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Spain’s roads double the cost of Germany’s: study

A new EU study revealing that roadbuilding in Spain costs almost twice as much as in Germany has led to demands for explanations and investigations into procurement practices.

Published: 19 August 2013 10:45 CEST
Updated: 19 August 2013 12:45 CEST
Spain's roads double the cost of Germany's: study
The average cost of 1km of road per AADT (Annual Average Daily Traffic) was more than four times higher in Spain than in Germany. Photo: Flickr/M. Martin Vicente

A report from the European Court of Auditors titled "Are EU Cohesion Policy funds well spent on roads?" has assessed whether road infrastructure projects financed by Cohesion Policy funds have achieved their objectives at a reasonable cost.

The study looked at co-financed road projects in Germany, Greece, Poland and Spain, according to national daily 20 Minutos.

These four Member States represent approximately 62 % of all EU road co-financing.

It highlighted that there were "significant cost differences" between countries.

Projects audited in Germany had the lowest cost per 1000 square metres (€287,043) compared with €496,208 in Spain but there was no evidence that this was a result of lower labour costs.

The average cost in the projects audited of 1km of road per AADT (Annual Average Daily Traffic) was more than four times higher in Spain than in Germany, with Poland and Greece being in the middle between the two extremes

For projects in Spain, auditors found a considerable difference between the total construction and roadway construction costs, indicating a heavy use of engineering objects such as bridges or tunnels.

The report's authors believed that some procurement practices did not deliver optimal costs.

Overall, it was reported that the road projects had partly achieved the intended results but their impact on economic development could not be assessed.

Most projects delivered less than the planned return on investment while clearly improving road safety and helping to save travelling time.

They concluded that enhanced transport capacity could have been achieved at lower cost.

The European Court of Auditors recommended that the cause of the "considerable differences" should be analyzed.

Carlos Martínez Gorriarán of Spain's Union Progess and Democracy (UPyD) party tabled a question in parliament in response to the report, demanding to know "on what to blame" the differences in cost between countries.

He also asked if "it the government considers the current model of motorways in Spain to be efficient" and demanded to know the conclusions that the Ministry of Works had drawn from reading the EU report.

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EUROPE

Brussels warns Italy to rein in public spending amid pandemic

Most EU member states should continue to invest to support the continent's economic recovery, but heavily-indebted Italy should rein in public spending, the European Commission warned on Wednesday.

Published: 24 November 2021 16:07 CET
Italian Prime Minister Mario Draghi
Italian Prime Minister Mario Draghi expects the country's GDP to recover in the coming year. Photo: Alessandra Tarantino / POOL / AFP

“The economy is bouncing back from the recession, driven by a rebound in demand across Europe,” EU executive vice-president Valdis Dombrovskis said.

“But we are not out of the woods yet. The economic outlook remains riddled with uncertainty,” he said, warning that the coronavirus is still spreading, prices are rising and supply chains face disruption.

Despite these unpredictable threats, European officials predict a strong recovery, and want eurozone governments to maintain their “moderately supportive fiscal stance” to support investment.

EXPLAINED: How Italy’s proposed new budget could affect you

Italy, however, remains a worry. Its public debt passed 155 percent of its GDP last year, and Brussels is worried that it is still budgeting to spend too much next year.

“In order to contribute to the pursuit of a prudent fiscal policy, the Commission invites Italy to take the necessary measures within the national budgetary process to limit the growth of nationally financed current expenditure,” the commission report said.

The commission did not say by how much Italy’s spending plans should be reduced, and its recommendation is not binding on the government.

The European Union suspended its fiscal discipline rules last year, allowing eurozone members to boost their public spending to help their economies survive the Covid-19 pandemic.

But the European commissioner for the economy, former Italian prime minister Paolo Gentiloni, said governments should now “gradually pivot fiscal measures towards investments”.

“Policies should be differentiated across the euro area to take into account the state of the recovery and fiscal sustainability,” he said.

“Reducing debt in a growth-friendly manner is not necessarily an oxymoron.”

Italian Prime Minister Mario Draghi, a former European Central Bank chief, has said Italy’s economy is recovering after the pandemic-induced recession.

Draghi forecast economic growth this year of “probably well over six percent” in a statement on October 28th.

Italy’s GDP rate grew by 2.6% in the third quarter of 2021.

While economists don’t expect Italian GDP to bounce back to pre-pandemic levels until 2022, ratings agency Standard & Poor has revised its outlook for Italian debt from stable to positive.

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