The Comptroller and Auditor General (C&AG) has initiated an examination into a sharp escalation in the cost of the roads programme in the National Development Plan, it emerged at a Dáil committee yesterday.
Mr John Purcell, told the Dáil Committee of Public Accounts that he had instructed his staff to examine costs in the programme and expected to receive a report within three months.
He saw the examination as a "validation" of work carried out by the National Roads Authority, which has responsibility for road projects.
The National Roads Authority told the committee that the cost of building a kilometre of road had doubled since 1999.
This included the cost of compulsory land acquisition, which is now estimated to cost about €1 billion by the time the programme is finished after 2006, up from €500 million in 1999.
The latest estimates suggest the entire cost of the programme has risen to €15.7 billion from €9.18 billion since the National Development Plan was devised in 1999, leading to sharp criticism yesterday by members of the committee.
Rejecting suggestions that the authority was now formulating better contracts, the Green Party finance spokesman Mr Dan Boyle TD said he had no optimism about the control of costs by the authority, and added that its estimates were "invariably wrong".
The authority also faced demands to produce financial details of its contracts with private companies with whom it formed partnerships to build certain roads. However, the authority's chief executive, Mr Michael Tobin, said he would not be able to provide the committee with information about "individual projects" in these Public Private Partnerships (PPP).
This was rejected by Mr John Curran TD, who asked how the committee could scrutinise public expenditure if this information was not made available to it.
He said the authority had responsibility for roads on either side of the stretches built by PPPs and stated that it should be entitled to detailed financial information about the projects.
Mr Tobin said the authority was conscious it was spending public money and rejected suggestions the authority "had lost the run of themselves".
"We are convinced we are getting reasonably good value for money," he said.
He said the structure of some of the latest PPPs had improved from an earlier model signed by National Toll Roads at the West Link Bridge in west Dublin, where long delays are the subject of frequent criticism.
Mr Tobin attributed some of the rise in the cost of the programme to the addition of new projects which were not included in the original plan and added that original plans for certain roads "were little more than lines on paper".
However, he also accepted that inflation in the construction industry was a major factor driving costs upwards. Building costs rose 15 per cent in 1999 and 2000 and increased by 10 per cent in 2001.
While he said building inflation fell last year to about 5 per cent, the Construction Industry Federation claimed in a statement that construction inflation was at zero per cent in 2002.
Mr Tobin said land costs were amounting to 12 per cent of overall expenditure, up from the 9 per cent projected initially.
He said the authority had spent more than €1 million per acre for lands in certain urban areas with the average per acre payment standing at about €80,000.
This contributed to an increase in the average cost of building a kilometre of road, which has risen to €10 million from €5 million four years ago.
The Construction Industry Federation said ecological, architectural, environmental, legal, planning and design costs had risen dramatically, but said there was "clear evidence" that tender prices in the construction industry had fallen consistently since 2001.
