Andrew Doyle (Wicklow, Fine Gael)

It is important to acknowledge and commend the people who are the genesis of this Bill, including Senator Feargal Quinn who introduced the Bill two years ago in the Seanad. It is to the credit of the Minister of State, Deputy Brian Hayes, that it has been progressed rather than replaced with a Government Bill. This has allowed the Bill to make its progression through the Houses as quickly as could have been expected under the circumstances of a change of Administration.

Most of us who represent the people experiencing the knock-on effects of defaults by large construction companies, in many cases multinationals, have had a flavour of the effects of non-payment not alone on these subcontractors, but on their employees and communities. The Government has also had experience of this in terms of major contracts, more often than not State contracts, for schools and roads. In the more recent past, one of the main contractors on a road project went out of business, leaving a number of subcontractors owed a great deal of money. It is hard for people to understand why, when a receiver takes over a construction company, it is allowed continue to operate its trucks under the same brand name despite being under new management and owing a great deal of money to many people. That must be mitigated as much as possible.

I have a couple of questions for the Minister of State. I refer to the overall construction - pardon the pun - of contracts, in particular public contracts, when they are being issued, prepared for tender and prepared for completion. A structure of payment is put in place but there should be some method by which it is clear that people who are due to be paid under the subcontractors clause have been paid. Those project managing the work on behalf of the State or otherwise should be able to verify that these people have been paid from the tranche of money issued. That is important. Cash flows need to be able to reflect that when contracts are being awarded. Some of these contracts are for anything between €10 million to €100 million, so it is important we ensure the flow of money goes all the way down to the people carrying out the work. In many cases, especially in today's environment, these people have greatly reduced credit facilities, such as overdrafts and terms loans, than would have been the case heretofore. There is not an open cheque book nor should there be.

Deputy O'Reilly mentioned thresholds but coming at it from a different perspective, I refer to the thresholds for public tendering and the statute barring of some people because they have been out of the business for a couple of years. I mentioned to the Minister of State before that people who have expertise, who traditionally worked as subcontractors and who have done all the civil engineering or specialist work, should be allowed to tender for smaller contracts. This, in part, would eliminate the dependence on a main contractor and the relationship that exists between subcontractors and main contractors. If that was allowed, it would neutralise some of the problems which occurred in the past. Perhaps it is something at which the Minister of State will look. I do not know if it could be done by way of an amendment to this Bill but it is something I would be willing to discuss with him at some other stage.

The fact we have established a default payment schedule in the legislation means people know at the outset when the payment schedule should take place and that if it does not, there is recourse to proper, swift and cost-effective adjudication. Those are the key points for people. People who have had bad experiences and have limited financial wriggle room have said it is not worth their while taking the risk anymore. That is an unfortunate scenario. These people have built up expertise over the years and are well capable of carrying out the work, yet they feel excluded by fear of being burned again. This Bill sets out to address that.

The Minister of State and Senator Quinn have come a long way towards addressing many of the key areas which have been mentioned by others. It is important that when this Bill is passed - the sooner, the better - subcontractors cannot be walked into a situation where they keep doing work on the basis that they will be paid when it is finished but by which time they have extended their credit to the limit and find they will not be paid at all or in full. That is what the Bill is meant to achieve.

This is a case of providing reassurance for people who are part of our small and medium-sized business sector. They are in every community and they provide local employment and the money is spent locally. It keeps all the ancillary services - the breakfast cafe, the local filling stations, the local hardware merchants or whatever - going. Every job counts. While we welcome the big announcements, it is important we keep those diverse economies going and the best way to do that is to keep money circulating in them.

This is a key area because what we do not want to see is a situation where the only people who feel comfortable tendering and doing the work are large multinational companies, which have a role to play, but which engage direct labour. This does not encourage entrepreneurship, people who want to improve their lot or competition.

I would like the Minister of State to look at the thresholds and at the statute barring. Given what has happened, some people have not been engaged in the industry for the past two or three years, so they are excluded by rules as they pertain. This could deal with many of the problems we saw in the past. I wish this Bill a swift passage through the House.

See this speech in context