Costs of road repairs increased after a put-off
Press Release – June 5, 2009
From September 2008 to March 2009, auditors from the Supreme Audit Office (SAO) audited the finances spent on maintenance and reconstructions of main roads within the period from 2006 to 2008, which were mainly drawn from the State Fund for Transport Infrastructure. The Fund aimed at investment ventures under construction, and ventures that were co-financed from EU funds as well as from credits sponsored by the Czech Republic. Over 90 % of the Fund’s approved budgets were allotted for the Road and Motorway Directorate of the Czech Republic. Programme No. 227 140 (Programme for reconstructions of main roads and motorways) was allotted with CZK 11.6 milliard in the period 2007–2010, but its implementation was put off.
“Road constructions got usually put off because of insufficient funding, sometimes by years. Construction costs rose significantly because of the delay in several cases. From 2006 to 2008, the costs of 208 projects increased in total by CZK 1.5 milliard (18 %). Awaiting implementation terms were not kept in 167 cases (69 %)“, said president of the SAO František Dohnal.
Among the revealed insufficiencies were violations of the budgetary discipline, which amounted to CZK 1.1 million (2 investments), insufficient management and inconclusiveness of activities worth CZK 3.8 million (3 investments), errors in awarding public procurements (8 cases), and insufficiencies of building approvals and advice notes (14 investments and constructions). Funding of maintenance and reconstruction of roads was questionable in total amount of CZK 22.4 million (7 cases).
Allowance organisations, originally established by regional administrations to maintain side and district roads, have been contracted by Ministry of Transport to provide service and maintenance of main roads since September 2007. Previously, the maintenance was procured by contractors selected by the Road and Motorway Directorate. “The Ministry failed to evaluate the possible (dis-)advantages of the new maintenance contracts and did not document the reasons for such changes. Comparative analysis of unit pricings revealed that costs increased by CZK 296 million a year under the new conditions“, said Dohnal.
Approvals, funding provisions, and realization were scrutinized in 243 constructions with expected costs amounting to almost CZK 25.3 milliard. The auditors focused on 60 constructions with expected costs over CZK 4.1 milliard and scrutinized routine year-round maintenance of main roads, which cost around CZK 3 milliard a year, including CZK 1.3 milliard allotted from the state budget funds in 2008.
The auditing operation was included into the 2008 Audit Plan of the SAO under No. 08/27. Jiří Adámek, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
Supreme Audit Office