PAC Meeting: April 23, 2015
Re: Procurement by the Health Service Executive
Those called and examined included Mr. Tony O'Brien (Secretary General), and Mr. Pat Healy (national director of social care), HSE.
Deputy John Deasy: I will start with Mr. O'Brien's opening statement and the section dealing with procurement practice in establishing inquiries. He said "inquiries are often urgent and the time periods for open tendering do not permit the conduct of a tender process in circumstances where the establishment of an inquiry is urgent."
The issue with which we are dealing concerns the alleged sexual abuse of mentally disabled children. It has been alleged that there were dozens of children involved. The allegations date back about 24 years.
I have looked at this issue inside out and there was no urgency in dealing with it. In fact, it was the exact opposite. There was resistance to dealing with it, from start to finish, within Mr. O'Brien's organisation. To actually characterise any of it as being "urgent" in any respect within the organisation is false.
On the tender process, Mr. O'Brien said inquiries were related to sensitive issues which it would not be appropriate or even permissible in some cases to discuss or publish for the purposes of an open tender process. I wish to delve into that specific point initially with the staff from the Office of Government Procurement at the Department of Public Expenditure and Reform who are present. It might also be worthwhile seeking the opinion of the Comptroller and Auditor General on what Mr. O'Brien said about the reasons this was not put out to tender.
A couple of things really strike me. Mr. O'Brien has said the necessary expertise was not available in Ireland, but how does he know that if it was not put out to tender? Tenders are not just about cost, they are also about getting the appropriate person with the appropriate skills set, but there was no attempt to do this.
When it comes to the rules on contracts, the relevant regulation is No.32 of the EC (Pubic Authorities Contracts) Regulations which permit awarding authorities to engage in a negotiated procedure without a call for competition in exceptional circumstances.
Was there a negotiated procedure when it came to Resilience Ireland and Mr. Conal Devine? Was the Office of Government Procurement involved in the negotiated procedure with the HSE in this regard? I ask Mr. Ryan and Mr. Bresnan to indicate whether that was the case.
Mr. Karl Ryan (Office of Government Procurement): We were not actually involved in that process. The Office of Government Procurement was not involved in the tendering process which was handled by the contracting authority. The general position is that our guidelines require a competitive process. That should be the norm when purchasing or awarding contracts, except in duly justifiable cases.
Deputy John Deasy: Therefore, there was no negotiated procedure. Is that correct?
Mr. Karl Ryan: Correct.
Deputy John Deasy: The other thing that really struck me about his opening statement was that Mr. O'Brien said the expertise required was not readily available in Ireland, but the HSE ignored the expertise available within the organisation. That is why we are in this position. The in-house experts were continually ignored.
Senior social care officers were continually ignored, which is the reason we have ended up in this position. Frankly, the last line of the statement is insulting, where Mr. O'Brien refers to the two whistleblowers who had made protected disclosures and says, "neither has ever held management responsibility for service delivery-----
Mr. Tony O'Brien: I am sorry, but I must interrupt the Deputy. I am not referring to the whistleblowers but to the two people procured through Resilience Ireland. I hope the Deputy will forgive my interruption.
Deputy John Deasy: Fair enough, but I put it to Mr. O'Brien that this has come about because the two individuals who blew the whistle were not in management...
I will go back to the issue of urgency. The two whistleblowers who made protected disclosures contacted their senior managers in September or October 2009, but they were ignored. They were then forced to go to the Department to make protected disclosures. A report was commissioned in March 2010, approximately four or five months after the protected disclosures had been made. It took two years to finalise the report, but at the time of its initiation, it was announced that it would take eight weeks. There was no urgency - absolutely none. We must remember that the allegations date back to 1992.
Regarding investigations, persons involved in the health care system and the health boards then in place reported what they felt were improper practices in the foster home mentioned by Mr. O'Brien. When he uses the word "urgency", I do not take him seriously because there is absolutely no evidence that urgency was shown in any of this. The report was then sent to An Garda Síochána. When was it officially sent to the Garda? When did it first get sight of the report finalised by Mr. Conal Devine?
Mr. Tony O'Brien: I will ask my colleague, Mr. Healy, to answer that question.
Mr. Pat Healy: I am not sure of the exact date, but a redacted version of the report was provided for An Garda Síochána. It has been fully advised-----
Deputy John Deasy: I asked when the report was given to An Garda Síochána.
Mr. Pat Healy: I do not have the exact date.
Deputy John Deasy: Come on - do not start the "I don't know" business. Mr. Healy is the one in charge.
Mr. Pat Healy: I do not have the exact date.
Deputy John Deasy: This is very serious stuff.
Mr. Pat Healy: Absolutely.
Deputy John Deasy: In the past couple of weeks Mr. Healy was well able to tell An Garda Síochána that the report would be published "soon" and asking for its comments. This issue has been hanging around for years and when Mr. Healy knew he was coming here and that this issue was going to come up, he was well able to contact An Garda Síochána.
