Finance agency pulls out as M50 adviser

The National Development Finance Agency has withdrawn from advising the roads authority on the €800 million upgrade of Dublin's M50 motorway. A potential conflict of interest arose because of the finance agency's links to a consortium bidding for the project.

The consortium is the Celtic Roads Group, which includes National Toll Roads, the Spanish civil engineering group Dragados, and HGB Ascon. It also includes the National Pensions Reserve Fund.

Both the finance agency and the pensions fund are part of the State's National Treasury Management Agency.

All three occupy the same building in Grand Canal Street, Dublin, and share some personnel as well as phone numbers.

Confirming last night that the finance agency had withdrawn from providing advice on the upgrade of the M50, its chairman, Dr Michael Somers, said the decision to pull out was made on the advice of the agency's chief legal adviser, Ms Anne Counihan.

"The three agencies are separate legal entities but because of the connections it was decided to write to the National Roads Authority and say we cannot be involved," Dr Somers told The Irish Times.

The move leaves the roads authority seeking new financial advice on the operation of the public-private partnership, which is due to start next year with the reconstruction of the Red Cow and other interchanges.

It is not yet known if the withdrawal of the finance agency will delay the work.

Construction of a third lane on the M50 between the Red Cow and the N4 junctions will go ahead this year, financed by the Exchequer.

Dr Somers said in future public-private partnerships it was proposed that the National Pensions Reserve Fund, of which he is an ex-officio member, would become involved, if at all, only when the winning bid had been announced. This was a similar stance to that taken by the European Investment bank, he said.

The Pensions Reserve Fund currently has €12 billion under management and has come under pressure from politicians to invest in Irish infrastructure projects.

Dr Somers said €200 million had been earmarked for investment in public-private partnerships. A sum of just €20 million had been committed to the Celtic Roads consortium.

Other road construction companies expressed disquiet on Wednesday when the Taoiseach appeared to tell the Dáil that National Toll Roads was already involved in the upgrade of the M50.

Mr Ahern suggested that the State's contract for the operation of the West Link bridge could not be bought out, "because NTR is involved in the funding of the project".

The Fine Gael spokeswoman on transport, Ms Olivia Mitchell, said it was important to have "clear separation and walls" between the various State agencies involved.

Both Ms Mitchell and the Labour Party leader, Mr Pat Rabbitte, are to raise the issue in the Dáil next Tuesday.