both the letter and spirit of the guidelines. There are updated guidelines now. However all guidelines regarding Government procurement and disposal allow for exceptional circumstances. There are many exceptional circumstances. I do not want to waste the committee’s time citing many exceptional circumstances where from the taxpayers’ or a pricing point of view, a deviation could be considered. This was one of those cases. That is clearly allowed for in the Government guidelines.

Deputy Foley: When this proposed sale was first mooted, there were a number of local sand and gravel business people and landowners interested. Why were they not given an opportunity?

Mr. Loughrey: Again that is a fair question. Once we had decided the taxpayer would get the best possible price from a ring-fenced negotiation with Roadstone, we believed that by going to the trade, even on a limited basis, with all the landowners and those who had expressed an interest, we were in danger of jeopardising our position.

Chairman: You said that before. However it is implausible to me that you would get a higher price by having secret negotiations with one party than by having competitive negotiations with several parties. That is where your case lacks credibility.

Mr. Loughrey: If my case lacks credibility it is because I have not put it across properly. The issue of planning arises in this case. We decided to sell to Roadstone unconditionally. There were to be no undertakings or assumptions about planning. The exposure to all risk, most notably planning risk, would lie with Roadstone as vendors.

There are better experts in planning matters than I in the room. By definition, if we had a public tender system or a known trade sale where we circulate - as Deputy Foley mentioned - there could be objections. This is correct, people are entitled to do so. The site with its history could mean - and this is borne out by An Bord Pleanála’s decision - it would not get planning persmission. If that sounds less than community minded by the Department, Deputies may say so. However the instructions from the Department of Finance on 1 September 1987 were for all surplus property to be sold to maximise the returns to the Exchequer. We followed them to the spirit and the letter of the law. Our tactics were based around the issue of planning.

Chairman: Was your objective to maximise returns to the Exchequer?

Mr. Loughrey: Yes.

Chairman: The real question is did your actions achieve that objective?

Deputy Foley: How did Mr. Loughrey arrive at the valuation of £1.5 million?

Mr. Loughrey: When one puts a price on goods or commodities the basic valuation equation is volume versus price gives value. The time value of money comes into it too and I will come back to that.

In terms of volume, I do not know of anyone who has contested the estimates for volume of gravel because we took a very considered decision. We acquired the geological survey - it was a very expensive drilling programme - to ascertain as professionally as possible the reserves of sand and gravel in the acreage. It was very expensive. It was a Rolls Royce job. We had toyed with the idea earlier of getting an outside survey and the outside quotations were much lower. However we wanted to ensure we had a fix on the sand and gravel in this pit. It was a very expensive but very professional exercise. The volumes of sand and gravel have never been contested so there is agreement on that. From there we worked in terms of price and how to value it.

I can defer to Mr. Barnett who did the calculations. From its independent assessment, the Department stands over Mr. Barnett’s approach, which was absolutely correct. His calculations were absolutely correct. A net present value system was used whereby the revenue and cost streams were brought into 1990 money terms and that was the value which was fixed for the property. That was how the valuation was achieved.

Deputy Foley: I accept what Mr. Loughrey says. I do not dispute Mr. Barnett’s view. Did the Department get an independent assessment of the valuation of the property?

Mr. Loughrey: Mr. Barnett, who has a distinguished record in valuation, was that independent advice. That is what the Department paid for. His calculations were done on the basis of the Department’s approach.

This is a central issue and I raised it at the outset. It is something which I, as accounting officer, want addressed if possible. I do not mean to be presumptuous. There are a great many figures in the public arena. I do not want to go over the press cuttings file - £70 million, £58 million, etc. The sum of £48 million was contained in a Dáil resolution. This is serious in a sense because the public may believe that we sold State silver for nickel prices. I was the accounting officer and I would like that addressed. It is my belief that, if anything, it can be demonstrated that Roadstone paid over the odds. There may be a perception that somehow this was sold for a song. Nothing could be further from the truth.

Deputy Foley: I preface my next question by saying that I accept what Mr. Loughrey said about Mr. Barnett. How does the Department decide on consultants?

Mr. Loughrey: At the time the Department was a neophyte in the planning business. Under section 84 of the 1963 Act, the State in its own activities like this had an exemption from the planning process. This was the first time the Department was faced with deciding how to go about a planning issue. If we had undertaken this on our own, we would have been exempt from planning. However, the original intention was to realise value for the taxpayer by assigning it to another party with planning permission. Subsequently, we did not follow that particular line but that was the intention. Therefore, we needed outside advice. We had what I might call friendly, fraternal discussions with Wicklow County Council, which was extremely helpful in guiding us in a general way. The council indicated that, given the history and inheritance of the Department, we would be advised to take professional advice. I agree totally with Mr. Carroll’s earlier assessment that, while the file note states the consultant, as advised, as far as he was concerned there is no mention of Mr. O’Malley and the Department got nothing but helpful advice from Wicklow County Council, its first cousin in public service terms. Mr. O’Malley was chosen because he was in the area and had long planning experience. From then, he was the Department’s independent adviser. He, in turn, associated himself with Mr. Barnet, who did the valuation work, and that is from where the advice came.

Deputy Foley: Deputy Roche, who has made a number of submissions here and has been pursuing this matter for a number of months or possibly years, makes reference here to a point raised by Mr. Loughrey this morning with regards to Mr. Ciarán O’Malley, that he stated to him in person and to representatives of the press that he at no stage departed from his original recommendation to the Department of Energy that the land should be sold by way of public tender. Is there a conflict there?

Mr. Loughrey: There is an apparent conflict, but I am quite sure that Mr. O’Malley would be able to address that. At the outset, his formal written advice was to go by way of tendering and we would have done that ourselves in any case. However, as the crystal ball got a little more murky rather than clear and the planning issue loomed so large as to jeopardise the price we might get, of course this is our version of what we believed happened at the meeting of 18 October written on a same day note. Mr. O’Malley may have a different recollection. Clearly that would have to be respected also. Deputy Foley is right. Prima facie from that press report, there is no alignment between what was allegedly said by Mr. O’Malley and the Department’s file.

Deputy Foley: In hindsight, was it wrong that it did not go to public tender initially?

Mr. Loughrey: It would be much more comfortable for the Department and civil servants, in particular, if that were the way. I still believe that what we did was correct. We had just one objective, to make sure that we maximised the receipts for the State and the taxpayer and we honestly believed that this was the way to go about it. I honestly believe too - I should not say this because it is purely speculation on my part - that if Roadstone could roll back the clock, they would say give us back the money and take back the land because I believe we did a good deal.

Deputy Foley: That does not seem to be the opinion of the public.

Chairman: I am anxious to get to other witness, but a number of Deputies have indicated that they wish to question Mr. Loughrey. I propose to take them in this order: Deputy Rabbitte, Deputy Doherty, Deputy Gildea and Deputy Ardagh. The questions should be brief.

Deputy Rabbitte: The answers should be brief too because I just want to retrace some of the stuff for the record. In January 1987, Hudson & Bros. expressed an interest in acquiring the gravel. Is that the case?

Mr. Loughrey: That is correct.

Deputy Rabbitte: In response to subsequent representations from the late Deputy Seán Walsh and Deputy Chris Flood, presumably on behalf or at the request of Hudson & Bros., the Department’s Minister, Deputy Michael Smith, stated in a letter of 5 November 1987 that he had made inquires for them in the matter and the position was that the sand and gravel deposits were required for State afforestation purposes and, as such, were not available for sale. He added that even if the deposits were available for sale, the area could be offered for sale by public tender competition in accordance with the Department of Finance delegated sanction for such sales. Is that a fact?

Mr. Loughrey: Absolutely.

Deputy Rabbitte: Is Deputy Foley right? When was that decision changed?

Mr. Loughrey: There was a dawning realisation between Mr. O’Malley and the Department that this was a complex deal from a planning point of view culminating in the meeting-----

Deputy Rabbitte: But planning did not come into it.

Mr. Loughrey: Does the Deputy mean originally?

Deputy Rabbitte: Planning was not a problem when Minister Michael Smith made his decision.

Mr. Loughrey: Planning was not a problem because at that stage the final decision on whether the land should stay with Coillte or be allocated to the Department for disposal had not been taken. In other words, it could well have been used as a gravel deposit for the extensive State afforestation roads.

Deputy Rabbitte: I am not asking about the complexity of it. When was the decision changed?

Mr. Loughrey: Mr. Power is the nearest expert. The decision was changed in October/November 1990.

Deputy Rabbitte: I accept Mr. Loughrey’s earlier point that the Department was seized of an important decision and it made what it thought was the best decision in the public interest. He must present files which are synopsised and summarised for a Minister. Given that the purpose of presenting this file to the Minister was to sanction the sale by this departure from normal procedure, it seems extraordinary that essential documents were concealed from him.

Mr. Loughrey: I would agree with the general thrust of what Deputy Rabbitte says but “concealed” is a pejorative word. I do not believe there was any concealment of any kind.

Deputy Rabbitte: Can we agree for a start that they were kept from him?

Mr. Loughrey: They were not submitted to him.

Deputy Rabbitte: Was there any attempt to contact, for example, the original company which expressed an interest, Hudson & Bros., that the decision had now been changed and the Department proposed to sell it?

Mr. Loughrey: No attempt was made because if you accept the logic of our position, to keep this as a tight ring-fenced private treaty sale to Roadstone, any attempt to alert people in the trade that we were doing so would bring it inevitably into the public arena and thereby bring out the whole planning issue.

Deputy Rabbitte: To return to the Chairman’s point, this was not a depreciating asset. What are the criteria that could lead one to reasonably conclude that? It is not the case of the price of zinc falling on the Rotterdam Exchange. For whatever it is worth, this gravel has been there for hundreds of years. It has not depreciated. Given that you have previously argued before the Committee the merits of bringing State companies to the market and of letting the market decide, how is it that in this case you thought that letting the market know would damage the price?

Mr. Loughrey: I accept the thrust of your remarks. Sand and gravel are steady commodities. There are no wild fluctuations in price. However, in this case there was one fatal possibility that could undermine matters. This sand and gravel deposit is effectively worthless without planning permission for extraction. That is the one factor we kept in mind. We could write down that deposit to zero if the planning issue was decided in the negative before sale. In view of this we were determined to get value for the taxpayer, to get value for money, to sell it unconditionally and without planning permission.

Deputy Rabbitte: Are you saying that only a company of the critical mass of Roadstone would be able to take the risk associated with the planning situation?

Mr. Loughrey: No. Roadstone was there, and while others had access, it had the best access. It also had the rest of the infrastructure and, critically, it had the water for screening which nobody else had. That is my belief from the file. It was more added value to Roadstone than anybody else.

Deputy Rabbitte: You presented a file to the Minister the purpose of which was to sign off on this method of sale of the State asset in question. In your own words, certain documents were not submitted to him. Did the Minister not ask if there were any other interested parties? I cannot conceive of a discussion where the Minister would be persuaded of the merits of the case in terms of the best interests of the taxpayers without asking if there was any other interest.

Mr. Loughrey: The Minister would have. The events took place before I became responsible. I was not party to the discussions with the Minister but I know how rigorous Deputy Molloy is and I am certain he would not have nodded anything through because that was not his style, nor was it the style of any other Minister. Questions would have been asked. I presume the response would have been - I believe it is on the file - that no meaningful offer had been received from any other third party.

Deputy Rabbitte: Is there a note on the file to that effect?

Mr. Loughrey: I believe there is.

Deputy Rabbitte: Regarding no meaningful offer?

Mr. Loughrey: I am searching the file.

Deputy Rabbitte: I accept your evidence. Is it not unreasonable to expect meaningful offers to have been submitted to parties who did not know it was for sale?

Mr. Loughrey: This dilemma faces us all the time. It is a judgment call. It is not possible to get meaningful offers from all parties, especially contiguous landowners, without some kind of tendering system.

Deputy Rabbitte: How do you put a note on file saying that no meaningful offers have been received as the reason for going the other way when, by definition, no meaningful offers could have been received since the other parties did not know?

Mr. Loughrey: The note, dated 25 October of that year, says that some general interest has been expressed in the acquisition of this property but only one party, Roadstone, has made any meaningful approach. The same note carefully laid out the pros and cons on the private sale submission regarding Roadstone to the Minister. This was not an attempt by civil servants to somehow railroad something past a Minister. In my experience no Minister would accept that. It was a carefully measured note that set out the pros and cons. The Department was concerned to get the best price possible. The Committee will recall much better than I that these were desperate times for the Exchequer with borrowing ratios in capital markets at dizzying heights. There was a push to get the best price for the State for the disposal of assets.

Deputy Rabbitte: The net point at issue is whether this was the best way of getting a better price.

Mr. Loughrey: I accept that.

Deputy Doherty: It appears from what we are hearing today that the file presented to the Minister was without two essential pieces of information. First, the Minister did not have on the file an indication of the commitment given in the Dáil by his predecessor as to the manner and method by which this property would be offered for sale. That is serious. It would be unusual that a commitment given in the Dáil central to the fundamental issue you were seeking to address, which was to obtain the best value for the Exchequer, was not on the file. Second, I am not satisfied that the type of information listing persons who were interested and had shown an interest regardless of whether they were meaningfully interested or not, was not on the file either.

The Minister is surely entitled to make a judgment or a decision based on full information. Why would an experienced civil servant deny the Minister full access to that information? It was denied.

Mr. Loughrey: I accept at face value what the Deputy has said.

Deputy Doherty: You could not do otherwise because that is the position.

Mr. Loughrey: Perhaps I was not as helpful to Deputy Durkan when he raised the issue of the parliamentary question. Regardless of any Jesuitical play on words, I accept what both you and Deputy Doherty say. However, it was not a commitment. The reply to the parliamentary question said it is the intention, which is perhaps a little more tenuous than commitment.

Deputy Doherty: We have become engaged in the meaning of words.

Mr. Loughrey: That was not my intention.

Deputy Doherty: I know. It is my intention to put you back into the position of where I was trying to lead you from in the first instance. There will be no splitting of words about it. Why was the intention as set down omitted from the file?

Mr. Loughrey: I do not have a reasonable excuse for that other than a lapse of two years and two months and the fact that the key people had gone to Coillte, a semi-State body. That is not sufficient excuse in itself, nor is the fact that the continuity in terms of memory was not there. I offer by way of partial explanation what might have happened.

Deputy Doherty: There is no sustainable excuse.

Mr. Loughrey: I accept that.

Deputy Doherty: There was negligence.

Chairman: Do you accept that there was negligence?

Mr. Loughrey: I accept that the point raised by Deputy Durkan and Deputy Doherty should have been included in the submission.

Deputy Doherty: From the information to hand on the case and apparently from the files made available to the C&AG setting out the initial interest in the property, and marked definitively and clearly in his report, none of it was set out in writing to the Minister. Why was that, regardless of anything else? The Minister was entitled to the full information.

It is not a matter for the Secretary-General or any of his subordinates to obtain a decision from the Minister, based on a recommendation contained in a file that has less than the full information, even if the missing information is irrelevant. The information should not have been interpreted by any public servant, in the context of a decision being made by the Minister, when that information was vital to that decision. Why was that expression of other interests not on the file? Was that negligence?

Mr. Loughrey: The Deputy is quite right that the specific interests, as expressed, were not on the file. The submission to the Minister referred to previous expressions but did not specifically say who they were. It then went into the pros and cons of going with that-----

Deputy Doherty: Who made the decision not to include the description of the four parties which were interested in this? There was Roadstone on one hand and, on the other, Michael Kavanagh who was offering £50,000 for five acres of property. There were papers to indicate the interest of Tracey Enterprises in Dundrum in early 1998. Brendan Johnson, was the first person to make an offer, long before Roadstone did. None of these offers, which were available on file, were given to the Minister. If he had been aware of their existence he could have accepted or rejected them. Why were they not made available to him?

Mr. Loughrey: Because the decision had been taken in the Department-----

Deputy Doherty: By whom?

Mr. Loughrey: Ultimately, by me. The decision had been taken in the Department that what would give the taxpayer the best sporting chance of getting the best possible value for money would be to do the business with Roadstone, which was uniquely and strategically placed in the best position to use the-----

Deputy Doherty: To achieve that end, in an internal non public forum - the exchange or consultation between the public servant, Mr. Loughrey, and the Minister - it was considered appropriate, in the privacy of the Minister’s office, to suppress information. Is Mr. Loughrey telling me that that was in the public interest?

Mr. Loughrey: No, that is not what I am telling the Deputy.

Deputy Doherty: Then he should try again.

Mr. Loughrey: I am saying that the submissions made to the Minister referred to other earlier expressions of interest but, at that stage, we set out the pros and cons of going the tendering route or the private treaty route. If one accepts the logic of going the private treaty route, those expressions of interest - unfortunately, at one level - fall by the wayside.

Chairman: Yes, but there were two key omissions. I would like to see that document. It appears it did not cite the fact that a parliamentary commitment had been given previously or that there were specific offers from other people. There was only a passing reference. Those two key pieces of information were missing.

Mr. Loughrey: I do not want to leave the committee with that idea. When Mr. Johnson came with a serious offer, that was laid out, side by side, for the Minister-----

Chairman: Did the Minister know there was an alternative offer?

Mr. Loughrey: Of course. When we got another offer from Mr. Johnson, regardless of the fact that civil servants had perhaps decided that this was the best way forward, there were several meetings with him at which this was teased out. The assistant secretary gave him every chance, both across the table and subsequently by telephone, to give it his very best shot. This was the end game.

Deputy Doherty: Now that we have established-----

Deputy Rabbitte: That is not quite the case. Does not date four say that the Roadstone board approved it two days before the meeting with Mr. Johnson, at which he tabled his offer?

Mr. Loughrey: That is absolutely right. The timing may appear to be fine. However, Mr. Johnson was satisfied that he was let, in a friendly way, to put forward his best offer in no uncertain fashion. He was subsequently contacted by telephone, when it was effectively left open to him again to increase his offer. He said colloquially that that was his final offer and good luck to whoever had offered more. He quite definitely got his chance to make an offer.

Deputy Doherty: Were any of the other people contacted in the same way as Mr. Johnson was and given the same opportunity?

Mr. Loughrey: No, none of the other people were contacted.

Deputy Doherty: And the Minister was not informed about the others?

Mr. Loughrey: The Minister was informed that there were other expressions of interest but they were not specified.

Deputy Doherty: In relation to the valuation of the site, what did Mr. Loughrey tell the Minister, given that a particular value had been put on it, on one hand, and a particular offer had been made, on the other hand? What criteria did Mr. Loughrey tell the Minister were used to establish that a valuation was worth recommending, apart from the offer?

Mr. Loughrey: This is obviously a fundamental point. One has to know, approximately, the value of what one is trying to sell when one goes into the market place, either on an individual basis or collectively. We got first class professional advice. Mr. Barnett has long experience of valuing these particular deposits. He adopted a classic net present value approach to valuing the assets. We have some experience in the Department of doing the same thing and we agreed entirely with his approach and his calculations. That was-----

Deputy Doherty: What calculations were received by Mr. Loughrey and were brought to the Minister?

Mr. Loughrey: Mr. Barnett put a royalty price on the sand and gravel to be extracted.

Deputy Doherty: Was there an amount established? Was it in tonnes?

Mr. Loughrey: It was 6.7 million cubic metres.

Deputy Doherty: What would that be in tonnes?

Mr. Loughrey: I grew up in the metric era but I can do a rough calculation for the Deputy. I am sure Mr. Barnett could tell the Deputy instantly.

Deputy Roche: That is not true-----

Deputy Doherty: There was a measurement of the amount of sand and gravel.

Mr. Loughrey: There was an absolute measurement. This measurement did not come from Mr. Barnett - it came originally from the Geological Survey, which put in a very expensive and comprehensive drilling programme to establish-----

Deputy Doherty: What was the valuation of that tonnage?

Mr. Loughrey: It was approximately £800,000 without planning permission, and £1.25 million with planning permission.

Deputy Doherty: The land would have been pretty worthless after the sand and gravel had been excavated.

Mr. Loughrey: Absolutely.

Deputy Doherty: The Department could have avoided planning permission and gone with its own exemptions, which applied at that time because it was before the change. The Department could have sold the sand and gravel, given leeway to the contractors to go in and out and still retained the land. That would have been far better but that option was never put to anybody.

Mr. Loughrey: I accept that, but implicit in Government policy at the time-----

Deputy Doherty: Based on the figures, it would have been worth much more.

Mr. Loughrey: I accept what the Deputy is saying as a general thesis. However, in setting up Coillte, a policy decision was taken by the then Minister and the then Government that this would be disposed of because of the surplus land rather than going into the sand and gravel business. There was no policy intent to go into the sand and gravel business.

Deputy Doherty: The Department had a product to sell, which was assessed and valued. If that product had been sold at that value, it would have far exceeded the amount received for the lands.

Mr. Loughrey: I am not sure I follow the Deputy.

Deputy Doherty: Did Mr. Loughrey check, at any stage, the value of land in that area at that time? Does he have on file an assessment or evaluation of adjacent lands?

Mr. Loughrey: The assessment of the value of the land, the timber stand thereon and, obviously, the deposit was an intrinsic part of the whole valuation-----

Deputy Doherty: It has come to my attention that about 250 acres of land were sold in that area for £15 million some time ago. In the case we are discussing, 147 acres were sold a few years ago, with its timber and everything else, for £1.25 million. Roadstone is adjacent to the lands which were sold for £15 million and the 147 acres at Glen Ding is on the other side. How could there could be such a disparity - almost seven times as much - between what was received for those lands and what was received for Glen Ding? That was way off what you got for Glen Ding.

Mr. Loughrey: I accept what Deputy Doherty is saying, but I cannot make comparisons between land which has--

Deputy Doherty: Hold on, Mr. Loughrey.

Mr. Loughrey: I cannot make that comparison.

Deputy Doherty: This is where the evaluation responsibility is, let it be of the Department’s knowledge within itself, through the Valuation Office, which apparently was not consulted, or through outside consultants. You must assess the market value, and if you are telling me that is not your responsibility to do that--

Mr. Loughrey: I did not say that.

Deputy Doherty:--that prompts me to suggest something else.

Mr. Loughrey: No, with apologies and respect to Deputy Doherty, that is not what I was inferring at all. I was just inferring that I have no knowledge of the parcel at all that Deputy Doherty said went for a multiple of the--

Deputy Doherty: Then you--

Mr. Loughrey: What I have is the most professional assessment possible of the value of the 147 acres put up for sale. There is no doubting that.

Deputy Gildea: Mr. Loughrey said that a position was taken that the private sale was in the best interests of the taxpayer. Was it also taken into account that a private sale could also be in the best interest of the purchaser?

Mr. Loughrey: I have been putting my foot on the ball for too long in replying to questions, but briefly, yes. The valuation of the lands without planning permission was £800,000, and we got over 50 per cent higher than that, in effect when the sale was closed. I honestly believe that the Department did very well on the deal, and I do not say so in any smug or self-congratulatory way.

Deputy Gildea: The Geological Survey of Ireland estimated the content at 22.5 million tonnes of sand and gravel.

Mr. Loughrey: That is right. Thank you.

Deputy Ardagh: What is the equivalent of a cubic metre in tonnes? This is important.