Mr. Pat Healy: Let me clarify a few points.
Deputy John Deasy: Can Mr. Healy tell me in what year An Garda Síochána was given the report?
Mr. Pat Healy: The report was concluded in March 2012.
Deputy John Deasy: I said that.
Mr. Pat Healy: There was engagement between the chairman, Mr. Conal Devine, and the Garda on the issue of whether the report could be completed. The reason there is confusion is that during the undertaking of the investigation, the Garda Síochána asked that there be a pause on it because of the work it was undertaking.
There was ongoing engagement between the chair of the investigation team and the Garda Síochána and, subsequently, he was able to continue his review. He sought and received clearance to complete the review and publish the report.
Subsequently, in light of additional information that became available to the Garda Síochána, an investigation was opened and continues today. In that context, there has been movement over time about whether there was clearance to publish the report. In relation to the current position, we have-----
Deputy John Deasy: Can I stop Mr. Healy there? This is a question for both witnesses. I am going back to the opening statement.
Mr. Pat Healy: Can I just clarify the situation with regard to the Garda Síochána?
Deputy John Deasy: Hang on now. I want to get to the bottom of this as far as I can. I will encapsulate it. The process began in September 2009. Two weeks ago, the HSE contacted the Garda Síochána to ask for its comment before publication.
It is now April 2015, almost six years on. Where is the urgency with regard to the protected disclosure that was made? Why has it taken so long to get to where we are now? How can Mr. Healy possibly characterise this, in any sense, as urgency?
Mr. Tony O'Brien: My comments about urgency in the opening statement are clearly addressed to the issue of procurement at the time of the investigator and the exemption from procurement requirements that attached to it. My comments relating to urgency do not extend back to 1992 or forward from the point of view of the procurement time. My comment about urgency is very specific.
Deputy John Deasy: When did Mr. Healy find out about these allegations?
Mr. Pat Healy: I found out about them in late 2009 and early 2010.
Deputy John Deasy: What position was Mr. Healy in at that time?
Mr. Pat Healy: At the time, I had just been appointed as regional director for the south, and my previous post was as assistant national director for community services in the south. Someone had been appointed to that role on an interim basis.
Deputy John Deasy: Mr. Healy did not know anything about this when he was in that position and was not aware of these allegations dating back to the 1990s?
Mr. Pat Healy: I was not aware of the allegations. They became known at corporate level. There were protected disclosures in late 2009, but there were three disclosures over a period from late 2009 to early 2010 and they were notified to our authorised officer who deals with this.
Immediately after it happened, engagement took place with those who had made protected disclosures and the work in establishing an investigation commenced immediately. In the note submitted to the committee, I mentioned that the preparation to undertake an investigation commenced immediately. The discussions with Mr. Conal Devine were undertaken by the authorised officer.
Deputy John Deasy: They were not started immediately. The people who brought this up were ignored for months before anything was done. They had to go and make a protected disclosure because the HSE ignored them and stonewalled them.
Mr. Pat Healy: The point I am making-----
Deputy John Deasy: No. This started with a particular senior social care worker who was employed in 2007 and started looking at the cold cases. He started going back to old files and found certain issues that concerned him gravely. He brought up these issues and the HSE management ignored him.
Then he felt compelled to make a protected disclosure, and he was not the only one. Six years later, here we are, and the report has not been published. I will keep going with the people contacted to do these reports, one of whom is a former HSE employee. Mr. Ger Crowley certainly is. Does Mr. Healy know Mr. Crowley?
Mr. Pat Healy: I did not contract anyone on this.
Deputy John Deasy: At a workshop held by Mr. Crowley in September 2014, he said that Mr. Healy had phoned him directly in May 2014 and asked him to write the policy.
Mr. Pat Healy: That is a different issue and concerns safeguarding policy. With regard to this review-----
Deputy John Deasy: That is what I am talking about-----
Mr. Pat Healy: The Conal Devine report was initiated by the authorised officer nationally-----
Deputy John Deasy: Does Mr. Healy know Mr. Crowley professionally and has he known him for years?
Mr. Pat Healy: He was a colleague at one point.
Deputy John Deasy: Is it appropriate to ask a colleague to deal with something as sensitive as this - someone who has worked in HSE apparatus?
Mr. Pat Healy: The report by Resilience, which he works for now, was commissioned locally in the south-east area.
Deputy John Deasy: Is it appropriate that the HSE commissioned someone who was a former employee to deal with something like this?
Mr. Pat Healy: It is important that the procurement rules and rules about former employees are followed, and they were in this case. The individual in question works for a company that was contracted to undertake the work and is in full compliance with the rules.
Deputy John Deasy: That is a real bureaucratic answer if ever I heard one. I will start with taxpayer. How does the taxpayer get value for money when someone contracts individuals he is familiar with to do the work?
