Cost of our national roads
programme overruns by euro9.4bn
Irish Independent 30th
by Treacy Hogan Environment
Taxpayers will have to fork out euro9.4bn extra for the
national roads programme - because it was not properly
There was a systematic failure by the State's National
Roads Authority (NRA) to fully price the plan, a damning
official probe reveals.
The ambitious new network of highways and improved roads
was initially priced at euro7bn by the authority. But it
will now cost as much as euro16.4bn, an investigation by the
Comptroller and Auditor General investigation discloses.
Original estimates were understated by more than 40pc
because of "a systematic failure to fully cost certain
project elements and a failure to take full account of
The report will be closely scrutinised by Finance
Minister Charlie McCreevy and Transport Minister Seamus
It highlights a litany of costly overruns and delays and
also reveals that consultants on multi-million euro road
projects are making a fortune. They automatically get 4pc of
the final cost, even if this has rocketed, and they earn a
flat fee of euro162,000 for contracts over euro25.4m on top
While 40pc of the overspend is due to inflation, about
one-quarter has been linked to underestimation of prices
when the roads programme began.
"A further 16pc of the increase was due to a systematic
failure to cost certain elements of schemes at the planning
stage," says the report. "This only became apparent when the
NRA adopted a new standard costing approach in
The report finds:
- A lack of costing expertise in the National Roads
Authority, since remedied. New projects added on and
changes which accounted for 20pc of the increase.
- Huge increases in the costs of the Dublin Port
Tunnel, the South Eastern Motorway and other major
national roads projects rocketted in just two years. The
Port Tunnel was expected to cost euro220m in 2000,
euro580m in 2002 while the current estimate is euro715m,
more than triple the initial projected bill.
- Half the roads programme originally due to be
completed by 2006 will not now be finished in time.
- The cost of acquiring land for road improvements is
soaring, eating up 14pc of the budgets. The cost of
building every kilometre of standard dual carriageway or
motorway has risen from euro6.29m in 1999 to euro8.28m in
2000 and euro10.2m two years later.
The chairman of the Public Accounts Committee, John
Perry, expressed "serious alarm and concern" at the report
and revealed he would be calling both the NRA and the
Department of Transport before the committee " to account
for the serious shortcomings.
The Comptroller says there may be scope for renegotiating
professional fee levels "to better reflect the purchasing
power of the State".
As far back as 1998 the need to adjust the cost of the
roads programme was signalled in a series of reports
prepared in association with the National Roads Needs
These alerted the NRA that extra costs would arise
because of the provision of roundabouts to upgrade existing
junctions, new junctions linking existing roads with new
motorways and dual carriageways and major river or other
But the State's financial watchdog, John Purcell, says he
was informed by the NRA that these adjustments were not
This alone resulted in an underestimation of euro1.4bn of
Michael Egan, NRA corporate affairs manager, said
yesterday that their cost estimates and cost trends at the
end of the 1990s were based on a limited amount of road
building activity. These were largely confined to town
bypasses rather than large stretches of new national roads
linking urban centres.
Mr Egan pointed out that many major new projects had been
added on to the roads programme, including the
Dublin-Waterford dual carriageway and the Slane bypass.