The state agency overseeing the National Development Plan roads programme is facing an investigation by the Public Accounts Committee into a projected €6.6 billion costs overrun, The Sunday Business Post has learned.
The National Roads Authority (NRA) underestimated the costs of the M7 Nenagh-Limerick road scheme by 95 per cent. The revised cost for the 38 kilometre motorway has escalated to €236 million, from an initial price of €121 million.
The M4 Kilcock-Enfield-Kinnegad motorway costs have spiralled by €85.5 million to €288.6 million. The revised estimate is 42 per cent higher than the authority's initial evaluation in 1999 of €203 million.
The N17 Knock-Claremorris scheme costs are running 68 per cent higher than previously estimated at €33 million, while the Kildare bypass will now cost €111 million instead of €78 million.
The committee is considering a value for money audit of NRA's costings, which have soared to €15.8 billion -- two-thirds over the 9.18 billion allocated by the National Development Plan in 1999.
The NRA's estimates for the plan were based on a 1996 National Road Needs Survey, which was updated by only 10 per cent to take account of inflation and other contingencies.
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The evaluation report also shows that the outturn costs on 100 recently completed projects had exceeded tender projects by an average 38 per cent.
In a study of five sample road projects by Fitzpatrick Associates, the NRA's cost estimates range from 46 per cent lower to 43 per cent higher than predicted. Inflation and changes to the scope of the project were accounted for in the study.
The Minister for Transport, Seamus Brennan, spoke to the NRA last week and instructed it as a matter of urgency to report back to him with specific proposals for getting better value for money.
The NRA's head of corporate affairs, Michael Egan, said extensions, upgrades and other changes were made to the scope of road projects, including the Nenagh-Limerick scheme. In this case, changes to the project accounted for 64 per cent of the cost escalation, and inflation for 37 per cent. NRA's contracts allowed the price of the road to keep pace with labour and raw materials costs. Contractors were also paid compensation arising from unexpected ground conditions.
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