Rail project costs review not over, inquiry told

Consultants were not asked to complete a CIÉ-commissioned report into the rising cost of a rail-signalling project following a decision by the company’s financial director.

Mr Jim Cullen, CIÉ’s chief financial officer told the opening day of the Oireachtas sub-committee on Public Enterprise and Transport inquiry that a PricewaterhouseCoopers summary report was circulated among the board members in July 2000.

The inquiry is investigating why a CIÉ rail-signalling project overran its estimated costs by some £36 million.

Mr Cullen said following discussions with the then group chief executive Mr Michael McDonnell, he decided "nothing useful would come out of any further investigations".

Mr Michael O’Niell, PricewaterhouseCoopers partner who worked on the report said his firm was commissioned to conduct a review of the Mini CTC contract. A draft report was prepared for CIÉ in March 200O. A summary of this draft report was prepared in July 2000. Mr O’Niell told the inquiry CIÉ did not ask to have the report completed.

This morning a former senior civil servant said an early-warning system for cost overruns in the CIÉ rail-signaling project had failed because of the information supplied to it.

Former secretary-general at the Department of Public Enterprise Mr John Loughrey was answering questions about the monitoring structures governing the CIÉ project.

Mr Loughrey, who retired as general secretary in January 2000, said there were quarterly progress reports on the progress of a number of infrastructural projects - including the CIÉ rail-signaling project.

These reports were forwarded to bi-annual meetings of a Departmental monitoring committee. Mr Loughrey said with relation to the CIÉ rail-signaling project the information coming back from the company did not give enough of an early warning system concerning difficulties.

Mr Loughrey was asked by inquiry chairman, Mr Sean Doherty TD, whether he was happy that the Department was getting full, up-to-date information concerning the progress of the project.

He replied that while he was satisfied the monitoring process was sufficient, "there was an element of wishful thinking in CIÉ - when the wheels were quite obviously coming off the project they were still hoping it would come right".

He said the department was reliant on the quality of information supplied to it and added that at no time did the quarterly reports suggest the project had run into difficulties.

Mr Loughrey said he first became aware of problems with cost overruns in the project in autumn 1999.

Current secretary general at the Department, Mr Brendan Tuohy, told the committee he would have to check who had in CIÉ had signed off the quarterly reports.

He said it was not the department’s role to micro-manage projects. He rejected a suggestion that the Department should have appointed someone to CIÉ to manage the project.

Oireachtas sub-committee member, Mr Austin Curry, asked Mr Loughrey if he was pointing the finger at CIÉ?

Mr Loughrey replied that in this one case, it became apparent in 1999 that the reporting on the progress of the project did reflect seriously the issue. Mr Loughrey added he was not blaming anyone.