According to a senior Welsh Government official, the M4 relief road could cost more than £1.4bn once VAT is accounted for.
Simon Jones told AMs it was not yet clear what VAT would need to be paid. The Welsh Government recently announced it planned on spending an extra £135m to improve Newport Docks. This would push costs up 10% for the project to £1.3bn.
Labour Llanelli AM Lee Waters feared costs could rise to as much as £1.5bn. The project has also faced opposition from environmental group and some AMs.
Mr Jones, director of economic infrastructure, told a meeting of the assembly’s economy committee;
“The figure that has been lodged with the inquiry is between £1.3-£1.4bn. The VAT situation is quite complex with that road. It applies to some parts of the scheme and not to others.”
When pressed on whether the cost would be more than £1.4bn after VAT, Mr Jones said: “Yes.”
Labour AM Lee Waters asked if there was a “tipping point” where the M4 was no longer value for money.
Economy secretary Ken Skates, who was also giving evidence, said;
“It would have to increase massively.”
Referring to comments by the first minister in late 2015, Mr Waters said;
“Two years ago it was being claimed that a new M4 would cost nowhere near £1bn. Now it’s clear that it will cost at least £1.5bn, and take longer than expected, and that’s before the likely legal challenge.
“Using the standard government measurement the new section of M4 is not classified as good value for money.
“We need to debate whether if there was a free hand to spend £1.5bn on projects to benefit the economy across Wales would this be the best way to spend it.”