EU funding for the Dublin Port Tunnel is "unlikely" to be provided at the maximum rate of 85 per cent, according to the European Commission.
In a reply to Ms Bernie Malone MEP (Labour), it indicated a decision to charge tolls for motorists using the route meant the revenue raised would be deducted from grant aid under the EU Cohesion and Structural Funds.
The Commission also warned there were "a large number of competing demands for the limited amount of Cohesion Fund assistance for Ireland which remains uncommitted". This would include the Dublin Port Tunnel, according to Ms Malone.
"The Commission has signalled very clearly that funds may not be available even if the environmental objections can be overcome. But of greater concern is the confirmation that the rate of assistance is unlikely to be the maximum [of 85 per cent]," she said.
"We were told that the decision to double the size of the tunnel from a single bore, two lane route for heavy goods vehicles to a twin bore, dual carriageway, contrary to the recommendations of the DTI [Dublin Transportation Initiative], would yield two tunnels for the price of one.
"Now it emerges that because cars will be using the four lanes dual carriageway, the tolls they pay will be deducted from the assistance Europe is prepared to give. If we had stuck to the more modest proposals of the DTI, we would be in line for greater funding from Brussels."
There are also growing fears the project will exceed its £130 million estimate. According to Prof Simon Perry of Trinity College, recent experiences with major tunnelling works in Britain provide "alarming evidence" of this tendency.
He noted that unforeseen tunnelling problems had swelled the cost of London Underground's Jubilee Line extension from £1.9 billion to £2.6 billion an increase of £700 million, or 38 per cent. This project is using the same tunnelling method proposed for the Dublin Port Tunnel.
Prof Perry also sad the Lime house Link, a 1.1 mile twin bore tunnel in the London Docklands which was opened in 1993, had ended up costing £448.6 million more than three times the original estimate of £141.5 million in 1988, before tenders were sought for the project.
By the time tenders were according to an investigation by Britain's National Audit Office, the cost had risen to £227.6 million. Then, because of difficult geological conditions, noise abatement requirements, design problems and poor management, costs rose again to £293.3 million.
In addition to direct construction costs, there were further costs of £155.3 million for acquiring land and rehousing local residents. The contractors were also paid a £9 million performance bonus, taking it to the final figure of £448.6 million.
The Dublin Port Tunnel has already exceeded its original £104 million estimate. However, those involved in the project have said this 1994 estimate excluded VAT The £130 million figure includes VAT and takes inflation into account. Several thousand objections have been lodged against the port tunnel scheme, mainly by residents in the Marino and Whitehall.
