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ICL PATHWAY LIMITED
MINUTES OF A MEETING OF THE BOARD OF DIRECTORS
HELD AT
ICL HOUSE, 1 HIGH STREET, PUTNEY, SW15 1SW
Present: Sir Michael Butler (Chairman)
Mr T K Todd ———
Mr R Banks { WI
Mr R Christou I I
Mr J H Bennett \
Mr A E Oppenheim
Mr T Reynolds \ POH-16210 _ )
In attendance: Mr R F Scott (Secretary)
Mr T Austin
Apologies for absence were received from Mr J White.
97/1 MINUTES OF PREVIOUS MEETING
The minutes of the meeting held on 25 November 1996
were approved as a correct record and signed by the
Chairman.
97/2 MATTERS ARISING
96/71 h) - Briefing of HM Opposition - The
Chairman, Mr Bennett and Mr Hall had called on Mrs
Beckett and Mr Howells of the Labour Party and had
been well received. Other briefings would take
Place in due course.
96/71 e) - Australian Post Office - Messrs Todd,
Reynolds and Murphy were discussing this
opportunity. Mr Todd said close cooperation would
be needed and the Chairman emphasised the care
needed to exploit this first international
opportunity.
96/71 c) - BT and Energis - Energis were proving
good to work with as prime contractor for the
network service. BT’s opposition had lessened,
although they were unlikely ever to accept the
company’s point of view. Mr Todd said discussions
were continuing between ICL and BT on the overall
relationship. .......
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97/3
a)
Mr Bennett
b)
ec)
Mr Bennett
Mr Bennett
dq)
e)
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MANAGING DIRECTOR’S REPORT
Mr Bennett reported and there were questions and
discussion. Points noted:
If Mr Bennett was using the Pathway Monthly Report
as his Managing Director’s Report for Board
Meetings and the Monthly Report was getting out of
date, he would consider a shorter note of important
topical items, to be circulated to the Board
immediately before the meeting.
ICL Pathway was negotiating with the customers
(PDA) over the plans for 1997 in light of their
delay in implementing CAPS. This was a complex
matter because of the inter-dependence of almost
all ICL Pathway’s activities. However, a three
phase plan was being proposed for the release 1
schedule namely OBCS implementation early (at the
end of April) then the benefits payments system at
the end of June, followed EPOSS in September.
National rollout would not be until 3 November (and
on child benefit only) compared to previous plan
for national rollout in July. ICL Pathway had not
yet agreed to this new plan as the commercial
implications were still being worked out.
Mr Bennett raised the issue of continual
modifications required by the customers and not
covered by the contract. Under the PFI philosophy
the customers expected such changes to be paid for
by the contractors and of course this was causing
concern. Mr Todd emphasised that a careful log
should be kept of these miscellaneous items and
their cost. It might be possible to make
representations for the customers to be budgeted
for such items in future. The Chairman suggested
Mr Todd and Mr Bennett decide whether this issue
needed to be raised above the level of the PDA team
and whether, probably after the election, ICL
Pathway should raise its experiences with the
Ministers and officials concerned with the PFI
process.
Mr Bennett referred to the problems the company’s
sub-contractors including Girobank and De La Rue
would have with the programme delays occasioned
(mainly by CAPS issues) by the customers. He was
mindful of getting information to the sub-
contractors as early as possible.
Mr Reynolds asked about introduction of EPOSS in
sub Post Offices under the revised 1997 plan. Mr
Austin said this was still planned although POCL
were delaying matters as they prepared their own
systems for the EPOSS int: tion. Mr Oppenheim
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f)
Mr Christou/
Mr Oppenheim
g)
97/4
a)
b)
ce)
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said that until EPOSS and also advance payments
systems were tested in the Post Offices, Pathway
would not get full acceptance of the solution at
the national rollout time of November 1997.
It was agreed Mr Christou, after input from Mr
Oppenheim and Mr Spencer, would review the contract
provisions, in the light of the following:
programme delays occasioned principally by CAPS;
damages to compensate ICL Pathway for delays;
possible fee increases; contract administration
including archiving and recording of everything
that was taking place affecting the contract; where
liability fell if there was not sufficient space in
sub Post Offices for the equipment (see later); and
whether Post Offices could use other equipment,
particularly networks such as that of Camelot, or
other terminals, to implement the solution.
Mr Bennett confirmed that Pathway was involved in
the Post Office Genesis initiative and also in the
Government Direct Green Paper to explore how to
connect citizens to services by digital
communications.
