Oireachtas Joint and Select Committees

Wednesday, 12 June 2024

Committee on Budgetary Oversight

Infrastructure Guidelines: Department of Public Expenditure, National Development Plan Delivery and Reform

Photo of Gerald NashGerald Nash (Louth, Labour)
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This evening's engagement is with representatives of the Department of Public Expenditure, National Development Plan Delivery and Reform to discuss the infrastructure guidelines and recent changes made thereto. On behalf of the committee, I welcome Mr. Kevin Meaney, Ms Ciara Morgan, Mr. Frank Newman, Ms Niamh Foley, and Ms Anna Cremins.

Before we begin, I wish to explain some of the limitations to parliamentary privilege and the practice of the House as regards references that may be made to other persons in evidence. Witnesses are protected by absolute privilege in respect of their presentations to the committee. This means they have an absolute defence against any defamation action for anything they may say at the meeting. However, witnesses are expected not to abuse this privilege. It is my duty as Chair to ensure this privilege is not abused. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, witnesses will be directed to discontinue those remarks and it is imperative they comply with any such direction.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that members must be physically present within the confines of the place where Parliament has chosen to sit, namely, Leinster House, in order to participate in public meetings. I will not permit a member to participate when he or she is not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside of the precincts will be asked to leave the meeting.

I invite Mr. Kevin Meaney to make his opening statement.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I ask the Leas-Chathaoirleach to excuse me for a while as I have another meeting on at the same time as this one.

Photo of Gerald NashGerald Nash (Louth, Labour)
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That is no problem.

Mr. Kevin Meaney:

I thank the committee for this opportunity to discuss the recent introduction of the infrastructure guidelines, which were published in December 2023 and became effective from the start of this year. I am a principal officer in the national investment office in the Department of Public Expenditure, National Development Plan Delivery and Reform. I am accompanied by my colleagues from the climate division. Mr. Frank Newman is also from the national investment office and Ms Ciara Morgan and Ms Niamh Foley are from the climate research unit.

The renewed national development plan was launched in 2021, and it is the largest in the history of State, with significant increases in investment in areas such as housing, health, transport, education, enterprise, sport and climate action. Conscious of these greater levels of capital spending, the Department sought to ensure that disciplined project evaluation, preparation and implementation would be enhanced and that vital infrastructure projects would be delivered on time and in a manner than ensures value for money for the taxpayer. The new infrastructure guidelines, following on from the previous public spending code, give project managers the necessary tool kit to achieve this. In March 2023, after examining the support structures and levers available across government in order to maximise delivery of vital infrastructure, six priority actions were approved by the Government to improve national development plan delivery and ensure that capital allocations are best utilised. The first of these six priority actions included having the public spending code reconstituted as the infrastructure guidelines.

The most recent public spending code, which was introduced in December 2019, provided a set of guidelines and a project lifecycle from conception to completion, which gave Departments and public bodies the tools to appraise project proposals in line with international standards. While these oversight arrangements worked quite well and provided a high degree of confidence that the projects will deliver value for money, there is also a necessity to ensure that projects are delivered in a timely manner and that there are no unnecessary administrative delays hindering this. This why we have refreshed the requirements for capital projects in the infrastructure guidelines. We have reduced the number of approval stages and streamlined the requirements for major projects while retaining the international best practice governance and oversight arrangements already in place.

These changes combined with the other significant actions aimed to enhance delivery of the national development plan, including reform of the capital works management framework, reconstitution of the Project Ireland 2040 delivery board and reviewing the capacity in major Departments and agencies, will provide a fresh impetus to the delivery of the national development plan.

Some of the key changes implemented through the updated infrastructure guidelines include that the number of approval stages prior to implementation for projects has been reduced from five to three. These include approval gates by the approving authority at preliminary business case and approval-in-principle stage, pre-tender stage and final business case stage. The general threshold for major projects has increased from €100 million to €200 million. Additionally, there will be a review of the thresholds every three years to ensure they remain appropriate. The Government is no longer the approving authority for major projects. Instead the relevant approving authority should seek Government consent at two key stages in the project lifecycle, namely, the strategic assessment and preliminary business case stage and the final business case stage. The external review and major projects advisory group review remains a requirement for projects greater than €200 million at the strategic assessment and preliminary business case stage, prior to seeking Government consent following the approval of the parent Department and-or the approving authority.

