NI Water: All parties should back Dallat’s call for a real Inquiry

For the first time in the history of Northern Ireland and only the second time in the history of the British Civil Service a Permanent Secretary has been suspended. That’s a big story, and one Slugger has been in somewhat lonely pursuit of since seeing the BBC’s footage of the PAC interrogation of Laurence McKenzie and Paul Priestly.

Here’s the straw that broke the camel’s back with regard to Paul Priestly. According to David Gordon, “it is understood evidence emerged yesterday indicating that Mr Priestly was involved in drafting the letter.”

Which letter? That would be the one Slugger put into the public domain some six weeks ago (and which was also announced -although not published –  by the BBC) which Peter Dixon wrote threatening the PAC with legal action, on his own company’s headed note paper.

There is no question that Mr Priestly did not know the full content of the letter. Not least because he circulated a copy of the Dixon letter to his staff the day before the PAC received it.

Patsy McGlone laid out the issues arising in a letter to the Head of the NI Civil Service, Bruce Robinson (to which he has yet to receive a reply) well over a month ago:

In light of the now established fact that Mr Priestly had received and distributed this letter well before the formal addressee had even received it, it is for you to discern what exact role the Permanent Secretary for DRD fulfilled in these matters and how the public good was being served through dissemination of a letter, neither from him, nor the Department, but from a person avowedly independent of the Departmentmaking serious criticism of public representatives as they pursue their duties at the PAC. You will also be aware this letter was promptly retracted with subsequent clarification by the Chair of the company which employs Mr Dixon [emphasis added].

We sometimes berate politicians for not doing what they say they are going to do when they get into power. Yet, what chance does a Public Affairs Committee have when it is up against this kind of interference?

All through the summer Slugger has picked its way through a whole bunch of inconsistencies in this story. We still don’t believe we are at the bottom.

It will take a genuinely independent inquiry to get to the bottom of this whole little charade. One in which all witnesses are called and grilled until their pips squeek; including the sacked NEDs.

Meanwhile, Mr Dixon will have some serious explaining to do to his Board Chairman. Mr McKenzie’s radical suggestion lies in tatters…

And the sacked members of the Board must be waiting for some kind of recompense, apology for being forced off into the deep end for the sake of… Well, for what we have still to hear…

It is surely time to take advantage of the Minister’s bold (if utterly painful and belated) action and back John Dallat’s call for a fuller, more public inquiry with the forensic teeth to get to the bottom of these problems.

And not simply to apportion blame and set up more scapegoats, but to give the company a fresh start, regardless of whether it remains publicly or privately owned.

There may be an argument brewing about who scooped this story, and who didn’t. When the rush of this high profile suspension has abated, the problems identified on Slugger through the summer will have to be addressed seriously and in the kind of detail we’ve seen in the genuinely independent report on the Malahide viaduct.

If this was a scoop for us, it might be better described as Slugger’s own anti scoop scoop… More on the virtues of ‘slow journalism’ later…

Mick is founding editor of Slugger. He has written papers on the impacts of the Internet on politics and the wider media and is a regular guest and speaking events across Ireland, the UK and Europe. Twitter: @MickFealty

  • Cynic

    I agree on an Inquiry but it needs to go deeper that the gloss of what happened in the last few months at NIW

    Going back years into the old Water Service there were always rumours of procurement issues. NIW spends a fortune and what this debacle has shown is that its entire procurement system seems dysfunctional. Key questiosn therefore need to be addressed:


  • fin

    “back John Dallat’s call for a fuller, more public inquiry”
    Thought the PM said no more inquirys for NI

  • Mick Fealty

    Exactly. It is not encouraging that Paul Maskey is still clinging to that figure of £28 Million though. A real inquiry will unearth the secrets hidden under that one.

    If we are to believe that figure means anything we are being asked to believe that this was the most serious problem in procurement in NI Water.

    Something which is simply not credible.

  • Mick Fealty

    You only need an independent inquiry which is free to investigate and deliver its verdict without let or interference. We don’t need another Saville.

