Consultant urged `hard-nosed' talks with RTE

 

The best option for Century Radio in the run-up to its application for a commercial broadcasting licence was to have hard-nosed talks with RTE with a view to negotiating a realistic costs base, a British technical consultant, Prof Ray Hills, told the Flood tribunal.

Mr James Connolly SC, counsel for Mr James Stafford, asked Prof Hills about his recommendation on the need for such negotiations between Century and RTE. The technical adviser had strongly criticised RTE's capital cost projections for the proposed commercial radio station.

He believed the best option was for himself as technical adviser to sit down with RTE's head of engineering, Mr John McGrath, to see what "padding" could be eliminated from these projections. All the relevant arguments should be mustered by Century to get RTE to reduce the figures, he urged - including convincing the minister to intervene as he was empowered to do under Section 16 of the Radio and Television Act, 1988.

Prof Hills confirmed he had made some crucial observations from a professional viewpoint on the tone of a draft memo from Century submitted to the minister, which he said had "a touch of the begging letter" about it. He had recommended instead a "cold logic" approach. Because the new equipment to be purchased would have a useful life of 20 years, the cost should not be borne entirely by the first franchisee (Century), he urged. RTE had stipulated it must be paid for within five years.

In effect, this amounted to a subsidy to RTE, he argued, and indeed in the event of the new station failing, the equipment would revert to the State-owned station for nothing.

In addition, he confirmed he was broadly in agreement with the rental figure of £375,000 a year submitted by Century in its application - for the provision and maintenance and operation of the new station.

Counsel for RTE, Mr Paul O'Hagan SC, challenged him: "At no time before the presentation of the Century proposal to the Independent Radio and Television Commission on December 16th, 1988, were you in a position to give measured or final figures which covered the likely cost of transmission."

Prof Hills agreed, "because there were still some unknowns" as to what the final engineering costs would be. He had based his agreement with the correctness of the £375,000 on "arithmetical argument" based on upper and lower limits. E to discuss these issues should have taken place but had not.

What could be the "remotely scientific upper and lower limits" that he had been prepared to stand over, Mr O'Hagan asked. RTE would say that everything Prof Hills said in this regard was "founded on inaccurate premises" including the "20-year financial availability for the equipment". "I don't recall they were based on scientific principles," replied Prof Hills. And he had never said there was a 20-year financial availability: "I said it had a potential useful working life of 20 years."

Mr O'Hagan said the witness was wrong in his assertion that the equipment would ultimately revert to RTE, but Prof Hills did not agree. The RTE figures, said counsel, "were based on the application of and preparation of real costs in the real world".

Prof Hill had rejected RTE's compilation of its estimates on a historical cost basis, arguing that Century should not have to pay for access to infrastructure already paid for by the taxpayer.

Mr O'Hagan said that historical overmanning at RTE was certainly a factor. But that was the true cost of the only service available unless Century had elected to set up its own service.