Lowry 'knew nothing' of Esat talks

Only days after his latest appearance before the Moriarty tribunal, Mr Michael Lowry TD found himself before another inquiry …

Only days after his latest appearance before the Moriarty tribunal, Mr Michael Lowry TD found himself before another inquiry yesterday, facing yet more questions about his time as minister for transport, energy and communications in the rainbow coalition.

He sat unsmiling for two hours before the sub-committee investigating cost overruns on an Iarnr≤d ╔ireann rail signalling system that is likely to cost more than £50 million despite a £14 million projection.

Mr Lowry has been in the political wilderness since the exposure in late 1996 of his financial dealings with the former supermarket magnate, Mr Ben Dunne. Thus it was a touch ironic when he sat before the inquiry chairman, Mr Seβn Doherty TD, who spent years in political no-man's-land himself after phone-tapping scandals in the early 1980s.

In the final formal session of an inquiry that has sat over six weeks since the beginning of September, evidence was also heard from the Minister for Public Enterprise, Ms O'Rourke, and Mr Alan Dukes TD, who succeeded Mr Lowry. Further hearings are planned next week, when counsel acting for witnesses will conduct cross-examinations.

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The construction by the Esat Group of a telecoms network alongside CI╔'s railway in 1997 has been blamed for at least part of the overrun on the signalling system.

The arrangement enabled Esat to construct a lucrative asset on State property. CI╔ claims it stands to gain more than £100 million over 20 years from the deal although the sub-committee has asked whether a better deal was possible, with Esat or another telecoms group.

The heads of agreement between the groups were signed in June 1997 by Esat's chairman at the time, Mr Denis O'Brien, and CI╔'s chief executive, the late Mr Michael McDonnell.

Mr Lowry was no longer in office by then. Rather than examining CI╔'s exploitation of its permanent way, as the railway is known, he was concerned todefend himself.

Still, the sub-committee had many questions about his relationship with the millionaire businessman, one which has been scrutinised at length by the Moriarty tribunal.

Mr Lowry's view was clear: except for what he had seen and read in the media, he had no knowledge of CI╔'s contract with Esat. He was still in office in October 1996 when negotiations were under way, but said he knew nothing of the talks.

An Esat director, Mr Leslie Buckley, was working on cost-cutting review in Iarnr≤d ╔ireann at that time. Mr Lowry said he had no knowledge of the work carried out by Mr Buckley, who led Esat's negotiation weeks after he left the rail company.

Mr McDonnell left the group early this year and died, tragically, in April. Mr Lowry was in office when he was appointed. He said Mr McDonnell's management style could be questioned, but not his integrity.

"He was the quintessential public official," Mr Lowry said. "I think that Mr McDonnell, in my view, was undermined deliberately. I believe that he was shafted in the company he was in and I believe that he was driven to distraction."

Mr Lowry declined to suggest who was responsible. "I am not going to speculate on them but I think anybody who was following politics and anybody who has followed the sojourn of CI╔ in recent times, you could come to your conclusions. I've come to my conclusions."

The subcommittee did not pursue the matter further. Mr McDonnell's family secured a High Court stay on the hearings in September in an attempt to protect his reputation.

When Mr Dukes was in office, he learned of a possible relationship between CI╔ and Esat at a meeting on May 12th, 1997, when Mr O'Brien suggested his company might be interested in constructing a telecoms network on the rail system. In fact, the talks were just weeks from completion. Mr Dukes agreed this was "odd".

Ms O'Rourke was questioned for about 21/2 hours on her knowledge of the affair. She said the heads of agreement were signed in haste "in a flurry of activity" during the interregnum after the general election which led to her appointment in June 1997.

When it came to CI╔'s need for a statutory instrument required to legally activate the Esat network, she implied she had been misled by CI╔'s director of programmes and projects, Dr Ray Byrne, and its property manager, Mr Jim Gahan, at a meeting in February 1998.

A paper they presented said the group's consultants, Norcontel, had endorsed the deal as a very good one for CI╔. But Ms O'Rourke had learned only this week that Norcontel had denied that.

Norcontel's endorsement was the coup de grace when Ms O'Rourke decided to ask the Attorney General's office to draft the statutory instrument. Only the sub-committee could rule on the implications of this disclosure, she said.