Mr. Carroll: The Geological Survey Office estimated the deposits in the total area of Glen Ding - 72.9 hectares - at 10 million cubic metres. They used a factor when converting that to tonnes, and I discussed that factor with the head of that office recently. He said it was based on various calculations and knowledge of the trade. Cubic metres relates to measurements in the ground, and there is density to consider. The 10 million cubic metres was broken down as 7.4 million of high grade and 2.6 million as low grade, and the total tonnage was estimated by that office as 23.5 million tonnes.

Deputy Ardagh: Deputy Rabbitte has already indicated that Hudson Brothers and Treacy Enterprises Dundrum, Limited, were not treated fairly in this matter, as they did not get a fair go at the property. It was not long after that a letter was put on the file and the GSI was called in to assess how much sand and gravel were in the location.

Roadstone put in an initial bid of £700,000 plus £400,000 with planning permission. Johnson Industries put in a bid of £715,000 plus £435,000 with planning permission. Roadstone, I understand, was aware that the GSI had stated that there were 23.5 million tonnes in the site. Johnson Industries were informed that there were 7 to 8 million tonnes in the site. Is that wrong?

Mr. Carroll: We need to clarify the parameters of what would govern extraction on the site. There were 23.5 million tonnes on the site, which related to 72.9 hectares, which was the total area owned by the Department in Glen Ding. Of that area, 14.2 hectares were transferred to the OPW, and the question arose then as to how much of the 58.6 hectares or 145 acres left could be exploited. The planning consultant and valuation advisor estimated one could only extract from 33.6 hectares or 83 acres; due to planning and environmental considerations one could not touch a large part of the property. Allowances had to be made for margins to external boundaries and restoring walls, so one came down to a gross extractable amount of 8.4 million tonnes, and when one took out the excessive fines, as is stated, the estimated extractable material the purchaser could take out fell to 6.7 million tonnes.

Deputy Ardagh: Was Johnson Industries informed of the valuation that the GSI found? Was Johnson Industries informed that there were 23.5 million tonnes in the area or was that firm informed in such a way as to put it off the scent by minimising the amount of ore on the site so that it would have no further interest?

Mr. Carroll: I have no information--

Chairman: Perhaps that question should be directed to Mr. Loughrey.

Mr. Loughrey: Does Deputy Ardagh feel that there was not a level playing field between Johnson Industries and Roadstone?

Deputy Ardagh: I feel that Johnson Industries put in a higher initial bid than Roadstone and that Roadstone was informed the Department was looking for £1.5 million but Johnson Industries was not. This indicates a cosy arrangement between the Department and Roadstone.

Mr. Loughrey: With respect to the Deputy, I reject that totally. In a negotiating position there would be no asymmetry in the information supply to either side; they would be exactly the same setting off. That would have been the intention. One cannot guarantee that the exchanges across the table would have given the exact same result, but there would have been no intention on civil servants’ part of tilting the balance in favour of Roadstone and away from Johnson Industries. That would not have been the intention.

Deputy Ardagh: Mr. Loughrey stated in the report to the Minister that following on that Johnson Industries actually put in a higher quote than Roadstone that only Roadstone made a meaningful approach. We are talking about £1.1 million, a significant sum.

Mr. Loughrey: There is a timing difference there. That was in November, before Johnson Industries put in its bid. There was a careful assessment, and four separate submissions were made to the Minister. When Johnson Industries came in with their best shot in the end game, as it was described at the time of the meeting, their unconditional offer was very significantly below that of Roadstone. I accept what the Deputy is saying - prima facie, the initial, conditional Johnson offer, with conditional planning permission, was marginally better than Roadstone’s initial offer. However, that was irrelevant as we had already decided that the only basis on which we would take offers would be without planning permission. I accept what the Deputy is saying prima facie.

Deputy Ardagh: But you told Roadstone that the Department was looking for £1.5 million? Did you give the same opportunity to Johnson Industries?

Mr. Loughrey: I cannot say for definite what happened at that meeting as I was not there. However, it would certainly have been the intention to be absolutely fair and equitable to Johnston Industries as well.

Deputy Ardagh: This gives the appearance of Roadstone having an advantage within the Department and of a situation which was not fair to Johnston Industries.

Mr. Loughrey: I repeat, that would not have been the intention. Mr. Johnston expressed himself satisfied that this was the most he would pay in any circumstances. He was quoted on the file as saying, “This was my very best shot”. He was even encouraged, on the telephone the following day, to increase his offer if he wished. He did not do so. The interchange, or chemistry, between different people at a meeting may not have been entirely the same but the intention was that both would be treated equally. That was the intention.

Chairman: It is clear that we will not finish this before lunch. I am very grateful to Mr. O’Malley who has risen from his sick bed to appear today and I am anxious that he be heard before we adjourn for lunch. I propose that we question Mr. O’Malley for ten minutes and then adjourn until 2.30 p.m. Agreed.

Deputy Bell: May I ask a brief question now because I must be in the Dáil for Question Time this afternoon? I understand the pressure of time. Can Mr. Loughrey tell us who, on behalf of the Department, approached Wicklow County Council regarding the question of whether planning permission might be secured? Did the planning authority indicate that Roadstone were more likely to get planning permission than any of the other applicants?

Mr. Loughrey: There was no direct contact between the Department and Wicklow County Council other than the friendly advice we received on how to describe the planning approach because this was the first time for us.

Deputy Bell: I have been a member of two local authority for 25 years. There is no such thing as friendly advice. The manager decides whether to grant permission on the recommendation of the planning officials.

Chairman: Were there informal discussions between...?

Mr. Loughrey: They were informal discussions.

Chairman: At what level?

Mr. Loughrey: They were about process. They were headed by the county engineer, the chief inspector of the Forest Service, their respective staffs and the people on our side. This had nothing to do with giving anyone an inside edge. We had never gone through a process like this in the Department and we were given friendly, informal advice about the approach. As to getting an indication from the county council concerning what was possible and what was not, we had employed Mr. O’Malley to do that reconnaissance for us professionally. He did that.

Deputy Bell: Did Mr. O’Malley, on behalf of the Department, approach Wicklow County Council to establish whether or not planning permission might or might not be secured?

Mr. Loughrey: I am not saying that. I was never privy to that and there is no such description on the file. I imagine Mr. O’Malley could answer that question for the Deputy.

Chairman: Did Mr. O’Malley advise the Department that it was unlikely to get planning permission?

Mr. Loughrey: Absolutely. He advised that there would be difficulties.

Chairman: I interrupted Deputy Durkan a while ago when he was about to ask Mr. O’Malley a question. I am grateful to Mr. O’Malley for coming today.

Mr. O’Malley called and examined.

Deputy Durkan: Having listened to previous submissions, has Mr. O’Malley read the Comptroller and Auditor General’s report?

Mr. O’Malley: I received it last Friday. I have read it.

Deputy Durkan: Are there any aspects of what he has read in the report or of the evidence he has heard today with which he disagrees?

Mr. O’Malley: I did not hear everything that was said. A statement was read which referred to sums of money and to commentaries assigned to me in relation to sums of money. None of that rings true. My only brief from the Department was to advise the Department in relation to a planning application. I advised them that there were serious difficulties with planning. That shifted the focus away from the planning application to the need for a decision about how to move the project forward. The question of how to dispose of the property became important. My only interest in the disposal of the property related to the planning component. I recommended Mr. Barnett for advice in relation to valuation. I do not deal with valuation. I could not have said what was ascribed to me earlier. I would have advised against making any deal that was contingent on planning permission being given. I had concluded that planning would lead to big trouble.

Deputy Durkan: Would it have been possible at that time for the Department who owned the property to develop the sand and gravel deposits without planning permission.

Mr. O’Malley: I advised the Department to consider whether they, as a Department of State, needed planning permission for that. The advice came back - I think from the Chief State Solicitor’s office - that because the Department did not intend to work the deposit itself, consent was required. While it was not a direct concern of mine, one of the hoped for advantages of a consent was that the property could be divided and sold in several smaller lots.

Deputy Durkan: Would this have carried the effect with it of planning permission, on that basis? The point having been established.

Mr. O’Malley: It would be very difficult to get a consent to split the property into lots. It is not easily done. The planning system would not be impressed by the argument that the division had been made merely to enhance the value of the property. The difficulty was that any third party with a decent access which by-passed the town of Blessington had a material advantage with regard to planning which the Department did not have. It did not matter to me who that third party might be. I was merely concerned that the Department of Energy did not have that capability.

Deputy Durkan: Would it have made much difference to the value of the property if the Department had decided to develop the extraction of sand and gravel and then sell it as a going concern.

Mr. O’Malley: To do anything, the Department would have had to get planning permission. I could not comment on value. That is not my territory.

Deputy Durkan: Could the Department, under the planning laws as they existed at that time, have established the use of the land for quarrying prior to the sale of the property?

Mr. O’Malley: No. The land holding was forestry land. In the corner of the property there was a small area where, historically, some sand and gravel had been extracted on a small basis to make forestry roads either on the property or nearby. That would not have established its use for quarrying. The Department could have done nothing further without permission.

Deputy Durkan: The previous witness had indicated that sand and gravel could be extracted for maintenance of forestry roads.

Mr. O’Malley: That was very small-scale activity. Sand and gravel would originally have been taken out by horse and cart. Activity would then have proceeded to a trailer-full here and there.

Deputy Durkan: Would there have been much difference between the valuation of the property without planning permission and with it?

Mr. O’Malley: That is outside my area of expertise.

Deputy Durkan: Having regard to Mr. O’Malley’s planning experience, would there be a considerable difference?

Mr. O’Malley: One presumed that planning permission would make all the difference in the world.

Deputy Durkan: The previous witness indicated that Mr. O’Malley originally advised the Department that he envisaged the property being disposed of by auction or public tender and subsequently changed his advice. Is this true?

Mr. O’Malley: That is true. There is a letter on file showing that I advised to that effect.

Chairman: We must be precise about this. What advice is contained in the letter?

Mr. O’Malley: The letter recommended that the Department seek tenders for the land if that was what the Department wished. I am getting out of my territory on the issue.

Chairman: But in your letter you recommended it be put out to public tender. We are told that the Departmental file subsequently said you changed your mind. Is this so?

Mr. O’Malley: I have not seen the Departmental file to that effect. I did not receive records of the meeting of 18 October. Perhaps that note was made after I left.

Chairman: What is your recollection of the meeting?

Mr. O’Malley: I cannot confirm or deny this. I had very little interest in the question of disposal. I was waiting for the final decision as to whether they were applying for planning permission or not. The question of disposal arose later.

Chairman: You are quoted in newspapers as saying that you never changed your advice regarding public tendering.

Mr. O’Malley: A month ago a copy of the document was shoved under my nose by a newspaper reporter during an interval at a meeting of Wicklow County Council. This was the first time I saw the document. I had not seen my own file in years, because I had no reason to look at it. The information in paragraph 6.4 does not seem correct. However, I do not have contemporaneous notes to either confirm or deny it. All I am saying is that I do not recollect this. I would not comment on other people’s offers because this would be moving out of my territory. My territory was planning permission.

Deputy Durkan: Did anyone accompany you in an official capacity?

Mr. O’Malley: No, I was on my own, other than at the meeting which was attended by Mr. Barnett.

Chairman: Are you saying that you have no recollection of whether or not you changed your advice to the Department?

Mr. O’Malley: My written advice was clear some months earlier. Afterwards I was interested only in whether the Department would apply for planning permission. As the Department appeared to lose interest in this, the debate focused on the disposal of the land. I was not interested in the disposal of the land because valuation and disposal was not my territory.

Chairman: Was Mr. Barnett at that meeting?

Mr. Barnett: I attended the meeting of 18 October.

Chairman: Do you recall advice being given that this should be done by private treaty?

Mr. Barnett: No.

Chairman: Do you recall the issue being discussed?

Mr. Barnett: The valuations were discussed with me in detail at that meeting.

Chairman: You heard Mr. Loughrey describe the internal Departmental minute of that meeting which purports to say that the advice was that it should be sold by private treaty. Do you recall this?

Mr. Barnett: Not really. I was very happy that the valuation I gave had been approached by a company.

Chairman: You would not be prepared to say that this was not said at the meeting? Do you recollect the matter being discussed?

Mr. Barnett: I do not recollect the matter being discussed.

Chairman: So you cannot say one way or the other?

Mr. Barnett: No.

Deputy Durkan: Is it correct that Mr. O’Malley was engaged by the Department as a consultant to advice the Department?

Mr. O’Malley: Yes.

Deputy Durkan: Were you aware of anyone who may have met with any of the parties interested in the purchase of Glen Ding prior to its disposal?

Mr. O’Malley: We just met the officials of the Department.

Deputy Durkan: Was Mr. Barnett employed by the Department as a consultant?

Mr. Barnett: Yes.

Deputy Durkan: Are you aware of any meeting which might have taken place, either between yourselves or those known to you, with any of those interested in the property prior to its disposal?

Mr. Barnett: None whatsoever.

Deputy Durkan: Is Mr. Loughrey aware of any such meeting that might have taken place, either with or without permission, between you, officials of your Department or any other interested party or body, with any of the people who expressed an interest prior to the disposal of the property?

Mr. Loughrey: Other than what is recorded on the file.

Deputy Durkan: And only those, nothing else took place?

Mr. Loughrey: Absolutely nothing else to my knowledge.

Deputy Doherty: At the time Mr. O’Malley was contracted by the Department, had he any contractual relationship with any of the companies referred to here today, including Roadstone?

Mr. O’Malley: No.

Deputy Doherty: Did he ever have any contractual relationship or obligation to Roadstone?

Mr. O’Malley: Yes.

Deputy Doherty: Was it previous to the period we are talking about or was it thereafter?

Mr. O’Malley: I worked for Roadstone between 1973 and 1990, on and off on a job by job basis, not a retainer arrangement. I worked for Roadstone on a couple of occasions since 1990. I worked for them on their gravel pits in Blessington in 1995 and made a planning application for a concrete plant on their land. I did some other work for them in the Dublin area. I work for them when asked.

Deputy Doherty: Had Mr. Barnett any contractual relationship with Roadstone or any of the other companies mentioned here today?

Mr. Barnett: I had no contractual relationship with Roadstone up to that date. Being a large company, Roadstone tend to have their own specialists in my area. I did a lot of work for one of the CRH group, Premier Periclase in Drogheda. I looked after geological issues such as planning and environmental aspects.

Mr. O’Malley: I did some work for Johnston Industries in Castleruddery. This related to a planning application for sand and gravel near Baltinglass, County Wicklow.

Chairman: When was that?

Mr. O’Malley: In the late eighties.

Deputy Doherty: Did you have a dispute with anyone?

Mr. O’Malley: No.

Mr. Barnett: I did work for other parties who were my clients.

Deputy Doherty: Has Mr. O’Malley been contacted by any official of the Department in the last number of weeks or months?

Mr. O’Malley: I have not spoken to a Department official since I closed my file in 1990 or 1991.

Deputy Doherty: Did Mr. Barnett have contact with a Department official?

Mr. Barnett: No.

Deputy Doherty: Mr. O’Malley is not very sure about what exactly he said at the meeting of 18 October in relation to his reported change of mind regarding the private or public aspect of this transaction. He felt privately was the right way to go initially. Has he any recollection of changing his mind on this issue?

Mr. O’Malley: I have no note of it. I have no recollection of events as suggested in paragraph 6.4. I am not saying I did not say this. I was talking about an area outside of my territory. I had no reason to be concerned with that. I was concerned only with whether I would have to make a planning application or not? The question of disposal was incidental as far as I was concerned.

Deputy Doherty: Do you think it peculiar that this question was put to you here today?

Mr. O’Malley: Planning is not totally in a vacuum.

Deputy Doherty: Was it an easy atmosphere that caused this type of chit chat?

Mr. O’Malley: It was an easy discussion. Relationships with the Department were excellent. I did not get formal minutes of that meeting. I do not think I got formal minutes of any meeting, and I have no note to confirm or deny that.

I am nothing if I am not single-minded. My work entailed advising on planning and planning alone. We know that was correct.

Deputy Doherty: Was you made aware of the requirements of the Department of Finance in relation to public tendering at any time? Was it brought to your attention? If it had been would you be so sure today that you could not have altered your position?

Mr. O’Malley: I was never informed of that and I would have no interest in it.

Deputy Rabbitte: You said in response to Deputy Durkan that the value of the property with planning permission compared to it being without it would “make all the difference in the world”. Can you put any quantum on it?

Mr. O’Malley: Absolutely not. Once it came to the question of numbers and valuations I recommended Mr. Barnett. It was totally outside my territory.

Deputy Rabbitte: What prompted you to write the letter counselling sale by public tender?

Mr. O’Malley: As the debate was going on I was making a report in relation to it and at this stage the Department were receptive to my advice that there were some serious planning difficulties out there. The discussion then went on to their primary interests. Presumably the only reason I was involved in planning was to do something to add value and, therefore, sell it to better effect. To that extent you cannot detach planning from value and that is the only reason I sent the letter.

Deputy Rabbitte: You said the report was stuck under your nose at a meeting of Wicklow County Council. We are all very pleased you have recovered from your recent brief illness but while you were ill did you get a chance to study paragraph 6(4)?

Mr. O’Malley: I have read the report.

Deputy Rabbitte: On reflection what is your view? How could it relate to you at all?

Mr. O’Malley: I was going to say that. It should not relate to me. Perhaps it is what Mr. Barnett said. I do not know.

Deputy Rabbitte: Was Mr. Barnett at the meeting in question?

Mr. Barnett: Yes.

Deputy Rabbitte: Was Mr. O’Malley there as well?

Mr. Barnett: Yes.

Deputy Rabbitte: Could the consultant being referred to Mr. Carroll be Mr. Barnett?

Mr. Carroll: It is possible.

Deputy Rabbitte: Who wrote the note on file that you gave this information to the Comptroller and Auditor General?

Mr. Carroll: A Department official. It was a higher executive officer who attended the meeting.

Deputy Rabbitte: Has he left us for better things in Coillte or is he still around?

Mr. Carroll: He retired a number of years ago.

Deputy Rabbitte: Is he retired or is he employed somewhere else?

Mr. Carroll: He is retired for a long number of years. The note records only statements by Mr. O’Malley.

Deputy Rabbitte: Does it seem very unlikely in the light of what Mr. O’Malley has said-----

Mr. Carroll: Perhaps in the corporate sense it may have been the visitors. It says O’Malley.

Deputy Rabbitte: Having regard to Mr. O’Malley’s evidence where he repeatedly stated “valuation is not my baby” and “I am not involved in that” does it not seem very unlikely that he would have “advised that it would be most unlikely that any other party would be able to match the offer and strongly offered that the sale to Roadstone be pursued”?

Chairman: Was Mr. Barnett hired direct by the Department or through O’Malley?

Mr. Barnett: Through O’Malley.

Chairman: When this note says “the Department met with Kiaran O’Malley and Company Limited” does it mean you and Mr. O’Malley? Were you subcontracted by Mr. O’Malley’s firm?

Mr. Barnett: Yes, I was subcontracted by Mr. O’Malley.

Deputy Rabbitte: Does Mr. Barnett agree with Mr. O’Malley’s impression from his long experience in the area that the value with planning permission as compared to no planning permission would make all the difference in the world?

Mr. Barnett: Yes.

Deputy Rabbitte: There must be a rule of thumb for this.

Mr. Barnett: Yes, when I did my valuation and produced the valuation report I was asked to consider this point about the value of the lands without planning permission. I find it very difficult to try and assess value of lands without planning permission because it is like plucking stars out of the heavens. Trying to put a value on the land or the minerals is difficult enough without trying to gaze into a crystal ball. I said in my report that in reality without planning permission there is no value for minerals. Under the terms of the Planning and Development Acts any working of the deposits on these lands constituted a development requiring planning permission. But they asked me the question and I did the exercise. I gave a very large discount factor in my equation to come up with a value without planning permission. I used 20 per cent of this factor as against 12 per cent in the valuation exercise.

Deputy Rabbitte: Can you remember what you said to Mr. Loughrey? He said it was £800,000 without planning permission and £1.25 million with planning permission.

Mr. Barnett: Yes, £860,000 without planning permission and £1.25 million with it.

Deputy Rabbitte: Those figures are difficult for a lay person to comprehend. As a member of a local authority I would have thought that the difference between £860,000 and £1.25 million was minimal enough but I agree with Mr. O’Malley’s statement that it makes all the difference in the world.

Mr. Barnett: Yes

Deputy Rabbitte: Would it not be a lot more than that?

Mr. Barnett: You can only work the minerals if you get planning permission for them.

Chairman: Yes, but the Deputy asked the question would the difference between the land without planning permission and land with planning permission not be greater than what is proposed here?

Mr. Barnett: No. This is the exercise I carried out and that is the figure I came up with.

Chairman: Was it your professional assessment?

Mr. Barnett: Yes.

Deputy Bell: With regard to planning, it would be normal to approach the planning department of Wicklow County Council. Therefore, I assume that when Mr. O’Malley was engaged by the Department he had discussions with the planning officials.

Mr. O’Malley: Yes.

Deputy Bell: Their report would be subject to the decision of the manager. Was it indicated to you that planning permission was more likely to be secured by Roadstone rather than by any other parties interested in the development?

Mr. O’Malley: No, it was not. The only questions I asked of the planning department of Wicklow County Council were on behalf of the State making application. There was no debate on how another application might fare.

Deputy Bell: You stated in your report that there would be a difficulty in securing planning permission.

Mr. O’Malley: Yes.

Deputy Bell: Was it indicated to you why there would be difficulties when effectively there was a sand and gravel pit already in existence?

Mr. O’Malley: In reality there was no sand and gravel pit there already. It was like a farmer with a 200 acre farm taking a full wheelbarrow or a couple of cart loads out of it once in a blue moon. That would not establish a right to anything. In fact, while I was not involved in it, I think Roadstone might have started reworking it but they were stopped in the courts on the basis that it was not a substantive pit. It was ancillary to forestry use. It had nothing to do with planning in a serious sense at all.

I had a meeting with the county planning department people in Blessington very early on and when I had fully researched the issues I concluded after a couple of months that there was serious planning difficulties likely to arise here. I did not want to bring a refusal to the Department of Energy without tracing the hope value.

Deputy Bell: But subsequently planning permission was granted.

Mr. O’Malley: Subsequently planning permission was refused. It would have been refused for at least one further reason had the application been made by the Department of Energy.

Deputy Ardagh: Can Mr. Barnett tell us on what did he base his valuation, particularly with regard to area, tonnage and the value on the tonnage?

Mr. Barnett: I looked at the planning issues because as has been expressed already at this meeting that was the area of concern. In carrying out my valuation I had to consider what would be a favourable or reasonable area for extraction of sand and gravel from these deposits.

I had to consider what would be a favourable or reasonable area for the extraction of sand and gravel from the deposits. I do not know whether the committee can make out the plans. The area which I thought could be the best area to go for planning permission is the red area.

Deputy Ardagh: So the valuation was based on what Mr. Barnett thought they would get planning permission for and not the value of the site itself?

Mr. Barnett: No. My valuation related to an area of 85 acres.

Deputy Ardagh: And the total site is?

Mr. Barnett: The total was 147 acres. I let in a substantial margin to the south of the site because the area of Glen Ding is very attractive. We are all aware of that fact. I wanted to retain the high woodland to the south so I left a barrier there. Therefore, I was knocking out quite a considerable amount of reserves that other people had possibly identified.

I was also a little concerned about the deposit itself. To my mind the deposit had a high silt content, 10 to 20 per cent. People may be wise now but that is in hindsight.

Deputy Rabbitte: Is that good or bad?

