Irish Rail hedge-trim bid 'rigged', court told
Published 20/05/2011 | 05:00
TWO men rigged the bid for a lucrative hedgecutting contract, a court was told yesterday.
The pair are alleged to have entered into an anti-competitive agreement to submit a minimum tender price for an Irish Rail vegetation clearance contract.
The contract, which was issued to 10 potential bidders in November 2006, was to remove hedges and trees on a disused 36-mile stretch of railway track between Ennis and Athenry.
John Joe McNicholas, trading as John Joe McNicholas Plant Hire; and Oliver Dixon, a director of Oliver Dixon (Hedgecutting & Plant Hire) Ltd, deny entering into an agreement to prevent, restrict or distort competition for their services.
Oliver Dixon (Hedgecutting and Plant Hire) is also being tried at the Central Criminal Court for entering into an anti-competitive agreement with Mr McNicholas.
It is alleged that following a site meeting of all potential contractors convened by Irish Rail on January 15, 2007, at Athenry train station, Mr McNicholas expressed the view that people were "underpricing themselves and not charging enough".
Sean Guerin, prosecuting, said it was alleged that after an Irish Rail official left the two-hour meeting, Mr McNicholas told the group of contractors that no one should charge less than €30,000 per 12-mile stretch of the 36-mile line.
It was also alleged that Mr Dixon said that no one should charge less than €50,000 for each 12-mile stretch.
Mr Guerin said there evidence that Mr Dixon "took the lead" but was "backed up" by Mr McNicholas and that it was suggested the group "shake hands" on an agreement not to charge Irish Rail less than €50,000 per 12-mile stretch.
"An agreement to fix prices is the classic form of an anti-competitive agreement," Mr Guerin told the court.
"The entering into the agreement is the offence."
The jury heard that Iarnrod Eireann first issued an invitation to tender in late 2006 to 10 potential bidders, including Mr McNicholas and Mr Dixon.
But the initial procurement process collapsed after eight bids returned by potential contractors were shown to have varied from €29,000 to €930,000. The extraordinary variations in the tender price prompted Irish Rail to review the specifications on the tender.
Irish Rail also convened a site meeting of all of the potential bidders at Athenry train station.
Irish Rail engineer Pater Dalton told the court that there was no animosity at the meeting and that he did not hear anyone agree a minimum price.
Mark Egan, a procurement executive for Irish Rail, told the court that a day after the site visit he was contacted by four of the contractors who withdrew their tenders, leading to the collapse of the process. The four contractors were subsequently retained for the project, the court was told.
The trial continues.