The computer system is not trusted by staff, say MPs
A "stupendously incompetent" government efficiency drive designed to save £57m will end up costing £81m, MPs say.
The Department for Transport scheme aimed to cut administration expenses by basing payroll, finance and personnel services all on one site in Swansea.
But the Commons public accounts committee said the project had been rushed through, was not yet fully introduced and was set to make losses.
The new computer system had even issued messages in German, the MPs added.
But the DfT said the scheme was now beginning to bring "real progress".
The DfT had attempted to bring in "shared services" project - part of a wider £1.4bn Whitehall savings plan - in a year, the committee said.
The MPs criticised the department for setting itself a deadline of April this year for getting all its agencies involved, calling this "overly optimistic".
The department knew that it was pushing things with such a tight timetable but, without robust challenge to such a risky strategy, ploughed on confidently
Edward Leigh, Commons Public Accounts Committee chairman
Staff had "little confidence" in the new computer system, which "in some cases" was worse than the old one.
Committee chairman Edward Leigh, Tory MP for Gainsborough, said it was one of the worst cases of "project management" he had seen.
"The department knew that it was pushing things with such a tight timetable but, without robust challenge to such a risky strategy, ploughed on confidently," he added.
"The result was lamentable. The underlying computer system was inadequately procured and tested, resulting in an unstable set-up when it was switched on," he added.
Eight months after the departments own deadline had passed, only two of its seven agencies were using the new system, Mr Leigh said.
In its report, the committee said: "Despite the extent of mismanagement in this case, no individuals have been dismissed or properly held to account."
Mr Leigh called on the department to deliver a functioning, trustworthy and beneficial system.
The shared services centre in Swansea was originally forecast to cost £55m and lead to £112m of savings - a benefit of £57m.
But the department now estimates the programme will cost £121m and save £40m, meaning taxpayers will have to make up the £81m difference.
A DfT spokesman said there had been "consequences" for some staff of the staff involved in setting up the scheme.
He added: "As with any large scale and long term project, there have been aspects of shared services that have taken longer to implement than others.
"However, the system is now starting to deliver real change within the department with smoother and more streamlined processes.
"We continue to develop shared services and believe that the new way of working will result in significant improvements.
"We welcome this report and will be responding to its recommendations in due course, with an update on our progress."
Shadow transport secretary Theresa Villiers said: "It is scandalous that at a time when Labour mismanagement has put our public finances in such a disastrous mess that Geoff Hoon's officials are pouring taxpayers' money down the drain.
"Hard working taxpayers will be incensed that a project that was supposed to save money will actually cost them £81 million - money that would have been far better spent on much needed transport improvements that Labour have promised so many times and failed to deliver."
Liberal Democrat transport spokesman Norman Baker said: "Here's yet another Government Holy Grail which has so far failed to bring any benefit.
"It is astonishing that the department failed to meet any of its targets and completely unacceptable that no one has been held to account for this mess."