I will repeat that we are dealing with allegations of the rape of mentally disabled children in a foster home. The allegations centre around not one but potentially dozens of people. How does HSE continue to contract people who had worked in the organisation for years, knew the people who were in management in the south east region and had had contact with them over years? Who in their right mind would consider that independent?
I have nothing against Mr. Conal Devine but I have been dealing with the families who dealt with Resilience and the process was appalling. I have never come across anything like this and I have been a public representative for 16 years. The process is a sham.
Mr. Pat Healy: The limitations of what I can say today about the inquiries mean that when both reports are published-----
Deputy John Deasy: I asked Mr. Healy a question about the appropriateness of hiring people who are former HSE employees to deal with allegations that go back to the 1990s. There must be an answer for that. Mr. Healy cannot just sit there and say that they are in compliance.
Mr. Tony O'Brien: In the 1990s, Mr. Crowley was an official of the Mid-Western Health Board and had no connection with the services in the south east.
Deputy John Deasy: Stop. Mr. O'Brien must be kidding me. He worked in HSE. This is absolutely absurd and Mr. O'Brien cannot stand over it, given the gravity of the allegations made over the course of 20 years...
Mr. Tony O'Brien: Does Deputy Deasy want an answer?
Deputy John Deasy: I am not sure I am going to get one, but I ask Mr. O'Brien to go on.
Mr. Tony O'Brien: I asked the Deputy if he wants an answer.
Chairman (Deputy John McGuinness): I want one.
Mr. Tony O'Brien: I thank the Chairman. I can speak with an independent mind about what happened in 2009, because I was not in the HSE when any of this was done in 2009. Given the range of requirements, it is not appropriate to automatically suggest that someone who worked in a different part of the system for most of his career, not in HSE at all but in its predecessor bodies-----
Deputy John Deasy: That is what I thought Mr. O'Brien would say. I am talking about the appropriateness of the HSE doing it in the first place and not the individuals and their professional integrity.
I am talking about the concept of employing people and tendering contracts as sensitive as this to people who are former HSE employees. It is absurd. I do not believe Mr. O'Brien's assertion in his opening statement that the expertise does not reside in Ireland. I do not think the HSE tried.
Mr. Tony O'Brien: The statement does not say that. Clearly the expertise resided in Ireland, because this individual-----
Deputy John Deasy: The reason they were picked was because nobody else at work in the HSE had that expertise.
Mr. Tony O'Brien: I understand that the purpose of having witnesses is that they can answer questions. The Chairman wants to hear my answer. I understand that the Deputy is unhappy about the situation and I understand why, but the reality is that the particular set of skills required to carry out an investigation like this are not widely available and when-----
Deputy John Deasy: How would Mr. O'Brien know if he did not tender it?
Mr. Tony O'Brien: Would the Deputy let me answer the question?
Deputy John Deasy: I have asked Mr. O'Brien this before and he did not answer the question. How could he possibly know that the expertise did not exist if the HSE did not put it out to open tender? He would have absolutely no idea whether the expertise existed if it was not publicised.
Notwithstanding the sensitivity he just mentioned, how would he know? The reason Mr. O'Brien and the organisation did not make an attempt to do this was because there was a comfort factor in finding individuals known by the senior officials in the HSE to deal with this. This stems back to 1992. It was 17 years previous to this commissioning of the report, in terms of Mr. Conal Devine, that these issues arose.
Surely there was an urgency within the HSE to take it out of the HSE and deal with this independently. There was never an attempt to do that - it remained in the fold and the fold got stronger.
Mr. Tony O'Brien: To reiterate, I was not involved and I was not in position so, I hope, I am taking an objective view. Conal Devine was not part the HSE. His piece of work was directed specifically at the specific allegations. The secondary decision was to have a broader look back.
The skill sets that the individuals have is an appropriate skills set and I told the committee what the exemptions are under EU procurement. Clearly, the Deputy is not happy with that situation. I am simply putting forward the rationale for the decisions that were made at the time and I do not believe there is any basis to question the integrity of the individuals concerned, particularly those whose names have been mentioned today.
Deputy John Deasy: Mr. O'Brien is the one putting those words in my mouth. I am not questioning the integrity of any individuals, I am talking about HSE procedures. This is the Committee of Public Accounts.
Surely we are allowed to ask about procurement procedures and whether it is appropriate to hire people who are former HSE employees - Mr Crowley, as was said, and not Mr. Devine. Is it appropriate to do that in cases like this? It is not and Mr. O'Brien would have known that. He would have known the history of this issue going back to 1992 and, institutionally, people would have understood the allegations that had been made back in 1992 and 1993.
Chairman: Deputy Deasy, allow Mr. O'Brien to answer the specific questions that you have put to him.
