The State's spending watchdog has strongly criticised the Government's handling of the new national postcode service.

The Comptroller and Auditor General says it's not clear that the €38 million Eircode scheme will achieve the data matching benefits the Government had hoped.

It also says 'some aspects' of the procurement process were unsatisfactory.

Eircode has been regularly criticised since it was launched by the Communications Minister earlier this year - with freight companies, couriers emergency services describing it as 'not fit for purpose'.

Now the State's own spending watchdog - the C&AG - says there were a number of shortcomings in how the service was created.

It says cost-benefit analyses carried out by the Department of Communications were based on an entirely different model to the area-based scheme the Government eventually settled on.

The Comptroller and Auditor General says aspects of the procurement process were unsatisfactory - including EU concerns over the qualifying criteria; and a pattern of non-competitive tenders for consultants working on the project.

Estimates from last month put the total cost of Eircode at €38 million.

The C&AG now says it's not clear that data matching by Revenue identified as Eircode's main benefit to the public sector - will even be achieved.