  • Cynic

    I agree on an Inquiry but it needs to go deeper that the gloss of what happened in the last few months at NIW

    Going back years into the old Water Service there were always rumours of procurement issues. NIW spends a fortune and what this debacle has shown is that its entire procurement system seems dysfunctional. Key questiosn therefore need to be addressed:

    1 a deep audit of NIWs procurmenet for a reasoanle periood – say 5 to 10 years

    2 why did Paul Priestly suddenly appoint the Chief Executive as Accounting Officer when it wasn’t in the original job advert? Did he know something was lurking and wanted to distance himself from it?

    3 why did the Chief Executive suddenly offer to resign? All the focus is on the one contract but he said that once he learned of his responsibilities as Accounting Officer he started a due diligence check on various issues. So why did he want to leave when as a new arrival it would have been open to him to portray himself as cleaning the stables out? He doesn’t seem the wilting flower type who couldn’t cope with the heat of that.

    4 Priestly is the new scapegoat but I do think that’s a pity. He always struck me as one of the most competent people in NICS and all this started long before he became Perm Sec. That’s what needs to be exposed too

  • fin

    Mick, my comment was slightly tongue in cheek, however, do the same arguements not apply, cost was only one objection with Saville, during and after ‘them uns’ argued that there should be an inquiry in to lots of other incidents even those who it was known who was responsible. So surely the same rules apply and all Civil Servants and Ministers and possible illegal sackings must be investigated

  • Cynic, the CE’s accounting officer role is described in the Hillyard Strand 2 report published on January 28, 2008, so why was it not in the job spec? The Hillyard report followed an earlier independent review.

  • Mick Fealty

    It depends on the TORs. Saville was not comprehensive in the way you are suggesting. But the evidence was difficult to gather and expensive to collate and analysis after the passage of time.

    No such problems exist here…

  • Drumlin Rock

    to put it in perspective this amount is less than 8% of NIW annual turnover, and I’m guessing covers more than one years contracts, that’s before we have any chance to scrutinize the 72 contracts in question, how many of them are “minor” breaches of procedure? How much might the savings have been if the full protocols had been followed?
    Spoke to a friend in NIW who told me the system is coming under strain because no-one is prepared to sign contracts these days just in case the proper procedure was not covered.

  • Drumlin Rock

    Cynic, it is unlikely to have an inquiry that covers both the NIW procurement problems and the cronyism of the NICS, in someways could the former not be managed in house when proper management is once again in place (with or without Mr McKenzie!)
    The issue of how far the rot goes in the civil service and quangoland is a bigger issue, there has to be a cultural change there.

  • Damian O’Loan

    I agree with the call for an inquiry and reject the ‘easy’ short-term fix of privatisation. Experience post-Thatcher surely offers some lessons.

    On that note, and related to another recent comment, it’s very important that there is no perception of a conflict of interest regarding any of the emergency NEDs, so for example that Mairtin O’Muilleoir can assure us that his actions are based on the welfare of all communities in NI, and not, for example, bodies like the Emerald Infrastructure Development Fund.

    Not unreasonable when one finds that O’Muilleoir is finishing his letters with Given John Simpson’s own work over many years to turn around one of our most underserved areas – an interesting choice of language when the instruction of the private equity investor in that fund was that at least half of that sum go to underserved areas in the North.

    Underserved. Disaster capitalism? Its stated first priority is to “generate returns for its investors.”

    As public confidence in the devolved institutions is the matter at stake, including the ability to make them work in the interests of the electorate and not shareholders an ocean away.

  • Damian O’Loan

    Another over-optimistic use of html. But I hope the point is clear. Are the NEDs outside interests public? They’re not on the NI Water website.

  • Mick Fealty

    Yes, that may be. But you have to take this thing one step at a time. This story has slipped under the general media radar because (IMHO) it depends on following almost incommunicable detail.

    And the devil, as always, lies in the detail… Start in the detail and work outwards… Then we can see if there is or is not a more general problem not necessarily confined to NICS…

  • medillen

    Fair play to Conor Murphy the NICS elite has been rocked to its core and we have turned a corner in terms of accountability and who is in charge.

