Róisín Shortall (Dublin North West, Labour)

I wish to focus the attention of the House on the budget overruns and the waste of public money in respect of transport projects. The most obvious example is spending on roads. The recent "Prime Time" exposé, as well as last week's report by the Committee of Public Accounts and last year's review by the Comptroller and Auditor General of the primary routes improvement programme, have pointed to the same thing — a culture of negligence, oversight and waste when it comes to the use of public funds on major infrastructural projects.

When we talk about overspending on such transport projects the figures are always in billions of euro, not millions. Spending on roads and public transport projects generally must be brought under control to ensure that the taxpayer gets value for money from the public finances. The excessive overspending represents a vast sum of money which is urgently needed elsewhere.

Last year, we heard from the Comptroller and Auditor General that over the course of the national development plan's roads programme, costs increased from €7 billion to €16 billion. In particular, the Comptroller and Auditor General highlighted the flawed procurement procedures and estimation processes that the National Roads Authority works to, including a systematic failure to cost certain elements of schemes at the planning stage.

This was underlined by last week's report from the Committee of Public Accounts. The committee's examination of road contracts delivered under conventional contracts shows an overrun of €357 million between the original estimate for these schemes and the eventual cost. They varied from €495 million, which was the original estimate, to an eventual cost of €855 million, an overrun of 72%.

In the case of design and build contracts the situation was even worse. They showed a 100% increase from an original estimate of €63.6 million to an eventual cost of €128 million. Deficiencies in the cost estimation procedures drawn up some years ago are a significant reason for the cost overrun. In addition, changes in the scope of the projects, generally decided at ministerial level with little reference to the cost, accounted for 20% of the overrun, a whopping €1.8 billion.

We saw a prime example of this in the roads needs study that was drawn up by the NRA in 1998. It was a programme of road improvements affecting the whole country. In some cases, motorways or dual carriageways were proposed depending on local demand. At ministerial level, however, decisions were taken to upgrade several dual carriageways to motorways, which accounted for €1.8 billion.

Decisions were taken, primarily for political reasons, to propose roads with a capacity of 55,000 vehicles per day. The likelihood is, however, that the daily demand for road space in those areas will not exceed 10,000 vehicles. Those political decisions amounted to an overrun of €1.8 billion for the roads programme. We should consider what other transport projects could be funded by that sum. For example, that amount of money would pay for 6,000 buses, which is more than five times the existing Dublin Bus fleet. Decisions are being taken by the Government to spend substantial amounts of money in certain areas, often for political reasons. The effect is that other areas are being neglected. There is a lot of catching up to be done in terms of public transport provision. We can see that is the case in Dublin and elsewhere where the supply of public transport is not meeting demand. One only has to travel by DART or train to see people packed in like sardines. People must wait in bus queues for long periods every morning. There is no incentive for people to follow the official policy, which aims to attract the public from cars to public transport because the supply of buses and trains is inadequate.

Recently, the NRA appointed a cost estimation manager and the Committee of Public Accounts has recognised that some improvements have been made. It begs the question, however, why such a post did not exist from the start. The most important job the NRA must undertake is to estimate the cost of motorway schemes, yet until recently it did not have sufficient financial expertise to do so. That oversight was responsible for approximately 15% of the €9 billion overrun.

The cost of the Nenagh bypass has doubled from the original estimate of €21 million to €43 million. Similarly, the original estimate of the Drogheda bypass was €112 million, while the final cost was €244 million. All the overruns involve ballpark figures of between 70% and 100% of the original estimates. Massive amounts of money are being squandered through the lack of proper control on public spending.

In recent years there has been a move towards the use of public private partnerships for motorway projects. The main experience to date, which was a disastrous one, has been the West-Link bridge. Taxpayers have been paying through the nose —€1.80 every time a driver passes that bridge — and they will continue to pay steadily increasing toll charges until 2020. The initial investment by the NTR company will see a 2,000% return. We have been assured that lessons have been learned from that bad experience, but how can we be sure?

For example, major questions remain to be answered about the actual cost of the N4-N6 Kilcock-Kinnegad scheme. We are told that this toll-based public private partnership scheme, costing approximately €620 million, is good value for the taxpayer. It is difficult to get information on the breakdown of those figures but in recent months the Joint Committee on Transport has been examining the matter. It found that the State will stump up a minimum of €230 million towards the cost of the project and probably a lot more by the time the project is completed. In return the private sector contribution to the cost is likely to be less than 50% and the developers will receive a 30-year concession to operate the tolls on the scheme. In addition, as the Minister is well aware, capital allowances have been made available on its construction costs. Taxpayers, therefore, will pay tolls for the next 30 years and fund more than 50% of the basic costs of a scheme which is being held up as an example of the way forward for public private partnerships. The Joint Committee on Transport has experienced major difficulties in obtaining information on this issue. Last year, for example, the National Roads Authority informed it that the price tag for the State was only €60 million, but it transpired from later correspondence that this figure is a significant underestimate.

Other examples of overruns include the Dublin Port tunnel, which was originally due to cost €449 million and is now due to cost €751 million, and the Luas, which according to the original estimate would cost €446 million whereas the project was delivered at a cost of almost €700 million, of which an astonishing €16 million was wasted on the demolition of the ramp at Connolly Station.

It is clear we need to establish a system whereby major projects of this nature can be monitored as they progress. While the Comptroller and Auditor General does worthwhile work in his examination of these projects, unfortunately he does so after the event. A system is required to ensure the original estimate for any major project can be rigorously examined to determine whether the cost stands up and monitored from construction to completion. Only then can we be certain we are getting value for money.

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