Guess why estimates go so wrong
Tuesday 20th August 2013, 5:00PM BST.
IT IS easy to see why the Public Services Department is sensitive to claims that it misled the States over the cost of repairing the island’s sewage outfall.
Asked why costs had risen from an initial £4m. to £15m. the department was robust in its defence. The new figure was for a new pipe, not a repaired one, and it would be much longer. Plus they had tacked on the cost of refurbishing the back-up short sewage pipe.
Equating the two was like comparing ‘apples and pears’ the minister said.
Fair enough, but it still begs the question of why the department was prepared to put a figure to a project that bears scant resemblance to its final plans.
PSD, of course, has previous when it comes to the sudden upward revising of estimates.
In April, the island learned that the cost of setting up the new waste strategy had rocketed from £3.5m. to £24m. That sevenfold increase, we were told, was acceptable because the cost of exporting waste should go down by roughly the same sum.
The impression given at the time – and it has been enhanced with the sewage outfall – is that estimates for major projects are either a) so inaccurate as to be pointless or b) prone to being nudged up or down depending on whether the department thinks the project is a good idea.
The estimated cost of full sewage treatment – an idea historically opposed by PSD – was £45m. to £55m.
But can the island have any faith in that figure given PSD’s record?
At least one deputy reckons it could be built for half that sum. If so, States members voting on the sewage plant would have had a much tougher call.
There is evidence that the States is getting better at budgeting for major projects. Most seem to come in on time and on budget.
Yet the suspicion remains that the problem has merely shifted up the line. Early estimates presented to deputies are ridiculously cheap, then are incrementally revised upwards until the final sign-off figure is accurate but much higher.
It is hard to find that comforting.