PROGRAMME UPDATE
Mr Austin reported to the Board. Points noted:
A significant milestone had been reached on the
completion by ICL Pathway of the two datacentres
and other infrastructure. After considerable
efforts by all staff concerned the Wigan and Bootle
datacentres were running and would be used in the
testing phases of the solution as soon as possible.
One datacentre would support the OBCS rollout in
April.
Difficulties were being experienced in testing
computers functioning in the open systems
environment (in contrast to the performance of
mainframes which in Mr Austin’s experience did not
usually suffered such capacity problems).
Proposals had been made to the PDA before Christmas
to recover lost time on the programme but so far
the PDA had not accepted these under the assessment
that they were high risk activities. Mr Austin
felt ICL Pathway was three to four weeks behind
where it should be at present and so far there was
no visibility of the Government review of the
delays being caused by the CAPS problems. The
Chairman said the proximity of the general election
might be delaying the civil servants as they felt
the need to obtain. ministerial approval for their
actions.
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d) Mr Todd emphasised ICL Pathway should explore the
possibility of price increases for contract
changes, and the possibility of advance payments.
Mr Oppenheim Such advance payments could be set off later
against the revised budgeted payments and would
help with ICL Pathway’s cashflow.
e) Mr Austin emphasised two other items on the
critical path, the Escher training mode facility
which was critical before the go-live date and the
need to demonstrate we can achieve connectivity for
20,000 Post Offices with the Riposte software well
before all 20,000 offices were likely to be
required to be online. Mr Austin said Mr Murphy
was aware of this.
£) The Board noted that many more sub Post Offices
than we had previously been aware, would have space
shortages such that it might be difficult if not
impossible to fit in all of the equipment required
under the solution (difficulties which might be
compounded by the need for separate equipment to
deal with debit cards). This was likely to resolve
itself into design and cost issues and as noted
above, Mr Christou would be examining the contract
to ascertain where the costs would fall.
g) Mr Todd asked Mr Bennett to circulate information
Mr Bennett to the Board on ICL Pathway’s views of the
implications of Year 2000 and single European
currency issues.
97/5 FINANCE DIRECTOR’S REPORT
Mr Oppenheim reported. Points noted:
a) He emphasised the seriousness of ICL Pathway’s cash
situation if advance payments were not received
from the customer now that the project was being
delayed. He would be backing up Mr Bennett in the
negotiations over the programme slippage.
b) A satisfactory agreement over the process of new
business development with POCL was, he thought,
about to be reached. Mails was expected to be the
first new business item and Mr Oppenheim assured Mr
Reynolds that maintenance of the mail facilities
was included on the ICL Pathway charging score
card.
c) He emphasised that the next major commercial issue
would be the whole process of acceptance of the
solution and he added several the fraud risks
may have been over estimated.
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d) The Chairman enquired of progress with discussions
on financing the project and the company. Mr Todd
and Mr Oppenheim said satisfactory discussions were
being held with Fujitsu over project finance and as
Finance Director, Mr Oppenheim said he believed
that Fujitsu would agree to assist with the
financing.
97/6 PROGRAMME PROGRESS
Mr Austin emphasised that although there had been
slippage in elements of the programme, the fact
- that OBCS and benefit payments would begin in April
rather than July meant that generally progress with
the solution was being maintained at a satisfactory
speed. This is the approach that would be used
Mr Bennett with press/public relations.
Mr Todd said that he had asked Mr Bennett to
Mr Bennett circulate the ICL Executive Management Committee
with a note on programme progress.
97/7 MR FRANK FIELD MP
Mr Banks was having lunch with Mr Field and Mr
Mr Bennett Bennett would inform him about ICL Pathway related
matters which could be raised.
97/8 REPORT AND ACCOUNTS FOR THE YRAR ENDED
31 DECEMBER 1996
It was noted that the ICL Group audit plan required
that subsidiaries’ (including the Company)
Statutory Accounts should be approved by the
relevant Boards of Directors prior to sign off of
the Group Accounts. This was likely to mean that
the Company’s draft Statutory Accounts would be
ready for Board approval prior to the next Board
Meeting on 14 March. Accordingly, the Board
RESOLVED
THAT Mr T K Todd and Mr A E Oppenheim be and are
hereby appointed a Committee of the Board for the
purposes of considering and if thought fit
approving the Reports and Accounts for 1996, and
dealing with associated matters including
arrangement of the audit and the 1997 Annual
General Meeting.
procter tntacnanna 02-49 DATES OF NEXT MEETINGS
Friday, 14 March 1997
I Wednesday, 7 May 1997
H Monday, 29 September 1997
Hl Thursday, 13 November 1997
‘7, all at IcL in Putney, Room 1401/2, 10am - 12noon.
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