€200m cost overrun for port tunnel disputed

Dublin City Council is in negotiations with the builders of the Dublin port tunnel to establish who will pay for cost overruns of more than €200 million, an Oireachtas committee has heard.

Fred Barry, chief executive of the National Roads Authority, admitted the cost of the project had risen from €535 million to €750 million.

When inflation was taken out of the equation, the project was still 15-20 per cent over budget, he told the committee yesterday.

While the NRA was not happy with this figure, Mr Barry noted it should be seen in the context of research showing a 48 per cent difference between the estimated and final construction costs on tunnel projects internationally.

He added he could offer "several dates" for the planned opening of the tunnel, "all of which have moved".

His personal view that an opening as soon as next spring would be "unlikely".

The Joint Committee on Transport was told that the design-and-build contract for the tunnel project was of an "earlier" type, allowing the contractor to claim added expenses from inflation.

There were "significant monies in dispute", Mr Barry said. "At the end of the day the contractor will get what he is entitled to - no more."

Questioned about the recent RTÉ Prime Time programme on cost overruns in road building, Mr Barry said he believed it had lacked balance.

"I don't think there was an awful lot of research done. It was old news. It was not a discovery of any sort."

In a separate development, the NRA chief executive claimed the developer of the N4 Kilcock-Kinnegad bypass would make a loss on the project despite expected revenue from tolling of €400 million over 27 years.

Describing the road as "a good deal for the taxpayer", he said it would cost contractors Eurolink €642 million to develop, according to the NRA's estimates. The net cost to the State, including land costs, was €93 million - a figure that included taxes, rates and Vat but excluded the Exchequer share in toll revenue.

However, Labour's transport spokeswoman, Róisín Shortall, said the figures were hard to believe given the NRA's previous estimates.

Ms Shortall said she had received confirmation from Revenue that construction costs could be fully offset against corporation tax.

Mr Barry replied that he believed Eurolink's profits would be taxed "but I may be mistaken about that".

Accusing the NRA of failing to take into account the costs to motorists from tolling, Ms Shortall asked whether public-private partnerships (PPPs) such as the N4 project were "simply another scam to enrich the private sector".

Cutting her questioning short, however, chairman John Ellis (Fianna Fáil) said PPPs would be discussed at a future meeting, adding that it was "a tribute to the NRA and the contractors" that the N4 project was being completed ahead of schedule.

Ms Shortall remarked that the chairman was clearly a fan of PPPs.

"I am a fan of people in the west of Ireland having access to Dublin," Mr Ellis replied.