The Dutch company building the Luas light rail system in Dublin will cease to exist when the construction is complete, according to a strategic review published yesterday.

Ballast-Nedam said in a statement that the Luas initiative would be finished before its international operation was wound down. It currently employs about 900 people in Dublin.

The Dutch group, which has projected losses of €135-€150 million for 2002, is one of three engaged in the construction of Luas.

The other two are Italian group Ansaldo, which is managing the project's rail element, and the Australian group MVM, which is responsible for design.

From an estimated project cost of €670 million, it is thought that Ballast-Nedam's element of the contract is worth in excess of €400 million.

A spokesman for the Rail Procurement Agency, which is overseeing the initiative, said yesterday's announcement by Ballast-Nedam at an emergency general meeting was in line with reassurances received from the group when its share price lost ground last year.

The group said its international business unit would cease to exist after completing five current projects, including Luas.

The full-year loss predicted yesterday was significantly in excess of the €105 million deficit projected in the middle of the year.

However, the figure excluded possible provisions for restructuring its international activity.

Ballast-Nedam added: "These additional provisions will be for an amount between €50 million and €65 million.

They relate to the winding down of the international division, the financial settlement of international projects (claims and outstanding payments) and the reorganisation of the UK activities."

The group disclosed that a financial group had made an offer for its Dutch activities.

The long-awaited Luas system has been the subject of frequent delays, with the first of three lines due to be commissioned early next year.