The company which has a contract with Iarnrod ╔ireann to build the controversial mini-CTC rail signalling system was put into liquidation on its own petition by the High Court yesterday.

Modern Networks Limited (MNL) was stated to be insolvent with a total deficit of £3.5 million (€4.4 million).

Mr Justice Kearns appointed accountant Mr Ray Jackson as liquidator of Modern Networks Limited after being told by Mr Cian Ferriter, for the company, that while an interim examiner had been put into the company in June last, he had been discharged by the court in August because it had not been possible to restructure its affairs to restore it to solvency.

In an affidavit, Mr Brian Powell, a director of the company, said the shareholders passed a resolution on August 21st last that, because of its insolvency, the company should be wound up by the court.

Notwithstanding that the examinership was unsuccessful and the insolvency of the company, it still had a contract with Eircom for the provision of cable laying services, Mr Powell said. This involved large numbers of small assignments.

Twenty employees, with some 70 sub-contractors, were engaged in this work and it would be of considerable benefit to the company's creditors if the work in progress could be completed and converted into realisable debts, said Mr Powell.

The company also had 50 other employees engaged in various activities.

It was stated that Iarnrod ╔ireann was not opposing the winding-up petition.

An Oireachtas sub-committee is carrying out an investigation into the cost over-runs involving the mini-CTC signalling project.

However, its procedures are being challenged in judicial review proceedings.