Kieran O'Donnell (Limerick City, Fine Gael)
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As Minister of State with responsibility for the Office of Public Works, I am here today to propose a Supplementary Estimate for the office.

While the OPW’s net Estimate for 2024 on Vote 13 is €624 million, profiled expenditure for the year indicates an expected excess of €40.336 million on capital expenditure and €15.624 million on current expenditure. When account is taken of expected savings on the Vote of €5.611 million, the net overall request for a Supplementary Estimate for Vote 13 is €50.349 million.

An additional amount of just over €40 million on capital expenditure is due to a number of factors. Approximately half of the sum required, €20.336 million, is to fund the data centre project in Backweston. When the national development plan allocations for the period 2021 to 2030 were agreed by Government in 2021, the estimated cost of the project was €57 million and this was provided for in the OPW’s multi-annual NDP allocation. Prior to going to tender, the Department of Public Expenditure, NDP Delivery and Reform was advised by the OPW that the pre-tender estimate had reached €80 million. The Department agreed in November 2022 that any additional funding required would be provided when it fell due and authorised the OPW to proceed with the procurement competition for the delivery of the project.

This project is also partly funded by the EU under the national recovery and resilience plan with an allocation of €40 million being provided from that source. That is 50% of the value of the contract. The data centre is on schedule to be completed in mid-2025. It will replace a number of older centres that are no longer fit for purpose and will facilitate the continued development of digital services across government. The new facility will also be more energy efficient than the existing centres, thus making a valuable contribution to meeting the Government’s climate action targets to reduce the State’s carbon footprint. This is the latest important infrastructural development that has been located at the Backweston campus following on from the recently completed Forensic Science Laboratory that was formally opened earlier this year. The successful completion of the data centre project represents a further tangible demonstration of the Government’s commitment under the national development plan to provide the critical infrastructure the State needs to deliver services into the future.

The remaining €20 million sought for capital expenditure includes €6 million for RePowerEU related expenditure on a major refurbishment project at the OPW’s former offices at 6 Ely Place, Dublin 2. A further €9 million of EU funding will be provided during 2025 towards the €35 million overall cost of this project, so €50 million of the overall cost is provided from the EU. It is scheduled for completion by the end of 2025. At that point, it will facilitate the consolidation of a number of areas of the Department of Justice in the State-owned office accommodation complex that extends from Nos. 51 and 52 St Stephen’s Green to Ely Place. A key feature of the project's design was to make better use of the space available, resulting in an increase in available workspaces from 300 to 380. A significant upgrade of the building fabric will improve the energy efficiency of the building in alignment with Government policy on climate action to reduce the State’s carbon footprint in its buildings.

A further €7 million relates to the fit-out of Smithfield Hall, also known as the Distillers Building. The OPW has taken out a 25-year lease on this modern, energy-efficient and strategically located building in the Smithfield area of Dublin, close to public transport and other major State offices, and will provide almost 1,000 workstations. The total project budget is estimated at €60 million. When the works are completed during 2025, the building will be the headquarters of Tailte Éireann, which has been created through an amalgamation of the Valuation Office, Ordnance Survey Ireland and the Property Registration Authority. The building will also accommodate the Valuation Tribunal, the Insolvency Service, and the Chief State Solicitor’s Office. When the building is completed and occupied, it will enable the OPW to exit other poor quality accommodation and make these State-owned buildings available for refurbishment and other State uses.

The €7 million balance of the €20 million is required for a new build on Leeson Lane which will provide a modern, energy-efficient office block in a strategically important location at an overall cost of €50 million. The project is expected to be completed by the end of 2024 with staff moving into the building on a phased basis commencing in quarter 1 of 2025. The main occupier of this new State-owned building will be the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media. Some staff from the Department of Finance will also be accommodated in the building. The building will provide 350 workstations in a predominantly open-plan environment with minimal use of cellular offices to meet the requirements of the occupying Departments in a cost-efficient manner.

These four key projects are being delivered on time and within the budgets and programmes agreed following tendering for the works involved. They represent a combined investment of €225 million in important State infrastructure that is essential for the effective delivery of public services.

The requirement for non-capital expenditure is €15.624 million which is net of a projected increase of €3.569 million in appropriations-in-aid for 2024.

A figure of €3.9 million is required for a number of pay items. These include a provision of €1.6 million toward the overall cost to the organisation of implementing the public service pay agreement, which had not been finalised in time for its provisions to be reflected accurately in the Revised Estimates Volume for 2024 when it was published late last year. A further €1.4 million relates to the cost of staff who are working on the Rosslare Europort project, which was previously funded from the Brexit adjustment reserve, BAR. BAR funding is no longer available to meet these staff costs and, accordingly, €1.4 million is required under the A1 pay subhead. The balance of €900,000 is required to fund the backfilling of vacancies and the staffing required to deliver OPW services.

An allocation of €408,000 is required to fund an increase in subsistence rates in 2024 to cover rising costs for operational services, encompassing supplies and sundries equipment and rising costs for digital investment and IT expenses. The latter covers software licences and additional contract staff hours in the ICT area. An additional €1.39 million is required in the arterial drainage area due to a number of factors, including the increased cost of carrying out essential maintenance works driven by fuel costs and general construction cost inflation, as well as the need to fund the cost of unexpected significant and essential environmental and archaeological survey costs. Ongoing engineer recruitment challenges have also resulted in a requirement to engage contract engineers to ensure essential works can continue.

The modest increase in the OPW's non-capital allocation for 2024 of 1.5% did not adequately cover the expected increase in the OPW’s cost base at the time when the 2024 Estimate was settled. As a result, estate management requires additional funds to cover the cost of inflation and increases in the number of buildings moving to maintenance. Several high-tech buildings, now coming under the B7 property maintenance budget, have significantly higher than usual maintenance costs. In addition, increases in insurance costs means that the overall requirement for estate management comes to just under €13.5 million. As I noted earlier, there are savings of €5.611 million available that will partially offset these costs.

In summary, the overall amount of the Supplementary Estimate required for both current and capital purposes is €50.349 million. I commend them to the House.