Links between Esat and a £36 million overrun on a CIE rail signalling project are a smokescreen, a key witness will tell an inquiry opening today.
It is understood Mr Leslie Buckley, Esat's former acting chief executive, is preparing to say that work on a telecoms system built for the company on CIE's railway could not have increased signalling costs to £50 million from £14 million.
Mr Buckley is a key figure in events under investigation by a sub-committee of the Oireach tas Joint Committee on Public Enterprise and Transport. He was a consultant to CIE up to two months before he became Esat's acting chief executive. Later he concluded a deal with CIE to construct a telecoms network on its railway in parallel to a new signalling system.
According to the inquiry chairman, Mr Sean Doherty TD, the telecoms and rail projects were linked from the outset. He has suggested that Esat's valuation when floated was significantly boosted by the deal.
But delays on the rail system and its rising cost were linked to the construction of the Esat system in a CIE-commissioned PricewaterhouseCoopers report. Because elements of the Esat system were built first, parts of the signalling network had to be inserted by hand into the ground to avoid damage to the telecoms system.
Mr Buckley is understood to be determined to vindicate his actions at the hearings. The licence agreement provided for payments by Esat to CIE of up to £35 million over 20 years.
As part of the deal, CIE received equipment crucial to any telecoms network from Esat. Mr Buckley is expected to argue that this was worth £100 million, meaning that the deal did not disfavour CIE.
He is understood to be preparing to say that his work at CIE up to December 1996 related to costs and not infrastructure. As such, he is expected to argue that this work had no bearing on his conclusion of a deal with CIE in 1997.
CIE's dealings with Esat are expected to come under close scrutiny in the hearings. Mr Buckley is understood to argue that questions about the breach of that policy are for figures within CIE to answer. Ironically, it was Mr Buckley, in his role as a CIE consultant, who said the transport group should seek savings through procurement.
Mr Buckley was understood last week to have questioned the validity of the inquiry and claimed its procedures were fundamentally flawed.
Barring a legal challenge, the hearings will feature senior commercial and political figures, and officials from the Civil Service. The Minister for Public Enterprise, Mrs O'Rourke, and former minister Mr Michael Lowry will give evidence.