The new guidelines also provide clarification on the roles and responsibilities of the Accounting Officer, better reflect the carbon and environment impact of proposals, provide updated guidance on the development and process for programmatic proposals which may consist of a number of related projects, and reflect changes arising from recommendations put forward by the major projects advisory group.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I apologise for interrupting but a vote has been called in the Dáil and, unfortunately, we must suspend for its duration.

Sitting suspended at 5.55 p.m. and resumed at 6.14 p.m.

Photo of Gerald NashGerald Nash (Louth, Labour)
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Mr. Meaney may pick up where he left off.

Mr. Kevin Meaney:

As well as projects delivering financial costs and benefits, they also deliver environmental costs and benefits, and it is essential that these are considered fully when appraising project proposals. Delivering on a sustainable and climate-friendly NDP is key to achieving our climate action targets as set out in the climate action plan, particularly to halve greenhouse gas emissions by 2030 and achieve net zero by 2050.

New capital investment and new infrastructure is required to keep pace with and provide for the needs of society. The achievement of climate targets would not be aided by a failure to provide for the infrastructure needs of a growing population. However, it is important to recognise that public investments made today may lock in emissions for many decades to come. These emissions cannot be disregarded. The new infrastructure guidelines therefore have an increased emphasis on climate change and consideration of climate and environmental issues. Under the infrastructure guidelines, climate and environmental performance is now an explicit appraisal element at preliminary business case stage. This climate assessment includes the assessed impact of the listed options on greenhouse gas emissions and the project’s resilience to the impacts of climate change, with a view to influencing the decision on the preferred option.

Under the infrastructure guidelines, as part of the economic appraisal, public sector bodies are required to estimate the impact, positive or negative, that a project or proposal may have on greenhouse gas emissions. This is done using the shadow price of carbon. The economic appraisal is a tool to inform decision-makers on the whole-of-society costs and benefits of a project, including climate considerations. This ensures the costs or benefits to society that arise from such emissions changes are fully considered.

To reflect the increase in Ireland’s national climate targets, the shadow price of carbon has been increased as part of these updates to the infrastructure guidelines. The shadow prices will be kept under review as compliance with our carbon budgets and progress towards our net zero target become more evident.

It is worth reiterating that improving our economic appraisal tools does not determine policy choices but better informs them. An accurate shadow price of carbon ensures the cost of emissions is properly considered when evaluating which projects are of overall benefit to society and can prompt lower carbon design choices. With the introduction of the infrastructure guidelines, the appraisal framework is in place for project managers and the Government to make decisions on infrastructure projects, fully informed of their economic, societal and environmental value.

I hope this has provided a helpful summary of the changes we made recently to the infrastructure guidelines. I look forward to discussing these in further detail and answering any questions the committee members may have.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I thank Mr. Meaney for his opening statement. I will now open the meeting to the floor, and the first contribution is from Deputy Conway-Walsh.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Mr. Meaney referred to the “increased emphasis on climate change and consideration of climate and environmental issues”. Regarding, for example, roads already in the NDP, would that impact them in terms of weighting or how they are assessed in respect of whether they should go forward?

Mr. Kevin Meaney:

We have changed two aspects. First, as part of the preliminary business case, there is now a separate area and requirement that when the options are put forward, especially the shortlisted final three or four options, the greenhouse gas emissions are published in a table on their own separate from, say, a wider value for money choice. The second is reflecting on our national targets. We had to look at the prices we charge each of those emissions within the economic appraisal. In respect of any individual project, which includes roads, it is a tool to guide the decision-making process. It is a further level of information the Government or any Minister, particularly the Minister for Transport, will have as to the different options that are up for discussion and the emissions. As I said in my opening statement, it is not only about whether it goes ahead. It can also guide better design choice. For example, is there an option that is a similar type of project that can deliver similar value but this way of doing it is much lower in carbon emissions than an alternative way of doing it?

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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I will tell Mr. Meaney why I am asking. For example, there have been so many accidents and fatalities on the N17. I had not meant to speak about this.

That project is in the NDP, but it is being delayed. If you are looking at building a road, you are obviously looking at extra emissions and so on. Could it mean that would then be impacted when the assessment is done? It would surely impact it, would it not? What if you had another option like rail or some other option? You would be likely to shelve what is there because of the emissions you would be trapped into for the future. Would that be the case?

