Re: Re: Irelands Ten Worst Roundabouts
NRA had no senior accountants when agreeing road costs
Thursday, 12th May, 2005
The National Roads Authority (NRA) did not have an accountant at management level at a time it was negotiating road building contracts worth billions of euros, it emerged today.
It also emerged that the cost of projects originally estimated at â‚¬5.6 billion is now over â‚¬18 billion and rising.
The revelations emerged at the launch of the Dail Public Accounts Committee interim report on the Department of Transport.
The contracts for construction of roads under the National Development Plan 2000 – 2006 were awarded by the NRA on a closed tender system. When awarded, there was provision for cost over-runs based on a variety of factors. “It might have been that it was men against boys when it came to the settlement figure,” Committee chairman Michael Noonan said.
He referred to several examples in the report which showed the cost of some projects at more than twice that originally agreed. In one case, the Croom by-pass in Co Limerick, the original cost of â‚¬10.37 million rose to â‚¬26.2 million – an over-run of 160 per cent.
Mr Noonan said there was a lack of expertise at the NRA evidenced by the fact that last year “there wasn’t a single accountant at management level”.
“When we called them in 12 months later they were pleased to tell us they had hired their first accountant.”
The report found 40 per cent of the cost increases were due to inflation and 16 per cent due to “a systematic failure to cost certain elements of the schemes at planning stage”. It also said 20 per cent of extra costs could be attributed to changes to the plans and additional work added to the original project.
While the committee recognised that improved contracts and a tightening up of procedures at the NRA had likely improved the situation, this could only be properly established by a future audit.
Mr Noonan noted, however, that a contract awarded under the newer, design-and-build system at Youghal, Co Cork, had led to a cost over-run in excess of 400 per cent.
The report found cost over-runs of 42 per cent – in excess of â‚¬420 million – in a series of projects completed between 2000 and 2003.
Committee vice chairman John McGuinness of Fianna FÃ¡il said that the public would not forgive politicians if lessons were not learned from what had been a serious waste of public money in road building.
“It’s been a steep learning curve that’s come at a considerable cost … We simply weren’t at the races when it comes to the spending of tax payers’ money,” Mr McGuinness said.
The Green Party’s Dan Boyle said questions were not answered at ministerial level and “there had been an unhealthy sense of complacency throughout the period”.
One of the committees recommendations included calling on the NRA to take “a more proactive approach to financial management” and developing better estimating procedures.
Mr Noonan also said it was difficult for the committee to asses the value of Public Private Partnerships because the private partner could regard information sought as commercially sensitive.