The Government has appointed former AIB chief Tom Mulcahy chairman designate of the Dublin Transport Authority (DTA), the powerful new body which will be responsible for all road, rail and light rail transport in the greater Dublin area, writes Arthur Beesley, Senior Business Correspondent

Minister for Transport Martin Cullen has also appointed Mr Mulcahy to the chairmanship of the Railway Procurement Agency (RPA), the body responsible for the Luas network. The RPA which will be absorbed by the DTA when it is established.

The two new appointments represent a significant comeback for Mr Mulcahy to the highest echelons of the public sector less than three years after he resigned the Aer Lingus chairmanship. He left the airline in May 2004 immediately after it emerged that he was among five AIB executives who had "tax issues" relating to periods up to 1998.

Mr Mulcahy succeeds former IDA Ireland chief Pádraic White as RPA chairman. Mr White, who opposes the proposed abolition of the RPA, said he "would have been willing" to serve again as chairman but declined to say whether he was disappointed not to receive a new mandate. "I really don't want to go any further than that."

Mr White said in a statement issued by a public relations agency that he was "immensely proud" of the RPA's achievements. However, it was a "matter of regret" that it was not possible to have a meaningful dialogue on the RPA's own proposals.

"While the board which I chaired was opposed to the abolition of the RPA, and its absorption into the Dublin Transport Authority, the board was strongly supportive of the case for a Dublin Transport Authority to 'add value' to the work of existing organisations in Dublin. The RPA board did not see the sense nor the logic of that new organisation doing what the RPA was already doing successfully."

Mr Cullen also appointed solicitor Jacqueline Cross to the RPA board. She works for legal firm Matheson Ormsby Prentice. RPA directors Tom Wall and Brendan Malone were reappointed by the Minister. Former board member Dr Finola Kennedy was not.

In a 2005 Irish Times interview, Mr Mulcahy said an examination of his affairs by the Revenue confirmed that he was tax compliant in 2004. He had made a voluntary disclosure in 2003 in respect of an offshore account containing "several hundred thousand" that dated from when he worked in Britain for the bank.

"I am not saying that I was always compliant. I made a voluntary disclosure and paid what I thought was due which is the right open to all citizens."

Revenue accepted his statement of May 2004 that he had no knowledge of Faldor, an offshore investment vehicle used by former AIB executives. His case was not connected with Faldor, whose affairs were made public by AIB soon after the exposure of over-charging in its foreign exchange unit.