A consulting firm acting for CI╔ denied endorsing a deal which enabled Esat to build a telecoms system on the railway, the rail signalling inquiry heard yesterday.
This was contrary to assertions in a paper CI╔ sent to the Department of Public Enterprise when it sought the Statutory Instrument required to activate the Esat system.
The paper was prepared by CI╔'s former head of programmes and projects, Dr Ray Byrne. It said the consultants, Norcontel, had "endorsed the deal as a very good one" for the transport group.
But that was refuted by a Norcontel director, Mr Padraic Casey, in evidence opened to the inquiry yesterday. He appeared in private session before a High Court commissioner last month, when the inquiry was suspended due to a court action.
According to the transcript published yesterday, Mr Casey was asked whether he endorsed the deal as a very good one for CI╔. He replied: "No, we did not. As I explained, we made no comments on the final version of the deal because we had not been asked by CI╔."
This is significant, because CI╔ was not empowered to activate the system without the Statutory Instrument, which was signed in April 1998 by the Minister for Public Enterprise, Ms O'Rourke.
The inquiry heard the Department of Public Enterprise was not informed of CI╔'s telecoms initiative and its negotiations with Esat until after the deal was done.
This was not "satisfactory", said an assistant secretary in the Department, Mr Pat Mangan. "We do like to know if there are significant events coming up," he added.
Another official, Mr Michael Harper, said the Department was expected to "jump through rings" without adequate information, to process the application "in record time". Ms O'Rourke and her immediate predecessors, Mr Michael Lowry and Mr Alan Dukes, will give evidence to the inquiry next Monday. Witnesses will be cross-examined at a later date.
CI╔'s executive chairman, Dr John Lynch, yesterday said he had no option but to cancel its contracts with the two companies hired in 1997 to build its new signalling system. The implementation of the contracts had been a "disaster area", he said.
Modern Networks Ltd (MNL) and the French multinational Alstom have claimed there are valid reasons to explain the rise in the cost of the project to more than £50 million from a projected £14 million.
Yesterday's session heard MNL's former managing director, Mr Brian Powell, blame CI╔'s non-payment of £4 million on the company's closure this summer, with the loss of 250 jobs. Mr Powell also questioned why CI╔ had agreed a settlement with Alstom before its executives gave evidence to the inquiry last September, but not with MNL.
Dr Lynch said he had been advised to cancel the deal. He was in a "no win" situation.
The project will be completed in-house, at a cost of £35 million, in addition to the £14 million spent already.
