Sierra Where Would You Get It?

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Independent TD for Kildare North, Catherine Murphy in the Dáil last night, above, and, top, Companies Registration Office showing GMC Sierra was registered on July 15, 2013

“Independent TD Catherine Murphy said the Government had failed to answer questions about the granting of the meter installation contracts. Ms Murphy, who has repeatedly raised the issue, asked why a cheaper installation offer from Siemens was dismissed.”

“Why did you choose to accept a more expensive option that required us to borrow from the Pension Reserve Fund with massive interest costs?” she asked.

Ms Murphy also queried how GMC-Sierra was awarded a contract even though it did not legally come into existence until 15 days after the closing date for bids, on June 30th, 2013.”

Good times.

Transcript to follow.

Alan Kelly plugs Irish Water while Opposition criticises (Irish Times)

Previously: Contains Impurities

UPDATE: The transcript of what Catherine Murphy said:

“Here we are today, almost 12 months to the week, that you rammed through the Water legislation and gave us a year of confusion and anger.  A year of one scandal after another. The reason we’re back here is because of ‘old politics’. The type of politics that is about arrogance; a Government using a huge majority to dismiss dissenting voices; a Government taking citizens for granted, cronyisms, strokes and ultimately a super-Quango paid for by tax-payers.”

“We’re back here because everything about this Irish Water fiasco has been flawed from the outset. I’ll say it again, Irish people are not fools. They were told that the Bord Gáis partnership was designed to save money then they watched as the Minister eventually disclosed that he knew the consultants (the usual suspects) were going to be paid almost €90 million.”

“They knew that they were being turned from citizens into customers and they resented that. Hugely. If there is one thing Irish people know about it is debt and they know that if they allow themselves to become customers then they will be responsible for repaying all the debt incurred in setting up this Quango and the money it borrows.”

“This has been mired in controversy from the outset and if you hoped that this Bill was going to dismiss that controversy then you are mistaken. You cannot keep dismissing these controversies. All these controversies have not only undermined any chance of people having confidence in Irish water but also eroded confidence in this Government.”

“But there are more controversies that are yet to come to the fore and one of these are the circumstances surrounding the awarding of the metering contract. There are major concerns on this issue, and understandably so.”

“Firstly there is absolutely a question to be answered as to why the cheaper installation offer from Siemens was dismissed. We must have an answer to that question. Why did you choose to accept a more expensive option that required us to borrow from the Pension Reserve Fund with massive interest costs?”

“Next we have got to get answers to the questions regarding the awarding of the contract. There is a key date here and that is June 2013.  In a PQ reply on June 12th 2013, Minister Hogan confirmed that the 30th of June 2013 would the closing date for bidders to apply to be considered for the metering contract. GMC/SIERRA (Company Registration number 530230) was one of the successful bidders. GMC/SIERRA was awarded a metering contract. But, and this is key, that same company, registration number 530230 did not come into existence, legally, until the 15th of July 2013. 15 days after the closing date for bids. How is it that an entity that did not exist when the deadline closed was awarded a contract? GMC/SIERRA – a company with Denis O’Brien as a vested party – was somehow awarded a contract before it even existed.”

“Even to tender for the contract requires, under both EU and Irish Law, a certificate of tax compliance. How could an entity that did not exist in law, get a tax clearance certificate? These questions need answering. They will not go away and they are being routinely spoken about across social media and online media outlets such as Broadsheet.ie”

“What really sits uneasy with people is the debt burden and, in particular, Anglo debt, that was placed on peoples shoulders. That same debt burden that underpins all the austerity measures, including Irish Water. They watched helplessly as Anglo debt was turned into sovereign debt, placing a noose around their necks for decades to come.  500 million to be extinguished each year from now up to 2022, then one thousand million from 2022 to 2025 then 2 thousand million EVERY year until it’s all gone.”

“In that context, imagine the anger that comes with seeing a company called Millington – another company owned by Denis O’Brien – a company established to buy Siteserv, a company who owed Anglo €150 million being sold onto Denis O’Brien’s Millington by Anglo for just €45 million. A discount of €105 million. Essentially, €105 million lost to the State. Interestingly, the €45 million paid for Siteserv was reportedly the lowest bid for the company. Yet it was accepted. Do we have an answer as to why?”

