Council bosses have been defending a £2m overspend needed to complete major roadworks in Derby.
Costs for Derby's inner ring road were estimated at £10.8m but for all work to be completed, including a footbridge, the amount will rise to almost £13m.
Derby City Council's assistant director of highways and transport Christine Durrant said unforeseen problems had contributed to rising costs.
A decision about extra funding will be made by the council next week.
Ms Durrant said costs had risen for a number of reasons.
"We had to put the pumping station in at a lower level than we thought because of unforeseen ground conditions.
"Also inflation in the construction industry has risen above anything else, especially with the rising price of steel which we used for the new barrier system," she said.
The scheme has been funded by the government and the council has applied for extra funding to cover the cost of completing a new footbridge.
If the Department for Transport funding appeal is not successful, Ms Durrant said some capital funding had been set aside by the council and cabinet members would be asked to approve the extra costs.
"This is a very difficult project and we have made a significant improvement to the look of the area, it's a real benefit to the city," Ms Durrant added.