    [Removed for legal reasons – be careful in how you choose your words – Mods]

    Interferring in that process of investigation by a senior civil servant is now under investigation and he is unprecedently suspended by HOCS at the request of Conor Murphy.

    Times are achangin.

  • militant mike

    Am i the only person who hasnt really got a clue what this is all about?

  • johnneycool

    Whilst its always good that some of these high ranking civil servants who seem to do whatever they want are brought to heel Murphy took the wrong tact on UTV live by staunchly defending both the independent (sic) enquiry and his permanent secretary.

    Either he wasn’t fully aware of the goings on as outlined in the program or misjudged people’s reactions to them but it seems that he’s taken guidance and is keen to keep up his no nonsense image with the electorate.

    If this lad Priestly is found guilty of some form of misdoing punishable by sacking I sincelerly hope there isn’t some sort of backhander dished out, full pension and all that, so that he goes quietly into the night.
    He could suppliment his income by doing lookalike work as Bob Hope in Emmerdale.

  • Pigeon Toes

    Declan Gormley

    “At no time did I or any other member of the non-executive team proceed with a tender operation unless it was within the expressly defined parameters of departmental legal advice.”

  • Neil

    No Mike. Dodgy civil servants trying to not take responsibility for not following procurement procedures I reckon.

  • Mick, it looks like the detail and a broad overview will proceed in tandem. Jim Allister has called for an investigation into DRD under the Inquiries Act.

    It’s likely that a CRD meeting on Friday morning will look at how it can proceed. I understand the Minister returns from holiday on Monday and the fortnightly NIW Executive Team minutes which did not appear on November 16, 2009, and thereafter will be brought up-to-date next week too.

    You will recall that the MacKenzie email to Dixon was also dated November 16. Do you have the time stamp for it? Mackenzie: “There are some sensitive souls in here. For example, I say that all future consultancy expenditure has to be approved, In advance, by me — they tell me I am being autocratic — I say — get used to It!” It’s likely that the ET meeting began at 8 am.

  • Pigeon Toes

    “No such problems exist here…”

    Depends how much material has already been deleted.

  • BigBoss

    I think Conor Murphy had very little to do with, more so it was the questioning from people like John Dallet, Patsy McGlone and Dawn Pervis that got the ball rolling on the illegal practices.

    Conor Murphy has been shown to be out of the loop in his own department! even accusing the SDLP of trying to score political points by mentioning irrelevant points……… not so irrelevant now!

    Not that it will count one bit coming to the elections next year

  • Mick Fealty

    Spare us the sound bites:

    “Wrong doing at NIW in terms of procurement practice exposed and dealt with swiftly and decisively.”

    There is virtually nothing in that IRT report that points at wrong doing. Certainly not by the Board.

    The Minister was pointed in that direction by a PS who is now under investigation. I would keep your powder dry until you know exactly what happened.

  • Mick Fealty

    Pretty close Neil. I like your brevity.

    Actually mike, some of the lack of scansion comes from the fact that the MSM have not been paying attention to the telling detail. Historically big stuff happened yesterday and yet beyond UTV, the Newsletter and ourselves few in the media have a clue what’s behind it.

  • William Markfelt

    ‘Murphy took the wrong tact on UTV live by staunchly defending both the independent (sic) enquiry and his permanent secretary.;

    No. He didn’t. Murphy did what a good boss does, publicly support his staff. In private, once in full possession of the facts, he can kick that employee the length and breadth of the office, but you keep these things ‘in house’ and at least make the right noises to the media/public. If you’re a public company or a corner tobacconist, that’s how you run your PR. Let aggrieved parties know of your concern, and then give some lippy employee the hairdryer treatment. So Murphy is blameless in taking the approach he tried to take. Top marks for at least adopting a good PR/man management style.

    Where Murphy took the wrong tack was in being so fulsome in his support of Priestly while not being in possession of the full facts. And as has been previously noted, Murphy’s antennae are well closed down if he’s not getting a sniff of this (and then choosing to say phrases like ‘nothing going on behind my back’).