Mr. Barnett: It is okay, it is marginal. I would not like to see it go above 20 per cent.

Deputy Ardagh: It needs to be washed out.

Mr. Barnett: There is a substantial amount of material within the deposit that runs with waste factors of 20 to 40 per cent. That is high and, therefore, I had to discount a certain amount on that basis. I wanted to see the land restored to woodland.

Deputy Ardagh: After the extraction was finished?

Mr. Barnett: Yes. I mentioned in the report that I would like to see it restored to forestry. Therefore, I wanted to keep a level above any likely ground water to keep it dry so that the restoration objective could be achieved. These are quite important points.

Deputy Ardagh: They are not very commercial.

Mr. Barnett: No, but they are important points from an environmental and planning point of view.

Deputy Ardagh: Was the valuation commercial or environmental?

Mr. Barnett: It was a commercial valuation. I discounted all the waste and finished up with 6.7 million tonnes. I then concluded that an operator would probably consider a 20 year life in order to amortise his investment in the land and any plant and equipment. With a 20 year life, one gets to production levels of something like 350,000 or 500,000 tonnes per annum. I applied a royalty of 50p per tonne.

Deputy Ardagh: That is £250,000 per year?

Mr. Barnett: Yes.

Deputy Ardagh: If one did not want to work and got someone else to work it, one would get 50p per tonne.

Mr. Barnett: I discounted that in my valuation formula using a risk rate of 12 per cent and finished up with £1.25 million.

Deputy Ardagh: That is very good.

Mr. Barnett: In the report I stated that that £1.25 million was for the sand and gravel only.

Deputy Ardagh: Why does Mr. Barnett think he was asked about the value of the property and the site when really he is an expert on the value of minerals? Why would he be asked about the value of trees and acreages in beautiful, West Wicklow? Why was a property valuer not brought in?

Mr. Barnett: I am a property valuer but I specialise in minerals. I am a chartered surveyor. Such surveyors are divided into a number of divisions. There are property and mineral surveyors and valuers.

Deputy Ardagh: Would Mr. Barnett have sought advice from other chartered property surveyors in the area or would he have a bank of knowledge on property in the area?

Mr. Barnett: I keep a bank of knowledge on minerals and mineral transactions. I am quite happy on that. I did not advise the Department on any other aspect other than minerals.

Deputy Rabbitte: Did Mr. Barnett value the timber?

Mr. Barnett: No.

Deputy Ardagh: So it would be £1.25 million plus the value of the timber?

Mr. Barnett: Yes.

Deputy Ardagh: What about the land around it. Let us say the timber was felled and there was potential for housing or amenity areas. Did Mr. Barnett put any value on that?

Mr. Barnett: I said in the report that, with respect to the value of all the landholding at Deerpark, I was not competent to give the value as my specialisation was only with respect to minerals.

Deputy Ardagh: Would there be extra value on that land as it stood, apart from the timber?

Mr. Barnett: Yes, there could be but I did not venture into that too much other than to give a nominal additional £500 per acre which would cover the residual value.

Chairman: I wish to ask Mr. Treacy, county manager, about the development potential of the land. What is the zoning position of the land?

Mr. B. Treacy, County Manager, Wicklow County Council, called and examined.

Mr. Treacy: It had no zoning under the original county development plan.

Chairman: So in 1990 it had no -

Mr. Treacy: It had no particular zoning.

Chairman: What does that mean in terms of potential for development? Does it mean that the county council would be open to any possible suggestion?

Mr. Treacy: Correct.

Chairman: So it did have a potential development value.

Mr. Treacy: Yes.

Chairman: Would the county council have consider a planning application for housing on part of the site?

Mr. Treacy: Yes, but the terrain was such that it would not be appropriate for housing. I am not a planner but I am just giving a view. The answer to the question is yes.

Chairman: So there was and is a potential value for the land?

Mr. Treacy: I cannot answer that categorically as I do not have the competence to do so. However, under the zoning, or lack of it, at that time any development which was proposed could be considered.

Chairman: What is the change in the zoning now?

Mr. Treacy: There is a proposed town plan for Blessington coming through which incorporates the type of activity which has been discussed today, i.e. the use of part of it for sand and gravel extraction.

Chairman: So there is a proposed re-zoning which would allow part of it to be -

Mr. Treacy: First time zoning, yes.

Chairman: What of the remainder of the site?

Mr. Treacy: That is for amenity.

Chairman: Just amenity?

Mr. Treacy: There are special zonings in. There is an old ringfort and various other things which have to be preserved.

Chairman: What does the word “amenity” cover?

Mr. Treacy: The retention of trees and walks.

Chairman: But it would still be open to some housing or physical development?

Mr. Treacy: It could be. I have not thought of that or put it to my people.

Chairman: Or industrial or commercial development?

Mr. Treacy: I doubt that it would be suitable for that. My personal, layman’s view is that I do not think it would be suitable.

Chairman: But under the general zoning, the county council turned down Roadstone’s application.

Mr. Treacy: Bord Pleanála turned it down. The county council granted permission. It was thrown out on appeal.

Deputy Bell: That is what I said earlier and I was told that planning permission was refused.

Mr. Treacy: Yes, by Bord Pleanála.

Chairman: It was originally granted by the county council.

Mr. Treacy: Yes, I granted permission.

Chairman: You granted permission yourself?

Mr. Treacy: Correct.

Chairman: Even though the indications previously had been, and you heard the advice given to the Department that it was unlikely to get planning permission.

Mr. Treacy: I am not sure. I think the point was that there was a suggestion that because there had been a limited amount of extraction previously in the Glen Ding area by the State with a view to providing gravel and sand for forest roads, there was an ongoing user of this area for this purpose and that planning permission would not be required. An intensification of use would arise because of Roadstone’s activities.

Chairman: What do the county council’s records show about discussions with the Department of Energy concerning this area?

Mr. Treacy: I appreciate the clarification from the Secretaries-General that we did not recommend any consultant to the State at that time. I have talked to the county engineer who was present, and he cannot remember the question of a consultant even coming up. It is possible what might have been said was that it would be necessary for the State to appoint a competent consultant to make an application for planning permission, if it was going to do that, because it did not have the skills to do so and it would be advisable to take on board competent planners. No particular planner was mentioned at that time.

Chairman: Does the record show whether there was an indication from the county council that planning permission was likely or unlikely?

Mr. Treacy: There was a subsequent discussion, after Mr. O’Malley was appointed; there is a brief note on the file of a discussion with him, where we made the point that an EIS would be necessary. That was a new element which was coming into play at that stage.

Chairman: That is an environmental impact study?

Mr. Treacy: Correct.

Chairman: Was that ever supplied or undertaken?

Mr. Treacy: In due course, when there was an application for development by Roadstone all these documents were made available.

Chairman: There is no record of any intimation by the county council that planning permission was unlikely?

Mr. Treacy: No, we would not say that categorically, we would have discussed the general issues. I think the issue which was coming up was whether the fact that there had already been limited use of the Glen Ding area for the extraction of gravel and sand for use by the State would qualify the new owners to claim they were continuing current practice.

Chairman: Mr. O’Malley, did I understand you to say you had advised the Department there would be planning difficulties?

Mr. O’Malley: I advised them after a couple of months looking at the issues, yes.

Chairman: Was that in light of any conversations you had with officials of the county council?

Mr. O’Malley: No. The discussions I had with the technical planners in Wicklow were not too unpromising but I came to the conclusion that when the application would be filed, third party interests would be mobilised and the issues would suddenly become a good deal more crystallised. In the event, last year’s decision to grant planning permission was the subject of a third party appeal, and it failed at An Bord Pleanála on third party appeal grounds. That concerned me.

This land is the backdrop to Blessington - it is some distance to the west of the town but it is extraordinarily prominent and is very much part of the town. While this is an exaggeration, it would be a bit like taking a lump out of Croagh Patrick but saying Westport remained the same. It was prominent, wooded land which was an important landscape feature between west Wicklow and Kildare - a lot of Kildare is quite flat. That was what concerned me most of all, the visual issue.

Chairman: Were you surprised that Wicklow County Council granted planning permission?

Mr. O’Malley: No because, as I said, seven or eight years earlier when environmental considerations were much less onerous - when I was first approached the environmental impact assessment regulations were not in vogue - the read out from the technical officers was not unpromising.

Chairman: Even though it was akin to taking a big lump from Croagh Patrick?

Mr. O’Malley: The Wicklow planning officer was entitled to his view - I had a different view, I had 25 years’ worth of dealing with third party attitudes, planning issues, etc. In one case in Kildare, not far from Sallins, a deposit not far from the canal banks was refused for archaeological reasons - I think that was the first refusal I ever had for sand and gravel. This had all the looks of it.

Chairman: A new trend.

Mr. O’Malley: The Department only had access in County Kildare and even that had to go through the amenity lands retained and the traffic through those lands would have eroded their quality. One went into Kildare through a poor road, into Wicklow through another poor road, and then through the middle of Blessington, whereas an adjoining owner on the other side, one example of which was Roadstone, could go directly and dodge all of this, it did not have to apply to Kildare County Council as well as Wicklow County Council whereas we had to have two applications.

Chairman: So it was of more value to them than to anyone else?

Mr. O’Malley: I was not concerned about value, if you recall, I was concerned about the prospect of getting permission. It had every chance going one way but little chance the way we were going.

Deputy Dick Roche called and examined.

Chairman: Deputy Roche, are there any unasked questions?

Deputy Roche: I think there are. I welcome the clarifications of Paragraph 6.4 by Mr. O’Malley because when I read the Comptroller and Auditor General’s report it struck me that the defence attributed to Mr. O’Malley was so improbable as to be unbelievable, because I know Mr. O’Malley’s work is primarily in the planning area.

Chairman: Are there questions we have not asked that we should have?

Deputy Roche: Yes. Mr. O’Malley mentioned planning; Hudson Brothers also enjoys access to the significant access to the Glen Ding lands and to the N81. Was Mr. O’Malley aware that Hudson Brothers had actively pursued their interest up to the sale?

Mr. O’Malley: I was unaware of that company’s interest. The only interest explained to me, other than Roadstone, was Mr. Johnson.

Deputy Roche: That is a significant point because Hudson Brothers have been closed out of this issue - most improperly, in my view. As to the evaluation of the land, the timber was valued by the Department on its files at that time at £340,000. Was Mr. Barnett notified about this?

Mr. Barnett: No, I was not notified.

Deputy Roche: I understand Mr. Barnett’s operational and professional expertise is in sand and gravel and mineral extraction, so he is not really a valuer of property in toto but of aspects of the property - I think that is fair.

Chairman: Mining aspects?

Mr. Barnett: Yes but I said in my report that the valuation of timbers or any other interest in the land is not my business - I mentioned it.

Deputy Roche: Even within those limits Mr. Barnett came to a valuation of £1.26 million, which is more than the land sold for.

Chairman: Deputy Roche, you were a member of Wicklow County Council for some time - what was your view of the development potential of this land?

Deputy Roche: My personal view is that the arguments here about planning are spurious, intended to mislead this Committee, and unsustainable when one reviews the facts, which are, as I mentioned in the note, that Wicklow County Council did not make a material contravention but an amendment to the development plan for Blessington in order to grant planning permission. Seven elected members of the council objected.

Mr. Barnett: Was that at the review stage?

Deputy Roche: No, prior to that. It was an amendment to the town plan for Blessington which did not require material contravention because of the manner in which it operated, but that is a technical issue. The suggestion that either Hudson Brothers or Roadstone would have had major planning issues is not in accordance with my view of the anxiety within the council to facilitate reasonable development.

Deputy Rabbitte: Deputy Roche does not agree with the Croagh Patrick analogy?

Deputy Roche: I believe the land is of significant importance in the landscape, that is my personal objection to the Glen Ding development.

Deputy Rabbitte: I hope your county manager has no intention of transferring to County Mayo.

Deputy Roche: No, I hope he will see out his days in County Wicklow and long may he be with us. To take the specific question you asked, Chairman, the defence put forward here and in the report, that planning difficulties were insurmountable, is not borne out by the facts. When this substantial planning application came in, Cement Roadstone - the then and current owner of the land, against whom I have no personal objection - got the permission it wanted without any great difficulty.

Chairman: From the county council?

Deputy Roche: Yes. The subsequent controversy about this land arose after two court actions.

Firstly, there was a judgment by Mrs. Justice McGuinness. The proof of the pudding will be in the ultimate advice which comes back to members of Wicklow County Council regarding the western corridor designation which the Wicklow country planners wish to attribute to this and which the manager has said would not prevent Roadstone or any other owner from having access to the sand and gravel deposits.

Deputy Durkan: That is subsequent to what was conceivable in 1990.

Deputy Roche: Yes. One can look at this in either of two ways. One way is to put oneself in the context of the information and knowledge available in 1990. On that basis there is no reason to believe there would have been insurmountable planning problems. Mr. O’Malley has just said, and he makes the point in his professional advice to the Department, that there was only one separate occasion when he was aware of sand and gravel at that time being refused planning permission. With respect, the arguments that the subsequent evolution of thinking in planning would have been an impediment is a case of current knowledge being retrospectively applied.

I wish to make a further point regarding tonnages. I fully understand the point made by Mr. Barnett and found it very interesting as I never previously had that information. None of that information was volunteered to Mr. Brendan Johnston in his responses from the Department. He actually asked specifically if he could have access to the GSI figures which work out at 23.5 million tonnes of sand and gravel, but he was not given that.

Chairman: Is it part of the Deputy’s contention that there is evidence that there effectively was insider dealing with Roadstone on this issue?

Deputy Roche: No, I have never made that allegation.

Chairman: What are you saying? Are you saying Roadstone got favourable treatment and got much more information than Johnston Industries or Hudson Brothers?

Deputy Roche: I am saying that Hudson Brothers was treated appallingly and scandalously wrongly. Hudson Brothers give good employment.

Chairman: Are you saying they were treated so by the Department?

Deputy Roche: Yes. No public official can stand over the manner in which that firm, which is respected in the area, which enjoyed full access to the land and which would have had all the advantages Roadstone had, was treated. Secondly, I do not believe Mr. Brendan Johnson was treated in a way which was proper. Certainly in my view there was no effort to volunteer information to him. My personal view from day one has been - I said it in my very first note to the Chairman - that the manner of sale of this land was entirely inappropriate and that there is a lesson to be learned by all public agencies, namely, that if they are to deal in any kind of valuable asset, they must do so in a way which is open, transparent and fair. The C&AG has said this. I find the suggestion that a public official could make a judgment and treat one citizen of the State in a way which is manifestly different and places him at a disadvantage in relation to another citizen absolutely repugnant, obnoxious and totally unacceptable. I do not think any Member of the Dáil or Seanad would stand over the suggestion that a citizen can be treated in a manner which is less than even handed in their dealings with the State. I find that defence totally unacceptable.

My contention is that the defence of planning is one which arises entirely with the benefit of hindsight from this point of view. Secondly, the defence was certainly not valid at the time of the land transaction and sale. Thirdly, my view is that there was a predisposition, for whatever reason, in the Department to sell the land to Roadstone, which was entirely improper. Fourthly, other parties were treated in a way which was scandalously unfair. I suggest with respect that out of this we must draw a lesson.

Chairman: The Deputy has made four points. I would like to let Mr. Loughrey respond to the points made. Deputy Roche has made fairly serious charges concerning your Department.

Deputy Roche: They are not charges.

Chairman: Let us not be semantic about this.

Mr. Loughrey: I recognise that Deputy Roche has had a long, sustained and public spirited attitude towards this whole deal and I greatly respect that. That said, I find his observations extraordinary. The C&AG set out the evidence very clearly in his first class report. This morning we heard from Mr. O’Malley about his advice at the time. We are talking about the mid 1990s.

Chairman: Mid 1990.

Mr. Loughrey: Mid 1990. There is no question of some sort of retrospective justification. These were the submissions which were put to the Minister at the time, Deputy Molloy. They were well documented at the time, and we heard from Mr. O’Malley this morning about his exact advice.

Chairman: One point, one charge being made is that Hudson Brothers was treated abysmally by your Department. Would you like to comment on that?

Mr. Loughrey: I believe, prima facie, that Hudson Brothers - I have some difficulty with this as litigation may be pending and from the taxpayers’ and public’s point of view I must be careful. It is reported in the media that Hudson Brothers is looking at its position. The logic of my basic contention was to maximise the value for taxpayers and the Exchequer and that you accept a route that is exclusive or tended to be exclusive. I agree with what you are saying as the Department at all stages wants to treat people fairly and equally. I cannot disagree with the cri de coeur of Deputy Roche - I basically agree with it and we do that 99.9 per cent of the time. However, even in the Department of Finance and Government guidelines there are exceptions and I suggest this is one of those exceptions. That was our judgment at the time and I still think it was correct.

Deputy Rabbitte: Do Mr. Loughrey and Deputy Roche agree that, to whomsoever blame attaches for whatever reason in the light of knowledge at the time, Roadstone is being improperly dragged into a controversy when no blame ought to attach to the company; that blame for breaches of procedure which took place in Mr. Loughrey’s Department, maybe for reasons of sound judgment, ought not to attach to Roadstone?

Mr. Loughrey: I am glad Deputy Rabbitte said that, as I believe that is exactly correct. Roadstone behaved professionally and properly at all stages and it is unfortunate for them that they have been dragged into this in a contentious manner.

Deputy Durkan: I wish to ask Deputy Roche a question. Was an evaluation of the mineral deposits or the properties carried out by Hudson Brothers or Johnston Industries?

Deputy Roche: I do not know - I represent neither.

Deputy Durkan: Not to your knowledge?

Deputy Roche: I do not know. I do not see how either of them could have, because Hudson Brothers, as an adjacent land owner, would have had a general view. They were always told the sale would be by public tender and they did not pursue the matter as they were continuously assured of this. My view is that it is highly improbable they expended any effort in establishing exactly what the sand and gravel deposits were. Regarding Mr. Brendan Johnston, from my knowledge, which is one side of the story, the characterisation being presented to the committee of the manner in which he was treated is at complete variance with the facts. Mr. Johnston was told, prior to putting in his final bid, that he should not bother to do so as the land had already been sold.

Deputy Durkan: I want to follow that question. I will come back to it.

Deputy Roche: That is very important, as the man was not given the kind of access to detailed information that I would regard as prudent to give anybody. If I was selling a house I would tell the person how many rooms it had and so would every other Deputy present.

Deputy Durkan: We have established that from previous meetings. I wish to return to the original question. One of the parties other than Roadstone made an offer.

Deputy Roche: Johnston Industries.

Deputy Durkan: Did they carry out any evaluation themselves to ensure the offer they were making was going to be in the ambit of its valuation?

Deputy Roche: I do not know, the Deputy would have to ask Mr. Johnston whom I believe would be available to the committee. The history of Johnston Industries is very accurately set out in the C&AG’s report and suggests Mr. Johnston was not finding it terribly easy to deal with the Department.

Deputy Durkan: In respect of the point made just now, is it correct that one of the prospective parties interested in the property was informed that it had been sold?

Mr. Loughrey: That is not in accordance with the facts.

Deputy Durkan: Did it happen?

Mr. Loughrey: I do not have a record, except for Mr. Johnston’s assertion which I accept because I have no reason to doubt what he said. If he were so informed, however, that was not correct because no such decision had been taken at that time.

Deputy Durkan: The contemporaneous notes to which Mr. Loughrey has repeatedly referred appear to be substantial in terms of refreshing the Department’s memory at this stage. However, no such note exists in respect of this aspect of the case.

Mr. Loughrey: No such note exists.

Deputy Durkan: Why? If the Department was dealing with an interested party in connection with the disposal of State assets and a detailed record was kept of the discussions which took place with other interested parties, why was no note taken of that?

Mr. Loughrey: A record was kept of all interactions with Mr. Johnston.

Deputy Durkan: However, that point was not recorded.

Mr. Loughrey: No.

Deputy Durkan: Arising from the situation whereby an interested party was presented to the Minister for his approval, which involved a change of policy wherein, by Mr. Loughrey’s admission, information was withheld from the Minister regarding the fact that commitments had been given previously in the Dáil, and taking account of the importance of this issue in respect of established practice, etc., what action was taken in the Department to ensure that this will never happen again?

Mr. Loughrey: I agree with Deputy Roche that that should not have happened. I do not agree with the use of the word “withheld” because it infers a conscious action. I believe it was not submitted. It was an act of negligence rather than one of conscious withholding. I assure the Deputy that there was no conscious withholding of information from the Minister.

Deputy Durkan: When a file is prepared to bring to a Minister for his signature in respect of a decision of one kind or another, is it not accepted and established practice to supply all relevant data and that a file is built up in various stages and references and tabs are applied to the side of the file to ensure that a Minister is fully aware of the position? Does a Minister not receive a chart directing him or her to refer to tabs a, b, c, d, e, etc.? Was that done in this case?

Mr. Loughrey: It was not done in that case but different Ministers have different modus operandi. As a Secretary, I have worked with seven Ministers and many of them want a composite note and not the file. I could not look the Deputy in the eye and state that this is what is always done because different Ministers have different house styles. I agree with the sectoral tenet that all relevant information should go to a Minister but not necessarily voluminous files.

Deputy Durkan: However, it did not go to him.

Mr. Loughrey: No.

Deputy Durkan: What action has been taken to ensure that that does not occur again?

Mr. Loughrey: I have taken on board what the committee is telling me in no uncertain manner today and I will apply that experience in the Department.

Deputy Ardagh: I stated earlier that this matter reflects a cosy arrangement between Roadstone and the Department. However, based on the evidence and people’s contributions, I accept that no such arrangement exists, that Roadstone is totally blameless and that it was the bungling of and unfair methods employed by the Department which cause me to come to that conclusion.

Deputy Rabbitte: As a former civil servant, will Deputy Roche comment on what happened in the Department and how the decision was handled?

Deputy Roche: To be fair to the then accounting officer, I believe he, the Department and the Minister were let down badly. I also believe that taxpayers were appallingly let down.

I wish to make a final point about Mr. Johnston. Mr. Johnston was informed by a senior official of the Department in December 1990 that there was no point in proceeding because the land had been sold. The departmental files must make reference to that. I do not believe they do not refer to it because Mr. Johnston caused a friend of his to telephone the Minister to complain about the manner in which he had been treated. It is not right, fair or proper that that fact should not have been presented to this committee because it is another element of this matter.

I can understand that in any administrative arrangement there is a predliction to be defensive when you are caught with your trousers down. However, the reality in this case is-----

Chairman: With regard to Deputy Roche’s point about someone complaining to the Minister on behalf of Mr. Johnston, is that noted in the Department’s file?

Mr. Loughrey: I have just been supplied with the note of the meeting between the assistant secretary and Mr. Brendan Johnston which states that Mr. Johnston handed in his offers, indicated he was making his best shot, etc. I will not rehearse the entire note but it goes on to state that Mr. Fitzgerald undertook to put Mr. Johnston’s offers before the Minister for his decision.

Chairman: Did that happen?

Mr. Loughrey: That was on 14 December 1990. The submission to the Minister for decision was made on 19 December, five days later.

Chairman: It was put to the Minister?

Mr. Loughrey: Of course, and very carefully put to him.

