A former Treasury official has been telling a Tynwald select committee how a massive ?120 million overspend at the Manx Electricity Authority came to light.

This morning (Wednesday), former financial controller Colin Kniveton told how the MEA had used different accounting practices which had hidden the degree of its problems.

He said the way entries had been made in the Authority’s books made it look more profitable in the year before the problems became obvious.

And the money woes were only revealed when the MEA released draft accounts in November 2004.

Jason Roberts reports (audio file attached):

Giving evidence this morning, Mr Kniveton said when he read the accounts he realised the authority had overspent by around 70 per cent – and would need vast amounts of money to service the debt.

The authority had previously been uncooperative and had only released the accounts because it wanted Treasury to back its plans to light the Island’s fibre-optic cable.

Mr Kniveton told the committee suggestions the Treasury had known about and helped to cover up the problems simply were not true.

He said the different accounting practices weren’t illegal at the time, but regulations had since been changed to prevent any similar incidents in future.