Mr. Seamus McCarthy:

The 2021 appropriation account for Vote 13 records gross expenditure of €492.5 million. The account is presented under two programme headings: €99.6 million, or 20% of the total, was spent on the flood risk management programme; and just under €393 million was spent on the estate management programme.

The OPW provides office and other accommodation to Departments and offices using a combination of leased and State-owned property. The associated costs are a direct charge on the Vote. This includes rent payments totalling €103 million; expenditure on new works, alterations and additions costing €97 million; and property maintenance and supply payments totalling just over €64 million. The account records the value of State-owned land and buildings at the year end at just over €3.4 billion.

Apart from the activity accounted for under Vote 13, the OPW also acts on an agency basis on behalf of Departments and State agencies. This mainly relates to the carrying out of major capital works and the leasing of accommodation. The expenditure associated with this agency activity is reflected in the accounts of the client Departments and agencies. Total agency expenditure handled by the OPW amounted to almost €184 million in 2021. This brings the aggregate value of the expenditure handled by the OPW to €676 million in the year. The surplus on the Vote at the year end was €40.4 million. Of this, unspent capital allocations for flood risk management to the value of €20.7 million were carried over to 2022. The balance of €19.7 million was surrendered back to the Exchequer.

I issued a clear audit opinion with regard to the appropriation account but drew attention to two matters disclosed in the statement on internal financial control. First, the Accounting Officer discloses that there was a material level of procurement charged to the Vote that was not compliant with public procurement rules. Second, he sets out the level of expenditure on two measured-term maintenance contracts, where the amount actually spent was very significantly in excess of the original estimated value. Total expenditure to the end of 2021 was €103.3 million on a contract put in place in 2018 that had an anticipated value of €15 million.

Chapter 8 of my report on the accounts of the public services examined how the OPW has managed certain contract-related underperformance in the operation of the Convention Centre Dublin. The convention centre is operated by a private special purpose company under a public private partnership, PPP, agreement with the OPW. PPPs are agreements between the State and a private partner where the inherent risks of a project or enterprise are intended to be assigned to the party better positioned to manage them. The financial terms of the deal should fairly reflect the allocation of the risks. In the case of the convention centre, the State is committed to a stream of expenditure over 25 years, in the form of regular unitary payments. In 2021, these amounted to €23.8 million. The primary objective for the State in entering the PPP agreement is to increase Ireland’s share of the international conference market, thereby increasing incoming tourism revenues. Under the terms of the PPP agreement, there is provision for a modest reduction in the annual unitary charge amounts payable to the operator when the number of international delegates falls below specified minimum levels. Due to the impact of the Covid-related restrictions on travel and indoor gatherings, the operator did not reach the target minimum level of international conference delegates. Under the PPP arrangement, the State was obliged to pay the bulk of the annual unitary charge. Due to the shortfall in international delegate numbers, however, an estimated €1.32 million was due for withholding in the period August 2020 to July 2022, with a further estimated €190,000 due to be withheld in the period August 2022 to July 2023. Pending the outcome of negotiations with the operator, the OPW paid the full unitary payment amounts that were otherwise due for the periods under review, without the specified deduction. In my view, this represents an overpayment of the amount due under the contract.