Deputy Roche: I referred to Mr. Johnston’s complaint, about which the Secretary General should know because appendix B of the C&AG’s report states that a “File note of the telephone call by Mr. Johnston to Minister’s office protesting at decision by Minister to sell to another party when he had arranged a meeting for 13 December to formally table his offer”. What the note does not indicate is that Mr. Johnston had encountered difficulties in gaining access to the Minister but I will ignore those issues because I do not want to burden the committee with too much detail. However, that note arose because Mr. Johnston had made a protest and caused a protest to be made to the Minister about the manner in which the sale had been made. Mr. Johnston had already been informed that he could meet officials on 13 December but he has contemporaneous evidence-----

Chairman: He had already been informed that the land had been sold and not to bother proceeding with his offer.

Deputy Roche: Yes, on either 10 or 11 December. I sent the committee and the C&AG papers about this matter. I apologise for the volume of papers and I must state that, as a public representative in Dáil Éireann, I do not have time to write a 200 page report on events which occurred ten years ago but I find what happened in this case offensive in the extreme.

Chairman: Was the submission made to the Minister after the protest from Mr. Johnston had been received?

Mr. Loughrey: No, it was underway already. As soon Mr. Johnston came in with his offer - it was a serious offer because he brought a bank draft with him, which was unnecessary but he insisted on doing so for emphasis - he was asked if it was his best shot and it was the subject of discussion. He received an undertaking that it would be put before the Minister. The Roadstone dossier was more advanced at that stage but the Minister had not taken his decision. He considered the Johnston and Roadstone offers side by side on a like basis.

Deputy Roche may be correct in saying that Mr. Johnston, who entered the process late, which did not take away from his right to be treated properly, but, regardless of hiccups, his best offer was put into the formal decision making process. That is the most important issue.

Deputy Durkan: When Mr. Loughrey presented the file to the Minister and given the history of the case, he obviously knew there was some contention involved? Mr. Loughrey stated earlier that some Ministers act differently and seek cover notes or briefing notes instead of files. Is it correct that Mr. Loughrey or some other official prepared a briefing note for the Minister before he signed the file?

Mr. Loughrey: That is correct.

Deputy Durkan: Does Mr. Loughrey have that briefing note in his possession?

Mr. Loughrey: Of course, like everything else it was made available to the Comptroller and Auditor General.

Deputy Durkan: What does it say?

Mr. Loughrey: Paragraph 6.7 provides a good summary of the note. I quote:

On 17 December 1990, a letter from Mr. Johnston’s solicitor included a presumption that he was the highest bidder.

A reply of 17 December, faxed on that day, denied that presumption and stated that the Minister was considering the offers. On 19 December a further submission was made to the Minister outlining the details of both offers with the recommendation that the Roadstone offer be accepted. The submission also stated that on the telephone to the senior departmental negotiator on 14 December, Mr. Johnston did not change the position of his offer even though it was left open to do so and said, if his offer was not the best then, he would accept that position.

Deputy Durkan: Had Mr. Johnston been told that the land was already sold at that stage?

Mr. Loughrey: I cannot say that somebody junior may have presumed that the Minister may have had (inaudible)... but, can I say the actual fact was, when it came to the senior negotiating team, that was put right, if that were said.

Deputy Roche: Mr. Johnston continually tried to make contact with a named official. This is itemised in the material I sent to Mr. Loughrey and to the Comptroller and Auditor General. He continually failed to contact an official at this level. He dealt with officials at HEO level. At that level, he was told that the land had already been sold.

Deputy Rabbitte: Was Mr. O’Malley correct in anticipating planning difficulties? The hinterland is of significant amenity value and in the normal course of events would one not expect that planning permission would not be granted? We have heard that it was and these things happen. Did Mr. O’Malley not show reasonable foresight?

Deputy Roche: I have great respect for Mr. O’Malley. I know him to be very fastidious in these matters. The points made by Deputy Rabbitte are the very ones on which I object to the rezoning of the land. Its preservation is fundamental to the protection of the landscape of the Blessington area.

Deputy Rabbitte: Did Mr. Treacy himself make the decision? What did the planning officer recommend?

Mr. Treacy: He recommended granting planning permission but that there should be conditions attaching to it.

Deputy Rabbitte: The planning official recommended that planning permission be granted subject to conditions.

Chairman: Was there consultation with the members of Wicklow County Council?

Mr. Treacy: No. the decision was an executive function. There was ongoing discussion at that time about the Glen Ding question. It was in the public arena.

Chairman: Had there been discussions at county council or at council committee level?

Mr. Treacy: In Wicklow, planning applications are discussed by a committee of councillors from the local area prior to decisions being made.

Chairman: Was that local committee in favour of granting permission?

Mr. Treacy: The majority were in favour. I thought a significant number of members had anxieties about it.

Deputy Roche: When the matter came to a vote in the council only seven of us disagreed with the decision. I do not find the argument that there could have been serious objections from the planning authority rational. There are always planning objections when an issue of this significance is proposed. Wicklow County Council is predisposed to planning and was disposed to give planning permission in this case. It may be that individual members such as myself object to it.

Chairman: Is it part of your contention, Deputy Roche, that the public purse is at a loss because of this decision?

Deputy Roche: I believe so fundamentally. In the environmental impact study which was part of the CRH submission the company argued that they would be extracting 800,000 tonnes of sand and gravel per year. One of the senior representatives of Hudson Brothers is present today. I asked him this morning what he would have got in a royalty bid on a tonne of sand and gravel in 1990. The figure he quoted is £1. That represents a revenue yield to the taxpayer of £800,000 per year. In the Roadstone EIS, it is made clear that that extraction level would be on a portion of the site over 15 years. That represents 12 million tonnes of sand and gravel or £12 million in royalties. This does not take into account the figure of more than £330,000 which is the value of the timber or the residual values of the land. These amounts have not been taken into account in any of the discussions on valuation other than in references by Members.

Chairman: Mr. Barnett, can you comment on the figures mentioned by Deputy Roche?

Mr. Barnett: A royalty is not a straight multiple against tonnage. Royalties are discounted over a period of time to get down to the present value.

Chairman: Did your valuation take the royalty potential into account?

Mr. Barnett: Yes, it did.

Chairman: And you still valued the property at £1.25 million?

Mr. Barnett: I used a royalty of 50p per tonne which I thought was an appropriate royalty to use at that time.

Chairman: Deputy Roche talks about 800,000 tonnes per year over 15 years being extracted, coming to £12 million. Even at a royalty rate of 50p per tonne the yield would be £6 million. Do you dispute Deputy Roche’s figures?

Mr. Barnett: I did my valuation in 1990. The Celtic tiger was in embryonic form at the time. The industry has had a six-fold increase in output over that period. Deputy Roche is speaking of 800,000 tonnes per annum. I was talking in terms of 350,000 tonnes which was realistic in 1990.

Chairman: Surely that is not relevant. Was there the potential to extract 800,000 per year for 15 years?

Mr. Barnett: If one had the market.

Chairman: But there was that potential.

Mr. Barnett: There would have been.

Deputy Roche: I do not disagree with Mr. Barnett.

Chairman: Would the 350,000 tonnes you refer to be extracted over 15 years?

Mr. Barnett: No. It would be over a period of 20 years.

Chairman: That is 350,000 tonnes per year?

Mr. Barnett: Yes.

Chairman: That would be 7 million tonnes.

Mr. Barnett: My figure was closer to 400,000 tonnes per annum which amounted to a total of 7.6 million tonnes.

Chairman: Your total royalty figure would be £3.5 million.

Mr. Barnett: No. Mine is a discounted royalty figure of 50p per tonne. If one were to look at that as a payment for sand and gravel in the ground at the time, it works out at 16p per tonne. I totally dispute the figure of £1 per tonne that has been mentioned as one which could be applied to sand and gravel deposits in 1990.

Deputy Roche: I got the figure of £1 from talking to people who knew the market in 1990 and who made the point that high quality sand and gravel within 15 miles of Dublin would have been worth £1 per tonne. The point is disputed but I got my figures from two sources both of whom are trading in the area. One of those sources can produce invoices from the period.

Chairman: Clearly the committee cannot conclude this issue today. I am not happy with the explanation of the Department’s failure to make the sale by public tender or by negotiated private treaty involving all those who had expressed an interest in the property. I propose that the transcripts of today’s evidence be supplied to those present and to Cement Roadstone, Hudson Brothers and Johnston Industries and to invite their comments on the transcripts; that the committee consider the matter further privately within the next couple of weeks to decide what our next step should be and that we resume hearings on the matter at a date to be fixed in the future.

Does the Comptroller and Auditor General wish to comment on what he has heard today?

Mr. Purcell: There have been many welcome clarifications and elaborations of the facts. In a report that is required within a reasonably short time one must cut one’s cloth to suit one’s measure. Nothing in the evidence heard today affects my own conclusion that the sale was handled in an inappropriate manner.

Chairman: The committee will adjourn on that subject. We will discuss it privately in a week or two and resume when the transcripts are supplied. Is that agreed? Agreed.

The private meeting of the Committee with Senior Counsel will take place next Tuesday at 12 p.m. The next public meeting is on Thursday at 10 a.m. when the Committee will deal with Vote 25, Department of the Environment and Local Government.

The Committee adjourned at 2.55 p.m.

COMMITTEE OF PUBLIC ACCOUNTS

Déardaoin, 25 Márta 1999

Thursday, 25 March 1999

The Committee met at 10 a.m.

Members Present

DEPUTY JIM MITCHELL in the Chair.

Chairman: The Committee of Public Accounts is now in public session. Today we will consider the 1997 Annual Report of the Comptroller and Auditor General and Appropriation Accounts, Vote 30: Marine and Natural Resources (resumed). We will also consider further the Special Report of the Comptroller and Auditor into Glen Ding.

Witnesses should be made aware that they do not enjoy absolute privilege and should be advised as follows: Members and witnesses’ attention is drawn to the fact that as and from 2 August 1998, section 10 of the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, grants certain rights to the persons who are identified in the course of the Committee’s proceedings. These rights include the right to give evidence, the right to produce or send documents to the Committee, the right to appear before the Committee, either in person or through a representative, the right to make a written and oral submission, the right to request the Committee to direct the attendance of witnesses and the production of documents, and the right to cross-examine witnesses. For the most part, these rights will only be exercised with the consent of the Committee.

Persons being invited before the Committee are made aware of these rights and any persons identified in the course of proceedings who are not present may have to be made aware of these rights and provided with a transcript of the relevant part of the Committee’s proceedings if the Committee considers it appropriate in the interest of justice.

Notwithstanding this provision in the legislation, I should remind Members of the long-standing parliamentary practice to the effect that Members should not comment on, criticise or make charges against a person outside of the House or an official either by name or in such a way as to make him or her identifiable.

Arising from previous hearings of the Committee, certain people were mentioned and we have offered them the rights to which I just alluded. Tracey Enterprises (Dundrum) requested a hearing before the Committee and we are offering that. The company said it wanted to take advantage of that offer today and we have with us Mr. Michael Stokes, Sales Director. You are welcome, Mr. Stokes. Perhaps you would introduce your colleague to us.

Mr. Stokes: Michael Kavanagh.

Chairman: What is Mr. Kavanagh’s position?

Mr. Stokes: He is a sand and gravel contractor.

Chairman: You are welcome also, Mr. Kavanagh. We also have with us the Secretary General of the Department of the Marine and Natural Resources, Mr. Tom Carroll. You are welcome, Mr. Carroll. Perhaps you would introduce to us your accompanying officials.

Mr. Carroll: I am accompanied by Mr. Tom Power, Assistant Secretary in the Department of the Marine and Natural Resources, and Mr. Brendan Buckley from the finance division.

Chairman: Both Mr. Power and Mr. Buckley are welcome. And from the Department of Finance?

Mr. Cardiff: Kevin Cardiff and Niall McSweeney.

Chairman: You are both welcome. Immediately after these witnesses we will hear from Mr. Frank Corcoran of Blessington Heritage Trust and some other colleagues. I am informed they have not yet arrived.

Mr. Stokes, you have been supplied with a transcript of the previous proceedings on the Glen Ding issue. Do you wish to make a brief opening statement to the Committee on those proceedings or on any other related matter?

Deputy Foley: Is there a time limit on this matter?

Chairman: It is my intention that we will have a maximum of 15 minutes to deal with Mr. Stokes’s submission and questions.

Mr. Stokes: In 1989, through the good offices of the Minister of State, Deputy Chris Flood, a meeting was arranged with the then Minister, Michael Smith. That was attended by the late Jack Tracey, Managing Director of Tracey Enterprises, Mr. Michael Kavanagh and myself. We had a meeting, not in the Minister’s Department but in his Dáil office; I believe it was on a Wednesday evening. We showed an interest in Glen Ding. We never heard anything more after that but we did show an interest in the property at the time for sand and gravel purposes. Our main operation is in Brittas, County Dublin. We have a stone quarry there where we manufacture tarmacadam as well.

The deposits in that area in Glen Ding are probably the best deposits within a 60 mile radius of Dublin. We would have been aware of that and Mr. Michael Kavanagh would have been aware of it as well. We were surprised that no one ever contacted us or that it never went out to public tender. We never heard any more after that meeting. We were serious about it at the time in so far as we purchased another quarry in Enfield, County Meath in 1990 and we continue to operate that quarry.

We felt we did not get a shot at tendering. From having read the transcripts, it seems it did not go out to tender.

Chairman: When did the meeting in Leinster House take place and with whom?

Mr. Stokes: With the then Minister, Deputy Michael Smith, and it consisted of the late Jack Tracey Michael Kavanagh and myself.

Chairman: Were any officials present?

Mr. Stokes: Not that I am aware of. We wrote back to thank them for the courtesy extended to us and we also wrote to Deputy Chris Flood.

Chairman: Have you an approximate date for that meeting?

Mr. Stokes: It was 1989. I am nearly sure it was on a Wednesday evening because it suited us. It was pointed out to us that, with the Dáil sitting on a Wednesday, we could have the meeting in Leinster House rather than over in the Minister’s Department.

Chairman: What was the purpose of the meeting from your point of view?

Mr. Stokes: To inform the Minister we were interested in that quarry and sand and gravel pit.

Chairman: Were prices discussed at the meeting?

Mr. Stokes: We discussed them and Mr. Kavanagh, who would have a very good idea of the layout of Glen Ding, also participated in that discussion.

Chairman: There was no question of you giving a ballpark figure of what you were prepared to pay?

Mr. Stokes: I believe there was a figure mentioned.

Chairman: Do you remember what it was?

Mr. Stokes: It was £1 million. We paid just under £1 million in 1990 for the quarry in Enfield in County Meath.

Chairman: Before I go to Deputy Cooper-Flynn, I want to ask the Secretary General if there is any record in the Department of this meeting.

Mr. Carroll: I have not seen it in the papers we have. It is in the Comptroller and Auditor General’s report. There is reference to interest being expressed by Tracey Enterprises in early 1988 and we have an undated letter on file from Michael Kavanagh-----

Chairman: From Mr. Kavanagh?

Mr. Carroll: -----Yes - which offered £50,000 for five acres of this site.

Chairman: An undated letter. Is it stamped?

Mr. Carroll: It begins, “I refer to your letter of 9 November 1987”, so I presume it is not too far away in time from that date. This obviously predates 1989.

Chairman: That is the only correspondence of which you are aware?

Mr. Carroll: That is the only thing.

Chairman: Do you, Mr. Purcell, have any inkling from your inquiries what record there is of this?

Mr. Purcell: Yes, as the accounting officer said, there is an undated letter from Mr. Kavanagh offering £50,000 for five acres. On 6 January 1988, there is a departmental acknowledgement of that letter. There is a letter dated 24 February 1988 from Tracey Enterprises (Dundrum) Ltd. to Deputy Chris Flood thanking him for arranging a meeting of representatives of the companies and Michael Kavanagh with the Minister of State to discuss the proposal for quarry operations in the Blessington area. They are the only references I came across in the course of my inquiry.

Chairman: That would be the same meeting referred to in either late 1987 and early 1988 and not 1989. At least we have clarified when the meeting took place. There is just an earlier reference to £50,000 for five acres?

Mr. Carroll: Five acres, yes.

Chairman: What is the total acreage in question here?

Mr. Carroll: It is 72.9 hectares, which is about 160 acres.

Chairman: Perhaps you could give us a ballpark figure for that. I call Deputy Cooper-Flynn.

Deputy Cooper-Flynn: Does Mr. Kavanagh agree with the sequence of events as read out by the Comptroller and Auditor General? Mr. Kavanagh, did you actually offer £50,000 for five acres? Is that correct?

Mr. Kavanagh: Yes.

Deputy Cooper-Flynn: That actually happened. It appears from the report that that was sometime between November 1987 and January 1988. Does that date seem-----

Mr. Kavanagh: It is a good while back.

Deputy Cooper-Flynn: I appreciate you probably do not keep the same records, but it does not seem unusual to you?

Mr. Kavanagh: No.

Deputy Cooper-Flynn: You got an acknowledgement of that fact on 6 January 1988. What about the letter from Tracey Enterprises to Deputy Chris Flood thanking him for arranging the meeting of representatives of the company with the Minister of State? There is no mention of the actual Minister, Deputy Michael Smith. That meeting took place in Leinster House?

Mr. Stokes: That is right.

Deputy Cooper-Flynn: And Deputy Michael Smith was in attendance?

Mr. Stokes: That is right. That is correct.

Deputy Cooper-Flynn: Could you tell what the general discussion was about? Could you give us an outline what that meeting was about? Were you aware the property was for sale at the time?

Mr. Stokes: We were aware the property was for sale.

Deputy Cooper-Flynn: How were you made aware of that?

Mr. Stokes: Mr. Kavanagh would have informed us that it was likely to come on the market.

Deputy Cooper-Flynn: How did you know that, Mr. Kavanagh?

Mr. Kavanagh: I cannot rightly remember. We just asked about it, had correspondence and it then went to Tracey Enterprises. Mr. Stokes got an appointment through Deputy Chris Flood with the Minister, Deputy Michael Smith. You know the rest.

Deputy Cooper-Flynn: Perhaps through some type of local information you became aware that it was available for sale. You met the Minister to discuss it and make some type of offer. What was the follow up to that particular meeting from the Minister?

Mr. Kavanagh: We never heard any more.

Mr. Stokes: The late Deputy Seán Walsh would have also been aware. He would have discussed it with me because he was a former Roadstone employee. We both soldiered on the road together. He would have known of our interest in that quarry in Glen Ding. He may have said to me in the course of conversation that it did not look likely we would get a shot at it.

Deputy Cooper-Flynn: The point I am trying to get to, Mr. Stokes, is that you knew the site was available for sale, you had an arranged meeting with the Minister and then, all of a sudden, everything was left, there seemed to be no further correspondence either from the Minister or Minister of State and you did nothing about it. I am trying to ascertain if you had any real interest in the site.

Mr. Stokes: One thing of which we were aware of was that there was no public announcement to say it was going to be put out to tender.

Deputy Cooper-Flynn: What were you told at the meeting in Leinster House? How was it left with you?

Mr. Stokes: The Minister listened and heard we were interested. It was a general conversation. We were certainly serious at the time because we purchased another quarry in Enfield in County Meath.

Deputy Cooper-Flynn: Was it a case that they were going to come back to you on it? Were you told you would be told about this at a later stage if the property were put out to tender? How was it left?

Mr. Kavanagh: He did go into it and he asked us to how many we would give employment and we said six or seven people. We never heard any more after the meeting was over.

Deputy Cooper-Flynn: Why did you not pursue it further?

Mr. Kavanagh: We were waiting to hear and the next thing we heard it was sold.

Mr. Stokes: It was a fait accompli when we heard it was gone.

Deputy Cooper-Flynn: You seem in this sequence of events to be one of the first people to have shown interest, and yet you drop out of it completely without following up on the matter until the place was sold. Why did that happen?

Mr. Kavanagh: We were told they would get in touch with us.

Deputy Cooper-Flynn: By the Minister?

Mr. Kavanagh: On the night, yes.

Deputy Cooper-Flynn: That someone would come back to you in regard to that?

Mr. Kavanagh: Yes.

Deputy Cooper-Flynn: Has the Secretary General of the Department any knowledge of this meeting? Are there any records of it? Was any official present?

Mr. Carroll: It is a long time ago. None of us here were members of that Department at the time and none of the staff of the Department which now exists who would have dealt with that are present in it. They have either retired or gone elsewhere. There is no evidence in our written records of what happened at that meeting.

Deputy Cooper-Flynn: From where did the offer in the report from Mr. Kavanagh of £50,000 for five acres come?

Mr. Carroll: He submitted that offer and sent it in.

Deputy Cooper-Flynn: A written offer? Is there evidence that that followed a meeting?

Mr. Carroll: No. It does not refer to the meeting.

Deputy Cooper-Flynn: So the first appearance of their interest on the file was that letter of offer.

Mr. Carroll: Yes, so far as I know.

Mr. Kavanagh: That was offered before we had the meeting with Michael Smith.

Deputy Cooper-Flynn: Explain the background.

Mr. Kavanagh: I cannot explain it, it is too long ago.

Mr. Stokes: Maybe I can throw some light on the issue. I became aware it was not going to be sold off in piecemeal. The offer Michael Kavanagh would have made was not going to be entertained if it was sold. That is why the late Jack Treacy and Michael Kavanagh said: “if we went in on a joint effort you would not have had the financial resources we would have”. We said we would go on a deputation. That is the reason that deputation was set up to see the Minister.

Deputy Cooper-Flynn: How did Mr. Stokes know it would not be sold piecemeal? Did he speak with somebody in Wicklow County Council? Who was his contact? From where was the information coming?

Mr. Stokes: I think Jack Treacy got that information. He had no chance of getting such a small acreage. It was going to be sold as an entity. After discussing the matter we asked for a meeting through the office of the Minister of State, Deputy Flood.

Deputy Cooper-Flynn: After that meeting did Mr. Stokes hear anything further about it? Was that the end of it?

Mr. Stokes: I could have heard something. The late Seán Walsh would have been familiar with that as well.

Deputy Cooper-Flynn: The verbal communication with the Minister after the meeting is very important. I am trying to ascertain whether Mr. Stokes had an understanding that someone would come back to him and that Mr. Stokes had a serious interest in this site. It appears he had a deputation with the Minister and that Mr. Stokes did nothing about it until it was sold.

Mr. Stokes: Jack Treacy and I were of the understanding that it would go to tender. It did not go to tender.

Deputy Cooper-Flynn: From where did Mr. Stokes get that understanding.

Mr. Stokes: Maybe the present Minister for Defence could throw some light on that because the discussion took place with him.

Deputy Cooper-Flynn: Did he state at that meeting that it would go out to tender?

Mr. Stokes: Yes.

Deputy Cooper-Flynn: Did Mr. Stokes have some verbal communication afterwards?

Mr. Stokes: Yes.

Deputy Cooper-Flynn: What was that verbal communication?

Mr. Stokes: It was sold. The verbal communication was that we would not get a fair shot at it. That would have come through former Deputy Seán Walsh.

Deputy Cooper-Flynn: What did Mr. Stokes do at that point?

Mr. Stokes: What could I do, it was sold.

Deputy Cooper-Flynn: Did Mr. Stokes make any complaint to the county council or anybody else until this negotiation took place?

Deputy Durkan: What specifically was the purpose of Mr. Stokes’ seeking a meeting with this committe?

Mr. Stokes: That is probably the best deposit within a 60 mile radius of Dublin. That is common knowledge in the sand and gravel business.

Deputy Durkan: Mr. Stokes may have misunderstood me. For what purpose did he seek a meeting with this committe, assuming that meetings took place in 1987 and 1989?

