More than £6m paid to rail project consultants

Dr Ray Byrne told the Dail subcommittee investigating cost overruns at CIE that he did not enjoy the three-hour cross-examination…

Dr Ray Byrne told the Dail subcommittee investigating cost overruns at CIE that he did not enjoy the three-hour cross-examination he faced yesterday when the rail signalling inquiry resumed.

It was hardly a surprise, for his engagement with the subcommittee chaired by Mr Sean Doherty TD was a testy one.

As the State transport group's head of programmes and projects when the cost of its £14 million signalling investment spiralled to more than £50 million, he has been called on several occasions to explain his actions in an affair which is linked to the construction of a telecoms network for Esat on the CIE railway.

The subcommittee of the Oireachtas Joint Committee on Public Enterprise and Transport was sitting for the first time since its suspension in September, when the High Court imposed a stay on the hearings. The Supreme Court lifted the stay last week, although a judicial review action by the family of CIE former chief executive, the late Michael McDonnell, is still expected.

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While the cost overrun was enough to prompt the inquiry, it emerged that about half the £11.5 million spent to date on the project by CIE was paid to consultants.

The group's executive chairman, Dr John Lynch, said £4.5 million was paid to external consultants and £2 million to internal consultants. This "stunned" him. He agreed with a suggestion that the poor flow of information meant good corporate governance had been "turned on its head" at CIE.

The flow of information was central to Dr Byrne's evidence, which centred on the group's relationship with the Department of Public Enterprise. Not for the first time, he took exception to certain questions and remarks by subcommittee members. In addition, he was frequently advised by Mr Doherty to refrain from asking his own questions of the subcommittee.

He was asked repeatedly about the contents of a paper he prepared for a CIE board meeting on June 4th, 1997, which sought approval from its directors for the construction of the Esat network.

That paper suggested that the Department of Public Enterprise had been informed informally of the negotiations with Esat and had raised no objections.

Dr Byrne stated yesterday that that was an accurate reflection of the situation at that time. Significantly, however, this was disputed by an assistant secretary at the Department, Mr Pat Mangan, who said it was "not factual". Mr Mangan suggested the paper had "overstated" the Department's position.

Yes, Mr Mangan was in favour of the commercial exploitation of CIE property, but while he had engaged in "general" discussions by telephone and over lunch with Dr Byrne and others about the possibility of CIE entering the telecoms business, he did not know of a specific proposal with Esat until June 16th - after the deal was approved by CIE directors.

That contention was supported in evidence given in September by a former secretary general at the Department, Mr John Loughrey, and in the statement of another senior official in the Department, Mr Michael Harper.

Concerns and "issues" were expressed by the Department, but the deal that went ahead had a different formulation.

In addition, Mr Mangan said he was surprised to learn that construction of the Esat network began before the statutory instrument enabling the group to enter the telecoms business was signed in April 1998.