The outgoing head of the Luas project has taken a High Court action against the State agency managing the initiative over its failure to select him as chief executive.

A legal team acting for Mr Dónal Mangan lodged a statement of claim yesterday against the Railway Procurement Agency (RPA), which took over management of the project from CIÉ on December 28th last year.

The agency's board selected a banker formerly with KBC, Mr Frank Allen, as chief executive after a competition initiated in March.

The selection surprised many observers because Mr Mangan was seen as strong favourite for the post. An engineer and former head of the three CIÉ bus and rail companies, Mr Mangan has led the Luas project since its inception eight years ago.

Mr Allen is expected to assume the role next Tuesday, although there are indications that Mr Mangan has yet to receive formal notification of the board's decision. It is believed Mr Mangan is on holidays. The post commands an annual salary of about €130,000.

In the statement of claim, Mr Mangan is understood to state that the competition to appoint a chief executive should be declared null and void. Under the terms of the Transport (Railway Infrastructure) Act 2001, Mr Mangan argues he should be made head of the agency because he was acting head immediately before its establishment.

It is understood he is calling on the Minister for Transport, Mr Brennan, to designate him head of the agency. He argues this is provided for in the Act. He is also calling on the Minister to designate other staff members as agency staff. At present, the staff are paid by CIÉ, although the transport group sources the monies from the RPA.

As the legal term ended yesterday, the case will not be heard until at least the autumn.

The agency's stance is not known although it is expected to defend the process. Mr Allen is believed to have been selected after a board vote.

The Luas project is highly sensitive politically, with the completion deadline before the end of next year believed to be very tight. The lines currently under construction will link Sandyford in south Dublin, and Tallaght in west Dublin, to the city centre.

The project has been long in gestation with the plans the subject of frequent controversy.

Mr Mangan's plans are not known although it is unlikely that he would return to CIÉ.