Vol. 564 No. 5
47 Mr. Hayes asked the Minister for Finance if he has carried out an analysis of overruns in the national development plan; and the aggregate value of overruns on projects completed, now in progress and awaiting implementation. [9652/03]
As I indicated in my reply to Parliamentary Question No. 170 of 25 February last, the current estimated cost of implementing the economic and social infrastructure operational programme of the NDP is €40 billion in 2002 prices as compared to an original estimate of €26 billion. The reasons for the increase cost are: construction industry inflation over the first three years of the plan was considerably in excess of that assumed; land costs, which impact heavily in the roads programme in particular, have also increased significantly; delays due to factors such as foot and mouth disease, environmental and archaeological factors and general planning considerations; and initial cost underestimation and subsequent re-specification of some projects.
I am obviously concerned that cost increases have reduced the quantum of output in the first three years of the plan. My Department commissioned evaluations of both the NDP roads and public transport programmes last year which analysed the reasons for increases in the cost of these programmes and put forward a series of recommendations in regard to project and programme management. These recommendations are now being addressed by the Department of Transport and implementing agencies.
In addition, Departments and implementing agencies are required to observe my Department's capital appraisal guidelines, the details of which I have set out in a separate reply to Question No. 31 on today's Order Paper. It is intended that revised capital appraisal guidelines will be issued by my Department later this year which will take account of experience in regard to NDP project management and appraisal, and compliance with which will be a condition of the agreement of a five year multi-annual framework for capital investment which I also hope to conclude with my ministerial colleagues this year.
I should point out that, notwithstanding cost increases, very good progress has in fact been made in the roll-out of the infrastructure programme of the NDP. In 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 and the plan is delivering on projects of unprecedented size and scope. I have no doubt that by end 2006, the NDP will have brought about a real enhancement in the quality of our economic and social infrastructure.
