Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

There is an element of pass the parcel going on here at the moment. As a committee, we will not allow that to happen. This public works contract is too serious. I am not certain of the full details on Roadbridge but, from what we hear, the sector is under serious strain with regard to the contracts.

A March 2022 statistic from the Civil Engineering Contractors Association has caused me serious alarm. Respondents were asked if they had ever submitted a bid price for a public tender at or below cost. The results showed that 56% of the respondents - the contractors - have submitted at or below cost. The main reason they have submitted under these conditions are business continuity, lack of a future pipeline and chasing cash flow - chasing the dragon - and I think many of them have been doing that. When Covid came, they were not able to maintain cash flow because contracts stopped and they could not physically get the money in and, eventually, that was going to catch up with them. In addition, due to deficiencies in the contract documentation, there was a lack of opportunity during tendering to engage with clients for clarification.

If they started prior to 1 January, they have to wait for 30 months to be able to engage with TII and they must have above 50% inflation. Since 1 January, it is 15% but they cannot engage with the Department for 24 months, or two years into the contract. That means the contracts themselves may not be sustainable, and I have to question whether they are or whether they can ensure success on the framework tender. We are getting that all of the time from the contractors. There are four main Irish contractors left. I do not want a situation where, in a short time, we may have no Irish contractors able to bid for roads projects. That is the critical thing for me. They are providing huge employment. There has to be realism between the Department of Transport and the Department of Public Expenditure and Reform. If the current framework is going to have a consequence of making these firms insolvent, we have a problem.

With regard to the Coonagh to Knockalisheen road in Limerick city, we spent months arguing with the Minister for Transport. If it had been allowed to go ahead the way it should have, it would probably be built by now. It is 30% complete and is idle for the people of Moyross and the north side of the city. It will have to go out to re-tender, and the company that was building it was Roadbridge. This is very serious.

I call Senator Buttimer to conclude.