Warnings that the CI╔ rail signalling system was going seriously over-budget failed to reach senior management because people in charge were "running for cover", according to a former chairman of the company.
Mr Brian Joyce, who resigned from CI╔ in March last year, told the Oireachtas inquiry into cost overruns and delays in the system that the CI╔ subsidiary, Iarnr≤d ╔ireann, failed to keep the parent company informed of the difficulties.
"In companies experiencing problems there is usually a lot of running for cover that goes on and a lot of people anxious about their future and so on and you find it very hard to extract bad news as opposed to good news from them," Mr Joyce said.
He said the board of Iarnr≤d ╔ireann had a duty to approach the CI╔ board and seek approval for further funding if they ran over-budget but this had not happened.
He did not know whether the blame lay with the Iarnr≤d ╔ireann board or its management but when he discovered the revised costing for the project - up from £14 million to £40 million - he was "not exactly best pleased".
Mr Joyce only found out about the overrun when the then group chief executive, the late Michael McDonnell, phoned him after an Iarnr≤d ╔ireann board meeting on September 28th, 1999.
He immediately stopped funding for the project and ordered Mr McDonnell to tell the Department of Public Enterprise about the problem and to prepare a report for the board. He also indicated he was prepared to cancel the project if necessary.
Mr Joyce said Iarnr≤d ╔ireann appeared to believe they could refute the £40 million claim (it has since been revised to at least £50 million) but that did not excuse the fact that the problems should have been signalled earlier.
"I know now there was some element of slippage on the project in 1999 and there were meetings that placed the price up to £17.7 million which should have set the alarm bells ringing." However, the inquiry heard that even after the revised costing of £40 million was flagged, the CI╔ board remained largely uninformed.
Consultants, PricewaterhouseCoopers (PwC) were asked in October 1999 to carry out a preliminary assessment, setting out the financial situation, and delivered a report on October 27th.
But Iarnr≤d ╔ireann company secretary, Mr Richard O'Farrell, told the inquiry the chief financial officer, Mr Jim Cullen, told him not to send it to the board.
Mr O'Farrell said Mr Cullen told him a more extensive inquiry had to be carried out which examined the background to the cost overrun rather than just the situation as it stood then.
Mr O'Farrell also told the inquiry Mr McDonnell asked him in early January 2000 to prepare a progress report on the mini-CTC.
Mr O'Farrell intended including the report in papers for a board meeting on January 19th but he got a phone call from Mr McDonnell telling him not to and the board did not see it either.
The inquiry has previously heard that a further PwC report, delivered in March 2000, was also kept from the board who only received a summary of the document in July that year, by which time it had to wait for the September meeting.
The result, said Mr Jim Higgins TD, was that the board did not begin to discuss the problem for almost a full year after the scale of it became evident.
The inquiry also heard from infrastructure manager, Mr Gerry Dalton, who rejected earlier evidence that he ordered cables to be laid for Esat in advance of cables for the mini-CTC project, causing delays to the mini-CTC.
Mr Dalton said he scheduled the mini-CTC cabling to start six months ahead of the Esat work but the contractors were late and Esat began first.