THE "bonfire of the quangos" could cost more than £35m, according to the Assembly's own internal estimates.
The Western Mail has learned that an internal Assembly study into the cost of bringing the Welsh Development Agency, Wales Tourist Board and Elwa in-house estimates the cost to be more than £35m.
Yet that figure does not even take into account the cost of any redundancies and costs associated with IT systems.
First Minister Rhodri Morgan announced the "bonfire of the quangos" in July, revealing that the three quangos would be brought into the Assembly's civil service.
An announcement is expected this month about the structure of the WDA, WTB and Elwa once they are part of the Assembly's civil service.
Speaking on the day he announced the bonfire, Mr Morgan said, "The shape of the Assembly Government will become more governmental because by merging the staff currently employed by the quangos with our existing depart- ments, it will give us more fire- power, more critical mass, more ability to generate distinct Wales- oriented policies, more opportun- ities for staff to specialise in policy areas in their careers and less of a distinction between making policy and implementing it."
He added, "It will enable us to merge back-office functions, IT systems and procurement and get improved value for money."
When asked about the £35m figure yesterday, a spokesman for the Welsh Assembly Government said, "The costs and benefits will depend on both the timing and the manner of the merger. No decision on those has yet been taken."
But others have expressed shock and concern at the scale of the predicted costs.
Professor Dylan Jones Evans, Director of Entrepreneurship at the North-East Wales Institute of Higher Education, said he was surprised at the size of the figure.
"It seems an extremely high figure when a process of rationalisation is being under- taken.
"Clearly from a business point of view, the key issue is whether it will ensure a more efficient service to business, but from a taxpayer's point of view the issue is whether those efficiencies will pay for this minimum cost, plus additional costs that will occur over the short term."
"In retrospect it is always good to make the case first for either merger or rationalisation, espec- ially the financial case, but it is clear that the political imperatives took precedence over the practical imperatives," he added.
Conservative economic dev- elopment spokesman Alun Cairns said he was stunned by the cost and was more scathing.
"This figure is staggering," he said. "It demonstrates the ill- thought-out U-turn in policy. The Welsh Assembly Government may dither and dally over policy but it is the Welsh public that has to pick up the cost.
"£35m equates to the cost of a children's hospital, the annual salaries of 1,400 extra teachers or nurses.
"Alternatively, it amounts to more than half the budget for Regional Selective Assistance and Assembly Investment Grant, the key means of supporting business.
"I am aware of Objective One projects that are either on stop or are being rejected. This must now be the reason. This ill-thought-out policy is costing Wales in more ways than one."