Report slams DRD over NIW debacles

PRESS EYE-BELFAST-NORTHERN IRELAND''Conor Murphy,Minister for Regional Development speaks to the media  at his Belfast office today about the ongoing problems at NI Water .''Pic : BrianThompson/Presseye.com
PRESS EYE-BELFAST-NORTHERN IRELAND''Conor Murphy,Minister for Regional Development speaks to the media at his Belfast office today about the ongoing problems at NI Water .''Pic : BrianThompson/Presseye.com

CONOR Murphy’s department has been to blame for a host of failings at Northern Ireland Water, a withering report by the assembly’s Public Accounts Committee has found.

Following months of evidence-taking by Stormont’s powerful PAC, the committee found that Mr Murphy’s sacking of four of NI Water’s five non-executive directors was based on a flawed “independent” review.

The PAC report said that the review by Deloitte consultant Jackie Henry, consultant Glenn Thompson and Phoenix Gas chief executive Peter Dixon into procurement problems at NI Water, which Mr Murphy has used to justify the directors’ sacking, was actually influenced by Mr Murphy’s department for regional development (DRD).

It found that Mr Dixon was a friend of Don Price, the one NIW non executive director not sacked. The PAC said that there were “three potential conflicts of interest, involving two of the three review team members”.

It found that the review team had been unable to fulfil its terms of reference because of the “undue haste” with which Mr Murphy’s most senior civil servant, Paul Priestly, insisted the review be completed.

It said that the failure of NI Water to adhere to “basic principles of procurement” was “inexcusable”, with 75 procurement failures totalling £45.9 million between 2005 and 2010. However, 41 of those contracts originated during NI Water’s period within the department when it was known as Water Service.

This “deeply embedded culture at all levels” made it acceptable to “bypass rules to get a job done”, the report said.

The report said that the governance arrangements at NI Water represented “the worst of both worlds”, leaving it as half-way between a commercial operation and a public body and said that DRD had failed to appoint an accounting office at NI Water for a year-and-a-half, something which should “never have been permitted”.

It also found that DRD had failed to ensure that NI Water had a full complement of non-executive directors until July 2008 and appointed the chairman of NI Water as its chief executive that year in “direct contravention of established good practice”.

The report found that senior NI Water executives were not bringing key information about procurement to the board – however, it said that despite this the board was not “absolved” of its responsibilities.

Conor Murphy welcomed the findings of the report in a statement issued last night. The regional development minister said: “This report clearly confirms there was a culture of disregard for procurement processes in the company which led to serious failings in procurement procedures totalling £46 million. These findings vindicate the actions I took to address this, including the removal of four non-executive directors at NI Water.”

l See tomorrow’s News Letter for a full analysis of the report.

sam.mcbride@newsletter.co.uk