    Sorry Conor, but it looks like you were played like a cheap violin.

    Frankly, Murphy has been made to look exceptionally foolish by Priestly, DRD and the whole NICS.

    Now, Murphy has bogged into silly phrasing before that have bitten him on the arse, but I suspect use of the word ‘untenable’ is not just slack use of English. I suspect Murphy knows exactly what he means by ‘untenable’.

    While an investigation must play out, in accordance with protocols, Priestly will, I think, either have walked the plank long before Halloween, or more realistically, may discover that all this pressure (he doesn’t want our sympathy, remember!) is making him ill. ‘Health grounds’ will be the card played, and will also be used (in accordance with the usual public sector plays in these matters) as reason why he can’t face the PAC now, or in the future.


    A sick note will be tossed into his bosses, and PAC, within about three weeks, i.e. before the NIA reconvenes in early September.

  • William Markfelt

    ‘Fair play to Conor Murphy the NICS elite has been rocked to its core and we have turned a corner in terms of accountability and who is in charge.

    Wrong doing at NIW in terms of procurement practice exposed and dealt with swiftly and decisively.’

    I hope to God this doesn’t sound like ‘playing the man’ but, frankly, you’re talking nonsense in a red-top stylee.

    NICS has not been ‘rocked to the core’, or anything like it. Its practices have been dealt a blow, but we’re closer to the beginning than the end game, and little of it to do with Murphy (either playing a blinder or having a ‘mare).

    Procurement mis-practice? Mick has already beaten me to the punch on the actuality of this matter.

    Decisively? By Murphy? No comment, followed by a comment, which included total faith in Priestly, followed by Priestly’s position being untenable, all inside a week? There is nothing decisive there.

  • William Markfelt

    from Jim Allister’s statement

    ‘the Columbia 3’

    makes them sound like a bunch of spacemen.

    I’d be pleased if Jim, or any other well educated barrister, could find this place ‘Columbia’ on a map of South America.

    Perhaps this is the TUV’s problem. Their grasp of geography is poor enough to ensure they haven’t quite found their constituency yet.

  • Pigeon Toes

    Is O Muilleor heading off the inevitable questions?

    “As tomorrow’s Andersonstown News will report (you are 11 hours ahead of me so that’s sooner for you then me) and as regular visitors will know that the suspended civil servant at the heart of the NI Water storm Paul Priestly spoke at the June New York-New Belfast conference. He also accompanied the Minister to the Golden Bridges conference in Boston last October (addressed the previous year by Sir Reg Empey who was also accompanied by his officials)…
    The Department of Regional Development was among sponsors of the New York-New Belfast conference in June and its forerunner, the Belfast City of Quarters Conference in March. Among other sponsors of the conferences were PwC, SIB, DSD, KPMG, Kalkow Corp., Tourism Ireland, Hibernia Atlantic, Invest NI, Belfast Harbour, NI Bureau, Belfast City Council and the University of Ulster. Other speakers at the Belfast conference included Will Haire, Permanent Secretary at DSD and David Gavaghan, ceo of Strategic Investment Board. Other speakers in New York included Kyle Alexander of the SIB, and Tourism Ireland CEO Niall Gibbons.

    The DRD contributed £1625 per conference in sponsorship to the New York conference, the same to the conference in Belfast.

    Mr Priestly’s travel and expenses associated with the NYC conference were covered by the DRD”

  • ‘Few in the media have a clue what’s behind it’

    I have been following this subject for some time and I hope there will be a full investigation. It has been eye watering, course it boils down to iffy contracts and sus civil servants.

    Congratulations Mick Fealty for sticking with it.

    The other thing is, there is something encouraging in seeing politics as practised by most of the world, in the north..

  • William Markfelt

    ‘it boils down to iffy contracts’

    It’s important to make a distinction between ‘iffy contracts’ and ‘iffy contractors’.

