Peter Power (Limerick East, Fianna Fail)

In the limited available to me I will focus on just one aspect of the Labour Party motion which alleges major cost overruns in the roads element of the national development plan. It is no coincidence that the motion was tabled one week after the broadcast of a "Prime Time Investigates" programme on public expenditure. It is unfortunate that the motion is predicated on the programme as it can be easily demonstrated that its research and analysis was seriously flawed and deficient. At best, the broadcast showed a fundamental misunderstanding of the manner in which the roads programme is delivered. At worst, it constituted a distortion of the facts which misled the viewer. I suggest it was probably a combination of both possibilities which was, nevertheless, unfortunate given RTE's special position as a public service broadcaster.

The "Prime Time Investigates" programme failed in its obligation to present the facts in an objective and impartial manner. It featured selective cherry-picking of projects in a manner which misled the viewer in an attempt to sensationalise an important policy issue. It is, therefore, unfortunate that the Labour Party motion refers to the programme as the basis of the motion.

The Oireachtas Joint Committee on Transport has examined the issue before us on a number of occasions and my comments are made with the benefit of the committee's deliberations. To draw a direct correlation between the under-estimation of the cost of infrastructural projects and overruns is a fundamental misrepresentation. In this debate the juxtapositioning of the three words, "underestimate", "overrun" and "waste", is at best confusing and at worst disingenuous.

I compliment the Minister for Finance, Deputy Cowen, on acknowledging last night that instances of overruns have occurred over the years and certain issues could have been managed better. There were clear deficiencies in the manner in which the cost estimates of these projects were arrived at but the key question is what was the Government's response. Deputies must also remember that the Government did not cause the problem. To present the difference between an underestimate in the first instance and an eventual outturn as an overrun is disingenuous. Everybody in the business knows only one figure counts, namely, the tender figure upon which the Government makes a decision to proceed with a project. This figure is the only basis on which it is legitimate for the Opposition to criticise the Government.

Many of the difficulties associated with pricing and outturn figures for contracts can be directly attributed to the old form CIS price variation contract, in particular, the variable price clause No. 17. I have experience of negotiating these contracts and it is clear that these old style contracts, which were in place in the late 1990s, suited the traditional method of public procurement when there was much less activity in the public infrastructure development field and greater competition in the market. However, when the amount, scale and value of the contracts exceeded the capacity of the construction industry to deliver on these projects, they turned out to be a disaster and contributed significantly to the outturn problem Deputies have been discussing. Simply put, the old style contracts virtually gave the contractor a blank cheque. Regrettably, the "Prime Time Investigates" programme completely ignored this fact when it was apparent to everybody in the industry, including contractors, their advisers and quantity surveyors, that this was the case. If the programme had been researched properly, this fact would have become apparent. It should have formed part of the programme because it would have provided the balance it sadly lacked.

The key issue is what was the Government's response when the under-estimation became apparent. The Labour Party motion repeatedly accuses the Government of delay in addressing the issue but the reality is that steps were taken to begin to address it in 2000, three years into the Government's term of office. The irony is that a number of the under-estimates were made between 1994 and 1997.

See this speech in context