TALLINN, 28 February 2012 – In its recently completed audit the National Audit Office audited the maintenance of national roads in Estonia from 2006-2010 and found that there has still not been any significant change for the better, and the weakening competition is particularly worrying. The audit carried out by the National Audit Office in the same area in 2005 was used as the basis for comparison.

Tarmo Olgo, Director of Audit of the Performance Audit Department of the National Audit Office admitted that almost all of the most significant issues raised in the audit carried out more than five years ago have still not been resolved. “Road maintenance does not correspond to the level set forth in contracts,” said Olgo. “There are numerous problems in road maintenance done in summer and winter, and the problems are especially serious during the winter period.”

The analysis carried out by the National Audit Office indicated that main roads were generally well maintained in winter 2010/2011. However, the situation was considerably worse on side roads, which is also used by public transport, incl. school buses. Half of such roads in the regions included in the audit were at least once not cleared of snow within the prescribed time (i.e. 24-36 hours) after it stopped falling. In these cases side roads were cleared of snow two or three days later and road users, incl. children travelling in school buses, were no guaranteed a safe drive to work or school during this time.

The observations made about road maintenance in summer mainly concerned maintenance of bridges and guardrails, repairing asphalt and gravel roads, and cleaning ditches. The condition of bridges is the biggest source of concern. Although approximately 900,000 euros is paid for the maintenance of the 938 bridges and viaducts in Estonia every year, many bridges had not been maintained as required, which leads to a rapid deterioration of these expensive technical structures. The National Audit Office also found a number of problems in other areas of maintenance – gravel roads were often full of holes and uneven, unsuitable materials were often used to repair potholes in asphalt roads, many ditches had not been cleaned, the verges soft and lower than required, etc.

Approximately 50 million euros is allocated for the maintenance of national roads every year. Approximately 60% of this money is used for everyday road maintenance: cleaning roads from snow and ice, mowing road verges and ditches, and repairing smaller holes. The remaining 20 million euros is used to buy surface dressing of roads, repairs of gravel roads and other smaller repair works.

The National Audit Office sees several reasons why maintenance is not adequate:

Firstly, competition between road maintenance companies has weakened over the years. Long-term contracts and lack of competition have led to the situation where road maintenance providers have not been changed in most regions. The Road Administration itself has also helped to reduce competition by preparing procurements with terms and conditions that favour existing service provides and keep newcomers away on the grounds of highly questionable omissions. For example, the company that submitted the cheapest tender did not qualify in the road maintenance procurement in Viljandi County. The reason being that the data of two pieces equipment were given on the wrong page in the tender. As a result of this, the state pays approximately 900,000 euros more for road maintenance during the term of the contract. The small number of tenderers and elimination for procurements means that the company that submitted the only tender was declared the winner in almost one-half of road maintenance procurements without a proper price competition.

The non-existent competition in road maintenance means that road maintenance expenses have multiplied even though the road maintenance requirements have basically been the same since 2003. Tarmo Olgo pointed out a significant circumstance: “Whilst an increase of up to 18% in maintenance expenses from 2006-2010 would have been justified due to the increase in the cost of living, the actual increase in the price of maintenance works when new contracts were signed was 40% on average. In the contract with the most expensive maintenance works, the price of the works more than doubled in comparison with the earlier maintenance period.” The calculations of the National Audit Office indicate that the amount paid by the Road Administration to road maintenance companies on the basis of contracts is approximately eight million euros more that would be justified on the basis of price indices.

Secondly, it still unclear which of the road repair works must be done by road maintenance companies for the specific amount they receive from the state every month and which are the works for which they can demand extra money. For example, it is not specified how they must maintain gravel roads and what this maintenance should guarantee.

Thirdly, the National Audit Office believes that the supervision exercised by the Road Administration is weak. Although this can partly be understood due to the massive workload of supervisors, the problem is that not all faults and omissions are recorded on the few supervision trips they make. However, the contractual fee cannot be reduced by the fee due for work not done if omissions are not recorded. It is also not ascertained whether the maintenance companies perform the precepts issued to them. This practice has created the situation where road maintenance companies themselves do not even bother to look for and eliminate road damage themselves, but simply sit around and wait until the supervisors of the Road Administration ‘order’ it from them. As the fines imposed for leaving work undone are marginal (deductions were made only from 0.02% of the payments made to road maintenance companies in 2010), then companies are guaranteed a monthly income from the state even without them providing a quality service.

Toomas Mattson
Head of Communication Service
640 0777
513 4900
[email protected]
 

• Posted: 2/28/2012 12:00 AM
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