The National Roads Authority will have to pay £2.8 million as part of a £3.15 million settlement to SIAC, a Dublin-based construction company, after a mistake made in a tender for the building of the new Limerick-Adare national primary route was spotted by Limerick County Council staff.
The mistake in the tender put forward by the company which eventually won the £33 million contract, Pat Mulcair contractors, was initially not noticed by county council staff, or the National Roads Authority, the secretary of the council, Mr Jim Feane, said yesterday.
Mr Feane said that during a legal dispute with SIAC over the format of the tender documents used, the error was discovered.
"The county council, in the process of preparing a defence against that particular action, was re-examining the tenders. In the exercise of re-examining the tenders, the error was detected by our staff," he said.
The dispute over the format of documentation used, which is similar to that used by all local authorities, has not yet been resolved.
Originally, eight tenders were assessed for the contract to build a 10km stretch of road which will run adjacent to the rail line between Limerick and Adare.
County council roads division staff in Mungret, Co Limerick, in conjunction with the NRA, carried out the assessments.
"We accepted the contract subject to the approval of the NRA," Mr Feane said.
Separately, computing errors were made by the council and new tender totals were reached for both SIAC and Pat Mulcair, with the latter winning the contract.
"SIAC would have been aware that the tender total as submitted by them would have been lower than the tender total as submitted by Pat Mulcair," Mr Michael Tobin, chief executive of the NRA, said. Errors in tenders were frequent because they had to be submitted "in ink" after being drawn up electronically, he added.
He hoped a new pilot electronic tendering process would be operational within two months.
Following a process of arbitration, with a consulting engineer as arbitrator, the settlement of £3.15 million compensation for SIAC was reached.
Mr Feane said the council was insured for £250,000 of that amount and would pay a further £100,000. The balance of £2.8 million will be paid by the NRA.