Mr. Stokes: Our company’s name and Michael Kavanagh’s name has come into the public domain in the press. We were an interested party.

Deputy Durkan: Was Mr. Stokes happy with the reporting of his interest in the property as expressed in the media?

Mr. Stokes: Yes, and when I read the transcript of your last meeting I am more convinced than ever that we did not get a fair shot at it.

Deputy Durkan: Was it on the basis that Mr. Stokes did not get a fair chance to tender or purchase at auction that he sought the meeting with the committee? On what basis did he come to the conclusion that the best deposits of sand and gravel exist at Glen Ding?

Mr. Stokes: Michael Kavanagh would have a fair idea of where the deposits are.

Deputy Durkan: Has a geological survey been conducted?

Mr. Stokes: I am glad the Deputy asked that question. John Barnett has been employed by our company in a professional capacity and also Kieran O’Malley from time to time. John Barnett who is a chartered surveyor in minerals would have been aware of our interest in that quarry.

Deputy Durkan: Did Mr. Stokes commission him to carry out a geological survey in his interest?

Mr. Stokes: Not on Glen Ding.

Deputy Durkan: Is Mr. Stokes aware he did so for somebody else?

Mr. Stokes: Yes.

Deputy Durkan: Was Mr. Stokes happy he did so for somebody else?

Mr. Stokes: He is a professional.

Deputy Durkan: Has Mr. Stokes any qualms with that?

Mr. Stokes: He is at the top of the market in his profession.

Deputy Durkan: We accept his bone fides. Given that Mr. Stokes regards the property as being extremely valuable in terms of deposits, how seriously did he set out to acquire the property in view of his prior knowledge of the vast resources that existed there?

Mr. Stokes: We were very serious.

Deputy Durkan: Mr. Stokes had one meeting.

Mr. Stokes: We had one meeting and nothing came out of it.

Deputy Durkan: An offer was made for five statute acres----

Mr. Stokes: Not from Treacy Enterprises.

Deputy Durkan: ---- by Mr. Kavanagh. In what year did Mr. Kavanagh make that offer?

Mr. Kavanagh: Whatever the Deputy says, I have to take his word.

Deputy Durkan: Was it in 1987?

Mr. Kavanagh: It could have been or in 1988.

Deputy Durkan: At the time was Mr. Kavanagh aware of the deposits at Glen Ding?

Mr. Kavanagh: Coillte had an existing pit on it and used it for making its own roads. One could see the whole lot.

Deputy Durkan: What offer did Mr. Kavanagh make for the five acres?

Mr. Kavanagh: £50,000.

Deputy Durkan: Did Mr. Kavanagh think that was a reasonable offer at the time?

Mr. Kavanagh: I do not know.

Deputy Durkan: Did Mr. Kavanagh assume that offer would be treated seriously given the expressed interest and local knowledge that existed in relation to deposits at the site?

Mr. Kavanagh: I thought it was the value at the time. I do not know what anyone else thinks.

Deputy Durkan: An offer was made by Treacy Enterprises of £1 million.

Mr. Stokes: It was mentioned at that particular meeting.

Deputy Durkan: At that meeting.

Mr. Stokes: The only meeting.

Deputy Durkan: Did Mr. Stokes expect to purchase it for £1 million or did he intend to better that offer?

Mr. Stokes: We would not have known. We would have gone to the auction if it had arisen.

Deputy Durkan: Was Mr. Stokes aware other parties were interested in the property?

Mr. Stokes: We would have known the Hudson brothers were interested.

Deputy Durkan: Was Mr. Stokes aware of anybody else being interested?

Mr. Stokes: Certainly the Hudson brothers were interested. Our original interest was through Michael Kavanagh.

Deputy Durkan: Would it have been known in the trade the people who were likely to have an interest in purchasing given the location etc.?

Mr. Stokes: Yes.

Deputy Durkan: Would there have been discussion within the trade?

Mr. Stokes: Yes.

Deputy Durkan: Would Roadstone have been identified as a possible

Mr. Stokes: It could not have been left out of the equasion.

Deputy Durkan: It would have an interest in that area.

Mr. Stokes: Yes.

Deputy Durkan: On that basis would Mr. Stokes have made a serious bid on the £1 million?

Mr. Stokes: Yes.

Deputy Durkan: Can Mr. Stokes say at this stage to what extent he would have gone beyond that?

Mr. Stokes: That is like asking how long is a bit of string.

Deputy Durkan: It is, but it is also asking how serious the bit was.

Mr. Stokes: If it was serious we certainly would have employed John Barnet to go in at that stage.

Deputy Durkan: Why did you not do so, considering that you were spending a million pounds?

Mr. Stokes: We only had the one meeting, Deputy. We actually spent £1 million in 1990.

Deputy Durkan: Yes, but did you carry out any surveys before you purchased this?

Mr. Stokes: We did indeed, yes.

Chairman: You spent £1 million on a different property.

Deputy Durkan: He did, in Enfield.

Mr. Stokes: In Rathcore, Enfield.

Deputy Durkan: I know the location. You are obviously aggrieved that you did not get an opportunity to tender and to purchase. Would you believe now that the property is worth considerably more than you anticipated at that particular time-----

Mr. Stokes: I would indeed.

Deputy Durkan: -----given that planning permission has since been refused? In hindsight, do you think the property is actually worth more now, given that planning permission has been refused?

Mr. Stokes: It is still worth a lot more as a deposit. If you go through the process, the planning was refused, and then you had to make a case to An Bord Pleanála, too.

Deputy Durkan: Let us assume that permission is not available, are you indicating that the property is worth more?

Mr. Stokes: I would still say that the property is worth more now, in 1999, than it was in 1990.

Deputy Durkan: For the purposes for which you intended to use it, and with the knowledge of hindsight that planning permission is not available for it, how do you view the value of the property and your interest in it now?

Mr. Stokes: It is hard to answer that question concerning our interest in it now, Deputy. We have now more or less accepted it as a fait accompli.

Deputy Durkan: So you are not interested in it now at all?

Mr. Stokes: Can you tell me, is it open now to a further planning application?

Deputy Durkan: We are coming to the nub of the matter now, Chairman. I will rephrase the question.

Mr. Stokes: Just a second. We operate a small pit in Russborough, just outside Blessington.

Deputy Durkan: I know that one, too.

Mr. Stokes: You know that one?

Deputy Durkan: I know the territory well.

Mr. Stokes: I just want to inform you that it lies between two counties.

Deputy Durkan: I know about that.

Mr. Stokes: The late Jack Treacy negotiated with two councils: that is Kildare County County - your own county - and Wicklow County Council. He was advised at that time about his chances of getting planning permission, but we did get planning permission. It is only a small operation.

Chairman: Was he advised that he would not get planning permission?

Mr. Stokes: He was advised that he would not get planning permission but he did, even though he had to deal with two county councils.

Chairman: Did he get the planning permission from both county councils, or did he get it on appeal?

Mr. Stokes: I think Kildare County Council - or was it Wicklow, I am not sure - took over the whole brief. There was one proviso, that we could not put a washing plant in. He was advised before that, Chairman.

Chairman: It was granted by the local authority rather than on appeal?

Mr. Stokes: He was granted it, yes, with certain conditions. One of the conditions was that he could not put a washing plant in.

Deputy Durkan: Can I come back to the question again? I want you to listen carefully to it because it is an important one. At this moment, given the refusal of planning permission, are you still interested in acquiring the property or making an offer for it in excess of the offer or price made previously, and giving that offer an updated value by today’s standards? In answer to a previous question, you mentioned that you would be prepared to do so, I assume, if you thought that planning permission was going to be available for sand and gravel extraction. Remember that the background to this question is simply that you have already made reference to the very valuable deposits of sand and gravel that exist there. I am now putting it to you that in the event of planning permission, given the refusal already-----

Mr. Stokes: If the property comes back on the market, we would.

Deputy Durkan: In excess of the offer paid for, updated from the date in 1990 to today’s values?

Mr. Stokes: Yes.

Deputy Durkan: For what reason?

Mr. Stokes: Because there is a healthy deposit there. We would see it as being profitable for Treacy Enterprises to operate that.

Deputy Durkan: Let us assume that planning permission is not forthcoming. Remember that already, at previous hearings, advice was given by consultants to the effect that planning was going to be extremely difficult. Given the knowledge that, at best, planning permission was going to be extremely difficult and, at worst, that it would never come at all, I will ask you again whether you still have an interest in purchasing the property on an updated value basis taken from the price paid by Roadstone, or whoever, in 1990 and adding today’s value on to it?

Mr. Stokes: We would.

Deputy Durkan: For what purpose?

Chairman: Yes, for what purpose?

Mr. Stokes: Are you being the arbitrator that there will never be planning permission there?

Deputy Durkan: No. I am asking the question.

Chairman: Let me focus the question. We know now that planning permission has been refused and let us assume that that is the unchangeable position. If it was clear that planning permission will not be granted and, therefore, quarrying the gravel is impossible, are you still saying that it would be worth buying that property?

Mr. Stokes: If we had that advice and were told that, we would not be interested.

Chairman: Yes.

Deputy Durkan: Are you then saying that you would hopefully get planning permission and that, on the basis of that aspiration, you would be willing to pay more for it?

Mr. Stokes: We live in hope all the time.

Deputy Durkan: Yes.

Deputy Foley: You had a meeting arranged by Deputy Chris Flood, with the Minister, Deputy Smith, sometime in 1989.

Chairman: Nineteen eighty eight.

Deputy Foley: Well, 1988 or 1989, which was it?

Chairman: Early 1988.

Deputy Foley: Following that meeting did any further correspondence take place between you?

Mr. Stokes: No.

Deputy Foley: Did you follow up your interest in the particular quarry?

Mr. Stokes: We were all trying to keep a watching brief on it, including Michael Kavanagh.

Deputy Foley: The deal with Roadstone was made on 18 October 1990 and the final decision was made on 20 December 1990. At what stage did you find out that it had been disposed of to Roadstone?

Mr. Stokes: I think Michael Kavanagh informed Jack Treacy that it was sold.

Deputy Foley: How soon after that?

Mr. Kavanagh: I cannot rightly remember.

Mr. Stokes: I think it might have been on the day it became knowledge to him that we got it.

Deputy Foley: Did you do anything then to highlight your disappointment?

Mr. Kavanagh: No.

Mr. Stokes: No.

Deputy Foley: You had no interest at that stage?

Mr. Stokes: We accepted that it was sold.

Deputy Foley: But surely, seeing that you had arranged a meeting with the Minister, I take it you got certain commitments from him, is that right?

Mr. Stokes: He was aware of our interest in it. We made him aware. He more or less did the listening at that particular meeting.

Deputy Foley: When you were informed that it was sold to Roadstone, did you not follow that up with the Minister and express your disappointment at not being informed?

Mr. Stokes: No, we did not.

Deputy Doherty: I would like to welcome Mr. Stokes. Who was present with you on the day you met the Minister, Deputy Smith?

Mr. Stokes: Deputy Chris Flood stayed for some little time and then he had other business in the House. Just three: the late Jack Treacy, Michael Kavanagh and myself.

Deputy Doherty: Yes. The Minister positively indicated to you that these lands would go for public tender?

Mr. Stokes: The figure was mentioned. In the general conversation he put it to Jack Treacy as to what kind of valuation or price he would put on it. He said he was prepared to put in a bid of £1 million for that.

Deputy Doherty: What did the Minister specifically tell you that resulted in your interpreting his statement to mean that the lands would go for public tender?

Mr. Stokes: I cannot remember word for word.

Deputy Doherty: I will put it another way. Without giving it to me word for word, how do you know from what he said that it would be going for public tender?

Mr. Stokes: He did indicate that it would. In the course of the conversation, I think he confirmed five acres being sold off and that it would not be sold piecemeal.

Deputy Doherty: That is not specifically focusing on the point I am trying to establish, which was that you indicated earlier that you were satisfied the Minister said it would go for public tender.

Mr. Stokes: I am satisfied, yes. That would have been in the course of the conversation.

Deputy Doherty: Was Mr. Stokes surprised when planning permission was refused?

Mr. Stokes: Does the Deputy mean after it was sold?

Deputy Doherty: Yes.

Mr. Stokes: I knew it was going to be controversial.

Deputy Doherty: Was he surprised that it was bought and that planning permission was subsequently refused?

Mr. Stokes: No. I would have said that if we had been in the same position as Roadstone, we probably would have gone ahead and bought it.

Deputy Doherty: Would that have been in the hope of getting planning permission?

Mr. Stokes: Yes.

Chairman: Would you have taken the risk?

Mr. Stokes: We would have taken the risk, yes.

Deputy Doherty: Does Mr. Stokes, as a well established business man, normally take notes of what goes on when he attends meetings?

Mr. Stokes: Yes, but I did not on that occasion.

Deputy Doherty: Mr. Stokes did not take notes, the Minister for State had left, one man died and Mr. Kavanagh, who is the subject of the feeling of aggrievement, is present here today. Were any notes taken?

Mr. Stokes: To the best of my knowledge, there was no note taken, but we left that meeting happy that we had put across our points, that we were interested.

Deputy Doherty: Was the £1 million mentioned?

Mr. Stokes: Yes.

Deputy Doherty: How did Mr. Stokes evaluate the lands and deposit as being worthy of a first offer of £1 million?

Mr. Stokes: Through knowledge from people. I am not going to mention the name Hudson & Brothers. I know that Mr. Jack Tracey would have had knowledge that they were also interested in it. Whether he knew that Mr. Johnson was interested, I cannot say.

Deputy Doherty: Have you any evidence of that knowledge?

Mr. Stokes: None other than that we would sit down and discuss these things. We did our sums. We did not pick the £1 million figure out of the air.

Deputy Doherty: That is my point. What documentary evidence is available to the Committee to state that there was absolute satisfaction that £1 million was an appropriate offer or even first offer?

Mr. Stokes: I would put it down as a first offer.

Deputy Doherty: How did Mr. Stokes come to draw that conclusion. This is a few years ago and £1 million was a great deal of money. On that basis, the fact that money is always scarce and commercial decisions must be made taking into account the best possible expectations, in what way, apart from loose chat, did Mr. Stokes come to the conclusion that this property was valued at £1 million? What survey was carried out?

Mr. Stokes: Mr. Jack Tracey would have been aware of-----

Deputy Doherty: I appreciate that that is Mr. Stokes presumption, but for any presumption there must be some evidence because Mr. Jack Tracey is dead. We devoted a great deal of time to this the last day and we want to be fair to Mr. Stokes in view of the fact that he was mentioned here the last day, as the Chairman pointed out. Mr. Stokes stated that there was £1 million on the table. We also must be fair to the Secretary-General of the Department who has set out his reasons and who has factually evidenced from where he is coming. We want some evidence of the fact that a survey was carried out by competent people and we want to see the documentary evidence of that survey. Otherwise it would be hard to get anybody to believe that, based on a general knowledge and perception, one looked in the field, saw what the forestry service was doing and came to the conclusion that the totality of these lands were worth £1 million. We need something substantial because it does not stack up well that nothing formal was done. Mr. Stokes did say at one stage that he had hoped to have had Mr. Barnett involved at another time, but why was he not involved at the time he was offering £1 million?

Mr. Stokes: I cannot answer that, that Mr. Barnett would not have had that information at that time and passed it to Mr. Jack Tracey also, but he did not do it on behalf of Tracey Enterprises (Dundrum). There was no survey and there is no evidence.

Deputy Doherty: In fairness to Mr. Stokes, we are hearing that there is no documentary evidence of any survey in existence, there never was-----

Mr. Stokes: For Tracey Enterprises (Dundrum).

Deputy Doherty: -----and that there were no experts brought in to establish that. The £1 million offer was based on the fact that it could have been worth £1 million, £950,000 or £1.5 million. That was a first offer based on nothing other than a fireside chat, which was had maybe where there was no fire.

Mr. Stokes: We would have known that it was worth much more than £1 million even at that stage.

Deputy Doherty: How would Mr. Stokes have known?

Mr. Kavanagh: We walked all over the area and we could see the bits which were there.

Deputy Doherty: Mr. Barnett and all of these people-----

Chairman: Are you saying that your £1 million offer was an opening offer?

Mr. Stokes: Yes.

Chairman: In reality, did you feel it was worth more than that and that you would have been prepared to offer more than that?

Mr. Stokes: Yes.

Chairman: That is very important.

Deputy Doherty: It is very important. On that basis, Mr. Stokes is saying that if he was going to give further offers for this property, he would then have brought in the experts and carried out a survey. In retrospect, what would Mr. Stokes have been prepared to pay for it at that time based on what we now know about it and on what we have heard from Mr. O’Malley and Mr. Barnett?

Mr. Stokes: I could not say.

Deputy Doherty: £2 million?

Mr. Stokes: Perhaps. We were certainly serious about buying another quarry or sand and gravel pit. The proof is there. We purchased another quarry in Enfield.

Chairman: When did you purchase the quarry at Enfield?

Mr. Stokes: In 1990.

Chairman: That was around the same time that Glen Ding was disposed of, as it turned out.

Mr. Stokes: Yes. We would have employed Mr. Barnett on the Enfield project.

Deputy Cooper-Flynn: One or two matters arose from Mr. Stokes’s evidence which I want to clarify with him, the first of which is the seriousness of his intent. He mentioned again that in 1990 he purchased the Enfield quarry. I do not want to pry into his private business but, would the Enfield quarry have cost of the same region of the Glen Ding site?

Mr. Stokes: It is only 40 acres in Enfield. One can see the comparison with 147 acres at Blessington. We purchased 40 acres at Enfield for just under £1 million in 1990.

Deputy Cooper-Flynn: Therefore, 40 acres costs £1 million roughly and he made an opening offer of £1 million for 147 acres-----

Mr. Stokes: At Blessington.

Deputy Cooper-Flynn: -----at Glen Ding. How would Mr. Stokes compare the deposits at Enfield with those at the 147 acre site at Glen Ding.

Mr. Stokes: I must explain that the Enfield quarry is a stone quarry and that consists of blasting operations and running it through a crusher, whereas the operation at Blessington is a sand and gravel pit which involves digging out the side of the mountain. One does not even have a higher cost at Glen Ding as one would at Enfield.

Deputy Cooper-Flynn: Mr. Stokes is saying that he offered £1 million for 40 acres where he had a great deal of work to get out the stone.

Mr. Stokes: Yes, to extract the stone.

Deputy Cooper-Flynn: I am using layman’s terms because I do not know much about quarries

Mr. Stokes: One is a stone quarry and the other is a sand pit.

Deputy Cooper-Flynn: There is much less work involved in the sand pit, it contains three and a half times as much ground, and Mr. Stokes was still prepared to offer an opening bid of £1 million. Is he stating that Glen Ding could be worth £3 million or £3.5 million?

Mr. Stokes: It was worth more than £1 million in 1990.

Deputy Cooper-Flynn: Was he confident of that?

Mr. Stokes: Yes.

Deputy Cooper-Flynn: Is it Mr. Stokes contention that he was a serious potential buyer? He had the money, which is clear because he bought the Enfield quarry.

Mr. Stokes: Yes.

Deputy Cooper-Flynn: The second thing he said which was of interest was that Mr. Barnett and Mr. O’Malley knew of his interest in Glen Ding.

Mr. Stokes: They would have known of our interest to purchase the site. Mr. O’Malley had done work on property for Tracey Enterprises (Dundrum) in a different capacity, but Mr. Barnett would have been aware that we were in the market for another quarry or sand/gravel pit.

Deputy Cooper-Flynn: Did he know specifically that Mr. Stokes had an interest in Glen Ding at the time?

Mr. Stokes: One would have to ask Mr. Barnett that?

Deputy Cooper-Flynn: I thought I heard you say that earlier. That was important because I was going to ask the Secretary-General if that point been communicated to the Department by Mr. O’Malley and Mr. Barnett. However, Mr. Stokes does not know whether or not he knew you were interested. Mr. Stokes mentioned that Deputy Walsh worked for Roadstone and that he seemed to be a link in organising the meeting between Mr. Stokes and the Minister.

Mr. Stokes: He formerly worked for Roadstone. Séan relinquished his position with it in the late 1970s, but he still had close connections with it.

Deputy Cooper-Flynn: After the meeting with the Minister in the Dáil Mr. Stokes had no further contact with the Minister, but he mentioned he had verbal communications with Deputy Walsh.

Mr. Stokes: He was no longer a Deputy at that time.

Deputy Cooper-Flynn: Had Mr. Stokes ongoing discussions with him about this job?

Mr. Stokes: We would have discussed matters.

Deputy Cooper-Flynn: Would he have been a link between Mr. Stokes and the Minister?

Mr. Stokes: He would have been aware of certain information on Roadstone’s position.

Deputy Cooper-Flynn: I refer specifically to Mr. Stokes’s meeting with the Minister.

Mr. Stokes: He did not arrange the meeting with the Minister.

Deputy Cooper-Flynn: I know that. After the meeting with the Minister when Mr. Stokes heard nothing further, did anybody act as a link between him and the Minister? Did he get information after that meeting?

Mr. Stokes: Not from the Minister’s office.

Deputy Cooper-Flynn: Did he get any information from anybody else, from a TD or a Minister of State?

Mr. Stokes: Not from a public representative. We were not aware that it was not going out to tender until it was a fait accompli that it was sold. We were aware of what was in Brittas and Blessington because we draw our pool of manpower from that area. Many people who work in the quarry come from there.

Deputy Cooper-Flynn: While Mr. Barnett and Mr. O’Malley, who were local consultants, may not have specifically known that Tracey Enterprises was interested in Glen Ding, they were aware this company was looking for another quarry. Will the Secretary General indicate if the consultants advised the Department, at any time, that there were other people, apart from Roadstone, who had considerable money and who could be potential buyers of Glen Ding?

Chairman: It is clear from the report that they recommended it be sold by public tender. That is in the report.

Deputy Cooper-Flynn: It is, but there is conflicting view from the Department on that.

Mr. Carroll: When the valuation on the property was done by Mr. Barnett, it was done on two bases, with and without planning permission. We had an interesting discussion the last day about how one value’s a property where there is major doubt about planning permission. I recall him saying, he was asked to do it. He came up with a figure, but he did not put great reliance on it because, in reality, as a sand and gravel deposit, without planning permission, it is worth nothing. One has to make a commercial judgment about the risks in regard to planning permission. When arriving at the valuation they would have been aware of potential local interest because of their knowledge of the area.

On the question of the tender, it is general public policy and practice for the sale of properties to go for tender. When any queries were made about this to the Minister or anybody else, that was the stock answer given, that the properties would be disposed of by tender. As it turned out, a decision was taken in mid 1990. It was only then a decision was taken not to go to tender on the basis of the advice the Department had. That is the subject of some differences and nuances as between the consultants who advised us at the time and the Department. Our records suggest we were strongly advised on the basis of a initial offer from Roadstone that the best commercial deal would be got by dealing exclusively with Roadstone and not to go for planning. That was partially informed by the sensitivities of the site from a planning perspective and the controversy that might ensue if that process was entered into.

Chairman: You are saying there was a feeling in the Department that if it went to public tender and subject to planning permission that there could have been a public controversy, which might have devalued the site.

Mr. Carroll: That is not explicit, but it is the subtext. That is my reading of it from afar. That was the mindset.

Chairman: It is extraordinary if that is an explanation. At least it is plausible. Mr. Loughrey never adduced that the last day.

Mr. Carroll: He may not have adduced that explicitly in those terms. He was implicit in what he said.

