Page last updated at 16:03 GMT, Friday, 9 April 2010 17:03 UK

Manx Treasury blamed for extra 2.26m runway costs

Ronaldsway Airport
The report into the runway costs will go before Tynwald on 20 April

Poor communication between Treasury officials has been blamed for adding £2.26m to the cost the Isle of Man airport runway extension scheme.

The £44m project's costs increased because the government failed to buy euros early enough to pay for it.

Exchange rate fluctuations meant the government had to pay more for the currency than it expected.

The Tynwald public accounts committee has recommended the Treasury reviews how such decisions are taken.

"The committee recognised that, if the exchange rate had improved between contract date and purchase of euros date, resulting in savings on the project, they would not be reporting on this issue," it said in a statement.

'Totally unacceptable'

"However, the delay in purchase did result in an additional cost to the scheme of £2,269,807 and the investigation has highlighted areas of concern which need to be addressed, irrespective of whether the exchange rate fluctuations had been to government's advantage or disadvantage.

"The breakdown in communication between Treasury officers appears to have been the main reason for the delay.

"The committee has therefore recommended that the Treasury conducts a review into how decisions are taken and implemented and the procedure for clarifying which officers have specific responsibility for the implementation of decisions."

Officials also failed to inform Treasury minister Allan Bell about the issue, the committee report said. He found out from the transport minister.

"The committee is of the opinion that that was totally unacceptable and that Treasury officers should have informed the minister as soon as the extent of the additional costs were known."

The committee - Tynwald's spending watchdog - has made a series of recommendations in its report, which goes before Tynwald on 20 April.

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