Fuel inflation could hit road plans across Cork

Inflation in fuel prices and oil-based construction materials linked to the US-Iran war could significantly impact road projects planned by Cork County Council, its director of roads and transportation has warned.

The council has received €240m from the Government for roads projects this year, but director Padraig Barrett said inflation will eat into what can be delivered, with costs estimated to rise by between 10% and 20%.

He said that if the conflict continues, inflation could settle in the 15%-20% range by the summer.

“(Tar) macadam is the big issue as it is oil-based,” Mr Barrett said, adding that contractors can also claim additional payments from the local authority for unforeseen increases in fuel costs on top of agreed tenders.

“We are concerned and keeping an eye on this. I’m hoping the inflation costs will be on the lower side of what I’m predicting, especially if the war finishes early. But if it drags on it could well be at the higher end," he said. 

"It is a concern and we are keeping a very close eye on it."

Warnings from contractors

Mr Barrett said warnings from contractors about rising costs began to emerge at the end of February, with formal correspondence received by March.

Engineers in the Carrigaline Municipal District have told councillors that tenders for smaller road projects are coming in at up to 33% above previous norms.

They said they are in discussions with the council’s Sustainable Travel Unit to explore whether additional funding could offset some of the increases.

The tenders under review relate to minor works, including the construction of speed ramps as part of traffic-calming measures.

While most contractors still rely on petrol and diesel vehicles, Mr Barrett said a quarter of the council’s heavy goods vehicles have been converted to hydrotreated vegetable oil, which is more environmentally friendly and has not been affected by the conflict.

It is understood that other council directorates are also monitoring inflation closely, with the housing directorate likely to be impacted by rising labour and construction material costs.