Olivia Mitchell (Dublin South, Fine Gael)

New benchmarks in the cost of land have been set by the Minister for Justice, Equality and Law Reform and that will feed into the cost of CPOs. Every road will cost more as a result of the ridiculous deal he made.

Over time the nature of projects changes and, of course, they will be more expensive because standards are being changed. However, this is not an excuse for indecision and procrastination. Although long lead-in times are a large element in the cost of increases, uncontrolled expenditure and waste of money, perversely, no lead-in time is also a cost. Ministers get a rush of blood to the head and decide something must be done immediately. That puts them in a weak negotiating position. I have seen this happen many times, particularly when money is released at the end of the year by a Department. The attitude is that the money must be spent. Naturally, the supplier has the Department over a barrel and can charge what they wish. That is another cause of wastefulness in spending on public projects.

There is also the example of the M50. It is almost finished and I hope it will link with the N11 at the end of next month. Even as it is completed it is already too small and we are preparing to spend another couple of billions of euro widening it and, perhaps, constructing an alternative. The M50 project is a lesson in how not to build a road. There was a lead-in time of 20 years and it took 20 years to build. We have been discussing it for 40 years or, on average, one mile per year. There is no excuse for it.

I spent some time researching the prices and discovered the cost per kilometre of the first phase of that motorway was €6.8 million. The cost per kilometre of the last section was a staggering €60 million. There is no excuse for that. Lessons must be learned.

I wish to refer to the change to fixed price contracts which the Government is proposing as the solution to all wastefulness. I understand the reasoning behind the proposal, but it is not the solution and might even result in higher costs. This debate is about waste of money and preventing it. Under the proposed new regime, all risks will be passed to the contractor. However, the contractor will price accordingly. The risk will be included in the price of the contract.

Under the old regime, extras arising in the course of a contract were passed on to the Department that commissioned the project, but that only happened when such extras arose. Under the new regime, the price of every risk will be built into projects regardless of whether they arise. Ultimately, the Government might end up spending more. It must be conscious of that when moving to fixed price contracts. I accept that such contracts give certainty but they are by no means the solution. The solution is good planning.

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