Many questions left unanswered as rail inquiry reaches end of line

After lengthy and detailed proceedings, more questions were raised than answered by the abortive inquiryinto the sequence of events which led to major cost overruns withan Iarnród Éireann signalling system, writes Arthur Beesley

Aristotle was among many of the wise invoked yesterday when the rail inquiry reached the end of the line without making any conclusions about the disturbing sequence of events which saw the cost of an Iarnród Éireann system rise by €45.7 million from a projected €17.78 million.

But it would not take a Greek philosopher to sense the frustration of a subcommittee, which met for 235 hours in public and private sessions before it was suspended after a High Court ruling on a separate inquiry into the Abbeylara incident constrained the scope of all Oireachtas inquiries. Flush from the success of the investigation into the DIRT scandal by the Committee of Public Accounts (PAC), this was not an outcome predicted when Mr Seán Doherty and his five colleagues began their work almost a year ago.

With the Supreme Court still musing its ruling on an appeal to the Abbeylara judgment, the subcommittee's worst fears were realised when the legal timescale failed to match the parliamentary. Those fears might not be universally shared.

Mr Doherty has known time in political no-man's-land, but there was no mistaking the thrust of the 60-page interim report published yesterday. "If scrutiny is part of the parliamentary function," it said, "then inquiry ought to be a legitimate tool to be used."

It remains to be seen whether the Supreme Court concurs. If it doesn't, a Constitutional amendment may be required to restore the power of the Oireachtas to investigate the expenditure of public money and the exploitation of State assets. Such matters were at the heart of the inquiry, whose suspension last November was akin to burial alive. After lengthy and detailed proceedings, more questions were raised than answered. To recap. Cash-strapped after generations of underinvestment, CIÉ is now the beneficiary of the largest investment in public transport since the State's foundation. With billions of euro to manage, and more pressure than ever on public transport, there should be every confidence in the strength of the group's management and management systems. What the subcommittee revealed was that all was far from well.

There is more. While CIÉ has traditionally been starved of money, it is asset rich. Be it in unused property or its railway network, such assets have been eyed for exploitation by privately-owned companies. Serious concern has been expressed recently about CIÉ's land deal with Treasury Holdings in north Dublin - which was not addressed by the subcommittee; now the rail inquiry has reached no judgment on another controversial agreement the transport group reached with another privately-owned company.

The contract in question enabled Esat Group, then controlled by Mr Denis O'Brien, to build a network along the railway. The subcommittee heard that Esat's principal in the negotiation, Mr Leslie Buckley, had worked simultaneously for the telecoms company and for CIÉ in advance of the deal. It also heard that CIÉ's then director of programmes and projects, Dr Ray Byrne, secured work with Esat after the deal was done.

Intriguingly, CIÉ hired expert consultants only after it agreed to deal exclusively with Esat. In addition, its departure into the telecoms market was sanctioned by the CIÉ board after a 15-minute discussion. CIÉ claimed it would gain more than €127 million over 20 years from the arrangement. The subcommittee wanted to know whether a superior deal could have been secured. That remains unclear.

Equally uncertain are the exact circumstances in which the costs on the signalling system - known as Mini-CTC - spiralled out of all control. This has been attributed to design delays, upgrading, deficiencies in the group's management information and accounting systems and, significantly, the construction of the Esat network.

In addition, three senior figures who worked for CIÉ jumped ship to its signalling contractor, MNL Networks, which went into liquidation last year. Counsel for the three - Mr Brian Powell, Ms Mary Hand and Mr Bernard Kernan - said last November that they believed they would be vindicated in the final report. There will be no such report.

The investigation found serious deficiencies in corporate governance too, with rampant politicking, senior figures running for cover and crucial internal reports delayed for months or spiked. It was an unhappy state of affairs.

The group's solicitor, Mr Michael Carroll, was out of the loop in relation to the deal with Esat, whose commercial pedigree he did not rate. Despite his best efforts, Mr Carroll was unable to develop a relationship with the group's then chairman, Mr Brian Joyce. For his part, Mr Joyce claimed not to have been informed of the signalling difficulty until it was much too late. And CIÉ's finance director, Mr Jim Cullen, claimed his job was to monitor expenditure but not costs.

Evidence was heard that the views of senior management and board figures were misrepresented in comments made by Dr Byrne, a former civil servant. A paper he presented to the Minister for Public Enterprise, Ms O'Rourke, said the group's consultants endorsed the deal as a good one for CIÉ.

Amid such distortions, a signalling system designed to enhance safety ran aground. After expenditure so far of €14.6 million - €7.62 million of which was paid to consultants - it is still incomplete.