A deal allowing Treasury Holdings to develop CIÉ's property at Spencer Dock has been strongly criticised by Labour party TD, Mr Pat Rabbitte.

Responding to the disclosure that CIÉ will receive about €1 million (£78,740) from €9.4 million annual rent roll from the flagship building on the site, Mr Rabbitte said the contract should be investigated by the Oireachtas Joint Committee on Public Enterprise and Transport. The deal dates to 1998 and while An Bord Pleanála rejected the initial proposals to develop the site, CIÉ remains locked into the arrangement. The anchor tenant leasing the 200,000 sq ft building on the seven-acre site will be PricewaterhouseCoopers (PwC), which acts as auditor to CIÉ. CIÉ stands to receive rents of €1.5 million annually from PwC, but sources said that would fall to about €1 million due to "tenant inducements".

Land in the area has fetched €7.62-€13.97 million per acre in recent years, suggesting that the site CIÉ owns could be worth up to nearly €100 million. Mr Rabbitte claimed: "It would appear on the face of it that CIÉ got a rotten deal and that the rental arrangement is grossly in favour of the developer to the detriment of CIÉ."

The Minister for Public Enterpirse, Ms O'Rourke, declined to comment yesterday on CIÉ's obligations to Treasury. She received a report in September 2000 which was understood to confirm that CIÉ was locked into the arrangement.

Fine Gael called for the report to be published. Its public enterprise spokesman, Mr Jim Higgins, said: "Looking at the ballpark payments, it would seem to me to be an incredibly bad deal for CIÉ, notwithstanding the development costs. The yield to CIÉ would seem to be pitifully inadequate in the context of the top-line rental figure. I'll be tabling a priority parliamentary question to the Minister for Public Enterprise insisting that she bring before the Dáil a full and detailed balance sheet outlining all the details of the transaction."

Both Mr Rabbitte and Mr Higgins are members of a subcommittee of the Oireachtas Joint Committee on Public Enterprise and Transport, which is investigating a €45.7 million overshoot on a rail- signalling project. The escalation was linked in part to the construction by Esat Group of a telecoms network along CIÉ's railway. According to evidence heard at the inquiry, CIÉ's board agreed to the deal with Esat after discussing a possible entry into the telecoms market for about 15 minutes.

That investigation is stalled due to a High Court judgment which puts limits on the scope of all Oireachtas inquiries. The subcommittee has heard evidence from CIÉ's former director of programmes and projects, Dr Ray Byrne, and its former property manager, Mr Jim Gahan, who were part of the team that led CIÉ's negotiations with Treasury.