Mr. Tony O'Brien: What I can tell the committee is that those who were charged with making these decisions at that time would have been aware that there was no basis upon which they could exclude persons merely because they were former employees of the health system, particularly in circumstances where they never, ever held an operational role in that part of the country.
Deputy John Deasy: In other words, Mr. O'Brien does not have an answer to the point I raise which is the inappropriateness of employing people when it came to Resilience Ireland. It was not just Mr. Crowley, but Mr. Drohan and Mr. O'Dwyer.
There were plenty of former HSE employees involved in this. This is endemic. It is just unbelievable. In terms of investigations, one name that comes up is a Mr. Tennant, who is recommended by HSE staff when it comes to section 39 bodies. It is par for the course - that is what the HSE does and has done for years. It employs former employees to deal with these issues. It was not once or twice.
I am not questioning their integrity but am talking about the HSE's unbelievably, incredible, illogical procedures when it comes to procurement and tendering these contracts when it comes to issues like this.
I remind Mr. O'Brien of a couple of things that occurred. In the case of one girl who was placed in placement, there were significant concerns of abuse back in the 1990s which led to a number of Garda inquiries. Files were submitted to the DPP. After a decision was made that it was in her best interests to be removed owing to allegations of sexual abuse, the child was left in that foster home for 13 years.
That was in the 1990s. Nobody has ever been sacked or disciplined. The decision was reversed. The senior care worker - Mr. O'Brien knows his name - arrived on the scene ten years later and went back over the files, making his disclosure in 2009. Here we are six years later. There have been news reports about this but they have been scant.
As Mr. O'Brien knows, it has been on RTE's "Prime Time Investigates". The big finger of the HSE points at people who try to air this, which is worrying when it comes to an organisation like the HSE.
There are other questions regarding the costs involved here which are directly related to the Committee of Public Accounts and the case of that girl. A fully funded residential bed, held open for two and a half years for the client in question at a cost of €120,000 per annum, was never used.
The costs with regard to Mr. Devine and Resilience Ireland came to a couple of hundred thousand euro. There were five legal firms involved, also. I believe the committee should be given the amounts involved in the costs of those legal firms.
Chairman: Has Mr. O'Brien got those costs?
Mr. Pat Healy: We have the costs involved and they can be provided to the committee. I will have them sent on.
Chairman: Can Mr. Healy give them to the committee now?
Mr. Pat Healy: I do not have the specific detailed costs here but they can be provided. Two firms were involved. From a corporate point of view, Arthur Cox was involved in more recent times. Local firms were used by the local team when involved in this.
In any investigation of this order, the investigation team itself has to be provided with legal advice separate from the HSE, so we use our own corporate lawyers, Arthur Cox. When the investigation was undertaken and the completed report was circulated for due process and fair procedure, there was correspondence from lawyers of some of those who received extracts, and that had to be engaged with.
To correct the record in respect of two names mentioned by Deputy Deasy, Mr. Tennant and Mr. Drohan. They have never been involved in this in any way. It is important to clarify that.
Chairman: Deputy Deasy was referring to general work done for the HSE.
Mr. Pat Healy: The Deputy mentioned it in relation to this particular issue.
Deputy John Deasy: They are directors of Resilience Ireland.
Mr. Pat Healy: I do not believe Mr. Tennant is a-----
Deputy John Deasy: I am not talking about Mr. Tennant, I am talking about Mr. Drohan and Mr. O'Dwyer. They are directors of Resilience Ireland. Is that correct?
Mr. Pat Healy: The Deputy mentioned Mr. Tennant's name as having been involved-----
Deputy John Deasy: Mr. Healy mentioned two people. The people I mentioned were Mr. Drohan and Mr. O'Dwyer as directors of Resilience Ireland and they are former staff of the HSE.
Mr. Tony O'Brien: The Deputy mentioned Mr. Tennant and Mr. Healy is only making a point-----
Deputy John Deasy: I am not talking about Mr. Tennant being involved in this at all. He is just hired for investigations.
Mr. Tony O'Brien: Mr. Healy was just confirming for the record that Mr. Tennant is not involved in the matter we are discussing.
Deputy John Deasy: I did not say he was, so Mr. O'Brien should not mix it up. I said Mr. Tennant was involved in investigations and he is referred by HSE staff to other investigations. The two people I mentioned in respect of Resilience Ireland are directors and are former HSE staff. Is this correct?
Mr. Pat Healy: I do not believe-----
Deputy John Deasy: Mr. Healy does not know.
Mr. Pat Healy: I do not believe Mr. Drohan is a director of Resilience Ireland.
Deputy John Deasy: Does Mr. Healy not know Mr. Crowley or Mr. Drohan?
Mr. Pat Healy: I said to the Deputy I know Mr. Crowley.
Deputy John Deasy: Mr. Healy does not know many people in the organisation of the HSE when it comes right down to it, an organisation he worked in all his life. I mean, this is-----
Mr. Tony O'Brien: I think the Deputy is being very unfair at this point.