Chairman: He was on the ropes looking for a defence and none was adduced for this lapse, this breach of public financial procedures. You are introducing, for the first time, a possible plausible explanation for breaching public financial procedures.

Mr. Carroll: There was no breach of public financial procedures. That was done within the procedures. There was no public tendering. Selling a property without it going to tender is quite consistent with public financial procedures. It is provided for within public financial procedures with the sanction of the Minister for Finance. There is no requirement to go to tender. As a general rule, a property should go to tender unless one gets permission to do otherwise.

Chairman: Yes.

Deputy Cooper-Flynn: There appeared to be some reference to it. On page 21 of the final report Mr. Loughrey states that as the crystal ball got a bit more murky rather than clear and the planning issue looms so large as to jeopardise the price.

Chairman: We have a plausible type public controversy, but that would not have prevented private negotiation. We now know there were at least three interested parties who intimated their interest to the Department and their offers were the same sort of ballpark figure, if Mr. Stokes’s testimony is correct. Does Deputy Cooper-Flynn wish to intervene before I ask a number of questions?

Deputy Cooper-Flynn: No.

Deputy Gildea: Despite the fact that Mr. Stokes and Mr. Kavanagh had a genuine interest in the property, were they convinced that, regardless of what steps they took, in the end they would not get a chance to buy the property?

Mr. Stokes: Does the Deputy mean after it become known that it would not go to tender? We were not informed that it would not go to tender. When we heard it was sold, we knew it had not gone to tender.

Deputy Doherty: Did the Minister or his predecessor have any discussions about the methods that would be used in respect of the sale of these lands, whether it would be sale by tender or otherwise?

Mr. Carroll: As I said, neither I nor any of the current staff have any direct knowledge of this event. It took place long before our time and none of the serving staff in the Department were involved. I discussed with Mr. Loughrey, who was the Secretary General of that Department at the time, if he had any recollection of conversations, as there often would be, on submissions of this nature with the Minister, but he could not recall any. I hope I am being fair to him in that regard.

Deputy Doherty: Since this matter became the subject of inquiry of this committee, as the current Secretary General of the Department, has Mr. Carroll bothered to check with any of the members of staff - who are hopefully alive and may be elsewhere - who would have dealt with this matter at that time?

Mr. Carroll: No. The only person I spoke with was the Secretary General at that time.

Deputy Doherty: Does Mr. Carroll not consider it would have been necessary to examine it further in light of the circumstances that revealed that Mr. Loughrey had no recollection or could not remember any conversations. Was it not necessary to probe it further?

Mr. Carroll: The submission to the Minister is clear. It was a good and comprehensive submission.

Deputy Doherty: One thing is certain, if another forum of inquiry were to accept that policy, it would have completed its business by now.

Mr. Carroll: The submission made to the Minister and the submission made to the Department of Finance laid out quite fairly the pros and cons of different approaches. A criticism made here the last day, which perhaps was valid, was that when the Minister was advised there was other general interest that was not set out in more detail to alert him to possible implications; perhaps that was not sufficiently explicit or detailed. The submission to the Minister states there was a general interest in the property, as did the submission to the Department of Finance.

The question the Deputy is getting at is whether that would have emerged in the normal course of discussion with a Minister, it would have been expounded on. A fully informed decision would have been taken by the Minister on the basis of a full exposition of all the relevant facts. Secretary General Loughrey, on the last occasion, seemed to accept that there was somewhat of an omission in that regard in terms of the style of the submission.

Deputy Doherty: In other words, there was not a fully informed decision made.

Mr. Carroll: I am not saying that. If one were rewriting this today one might say these specific companies are interested, and so on. The submission said that some general interest has been-----

Deputy Doherty: Does Mr. Carroll honestly believe that the then Minister, who had an initial offer of £1 million conveyed to him at that time, would have failed to notify the Secretary General or the next appropriate officer, and failed to make the justification for adhering to the criteria of public tendering?

Mr. Carroll: We have no record of Mr. Tracey’s conversation with the Minister, the offer of £1 million or the nature of the-----

Deputy Doherty: I did not ask Mr. Carroll that. If I accept what Mr. Stokes said, that an offer of £1 million was made, would Mr. Carroll be surprised that that was not communicated by the Minister to the then Secretary General or other appropriate officer?

Mr. Carroll: I would be, if an offer of that scale was mentioned. The Department and the Minister knew this property was potentially quite valuable. Various figures were mentioned from time to time but no valuation had been done at that stage.

Deputy Doherty: Regardless of any valuation the Department might have done, if somebody wants to pay more than its value, surely the Department, and particularly the Minister, would be anxious to know that. The economy was not booming at that time. Evidence is being given here that the offer of £1 million was communicated to the Minister. Either the Minister said nothing about it or we must accept the evidence of Mr. Loughrey that he cannot remember the period. Surely he would have remembered £1 million.

Mr. Carroll: There is no-----

Deputy Doherty: Mr. Carroll made no check with any other officers in the Department and all we have is the loss of memory in respect of Mr. Loughrey. If other agencies of the State were to finalise their investigation at a point where somebody could not remember something, we would not know anything about most matters.

Mr. Carroll: First, there is no record of the offer in question. Second-----

Deputy Doherty: He was not on his own in the Department.

Mr. Carroll: This took place in 1987 or 1988.

Deputy Doherty: I know. There seems to be a memory barrier after that.

Mr. Carroll: The question of selling the property other than by tender and getting the valuation did not arise until 1990 so there was a considerable lapse of time. A number of officials, and a number of Ministers, were dealing with it.

Deputy Doherty: A final question to Mr. Stokes. Was the final offer for Enfield the only offer or was there an initial offer?

Mr. Stokes: For the Enfield quarry?

Deputy Doherty: Yes.

Mr. Stokes: The eventual figure was reached by negotiation.

Deputy Doherty: And it took place on the one occasion or over a period?

Mr. Stokes: There would have been two or three meetings.

Deputy Doherty: Was a survey done at the time the offer was made?

Mr. Stokes: Yes.

Deputy Doherty: And the offer was made based on a survey?

Mr. Stokes: Yes.

Deputy Doherty: Was the offer in respect of Glen Ding made in the absence of a survey?

Mr. Stokes: No survey was done on behalf of Tracey Enterprises.

Deputy McCormack: Did Mr. Stokes relax after the meeting with the Minister and the Minister of State in that the £1 million was mentioned, he was satisfied that it would go to tender and he would have a chance to have this site evaluated?

Mr. Stokes: We went away from that meeting with the Minister happy that we had aired our views about our interest in the property. We made that very clear.

Mr. McCormack: As a result of that meeting did Mr. Stokes anticipate that this property would be sold by tender?

Mr. Stokes: We were of that opinion leaving that meeting.

Chairman: It is clear the meeting took place in late 1987 or early 1988, the December-January period. The meeting was with the then Minister of State at the Department, Michael Smith. Is that correct?

Mr. Stokes: Was he not the Minister at that time?

Chairman: That is what I want to clarify. He was the Minister for Energy at the time, is that correct?

Mr. Carroll: He was Minister of State at one time and became Minister during the period of that Government but I cannot remember the precise date.

Chairman: It was Minister Smith, anyway. If he was a Minister of State at the time that would create any extra step of communication. When the decision came to be made, it was a different Minister for Energy. The Government changed in 1989 and the decision was made in 1990. I had the impression from what you said earlier that Michael Smith was Minister of State at the time, but we will check that. If a Minister of State met a deputation and sought the file, would there be a note to that effect in the Department?

Mr. Carroll: If papers were sent to the Minister the papers would be noted and returned in the file. I am not sure how this meeting was set up. Different types of meetings take place, as you know. I do not know whether this was a formal meeting with officials present and note takers. It does not seem to have been that type of meeting. Meetings take place where a Deputy brings in people with an interest and sometimes notes are not kept. I do not know what happened on this occasion.

Chairman: There is an undated letter from Tracey Enterprises thanking the Minister for the meeting, and that was acknowledged in early 1988. That is the clear evidence that the meeting took place. It is clear also from the correspondence that the meeting was in relation to the Glen Ding site, so the Department knew from the records that another company called Tracey Enterprises had some interest in the Glen Ding site.

Mr. Carroll: That is clearly listed in the Comptroller’s report.

Chairman: We also know from the report that interest was expressed by a number of other people. Johnson Industries made an offer of up to £1.1 million with planning permission, or £700,000 without planning permission; I am talking ballpark figures. Mr. Stokes now says that his company, Tracey Enterprises (Dundrum) Limited, made a verbal offer of £1 million of which there is no record in the Department. If the Department had made further inquiries it might have discovered that not only was the company prepared to confirm formally the offer of £1 million but perhaps make a bigger offer.

Mr. Carroll: It was not clear at that point how and when the property would be sold or whether it would be subject to planning permission. The intention was to go to tender so the question of follow-up on any particular interest did not arise. The question is whether it should have arisen when, two or three years later, consideration was being given to disposing of the property without going to public tender.

Chairman: In the case of Johnson Industries, the report states that it was made clear by Mr. Johnson that his final offer was £1.1 million with planning permission and, therefore, it was taken by the Department that the £1.25 million final offer by Roadstone was a better one.

Mr. Carroll: Without planning permission.

Chairman: Is it not extraordinary that no inquiries were made of other people who had expressed an interest in it?

Mr. Carroll: That is the kernel of the point at issue in this examination, which is the judgment call made by the Minister at the time and the advice available to the Department. They made a judgment that to negotiate with Roadstone was likely to get the best value for the property.

Chairman: How did they come to that judgment, given that they did not even approach Tracey Enterprises?

Mr. Carroll: They came to that judgment on the basis of the valuation advice they had. Tracey Enterprises were on file as having expressed an interest but not as having made a firm offer in the sense of £1 million. Mr. Kavanagh was on file as having offered £50,000 for five acres and that is the information available.

Chairman: It is absolutely clear no further inquiries were made of Tracey Enterprises.

Mr. Carroll: No further inquiries were made of any party, and the Johnston offer was sent to us, it was not sought. The record clearly shows that.

Chairman: It is curious to say the least.

Deputy Durkan: Mr. Stokes, you carried out a geological survey in the quarry you bought in Rathcore.

Mr. Stokes: Yes.

Deputy Durkan: Why?

Mr. Stokes: That quarry we purchased in 1990 was not put out to tender. We bought it by negotiation, but before we came up with a figure, we employed Mr. John Barnett in his professional capacity to conduct a survey.

Deputy Durkan: Before you made the offer for the Rathcore property, you had a geological survey carried out first?

Mr. Stokes: Yes.

Deputy Durkan: On which you based your offer?

Mr. Stokes: Yes.

Chairman: Not Glen Ding?

Mr. Stokes: No, but something further should be added. There was planning permission for Rathcore. We bought a quarry with full planning permission.

Deputy Durkan: Notwithstanding the existence of full planning permission, you still carried out a geological survey?

Mr. Stokes: We did.

Chairman: The property you bought in Enfield was a rock quarry?

Mr. Stokes: It was a rock quarry, and rock quarries need to be blasted.

Chairman: I do not have a clue about the different values of gravel and rock. Is there a different financial yield from rock than there is from gravel?

Mr. Stokes: Sand and gravel are the main ingredients in ready mix concrete, whereas stone is the main ingredient in road foundations. When it is blasted, it is put through a crusher and can then be put through a secondary crusher to make the chippings which form the basis of tarmacadam.

Chairman: Is a tonne of rock more expensive than a ton of gravel?

Mr. Stokes: To quarry a tonne of rock is more expensive than to quarry a tonne of gravel.

Chairman: Would you receive more for crushed rock than for gravel?

Mr. Stokes: You would. The rock would be a more expensive commodity than sand and gravel.

Chairman: What sort of profit margin would you be talking about for rock compared to gravel?

Mr. Stokes: You could sell a tonne of rock on the current market at £5.50 per tonne, whereas a tonne of gravel would be on the market for in the region of £1 less.

Chairman: Is that because there is much less handling or processing to be done?

Mr. Stokes: Yes, you are digging into the side of a mountain for sand and gravel.

Chairman: In other words, gravel is more profitable?

Mr. Stokes: It would be more profitable. On the planning permission being turned down for Glen Ding, there is evidence that sand and gravel were extracted from the site many years ago.

Chairman: You were prepared to take a gamble on it on the basis that there was a prior use. Planning permission was granted by Wicklow County Council but refused by An Bord Pleanála.

You had one meeting with the Minister at the time. You are not sure if he was accompanied by a private secretary or-----

Mr. Stokes: He was not.

Chairman: Are you clear he was not?

Mr. Stokes: I am certain it was on a Wednesday evening. It suited to meet in the Dáil rather than in the Department offices.

Chairman: No official was present. You subsequently wrote to them thanking them for the meeting and received an acknowledgement from the Department.

Mr. Stokes: I wrote thanking them for the courtesy extended to us at the meeting. Whether we received an acknowledgement in return-----

Chairman: It is recorded that an acknowledgement was sent. That is the only record in the Department of it. You made no further contact with the Minister, his office or the Department at any time subsequently?

Mr. Stokes: No.

Chairman: When you discovered Glen Ding had been sold privately to Roadstone in 1990-91, did you then contact the Department or the Minister or did you express irritation to anyone?

Mr. Stokes: We were annoyed, but we accepted it as a fait accompli.

Chairman: Had you any thoughts as to why it was done in that manner?

Mr. Stokes: Mr. Tracey had. He thought it very unfair that we did not have a level playing pitch. That was his comment.

Chairman: Had you any suspicions as to why it was done in that manner?

Mr. Stokes: We left that meeting knowing we had stated our case and under the impression it would go to tender. We would have put in an offer at that stage.

Deputy Durkan: You were interested in the property from the point of view of developing it and extracting the sand and gravel?

Mr. Stokes: Yes.

Deputy Durkan: You made an offer for it in the knowledge that planning permission might be possible but not guaranteed?

Mr. Stokes: Not guaranteed.

Deputy Durkan: It was sold and you realised it did not go to public tender. Do you regard the offer you made, either the £50,000 or the £1 million, as part and parcel of a negotiation between you and the owners or the Minister who was acting on behalf of the owners at the time?

Mr. Stokes: Tracey Enterprises did not make the offer of £50,000 for five acres. Mr. Kavanagh did that.

Deputy Durkan: You were aware of it?

Mr. Stokes: I was aware of it. We put in that £1 million as our opening shot.

Deputy Durkan: In the negotiations?

Mr. Stokes: In the one meeting, so that we would be taken seriously.

Deputy Durkan: Arising from your replies to Deputy Cooper-Flynn, how long was it before you again expressed an interest in the property, given that it was sold at the time?

Mr. Stokes: As I explained, our workforce is drawn from the Blessington-Brittas area. Through local knowledge we knew that it would not be sold piecemeal in lots of five acres.

Deputy Durkan: We accept that, but at this stage when did you follow up your £1 million offer?

Mr. Stokes: We never got an opportunity to do that.

Deputy Durkan: It was gone. That goes back to my first question. What is your interest in the property at this stage given the business of the Committee to ensure the maximum possible amount is achieved in terms of value for money and State finances are preserved? What is your interest in the property now and consequently your appearance before the Committee? Why are you here today?

Mr. Stokes: We did not bring it into the public domain.

Deputy Durkan: No, but that is not my question. What is the objective of your appearing before the Committee at present other than to express the view that you had an interest at the time? What is your objective now in relation to that property?

Mr. Stokes: To state our case in front of the Committee.

Deputy Durkan: If the property were on the market again, you would bid for it again?

Mr. Stokes: As the Chairman has said we would have to take advice from people such as John Barnett and from Kieran O’Malley if it was unlikely that we would get planning permission.

Deputy Durkan: Mr. Stokes answered that question previously. He will be aware of case law to the effect that the existing use of sand and gravel extraction does not necessarily guarantee continued use.

Deputy Doherty: When Mr. Stokes met the Minister he wanted to communicate particulars due to him. What did he want the Minister to do for him?

Mr. Stokes: We wanted to show we had an interest in developing that site. We were of the knowledge that it was possibly the best deposit within a 60 mile radius of Dublin.

Deputy Doherty: Having told the Minister that, what did Mr. Stokes expect of him?

Mr. Stokes: That we were an interested party.

Deputy Doherty: I do not want to misrepresent Mr. Stokes. When Mr. Stokes went to the Minister he had a specific intention to communicate something that was of commercial interest to him. He wanted the Minister to listen to him. What else did he want him to do?

Mr. Stokes: To look favourably towards us, to make a case for us.

Deputy Doherty: In other words that he would go back into the Department and tell his officials ---

Mr. Stokes: That we were an interested party.

Deputy Doherty: Did Mr. Stokes go to the Minister to make the offer through him?

Mr. Stokes: It was to outline all our interests.

Deputy Doherty: Was it to persuade him to sell?

Mr. Stokes: After discussing the matter with the Minister we came away on the understanding that it was going out to tender. We were happy with that situation.

Chairman: A year earlier other people who approached the Department were told it was not for sale at that stage. Was it clear to Mr. Stokes at the meeting with the Minister that it was going to be sold?

Mr. Stokes: Yes.

Deputy Doherty: Mr. Stokes went to the Minister to communicate an offer to him in the knowledge and expectation that that offer would be brought into the Department and acknowledged. Did Mr. Stokes, as a prudent businessman, consider at any stage that offers of that extent should be made in writing?

Mr. Stokes: We continued to live in hope that it was ongoing, that it would go out to tender and if it went to auction we could attend that auction.

Deputy Doherty: Did Mr. Stokes presume there would be an auction?

Mr. Stokes: Yes.

Deputy Doherty: Presumption is a foolish expectation of salvation.

Chairman: Was Mr. Stokes told that?

Mr. Stokes: We were led to believe that.

Deputy Doherty: We end up with a situation where Mr. Stokes made the offer and no acknowledgment of the offer from the Minister or the Department was received and the matter rested so. Did Mr. Stokes at no time consider it important to contact the Minister either by phone or in writing to confirm that offer?

Mr. Stokes: That may not have crossed my mind. What did cross my mind and Jack Treacy’s mind was that we should contact Deputy Flood, who was not a Minister of State at the time.

Deputy Doherty: All the potential was there.

Mr. Stokes: We considered going back to him to make further representations.

Deputy Doherty: Did Mr. Stokes do that?

Mr. Stokes: No. We were told to let the hare sit.

Deputy Doherty: Was Mr. Stokes of the opinion that the situation had changed since then in relation to planning and gravel pits? Did he consider he had an exemption or an entitlement, without making a fresh application for planning permission, to continue to extract on the basis that it was previously used for that purpose?

Mr. Stokes: Yes.

Deputy Doherty: Did Mr. Stokes go to the Minister in the honest and genuine opinion that if he had an opportunity to buy it he could have proceeded to go to work without making as formal application because of its previous use?

Mr. Stokes: We would have known there would be objections to quarrying on a scale. Because it had already been used we would not have been creating a precedent by extracting again.

Deputy Doherty: I am aware of that happening elsewhere. In view of the intensity of Mr. Stokes’ case to have it put up for public auction did it cross his mind that making an offer in private to the Minister was not in the spirit of public auction?

Mr. Stokes: No. We thought on more than one occasion when we discussed the matter in the company of making further representations but we did not go ahead.

Deputy Doherty: If the Minister had sold it there and then to Mr. Stokes without going to tender and accepted the £1 million would he have been happy?

Mr. Stokes: Very happy.

Deputy Doherty: There is no doubt about it, it depends on which foot you wear the shoe.

Chairman: To clarify the position, in case there is any confusion, the Department received an undated letter from Mr. Michael Kavanagh offering £50,000 for five acres. That was acknowledged on 6 January 1988. We have to assume it was received days or weeks preceding that. On 24 February 1988 there was a letter from Treacy Enterprises (Dundrum) Limited to Deputy Chris Flood, thanking him for arranging a meeting of representatives of the company and Mr. Kavanagh with the Minister of State - presumably Mr. Smith was the Minister of State - to discuss proposals for a quarrying operation in the Blessington area. Presumably Deputy Flood passed on that letter to the Department and it is on the Department’s file. That was the only intimation in reality on the Department’s file that Treacy Enterprises had some interest in this matter. It also clarifies that it was the Minister of State Mr. Stokes met and not the Minister. This may be a factor. It was not the same person or even the same office that ultimately made the decision. That may explain some of the confusion. Nonetheless there was an indication of interest which had never been followed up by the Department. It was nice to see Mr. Stokes again, we know each other a long time.

Mr. Stokes: We do.

Chairman: Thank you. You are welcome to stay if you wish. We have here Mr. Frank Corcoran, Chairman of Blessington Heritage Trust. Please note you do not have the same privilege as members of the committee. I draw your attention to the provisions of the compellability of witnesses Act in that respect. Do you wish to make a brief opening statement?

Mr. Corcoran: Perhaps I should say something about the quality of the information we have in relation to this area. We received the Environmental Awareness Award from the Department of the Environment our work in researching geological, archaeological, historical, ecological and cultural aspects of Glen Ding. That has been independently attested. As well as that we received much high quality information in relation to aspects of archaeology especially at the time of the sale of the land because we were involved in a number of proceedings. When Roadstone bought Glen Ding in 1991, it stated it believed it did not require planning permission. Because the Department had opened up a pit, known as the Department pit, which was used for internal purposes for forestry etc., Roadstone stated in its affidavits to the High Court that it believed it did not need planning permission to go in there. When it succeeded in purchasing it, Roadstone proceeded to quarry it without planning permission and removed 67,000 tonnes. We instituted proceedings in the High Court to prevent any futher quarrying without planning permission and succeeded. Eventually, Roadstone gave an undertaking to the High Court that it would not do any further quarrying in Glen Ding without obtaining planning permission.

Secondly, when, subsequently, Wicklow County Council rezoned Glen Ding - it had been zoned as an area of outstanding natural beauty in the county development plan - it produced for the first time a draft development plan for Blessington. Having studied the area for about a year, the officials decided that the zoning for Glen Ding should be amenity/forestry. There were six submissions to that particular plan, generally they were in favour of that particular zoning. The community council was in favour of it as well. There was one submission from Roadstone which proposed that 80 acres of it should be rezoned to quarrying. The 80 acres correspond with the 80 acres identified by Mr. Barnet, who said it was the only area one could get quarrying permission for. In other words you would not get planning permission for quarrying around that 80 acres.

When the development plan went on display there were 1,415 objections from Kildare County Council, Naas Urban District Council, Blessington and District Community Council, the Blessington Women’s Group, which has 500 members, and various other groups and individuals. There was only one submission which was not opposed to it.

Obviously, it was a very controversial change. Because of the manner in which that development plan was adopted, the then chairman did not allow the elected members to vote on the alternative which had the support of everybody, including the planners. He only put one proposal to a vote, which is in breach of the standing orders.

In the High Court we sought a judicial review of the Blessington development plan, which affected the rezoning and we were successful. The High Court overturned the zoning. During the second High Court case we got a lot of high quality information pertaining to the circumstances of the sale as well as other aspects of the land.

Thirdly, after that, Wicklow County Council nevertheless granted permission to Roadstone to quarry the 80 acres they had sought. We appealed that to An Bord Pleanála along with An Taisce, Blessington and District Community Council and the Save Glen Ding group, which is a Kildare based group. In that appeal Roadstone had to give evidence. There was a two day oral hearing during which we received more high quality information, pertaining to Roadstone’s relationship with the Department in obtaining lands in the area, which I think will be very useful to the committee. That sets out where we acquired our knowledge and its quality and basis.

