CIE's failure to pay outstanding money caused the closure of a company which was one of its contractors on the Mini-CTC signalling project, an Oireachtas Committee was told yesterday.
A former director of Modern Networks Ltd (MTL), Mr James Murray, was giving evidence at the subcommittee inquiry into the Mini-CTC signalling project.
MTL, a private company, went into liquidation last August.
Mr Murray said he resigned as an MTL director in April 1996 but remained a major shareholder until 1998. He did not hear of the Mini-CTC project until he read about it in the newspaper.
Mr Pat Rabbitte TD (Lab) asked if he was surprised that a relatively small contract should have run into such trouble.
Mr Murray said: "I was extremely surprised but I didn't know that at the time."
Mr Rabbitte asked why it should have run into such trouble.
Mr Murray replied: "I don't think I would blame any of the people involved on our side from what I can gather. Strikes me, and again this has all come out here, that the information that they needed to do the work wasn't available to them."
Mr Rabbitte said Mr Murray ascribed the explanation for the difficulties to the fact that technical and signalling telecoms people, design systems people, did not produce the goods. However, the company seemed to have other troubles.
Mr Murray said he would not fully agree with this.
"The troubles, as I understand them , were caused by the starvation of money from Iarnr≤d ╔ireann or CI╔. The company was perfectly profitable and was doing very well. The first I heard about the Mini-CTC was I think in 2000 and that's when money was needed to keep the company afloat and that was organised. The shareholders coughed up in 2000 £1 million on the understanding that CI╔ were going to pay the monies that were outstanding and that went on and on and on and on."
In May of this year, they were told the Mini-CTC issue was resolved, that it had been cleared through the Iarnr≤d ╔ireann board and it was now going to CI╔ for confirmation. The next thing they heard was the contract was being cancelled. Arrangements had been made by the shareholders to put money into the company on condition that the Mini-CTC issue was resolved.
"I don't know the figures but there was something like £3 million oustanding, I might be wrong, it might be £2 million, but there was a very substantial amount of money outstanding."