Dáil debates
Thursday, 17 July 2025
Ceisteanna Eile - Other Questions
Public Procurement Contracts
3:15 am
Séamus McGrath (Cork South-Central, Fianna Fail)
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16. To ask the Minister for Public Expenditure and Reform the safeguards that are now in place to ensure large-scale public infrastructure contracts are completed on time and within budget; and if he will make a statement on the matter. [40074/25]
Séamus McGrath (Cork South-Central, Fianna Fail)
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I thank the Minister for taking this question. What safeguards are in place to ensure our large infrastructural projects come in on time and on budget? As we are about to embark on an ambitious national development plan review involving significant capital funding, it is timely that we set out the safeguards in place to reassure the public that we are managing the situation as effectively as possible.
Jack Chambers (Dublin West, Fianna Fail)
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I thank the Deputy. My Department has implemented several safeguards and strategic frameworks to ensure that large-scale public infrastructure contracts are completed on time and within budget. The infrastructure guidelines published in 2023 set the key requirements for project governance over a project’s life cycle. The guidelines cover the evaluation of projects and their proper planning and management once approval in principle is obtained.
The guidelines have replaced the public spending code and, significantly, have reduced the number of approval stages and streamlined the requirements for major projects, while retaining the international best practice governance and oversight arrangements already in place. These arrangements sharpen the focus on risk and cost management and reduce the compliance burden on low-risk projects, which brings Ireland into line with leading international approaches to major project delivery. The introduction of the external assurance process and the establishment of the major projects advisory group has improved the governance and oversight arrangements for major infrastructure projects.
Standard procurement and contract templates are published under the capital works management framework, CWMF, and apply to projects that are majority Exchequer-funded. There are several cost control review points set out within key stages of a project’s design evolution which utilise standard reporting templates. It is a general principle that projects to which the CWMF applies are put out to tender on the basis of a comprehensively defined set of project requirements so that tenderers can provide a lump sum price for the completion of the project. However, major infrastructure projects, due to their scale, duration and risk profile, often require bespoke contractual strategies not catered for under the CWMF. Typically, these projects use standard forms of contracts which are used internationally in order to attract as wide a field as possible to tender.
These contracts bear many similarities with the standard form of public works contract, with clearly defined circumstances where the price and date for completion may be adjusted. They typically employ comprehensive change management procedures which are adhered to by both parties. They differ from the CWMF contracts in the pricing structure and the inclusion of incentives to deliver the project on time and within budget.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I recognise significant work has been done in this area. We are about to embark on the national development plan. The current plan involves €165 billion and there will be additionality on that, which is very welcome. We will be spending significant money on water infrastructure, energy, transport, health, housing and more. It is important we rebuild public trust in our management of large-scale capital projects. Unfortunately, we have seen too many examples - the national children's hospital, the Dublin Port tunnel, the national broadband plan and so on - of significant overruns. The Irish Fiscal Advisory Council has commented on this.
I welcome the work of the Minister and his Department. It is critical we have robust processes in place to ensure proper cost analysis and forecasting, rigorous risk assessment and a sound legal basis for contracts, so we reduce the risk of budget overruns and projects not coming in on time and so we can rebuild public trust, which is badly needed.
Jack Chambers (Dublin West, Fianna Fail)
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I agree. Much work has been done in recent years to embed international best practice into contract management. The wider point has to be acknowledged that if things become too risk averse and no decision is made, then we do not have any delivery and have a long list of hypothetical projects that are not delivered over time. We need a balanced discussion on delivery, in addition to that on risk and cost which is sometimes the broader discussion in this House, the media and elsewhere. The metric has to be delivery and ensuring appropriate safeguards are in place in respect of guidelines and frameworks. Some of the feedback received as part of the infrastructure task force is on balancing risk. The real metric for the future of our economy will be delivery of critical infrastructure. If it sits on lists and circles around processes for decades, we cannot embed any investment. Balancing the need for safeguards against the need for delivery will be critical to delivering this Government's infrastructure ambition.
Séamus McGrath (Cork South-Central, Fianna Fail)
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I accept the Minister's point on balancing the process. We cannot become too risk averse. I fully understand that. Delivery of large-scale infrastructural projects is critical but we have seen examples of large-scale projects that were 100% over budget. It is critical we do not repeat that. I sit on the Committee of Public Accounts and listened to the national children's hospital development board speak of the number of claims lodged, the lengthy dispute process involved and the uncertainty as to when many of these claims will be concluded. That is just one example. It is critical we strike the right balance and have a robust system in place to ensure projects can be delivered in a reasonable timeframe and with proper risk assessment. I understand the challenge with large-scale projects. They go on over a long period. We face international uncertainty and have faced inflationary conditions in recent years. I thank the Minister and Department for the work they have done. We have the opportunity to rebuild public trust and ensure we can deliver.
The Arklow wastewater treatment plant is an example of a large project being delivered on time and within budget, so we can do it.
3:25 am
Cathal Crowe (Clare, Fianna Fail)
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I echo the points made by Deputy Séamus McGrath. The EU procurement rules are rather outdated. A lot of the regulation that is stifling what this country is able to do is not domestic but comes from an EU treaty. The time has come for us to be able to procure beyond the EU 27 bloc for very large projects, such as hospitals, large road projects, rail, etc. It has repeatedly happened that projects we pitch a certain amount of money for have cost twice as much by the time they have gone through all the gateways. We need to procure beyond the European Union. I hope the Minister will be able to raise that at the Council of Ministers in due course.
Peter Cleere (Carlow-Kilkenny, Fianna Fail)
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Deputy Connolly has been waiting patiently. I will allow him one minute to ask a supplementary question.
John Connolly (Galway West, Fianna Fail)
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I very much welcome the Minister's response. I have a similar question, Question No. 32, on the commitment in the programme for Government to review the infrastructural guidelines. One of the most frustrating aspects of being a public representative is the time it takes between the concept of a project to its delivery. I was a member of a local authority from 2004 to 2009, and my recollection is that public projects moved a lot quicker during that period than they do now. I welcome the Minister's response on the need to balance the necessity for prudence with the ambition to make sure we deliver projects. I understand the need for prudence and I am not promoting financial recklessness, but I agree with Deputy Crowe. I have found that as the financial appraisal takes place, the costs rise. One wonders about the objective at the outset in undertaking them. As promised in the programme for Government, the guidelines need to be reviewed to try to make sure delivery is made easier.
Jack Chambers (Dublin West, Fianna Fail)
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I thank the Deputies for their questions. To speak to Deputy Crowe's point, there has been a significant consultation on Ireland's procurement strategy and we will have a new national procurement strategy in the coming months. The Minister of State, Deputy Emer Higgins, is leading out on that work. Changes are taking place in the EU and we expect them to conclude during Ireland's Presidency of the Council of the European Union in 2026. I agree with Deputy John Connolly that we need more balance in the broader discussion around infrastructure delivery and the metric has to be that it can advance and be accelerated while having the appropriate safeguards in place. That is the work we are doing on the project life cycle. From concept to delivery, how can we cut time out of the particular points which are creating excessive delays and impacting on communities that have an infrastructure deficit? That question is central to the work we are doing as part of the review of the national development plan and the accelerating infrastructure task force, as is how we better balance risk to promote delivery.