A LEGAL challenge to the Londonderry to Aughnacloy road project is costing the Department of Regional Development (DRD) up to £750k a month whilst the postponement of work on the scheme means the Department of Regional Development (DRD) will have to hand back £10m a month in unspent capital allocated from the NI block grant.
Roads Minister Danny Kennedy revealed work on the A5 western transport corridor between New Buildings and Ballymagorry and between Omagh and Ballygawley was due to start in October. However, work has been delayed due to a legal challenge.
Mr Kennedy explained: “In order to mitigate the impact of delays associated with the legal challenge, the contractors have been instructed to carry out preliminary works, which include ground investigation, ecology works and service diversions.
“That work is ongoing. However, it is not possible to say when the main construction contract works will commence, as that will be dependent on the timing and outcome of the legal challenge.”
The Minister went on to reveal the substantial cost of the delay.
“Any delay will certainly result in increased costs in a number of areas,” he stated. “Assuming that there is no change in the total construction period, there will be direct, quantified inflationary increases arising from month-on-month delays to the start of construction.
“The project team will attempt to mitigate the impact of any delay. However, the initial assessment of the impact of a delay to the starting date is in the order of £700,000 to £750,000 a month.
“Of course, the postponement of the scheduled start date will result in the Department having to declare back to the Northern Ireland block approximately £10 million for every month of delay,” he added.