Risk management hinders Estonian projects

A National Audit Office report noted poor documentation of the work that had been completed and why it was later changed.
Finance & Funding / May 9, 2022 1 minute Read
By David Arminas
Surprise! Detailed information about buried obstacles is poor (© Jfspic/Dreamstime)

A report by Estonia’s national auditor shows that seven of 18 local urban road projects that it analysed had poor risk management systems in place.

The projects, completed between 2019 and 2021, also lacked well defined initial studies about the impact that any road design might have on surrounding neighbourhoods, according national media reports of the auditor’s work.

During the construction time, a common shortcoming was poor documentation of what work that had been completed and why it was later changed as work progressed. This additional work was costly in time for the project schedule and for the taxpayer in euros, noted the report by the country’s National Audit Office. It was, therefore, unclear why it had been decided to change original designs during the construction and what had necessitated the changes.

Because initial studies, including detailed information about buried obstacles, were poor, many projects had to be stopped when these object – gas lines, pipelines, buried cables – were discovered. This added greatly to project costs.

"As customers, local governments sometimes rely too much on the expertise and goodwill of their contractual partners," said Janar Holm, Estonia’s Auditor General. "As a result, the requirements for the designer, builder or owner-supervisor in the contracts remain general or do not check that these requirements have been met."

According to the National Audit Office, the association of cities and rural municipalities should compile standard conditions for both the technical description of works and of the contracts then make them available online and keep them up to date.

The National Audit Office also urged closer oversight of the country’s larger more expensive projects by the State Transport Board. It was acknowledged, though, that the board had already started down this path in the second half of 2019 and has inspected 10 to 15 sites a year since then. More than half of these inspections have revealed some defects, most often an insufficiently thick substrate.

But the projects to be reviewed by the board were chosen randomly, a method not in the best interest of the taxpayer, according to the auditor. A more systematic approach is needed.

In 2021, there were around 23,300km of local roads in Estonia, around three-quarters of which were outside cities, towns, small towns. However, traffic load on local roads is largely concentrated with the immediate urban areas, where half of the streets have a traffic frequency of at least 2,000 cars per day. Outside the settlements, about 90 per cent of the roads have less than 500 cars a day.

The audited local governments were Tallinn, Tartu city, Lääne-Harju municipality, Rakvere city, Kohtla-Järve, Märjamaa municipality, Luunja municipality, Rõuge municipality, Tori municipality and Viimsi municipality. The projects varied in value, from €70,000 to €1.5 million.

Between 2019–2021, local governments spent about €170 million euros a year on road maintenance, of which 57 per cent was spent on road construction and surface repair