Tom Hayes (Tipperary South, Fine Gael)

I am grateful for the opportunity to speak on this Bill. Like many Deputies in the House I have consulted with a number of subcontractors in my constituency on this matter. I appreciate it is a matter of great importance and something they have sought for a long time. It will give a great deal of assurance to many vulnerable people who were left unpaid in many different areas.

I thank the Minister of State, Deputy Brian Hayes, for all his work on this issue. As someone who was in contact with him on this matter on a regular basis I appreciate the openness he has shown in taking on board the many suggestions, responding to queries and being so open in accepting those queries.

I thank also my colleague, Deputy Olivia Mitchell, and commend Senator Feargal Quinn for his openness. He pursued this issue from the outset and his work has not gone unnoticed. People regularly refer to this legislation as the Feargal Quinn Bill, and he must be commended for all the effort he has put into this subject.

As many of my colleagues noted during the debate, there is not a Deputy in this House who has not been contacted by a subcontractor in recent years. The pressure they are under is incredible, and this Bill is badly needed to provide some support for them. In recent years a culture of people not paying appears to have developed, and that is a serious issue. The reason they cannot pay is understandable. They are in extreme difficulties. People can be short of finance and under pressure, and there is nothing as difficult than that. I understand the reason those people cannot pay but the culture of non-payment is something we must address because it should not be acceptable or allowed.

The purpose of the Construction Contracts Bill is to improve payment practices in the industry, and to allow swift resolution of payment disputes by way of adjudication. That will allow projects to be completed without wasting time and money in litigation.

The level of non-payment facing subcontractors and suppliers is shocking. The most important function of this Bill is to address that problem. The extensive time between payments on a project is simply too long and it often leaves companies vulnerable to serious loss of revenue.

There is a balance to be struck between protecting subcontractors and imposing unnecessary cost on the taxpayer. The challenge the Bill must overcome is finding a way to protect the payments of subcontractors without imposing a system that would require the State to support unpaid businesses or underwrite their risk of non-payment.

On the costs imposed on taxpayers, significant progress has been made through the introduction of a new contract regime for public works. This change allows for the appropriate risk transfer from public bodies to contractors and consultants by costing for risks as a fixed price lump sum. For years we constantly read stories about Government projects running way over budget. Many of these overruns resulted from a contract system under which a price variation clause was included in many public sector contracts. I welcome the elimination of such clauses and note that their abolition has resulted in a €300 million annual saving. This is a major step forward. The Minister of State should consider addressing similar cases involving local authorities which engage subcontractors. In recent weeks Deputy Mattie McGrath and I have dealt with a case in Carrick-on-Suir in our constituency where a project has stalled and contractors have been left high and dry. While this is outside the scope of the debate, the matter should be addressed in the not distant future.

On the contents of the Bill, I welcome, in particular, the efforts made to address the issue of non-payment. The legislation provides for the introduction of regular interim payments which will reduce a payee's exposure to non-payment. On a similar note, the introduction of a new mechanism for the swift resolution of payment disputes through a process of adjudication is welcome.

The Minister of State will be aware of a number of concerns expressed by experts in the industry and others I have identified from a reading of the legislation. For example, the thresholds included in the Bill are set much too high. The €200,000 threshold to apply to public sector contracts will exclude many subcontractors and, as a result, fail to protect those most in need. I commend the Minister of State for identifying the thresholds as an issue and have no doubt he will introduce amendments to reduce them on Committee Stage.

My second concern relates to the possibility of broadening the legislation to include bespoke supplies. Again, I note that the Minister of State has spoken on this issue and highlighted a number of problems that may be faced if he decides to address supplies and suppliers under the legislation. I also recognise that the regulatory impact assessment states the inclusion of bespoke supplies made specifically for a contract could be examined. I hope this matter will be addressed on Committee stage.

I hope the House does not miss the opportunity provided by this legislation to address the problems faced by suppliers in the construction industry. Perhaps we should consider better defining what supplies could be protected. I ask the Minister to consider protecting suppliers of products that cannot be retrieved from a construction site owing to their nature. For example, concrete blocks cannot be taken back by a supplier if he or she is not paid as they form part of a structure. I expect and hope we can better define supplies in order that they can be included in the Bill.

I have no doubt the Minister of State will consider these and other suggestions when the Bill comes before the select committee. It is a strong and robust Bill and if we incorporate some of the changes I propose, it will be made even stronger. It will also result in a much more honourable way of doing business and afford much better protection to many small companies and subcontractors. Those affected by non-payment tend to be vulnerable and include the families of workers who experience non-payment. Subcontractors have been badly affected by the problem of non-payment, especially in recent years. I thank the Government for introducing legislation to change the position.

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