Europe’s 30 most important transport projects will cost far more than first thought, making it uncertain how some financially strapped governments will find the necessary funds, according to an independent study.
The report, prepared by PwC, the professional services firm, for the European parliament, blames the €40bn ($63bn, £32bn) cost overrun on poor project management, planning difficulties, changes in project specifications, lawsuits and lack of funding.
In 2004, the European Union identified 30 road, rail and sea transport schemes as priority projects for the purpose of integrating the economies of the bloc’s 27 member states, promoting their competitiveness and strengthening sustainable economic development.
The projects include a rail link from the French city of Lyon to the EU’s eastern border with Ukraine, another rail connection from Berlin to Palermo in Sicily, and a motorway from the Polish port of Gdansk to Vienna and Bratislava, Slovakia’s capital.
The cost of the 30 projects is likely to be about €379bn, 11.6 per cent more than the original estimate in 2004 of about €340bn, according to PwC.
More than half the bill is expected to fall on four countries – €62.7bn for Italy, €62bn for Spain, €41.4bn for France and €31.8bn for Germany. The UK’s costs are forecast to be €26.7bn.
Paolo Costa, an Italian liberal who chairs the European parliament’s transport committee, said individual countries were at present expected to bear 80 per cent to 90 per cent of the cost of the projects, with EU funds accounting for the rest.
But he noted that a country such as Italy, whose public debt is more than 100 per cent of gross domestic product and whose economic growth rate has been one of the EU’s lowest for 15 years, would not find it easy to come up with the vast sums required.
“It’s high time for EU member states to tell us how they intend to deal with these projects,” Mr Costa said. “I don’t think the EU can just sit and wait for things to sort themselves out.” He recommended that EU governments make a bigger effort to obtain private sector support to co-fund the projects.
The biggest cost overrun affects the rail link from France to Ukraine, which according to the report will cost €52.7bn rather than €38.1bn as predicted in 2004.
Another rail project soaring in cost is a high-speed axis connecting Paris and Lyon with Bilbao, Barcelona, Madrid and Lisbon. This is put at €45.2bn, up from €39.7bn in 2004. The Berlin-Palermo rail link will cost €51bn rather than €46.2bn as first thought, according to the report.
The study also names several projects that are falling years behind schedule. The worst offenders are a freight railway line from Sines in Portugal to Madrid and Paris, and a high-speed, interoperable rail network designed to integrate Spain and Portugal. Both are 10 years behind schedule.
The European Commission regards the 30 projects as important because they will reduce road congestion, help deal with a big increase in freight traffic and slow down an anticipated rise in carbon dioxide emissions from transport.
