CIE's chief financial officer approved £10 million in payments to contractors in the rail signalling project over a two-year period without knowing that hardly any of the work was done, the inquiry was told.
Mr Jim Cullen said he first became aware of a cost overrun in July 1999, two years after the contract was signed, but the estimate then was only around 15 per cent which did not worry him.
He only discovered the true scale of the overrun and delays in September 1999 when the contractors submitted a revised costing of over £40 million. He rejected a suggestion that he should have known before, saying the project manager should have informed him.
Mr Cullen said he understood the project manager from December 1998 was a consultant firm, MHA (Michael Hamlyn & Associates), and before that Mr Bernard Kernan. Mr Kernan, however, said he was project engineer.
Mr Cullen said he would not have paid out money on the project if those in charge of it had not signed off on the work. He was unable to say who the signatories were.
Yesterday's session also re turned to the issue of changes made to a draft paper prepared for the board of CIE towards the end of the signalling project tender process.
The final paper excluded the reservations of engineers about the suitability of the contractors who were ultimately awarded the signalling contract.
Iarnrod Eireann company secretary Mr Richard O'Farrell said he would normally prepare final board papers in consultation with the relevant departments and he presumed either Mr Rory O'Connor, of the procurement department, or Mr Brian Powell, former head of procurement, had advised on the changes. Both men have already said they had nothing to do with altering the paper.
Earlier, inquiry chairman Mr Sean Doherty TD told the hearing the sub-committee was considering legal action in respect of two witnesses who were ordered on Monday to attend the inquiry but failed to do so.