“It should also be noted here that SIERRA is a subsidiary of the aforementioned Siteserv. It gets muddier. There are suggestions that, contrary to all best practice models, the legal firm Arthur Cox, acted for the seller, Anglo, and the purchaser, Millington, during this transaction. If this is the case, then that is another question that deserves an answer.”

“The Taoiseach keeps telling us that this is about more than water. He’s right, it is. It is about people power. It is about people demanding what they demanded before the last General Election. It’s about people demanding different politics. Reform. People are realising that we should not have been exposed to the debt burden that was placed on us. 43% of the entire European banking debt shouldered by one country, us. People know that was unfair.”

“People wanted – expected – this Government, to respect the economic limits of households. They expected this Government to spend wisely. The last thing they expected was to see a hugely inflated, super-quango. December 10 will be an incredibly important date. As important as October 11th was, when over 100,00 people took to the streets, the people who were saying ‘Why haven’t we done this before’ and the people who found strength in the sense of solidarity and realised – it’s not the people who are in power that matters, it’s the power that is in the people.”

Thanks Anne Marie McNally and Gemma

32 thoughts on “Sierra Where Would You Get It?

  1. Michael

    Did Siemens put in a tender? Would it be ok for a minister to ignore legally mandated tendering process to do a side deal with a company, never mind a company that has had a dodgy record with such side deals?
    The tender notice for this contract allows bids to be submitted by groups that do not have a specific legal form, hence the closing date for submissions not relevant. What would be relevant would be that at the time of the awarding of contracts it would have proper legal form and all appropriate documentation.

    1. zynks

      I did a search before for the IW tenders, and there are a few of them, but none relating to meter installation, consultancy services, nor legal services. The ones Available were issued by Bord Gais, and none directly by IW. I wonder if the fact that they choose to use ltd company format has something to do with there being no public tenders.
      as a matter of interest, the meter supply is available, with the contract going to a UK company with a strong presence around Europe.

    2. MUlch

      I could be wrong on this, but wasn’t there something up on BS before that said the Siemens offer was to initially install the meters for free, but this cost would be levied onto water charges at a later point? I thought this whole ‘free’ Siemens offer ad been debunked.

    3. Mayor Quimby

      Siemens didn’t tender.

      A Sindo story floated the idea that Siemens would take over the running of the treatment plants and install the meters – by recouping the cost later on. If you think this means “free ninety nine” you’re wrong.

      This is privatisation-clear and simple – the slow learners can’t get their heads around this.

  2. Alfred E. Neumann

    Mulch, there’s more here. It seems that Sierra released the details of a possible offer, and then decided not to make an offer after all. They did have two meetings with the government beforehand, of which details are sketchy to non-existent.

    https://www.broadsheet.ie/2014/02/06/water-addendum/

    Whether this is a business being a business for businessy reasons, or they were discreetly advised not to waste their time, may depend on the shape of your tinfoil titfer. Or it may not. Siemens haven’t commented, and neither has the government.

    1. MUlch

      Thanks Alfred.
      Again i could be wrong, but i believe there were other, cheaper alternatives on the table to IW, and these were also not pursued. I believe i read something on that here too.
      Phil Hogan’s comment of “an Irish solution to an Irish problem” is one of the bits that annoys me. Picking an inexperienced new company over those that are well versed in the area just doesn’t sit well, especially as i believe it wasn’t even the cheapest option. You have to really question the merits of IW. Stick in the timeline of the setup of GMC and the DO’B ownership, and you have got yourself a nice political timebomb on your hands.
      But sure big Phil has his EU job now, happy days……

        1. MUlch

          I’m not for the Siemens bid at all Michael. I think they were first out of the blocks, but that’s about it. They saw an opening and took a shot before the process had really been thought out. I believe there were other non-Siemens bids that would have worked better.

        2. Clampers Outside!

          I think we should stick to the issue of whether contracts were properly tendered or not, and separately whether Siemens offer was considered or not.

          I don’t believe there is one single multi-national corporation that has not had corruption charges. Not that that is excusing any behaviour of Siemens, just saying we should focus on the tender, and where the Siemens bit fits in.

