Ossian Smyth (Dún Laoghaire, Green Party) | Oireachtas source

The objective of the inflation-supply chain delay co-operation framework is to safeguard public projects that were under construction or tendered in advance of the onset of the exceptional inflation in the price of construction materials, fuel and electricity.

The framework facilitates both parties to a public works contract to engage with one another to address the impacts of exceptional inflation and supply chain disruption and operates on an ex gratia basis. The framework sets down the approaches and parameters within which parties to the contract may calculate additional costs attributable to material and fuel price fluctuations on an ongoing basis using price indices published by the Central Statistics Office.

The measures available under the framework strike an important balance between the additional costs incurred by the State to support contractors engaged on public projects and the State’s ability to deliver the NDP, including housing delivery, while providing value for money for the taxpayer.

The feedback received by my Department suggests that the parties are engaging and that agreements have been entered into for a substantial number of projects. While payments covering the cost of inflation are made monthly, once formal agreement is reached, the total additional cost attributed to inflation for each project will not be known until it is completed. The measures introduced are intended to operate until completion or until they are no longer required. Any increase attributed to inflation may be shared between the parties with the State bearing up to 70% of the additional cost. Any additional costs identified are to be met from within the capital ceiling allocations for each approving authority.

Information on costs is not collated centrally. Management and delivery of capital projects and programmes are a matter for the sponsoring agency and approving authority in each case. Similar to any process of Vote management, it will be the responsibility of sectors and accounting officers to assess whether existing timelines for the implementation of key projects will need to be adjusted on account of the framework implementation or if there will be a need for prioritisation within their existing five-year departmental ceilings.

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