Official says State facing 'significant' Mahon costs

The secretary general of the Department of the Environment has said that the State is facing "a significant liability" arising from third-party costs awarded by the Mahon tribunal.

However, appearing before the Dáil Public Accounts Committee yesterday, Niall Callan said that he did not have a figure for the total potential financial exposure in this area. He said that it would be wrong to put another "guess-timate" into play.

The Comptroller and Auditor General, John Purcell, told the committee he would undertake an examination of the financial control systems in place in the administrative side of the various tribunals as part of his annual report for 2006. He said that as part of this exercise he would look at the feasibility of producing an estimate for third-party costs.

Committee chairman Michael Noonan, of Fine Gael, said the Minister for Justice had forecast that the cost of the Mahon tribunal could be €1 billion; the chairman of the inquiry, Judge Alan Mahon, had said that it would not exceed €300 million; the Department of Finance had suggested that the figure could be about €340 million; but the Department of the Environment (which is the sponsoring department for the tribunal) had no view at all.

Mr Callan said he wanted to emphasise that he was not withholding any better estimate in relation to possible third-party costs.

He said the department had not carried out any detailed exercise nor arranged access to the tribunal's records which would be necessary to deal authoritatively with the issue of costs.

Mr Callan said that in his view there was no requirement under State accountancy rules for the department to estimate the contingent liabilities in relation to the cost of the tribunal.

In response to questions from John Deasy, of Fine Gael, Mr Callan said the department had paid out about €7 million in third-party costs arising from the Mahon tribunal.

These payments relate to 28 claims arising from hearings of the tribunal in the years to 2002.