Uniform Construction have been awarded €32.3 million by an arbitrator in a final report.
The company was fired from the main drainage scheme in 2001 amid claims it had fallen behind schedule and was over budget.
As a result the company was prevented from tendering for public contracts since then and had to leave most of its 300 workers go.
A spokeswoman for Uniform Construction said yesterday: “Uniform Construction welcome the substantial award and is pleased that its professional competence has once again been completely vindicated”.
It is believed Limerick City Council will seek funding from the Department of the Environment to pay the compensation as such a payout would break the authority financially.
The council said the department backed its handling of the matter at all stages.
Limerick City Manager, Tom Mackey said yesterday the company was seeking €85m.
He said: “We feel it vindicates our decision to pursue the arbitration process, bearing in mind the magnitude of the claim lodged.”
Last November the High Court refused to interfere in an interim arbitration award following an approach to the court by the council.
In June 2005 the arbitrator issued an interim report which found in favour of Uniform Construction. The dispute had also gone to a conciliation where the decision also went in favour of Uniform.
The findings at both conciliation and arbitration confirmed Uniform was progressing all work with due diligence and was not in breach of contract.
Speculation at the time of the arbitration report suggested the final cost to Limerick City Council could be in the region of €50m.
Uniform Construction won a €9.5m tender for work on the Limerick Main Drainage Scheme in 2000. Uniform encountered site difficulties, which were not anticipated in the original tender.
Because of the dispute with Limerick City Council Uniform has been unable to tender for any new work in the State sector since 2001.