The Government may be forced to return up to £10 million in EU funding if the troubled CIE rail signalling project is not satisfactorily concluded, an inquiry set up to investigate the project heard today.
In his testimony to the rail signalling inquiry, Mr David Doyle, from the Department of Finance, said the EU commission may seek a return of grants made for the project if a viable strategy for its completion was not forthcoming.
He said the country was "at serious risk" of losing the funding.
Mr Doyle said the EU Commission was awaiting a report from CIÉ and the Department of Public Enterprise outlining a credible timetable and strategy for the project’s completion.
He also said the EU funds already approved could be transferred elsewhere. The project has cost £16.5 million already, of which the EU has funded £10 million
The inquiry by a subcommittee of the Joint Oireachtas Committee of Public Enterprise and Transport was set up to establish why the cost of a 1997 signalling programme for lesser-used lines on the Iarnród Éireann railway spiralled to more than £50 million despite a £14 million projection.
Work on a parallel telecoms system built on the network for Esat Group, then controlled by Mr Denis O'Brien, was linked to the overrun.
The subcommittee is investigating a number of overlapping relationships between CIÉ and Esat, which was awarded the State's second mobile phone licence by Mr Lowry when he was minister.
This will be the final formal session of the inquiry before witnesses are cross-examined by counsel, most likely next week.