Deputy John Deasy: I think this is unbelievable and Mr. Healy is having a laugh. I think he knows all these people. In many respects, the witnesses are the ones who actually hired these people. They knew exactly what their backgrounds were. They knew them intimately, in my opinion.
Mr. Pat Healy: If I could respond to that, Chair.
Deputy John Deasy: Mr. Healy is giving us the impression that he does not know these people. Of course he knows them.
Mr. Pat Healy: Could I respond, Chair? Is that okay?
Mr. Pat Healy: Just specifically in relation to Mr. Crowley, who was, in terms of the look-back exercise, identified by Resilience Ireland as the lead consultant, he was engaged locally by the area manager in that area and, can I say, in looking at it, I have looked at the basis-----
Deputy John Deasy: Mr. Healy was the head of HSE South when Mr. Crowley was hired and he is saying he was hired-----
Mr. Pat Healy: I was not, no. I was not the head of HSE South when he was hired.
Deputy John Deasy: Was Mr. Healy head of community care in the whole of the country or what was he?
Mr. Pat Healy: I was the national director of social care.
Deputy John Deasy: This is relevant. Is it not?
Mr. Pat Healy: But, if I could-----
Deputy John Deasy: Mr. Healy did not know that this guy had been hired at all, did he?
Mr. Pat Healy: No, I did, and I suppose-----
Deputy John Deasy: Did Mr. Healy know Mr. Crowley?
Mr. Pat Healy: It was in the-----
Deputy John Deasy: How long has Mr. Healy known Mr. Crowley?
Mr. Pat Healy: If I could answer, Chairman.
Mr. Tony O'Brien: Can Mr. Healy be allowed to answer any of the questions?
Chairman: If Mr. O'Brien allows me to chair the meeting I will arrange for that.
Deputy John Deasy: Mr. Healy really has no interest in answering these questions whatsoever.
Chairman: That is my job.
Deputy John Deasy: The connections I have are like that.
Mr. Pat Healy: I have looked at the file in relation to the decision-making around the appointment of Resilience Ireland and Mr. Crowley and it speaks, in particular, to the point in relation to section 32 of the EU regulations in relation to the expertise that was required, the expertise that was identified as necessary. It is quite a complex and difficult situation.
Deputy John Deasy: Is Mr. Healy referring to the prolonged discussions that took place with the office of procurement?
Chairman: Deputy Deasy should allow Mr. Healy to answer.
Mr. Pat Healy: I am saying that in relation to the look-back exercise, the expertise that was required was: number one, senior management experience of running inquiries and that capacity; number two, a detailed knowledge and expertise in relation to disability and child care services; number three, a knowledge of safeguarding, which has significantly changed over recent years; and number four, an actual professional expertise in relation to social work.
Now, it is the rare individual who actually has all of those capacities. In this individual, one has someone who actually led the Madonna inquiry in Ireland, which gave rise to the basis of the establishment of the social care inspectorate.
He has been involved in, and led, on behalf of the regional health boards at the time, the child care guidelines, Children First. He was a key player in implementing that. He is currently a registered social worker. He was a head social worker for the mid-west for 12 years.
Deputy John Deasy: I know this. I have gone through all of that.
Mr. Pat Healy: One of the key pieces of both this-----
Deputy John Deasy: But I-----
Mr. Pat Healy: Can I explain as to the-----
Deputy John Deasy: The funny thing is that the question I asked Mr. Healy was: does he know this man and does he know him well?
Mr. Pat Healy: Can I finish the point I was making?
Chairman: Yes, please do, Mr. Healy.
Mr. Pat Healy: The point about it is that when one takes of all of that together, that is, in one individual, the expertise required.
Deputy John Deasy: I know plenty of people with great CVs.
Mr. Pat Healy: Over 40 families had to be met-----
Deputy John Deasy: I know tonnes of people with wonderful qualifications. It is not the point I am making. It is not the question I am asking.
Mr. Pat Healy: Sorry, Chair-----
Chairman: What is the question Deputy Deasy is asking?
Deputy John Deasy: The question I am asking is: how familiar was Mr. Healy with Mr. Crowley when he was hired?
Chairman: Let us take that question then.
Mr. Pat Healy: I was not involved in hiring-----
Deputy John Deasy: I did not ask Mr. Healy-----
Mr. Pat Healy: I know him. His reputation is well-----
Deputy John Deasy: Did Mr. Healy know Mr. Crowley well when he was hired at that time?
Mr. Pat Healy: I know Mr. Crowley and his reputation. I am just outlining for the Deputy, he is well known within the health service. His reputation is very significant. The point I was trying to make was that a key piece here was that a clinical team had to go to meet very sensitively and in line with a protocol from the gardaí, in line with data protection and in line with legal requirements all of these families. He supervised, and had the professional capacity to supervise, that work.
