Statement 2 March 2007

Statement by the Department of Community, Rural and Gaeltacht

Affairs on the awarding of a contract for ferry services to Cape Clear
Island

1. The Department of Community, Rural and Gaeltacht Affairs affirms that it is

under no legal obligation with regard to the employment conditions of any
person employed under the contract that was in place with the company
Naomh Ciarán II Oileán Chléire Teo, that came to an end on 28 February
2007. The state complied with all conditions relating to redundancy in 2001
when payments of €190,691 were made to the staff employed by the ferry
service prior to the service being transferred to private ownership. Having paid
redundancy to the workers, the State clearly has no further liability to them.

2. The provisions of Statutory Instrument 131, regarding the protection of

employees where business was transferred, does not apply in this case or in
any of the other of the Department’s contracts that provide subsidised ferry
services to the various islands. There is a clear exemption of seagoing vessels
in this Statutory Instrument and in the European Commission regulations on
which the Statutory Instrument is based. The Minister has offered to have his
officials meet SIPTU officials out of courtesy to brief them on why the
Transfer of Undertakings directive is not applicable to contracts entered into
by the Department for the provision of subsidised ferry services.

3. Background
Traditionally, for many years up to 2001, the provision of a ferry service to
Cape Clear Island was handled directly by the State. The State (The
Department of the Gaeltacht) owned the vessels that were in use – Oileán na
nÉan and the Naomh Ciarán II. The service was managed by a committee that
comprised representatives of Cape Clear Island and the Department of the
Gaeltacht.

4. In 2001, a decision was made to transfer the service to a private company -

Naomh Ciarán II Oileán Chléire Teo - that had been established by the skipper
of the service. A contract was agreed with this company and, as part of that
contract, it was agreed that the State (The Department of Arts, Heritage,
Gaeltacht and the Islands) would lease the vessel, the Naomh Ciarán II, to the
company and pay an annual subsidy of €104,126 for a period of 5 years, from
June 2001 to June 2006.

5. As part of that arrangement, and under the terms of the contract agreed, the
State made redundancy payments of €190,691 to the four crew members who
were employed by the company before the transfer.

6. Unfortunately, the new company’s principal, who was skipper of the ferry
service, died suddenly during the term of the contract. Comharchumann
Chlére bought the company and continued to run the ferry service under the
contract that was in effect.
 7. While preparing for the new contract that was to come into effect in June
2006, the Department of Community, Rural and Gaeltacht Affairs decided to
seek tenders through an open public competition. This also happened in the
case of all other services being subsidised. To that end, it was decided to sell
the vessel, the Naomh Ciarán II, to allow tenderers to buy it for use on the
service. The community of Cape Clear Island was kept informed of the
planned arrangements by continued communication between officers of the
Department and Comharchumann Chléire and the open public competition for
the tender was advertised in local and national newspapers in September 2006.

8. Through agreement with the company, Naomh Ciarán II Oileán Chléire Teo,
the current contract was extended to 28 February 2007 to allow for the
completion of the tender process and to award a new 5-year contract for the
period of 1 March 2007 to 29 February 2012.

9. Two tenders were received as a result of the competition. After having

evaluated them, it was decided to engage in a negotiation process to select a
tenderer. As a result of that process, it was decided to award a 5-year contract
to the company Tithe Saoire Chléire Teo for a total price of €1,239,848, using
the vessel Naomh Ciarán II for the entire 5-year period or otherwise a price of
€1,446,268 if an option was included to introduce a new primary boat for the
service at the beginning of year four of the contract.

Issued by the Press & Information Office of the Dept. of Community, Rural and Gaeltacht Affairs
Tel: 01 647 3130 Fax: 01 667 0826 Éadaoin Ní Mhoghaile 087 8519913
Email: eolas@pobail.ie Website: www.pobail.ie