Highway conditions worsening amid budget cuts, AG says

The Department of Transportation’s decision to cut back on funding for road maintenance is deferring millions of added costs into the future, according to the auditor general’s latest report.

Auditor General Kim MacPherson examined the department’s asset management program, which was designed in 2008 to pinpoint the best time to upgrade highways and roads.

"Significant reductions in current funding threaten to reverse the department’s achievements under the asset management business framework…. Departmental projections indicate increasing deterioration of the highway network should funding remain at this level," the report said.

"This reduction will make it difficult for the department to continue implementing asset management recommendations and will result in significantly worsened highway conditions and future long-term increased costs."

Her report said the cost of maintaining roads escalates quickly. She said for every $1 invested in improving a road that is rated in "good" condition, it can cost $5 to $6 if the department waits until it is in poor condition, which may be six years later.

Finance Minister Blaine Higgs unveiled a $948-million capital budget in December 2011, but $544 million for the Route 1 highway project and $404 million for ongoing capital projects. Only $24 million was set aside for new capital projects.

The auditor general wrote in her report the department has the right tools to identify and pick what roads and highways needed funding. But delaying these decisions, there will be a "greater overall cost to the province," she wrote.

Based on the latest budget forecasts, the auditor general’s report said the number of kilometres of roads in poor condition would increase to 2,224 in 2015 from 1,730 in 2012.

MacPherson said departmental staff have a role in lobbying harder to get adequate funding for these projects.

"We believe it is imperative the department clearly and accurately communicate the impact of the growing infrastructure debt to government," the report said.

In 2008, the transportation department set a target that it would pick 80 per cent of the projects that it funded from the asset management program. The department has not met that benchmark.

Instead, 60 per cent of the projects picked by the transportation department for upgrades were chosen by the asset management program.

Some of the other factors the department uses to pick these projects include:

•  traffic demand
• accident levels
• MLA requests
• district priorities
• administrative boundaries.

The auditor general said there is a "risk that non-optimal considerations may influence the choice of capital maintenance projects."

"When considering such factors as district priorities and MLA requests the department may be influenced by non-condition related variables, such as economic and social development, industry considerations, and political activism," the report said.

The auditor general received a list of government priorities that altered project selection in 2011-12 and would likely affect projects picked in 2012-13. The list included 48 MLA requests for work on asphalt roads and 31 MLA requests for work on chip seal roads.

"Although we could not specifically identify which of the MLA requests have been completed, we confirmed with the department that at least some of these had been included in the 2011-12 capital program. Some are also on the 2012-13 proposed project list," the report said.