Mr. Kevin Meaney:

In the first instance it would be for the transport sector and the Minister for Transport to consider. There are many different values that go into the economic appraisal and many other benefits that can be achieved. We are looking at the costs of carbon and the costs have gone up as a reflection of our national targets. For projects that may have increased carbon, the costs go up. That is the case. The decision as to whether the road project is a better means to deliver whatever objective they are trying to achieve can only be decided by the sector. I reflect that the Deputy is broadly correct. Projects that may induce or have more carbon will now have a higher cost because our targets are set.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Yes, that is something we need to look at. I know Mr. Meaney is just providing the tools and the decisions about options are made somewhere else. Will Mr. Meaney outline the changes that have been made to individual Departments because of the guidelines, or maybe give an example of what the changes mean in specific Departments? That is particularly for the large projects. How are we measuring the effectiveness of the new guidelines compared with the former public spending code?

Mr. Kevin Meaney:

First, the changes are still relatively new. In terms of the major projects, it will take a bit of time for those types of projects to come through, so we will have a good evidence base from multiple projects. From initial indications, the intention is that it makes the process more streamlined and simpler. For projects between €100 million and €200 million, the process for approval does not have to go through so many external review steps to be approved in the sector. When we spoke on this previously, we identified a couple of points where there would possibly be between three and four months of savings for projects that now would be below the threshold, and for major projects that do not have to go through the review process a second time. That could potentially speed up the process by between three and eight months depending on the nature of the project.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Is Mr. Meaney getting feedback from Departments all of the time as to the impact of this?

Mr. Kevin Meaney:

Yes, we have a few particular examples with individual projects, in transport in particular. It is a good area for that feedback. It indicated that first stage, where we had a decision at what was called decision point zero. We have essentially done away with that decision point. For one particular transport project, which was a rail project, it took between five and six months to get approval through the different stages at that point. Because that point is no longer there, it is being indicated to us that if a similar project were to come along, they anticipate a saving of between five and six months. That is for a major rail-type project.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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For example, in 12 months’ time you will have had projects and will have measured the effectiveness of this as projects work their way through. Is that the case?

Mr. Kevin Meaney:

We will see it at the preliminary business case stage in particular. For major projects that come to the Department of Public Expenditure, NDP Delivery and Reform, it goes to the major projects advisory group. We had a decision point before that, so it should become clear as part of that, when we see the business cases, that the process has been quicker.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Is it just time or is man and woman power needed as well?

Mr. Kevin Meaney:

It seems to be indicated to us that when you have a decision point and you have to go through different processes to different units, time tends to be the main thing and gets lost during that process. Not having it at that point is of assistance.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Are any additional flexibilities worked into it for particular Departments under the guidelines?

Mr. Kevin Meaney:

No, it generally applies across the board. One flexibility more broadly is that we have included a wider approach for programmatic proposals, which was not in the public spending code from 2019. For that there are a couple of different Departments in particular that would regularly do a lot of similar projects, which are not of major scale but when grouped together come up to a major level. Housing and education would be two good examples. An intention of the guidelines is to allow them to come to us with a broad proposal as to how programmatic spend would be managed for smaller projects that would be quite large when grouped together. That is hopefully a step that can assist them, so they do not have to do similar business cases for similar projects repetitively. They can take a programmatic view of it if they are coming forward with a procurement of one bundle. They do not have to do multiple business cases to back it up.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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For instance, Mr. Meaney is saying that for the Minister for housing, that would streamline things in terms of the four-stage process.

Mr. Kevin Meaney:

The four-stage process is their own internal process. They have internal processes that feed down from the guidelines. What we said to them is that if they are coming forward, they can absolutely take a programmatic approach, for a preliminary business case, to the bundling of housing so they do not have to do multiple business cases. It is a recent enough change so they have not yet come forward with their sectoral proposal of how they will do it. However, it has been indicated that it could be a huge and time-saving advantage to them.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Mr. Meaney is saying they would not have to put forward a business case as to why we need to construct social and affordable housing. For the Minister, that would be taken as a given.

Mr. Kevin Meaney:

They could come forward with one business case that would underpin a block or bundling of social housing developments, rather than having to do it-----.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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Rather than having to do it for individual houses.