Deputy John Deasy: The witnesses all knew these people. That is my point. They should not have been hired for that reason considering what we were dealing with here. It was inappropriate. It was wrong. I know plenty of people with good CVs and great qualifications. It was completely wrong for the HSE to hire former employees to deal with something that had existed since 1992. By the time they made their protected disclosure it was 17 years later. Surely, one would have copped on by that point that there was something wrong.
Mr. Pat Healy: I believe that the report when it is published will actually-----
Deputy John Deasy: In my opinion-----
Chairman: Is Deputy Deasy finished?
Deputy John Deasy: No, I am not. Over the course of 23 years, the HSE failed to deal with this issue. Over the course of many years in the 1990s, the HSE failed to protect these children. Mr. O'Brien may not have been in the health board but the organisation that he is head of now failed to protect these children and I think it is incredibly serious.
I think it is a dereliction such as I have never seen before. It is absolutely amazing stuff. Management that presided over this case had left by the time this inquiry had been completed; they are gone to places like Tusla, the Child and Family Agency. I think everybody who was involved in a senior management position between the early 1990s to date needs to be investigated.
I think that, considering what I know, and what I think the Chairman knows, and considering the interaction we have had with the families, the social care workers who were involved in this and the gardaí, this needs to be taken out of the HSE's hands completely. I do not think the HSE has a role in this whatsoever any longer.
I do not think the HSE can be trusted to actually look at this independently. I think the HSE has failed miserably when it comes to the review of this and the investigation of it, regardless of the reports the witnesses have commissioned by their friends.
I think there needs to be a commission of investigation conducted under the appropriate legislation and I think the Minister for Health should look at it immediately with other members of the Government, and I think it should be taken out of this completely now. The HSE has mishandled this for 23 years. It is astonishing. That is it for now.
PAC Meeting: April 16, 2015
Re: Broadband infrastructure
Mr. Mark Griffin (Secretary General, Department of Communications, Energy and Natural Resources) called and examined.
Deputy John Deasy: I will tag onto what the Chairman has mentioned and what Mr. Griffin spoke about with regard to the national broadband plan.
Mr. Griffin has only been in place for a year and a half and I have not had an occasion to question him at this committee. Leaving the historical issues behind, something which I believe will define his time as Secretary General will be how successful he is in rolling out the national broadband plan.
I wish to ask about the way it was announced and is being operated in the Department. Rural areas with smaller population densities, or with fewer than 900 people, are not seen as economically viable. We have what is called State intervention on one hand, and I hope the commercial operators will actually provide the crossover so we will cover 96% or 97% of the entire country by 2020.
The mapping process was published last November, pinpointing the geographical areas requiring State intervention. The public consultation process on the accuracy of the maps closed for submissions in February of this year.
In my constituency, it is estimated that approximately 29% of the entire land area will not be covered by the commercial operators. The area has 17,000 or 18,000 households. In the past four or five years, in particular, and for longer in certain locations, including coastal villages such as Bunmahon and in Kill, broadband is the major issue for people with businesses. People who want to start businesses cannot get a proper broadband service.
I understand that the Department was meeting telecommunications companies in February and March of this year. I want to find out how much on schedule the Department is with regard to rolling out the project.
How is it going? I understand Vodafone made its announcements yesterday or the day before. It is in competition with Eircom. How is this going? What is the timeline considering what the witnesses announced, and what is the current position?
Mr. Mark Griffin: The project is going very well. I will come back to the specific points the Deputy raised, because they are very important, but I will take the last point as an example and knit it into the broader discussion we have had today about project governance.
We have a very effective and robust project governance arrangement in place for the national broadband plan. I refer to a formal project plan setting out critical paths, milestones, deliverables, resources, funding, risks and issues, steering groups with the appropriate governance, financial, administrative and technical expertise, checkpoint meetings, risk and issue management and change request systems.
To pick up on the point raised [earlier] there is a reference to regular reporting to senior management. I am briefed on this very regularly. I have two meetings scheduled, for tomorrow and Monday, to go through some of the funding and cost-benefit analysis issues. The Minister is briefed on a very regular basis and is very much in command of where the project is at and where we need to go.
Obviously, we discuss it at the management advisory committee meeting we have with the Minister every four weeks. We also buy in external expertise to advise on key aspects of some of the projects, such as the CBA stuff, funding options, procurement and so on.
Deputy John Deasy: That was going to be published in July. Is that correct?
Mr. Mark Griffin: It is still on track. The intervention strategy is to be published in July for the consultation process. Work on the issues around funding, the cost-benefit analysis, the ownership model and all the technical work is under way and nearing completion. The intention is to go to tender towards the end of this year, with the first elements of the roll-out to commence in 2016, with the aim of completing the project in 2020.
As the Deputy knows - he is very familiar with the maps - one is talking about the intervention area the Government has to manage, covering 96% of the land mass of the country. It covers approximately 750,000 properties. If my memory serves me correctly, there are about 80,000 farm holdings within that. This is a big prize; it really is.
