Batt O'Keeffe (Cork North West, Fianna Fail)

I propose to take Questions Nos. 111, 117 and 154 together.

My Department's total budget in 2009 for primary, post-primary and third level capital is €841 million. Of this, just under €614 million is in respect of primary and post-primary schools and just under €200 million is in respect of the third level sector. In respect of third level sector capital, at the end of September a total of almost €115 million had been expended from a total allocation of just under €200 million. I am confident the entire remaining sum of €67 million will be fully expended between now and the end of the year. On the schools' capital side, expenditure to the end of September was €321.3 million, almost €92 million below the anticipated figure.

The main area in which expenditure is less than anticipated is that of primary and post-primary major capital projects. These projects comprise new schools and major extension and refurbishment projects. The main reason that expenditure is less than originally anticipated on the major schools capital projects is that my announced programme of 78 projects to commence construction in 2009 has been slower to get started on site than initially expected. Another significant factor is that tenders obtained for this programme are yielding a reduction of up to 30% as compared with prices at the height of the construction boom. I have always put a high priority on the achievement of value for money in capital projects and I welcome this reduction in tender prices.

It should be noted that any saving in 2009 relating to the later than expected commencement on site of any major project is a deferred or delayed commitment. This commitment will now arise in 2010. The rolling multi-annual capital envelope framework allows for the carry-forward into the following year of up to 10% of the annual capital budget and my Department will engage with the Department of Finance in this regard.

These projects are the first batch of school projects to be tendered under the new form of public works contract now in operation throughout the public sector. The introduction of this new type of contract and associated documentation for public construction projects, the use of which became mandatory in February 2008, has proved to be a significant culture change in the external construction consultancy industry. A bedding down period has ensued while the external construction consultancy industry builds up expertise and familiarity with the new requirements. It has taken an average of three months longer than originally expected to ensure the updated tender documentation is fully compliant with the new contractual requirements.

The large number of relatively small projects involved in the schools capital programme has meant these delays have had a significant cumulative effect on anticipated capital expenditure. There is a significant amount of capital expenditure planned for the remainder of the year. I will continue to monitor the overall position carefully and will consider, in consultation with the Minister for Finance, the options regarding any capital savings. These options include the option to carry forward to 2010 deferred expenditure commitments.

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