Banks paid €6 million for cash escorts

The banks paid the State €6.03 million this year towards the cost incurred by the Department of Defence in providing cash escorts.

Minister for Defence Willie O'Dea said he had discussed the matter with the Irish Bankers Federation (IBF) last year, with a view to increasing the banks' contribution. A formal agreement was later signed.

"This agreement, for a five-year period, provides that the banks will pay the total actual costs incurred by the Defence Forces in the provision of cash escorts. Costs in respect of each 12-month period to end of the December would be paid the following year on or before June 1st. This is to allow for the compilation of returns from the brigades and allocation of costs following the year-end."

Replying to Fine Gael's Bernard Durkan, Mr O'Dea said the first payment under the new system was paid on June 1st, following agreement with the banks that it be deferred to meet budgeting and accounting timeframes.

"In return for my agreement to this deferral, a transitional payment of €1 million payable before the end of 2005 was negotiated as part of the overall agreement. Therefore in 2005 the banks made their annual payment of €2.86 million plus the additional €1 million, making a total contribution of €3.86 million."

Mr O'Dea said that before the arrangement, the banks paid €2.86 million annually to his department. The figure had been set by the Department of Finance in the 1995 budget.