I attended the last hearing of this committee. The impression had been given from the evidence that the Department of Energy had acted alone in showing favourable treatment. I would say that it did show favourable treatment to Roadstone in the sense that it did not show the same level playing pitch to the other people who put in a bid for the land. I would use the words “they showed favourable treatment”. However, this is only part of a pattern. This is not the first time that the Department showed favourable treatment to Roadstone in that area.

In 1970, Roadstone purchased about 80 or 90 acres of Glen Ding from the Department of Energy. It had gone to public tender but the public tender documentation did not state that one could pay by staged payments. Roadstone paid by six staged payments over a period of nearly a decade after that. The purchase price of that particular land was supposed to be £150,000. It was brought up during the An Bord Pleanála hearing. Roadstone could only produce receipts from the Department for half that amount - £70,000. It produced a letter from Coillte stating that, without specifying any lands, their dealing had been completed with Roadstone, but this land had never gone into the ownership of Coillte - it was always in the ownership of the Department of Agriculture. The Department was the registered owner and it had not been transferred to Coillte.

The question of the ownership of that land had been raised in An Bord Pleanála and at the end of the day, Roadstone’s senior counsel said that “at least we have squatters rights to that land”. These are State lands from which it has removed over 20 million tonnes of sand and gravel over the last number of decades.

Subsequently, in 1982 they purchased 20 acres of land adjacent to Glen Ding from the Department. That did not go to public tender and it was not advertised for sale either. Roadstone were the only people on the inside track on that deal.

Deputy Doherty: What Department?

Mr. Corcoran: In 1982, the Department of Agriculture was the registered owner. In 1982, the Department of Energy was in charge of forestry. It was whatever Department dealt with forestry at that time. I know it changed from Agriculture to Energy and now it is the Department of the Marine and Natural Resources. The year was 1982. The State sold lands adjacent to Glen Ding to Roadstone without going to public tender, nor did they advertise for sale.

As regards the third sale, this is part of a pattern. At that time, Coillte was being set up. The State transferred all its forestry lands to Coillte, except for 20 specific sites. Of those 20 sites, all were sold by public tender, apart from Glen Ding. Something that has been lost sight of is that not only was it not sold by public tender but it was not sold by auction or by private treaty following public advertisement. Most properties, after all, are sold by private treaty following public advertisement, so that one can get the maximum interest in the property. In this case it is rather strange that it is the only one of those 20 sites which was sold without going to public tender. This was the most valuable of all those sites so one would imagine that of all of them this one should have gone to public tender.

At the last meeting, Mr. Loughrey stated, on page 19 of the transcript, that if it had gone to the public tender system or if there was a known trade sale with the people who had shown an interest in it, there could be objections. This is correct. People are entitled to do so. If that sounds less than community minded by the Department, Deputies may say so.

Of course, there would have been objections. I would go further than that. If the sale had been advertised and if the public had been aware of it, it would never have been sold at all. That is because An Taisce would certainly have objected to the sale going ahead. The reason I say this is as follows. The lands contained a very important archaeological complex comprising three layers of archaeology. There were two listed archaeological sites on that land. In other words, they were on the sites and monuments record. As well as that, it was know that there were three layers of archaeology on it. There is a 3,000 year old strategic Bronze Age site whose very elevation would have made it important. It overlooked the Leinster plain, and one can see all of Kildare towards Portarlington from the top of that hill. That is what attracted the original Bronze Age settlers to Blessington. The hill fort was not strategically important, it was just a prestige site. The site that was sold was the important aspect. I will not go into the archaeological merits because they were listed and were known about.

In the Viking era, it was the last known outpost of Viking Dublin. The last Viking king of Dublin, MacTorcaill, had his settlement on top of Glen Ding. It was not the Rathturtle moat that interested him because its view is obscured by a hill. When one walks back from the moat to part that was sold, one suddenly sees for 50 miles into the Midlands. That is why the Vikings settled that particular land, and that was known to the Department.

The third element is that it was a walled deer park built under royal licence from King Charles II in 1669. The charter exists to build a walled deer park. Being pre-1700 all structures have to be on the sites and monuments record. They knew of the existence of that wall and, therefore, it would have to be on the record.

At the time of the sale, Brendan Johnson asked if were there any ancient monuments on the land to be sold. The response was that there were no ancient monuments on the land to be sold. That was totally untrue.

That was totally untrue because there was a listed archaeological site - irrespective of what one thinks about the merits of it, it was listed - apart from all the other archaeology, such as the wall, and there were embankments on it also.

Second, when the requisitions and title came through-----

Chairman: Normally we have only a brief presentation which is followed by questions because our time is limited.

Mr. Corcoran: I will be brief but this is important because my point is that statements were made which were untrue.

Second, when the purchasers send in the normal requisitions and title, there is a standard question “Have any notices been made under the National Monuments Acts?”. That is to flush out whether there are any archaeological sites on it. The answer was “No” even though there was a listed archaeological site on the lands to be sold.

Third, to show that this is not a freak accident but that it is part of a pattern, when it was subsequently decided to rezone the lands there were 1,400 informed objections based on the archaeology from people who had seen the archaeology, but they were undermined by a report from the OPW which stated that SMR 11 was not an archaeological site - a number of sites had been delisted. That statement was totally untrue and succeeded in getting the land rezoned despite all those objections because one councillor stated that the council believed the OPW, who are the experts, and that these people could not be telling the truth.

To paraphrase Oscar Wilde, to err once would be unfortunate, twice would be carelessness but to do it serially one would have to wonder about it. Again to show that it is again part of the pattern, when planning permission was sought subsequently, a report was required from Dúchas, which had taken over the functions of the OPW at that stage. The question was should quarrying be allowed in that particular area. There was no objection to quarrying in the area. The chief archaeologist turned up at the oral hearing to give evidence. He was asked was the listed archaeological site outside or inside the area for which planning permission had been sought and granted and he said “outside”. The county council granted planning permission based on his report. It was pointed out to him that it was clear from Roadstone’s map on the environmental impact statement which accompanied the planning application that it was inside. An Bord Pleanála’s inspector excepted that point and it is in his report. In other words, the chief archaeologist misled An Bord Pleanála in relation to the location of that site.

Therefore, the statements made at the time of the sale were not unique or freak statements which were incorrect. They were part of a continuous pattern which is continuing to the present day. If there should be a planning application again, I have no reason to believe that they would change that.

It gets even worse. Because of that the then Minister for Arts, Culture, Heritage and the Gaeltacht, Deputy Michael Higgins, tried to conduct an investigation into how an archaeological site could have been sold because that is the whole point. If it was advertised that a listed archaeological site was going to be sold to a quarry company, I am sure An Taisce would have succeeded in preventing the sale going ahead. When the Minister conducted a ministerial investigation into how that happened, senior officials in the Department misled him as to the most important aspect of it. In other words, they never told him that they visited Glen Ding and changed the archaeological status of it prior to the sale. The Deputy has stated so publicly, both on RTÉ television and in The Irish Times.

The senior officials made a number of statements to the Minister. They said that the trees on the land had destroyed all the archaeology. That statement was totally untrue because the Deerpark wall which surrounds it and was built under Royal Charter is visible from the road to any archaeologist without him even getting out of his car.

(The witness referred to an aerial photograph)

Yet they told the Minister that the trees had destroyed all the archaeology.

Chairman: Who are they?

Mr. Corcoran: Senior officials in the Department?

Chairman: Is that the Department of Energy?

Mr. Corcoran: No, the then Department of Arts, Culture, Heritage and the Islands.

Second, they said that the wall was not archaeology as it was above ground. Of course that is untrue because the Acts refer to structures as being archaeology.

Third, they said that the wall, being partly ruined, could not be considered to be archaeology, which of course is a nonsense because most archaeology consists of ruins and is accepted as such.

Four, they stated in a report to him that to quarry away the land, which included the listed archaeological site and all the other archaeology, would restore the impressive view to the Rathturtle Moat, that is the hillfort beside it. That is not only totally untrue but it is a total nonsense because the area sold and all the archaeology did not pop up after the Rathturtle Moat was constructed. Even in archaeological terms, it would be a nonsense.

I am not talking about the merits of archaeology because I know people can differ about that, but the Minister was given a comprehensive report by Dr. Eoin Grogan, who did the field study reports for the OPW on Glen Ding. Because they conflicted absolutely with what he was being told by his senior officials in March 1997, he demanded that a meeting should take place in April 1997 between Dr. Grogan, the chief archaeologist and himself because he wanted to sort it out. The chief archaeologist did not carry out his instructions to have that meeting.

The Minister gave a commitment to former Deputy Liam Kavanagh and Councillor Tommy Cullen, a former chairman of Wicklow County Council who was concerned about the matter, that this matter would take place. Despite the instructions of the Minister, the meeting did not take place.

Clearly there is a consistent trend. The Department is consistently misleading purchasers, the county council, An Bord Pleanála and the Minister in order to hide what happened at the time of this sale. Clearly if they were now to say that there is archaeology at the site, the question “Why did you sell it to a quarry company?” would arise. Did somebody ask somebody to interfere with the archaeological records in order to allow the sale to go ahead? That is why I make the point, when Mr. Loughrey states that there would have been objections if it had been advertised, that not only would there have been objections but I am convinced that the sale would have been prevented by An Taisce because of the known archaeology on the land.

Chairman: You are saying that there is a pattern of favouritism towards Roadstone over a period of years by a Department which has been known by various names, including the Department of Energy and the Department of natural resources.

Mr. Corcoran: It was never the Department of natural resources then. It was the Forestry Service.

Chairman: It was the Department covering the Forestry Service.

The second major point is that you say the same Department tried to mislead about the existence of archaeology on the site.

Mr. Corcoran: No. That was the OPW, another Department. That is the point I am making.

Chairman: I want to be clear about that. I must ask you to be brief because the Committee has other business to take.

Mr. Corcoran: I made that point from the beginning.

Chairman: Who misled whom about the archaeological site? Was it the Department of Energy which misled the OPW or did the OPW mislead somebody else?

Mr. Corcoran: One of the letters was from the Department of Energy and one of the letters was from the Chief State’s Solicitor’s Office, which would act on the instructions of the Department of Energy.

Chairman: When were these letters dated?

Mr. Corcoran: The one to Mr. Brendan Johnson was dated September or October 1990. The requisitions and title one was dated after June 1991.

Chairman: What do they say in those letters?

Mr. Corcoran: In the first Mr. Johnson asked “are there any ancient monuments on the site.”

The response he got was “no, there are no ancient monuments on the site.” That was untrue. There was a listed sites.

Chairman: That was sometime in 1990.

Mr. Corcoran: Yes.

Chairman: In November 1990?

Mr. Corcoran: Yes. That was about September or October 1990 from the Department of Energy.

Chairman: It was in November 1990.

Mr. Corcoran: Maybe it was November.

Chairman: The second letter you mentioned was in 1991. What letter is that?

Mr. Corcoran: That is the response to the requisition in title from the Chief State Solicitor’s Office to Roadstone. A standard question on a requisition in title is have any notices been issued under the National Monuments Acts. The purpose of that question is to find out are there any listed sites on the land. The response was “no”.

Chairman: You are saying that was untrue.

Mr. Corcoran: The Chairman can decide that.

Chairman: What are you alleging here?

Mr. Corcoran: Given that they were selling lands containing a listed archeological site under the sites and monument record, that should have been the answer given, but the answer given was “no”.

Chairman: Secretary General, was this a listed site?

Mr. Carroll: I am not familiar with that aspect of it. When the possibility of selling the site came up, the Department consulted the OPW. The chief archeologist there investigated sites in 1998 and gave various advices.

Chairman: In 1998?

Mr. Carroll: Sorry, 1988. He said some of the sites there were particularly important and 14.2 hectares was taken out of the site and transferred to the OPW.

Chairman: Are you referring to the same 14.2 hectares covered here?

Mr. Carroll: This matter is dealt with on page 3 of the Comptroller and Auditor General’s report.

Chairman: I am leading you to another point. I want to make sure we are identifying the same area. I will quote from a letter to the Secretary of the Department of Finance from the Department of Energy at the time. It is dated 14 December 1990. It states:

I refer to previous discussions concerning the sale of the Department’s property at Deerpark, Blessington, County Wicklow. Approval was then sought for sale of this property to Roadstone Limited at an agreed price of £1.25 million. The site comprises a total of 72.9 hectares and was retained by the Department following the establishment of Coillte because of its substantial reserves of sand and gravel. The property contains a ringfort, which the OPW has identified as being an impressive monument strategically located with possible Viking associations. It is regarded by the OPW as one of the finest of its type in the country and they have requested that it be transferred to them. The associated area of land required is 14.22 hectares. This leaves a net area for sale of 58.65 hectares.

Clearly, the Department of Energy set out that position to the Department of Finance in seeking sanction. Is Mr. Corcoran saying there were more archeological sites outside that 14.2 hectares?

Mr. Corcoran: Yes. On the lands they were selling to Roadstone, that land contained a listed archeological site, SMR5/11.

Chairman: Would Mr. Carroll like to comment on that?

Mr. Carroll: We relied on the advice of the OPW in regard to the disposal of this site. My understanding of the papers is that from an archeological perspective it was in order to sell and to develop the site we were selling. That was the understanding I gathered form the papers.

Chairman: It is clear from the report of the Comptroller and Auditor General that the OPW’s archeological section was asked for its opinion about this site and had issued a report.

Mr. Corcoran: Yes.

Chairman: Are you saying there was something false in that report?

Mr. Corcoran: I do not know what they said in the report they sent back to the Department. I would dearly love to puruse the file.

Chairman: It is referred to in the Comptroller and Auditor General’s report, which is a public document. Presumably you read that document.

Mr. Corcoran: Yes, I read that document. The SMR/11 site was on the land sold to Roadstone. It is a wetlands area associated with the hillfort. In all areas where there is a Bronze Age hillfort there is always an associated wetlands area. That was identified by Dr. Owen Grogan in his report to the Minister. For some reason the OPW said it would take SMR/12, which is the Bronze Age hillfort, but we could sell the lands containing SMR/11. On checking the borehole logs of the Geological Survey of Ireland Report and Roadstone’s records, one finds there are very rich deposits underneath that archeological site.

Chairman: I want to be clear that we are talking about the same site. Paragraph 4.2 of Comptroller and Auditor General’s report states that the OPW replied on 21 July 1988 that the chief archeologist had inspected both sites. He confirmed that one of the sites was only a dried up pond or small lake and is not of archeological importance. However, his opinion was that the other site is an impressive ringfort strategically located with possible Viking associations. The reply also stated that in view of the archeological importance of this site, which is one of the finest of its kind in the country, the Commissioners of Public Works were very interested in acquiring it and its surrounding area. Clearly, the Department of Energy sought advice from the relevant authority, got it and acted upon it. You are disputing that advice?

Mr. Corcoran: The point I made from the beginning is that it was only the Department of Energy that was showing favourable treatment to Roadstone. The Heritage Service has consistently shown favourable treatment to Roadstone in this matter as well.

Chairman: In this matter or in other matters?

Mr. Corcoran: In this matter. That was part of it. I listed the litany of things. I could go on, but the Chairman told me to be brief. It is an ongoing matter with that Department.

Chairman: Is it in relation to this matter or other matters concerning the disposal of land?

Mr. Corcoran: It is in relation to the disposal of this particular piece of land.

Deputy Doherty: Is what Mr. Corcoran submitted to us here part of the evidence given in court?

Mr. Corcoran: The evidence given by the chief archeologist to An Bord Pleanála was that the listed archeological site was not in the area for which planning permission was sought or granted. When he was presented with the EIS and asked to look at Roadstone’s EIS map, he was told he completed a report on that for the county council based on which planning permission was granted. He refused to look at it. He said he had not even read it, but he was told he had made a report on it. The chairman told him to step down. He had misled An Bord Pleanála. This was part of the chief archeologist’s evidence to An Bord Pleanála. That was part of that pattern.

Deputy Durkan: I wish to focus on the purpose of this committee. I am sure Mr. Corcoran accepts that the remit of this committee does not involve heritage issues other than in so far as they affect public finances and accountability.

Mr. Corcoran: I do.

Deputy Durkan: I am sure Mr. Corcoran will pardon me, if my questions move away from that arena. What was his interest in the property at the time of the sale, which is the issue we are investigating?

Mr. Corcoran: At the time of the sale, there was a rumour that Roadstone had bought the land in 1991. I am here as chairman of the Blessington Heritage Trust. I have walked the land almost every day.

Deputy Durkan: I am looking for precise answers to questions. I do not want a long reply.

Mr. Corcoran: I live in the area. I have walked the land almost every day. This was raised by the Blessington and District Community Council Meeting when it was rumoured that Roadstone had bought the land. They decided, unanimously, quite shortly afterwards, that they would oppose any further planning application for quarrying.

Deputy Durkan: Did your community express an interest in purchasing the land, given that obtaining the maximum amount of value for the disposal of property is part and parcel of the remit of this committee?

Mr. Corcoran: No. I made inquiries of the Department of Energy at the time, that was in early 1992, but it refused to give me any information about it. By the time it was sold it was too late.

Deputy Durkan: Did Mr. Corcoran express an interest at the time? It must be remembered we are talking about the offer for tender and the negotiations relating to it.

Mr. Corcoran: No.

Deputy Durkan: Did anybody on behalf of the heritage trust?

Mr. Corcoran: No, because we did not know it was for sale.

Deputy Durkan: And the heritage trust was in existence and active at the time?

Mr. Corcoran: I am also involved in An Taisce.

Deputy Durkan: No-----

Mr. Corcoran: The heritage trust was not in existence at that time but An Taisce was, and I am a member of An Taisce. An Taisce was not aware of the sale. I can speak for An Taisce in that regard.

Deputy Durkan: I am sorry, but I am looking for answers to the questions I am asking, not qualification. Did Mr. Corcoran not express an interest in the purchase or negotiation with anybody in the heritage trust at the time?

Mr. Corcoran: No, because we did not know it was for sale.

Deputy Durkan: And the heritage trust did not exist at the time.

Mr. Corcoran: No, but An Taisce did exist. It had an interest in that area and I can speak for An Taisce because I was vice-chairman of that organisation.

Deputy Durkan: Mr. Corcoran is here representing the Blessington Heritage Trust.

Mr. Corcoran: I can tell the Deputy that An Taisce was not aware of that sale.

Deputy Durkan: An Taisce was not aware and the Committee may seek a meeting with An Taisce also. That is a matter for the chairman and the Members.

Mr. Corcoran: Yes.

Deputy Durkan: Will Mr. Corcoran confirm that at the time he did not raise an objection to the sale through Blessington Heritage Trust?

Mr. Corcoran: Nobody knew it was for sale.

Deputy Durkan: The trust did not exist at the time.

Mr. Corcoran: The community in Blessington did not know it was for sale.

Deputy Durkan: Did anybody raise a question about the disposal of the lands knowing that information was going through the grapevine at the time?

Mr. Corcoran: No, nobody knew it was going through the grapevine. The only time we heard a rumour was after the sale was completed. Even after it was completed we could not get straight information from the Department. The sale was already completed.

Deputy Durkan: Did Mr. Corcoran read the transcripts in relation to the previous witnesses?

Mr. Corcoran: Yes.

Deputy Durkan: He is aware of the purpose for which the property would be put?

Mr. Corcoran: Yes.

Deputy Durkan: The previous ones were Tracey Enterprises, Hudson Brothers, Johnson and Roadstone.

Mr. Corcoran: Yes.

Deputy Durkan: Did Mr. Corcoran know all those were interested in the property?

Mr. Corcoran: At the time, no.

Deputy Durkan: When did Mr. Corcoran become aware of their interest?

Mr. Corcoran: After the sale had been completed. I made inquiries of the Department of Energy which refused to confirm or deny that it was sold. It was many weeks later that it confirmed it was sold, but the sale was completed at that stage.

Deputy Durkan: It was over and done with.

Mr. Corcoran: Yes.

Deputy Durkan: Mr. Corcoran then became aware of the interest of the other unsuccessful tenderers or those who did not get a fair chance.

Mr. Corcoran: Yes, much later.

Deputy Durkan: When did Mr. Corcoran first become aware of that?

Mr. Corcoran: Much later than that. There was a response to a parliamentary question and in that we became aware that Johnson Industries had expressed an interest in it.

Deputy Durkan: By whom was the parliamentary question put?

Mr. Corcoran: Deputy Liam Kavanagh put a question down to the then Minister for Agriculture, Deputy Ivan Yates. In that parliamentary response it was stated there was one other interested party, and Johnson Industries was mentioned in brackets in the parliamentary question. Subsequently, an article appeared in one of the newspapers, I think it was The Sunday Business Post, in which I was mentioned about it.

Deputy Durkan: In what context was Mr. Corcoran mentioned? Was he concerned that the other tenderers did not have a fair opportunity to tender and purchase the property and that the regulations were not observed?

Mr. Corcoran: My concern was that because of the secrecy of the sale, the interested parties were not given the opportunity to correct the true position that it contained listed archaeology.

Deputy Durkan: Some of the other witnesses before the Committee had a grievance to the effect that they were not given ample opportunity to make a substantial offer for the property. If they had been afforded that opportunity, they would have made a more substantial offer. Is Mr. Corcoran aware of the purposes for which they intended to acquire the property?

Mr. Corcoran: I am sure it was to quarry it. They are quarry companies.

Deputy Durkan: Would Mr. Corcoran have been concerned about that?

Mr. Corcoran: Yes, we would have objected to it.

Deputy Durkan: Would he have equal concern about their proposed use of the enterprise as he would about the Roadstone case?

Mr. Corcoran: Absolutely.

Deputy Durkan: The original question arising from these hearings came from a different source in Mr. Corcoran’s case. Previous witnesses said they did not get a fair opportunity to tender, that they would have paid more and possibly beaten the Roadstone offer. Is Mr. Corcoran aware of that?

Mr. Corcoran: Yes.

Deputy Durkan: The question is whether the other interested parties were given an opportunity to tender for the property and purchase it at a higher price. Is that correct?

Mr. Corcoran: That is what they are saying.

Deputy Durkan: Is Mr. Corcoran also saying he was not aware of any other person who might have wanted to purchase the property at that time?

Mr. Corcoran: At that time, no.

Deputy Durkan: For any other purpose.

Mr. Corcoran: Subsequently I became aware of it.

Deputy Durkan: For another purpose?

Mr. Corcoran: No, for quarrying.

Deputy Durkan: I know that planning and development are not the function of this Committee.

Mr. Corcoran: I agree with the Deputy.

Deputy Durkan: But Mr. Corcoran mentioned there were 1,450 objections to the proposal.

Mr. Corcoran: 1,415.

Deputy Durkan: Were they individual or organised objections?

Mr. Corcoran: About 70 were hand-written letters. The Blessington Heritage Trust distributed leaflets door to door in Blessington explaining the attributes of the area and that it was on display for a period of one month, and that if they wanted to participate in the process they should sign a letter to the secretary of Wicklow County Council and that we would go around-----

Deputy Durkan: That is an organised objection.

Mr. Corcoran: Yes. Of those, we were concerned with 530. I do not know about the others because they came in from other sources. There were 70 individual letters plus a submission from Kildare County Council, Naas Urban District Council, the Blessington Women’s Group, the Blessington and District Community Council and the Blessington Heritage Trust.