I have a number of key priorities that the Department will be dealing with over the next couple of years. I would set that up as among the top one or two. All the resources that are required in the Department to deliver that and any external resources we require to back us up are being put in place.
I am very comfortable about the governance arrangements in place for the management of the project. A very significant block of work that we have commissioned from external consultants concerns what governance arrangements need to be in place for the project for the five-year period. Also to be determined are the governance arrangements that need to apply, perhaps for a longer period, over a contract term.
Deputy John Deasy: Some of this was dependent on European Investment Bank, EIB, funding. What is the story with that?
Mr. Mark Griffin: We are looking at a range of funding options. We have a commitment of €75 million from the ERDF and we have been in touch with the EIB. We had been in touch with the Ireland Strategic Investment Fund and we have also been in touch with external private commercial lenders, as have some of the companies. Therefore, all that work is ongoing.
Deputy John Deasy: In rolling this out, Mr. Griffin is talking to funding entities, but he has not reached any resolution with them. I refer to the EIB, the Ireland Strategic Investment Fund and private equity.
Mr. Mark Griffin: I expect that to come to closure over the next couple of months. Obviously, we will need to be in discussion, as we are, with the Department of Public Expenditure and Reform in the context of the Estimates and multi-annual capital programme in relation to whatever level of Exchequer investment is required to fund the programme.
Deputy John Deasy: People have been let down time and again over the past ten years, particularly in the area I am from, which is rural Waterford. I worry when I hear Mr. Griffin saying the funding has not been put in place for something that has been announced.
It has been announced that it will be completed by 2020. This is a fair point. We are dealing with public money here and talking about public expenditure and reform. There is no funding secured for this project as of now beyond what the Department of Public Expenditure and Reform will give.
Mr. Mark Griffin: Beyond what the ERDF has committed to. There is strong Government backing for this project. Before the final-----
Deputy John Deasy: That is not quite what I asked.
Mr. Mark Griffin: I know that.
Deputy John Deasy: This is important. I am asking questions that I am not sure I can answer any longer.
Mr. Mark Griffin: Yes.
Deputy John Deasy: I have been asking them for far too long. There is too much riding on it. As Mr. Griffin said, this project is his priority as Secretary General for the next few years. This is why I am asking him about this. It is defining in regard to his role in the Department. We do not have the funding in place to roll this out right now.
Mr. Mark Griffin: There is a block of work to be completed first regarding the estimated overall cost of the intervention. In parallel with determining that, we need to assess what the available funding options are. Some of that will be commercial through the EIB, potentially through the ISIF, and obviously the companies that bid will place a strategic value of the investment.
Deputy John Deasy: There is no guarantee that they will tender.
Mr. Mark Griffin: I have no doubt whatsoever that they will. Our contacts suggest there will be a strong level of interest in it.
Deputy John Deasy: What is the problem with the strategic investment fund? It is well publicised these days. It is so under-subscribed it is not funny. There is a fund of €5 billion or €6 billion, but very little of that - just over €104 million - has been taken up. What is the problem in accessing the funding?
Mr. Mark Griffin: I do not believe there is an issue. Obviously, the fund will lend on commercial terms and will want to make sure all the i's are dotted and t's crossed in terms of the work we need to complete to feed into that.
However, that work is very well advanced. We have a number of draft reports from the consultants at this stage which should allow us to close out substantively on aspects of that.
Deputy John Deasy: The Department is finishing its intervention strategy in July.
Mr. Mark Griffin: Yes.
Deputy John Deasy: It is meeting the companies in the meantime.
Mr. Mark Griffin: We meet companies on an ongoing basis.
Deputy John Deasy: Given my perspective on the Department, my understanding of what we are dealing with today and the fact that I agree with Mr. Griffin as far as the historical issues are concerned, I believe this project is the big issue and the big-money item that the Department will be dealing with for the next four or five years. It worries me slightly that the funding is not in place yet for something that has been announced many times. We should keep tabs on this.
Mr. Mark Griffin: In any project, there are several stages of planning before the final commitments around a number of things. I would like to think we have the bulk of the planning work done and that, over the next few months, we will be in a position to call it in relation to some of the key issues the Deputy has outlined.
Deputy John Deasy: The physical roll-out of this was planned for late 2016. Are we on track with regard to the beginning of that physical roll-out?
Mr. Mark Griffin: Yes.
Deputy John Deasy: Will it be late, middle or early 2016?
Mr. Mark Griffin: Realistically, we are talking about the second half of 2016.
Chairman: The Department is before us in three weeks' time.
Mr. Mark Griffin: The committee will have many more opportunities to quiz me on this and a range of other things.
PAC Meeting: April 2, 2015
Deputy John Deasy: The essential part of this for the past ten years has been the money we put into Irish Aid and the systems within the Vietnamese Government's structures of accounting for that. We felt comfortable about its practices but that will be part of the report we do and the findings.
