Big Budget Overspends“They cost at the time, more than the Trident nuclear missile programme. That’s how expensive they were.”

As heard on Today with Claire Byrne

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The world of government capital expenditure is not usually viewed as too exciting and, crucially, its budget estimates are generally seen as works of fiction. Just look at the new National Children’s Hospital, currently under construction in Dublin and running at something like three times its original budgeted cost (and counting). But it wasn’t always thus and even when it was, it wasn’t always Ireland. As Anton Savage told Claire Byrne, some of the biggest capital projects in this country have been on budget (or thereabouts). The construction of the Ardnacrusha hydroelectric power station in the 1920s was at the time the biggest spend in the fledgling state’s history: 

“It took one-fifth of the entire state’s budget to build. So, we’re talking in modern terms, tens of billions of euro. It came out on time and almost – within a whisker – on budget. 

Impressive. So impressive, in fact, that the US president, Franklin D Roosevelt, requested information on Ardnacrusha and used it to inform the development of the Tennessee Valley project in the States. In more recent examples of fiscal accuracy, the Luas Cross City project in Dublin came in on time and under budget. So it does happen, now and again. But, as Anton points out, it’s the projects that blow their budgets that get all the attention. And what’s worse than a project that costs multiples of its budget? A project that costs multiples of its budget and is immediately useless upon completion. Case in point: Martello Towers.  

“They cost at the time, more than the Trident nuclear missile programme. That’s how expensive they were. And by the time they were finished, they were redundant.” 

The towers were built to protect the UK against Napoleon’s navy, but by the time they were finished, so was Napoleon’s navy and the Martello Towers never saw a cannon fired in anger. Let’s hope the same can be said for the Trident nuclear missile programme. 

Big budget overspends also happen in unexpected places. Germany, for example, which, as the stereotype would have it, is at all times fiscally responsible. Not so, Anton tells us. 

“They decided to build an airport in Berlin, which you wouldn’t have thought would have been that tricky. They ended up with a four times budget over-run, they had several of the contractors involved go bankrupt, they took very nearly twice as long as they were meant to take…”  

Eventually, they called in an airport specialist to look at the project – something you might think they should have done before they started – and ask that specialist to advise them on how to get the floundering development back on track.  

And the quote from the airport specialist was that the best thing you could do to fix the problem would be to use dynamite.” 

Ouch. You can hear more huge budgetary over-runs– like the Scottish Parliament buildings in Holyrood (pictured) – from Anton Savage’s conversation with Claire by going here. 

Niall Ó Sioradáin 

© The Listener 2020

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