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Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: In that case, there is an agreement in principle with the OGP that there is a need to bring in the price variation. It has made certain proposals to the Department. Who in the Department have the proposals gone to?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: When were they submitted?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: When the CIF representatives met the Minister, Deputy Michael McGrath, had the proposals been submitted to the Secretary General by the OGP?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: How did the latest discussions go?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: What would you deem to be, on average, construction inflation costs for roads?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: It is probably going to be 30% on average.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: Looking at the Exchequer costs, if it was making approximately 3.8% margin and it is now going down to 2% and there is inflation in costs, which I put at 30% to 40%, one is looking at contracts being priced at very small margins. We are probably looking at 30% to 40% and almost a quid pro quo from the increase in costs to the increase in the contract price. Is that a fair comment?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: However, the margins are so tight. The cost to the Exchequer has to be recognised. It is going to be quid pro quo. Whatever is the increase in inflation in costs is more or less going to manifest itself and increase the cost to the Exchequer in the public contracts-----

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: It would not be a full increase in the costs because that would be divided between the contractor-----

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: If the inflation rate was 30%, we are probably looking at a 15% increase for the Exchequer if it was 50:50.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: The principle of what I am saying is not unreasonable.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: Deputy Cathal Crowe is next.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: That particular contract was tendered for two or more years before it started. That is a big issue as well.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: Does the industry have the capacity to deliver?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: Mr. Parlon did so in his time.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: Will there be shortages of people to do the work?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: That is 500 a month.

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: I ask Mr. Parlon to expand on that. Apart from, obviously, the Ukrainian refugees coming in and so forth, what about generally ramping up house building, including affordable housing, for the Irish population? Where does that stand? What are the challenges to get to the targets we need to reach?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: Based on our available building skill sets, what is the limit of our capacity to construct? We must remember, in the context of the Ukrainian crisis, that we will have to construct quite a large number of units very quickly. What is our capacity?

Joint Oireachtas Committee on Transport, Tourism and Sport: Reform of Public Works Contracts for the Construction of Transport Infrastructure: Discussion (27 Apr 2022)

Kieran O'Donnell: They must the oldest brickies in Ireland.

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