HEALTH INSURANCE MARKET AND VHI FOR REVIEW - Goodbody Stockbrokers and Matheson Ormsby Prentice are to be awarded a major consulting contract to review the health insurance market in Ireland and VHI's role in it, the Irish Independent has learnt. The contract is expected to be announced within days by Health Minister James Reilly. The multi-million euro contract was won by a joint bid involving the law firm and Goodbody's corporate finance arm. With government consultancy work drying up in the past two years, the contract is understood to have attracted widespread interest. The previous Government wanted a broader study of the health insurance market, but it is understood this contract is slightly narrower in its terms of reference. The last Government was committed to privatising the VHI, the country's largest health insurer, but the Fine Gael-Labour administration wants to keep it in state control. However, Mr Reilly is looking at splitting the company into two or three separate entities - and the consultants will look at how this might be achieved.
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AG URGED TO TACKLE RENT REVIEWS - One of the main representative bodies for the retail industry has called on new Attorney General, Maire Whelan, to tackle the ongoing issue of commercial rent rates by introducing legislation ending upward-only rent reviews for existing leases, says the Irish Examiner. Such a move, according to IBEC-affiliated body Retail Ireland, is urgently needed and should be accompanied by the establishment of a commercial rents assessment board, something which should be chaired by a High Court judge and have statutory powers, where tenants could seek rent reductions to reflect economic circumstances. "As it stands, there is no self-correcting mechanism available for inflated commercial rents. Over the last decade rent as a percentage of turnover has doubled from 10% to 20% for retailers. Upward-only rent reviews have not only contributed to this inflation, but have contributed significantly to the loss of over 50,000 jobs in the retail sector since 2008," according to Retail Ireland director, Torlach Denihan. Mr Denihan added: "The previous government would not remove upward-only rent review clauses from existing leases because their Attorney General said to do so would be unconstitutional''.
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PROFITS AT AMAZON'S IRISH UNIT UP 29% - Operating profits at the main Irish unit of online retailing giant Amazon increased by 29% last year as revenues climbed sharply to $53.6m (€37.6m). The Irish Times says accounts filed with the Companies Office show that operating profits of Amazon Data Services Ireland Ltd (ADSIL) increased by €722,552 to €3.15 million in the 12 months to the end of December 2010. This follows the company's revenues increasing by 62% or €20.5 million, from €33.1 million to €53.6 million last year. Amazon operates five data-hub facilities in Dublin and at the end of 2010 ADSIL employed 131 people - an increase of 54 on the 2009 figure - supporting the Amazon group websites. Accounts for the company's European Systems Network Operations Centre show that the company's pre-tax profits increased last year by 18% from €1 million to €1.2 million.
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BP TO RESUME DRILLING IN GULF OF MEXICO - BP will resume drilling in the Gulf of Mexico as early as July, less than 15 months after an accident that killed 11 workers and led to the worst offshore oil disaster in US waters, says the Financial Times. The UK oil group has struck a deal with US regulators, under which it will be allowed to drill 10 existing wells that were under way before the accident and which it needs in order to maintain or increase production on existing platforms, according to sources familiar with the situation. BP declined to comment. In exchange for permission to return to drilling, which means BP can restart just weeks after other groups, including Chevron, were given consent, the UK group has agreed to 24-hour access to government overseers. It has also detailed its plans in case of an accident or emergency, including what lessons it learnt from last year's disaster. All of BP's existing wells in the gulf are located in deep water. The company will not be allowed to drill any new exploration wells. The deal is a coup for Bob Dudley, BP's chief executive, and the prospect of increased production is likely to be welcomed by investors.
