Banks to pay €6m for full cost of Army escorts

The main banks across the Republic are to pay some €6 million to the Government next week to cover the cost of cash escorts provided by the Defence Forces last year.

A spokeswoman for Minister for Defence Willie O'Dea said this would be the first time the banks have had to pay the full cost of escorts.

The payment follows an agreement reached last summer between Mr O'Dea and the Irish Bankers' Federation.

Previously the banks paid only about 42 per cent of the cost of cash escorts by the military. This amounted to €2.8 million a year.

The Minister's spokeswoman said the €6 million to be paid in mid-January would go into the general Exchequer and would not be ringfenced for Defence purposes.

Under the terms of the agreement with the Irish Bankers' Federation, the Government can seek recovery from the banks of costs incurred by military personnel.

These include pay and allowances, including PRSI and pension contributions and subsistence, as well as transport mileage costs for vehicles.

The Government can also seek repayment from the banks of the cost of providing aerial surveillance. The current agreement will run for five years.

The Department of Justice has a separate system to recover costs incurred by gardaí providing escorts.

At the time of the agreement, Mr O'Dea said that in any given month, at least 1,600 Army personnel days were spent on providing cash escorts.

In 2003 the Army provided 2,335 escorts. About 80 per cent of these covered deliveries to banks and the other 20 per cent were to post offices.