Criteria removed after Lowry took office

A critical omission was made in the criteria for the second GSM mobile telephone licence shortly after Michael Lowry became Minister for Transport, Energy and Communications in December 1994.

John Coughlan SC for the Moriarty Tribunal said yesterday initial criteria for the licence competition stipulated applicants had to demonstrate financial capacity and technical expertise to the inter-departmental GSM project group that first met in March 1994.

After Mr Lowry became minister these two stipulations were removed and it was left for him to decide if they were complied with.

The GSM project group was speedily set up after warnings from the European Commission it would take formal proceedings against the Government if a tender for the licence was not issued.

The Commission was concerned to end the monopoly enjoyed by Telecom Eireann. Martin Brennan, former assistant secretary, Department of Transport, Energy and Communications, was appointed chairman of the GSM group.

The group, responsible for vetting licence candidates, also stipulated that contestants would have to furnish full details of company ownership.

The Esat Digifone consortium secured the licence for €19.05m in May 1996. Its successful bid was announced by the Fine Gael-led government in October 1995.

From the outset, Mr Brennan insisted in letters to the Department of Finance that there would be no crock of gold involved in the licence grant.

The successful candidate would have to make an up-front payment of €6.53m for the licence but it was acknowledged among members of the group that it could realise much more, perhaps even greater than €25.39m. It was also decided the highest bidder would not necessarily win the licence.

The GSM group laid down stipulations for dealing with licence applicants: no one-to-one meetings; at least two officials would have to be in attendance at all times; no social outings could involve candidates and records had to be kept of all meetings.