Mr. Kevin Meaney:

Yes.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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They would still have to do the business case even though it is obvious that social and affordable housing is needed everywhere.

Mr. Kevin Meaney:

The underlying need is one aspect of a business case. There are others around project delivery and governance. Depending on whether it is being delivered by different county councils, by approved housing bodies or by the LDA, there might be different structures. They would potentially have to set it out regularly. However, the intention is that every small development of housing will not now require a business case. They can group them together, and one would do for a significant level of housing.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I thank Mr. Meaney.

Photo of Rose Conway-WalshRose Conway-Walsh (Mayo, Sinn Fein)
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I was only getting started.

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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I thank the witnesses for the presentation. I was listening to the conversation. There are two or three areas I am particularly interested to ask about. I recognise that every kind of project will be different, whether housing, a road project, a hospital or whatever. Given that the number of approval stages is being changed, is there any indication of the time savings that will be made with those even if they are to be broken into larger, middle size or smaller projects? Is there any indication of the kind of time saving?

The Department is doing a smaller number of stages, but will it spend longer on those with less of a benefit in time savings on them? Has the Department looked at that or carried out any assessment of it? Is there any indication of the time that would be saved with those changes on the different projects?

Mr. Kevin Meaney:

There were two big changes we made, particularly for major projects. The first was removing what was decision gate 0 which was at the end of the strategic assessment. I provided an example to Deputy Conway-Walsh earlier. An indication of a rail project from the Department of Transport suggested that the time it took to take that decision at that point was five to six months. I think we provided a lower average of about three to four months of a saving just for that decision point which is no longer necessary. We anticipate somewhere between three to six months as a result of that.

Under the old public spending code, we used to require a second round of external review at the final business case, which is approval gate 3. That would have come to the major projects advisory group and we know that broad process is a three- to four-month process as well. With those two particular changes for major projects, we estimate there should be a six- to eight-month reduction in time.

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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Given that the Department is not conducting those stages resulting in that saving, is there any possibility that Department officials are spending more time with the reviews they will be doing and that those could possibly go slower?

Mr. Kevin Meaney:

I would actually say the opposite. With the early step where there was decision gate 0, we had requirements before that point and requirements after that point that were essentially duplicated. We have removed some of the duplication. We think there will be time savings even for the agency putting forward the proposal. We think it is shorter to do the business case up to the preliminary business case point. We have shortened the number of stages. There are no real additional requirements in the three stages we have now. We are not-----

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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Is there any possibility that any of the stages the Department is conducting and would always have conducted will now grow longer with further inspections given that the Department is not doing the earlier ones? I am trying to make sure the benefits of reducing it are not lost later with further oversight in some other stage.

Mr. Kevin Meaney:

We have not really added any requirements within those three stages that were not already there, except at the start of it-----

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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Except.

Mr. Kevin Meaney:

-----the environmental assessment is now a requirement in the preliminary business case which was not the case prior to 2024. However, that is a technical bit that an agency has to fill out. There are no other additional requirements. I do not anticipate it will take any longer for those three stages than it did before.

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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Mr. Meaney mentioned the environmental assessment stage that will be introduced. I am thinking of projects like the N22 road going west from Cork city towards Tralee. There would have been a view that it now may be more difficult to justify the eastern side of that from an environmental point of view. There is definitely enormous pressure from the point of view of road safety. Does that carry much weight in assessing the value of a project and prioritising it if, for example, on that road people are now getting seriously injured or killed at the various junctions? From our point of view locally, it would be very important that those kinds of works would be prioritised. I would be concerned that looking at it from a carbon footprint point of view might impede moving forward with the project. I would like to hear the Department's view on that.

Ms Ciara Morgan:

I might come in there in response to that question. Regarding road safety, as the Deputy knows, the Department of Transport set up its own appraisal guidance which sits underneath the infrastructure guidance. Within that I think there are seven - do not quote me on that - factors that feed into it. Obviously, the value of that saving is one but safety is another major factor in there. That would be one of the considerations along with environmental considerations that would be considered in the business case. As to how those weightings are applied in each project, I apologise that I cannot tell the Deputy off the top of my head, but it is in its guidance as to how it looks at roads projects in particular. As Mr. Meaney said earlier, it is a tool to make the Department and the Minister aware of the costs and benefits of the project. It is then up to the Minister of the day and the Government to decide what they want to do with it. It is not that these elements would put a bar in place to stop the project going ahead. It is that they make us better informed in the decision-making. As far as I know, I think these kinds of things can then factor into how the different routes are designed. Obviously, those are looked at from a safety perspective. They can also be looked at from an environmental perspective and weigh up the different costs and benefits for the routes. That is how it all feeds in.

