Sewage contract - Money down the drain in Limerick

In his annual report published yesterday Comptroller and Auditor General John Purcell, the state spending watchdog, highlighted the sewage works contract in Limerick that was priced at €9.5 million, but will end up costing the taxpayer at least €83m.

Mr Purcell noted the failure of the Department of Environment to issue dispute resolution guidelines for Limerick City Council, which became implicated in the massive over-run as result of a dispute with a construction company that submitted the lowest tender for part of an overall drainage contract.

Rather than cutting its losses when the company ran into difficulties over ground conditions, the city council rejected a settlement offer and went to arbitration.

Then it went to the High Court to try to block the arbitration.

Between the arbitration, the court costs, the legal fees, and the payment to another company to complete the work at more than twice the original tender, the whole thing has ended up costing almost nine times the original price.

On the brighter side, Mr Purcell’s report also highlights that the State has already collected more than €40m as a result of tax evasion uncovered by the investigations of the Moriarty and the Mahon tribunals.

Other cases are still being investigated by the Revenue, so that figure is likely to increase, but it still falls well short of the millions that have literally gone down the drain in Limerick.