THE Government remains committed to building a £120 million peat energy plant in the midlands, and still expects to get a £21 million European Union grant for the project, the Minister for Transport, Energy and Communications, Mr Dukes, said last night.

Bord na Mona, which met yesterday, said it was satisfied the plan was still on course, and the plant would be operating by the end of 2001.

Responding to newspaper reports that EU consultants have recommended that Brussels abandon its share of the funding, a spokesman for Mr Dukes said that he had met Bord na Mona representatives and was confident that the plant would be built.

"We are fully committed to the building of the European power station, we are confident that it will be constructed, and that it will go to tender before the end of March, and that it will meet all the requirements for EU funding," the spokesman added.

The project, which would create some 500 jobs in west Kildare or east Offaly, would also guarantee an indigenous source of electricity in the Republic until at least 2026. Ireland's gas reserves are expected to run out within the next five years, giving the peat project an added importance.

According to reports, Brussels is unhappy about the delay in appointing consultants and issuing tenders, and about the lack of a decision on the site for the plant.

A spokesman for the board also stressed that the company had met frequently with the Department of Transport, Energy and Communications, and with successive ministers including Mr Dukes.