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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I might come back in on it again later. I do not want to go too deep on it at this stage.

Photo of Seán CanneySeán Canney (Galway East, Independent)
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I thank the officials for coming in and for their presentation. I have a number of problems with what is going on at the moment. As someone who comes from a quantity surveying background, I think some things have gone off the Richter scale entirely. Has the Department ever costed the time and effort that goes into these procurement guidelines? Are they factored in anywhere? For example, if there is a project to build a road or to build houses and, four years later, they are still not built but have gone through a seesaw of processes with all of the consultants involved looking into it and doing reports, has that ever been costed as a percentage of the overall spend on our national development plan?

At a very high level the officials inform the Minister for public expenditure and reform. These are tools to help him know what is being spent and if it is within guidelines or whatever. However, it then goes to the next level. For example, if Galway County Council is building a housing scheme or Galway City Council is building a footbridge over the Corrib, those local authorities might need to go through 13 gateways of approval before getting machinery on the ground on a project. They need to spend considerable time, money and resources in answering to the Department, whichever Department it is, at every stage. For instance, if they want to appoint a design team, they must get approval to do that. They have to get approval before they do the tender for the design team. They then need to get approval at design stages throughout the project after that.

It is creating a sea of activity going up and down between the Department and the local authority wherever it might be in the country. Whether it is housing, roads or whatever, it is creating all this stuff going up and down with consultants being employed to do all the reports that are needed. Is anybody looking at the cost and the time taken there and saying, "Hold on a minute"? We have gone from no regulation to being totally over-regulated and now we are paralysing ourselves. We cannot do anything we need to do until we have four or five years of paperwork lashed together and then some jobs get through. Given the high inflation in construction, are we not wasting money at the moment?

Mr. Kevin Meaney:

I will try to respond. On the first question, we are cognisant of the cuts, in particular the costs of delay and having that kind of bureaucratic delay in the process. That was the driver of the reforms that we were trying to introduce. We do sit at a higher level and are not directly involved in project delivery, which is delivered by agencies, so we were relying on the sectors and agencies themselves to come to us with the issues around the process of getting approval through what was the old public spending code and now the infrastructural guidelines. That challenge and some of the delays we are facing were the reason we first took a look to see what we could do. We are making the changes to reduce some of the burden relating to the steps that are required. Agencies are very cognisant of development costs that are required before they even get to construction. Outside of our processes, there might be wider processes around the planning system such as, for example, environmental checks that are requirements for planning approval. In the context of the gateways of approval within each of the sectors, our guidelines probably do sit at a higher level. In terms of the intention behind our guidelines, proportionality was a key consideration when we were setting them out. That is why we have introduced the thresholds.

Where we have the full rigour and the full checks and external assurance processes, it is for those large-scale projects that are over €200 million. The reason is that they come with a lot of added risk and if the work is not done to a sufficient standard early before tendering or going into contract, there is a huge risk that costs will materialise afterwards where potentially they are more costly. There is a new threshold of €20 million for projects that are smaller and require the least oversight in terms of the guidelines. There are fewer steps for projects under €20 million, but there are some. We try to ensure value for money and rigour, but they do not have to go through the same level of external checks or go all the way up to the Government at those kinds of stages. There is proportionality built into the guidelines. We do not want to unnecessarily delay projects that have less of a risk and that could go ahead in a more timely manner.

Photo of Seán CanneySeán Canney (Galway East, Independent)
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Let us take the children's hospital as a prime example of where - I do not blame the contractor, by the way - the budget was not right at the start. The design was not right and things have evolved from there. The contractor is just doing his duty. If he builds something where there is a change order, he has to get paid for it. What happens is that when you have a project of which ends up going that way, every other project then gets screwed in that those involved cannot do anything because of what happened in that instance. There is too much regulation. The default position is that because it is public money we have to protect it, but the undercurrent of that is that we are spending public money trying to protect public money. We end up spending more than we are protecting, if I can put it that way.

