NRA seeks additional road funding

The National Roads Authority (NRA) has requested an additional €2.5 billion over the next five years, to allow it to accelerate work on certain road building projects.

In submissions to the Department of Transport, the NRA has requested an extra €500 million in this year's budget and for each of the next four years. This would bring the NRA's annual budget to around €2.1 billion.

According to the NRA, the slow-down in residential building means the construction sector is now in a position to absorb additional funds without prompting inflation.

It is understood that the first submission lists Exchequer-funded road projects, and the second a series of road projects considered suitable for funding by a Public Private Partnership (PPP). The latter projects do not include a provision for tolling.

Given the size and timescales required for most national road projects, the funding request applies for the next five years.

On Monday, the Minister for Finance Brian Cowen said that he believed borrowing to fund infrastructure projects to improve the "productive potential of the economy" was justified and while current spending is expected to slow, he has indicated that capital spending is expected to increase by over 12 per cent next year.

The NRA has been saying for much of this year that there is spare capacity in the construction sector which could absorb additional infrastructure spending without causing inflation.

At its September board meeting Fred Barry, NRA chief executive, said tenders for road projects due to commence in 2008 were "highly competitive", confirming for the NRA that the sector can absorb the current high volume of work.

The NRA is currently concentrating on completing the main inter-urban routes linking Dublin to Cork, Limerick, Galway and Waterford.

Were additional funding to become available, it would allow the NRA to accelerate progress on some of the more than 120 other road projects listed in the National Roads programme under Transport 21.

With the awarding of the €933 million, 35-year contract for phase two of the M50 widening project to the a consortium led by PJ Hegarty, the NRA has now completed its 10 PPP projects.

The NRA says it is satisfied with the performance of this funding mechanism, and is keen to utilise it for further projects.

As a result, the Authority has made a separate submission to the Department of Transport specifically on projects suitable for PPP funding, although none of the projects listed include tolls.

For the PPP schemes, the NRA has nominated projects which could be easily amalgamated into one large contract, as the larger projects are seen as being most suitable for this funding mechanism.

While this is not the first year that the NRA has requested access to additional capital, it is not something the Authority does prior to each budget.

A spokeswoman for the Department of Transport said yesterday that a set amount of funding available was available for Transport 21 programmes each year, and that "acceleration of any project would result in the deferral or slowing down of other projects".

Under the terms of the deal with the consortium, upgrading of the M50 motorway is required to upgrade two sections of the motorway, and then to maintain the entire road for 35 years.

In return it will be paid yearly instalments of €20.8 million from when the upgrade is completed, which is scheduled for 2010.