Rail fraud report cost almost €2.5m

A REPORT commissioned by Iarnród Éireann into fraudulent activities by employees and issues with procurement processes cost the company almost €2.5 million, an Oireachtas committee has heard.

CIÉ and Iarnród Éireann chairman Dr John Lynch told the transport committee three employees were sacked after sleepers and other disused railway infrastructure were sold illegally.

This misappropriation of track materials from the company’s North Wall depot cost the company €363,540, along with invoices of €30,602 for work not done.

One of the three sacked employees had engaged in collusion with a plant hire contractor, and fraudulent invoices paid under the staff member’s authority cost Iarnród Éireann €271,665.

The committee was told €100,000 of the total €665,807 incurred by fraudulent activity had been repaid by one individual.

Meanwhile, an investigation into procurement process and controls showed deficiencies cost Iarnród Éireann more than €1.8 million, including the foregoing of close to €800,000 of EU aid for resignalling projects on the Westport and Rosslare lines.

Independent Senator Shane Ross described the report as “quite devastating”. He added: “It’s a litany of woes within Iarnród Éireann. It finds collusion, it finds a lack of documentation, it talks of theft. I counted 19 times where the word fraud or fraudulent are used. The company carrying out the investigation had come up with a figure of €8.7 million in losses in a draft report.”

However, Iarnród Éireann chief executive Dick Fearn said that figure was “a guestimate of what if these issues had happened elsewhere”.

Dr Lynch said Iarnród Éireann had been unfairly portrayed as “rife with backhanders”.