Belfast Telegraph

Ulster water firm may be scrapped

A troubled water company at the heart of a long-running investigation into the awarding of contracts could be scrapped, Northern Ireland's regional development minister warned today.





Conor Murphy said Northern Ireland Water's (NIW) hybrid status as a government-owned company had not served the public well. One option would be to incorporate it back into the department.

At an evidence session today at Stormont, the minister defended his decision last March to sack four members of the under-scrutiny business. An investigation team found that £28.5 million in contracts were issued without the work being properly tendered.

Mr Murphy said: "I do think it has been quite clear that the Goco (government-owned, contractor-operated) idea has not served us well, has left us in a hybrid situation which I don't think is acceptable going forward."

He is in discussions with his officials about how legislation could be passed to bring about the change within the tight framework imposed by next year's Assembly elections. He would need agreement from his ministerial Executive colleagues and there could be funding changes linked to Treasury rules.

The Sinn Fein minister told the regional development committee at Stormont the company had done a good job in upgrading Northern Ireland's ageing water and sewerage systems.

It was announced today that Sir Jon Shortridge, the former permanent secretary of the Cardiff administration, will examine the events that led to the suspension of Paul Priestly from the Department of Regional Development last month.

The action against Mr Priestly came after claims he drafted a letter of complaint to a powerful Stormont scrutiny committee that was sent by one of a team of independent investigators probing the business of NIW.

The incident that prompted Mr Priestly's suspension related to later exchanges between one of the investigators and the Public Accounts Committee (PAC), which was also investigating the NIW affair.

Phoenix Gas chief executive Peter Dixon was unhappy with the tone and direction of some of the questions he faced from PAC members in July and wrote a letter of complaint.

While that letter was later withdrawn, it has emerged that Mr Priestly had offered Mr Dixon advice on the form the letter should take.

The head of the Northern Ireland Civil Service, Bruce Robinson, who suspended Mr Priestly, said Sir Jon cannot start work immediately due to other commitments but will begin his investigation in October, and should be finished by the end of that month.

The 63-year-old father of two held the top post in Cardiff from 1999 to 2008.

He is currently chairman of the Audit Panel of Cardiff County Council and a council member of Cardiff University.

Mr Murphy said there had been a frenzy of media and cyberspace leaks about events at NIW but added that he stood by any decisions he had made.

The sacked NIW board members included chairman Chris Mellor, Ruth Thompson, Declan Gormley and John Ballard.

The minister was asked about an alleged link between NIW chief executive Laurence MacKenzie and Mr Dixon from the independent team reviewing the company's performance but Mr Murphy said he was satisfied the group's independence had been preserved and it had access to the information it needed.

The review team found that there had been a "serious breakdown in the governance and control framework" of the company.

It identified 24 contracts where appropriate governance procedures "had not been followed".

The team also established a breakdown in relations between the board of NIW and Mr MacKenzie, who raised the matter with the minister and offered to resign.

Mr Murphy said issues surrounding the former board justified his action.

"I think the extent of them pointed to me to a failure of governance and a failure of carrying out responsibilities for which people were being paid for being on the board of NIW," he said.

"They were appointed by me on behalf of the public to protect the public interest in NIW."

He added: "Ultimately the buck stops with the people appointed."

The minister spoke for two hours about events at NIW.

Drafts of the report were available to members of the Department for Regional Development, but the minister said he did not see it until the final version was submitted last February.

Democratic Unionist committee deputy chairwoman Michelle McIlveen asked: "Given the enormity of this report and the potential consequences of it, that you had no knowledge and sight of it in advance of it coming to you in final form?"

The minister said that would not be unusual.

SDLP MLA Conall McDevitt asked the minister to produce all drafts of the report and said the issues raised serious concerns.

Sinn Fein MLA Willie Clarke said NIW should be incorporated back into the department.

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