SAO warned of the delayed modernisation of railway corridors III and IV
Press Release – June 8, 2010
From June 2009 to January 2010, auditors from the Supreme Audit Office (SAO) performed an audit of the railway corridors III and IV modernisation projects. By the end of September 2009, CZK 29 milliard were utilized out of the approved investment funds (CZK 117.6 milliard). Auditors also aimed at high-speed tracks’ construction planning within the auditing period 2006–2009. Among the audited bodies were Ministry of Transport, State Fund for Transport Infrastructure, and Railway Infrastructure Administration with its organizational units Directorate and Civil Engineering Administration in Plzeň and Prague.
In 2001 and 2002, Ministry of Transport submitted to the Government under-rated investment requirements of the railway corridors III and IV modernisation projects that amounted to CZK 97.1 milliard. The investment needs were covered by funds of the State Fund for Transport Infrastructure (SFDI) and loans, which was found problematical. Several of the insufficiencies described already in the previous audits 1, during which auditors scrutinized the construction of railway corridors I and II. As early as 2005, the Government was asked to revise the funding models according to a plan submitted by the Ministry of Transport.
“The costs increased by 21 % to CZK 117.6 milliard and the building accomplishment terms were postponed by 6 years to 2016. Thereby the effectiveness of the modernisation projects, which the Ministry had proclaimed during the approval process, dropped by more than one third“, said president of the SAO František Dohnal.
The Ministry failed to accept any measurements to ensure the realization of the modernization projects according to the revised funding models. The actual state of the construction produced little evidence that even the revised model of funding would be followed, as the completion activities will increase the investment needs by further 15 % to CZK 135.5 milliard. The finalisation terms will be postponed by 2 years (at minimum). In spite about a half of the realisation period passed, CZK 29 milliard were utilized (some 25 % of the presumed expenditures), and only 28 % of the total building length of corridors III and IV were finished.
Such increases of investment needs and extensions of the realisation furthermore affect the effectiveness of the projects. In 2008, Railway Infrastructure Administration re-assessed the effectiveness of 2 parts of corridors III and IV and summarized that the indicators were sharp cost-effective (even with overrated social and economic impacts).
“The funding possibilities of the development and reconstruction of the transport infrastructure got more and more problematic as the Ministry approved too many projects for realisation. Realisation of projects that were included into the construction of corridors III and IV cumulated in the second half of the realisation period. Because of the current economic state of our country, the ensured funds are estimated to be at 18 % of the needed financial amounts, which are to be utilised for finishing the constructions in 2009“, said Dohnal.
Realisation delays and increases of costs occurred mainly during the phases of processing preparatory documentations and building projects. Among the causes of such problems were complicacies of planning inquiry and building control processes, especially when needs of the individual parties to the actions had to be settled. Further problems were caused by conceptual variations of stages from Praha to Beroun (corridor III) and from Tomice to Bystřice u Benešova (corridor IV) and by afterthoughts presented by Railway Infrastructure Administration or the Ministry, which were included into previously approved documentations of the projects.
The auditing operation was included into the 2009 Audit Plan of the SAO under No. 09/19. Jiří Adámek, Member of the SAO Board, controlled the operation and prepared the audit conclusion as well.
1] Audit Operation No. 00/29 – Construction and operation of the Railway Transit Corridors I and II and Audit Operation No. 03/26 – Construction and operation of railway corridors.
Bc. Radka Burketová
Press Speaker
Supreme Audit Office