It probably should be mentioned that a director from the Comptroller and Auditor General's office accompanied us to go through the controls within the Vietnamese Government's systems. That will be part of the report we compile. It is important because this involves a great deal of money. That should be included as well...
I will develop the trade element... particularly the export of dairy products. The current value of Irish dairy exports is €1.6 billion, but the market for liquid milk and milk ingredient products in Vietnam is worth $6 billion.
That market has not been tapped into by Ireland in any great shape or form. It became an inescapable fact that much work needs to be done in this area. A lot has happened since we returned home.
The draft report has been compiled and will issue to members in due course. We came to the conclusion that we need more personnel from Bord Bia and Enterprise Ireland on the ground in Vietnam.
With the ending of milk quotas and the free trade agreement being hammered out between the European Commission and the Vietnamese, this is timely. We have had conversations with the Minister for Agriculture, Food and the Marine since our return.
He has spoken to the Department of Public Expenditure and Reform and agreement has been reached to fund additional personnel in emerging markets.
The Minister has agreed in principle to use some of that money to fund an individual from Bord Bia in Vietnam to promote the food and dairy industries specifically. From that standpoint, the work we did with the embassy will bear some fruit.
It became inescapable after being there just for a few days the kind of market that has begun to open in Vietnam, with a lower middle class income range emerging there.
It is important we spread our risk effectively when it comes to the dairy industry outside China. The free trade agreement that will be hammered out between the European Commission and Vietnam does not just affect Vietnam but also acts as a gateway to the Association of South East Asian Nations, ASEAN, countries, with a population of approximately 630 million people.
The Kerry Group has been working in Vietnam and will make an announcement when it comes to a very tiny slice of the milk industry there. It has a collaboration with an indigenous company and that is really the first kind of enterprise that has taken hold in Vietnam with an Irish-owned company.
Bord Bia's presence is in Shanghai in China and the comment or criticism from people we met in business circles dealing with food is that all our bets seem to be placed in China.
As a result of what is happening in south-east Asia, the idea is that we need to create a presence outside China. In many respects, Vietnam is the engine in south-east Asia and those people believe strongly that the presence should be in Vietnam.
There is also an issue with regard to where the embassy is located. The commercial hub of Vietnam is Saigon or Ho Chi Minh City and not Hanoi. That is also significant.
There is some precedent in the agricultural sector. The pork market was opened and exports began in 2014. Work has been done within the Department in that regard.
When it comes to the initial step, the timing is right for that funding of an individual or individuals in Vietnam. As we learned, the most significant groundwork for contacts within official and government circles has been done over the past ten years.
It has taken that long for our officials in the embassy to create a very substantial and solid contact network within government circles. The timing is right for these kinds of initiatives because of contacts made over the past ten years.
I will not be mealy-mouthed about the fact that we have helped programmes through Irish Aid over the past ten years and, as a result, this has allowed us access to government circles.
That has proved very productive with respect to government officials and politicians understanding Ireland a little better. We should capitalise on that, and there is a need for us to use those contacts in an area like food and dairy.
That is the conclusion everyone reached, including us, the embassy and the Department of Foreign Affairs and Trade.
Since our return, that issue has been solidified, and I believe it will result in additional personnel from Bord Bia being funded to go to Vietnam.
For that reason, it was a positive trip.
Chairman: I welcome the report. I will ask the clerk to change the foreword to reflect the fact that Deputy Deasy and others contributed in the way they did. I ask that we do some form of press presentation. We can send out a press release and flag the success of the delegation and what has transpired since it returned.
In light of the fact we give €12.25 million in aid, it is important for us to have the right structures to monitor that spend. As has been proven in Vietnam, the structures are there and are being used by other countries which are delivering aid in Vietnam.
From a trade perspective, I cannot agree more with Deputies Deasy and Costello in that having a presence in the country is very important. It can take many years for a business to build a relationship with a partner in parts of Asia and that requires a lot of investment.
The Government should invest, first and foremost, and put its foot forward because having a presence in Vietnam is essential. This is especially relevant when we consider the Chinese economy, which has many advance factories built in Vietnam.
The Chinese are looking at that market and their presence there. All that is based on the cost of labour. It is important, therefore, for us to be in the middle of that economic activity.
Having people on the ground means they might look at the markets other European countries are exploiting such as Taiwan. We have raised this previously with various Departments that have appeared before us.
I am delighted the Deputy managed to visit some schools and industry and that he met some project leaders on the ground, which was very important. As was the case in other visits, time was taken to look at the disability and research sectors.
I support Deputy Costello's view on trade missions. It is important we have a full trade mission to Vietnam. I thank Deputy Deasy and the other members of the delegation for their work there and their work since they returned. We should continue to highlight the aid programme and the strong possibilities for trade as we do our work.