    It has been confirmed no fraud charges are pending, so we may assume at this point that contracts were tendered, offered, and work undertaken on the basis that the price was acceptable, and offered VFM.

    The ‘iffiness’ lies solely with NIW who moved away from established procedures.

    McKenzie has made much about contracts not be VFM, but as things stand it’s merely his analysis whether they were or weren’t.

    My analysis that his salary is about three zeroes too many has just about the same value as his on matters pertaining to contracts right now.

    One minor difference being that there is a body of evidence in the public domain that ‘gives rise to the perception’ that his salary is three zeroes too many, while the detail of contracts that concern him remains shrouded in mystery.

  • William Markfelt

    I thought I was clear, perhaps I was not clear enough, sorry.

    Completely agree with you re McKenzies salary.

  • William Markfelt

    ‘It is not encouraging that Paul Maskey is still clinging to that figure of £28 Million though.’

    Yes, £28m is an entirely misleading figure. I’m confident you have a grasp on the actuality, Mick, but in case any MLAs are reading, here’s a simple explanation.

    The totality of contracts = £28m, allegedly. That figure refers to work done. The overwhelming amount of that sum is for legitimate work undertaken and paid for. There is NO evidence to suggest the work was not done correctly, so much of that sum is self-evidently not in dispute.

    If all of this sum refers to single-tender contracts, it can be argued that other people tendering MIGHT have done the work for less.

    If we assume a second tenderer offered to undertake the work at 10% LESS than that eventually paid for, the ACTUAL figure of ‘loss’ or ‘not being good VFM’ = £2.8 million (Two point eight).

    So MLAs or anyone else clinging to figures like £28m simply demonstrate that they’re supping up a line, or simply aren’t smart enough to grasp the simple business maths.

    I would argue that, in the current economic climate, the sums involved are more likely to have been a much closer final set of tender prices (plus or minus 5%) and when letting you know if you’ve missed public sector contracts, you are now routinely told of the differential from lowest to highest tender- so NIW will have an average figure of their lowest/highest contract differential, over the past 2, 3 years.

    A member of PAC should be able to ask NIW what the average differential is, and get a clear response. 6% 7%. or therebaots. It should not, realistically, be too far off that figure.

    But taking 5%, just for the sake of simple division, we arrive at a figure of £1.4m that may be ‘disputed’ on the basis of being good or poor value.

    That is NOT a sexy figure. £28m looks fantastic, £1,4m doesn’t.

    For McKenzie or Maskey to say ‘look, look…dodgy deals of a value of £28m!!!!’ is simply being disingenuous on their part.

    If they’re saying £28m, the real estimated ‘loss’ (and we cannot conclusively prove if there is any loss at all, the winning contractor MAY have still been the lowest tender) is a figure of around £1.4, £1.5 million.

    Indeed, it’s entirely possible that the £28m represents a net ‘gain’ to NIW, on the basis that second tenderers would, equally, have costed at 5% higher (on average) than what was paid out.

    Currently, we have one autocrat who BELIEVES the contracts were not good VFM, but no evidence to support this claim at all.

  • medillen

    Can someone please point me to the quote where Conor Murphy expresses total faith in Paul Priestly?

  • William Markfelt

    Start here, Medellin (that’s in ‘Columbia’, isn’t it?)

    I’d add further links except multiple links don’t work on SOT.

    But in that link, the sentence you’re looking for is

    ‘Mr Murphy made clear in the programme that he was standing by his most senior civil servant.’

    I’ll add more, individually, if you aren’t prepared to accept the fact that Conor supports his Perm Sec in a variety of media outlets.

  • William Markfelt

    My misreading, Pip.


  • William Markfelt

    Not a problem, and I still say you stuck with the nitty gritty with the kind of maze that would have tried the patience of a corpse.

  • fin

    Mick, Saville was overly comprehensive hence the delay and cost, the TOR doesn’t matter according to the DUP cost and fairness does matter. Pick up a copy of this weeks Private Eye its full of similar incidents of mismanagement.

