'I don't do public projects for the money,' Laura Magahy told the PAC. But the financial terms of her contract were extraordinary, writes Frank McDonald, Environment Editor
Laura Magahy could hardly have enjoyed the three hours she spent yesterday at the Dáil Public Accounts Committee.
The one-time "Ms Temple Bar" was under pressure to explain her success in winning €127,000-a-month contracts for two major State projects - Sports Campus Ireland and the Digital Media Hub.
Apparently, it had nothing to do with the fact that she has known Paddy Teahon - the man who was in charge of both projects, at least until last week - for the past 12 years.
"We won all contracts on merit and I resent any implication that we landed them as a result of knowing Mr Teahon," she said in response to questions from Labour Party TD Mr Pat Rabbitte.
"I don't do public projects for the money," Ms Magahy declared, after hearing Mr John Purcell, the Comptroller and Auditor General, suggesting that her company's contract with Campus and Stadium Ireland Development Ltd (CSID) could be worth up to €12 million.
This figure was based on estimates of what the Abbotstown project might cost.
Right arm raised in the air, the former Secretary General of the Taoiseach's Department, leaped to her defence.
He said he was not the only person who had made the decision in August 2000, to award the contract for executive services for Abbotstown to Magahy and Company - there were others involved, too.
But it was Mr Teahon alone who later negotiated the extraordinary financial terms with Ms Magahy.
Under these terms, the consortium of consultants headed by her would receive a generous 1.8 per cent of the then-unquantifiable final cost of the sports campus which, by their own admission, had grown like Topsy since it was first mooted.
What's more, the penalty for terminating the contract at less than six months' notice would amount to £1.27 million.
No wonder Mr Teahon had to concede that, in hindsight, it might have made more sense if the issue of fees had been included in the original tender for executive services.
Though the contract was advertised in national newspapers and in the Financial Times on April 3rd, 2000, it was not done under European Union procurement procedures or, arguably, under the 1993 rules laid down by the Department of Finance; had fees been part of the tender, it would have had to have been flagged.
"The principles underlying public procurement certainly were not followed" in terms of securing value for money, according to the Comptroller and Auditor General.
Mr Con Haugh, a senior official of the Department of Tourism and Sport who was appointed last Thursday as chairman of CSID, also thought the fees were "quite high".
It was only after eyebrows were raised in the media and civil servants started asking questions that Ms Magahy offered to cap the fees, shared out in a manner she was not prepared to reveal between herself and her team, which includes firms specialising in accountancy, engineering, planning, sport and public relations.
But all the cap had done, according to Mr Rabbitte, was to alter the perception, not the cost, of the executive services contract, which had been described earlier by the Comptroller and Auditor General as "not the most economically advantageous" compared to, say, employing a full-time chief executive and a team of consultants.
Mr Teahon disagreed with Mr Purcell's verdict that the public purse had not been properly protected. He argued that it might have cost more to employ directly all of the experts required to progress the Abbotstown project and that the fees were no more than what architects and other building professionals would charge.
But Barry Murphy, chairman of the Office of Public Works, pointed out that fees for any building project were paid in phases based on specific work done, leaving only 15 per cent outstanding by the time construction got under way.
Ms Magahy told the committee that she expected to conclude talks with the OPW's Seán Benton, CSID's interim chief executive, by the end of next week on a revised contract that would reflect the fact that Abbotstown is "on hold".
She added: "Anyone's guess is as good as mine whether this project will see the light of day or not".