Vol. 562 No. 1
170 Mr. Connaughton asked the Minister for Finance if the cross-departmental team on infrastructure and public private partnerships has calculated the cost of the major infrastructure as outlined in the National Development Plan 2000-2006 at present day cost levels compared to the 2000 level; and if he will make a statement on the matter. [4519/03]
Taking account of the recent Fitzpatrick evaluation of the NDP roads programme and based on other assumptions, the cross-departmental team on housing, infrastructure and PPPs has carried out an assessment of total cost of completing the economic and social infrastructure operational programme of the NDP. This assessment indicates that the cost to complete the overall NDP economic and social infrastructure operational programme is estimated at €40 billion approximately in 2002 prices as compared to €26 billion, nominal prices, when the operational programme was published in January 2001.
As I indicated in my budget speech this escalation reflects cost increases which have impacted adversely on the NDP infrastructure programme. There have been a number of reasons for the increase in costs. These have been highlighted in particular in the recent Fitzpatrick evaluation of investment in the road network. First, over the first three years of the plan construction costs have increased by considerably more than the 19% originally assumed. The Department of the Environment and Local Government, in its most recent Construction Industry Review and Outlook, has estimated an increase in civil engineering costs of 42% over the four year period 1998-2001 with the NRA estimating tender price inflation of 54% over the same period. A second factor has been the significant increase in land costs, which directly impacts upon the costs of construction. Third, delays due to the foot and mouth crisis, environmental concerns and compliance with consent procedures have all increased costs. Finally, a number of project costs were also initially underestimated or projects have been respecified since the start of the NDP.
I would, however, also point out that over the first three years of the plan the Exchequer investment in infrastructure has amounted to €9 billion or about €1 billion more than the original commitment. While it is clear that the cost increases will impact adversely on the timescale for completion of the NDP infrastructure programme, good progress is being made and the plan is funding projects of unprecedented size, particularly in the area of transport. A comprehensive estimate of the total cost, based on a consistent set of assumptions across sectors will not be available until the completion of the mid-term review of the economic and social infrastructure operational programme later this year.