    Which brings us back to the issue, can unionism or the govt. now demand an inquiry into a specific case of unfair dismissal while dismissing inquirys into cases where people have died?

    here’s two, Deepdene and Network Rail which are far bigger than this one, oh, not to mention companies like PWC and Ernest happy to sign of audits on banks and …well gosh the list goes on.

  • fin

    Geez, don’t you guys living in the sticks ever read Private Eye, all this stuff is fairly standard fare and NI Water is fairly tame compared to whats going on elsewhere, Network Rail for example, any hoos its not as if NI Water is actually paid for by NI taxpayers I guess it comes out of the
    10-20,000,000,000 donated by the South East of England

    Like, apparently all those contracts that civil servants signed off to PFI companies because they offered a better return on investment is actually11billion spent, £65biullion to be paid back, not to mention all the privatised companies that were meant to be competitive and give real value to taxpayers but ended up enriching sharteholders instead. So what about all those civil servants? do they get hauled in front of an inquiry too

  • William Markfelt


    I am disappointed to say that for some of us, this story is a piece of piss.

  • William Markfelt


    I have followed this story for several weeks, I did not comment, but it seemed to me that most of the commenters were serious and concerned people taking a real interest and in several cases offering information, those people of course included yourself. I have seen no sign that anyone thought this was the ‘piece of piss” you mention. I wish you luck with your endeavours.

  • Just one autocrat, William, or is this Minister a gullible fool?

    Murphy: “.. so the core issue is here is that attention my attention was brought to the fact, initially in relation to one contract that there was something on-toward going on within NIW and I asked for further inquiries into that and that turned up 73 contracts with £24.5 million of awarding of contracts which couldn’t be defended which was done in an improper fashion”

  • William Markfelt


    Those of us in the sticks can generally clarify whether or not we’re talking pence, pounds, or Turkish lira.

    As for ‘tame’, is there some sliding scale where we ignore departmental misdeeds?

    At what point do you imagine us straw-chewing sheep shaggers ignore departmental misdeeds?

    How many miles north or Watford do we qualify as sheep shaggers?

  • William Markfelt

    To clarify, Pip.

    Following the detail of the story is a piece of piss.

    Not particularly difficult if you have professional or personal experience of how these things operate.

  • William Markfelt

    Thank you but I do know the phrase ‘piece of piss’, which is why I mentioned other commenters. Those of us who have had to do any research know that quite often opening one book merely leads to another. In other words it aint as easy as it looks…

  • Damian, you’ll find out a little bit more about Máirtin (and Paul Priestly) on the NewYorkNewBelfastdotcom website. As a close acquaintance of the Minister you’d not expect his actions to relate to ‘all communities in NI’ but rather the Strand 2 ‘island of Ireland’ context.

  • Fascinating quote from Declan Gormley, PT.

    Can the PAC now avoid the need to call the sacked NEDs – in the interests of justice?

  • “He told the New York-New Belfast conference, hosted by Belfast Media Group and Irish Echo”

    Interesting ‘revelation’ by Máirtin, PT. Here we have a private venture with a political skew paid for by other people’s money, both private and public. And lo and behold he becomes an NIW NED.

    Could there be any conflicts of interest in the appointment process that led to his selection? Did all NEDs go through the same hoops?

  • William Markfelt

    I can only speak for myself, Pip.

    Personally speaking, following this unfold has been relatively easy. There have, of course, been moments where the pieces don’t fit (Nevin has suggested the same), but then some little titbit knocks about three or four pieces into place at once.

    I can guess at how some of this plays out (‘sick notes’ being one informed guess as to a fairly imminent play), but there are other matters where professional and personal experience suggest certain directions.

    The one major difference to what I have seen unfold before is media interest, where other incidents of replicated behaviour have had none. That’s the one unknown in my equation board.

    But as to issues like FOI obfuscation, relationships that undermine independence, etc, much is old hat, and I detect that other contributors share this knowledge.

  • Right this now calls into question the appointment of Máirtín Ó Muilleoir – DRD at the time were courting him yet taking part in an event sponsored by Belfast Media group !!