Cost of national ‘megaprojects’ is likely to derail other big plans
Government told to assess priorities
LARGE increases in the cost of ‘megaprojects’ such as Metrolink, BusConnects and Dart+ could see other capital projects shelved, the Government has been warned.
Ministers have been told parts of the National Development Plan (NDP) ‘require active consideration of project prioritisation’, likely meaning a choice will have to be made over which can proceed.
The Major Project Governance Oversight Group (MPGOG), which advises the Department of Transport, met last October to discuss the progression of ‘megaprojects’ including BusConnects, Metrolink and DART+.
At the meeting, the National Transport Authority (NTA) told the group that there had been ‘significantly increased capital cost ranges’ in each of the three key infrastructure projects, compared to the initial figure presented to the Government when they were initially approved.
The meeting note, obtained by the Irish Daily Mail, said: ‘It is important to note that, at this juncture, none of the megaprojects have a definitive single
‘Going to be a huge challenge’
point cost estimate, as all three are still at a relatively early stage of development and have yet to receive planning approval or a final tendered cost.’
The minutes also noted that the ‘increased costs’ were ‘broadly consistent’ with the cost increase across the NDP transport projects to 2030 that Cabinet considered earlier.
The Irish Mail on Sunday reported in October that there was an almost €15 billion budget deficit in the NDP due to inflation and other pressures.
The Cabinet memo said at the time that some projects would have to be ‘de-prioritised’ as a result.
The minutes of the MPGOG show that a number of items contributed to the increase in the cost of these projects including increases in base cost, inflation and contingency provision, with some related increases associated with project design and planning delays.
‘The Department [of Transport] is currently in the process of interrogating these figures and will engage further with the NTA in order to fully understand the cost drivers and any mitigating measures that can be taken.
As noted in recent eSubmissions, cost increases require active consideration of project prioritisation within any available NDP or other funding envelope’ the minutes say.’ The Department said that it would be meeting with the NTA to ‘further interrogate’ the cost drivers and any mitigating measures.
Crucially, it was flagged: ‘As noted in recent eSubmissions, these issues also require active consideration of project prioritisation within any available funding envelope.’ Last month Public Expenditure Minister Paschal Donohoe wrote to colleagues asking for their priorities to spend a €2.5 billion fund on public infrastructure projects.
The move was widely seen as the Government seeking to have as many projects as possible under way as it entered into the final 12 months or so of its tenure, ahead of a general election.
However the news that megaprojects could now scupper other smaller projects will likely lead to tension within the Coalition, with all three of the major megaprojects noted by the MPGOG being based in Dublin and its environs. Speaking before Christmas, Eamon Ryan, the Green Party leader, acknowledged that funding for public transport infrastructure was ‘going to be a huge challenge’.
Earlier this month the Irish Daily Mail reported that senior civil servants had warned that fast-tracking megaprojects in a bid to ‘start digging’ lead to lengthy cost over-runs and delays.
The eager approach to major capital projects by pushing them through with ‘chronic, delusional optimism’ leads to persistent budget overruns.