Bord Gáis has estimated that opening up the gas market in 2004/05 could cost it more than €103 million.

The company's estimate has yet to receive approval from the Commission for Energy Regulation (CER) and further discussions are planned.

A spokesman for the regulator said it would not sign off on any figure until it heard from the gas market opening working group, which is made up of industry representatives and Bord Gáis personnel.

In order to recover the full amount, Bord Gáis must get approval from the energy regulator, Mr Tom Reeves.

Bord Gáis has estimated the cost at €103.4 million, although the company claims this would be spread over several years and, consequently, would not affect the price of gas in the newly liberalised market.

Bord Gáis intends to recover the full cost through a transportation tariff on all end users of the gas distribution system.

A large part of its estimate relates to information technology costs. According to Bord Gáis, its capital expenditure on IT infrastructure will amount to €19.3 million.

However, in talks between the CER and Bord Gáis, the issue of how much individual IT staff need to be paid has arisen.

Bord Gáis has claimed that its contract and full-time IT staff should be paid according to its internal scales, but the CER has raised questions about the rates involved, with Bord Gáis requesting that some staff be paid €110,000 per annum.

The issue of who is going to operate the IT systems in the newly liberalised market prompted Mr Reeves to make comments directly to Bord Gáis during the summer.

In the letter of June 10th - seen by The Irish Times - Mr Reeves sets out stringent conditions governing Bord Gáis's future operation of IT systems. The letter was addressed to Bord Gáis chief executive Mr Gerry Walsh.

The CER, along with several potential entrants to the gas market, is anxious to ensure that, if Bord Gáis operates the new gas distribution system, competitors are not put at a disadvantage.

The CER is particularly keen to ensure that Bord Gáis's distribution business does not operate in any way alongside its supply business, Bord Gáis Supply. This is because there could be conflicts of interest.

In the letter, Mr Reeves tells Bord Gáis he wants "firewalls", or some kind of separation, between different Bord Gáis business units.

He also insists that a code of conduct "educating the employees of Bord Gáis Éireann" about information security be drawn up and given to the CER for approval.

It is understood that Bord Gáis has addressed this issue and workshops for employees have taken place.

There must be "a level playing field regarding access to infrastructure services", according to Mr Reeves.