The installation of a new rail signalling system for the State is running way over-budget and behind schedule. Many of those who drew up the "very unsatisfactory" contract on CIE's behalf have left the company to work for the main firm involved.
The Minister for Public Enterprise, Ms O'Rourke, confirmed to the Dail yesterday that the project, initially costed at £14 million, would now cost between £25 million and £40 million.
Saying it was also behind schedule, she said the contract drawn up was "very unsatisfactory" and "not tight enough". Yet many of those involved in drawing it up had left CIE to work for the main firm involved, MNL.
She did not disagree with Fine Gael's public enterprise spokesman, Mr Jim Higgins, who said there was a "bizarre stench" off the episode.
She said it was "one of the most dreadful matters I have had to deal with" as Minister.
She told Mr Higgins, who raised the matter, that she had "grave doubts about certain aspects of the whole operation concerning the public procurement of this signalling system".
She said it was "remarkable" that, according to the contract, the work was not scheduled to be concluded until 2002.
Mr Higgins said: "The taxpayer has again been taken for a ride. A contract supposed to cost £15 million now has an overrun of up to £25 million which John Citizen will have to pay.
"Is there not some bizarre stench off the entire contract, given, as the Minister has rightly acknowledged, that four of the people involved - the head of procurement; the signalling engineer, who was the manager in charge; the company solicitor; and another engineer - have all effectively defected to the company with which they negotiated the contract?"
Ms O'Rourke said: "Letters have been written to me concerning legal matters arising from this affair . . . I am distinctly unhappy about the fact that people have left and gone to one of the main companies who are part of this process.
"I await the next [CIE] board meeting and my next meeting with the chairman to see what the board intends to do about it. I await their advice on the matter."
However, Iarnrod Eireann has defended its role in the matter, saying there was nothing untoward in the handling of the contract.
An Iarnrod Eireann spokesman, Mr Myles McHugh, said a number of things had happened which had delayed the project since it was agreed in July 1997.
He said the company which had won the contract had been taken over by another company and this had been a major factor in the delay. Then, two years ago, a safety audit had recommended that trenches be hand-dug, rather than machine-dug. "This added a huge cost to the project," Mr McHugh said. "What would have cost £1 million was now costing £8 million."
He said as time went on the original plans were updated with new technology and this compounded the delays.
He said there were still contractual difficulties with the project because of the change in company ownership but it was hoped that work would soon resume.
On the departure of Iarnrod Eireann staff to MNL, Mr McHugh said this happened in business all the time. It was natural that people should move between jobs, particularly when they had been dealing with another company and knew how it worked.