Here's something you never hear when a government is announcing a major new infrastructure project: "We're pleased to unveil this ambitious scheme even though the costings are based on outdated figures, don't make any provision for inflation and don't account fully for the scope of the project or the risk involved."
Yet that's precisely what senior officials at the Department of Public Expenditure and Reform – the very people charged with scanning projections for such projects in the first place – told incoming Minister Michael McGrath. Costings for a series of high-profile investments in the current €116 billion National Development Plan are effectively a fiction.
Officials told the Minister they were referring to “very early stage cost estimates” but these are all projects due for completion by 2027. They include MetroLink, BusConnects and the M20 motorway between Cork and Limerick.
A mid-term review of the plan, promised in the programme for government, will, they say, give them a chance to replace these figures with a more realistic assessment – apparently shorthand for replacing a figure with a more nebulous “cost range”.
This “updated methodology” is drawn from “international good practice”, which clearly wasn’t available a couple of years ago when the plan was first drawn up.
Quite why no reckoning was made for inflation, project risk and the like first time around is unclear but, given that they “are liable to be overtaken by actual costs”, department mandarins are worried that “there is a risk of undermining credibility in our infrastructure investment programme”. Imagine that.
Presumably, once the new cost ranges are in place, we’ll be spared the sort of cost overruns that have bedevilled so many major national infrastructure project of the years. But don’t bet on it either.
