The National Roads Authority has been asked by the Department of Transport to agree fixed-price contracts with construction companies in a bid to curb National Development Plan costs.
Most road contracts are now going 25 per cent over budget, the Minister for Transport, Mr Brennan, told The Irish Times, though he added that some of the extra cost was caused by redesign.
"I have asked the NRA to use fixed-price contracts. The upside is that you know what you are getting. The downside is that you may have to pay a premium to get it," he said.
Under an agreement with the Department of Finance, Mr Brennan has been promised €1.1 billion for each of the next four years to pay for the upgrading of the national roads network.
However, the Minister said he wanted the proposed National Development Finance Agency to raise €2 billion to bridge the gap between the Department allocation and the NDP plans.
"I am very anxious that it will give us additional money, but the Department of Finance seems to think that it is a better way of giving us old money. We are arguing about that just now," he said.
But he acknowledged that "early indications" were that the proposed agency's debt would have to be included in the Government's debt figures under the EU Growth and Stability Pact. The NDFA was the centrepiece of Fianna Fáil's general economic manifesto put forward by the Minister for Finance, Mr McCreevy. Half of its proposed €10 billion debt would not count in Ireland's EU deficit figures, he believed.
However, a number of government departments cast serious doubt upon this in their ministerial observations submitted to last Friday week's meeting of the Cabinet. In the observations, Mr McCreevy was told that all of the NDFA's debt would count because it would be State-guaranteed.
A similar idea in Portugal has already been questioned by the EU's statistical agency, Eurostat.
Meanwhile, the escalating cost of land purchase is causing concern both within Finance and Transport: "In the case of the Dundrum bypass, €30 million of the €44 million bill was made up by land prices," Mr Brennan said.
The Minister said he favoured the creation of a special division of the High Court to fast-track compulsory order purchases and to curb prices. "My impression is that the State has been very generous," he said.
Meanwhile, Mr Brennan said he wanted to award motorway contracts that would be sufficiently big to attract multinational construction firms - despite the opposition of Irish builders.
Last week, the Construction Industry Federation lobbied the Minister to continue the piecemeal construction of the motorway network.
"They want them in bites that their members can handle. We want to get the projects built. That is what we will do. Irish builders are big enough to stand up for themselves. They don't need me to worry about them. My job is to build these roads," Mr Brennan added.
However, he that said shorter contracts could still get the go-ahead: "If you have a 40-kilometre stretch ready between Ballinasloe and Galway, then you have to decide whether to go with that, or wait for the stretch between Ballinasloe and Athlone.
"If you hold back, the first section will cost you more to build when you get around to it and you will lose whatever it was you would have saved by bringing in outside contractors."
