Plans and timelines for the future expansion of rail services across the country could be at risk due to the costs associated with a failed €50 million IT system, the National Transport Authority (NTA) has indicated.
In a confidential letter to Irish Rail on Monday, the NTA said it accepted a decision by the board of the train operator to terminate a contract with Spanish company Indra for the development of what is known as a traffic management system (TMS) as well as an associated maintenance contract.
However, the NTA said there would be “significant financial consequences”.
The TMS is aimed at integrating signals, communications and other systems on the rail network and is scheduled to form a key part of a new National Train Control Centre (NTCC) at Heuston Station which is now expected to cost €250 million.
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However, the TMS component of the overall project has been beset by delays and cost overruns.
The Irish Times reported in May that the Irish Rail board had written down by €50 million the value of its investment in the NTCC.
Irish Rail told the NTA on June 29th that its board wanted the contract with Indra ended. It suggested entering into a new arrangement with another company, Siemens Mobility, as an alternative.
In its letter to Irish Rail on Monday the NTA said: “Clearly, there are significant financial consequences arising from the position reached on this project, where the supplier contract is to be terminated and a very significant financial impairment has been implemented.
[ National Transport Authority rebuked for ‘wasted’ €50m on rail traffic systemOpens in new window ]
“The financial impacts of these events on the remainder of the heavy rail investment programme will need to be assessed, particularly in light of the continued funding requirement for a replacement train control system.”
At present Irish Rail has ambitious plans to expand its Dart service to Drogheda and Wicklow and to develop a train service to Navan.
The rail company did not comment on the NTA letter.
Irish Rail is expected to tell the Dáil Public Accounts Committee on Thursday that its existing technology for controlling train movements was life-expired, was not technically supported and would not allow for further expansion.
In a report to the committee, Irish Rail said the root cause of the project’s failure or underperformance was the inability of the contractor to deliver a version of the TMS software that on formal testing met its requirements and was safe and operable to be commissioned.
However, in its first public comment on the controversy, Indra told The Irish Times that “while the Irish project has faced exceptional challenges, including the impact of the Covid-19 pandemic and the complexity of integrating a modern TMS system into a century-old railway network with extensive legacy infrastructure”, it had fulfilled its contractual obligations.
“In the event of receiving notice of termination of the contract, Indra will analyse the situation and take the appropriate steps in accordance with the stipulated terms,” it said.
The NTA letter sent indicates that Irish Rail had sought approval to publish what is known as a voluntary ex-ante transparency notice setting out its intention to award a contract outside of normal tendering rules to Siemens Mobility to cover about 49 per cent of the network.
