Troubled water company 'could be scrapped'

A troubled water company in the North at the heart of a long-running investigation into the awarding of contracts could be scrapped, Northern Ireland’s regional development minister warned today.

Conor Murphy said Northern Ireland Water’s (NIW) hybrid status as a British government-owned company had not served the public well. One option would be to incorporate it back into the department.

At an evidence session today at Stormont, the minister defended his decision last March to sack four members of the under-scrutiny business. An investigation team found that £28.5m (€34.2m) in contracts were issued without the work being properly tendered.

Mr Murphy said: “I do think it has been quite clear that the Goco (government-owned, contractor-operated) idea has not served us well, has left us in a hybrid situation which I don’t think is acceptable going forward.”

He is in discussions with his officials about how legislation could be passed to bring about the change within the tight framework imposed by next year’s Assembly elections. He would need agreement from his ministerial Executive colleagues and there could be funding changes linked to Treasury rules.

The Sinn Féin minister told the regional development committee at Stormont the company had done a good job in upgrading the North's ageing water and sewerage systems.

It was announced today that Sir Jon Shortridge, the former permanent secretary of the Cardiff administration, will examine the events that led to the suspension of Paul Priestly from the Department of Regional Development last month.

The action against Mr Priestly came after claims he drafted a letter of complaint to a powerful Stormont scrutiny committee that was sent by one of a team of independent investigators probing the business of NIW.

The incident that prompted Mr Priestly’s suspension related to later exchanges between one of the investigators and the Public Accounts Committee (PAC), which was also investigating the NIW affair.

Phoenix Gas chief executive Peter Dixon was unhappy with the tone and direction of some of the questions he faced from PAC members in July and wrote a letter of complaint.

While that letter was later withdrawn, it has emerged that Mr Priestly had offered Mr Dixon advice on the form the letter should take.

The head of the Northern Ireland Civil Service, Bruce Robinson, who suspended Mr Priestly, said Sir Jon cannot start work immediately due to other commitments but will begin his investigation in October, and should be finished by the end of that month.

The 63-year-old father of two held the top post in Cardiff from 1999 to 2008.

He is currently chairman of the Audit Panel of Cardiff County Council and a council member of Cardiff University.