The €100m Dunkettle interchange upgrade is under threat with the Government considering halting work due to spiralling costs.

There are now fears the cost of the infrastructure project, which is critical in relieving congestion around Cork City, could end up as high as €170m.

Fianna Fáil leader Micheál Martin has called on the Government to “come clean” on the current cost of the upgrade, which has already been delayed.

Documents seen by the Irish Examiner show work is being carried out to agree a “target cost” for the project, which was first estimated to come in at €100m, but then jumped to €115m. However, the document reveals that, “at this early stage of assessment, there are areas of significant differences with the contractor in relation to pricing rates submitted”.

The document, issued on June 27, also warns that contractors Sisk may be let go if agreement on price cannot be reached and a procurement process to find another company to carry out the work would have to begin.

“This will delay the completion by some 12-18 months. It is a question of value,” wrote Peter Walsh, Transport Infrastructure Ireland director of capital programmes.

Mr Martin said “there will be huge alarm” around the revelations that the main work on the upgrade, which was due to begin earlier this year, could now be completely stopped while a new tender process is under way.

“It’s very worrying and I am very concerned about it,” he said. “It begs the question, how have the Government got this wrong again?”

He and others had been seeking an update on the project for months, adding that rumours are swirling around the cost of the development which may rise to between €160m and €170m.

The Department of Transport did not provide any updated costings to the Irish Examiner. However, a spokesperson said the target cost stage would be concluded in the coming weeks.

“Advance works have been carried out, the contractor’s design has been finalised and quantified and work is currently progressing on the establishment of the target cost,” the spokesperson confirmed.

“If the parties agree a target cost with the stage one contractor, construction can commence, subject to the necessary approvals as required under the public spending code. Alternatively, if the parties cannot agree a target cost, stage two will be retendered.”

More than 100,000 vehicles use the interchange every day and it is one of the biggest congestion blackspots in Cork.

Mr Martin said planning permissions for residential developments had been granted on the basis of the upgrade being carried out and the city development plan reflects the fact that the project will go ahead.

“There is significant gridlock around this interchange,” he said. “There are massive volumes of traffic going through it each day, especially at rush hour.

“I think the Government need to come clean on this and need to be transparent.”

The Cork South Central TD said the latest revelations add to a trend of spiralling costs on public projects.

“There is a wider issue here also in terms of how accurate the figures for projects in the National Development Plan now are,” said Mr Martin. “It’s all looking very ropey when you have overspending on the National Children’s Hospital and the National Broadband Plan. Now this project seems to be out of kilter as well.”

Last month, Sisk chief Stephen Bowcott said Dunkettle is “in the hands of the Government as to how to proceed”. In April, the company, which has carried out the first phase of the two-phase contract, said they had found the site to be more challenging than expected.