The Department of Environment confirmed the controversial move was agreed in recent weeks in a bid to consign the wider e-voting scandal to history.
Speaking at the latest Dáil Public Accounts Committee, new Department of Environment secretary general John McCarthy confirmed that a deal was struck with Martin Duffy earlier this year as part of ongoing attempts to address unresolved issues relating to the project.
In February 2004, Mr Duffy, from Scotstown outside Clones, Co Monaghan, won a lucrative €420,000 tender for the right to house 288 of the 7,500 machines — which, despite much fanfare and a €55m bill, were never used and ultimately had to be scrapped.
The tender was handed out by Mr Duffy’s aunt, Josephine Duffy, who at the time was also the returning officer for the Cavan-Monaghan electoral area.
Speaking when the controversy first emerged in 2010 Ms Duffy, who has since passed away, insisted the family connection “didn’t make a difference” to the decision, adding the deal was agreed “between his solicitors and mine”.
However, in later media interviews, the then senior official admitted she had “coerced” her nephew into building the shed which housed the e-voting machines — a building which was key to Mr Duffy’s bid for the lucrative contract beating five other rivals whose facilities were deemed inadequate.
Despite extensive attempts by the department to find a way out of the agreement in recent years, it had been expected that the State was legally obliged to continue paying Mr Duffy for the €420,000, 25-year contract.
However, speaking at yesterday’s PAC meeting Mr McCarthy said in recent weeks the department and Mr Duffy have agreed to cancel the deal on the condition the businessman receives a 50,000 severance payment.
Mr McCarthy said the move is part of wider attempts to consign the e-voting scandal to history.
In all, 13 premises were used to house the 7,500 e-voting machines after they were purchased by then Fianna Fáil Environment Minister Martin Cullen in 2002.
Of those sites, three were State-owned and did not require any tender process, four were leased buildings and five were contracted out — with Mr Duffy’s facility being the last of these premises to be resolved.
The machines have to date cost the taxpayer €55m in purchase, storage and associated fees. Following an EU-wide open tender competition the equipment itself — which was valued at €24.5m — was sold for just €70,000 in June 2012, or just €9.30c per machine.