I propose to take Questions Nos. 143, 259, 273 and 274 together.
Procurement arrangements, contracts and the delivery of capital infrastructure are primarily the responsibility of the State bodies under the aegis of my Department. They comply with the requirements of the code of practice for the governance of State bodies, including conformity with the guidelines for the appraisal and management of capital expenditure in the public sector.
Good progress was made in the implementation of the overall national roads upgrade programme provided for in the NDP. To date 41 projects, a total of 278 km, including 76 km of motorway and 62 km of dual carriageway standard, have been completed. In addition, work is under way on 18 projects totalling 199 km, including 175 km to motorway-dual carriageway standard and another 12 projects, or 88 km, are at tender stage.
In relation to the five major inter-urban routes, the key NDP mid-term, end of 2003, target of 30% completion of the five MIUs was substantially met with 29% achieved and work under way on approximately another 12%.
Following publication of the NDP in 1999, at a time of high construction sector inflation due to constrained capacity in the construction industry, the cost of the national roads programme mandated in the NDP increased substantially from €6.96 million, early 1999 prices, to €15.8 billion, early 2002 prices. The increase was attributable to: exceptional items such as the additional land-archeological costs on the south eastern motorway and the Dublin Port tunnel. There were also add-ons such as a reduction in timescale, higher road standards, upgrading of routes such as the N9 — 31%; construction cost inflation and initial underestimation — 49%; and scheme refinement as design process proceeded — 18%.
Since 2001 construction cost inflation has moderated from an annual average of 12% to less than 5%. Given the lower level of construction inflation and improvements in cost estimation and control, it is likely that the overall cost of the NDP mandated programme will not have changed significantly from the 2002 figure of €15.8 billion.
In considering the national roads programme and its development and management in recent years, it is important to bear in mind the major expansion in the scale of the programme over the period since 2000. The level of activity on the programme was increased very significantly in this period. Initial costing of the programme of work proved difficult due to the limited information available from the smaller preceding programme and the preliminary scheme outlines available as a basis for costing.
The NRA made significant efforts to strengthen programming, project management systems and cost estimation and control. A number of independent evaluation reports, such as C.F. Fitzpatrick and Indecon, acknowledged that the national roads investment programme is, in general, well managed.
My Department continues to support the NRA in the strengthening of its cost estimation, control and procurement procedures. This is being done in order to have more accurate cost estimates from the earliest stages of a project and to ensure greater certainty of outturn costs between tender stage and completion date. The measures taken include: a greater use of design and build lump sum fixed price contracts offering cost efficiencies; greater certainty of outturn costs and reduced scope for claims; standardisation of economic designs for high cost items such as bridges and other structures; the buy out of price variation, clause and risk, or traditional procurement, where this gives good value; the further attention to improving the quality of site investigations; and the acceptance of such investigations by contractors as an agreed basis for pricing.
The mid-term evaluation of the economic and social infrastructure programme recognised that, as result of NDP investment since 2000, significant increases in public transport capacity were achieved in a number of areas, including the DART, suburban rail, Dublin Bus and Bus Éireann. The full impact of public transport investment will be evident over the next two years. There will be further additions to capacity with the coming into operation of the Luas lines, the upgrading of the DART system, the placing into service of additional rolling stock and the expansion of the quality bus corridor network in Dublin.
The NDP's public transport priority performed positively in terms of physical output, financial absorption and good management. As a result the Department of Finance and the European Commission have recommended that it be allocated a proportion of a performance reserve allocation from the EU Structural Funds.
There have been increases in the cost of public transport projects since the NDP was published due to the cost of inflation. There have also been improvements in cost estimation, project management and monitoring and in general projects are being completed in line with tender prices.
One of the objectives of the NDP in relation to mainline rail includes completion of the Railway Safety Programme 1999-2003 at a cost of €546 million using 1998 prices. Another objective was the reconstitution of the rail safety task force to prepare recommendations for a second five year safety programme before the end of 2003. Both objectives were met. Some individual infrastructural renewal targets were not achieved such as level crossings. However, other significant and essential renewal works, such as cuttings, embankment and coastal protection, not envisaged in the original safety programme were completed instead.
Approximately €571 million was invested under the safety programme during the course of the NDP. Over €660 million will be invested over the full five year programme. The task force completed its work and will shortly submit its recommendations to Government for a new safety programme.
On 30 June the opening ceremony of the first Sandyford Luas line took place. Passenger services on the Tallaght line will commence at the end of August.
In 2000 the Government approved the capital cost of €466 million for the Luas project. It consisted of €265 million for the Sandyford line and €201 million for the Tallaght line. The sum was based on preliminary estimates, using 1999 prices, submitted by CIE.
In February 2001 the budget was revised and increased to €675 million. As much as €480 million was allocated for the Tallaght line and €295 million was allocated for the Sandyford line. There was also a risk provision of €89 million to take account of actual competitive tender prices received. The revised allocation reflected high inflation in the construction sector, higher than anticipated property acquisition costs and changes to the scope of the project mainly related to the provision for upgrading the Sandyford line to metro status.
In December 2002 the Government noted the increase in the budget to €691 million, composed of €501 million for the Tallaght line, €290 million for the Sandyford line and a risk provision of €84 million. The reasons for the increase of €16 million is accounted for by the higher than anticipated costs associated with the demolition of the Connolly ramp and increases in the costs of utilities and enabling works. The RPA has informed me that the project is within the €691 million budget and risk provision.
Responsibility for the completion of projects within the targeted timescale rests with the regional airports. However, the first round of approved projects was completed on time and within cost estimates of approximately €9 million. A further round of projects will be considered for funding later this year.
My Department also has a contract with the consortium, PricewaterhouseCoopers, Matheson Ormsby Prentice and Steer Davies Gleave to advise on all aspects of the Aer Rianta restructuring process. To date payments are within the budgeted sum.