Does the Department have any input into the types of contracts that are used in respect, for example, of public private partnerships, PPPs, or the like? What kind of guidelines does it provide when it comes to projects of that nature? Who prepares the guidelines? The HSE built a number of primary care centres across the country. The PPP company involved owns these buildings and decides everything relating to them. Has any appraisal been done of that contract and will it ever be used again?

In one of the primary care centres in Tuam the design did not include an X-ray facility, which was a design brief omission, but then it was decided to put it in afterwards. The money was allocated in 2017 and, lo and behold, about two months ago, it opened. It was a job that could have been done during the course of the works but it could not be done because the contract would not allow it. It could not be done after the project was handed over either because the final account was not agreed. It was only after that point that negotiations could start with the PPP company about putting in an X-ray facility. It probably cost €700,000 or maybe even €1 million when it could have been done during the course of construction for a fraction of the amount. In addition, if a doctor wants to go into the primary care centre after 12 noon on a Saturday, he or she will not get in because the people who manage the place have a contract with the PPP company to finish at 12 noon and that is it. That is an area that needs rigorous attention from the Department of Public Expenditure, National Development Plan Delivery and Reform to ensure that when we do spend €20 million – I do not know how many millions were spent in all of these cases, but we ended up in a situation where we have lost control of them - we cannot decide on anything without negotiating it with the PPP company, which seems to be a scandal in its own right.

We are overly prescriptive. We are great at creating guidelines and whatever else, some of which put more pressure on the local authorities that need more resources to deal with the guidelines. The job is left to one side as the paperwork has to be right, which is creating a huge waste of public money rather than doing the opposite. We have tipped over the cliff with what we are doing at the moment. We need a complete overhaul of public contracts at this stage. What we have now is worse than what we had before public sector contracts were brought in.

Mr. Kevin Meaney:

Just in terms of the broad contracts, there is an office within the Department of Public Expenditure, National Development Plan Delivery and Reform, but it is not our area, it is the Office of Government Procurement that oversees the public works contracts. It does have a Government contracts committee at which , where the nature of projects is discussed and the appropriate contract that could be used. The default contract is the public works contract that the Government approved, but there have been derogations where required to use an alternative type of contract if the agency that is delivering it seeks that derogation and thinks it is a better type of contract. That, however, does not include PPPs. The direction of PPPs tends to come from the agency that is seeking to deliver an infrastructure project. For many reasons, it sets out a case that a public private partnership is the route it wishes to go down. Tests are applied. There is a separate set of guidelines on PPPs. There is a value-for-money test, and that is the key criteria by which they are assessed, but an agency might put it forward.

We have technical advisers within the National Development Finance Agency who help directly with the agency or the sector that wants to deliver the PPP product. Within the PPP contract, in particular given the nature of the type of works and the fact that the PPP company will be operating and maintaining the building for 25 years afterwards, the construction component of those contracts involves a very big fixed-price agreement and those involved, both the State and the contractor, seek a lot of certainty at the construction stage. It does push the need, before we get to the contract stage, to ensure that designs are as complete as possible and checked three times to make sure before the contract is signed that it includes all the needs that are required within the piece of infrastructure because, as Deputy Canney says, it can be challenging to make changes after the event.

Photo of Gerald NashGerald Nash (Louth, Labour)
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There is a vote in the Dáil.

Photo of Seán CanneySeán Canney (Galway East, Independent)
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I just want to add one sentence before we finish.

Photo of Gerald NashGerald Nash (Louth, Labour)
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The Deputy can proceed.

Photo of Seán CanneySeán Canney (Galway East, Independent)
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I am sorry for harping on about this, but I believe that what is wrong is that the primary care centres should be about the patient and they are not, they are about the finances and about financial considerations and all of that. The contracts in principle are fine, it is the conditions of contract that are not right.

Photo of Gerald NashGerald Nash (Louth, Labour)
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I thank the witnesses for attending. I thank Mr. Meaney, Ms Morgan, and their colleagues for their contributions. I also thank members, whose attendance is appreciated. I apologise for the earlier interruption.

The joint committee adjourned at 6.50 p.m. until 5.30 p.m. on Wednesday, 19 June 2024.