The European Commission began investigating the Mini-CTC (Central Traffic Control) signalling project late last year, but an Oireachtas inquiry into the project only learned of the investigation last week, it has emerged.
Under the original plans for the signalling project, dating from 1996, Iarnrod Eireann was to have availed of structural/ cohesion funds supporting the then National Development Plan. The Oireachtas Joint Committee on Public Enterprise and Transport was told by its chairman, Mr Sean Doherty, on Wednesday that the signalling system may cost CIE £50 million (#64 million), despite an initial projection of £14 million. In a preliminary statement to the inquiry, Mr Doherty said he had become aware of the Commission's investigations through discoveries made to the committee by the Department of Finance.
These discoveries included a letter dated June 11th, 2001, in which the Commission expressed concerns relating to possible "serious errors in project management and contracting that compromised the success of the project".
Potential conflicts of interest and staff movements from Iarnrod Eireann to the contractors, Modern Networks Limited, were also mentioned.
Mr Doherty said the Commission had sought from the Department of Finance "a full explanation of how the project was managed from inception as well as assurances that there were no irregularities in the contract".
Assurances that the Mini-CTC is proceeding towards completion were also sought.
The Commission's letter read: "In the absence of a modification to the description, the physical completion of the project is a prerequisite for the payment of the final balance."
Mr Manfred Beschel, head of the unit for Ireland and Britain in the Directorate General for Regional Policy told The Irish Times yesterday that "inquiry" was too strong a word for the Commission's investigations, which had been proceeding for several months. His organisation is responsible for administering cohesion funds.
"As cohesion funds are financing the whole thing, we would like to know a little bit more about it," he said.
The Mini-CTC was designed to introduce "power" signalling on four intercity lines. It would have involved laying 900 km of fibre-optic cables, but has yet to be completed, despite safety concerns.
Mr Beschel said his unit first became concerned when the signalling aspect of the infrastructure project was not completed within an agreed time. Subsequent media reports about potential irregularities prompted further questions from the Commission.
Mr Beschel said that while his unit's priority was the completion of the infrastructure project as a whole, questions on commercial irregularities were also of interest.
The inquiry is mainly concerned with investigating a deal under which an Esat group telecoms system was built on Iarnrod Eireann's railway at the same time as Mini-CTC construction was ongoing.
It is understood that the Commission has sought information on the project from both the Department of Finance and the Department of Public Enterprise on the circumstances.
