Strict rules existed for mobile bids, Moriarty told

An inter-Departmental group set up to oversee the awarding of the State's second mobile phone licence had strict protocols in…

An inter-Departmental group set up to oversee the awarding of the State's second mobile phone licence had strict protocols in its dealings with prospective bidders, the Moriarty tribunal heard today.

Members of GSM project group, as it was known, were forbidden to meet potential bidders outside Government offices and were forbidden to hold meetings without another member of the group present.

The protocols, revealed in an internal group memo, also stipulated members were required to keep a brief but detailed record of meetings and that the meetings with potential bidders were only to be used for the purpose of "informal clarification".

Key civil servants involved in the selection process have maintained that the competition for the second licence was fair and was designed to withstand litigation from disgruntled failed bidders.

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The State could be sued for hundreds of millions of euros by the losing bidders for the licence if the tribunal finds the competition was tainted.

The tribunal is continuing to investigate the circumstances surrounding the award of the licence to the Esat Digifone consortium in 1996 and in particular a number of financial transactions linking Mr Denis O'Brien, the main force behind Esat Digifone, and Mr Michael Lowry, the minister who issued the licence.

In its first public sitting in 12 months, Senior Counsel for the tribunal Mr John Coughlan today read a lengthy statement detailing what the inquiry has learnt of the competition process and its selection criteria.

The tribunal heard how the inter-departmental group overseeing the competition estimated the licence could not be sold for any more than £20 million. In a letter to the Department of Finance, senior civil servant Mr Martin Brennan said there was "no crock of gold available from the licence".

It was eventually sold to Esat Digifone for £15 million. The tribunal also heard how the-then minister of finance was concerned by the financial capabilities of some of the bidders.

Mr Coughlan resumes his statement this afternoon.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times