Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I thank the Deputy for the question. The rural regeneration and development fund has to date approved funding of €252 million for 164 projects nationwide costing over €343 million. Projects initially approved for funding in principle progress through a comprehensive due diligence process before final confirmation of funding is provided by my Department. At each stage of this approval process, the project is reviewed by my Department to ensure it continues to meet its stated objectives, including financial sustainability. This review includes an assessment by an independent quantity surveyor to ensure all costs and contingencies have been included by the lead party.

In line with best practice project management, all applicants to the fund are asked to put in place a contingency budget at a level appropriate for the type of project being undertaken. While I recognise the challenges currently faced by capital projects in terms of rising construction costs, a carefully calculated contingency budget will meet most of these challenges. Notwithstanding this, it is open to project lead parties to make a case to the Department for additional funding if the cost of an approved project significantly increases once the procurement process has been completed and the final cost of the project is confirmed.

However, any such case must be supported by a detailed justification from the lead party setting out the reasons for the increased cost, detailing exactly where the additional costs arose and outlining what was attributable to construction inflation. As the project would have been approved based upon the original budget, a full value for money review with an updated business plan must be provided by the lead party before any additional funding could be considered.

See this speech in context