Bord Gáis underestimated the cost of the Irish Water metering programme by more than €100 million, as part of a detailed breakdown which they provided to the Government.

According to correspondence from May 2013 seen by RTÉ's This Week, the Department of Environment said its "understanding of the overall budget" was based on figures provided by Bord Gáis.

In the figures, the department estimated the entire cost of the metering programme would come to exactly €431.56m.

However, just weeks later it emerged that the final cost of the metering programme was €539 million.

This figure is €107m higher than the detailed estimate provided by Bord Gáis to the department.

The detailed estimate was carried out for Bord Gáis by external consultants working alongside Bord Gáis staff.

The document, in which the department noted its understanding of the likely costs, was dated 22 May 2013.

The following month, at its first official board meeting, Irish Water awarded the main contracts to the successful bidders for the installation of meters nationwide, subject to further negotiations.

The detailed survey included a breakdown of 20 separate sub-components of the likely costs.

The costs included everything from the meters; boundary boxes; ancillary works and management costs to smaller items including miscellaneous media and print material.

The full estimate came to a very precise €431,563,251.

Asked about the 25% difference between the detailed estimates provided to the Government and the final costs, Bord Gáis (now Ervia) told RTÉ in a statement that the earlier estimates were developed prior to detailed survey work designed to find out where and how many meters should be installed.

However, the survey work referred to in the company's statement began in late 2012.

The statement was 50% complete at the time that the estimated cost of €431m was being discussed as the likely figure by the department and Bord Gáis in mid-2013.

The statement said that the final budget "emerged from this survey work and the development of detailed contract documents".

A spokesman for Minister for the Environment Alan Kelly said that the final cost only emerged "following the completion of this survey work" and the procurement process.

However, the precise €539m final cost was first reported by the Irish Independent newspaper in July 2013, while Bord Gáis (Ervia) confirmed to RTÉ that the surveys did not conclude until October of that year.

"With capital projects of this scale such changes between initial estimates and final contract costs are common, particularly when there is no comparable precedent," the Bord Gáis statement said.

It is understood that the consultancy group which advised Bord Gáis on the estimated costs of the metering programme had worked previously on major projects with Thames Water, which is one of the largest water utilities in the UK.

"The final budget figure reflects the outcome of the detailed scoping of the project and a very competitive procurement process which took place under EU regulations.

“That procurement process has proven to be very successful, with the appointed contractors delivering the meter installation programme ahead of target so far," the Bord Gáis-Ervia statement said.

Minister Kelly's office said it would be "wholly incorrect" to describe the €431m estimate as a budgeted figure adding that the formal budget for the meters was not decided until after the procurement and surveying processes.

However, in the correspondence dated 22 May 2013, which was obtained by RTÉ as part of a Freedom of Information request, a senior official at the department referred to the sum as the "overall budget" for the cost of water metering programme.

In addition to this, an appendix at the end of the document describes the detailed breakdown of €431.5m as the "Budgeted Metering Programme Costs".