Taxpayer to foot €83m bill over 'cock-up'

THE Department of the Environment has acknowledged that no one was fired or sanctioned after a "monumental cock-up" of a simple sewage scheme in Limerick left taxpayers with an €83 million bill.

Department secretary general Geraldine Tallon yesterday confirmed to the Public Accounts Committee (PAC) that "no heads had rolled" after Uniform Construction Ltd was wrongfully fired from the €9.5m sewerage scheme.

The final bill to the taxpayer is expected to be in excess of €83m after years of legal wrangling and the employment of another company to finish the job.

Ms Tallon also admitted the department ignored the advice of the Attorney General when it advised Limerick City Council to fight the case in the High Court, despite having been told during an arbitration hearing that the contract was wrongfully terminated.

The original €9.5m contract for the 2.6km of sewer work was awarded to Uniform Construction in 1999 but the company told the city council soon after that it had come across "unforeseen ground conditions" while tunnelling.

But the council decided the company was to blame for significant problems with the work, such as roads collapsing. Its contract was terminated in 2001.

The company and council fought the case out at conciliation and arbitration hearings, where it was ruled the contract was wrongfully terminated.

However, Limerick City Council refused to pay the company the costs and damages it demanded.

Furthermore, the decision to stand its ground was backed by the department which supported an appeal to the High Court despite advice against doing so by the Attorney General.

Arbitrators ultimately decided to award the company €32m. With legal costs as well as a further €27m for a different company to do the sewer work, the final bill is set to cost the taxpayer €83m.

Comptroller and Auditor General John Purcell told the PAC yesterday that cases of terminating similar contracts were "very rare".

His report also noted that former Environment Minister Noel Dempsey had been first informed of the debacle as early as September 2001.

But stunned committee members queried how the simple sewerage job had cost so much. TD Niall Collins asked: "Has anyone been held responsible for this monumental cock-up? The figures are exorbitant."

Ms Tallon replied: "There's no escaping the disappointment the high cost the exchequer has had to pay for this."

When pressed, she also admitted: "No, heads haven't rolled."

Solicitors McCann FitzGerald advised Limerick City Council on the company's termination and an independent review of the decisions taken is under way, said the department chief.

Fine Gael TD Jim O'Keefe asked why alarm bells had not sounded when the case first came before the department's attention.

The PAC's chairman, Bernard Allen, said members intended investigating all reports on the decisions that had been taken by the council and department.

Juno McEnroe
Irish Examiner

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Strategy for dealing with Dublin sewage output to be announced

A new plan to deal with the sewage output of homes and businesses across the greater Dublin region is to be announced in the coming months.
The new strategy, likely to be published in September, follows the rejection almost two years ago by Fingal County Council of plans for a €140 million regional sewerage plant at Portrane in north Dublin.
Portrane had been identified in the Greater Dublin Strategic Drainage Study, commissioned by the seven local authorities in the greater Dublin area, as the preferred site for the new municipal sewerage plant to satisfy the region's growing sewage needs.
The proposed plant would have had the capacity to process the waste of 850,000 people and would have been second in size in the region to the waste water treatment works in Ringsend.
However, in November 2005 Fingal councillors voted to reject the plan and ordered that the strategic drainage study be reviewed.
Consultants were appointed a year later to conduct a strategic environmental assessment (SEA) of the report. Their recommended strategy to deal with the region's waste is being finalised.
Consultants Mott MacDonald Pettit and ERM identified 16 options for dealing with the waste and will recommend one to the local bodies, comprising the four Dublin authorities and Meath, Kildare and Wicklow county councils.
Despite Fingal's rejection of the original plan, the plant at Portrane remains among the options under consideration by the consultants and could be returned to the local authorities in September as the preferred strategy.
It is likely that a final decision on the waste strategy will be made on the basis of the consultants' report as the local authorities will be obliged by the forthcoming Water Services Act to put in place a strategy for dealing with the region's waste. Failure to do so will result in a strategy being imposed upon them by the Minister for the Environment.
Options under consideration include the 850,000 PE (population equivalent) capacity plant at Portrane; a 450,000 PE plant at Portrane plus a 350,000 PE plant discharging to the Liffey, either upstream of Islandbridge or to the Grand Canal Storm Cell; or extensions to the Ringsend plant in conjunction with improvements to capacity at smaller existing plants or sewers.
The consultants are also considering a strategy for a 850,000 PE plant within north Dublin, but not necessarily at Portrane, or a network of sub-regional plants or even smaller community-based plants throughout the seven local authority regions also at yet to be selected locations.

Olivia Kelly
© 2007 The Irish Times