Roads cost doubles in two years

THE cost of putting down a kilometre of road has doubled from €5 million to €10 million in just over two years.

The cost of buying land for building roads has also doubled during that time, rising to an average of €80,000 per acre, according to the National Roads Authority.

But the massive escalation in the cost of the new roads programme from €6 billion to €14 billion was blamed by the NRA on the dramatic rise in inflation in the construction industry.

The National Development Plan envisaged completing the 900kms in the roads programme for €5.96bn by 2006. But now the NDP roads projects will cost up to €14bn and will not be finished until at least 2009.

Originally the NRA planned to pay €500m for around 20,000 acres for roads projects but it was now costing €1 billion.

The price of land under Compulsory Purchase Order varied from €10,000 to €12,000 an acre to €1m, depending on the location.

NRA chief executive Michael Tobin cited inflation running at five times expected levels and the addition of new projects as the key reasons for the overrun.

Admitting that the NRA had underestimated the rate of inflation, he said it expected construction industry inflation to remain at around 3% for the seven years, but instead it rose by:

15% in 1999, 15% in 2000, 10% in 2001 and 5% in 2002.

The cost of the additional projects was €2.5bn and the cost of the Dublin Port Tunnel also increased substantially, Mr Tobin said.

Environmental considerations and additional archaeological work was also adding up, he said.

“It is not hard to see how you can suddenly get serious add-ons to the cost. And it behoves us to ensure the tunnel was state of the art and had all the modern requirements,” Mr Tobin said.

In some cases the NRA were building roads far in excess of what was required to carry the projected level of traffic, according to Green Party finance spokesman Dan Boyle.

But Mr Tobin said the NRA was merely implementing Government policy, which was to opt for motorway and dual carriageway similar to the European norm.

“The NRA did not dispute the Government decision,” he said.

Mr Boyle said the NRA was failing to deliver roads on time and within budget and had overspent by €250m in the past two years.

“This scale of misusing public money is the worst example currently to be found in public life,” he said.

Public Private Partnership deals now had a clause installed to ensure the private developer could not make a profit of more than 15%, Mr Tobin said.