The secretary-general at the Department of Public Enterprise and his predecessor have told an Oireactas inquiry they did not seriously question a troubled CIE rail-signalling project for over two years while its costs more than tripled.
The inquiry heard that the Department only took action when the initial £14 million estimate rose to £50 million and CIE itself was admitting that it was "escalating out of control".
It also heard that a consultant's report which raised serious questions about the handling of the project was not discussed by the board of CIE for six months after it was delivered to the company.
The details emerged yesterday on the opening day of the inquiry by a sub-committee of the Oireachtas Joint Committee on Public Enterprise and Transport into the £36 million overrun on the still unfinished rail-signalling system known as mini-CTC (centralised traffic control).
Contracts for the project were finalised in mid-1997, and it was due for completion at the end of 1999.
But major delays and cost overruns were evident in November that year, and consultants Pricewaterhouse
Coopers were commissioned to examine the problems.
The secretary-general at the Department of Public Enterprise, Mr Brendan Tuohy, told the inquiry he received quarterly progress reports from CIE on the mini-CTC project, but the scale of the difficulties was not apparent until the consultant's report last year.
Mr Tuohy defended the reliance on the quarterly reporting procedure, saying it was not the Department's job to "micro-manage" CIE by involving itself in every detail of the company's work.
He said the Department was handling £500 million in projects at the time. In that context, a £3 million overrun in the mini-CTC project revealed in April 1999 was "modest".
Mr Tuohy said he believed CIE was taking care of it, and nothing in the quarterly reports which followed suggested otherwise.
Mr Tuohy's predecessor, Mr John Loughrey, who retired in January 2000, also defended the reporting system. "There was an effective early-warning system on this project . . . but the information that was coming through on the standard quarterly reports was such that it did not give sufficient early warning on this occasion."
Mr Loughrey said the Department's relationship with CIE was based on trust and he had no reason to doubt the reports, even when an overrun began to appear. "The reports were totally relaxed in attitude to this overrun," he said.
He admitted with hindsight, however, that there must have been "an element of wishful thinking" on CIE's part and that the reports lacked "the hard edge of reality".
The CIE executive chairman, Mr John Lynch, who took up his position the day after the consultant's report was delivered to the company in March 2000, said he became aware of it only in May that year and got his first real inkling of trouble in July. "I was the non-executive chairman until September, and he is not filled in on everything," he said.
Mr Lynch asked the inquiry to bear in mind that he was also dealing with a protracted rail strike at the time.
He defended the board's deferment of discussion on the PricewaterhouseCoopers' report to September. "It was a historical document. I was facing into a cost overrun from £14 million to £50 million and the onus I saw was to sort that out rather than go backwards."