Deputy Durkan: At this juncture, what is Mr. Corcoran’s objective - I asked the same question of the previous witness? Does he wish to state that procedures were not pursued in accordance with the regulations and that the sale should be set aside? Does he know of somebody who wishes to purchase the property? It must be remembered that the remit of this Committee is in relation to financial matters - achieving the best possible results for the State and protecting its assets. Does Mr. Corcoran have an interest in that particular area in relation to this issue?

Mr. Corcoran: I would regard archaeology as an asset of the State.

Deputy Durkan: No-----

Mr. Corcoran: I regard archaeology as an irreplaceable State asset.

Deputy Durkan: I do not wish to be lectured on the issue.

Mr. Corcoran: No, the Deputy used the word “assets”.

Deputy Durkan: No, assets in the context of this Committee. If the remit of the Committee is extended to the areas Mr. Corcoran is talking about, we will move into the areas covered by other committees in other Departments. I am asking Mr. Corcoran questions in relation to this Committee. I do not want a lecture on-----

Mr. Corcoran: No, I just responded to the word “assets”.

Deputy Durkan: I am aware of that and I am aware also of the meaning of the word “assets”. Can I finish the question?

Mr. Corcoran: I was not lecturing; I was responding to questions.

Chairman: We have a particular focus and I would like the questions to reflect that.

Deputy Durkan: Having regard to the remit of the Committee and the question I asked the previous witness and witnesses, can Mr. Corcoran tell the Committee the interest of his trust in the event of the sale being set aside, for example? Does he have an interest in somebody purchasing it? Does he know of somebody who will pay a greater price for it? What is his objective?

Mr. Corcoran: My primary objective is that somebody will establish the truth as to what happened at the time of that sale. That is extremely important. If the truth could be established now it would mean that the continuous misleading of various statutory bodies would perhaps discontinue. I think it is extremely important that if one is investigating the sale, one gets to what happened to the site’s listed archaeological status at the time. That should be investigated. The archaeology is referred to by the Comptroller and Auditor General in his report. It was an extremely important part because it was also referred to on the last date that if it had been known publicly that it was for sale there would, quite rightly, have been objections. That is the truth. I am convinced that the sale would have been stopped by An Taisce at that time because it would have been able to correct the misleading information that was going about on the public record, that there were no ancient monuments there. That was untrue and an Taisce could have corrected that point.

Chairman: Mr. Corcoran, you have made a number of comments which might detract from the reputations of certain people who are not here to defend themselves.

Mr. Corcoran: Yes.

Chairman: You know that you are not covered by privilege.

Mr. Corcoran: Yes. I am referring to documentation.

Chairman: You are quite aware of the fact that you are not covered by privilege, as I mentioned at the beginning of your testimony.

Mr. Corcoran: Which statement are you concerned about?

Chairman: I am not going to add to it.

Mr. Corcoran: I am referring to the documentation that was presented to us.

Chairman: We have now established at least that the Department of Energy consulted the Office of Public Works-----

Mr. Corcoran: Yes.

Chairman: -----and that the professional assessment of the Office of Public Works was sought and given to the Department. In that respect, at least, the Department of Energy would appear to be blameless. You may dispute the findings of the Office of Public Works and the particular specialist officials in that office, but I do not think the committee could allow the situation to go uncommented upon. We cannot accept on hearsay that those conclusions were other than professional conclusions. You may not wish to accept that.

Mr. Corcoran: But you asked the question as to whether there was a listed archaeological site on the lands sold. You did not get a response to that question but I am sure that if you check the files you will find that there was in fact a listed archaeological site on the land to be sold.

Chairman: Hold on a second. It is absolutely clear that in this case the Office of Public Works was asked for a report on the site, and it did report on the site.

Mr. Corcoran: Yes.

Chairman: It was agreed that 14.22 hectares be transferred to them containing certainly the most important archaeological part. They said the other part was not of importance. You may dispute their assessment and that is a point of view, but I do not think you can impute to them, without other evidence, any malfeasance.

Mr. Corcoran: But I have given the evidence. I said that it was a listed archaeological site. I am not talking about the quality of the archaeology; it is either listed or it is not. That is the point I am making. You can check to find out if there was a listed archaeological site on the lands sold. I am saying there was. You did not get a straight answer to it when you asked the question, but I am telling you that there was a listed site on the land to be sold.

Chairman: That may well be but the Secretary-General said that he was not aware. Is that right? You are not up to speed on that.

Mr. Carroll: First of all, I had no notice that this particular issue would be raised or that this particular gentleman would be present. I have no direct knowledge of those papers. I take particular exception to the tone and accusations being made here. Everybody on this side of the table is apparently dishonest, misleading and conspiratorial. I take particular exception to that. A whole range of statements have been made which I have to reject. It was said that I did not give a straight answer to the question that was asked.

Mr. Corcoran: I did not hear a straight answer to that question.

Mr. Carroll: I want Mr. Corcoran to withdraw the statement that I did not give a straight answer. That implies that it was a misleading answer, a dishonest answer.

Mr. Corcoran: Mr. Carroll did not answer yes or no, that is the point I made.

Deputy McCormack: On a point of information, what has this got to do with what we are deciding about whether or not money was lost to the State? I have been sitting here since 10 o’clock and I would like to get back to the business we should be dealing with.

Chairman: I accept that but in fairness we were asked to see a number of people and we agreed to see them. Mr. Corcoran has been given great latitude to give evidence. A lot of what you have said is unsubstantiated.

Mr. Corcoran: I have referred to public documents.

Chairman: I will offer you an opportunity to substantiate anything you wish to.

Mr. Corcoran: I will do that. I will substantiate everything.

Chairman: The evidence you have given will, of course, have to be drawn to the attention of those who have been mentioned in your evidence.

Mr. Corcoran: That is fair enough. I think that is a very good idea.

Chairman: In relation to our holding to account the Accounting Officer of the Department of Energy, it is clear that the Department - in respect of the archaeology, at least - sought advice from the appropriate authority.

Mr. Corcoran: Yes.

Chairman: You obviously dispute that advice, or the completeness, or some of the conclusions of that advice. That is a matter of opinion, but I do not think we can allow a situation to go unremarked whereby you can attribute that difference of opinion to any improper influence without any evidence to the contrary.

Mr. Corcoran: The point I made was that it is a matter of public record whether the site sold contained a listed archaeological site or not. You are asking where the substantiation is, but it is a matter of public record. It is a matter of record that the Department of Energy responded to Brendan Johnson that there were no ancient monuments on the site. The requisitions and title is a matter of record. The report to the county council is a matter of public record. The statements made to An Bord Pleanála is a matter of public record. Therefore, all the points I have made are substantiated in that manner. The statements the Minister made, that he was not given important information when he conducted his investigation into the sale, is a matter of public record as well. Everything I have stated has been substantiated. I can give you documentation if you wish.

Chairman: What is in the public record is obviously something that can be checked, but some of these things are in the eye of the beholder. We can all be very selective about what we present. In summarising what we see is in the public record, sometimes we miss certain points, but that does not matter. From the point of view of this committee and the interest that your trust has in this matter, at least the Department of Energy did seek archaeological advice. It seems to me on the face of it that we cannot find fault with the Department of Energy in that respect because it did at least seek archaeological advice. Whether the professional advice given would be agreed by all archaeologists or people who have a knowledge of those things is another thing. However, I do not think we can impute wrong motives to people without having clear evidence. We cannot just take people’s opinions.

Mr. Corcoran: But I did not impute motives. What I did say was that favourable treatment was shown to Roadstone. That is the point I made.

Chairman: What is your evidence for that?

Mr. Corcoran: I gave you three land sales. The previous land sale did not go to public tender either.

Chairman: I asked you whether you were making that comment in relation to this land only or other lands and you said: “No, this land only”. That is what you replied to me.

Mr. Corcoran: This particular sale is part of a pattern of three sales to Roadstone where they were shown favourable treatment by the Department. That is the point I have made. The previous sale in 1982 did not go to public tender. Roadstone were the only people on the inside track, nobody else was given an opportunity to know about that sale at all.

Chairman: You mean other parts or parcels of land at Glen Ding?

Mr. Corcoran: Within yards of Glen Ding.

Chairman: In the same general area?

Mr. Corcoran: Within a few yards of Glen Ding. It actually adjoins Glen Ding.

Chairman: You are talking about three sales of parcels of land to Roadstone in the same general area, from 1982 to when?

Mr. Corcoran: The first one, which was part of Glen Ding itself, was in 1970. Roadstone paid for it by instalments. Were other purchasers told in the tender documentation that they could pay for it by instalments? At the time of the An Bord Pleanála hearing last year, I checked and found that the Department of Agriculture was the registered owner of that land. I raised this point at the oral hearing and the senior counsel for Roadstone said that “at least we have squatters rights to the land”. I wanted to know did they actually buy the land from the Department of Agriculture. The public record shows they never bought the land from the Department of Agriculture, and that it is still registered in the name of the Department. Even quite recently the Department of Agriculture directed its mind towards the registration because when it transferred other lands in the area it then registered something in the folio to show it owned this land in 1970 that, purportedly, Roadstone had been acquiring for the past two decades and has taken over 20 million tonnes from it. We know they have been operating there and in the end all the senior counsel for Roadstone could say is that “at least we have squatters rights to it”.

The public records show the Department of Agriculture is the registered owner of it. I do not know if that has changed in the past week or two but at the time of the oral hearing last year, the Department of Agriculture was the registered owner of that land. The inspector wanted to see the evidence that it had purchased the land, but it could not produce full evidence that it had purchased it. The inspector had to recognise it had an interest in the land because everyone knows that if one has been there for more than 12 years, one has squatter’s rights. I recognise that also, and was not questioning that it did not have squatter’s rights because I know they have been there for more than 12 years.

Chairman: Mr. Carroll, do you have a comment to make on that?

Mr. Carroll: I am not familiar with the two earlier sales. I do not accept there was a pattern of favourable treatment as regards Roadstone. Roadstone is a major player in this business and one would expect it would be in most areas with sand and gravel deposits throughout the country. Where such land is sold, Roadstone will always figure because of its scale. No favourable treatment was shown on this occasion. The sole motivation for the State was to maximise the value and dispose of the asset. The Department of Energy was under extreme pressure from the Minister for Finance and others to raise money reasonably quickly. Everything I have heard today both from Mr. Corcoran and Mr. Stokes confirms my view which I expressed in the Comptoller & Auditor General’s report.

The judgment the people made at the time was a good one. Putting it out to tender, negotiating with Roadstone and getting a price significantly above that recommended by Mr. Barnett, whose qualities were extolled today by Mr. Stokes, resulted in a secure sale being made. It has been confirmed that had it been in a public tender or a semi-open public tender process, it would have been extremely difficult to dispose of the property.

Deputy Gildea: Is deviousness a standard practice in the Department to avoid civic minded objections by individuals or local groups?

Mr. Carroll: It was subject to planning, so all the issues which arose were all proper to the planning process. It is a difficulty in Departments and, indeed, in public sector bodies that sometimes one is expected to take on the planning function in terms of how one does one’s job. Our task and instructions from the Government were to dispose of properties quickly for best value. The strategy adopted here was solely designed for that purpose. That in no way disenfranchised, if you like, the rights of people who had an objection to the use of that property who were able to avail of that right under the planning process, and they did so successfully.

Chairman: I thank Mr. Corcoran for coming before the Committee. You are now discharged.

Mr. Corcoran: There were one or two other items of which I am aware which would be of assistance.

Chairman: Perhaps you would write to us on the matter.

Mr. Corcoran: I will write to the Committee on the matter.

The witness withdrew.

Deputy McCormack: At the meeting of 11 February I raised a number of points with the Department of Marine and Mr. Carroll who appeared before the Committee. In the correspondence I got dealing with my queries, I received two letters which were replies to parliamentary questions I tabled on 18 February. That was the only response I received to the questions I raised. I consider that poor treatment given the time I spent at the Committee and the questions I asked. There was no need to send the replies to the parliamentary questions I tabled because I was aware of them. In fact, it is an insult to my intelligence that my queries were dealt with by sending me copies of replies to parliamentary questions which I already had. I was very dissatisfied with the treatment I received having staying here all day and having asking relevant questions only to receive an inadequate and ridiculous response. Perhaps if I ask the questions again, I will get a response to them.

I asked if Mr. Carroll could give me an assurance in writing that the Department of the Marine, the institute and the Central Fisheries Board would work together to ensure those reports are implemented but did not get a response to that question. I stated that this property, Killary Salmon Farms, had been or was in the process of being sold, and asked for clarification on that. Mr. Carroll said he was not familiar with the case. I sought an assurance on every aspect of the sale. It is very serious when the capacity of a farm is increased from 750 to 2,200 tonnes. It is far more serious if it is sold to somebody who will not carry out correct farming practices.

Mr. Carroll said he was not aware of the company and could not comment on it, so I asked him to find out. He said he would let me know the position. Has Mr. Carroll made himself familiar with the company since 11 February in the light of the remarks I made? I asked if Mr. Carroll would meet the members of the Central Fisheries Board to discuss the problem. Has such a meeting been request or granted? Principally, I am very concerned about being treated with contempt in that it was deemed satisfactory to send me copies of replies to parliamentary questions I had tabled in the Dáil as a response to my queries. Naturally, I was aware of those replies and it was not necessary to send me them.

Mr. Carroll: I greatly regret the Deputy should feel I have not answered his questions and that the formal response was inappropriate. Certainly, there was no intention to be discourteous to the Deputy. We went through the record and thought we had identified the specific questions which required specific written answers. I am sorry if I missed some of those questions. Obviously, we were not assiduous enough in checking.

Deputy McCormack: I do not accept that. How does Mr. Carroll think I would be satisfied with the replies to parliamentary questions I tabled? I already had that information. This type of work will cost this State millions of pounds and my only concern relates to the threat posed to wild trout and salmon fisheries. This company, which had good farming practices at 750 tonnes, is being passed on to a Norwegian company which might not have good practices, as has been the case in Connemara. It will have the capacity to manufacture 2,200 tonnes. That is a colossal increase in the capacity of the area of Killary Salmon Farm. As the Chairman pointed out the last day, the Killary farm area is in Killary Harbour on the road between Clifden and Leenane, the most beautiful and scenic area in the country. I am very concerned about what this will cost the State eventually in terms of tourism and the loss of our wildlife stocks.

Chairman: The Deputy’s questions have been inadequately answered. Will the Secretary-General answer them more extensively as soon as possible?

Mr. Carroll: The questions are not necessarily strictly ones for me as Accounting Officer in that they are policy or ministerial decision questions for which I am not accountable. We try to be as helpful as possible but these areas can become blurred.

On the question of the proposed increase in salmon farming in Killary, the position is as explained in the Minister’s answer to the Deputy. The Minister considered those applications, which went through a public advertising and planning process, and objections were received and considered. He granted the licence but that may be appealed to the independent aquaculture licensing appeals board, and I understand an appeal has been lodged. That is the process for dealing with the matter. As to the merits of that, the Minister takes these decisions through a process. That will be dealt with. A number of appeals have been made to the appeals board in respect of that proposed increase and I presume that the board, which is independent, will deal with them on their merits.

Deputy McCormack: Several times in his responses in the previous debate Mr. Carroll said he was not familiar with the case. Is he now familiar with it?

Mr. Carroll: No, I am not. We deal with thousands of cases and in my job I would not be familiar with individual cases.

Deputy McCormack: This relates back to my function as a Member of the Committee of Public Accounts. No matter how major the case is or how big an effect it will have on the future finances of the State, Mr. Carroll does not have to be familiar with a renowned case like Killary Harbour?

Mr. Carroll: The organisation deals with the cases through a process which involves technical advice. Cases of that nature would normally be submitted to Ministers under delegated authority at principal officer level, as they would be managers of divisions. I know this case would have been subject to very intensive inquiry and examination, and that the Minister would have considered it also.

Deputy McCormack: When I asked the question, Mr. Carroll said he was not aware of the company and could not comment on it, I asked him to find out for me, and he said he would let me know the position regarding the handling of the assignment. He has not let me know anything, except what I know from replies to my Dáil questions, which is a separate matter, nothing to do with this Committee.

Mr. Carroll: No decision had been taken on that case at that time. I was not familiar with it then. Neither had a decision been taken when the Minister replied to the Deputy’s parliamentary question on the same subject. In the meantime-----

Deputy McCormack: I am not interested in that - my parliamentary question has nothing to do with Mr. Carroll, with all due respect. What I asked Mr. Carroll at this Committee has everything to do with how he has dealt with me as a Member of the Committee. When he said he would let me know the position relating to the handling of the assignment, I would have expected to be told.

Mr. Carroll: I am not in a position to disclose to the Deputy what files may be passing between the Department and the Minister on a matter like this. It is the Minister who takes the decisions on an assignment of that nature, and no decision would have been taken at that time. A decision has now been taken, as I understand it; in the case of the Killary operation, the Minister has given consent to a change in shareholding.

Deputy McCormack: A change of ownership?

Mr. Carroll: Shareholding, taking ownership of the licence.

Deputy McCormack: What does that mean? If a company which already has a proven bad track record in Connemara, as I established the last day, is now going to take over a salmon farm at Killary which will have three times as much capacity as previously. it could have serious repercussions for valuable estuaries of sea trout and wild salmon stocks.

Chairman: I am trying to relate this to the public finances, Deputy McCormack. Is it part of your case that it could affect them?

Deputy McCormack: Yes, it could have a serious effect. From that point of view, it is the duty of the Committee to get answers to the questions I am asking. A lot of this might have been short-sightedness. For example, the last day I asked whether Mr. Carroll would meet members of the Central Fisheries Board to discuss the problem, and I now wonder whether such a meeting was sought, granted or took place.

Mr. Carroll: The Central Fisheries Board has not sought a meeting with me in relation to that question. That board is an integral part of the licensing process and its technical and other advice would be brought to bear at all stages. I also understand that the board, as an independent agency, has the right to appeal a decision of this nature if it impinges on its interests.

Chairman: Do you accept the point made by Deputy McCormack, that some of these decisions can have knock-on effects on the public finances?

Mr. Carroll: Any licensing decision or decision of that nature, if it turns out not to be correct and if legal or other damages arise, could have substantial implications. One endeavours, through the process, to minimise the risks of that happening.

Deputy McCormack: Was the track record of the company now taking over Killary salmon farms taken into account? There is circumstantial evidence that in the estuaries where this company operates, because of its farm management practices, the incidence of sea lice has wiped out the wild trout population. That has not happened in Killary because of the previous good management practices of the Killary salmon farms. I and others fear that the practices of the company - that is, the company which is reported to be taking over, I am only going on what I know because I cannot find out - will lead to destruction of the wild trout in Delphi and Dowra bays, which would have a serious effect on tourism, etc., in the area, at great loss to the State. I want to know the name of the company because I think this Committee is entitled to know what company is taking over the farm. Is it the same company which has bad farm management practices in other parts of Connemara? I will not go into those practices but the problems are colossal.

Chairman: I do not want to stray into areas which are appropriate to the House itself. Mr. Carroll, can you give any of the information sought by Deputy McCormack?

Mr. Carroll: There will be no change in the name of the company, it will still be Killary Salmon Company. I understand the shareholding has been acquired by a company called Murpet Fish Limited, 60 per cent of which is owned by a Norwegian group, 30 per cent owned by a fisherman from Killybegs, and the rest by the current managing director of Killary Salmon Company, Mr. James Ryan. The Minister of State has approved that change and is satisfied that the company would continue to meet the standards required under licensing.

Deputy McCormack: I hope you and he are right.

Chairman: Those are judgments which are not to be made by this Committee.

Deputy McCormack: What is the position regarding the appeal against the granting of the increase in the licence?

Mr. Carroll: The present limits on production in Killary are, I think, 850 tonnes per annum and there is no change as of now in that position. The Minister has consented to a phased increase to 2,200 tonnes up to the year 2004, which has been notified in the public press.

A period of a month is given for an appeal. Seven appeals have gone to the new independent aquaculture licence appeal board, which has been established. That board will determine the outcome in due course but, in the meantime, there will be no change. The guideline the board has is to try to settle things within four or five months, but these are complex and difficult decisions. I presume it will do it properly in its own time.

Deputy McCormack: I thank Mr. Carroll for his forthcoming replies. If I had received those in writing, I would have been satisfied. I thank him for clarifying some of the issues, although the matter is not closed.

Chairman: I have no doubt about that.

The witnesses withdrew.

Chairman: I propose that the Committee notes the accounts of the Department. I will put the Glending issue on the agenda for a private session of next week’s meeting so that we can give further consideration to a draft report on the subject and ascertain if there are any additional amendments to the current draft in light of today’s evidence.

Deputy McCormack: Will we encourage or discourage further people to make submissions?

Chairman: It is a matter for the Committee to decide in each case. We also have responsibilities and duties under the Committees of the Houses of the Oireachtas (Compellability, Privileges and Immunities of Witnesses) Act, 1997, which gives rights to certain people.

Deputy McCormack: I am afraid the Committee will be used as a platform by certain people who may not have the same interest in or understanding of its duties as the members.

Chairman: That is always a risk.

Deputy McCormack: We must be careful about it.

Chairman: Next week’s meeting is at 10 a.m. on Thursday, 1 April 1999 and not on Tuesday as previously stated. We will discuss the Central Statistics Office, the Department of Social, Community and Family Affairs, the Department of Enterprise, Trade and Employment (resumed) and Mr. Tansey’s report for the Committee on the difference between the labour force survey and the live register.

The Committee adjourned at 1.15 p.m. until 10 a.m. on Thursday, 1 April 1999.

APPENDIX 1 - WITNESSES EXAMINED

11 February 1999

25 March 1999

APPENDIX 2 - RELEVANT CORRESPONDENCE

1.Correspondence dated 29 October 1997 from Deputy Dick Roche

2.Correspondence dated 13 July 1998 from Deputy Dick Roche

3.Correspondence dated 24 September 1998 from the Committee to the Tribunal of Inquiry into Certain Planning Matters and Payments

4.Correspondence dated 15 October 1998 from the Tribunal of Inquiry into Certain Planning Matters and Payments

5.Correspondence dated 8 January 1999 from Deputy Dick Roche

6.Correspondence dated 14 January1999 from Deputy Dick Roche

7.Correspondence dated 12 February 1999 from Deputy Pat Rabbitte re Blessington Heritage Trust

8.Correspondence dated 23 February 1999 from Department of Marine & Natural Resources

9.Correspondence dated 3 March 1999 from Department of Finance

10.Correspondence dated 4 March from the Committee to Tracey Enterprises Dundrum Ltd

11.Correspondence dated 5 March 1999 from the Committee to Blessington Heritage Trust

12.Correspondence dated 8 March 1999 from Tracey Enterprises Dundrum Ltd

13.Correspondence date 8 March 1999 from Roadstone Dublin Ltd.

14.Correspondence dated 9 March 1999 from Tracey Enterprises Dundrum Ltd

15.Correspondence dated 11 March 1999 from the Committee to Tracey Enterprises Dundrum Ltd

16.Correspondence dated 18 March 1999 from Tracey Enterprises Dundrum Ltd

17.Correspondence dated 23 March 1999 from the Committee to Tracey Enterprises Dundrum Ltd

18.Correspondence dated 23 March 1999 from the Committee to Blessington Heritage Trust.

19.Correspondence dated 31 March 1999 from the Department of Marine and Natural Resources.

20.Correspondence dated 31 March 1999 from the Comptroller and Auditor General.