The lead consultant to the 1995 mobile phone licence competition has said he does not share serious concerns the Moriarty tribunal has about how the bids for the licence were evaluated.
Prof Michael Andersen was asked by Jim O’Callaghan SC, for the businessman Denis O’Brien, about weightings that were applied to the criteria under which the bids for the licence were evaluated. The first criteria evaluated was given the greatest weighting, 30 per cent, and this weighting was broken down into three components. The tribunal is querying how this breakdown changed during the evaluation process.
Mr O’Callaghan reminded Prof Andersen that Michael McDowell SC, for the tribunal, had said it was “deeply concerned” about the changes to the breakdown of the 30 per cent. Prof Andersen said he did not share the concern.
The tribunal has queried how a 10-10-10 breakdown was arrived at given that a 15-7.5-5 breakdown had been agreed at an earlier stage in the process. However Prof Andersen said the earlier breakdown totalled 32.5 and was wrong.
He also said there was “nothing sinister” in another issue that had been raised by Mr McDowell during his questioning. This concerned the equity requirements that would be needed for the various consortia in imagined worst case scenarios.
Mr McDowell said a “better worst case scenario” had been applied to Esat Digifone’s bid than to that of Persona. Esat won the competition, and Persona came second.
However Prof Andersen agreed with Mr O’Callaghan that the multipliers applied to the two consortiums’ equity requirements were arrived at by way of sensitivity analyses of turnovers. It was the different results of the two analyses that led to the different “worst case scenarios”.
“So there is nothing sinister in this?” said Mr O’Callaghan. “That’s fully correct,” said Prof Andersen. “I tried to bring this message across that [the difference] is based on underlying sensitivity analyses.”
