A budget shortfall of nearly $2 million is threatening plans to fix a series of "safety hotspots" on Otago Peninsula's winding roads.
The much-anticipated $12.5 million series of projects, unveiled in January, was aimed at improving safety on sections of Portobello and Harington Pt roads by 2013.
Two of six projects planned in that period - improvements to a section of Harington Point Rd and at Company Bay - are already almost complete, while tenders have closed for work on a third, improving the stretch of road between Macandrew Bay and Company Bay.
However, Dunedin City Council acting manager transportation operations Pieter Besuijen this week warned a "trend of cost increases" had been detected since resource consents and New Zealand Transport Agency regional funding were granted.
Speaking at a meeting of the council's infrastructure services committee, he said the rising cost of construction, on the back of increasing petrol and bitumen prices, was largely to blame for the budget shortfalls.
There was a $916,000 shortfall for this year's work, and forecast shortfalls of $281,000 for 2009-10 and $626,000 for 2010-11, figures presented to the committee showed.
That amounted to a three-year shortfall of just over $1.8 million.
The projects had already been allocated 65% funding from the NZTA's regional fund - amounting to $8.1 million - and another $4.4 million from DCC coffers.
Committee members voted to approve $320,000 in additional funding for the 2008-09 year to cover the council's share of the extra costs, and seek additional funding from the NZTA at the agency's September review.
Additional council funding would need to be considered for the 2009-10 and 2010-11 years to complete the upgrades, the councillors agreed.
Ratepayers' share of the additional burden would be funded through increased debt absorbed into the council's transportation operations budget.
Mr Besuijen told the Otago Daily Times the work would remain on schedule as long as additional NZTA funding was approved.
"If we want to finish the project we are likely to need more funds," he said.
"If we don't [receive the funding] we will have to look at other options."
However, Councillor Syd Brown warned the additional funding was not guaranteed.
He told committee members there was increasing competition for NZTA regional funds from other parts of the country.
"This will have to have a very good presentation to be successful in achieving the funding," he said.
Cr Neil Collins said the work should proceed despite the budget difficulties, as it was a "crucial" project for the peninsula.
"It has to be done and it's not our fault, or anyone's fault at the moment, that costs have gone up," he said.
"It's been on the waiting list for several years and has to be done."
Otago Peninsula Community Board chairwoman Irene Scurr was encouraged to hear the council had voted to extend its funding for the next year, and hoped additional support for the works would come from the NZTA.
