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for 1976/77 were prepared in Cctober 1975 when labour, materials and tender
prices had already hit a low level and were beginning to show an upturn
and the estimates therefore allowed for rising costs. However, as the
Financial Secretary stated in his speech, the expected sharp rise in prices did not materialise even with the demands being made on the construction
industry.
The third largest factor in the under-expenditure was slippage. Over the year contractors failed to meet their programmes due to organisational and labour problems, the effects of exceptionally wet weather and in
particular cases to abnormal site conditions and delays in obtaining
materials and plant on schedule. The overall figure for slippage amounted
to about 109M. or 25.5% of the total.
་
Changes in the design and scope of projects by client departments and P..D. offices causing reductions in cost or delays in starting works
induced an underspend of 54.5M. or 12.7%.
Over-estimation of financial requirements by other Government
departments for such items as furniture and equipment and works under their
direct control amounted to 30M. Provision under various heads to allow for
works to be carried out during the year which can now be seen to have been
over-optimistic accounted for a further 20.5M. These items together
represent 11.8% of the total under-expenditure.
Work on the Aberdeen Tunnel project was programmed to start in
the latter half of 1976. The programme was however held up while consideration was being given to a proposal that the tunnel be constructed and operated by
private enterprise. As Honourable Members are aware it was eventually
decided that Government should itself proceed with the scheme but because
of the time lost works could not be put in hand during the financial year and 35M. was left unspent. The time required to obtain approvals on some
/Cont'd.
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