National roads programme cost overruns
Sargent asked the Taoiseach to explain major cost overruns, review the roads plan and reconsider the decision to replace the national roads needs study with a motorway programme. The Taoiseach defended the NRA’s management, citing inflation, scope changes and planning omissions as contributors, and said stronger cost controls were now in place and the ten-year programme was proceeding.
The Taoiseach has to answer after last night's "Prime Time" programme about the overruns. I will not ask him again as I have attempted to ask him before. Are we not witnessing the biggest abuse of taxpayers' money in the history of the State? Will he explain, given the international research carried out, how the Government can stand by after receiving a national roads needs study, effectively sidelining it and cooking up an ad hoc notion not to upgrade the roads, as the study from the NRA specified, but to replace them with motorways? Last night’s example was Clare to Mitchelstown, with 10,000 vehicles a day, which is to get a motorway with a capacity of 55,000. Where is the financial or traffic management logic in such a plan?
How has this trick been allowed to become systematic? A bid is made at a price low enough to gain political support and when it is accepted, claims are maximised to ensure that the cost overrun is not 20%, the international average, but 86%. Will the Taoiseach explain on that basis? We are talking about cost and finance. It makes no sense from a traffic management point of view. We all know that we need roads, and the national roads needs study pointed out how they were to be provided. Will the Taoiseach explain how that was ditched and the motorway plan put in its place?
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It was not a plan as it arose only at Government level and not from the National Roads Authority. How has that cost overrun been allowed to continue? Will the Taoiseach halt that and review the national roads plan so that we can return to some financial common sense?
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Deputy Sargent knows that a few years ago the NRA totally changed the systems and structure it was operating for roads, designing them in a very loose way rather than producing detailed plans. Then, when high specifications were put in, costs were far higher. I explained that to the House several years ago based on what had been happening.
Since then, there has been far more accurate costing. The cost estimation control and procurement procedures in the NRA were changed and the designs have been far more accurate. It is now producing more detailed designs from an early stage, which is the right way to do it. It has made greater and more efficient use of the cost-effective "design and build" lump-sum, fixed-price contracts. That is why we have seen projects such as the Monasterevin bypass and now the Kinnegad road coming in under contract and on time. Those systems were not operated before. A specialist has also been appointed who reviews all the cost estimates. That was not the position previously. Tender and system outturn costs have been benchmarked. Design and construction standards have been established through publication of NRA specifications on road works. All those initiatives have been developed over the past few years.
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We are now spending €2 billion a year on roads, and a few years ago we did not have the structures to deal with that. We brought expertise into the NRA——
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——from Ireland, around Europe and South Africa. All those systems are now in place, leading to far more cost-effective contracts. We had other delays as a result of planning issues and other problems. During the initial years, as highlighted in the contracts, there was 40% inflation on them. That was the major part of contracts in the past. The system is now far better, with much more resources, and it is leading to a much better position. I do not know if Deputy Sargent is asking us to change the roads plan.
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The roads plan is built into a ten-year programme and we are delivering on that. The Deputy has seen how many schemes there are. There are 19 this year, and 15 or 16 were finished last year. It is developing a far better roads structure in the country than we have ever had.
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The Taoiseach referred to inflation, but I referred to the cost overrun after inflation. If one wished to include inflation, it would be even worse. The overrun after inflation was found to be 86%.
The Taoiseach has still not answered my question about whether he accepts that it is right and proper that a plan presented as costing €5.6 billion is now estimated to cost up to €18 billion or, as some people say, €20 billion. Is that acceptable? As head of the Government, does the Taoiseach have any sense that a mistake was made when the national roads needs study was effectively binned? What we have instead is a motorway plan that is not rooted in sound traffic or financial management. That has been proven, and it is not we who are saying it; it has been said internationally. Might the Taoiseach at least have some pause for thought and halt the signing of contracts for the toll roads, which will make enormous profits for private builders over the heads and at the cost of taxpayers for years? Will he at least halt those contracts and investigate where the financial management commonsense has gone? Will the Government put this commonsense back into the plan and reincorporate the national roads needs study?
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The Ceann Comhairle should remove the Ministers for Transport and Foreign Affairs from the Chamber.
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There has been a number of independent evaluations. Both Fitzpatricks and Associates and Indecon have acknowledged the NRA is generally well managed as regards those factors within its control. There are factors outside the control of the NRA.
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The Taoiseach is responding to a question from the leader of Deputy Boyle's party and should be allowed to continue without interruption.
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We will not get into the issues outside the authority's control.
Deputy Sargent has quoted figures in regard to the roads programme. The Deputy is well aware this was a particular programme for a limited number of roads. It was expanded significantly over several years and there are now 68 projects involving the construction of 120 km of roadway and almost 120 km of dual carriageway around the country.
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The early schemes for control of these projects were obviously not adequate. This is why the NRA has strengthened its cost estimation and control procedures in the past five years. A figure of 86% was mentioned in last night's television programme, as quoted by Deputy Sargent. However, 40% of this was inflation. The report of the Committee of Public Accounts offers a full breakdown of the figures. Some 40% was accounted for by inflation and 16% was due to the failure to cost certain elements at the planning stage.
Comment on this
Some 20% was due to modifications in scope where architectural changes were made to projects and 24% was a consequence of project-specific increases such as those relating to the tunnel, the south-eastern motorway and the Glen of the Downs.
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These were changes the local authorities and the NRA made in the design of projects.
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The NRA has introduced new cost-effective methods and procurement practices which ensure the new design-build projects are coming in on time and under cost. This was not the case before.