Irish Rail accused of burying €8.6m fraud

IRISH RAIL have been accused of burying a report which concluded a potential €8.6 million in taxpayers’ funds was lost through cracks in its contracting systems and through fraud.

An independent accountancy firm told Irish Rail in mid-2008 in a draft report that it had found the “historic loss,” but the CIÉ group told the consultants that it had strayed outside its terms of reference.

The subsequent report by accountants Baker Tilly Ryan Glennon (BTRG) on Irish Rail found that almost €2.5m was lost to the group through problems with procurement methods and fraudulent activity.

Three employees, including a supervisor, have since been fired.

But independent Senator Shane Ross told CIÉ before an Oireachtas Committee yesterday it had “buried” the original draft report and the final report was a “whitewash”.

“What worries me is why these figures were ‘disappeared’ between the draft and final report,” said Mr Ross.

Irish Rail chief executive Dick Fearn defended the decision to go with the final report, saying the larger figure had not been substantiated and had been a “guestimate”.

The €8.6m in losses could not be substantiated, argued Mr Ross, because there was such a lack of documentation in Irish Rail — one of the main criticisms of the BTRG report.

Other criticisms in the yet unpublished report found theft, “all sorts of malpractice that were endemic” and had made clear Irish Rail was a company completely out of control, said Mr Ross.

The final €2.5m in losses reported included fraudulent activity amounting to €665,807. This included €271,665 which came from fraudulent invoices and another €363,540 lost through the loss of scrap rail and sleepers.

Just €100,000 had been repaid by one individual.

Losses had included overstated works on soil removal as well as the failure to properly get EU grants for rail lines in Westport and Rosslare.

Gardaí had secured charges against two employees and were chasing a third, the Committee on Transport heard.

The BTRG report had cost €450,000.

Labour’s Tommy Broughan listed other concerns about Irish Rail from the report which included a lack of trained staff, incorrect documents used for procurement, generic invoices and problems with budgeting and a lack of traceability in the company.

Committee members agreed to call the accountancy firm before it as well as Transport Minister Noel Dempsey over the report.