          As I know it, the Siemens “offer” was before Phil arrived, and he trashed it and introduced the process that gave us the muddled mess we have now. So, the Siemens offer at some point was looked at, but why did Phil rubbish it and award contracts as he did when clearly there were better offers on the table, lets just stick to those questions. Throwing mud on Siemens can be done anyday and won’t answer any questions.

          Just sayin’

          1. Michael

            Contracts such as these have to go through EU tender process. I can only imagine furore if contract was awarded to Siemens without following proper procedures.
            Not so sure all companies have Siemens record but pretty sure if they had been given contract on a side deal everybody here would be quick to point fingers and rightly so.
            So lets focus on tender. Catherine Murphy’s question seems to be based on misunderstanding of how the process works. The tender process is an EU one and open to challenge and scrutiny.

      1. Alfred E. Neumann

        Even at the level of political tact, you’d think that anyone making a deal with DOB would ensure it was transparent, independently monitored, fully recorded and so unquestionably above board that only the loons could quarrel with it.

        That doesn’t seem to have ben Phil Hogan’s style, to put it mildly.

        1. Alfred E. Neumann

          Do we know anything about the two meetings Siemens had with the government before deciding not to tender?

          1. Michael

            I don’t but if reports are true that Siemens were offering to install meters for free in return for some investment stake then it may just be they were not interested in a simple contract for work and wanted a stake in the business.
            Which for people like me opposed to privitisation would not seem to be a welcome move.

          2. Alfred E. Neumann

            I suspect it’s something like that. People’s embrace of Siemens (careful) is more about distrusting the government than making a specific judgement on this transaction, or non-transaction.

          3. Kieran NYC

            Usually when you have Phil Hogan and DO’B on one side of something, it’s safe to assume it’s the worse of two evils.

  3. Rep

    Not being stupid here, but isn’t it not that unusual that companies that win a bid only come into existence after winning the bid such as many construction companies who are partnerships between construction companies & engineers?

    1. Michael

      The tender document specificall allows for groups to make bid before they have specific legal form –
      ” Requests to participate may be submitted by single entities or by groups of service providers. A group will not be required to convert into a specific legal form in order to submit a request to participate, but may if Bord Gáis Éireann considers it necessary to ensure that the contract is carried out to its satisfaction, be required to do so prior to award of the contract. Bord Gáis Éireann also reserves the right to contract with each member of the group on the basis of joint and several liability, or with one member of the group as a main contractor with a number of sub-contractors or on any other basis as Bord Gáis considers appropriate.”
      https://irl.eu-supply.com/app/rfq/ojecform.asp?OJEC=5&PID=60431&PUB=2&PUBID=123073&PAGE=/insidemain.asp&FRID=V

    2. JimmytheHead

      any other company would be ignored if they tried something like this on a government bid, especially on one so large and controversial. tenders would usually only be awarded to well established companies

      1. Rep

        Would it be? I was under the impression that it was the case for most large construction builds, including road projects which are generally purely state funded.

        1. Rep

          I should point out, I don’t know I am just curious and could well be quite wrong. This was just my understanding of how large projects worked.

  4. paul m

    Interesting reply to Ming Flanagans Facebook post about the issue from a chap who appears to know a thing or two about business tenders. It would help if our politicians checked with their very own Legal Coffee Drinker before stepping into the fray.

    “For the record, SiteServe was awarded the contract. The company has many businesses although installation of water meters was not one, until they ‘won’ the contract. Given the size and value of said contract it is normal for a diversified company to establish a subsidiary company, in this case GMC-Sierra. The purpose of this is to make it easier to administer and also to protect the parent company (SiteServe) if it all went badly. This is normal business practice and has been for decades. By way of example, every single wind farm site operated by Bord Gais is incorporated as a separate limited liability company. These subsidiary companies number in excess of one hundred and thirty, in the case of Bord Gais.”

    1. Mayor Quimby

      eh they already installed water meters – infact Broadsheet had a laughable conspiracy post up revealing that the GMC Sierra website mentioned this

  5. Milo

    Yet again…. Absolutely nothing to see here. Does this fruitcake thing Siemens we’re going to put the meters in for free? Totally normal in joint ventures to setup a single purpose entity which will be of limited juration. Did she expect to see “Ye olde metere company” of 1889 bidding?

  6. Ferret McGruber

    Can anyone recall the mess that came out of the contract for running the National Aquatic Centre being awarded to a shelf company? Something that came back to bite?

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