CIE and ESAT differ over bonus

CI╔ and ESAT were in disagreement over whether CIE had reached a performance target for which it would receive a bonus payment…

CI╔ and ESAT were in disagreement over whether CIE had reached a performance target for which it would receive a bonus payment, the inquiry was told.

The Oireachtas subcommittee inquiry into the Mini-CTC Signalling Project had heard about issues relating to the deal between CIE and ESAT to set up a telecoms network on the railway.

Under the agreement, payments to CIE from ESAT took two main forms. One was a predetermined annual licence fee and the second was a bonus payment, a kicker, on certain revenues that might be earned in a given year.

Mr Jim Cullen, the finance director of CI╔, said there were two parts to the agreement, one was the fixed payment and the other related to a payment as a kicker when the market exceeded £185 million.

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"We would have a difference of opinion with ESAT at the moment in relation to whether we've exceeded £185 million this year. Our understanding of the situation is that we have. We've got a letter from them on November 1st saying that we haven't. We replied today saying that we reckoned we had," Mr Cullen said.

Mr Cullen said he considered the deal between CI╔ and ESAT a good one.

Earlier, Mr Richard Cooke of ESAT told the inquiry he could not confirm all outstanding payments had been made to CI╔.

He said £4.32 million had been paid to date under the licensing agreement. Whether all those monies had been transferred to CI╔'s account, he did not know.

"The value to CI╔ of the deal with ESAT is somewhere in the range of £70 million to £120 to £130 million made up of a number of different portions," he said.

There was a fixed guaranteed amount which was the licensed payment and the £4.32 million paid to date.

Over a 20-year term, £35 million was to be paid, he said.