The Railway Procurement Agency yesterday said it would defend a legal action taken against it by its former chief executive designate, Mr Dónal Mangan.
Mr Mangan is still attending the agency's offices at Parkgate Street, Dublin, two months after the new chief executive took office.
He initiated the action against the agency after declining the post of Luas project director.
Mr Mangan had led the Luas light-rail initiative since its inception but was unsuccessful in his attempt to secure the post when it was advertised earlier this year.
The successful candidate, Mr Frank Allen, is thought to have been regarded as an outstanding candidate. Mr Allen formerly worked as head of infrastructure finance at KBC Bank in the Irish Financial Services Centre in Dublin.
When asked whether Mr Mangan was still turning up for work, a spokesman for the agency said: "That's correct but he is no longer a member of the agency."
He added: "He is no longer acting chief executive because the new chief executive is in place. The agency's position is that we will be defending the action."
That comment implies that there will be no moves by the agency to settle the case. It is thought that no date will be set for a hearing of the case until the new legal term starts this month.
While Mr Mangan was reluctant to be interviewed for what he regarded as his own job, he entered the recruitment process. Certain observers believe this may weaken his case.
However, the action is thought to call for his designation as chief executive under the terms of the Transport (Railway Infrastructure) Act 2001.
Mr Mangan argues that he should have been made chief executive because he was acting in that post immediately before the agency was established.
An engineer and former managing director of each of the three operating companies in CIÉ group, he had been regarded as favourite for the post.
The agency is managing the construction of the Luas system, which is expected to be introduced by the end of next year. But some observers believe that deadline will be very difficult to meet.
The construction of tram lines in the city must be finished first and staff must be trained to drive the trams. The contract to operate the system has been awarded to Connex, a French-owned company whose parent Vivendi is divesting certain subsidiaries to counter a debt squeeze.
