Postcode investigation will not be re-opened, Dáil hears

The European Commission has told the Government there are no grounds for re-opening an investigation into the procurement process for the new postcode system Eircode, Minister for Communications Alex White has said.

Mr White has told the Dáil, in answer to a parliamentary question, that, following correspondence between his department and the commission, it had confirmed it now regarded the matter as closed.

The commission had investigated alleged irregularities in the procurement process following a complaint by a rival postcode provider.

It found that the State wrongly excluded small and medium enterprises from competing for the contract by imposing a €40 million minimum turnover requirement on companies eligible to tender for the project.

However, it did not take any infringement proceedings.

Mr White said the total spend on the Eircode project to date was €19.5 million.

Of this, the postcode contractor Capita had been paid €17.5 million, “on foot of delivery of agreed milestones”.

In total, the 10-year contract awarded to Capita is worth €27 million.

The Department of Communications has refused to release a copy of the contract.

‘Open process’

Responding to a question from Independent TD Tommy Broughan, Mr White said an "open and competitive procurement process" had been conducted in accordance with Department of Finance and European Union procurement frameworks.

He said that, in 2012, his department received correspondence from the European Commission regarding certain aspects of the procurement process.

“In 2013, the commission informed the department that the matter had been closed on the basis that it could not establish any breach of EU procurement law that would justify the opening of an infringement procedure.”

Mr White said the commission had subsequently requested that the State adopt certain measures regarding the “clarity of language” to be used in future procurements.

“My department responded to this request after consulting the Office of Government Procurement.

“In recent correspondence, the commission confirmed that there are no grounds for reopening an investigation into this matter, which it now regards as closed.”

Total cost

A recent report by the Comptroller and Auditor General (C&AG)estimated that the total cost of the postcode project now stood at €38 million.

In his annual report for 2014, Séamus McCarthy said improved data matching was expected to be the main public sector benefit for the project, but the Revenue Commissioners had indicated that this had largely been achieved through other developments, including the Local Property Tax register.

“It is not clear that benefits to the value projected [€6 million to €20 million] will be achieved as a result of the implementation of Eircode,” he said.

Responding to another question, Mr White said that as Eircodes were only launched in July, their usage was only starting to become visible and it was “too early to make a full evaluation of the project”.

“However, based on engagement with public and private sector bodies during the development phase of the project, I am satisfied that, in time, as usage of Eircodes increases, they will support economic activity and deliver social benefits identified in the cost benefit analyses carried out for the project.”

He said the National Ambulance Service was building a new dispatch system to use Eircodes and that this would be used in its new national call centre in Tallaght.

He said that a number of licensing issues, expected to be finalised in the coming weeks, would also allow the use of Eircodes in commercial databases.