Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I appreciate the opportunity to come before the House to say a few words on the national development plan, NDP. I will have to leave the House at about 5.45 p.m. to go to Dáil Éireann as I must introduce a Bill. The Minister of State, Deputy Ossian Smyth, will deputise for me at that point. I am grateful to have this opportunity to speak with the House about the revised national development plan which I launched last month along with the Taoiseach, the Tánaiste and the Minister for Environment, Climate and Communications and Minister for Transport, Deputy Eamon Ryan.

As the largest and most climate-focused national development plan in the history of the State, the NDP sets out a clear, overarching strategy of planned investment of €165 billion for the coming decade to 2030. This is an ambitious plan that will deliver the infrastructure required for a growing population and for a digital and green transition. It is a plan that will provide more social and affordable homes for families and individuals. In essence, it will transform our country and promote job creation, economic development and regional growth. Balanced regional development is very much at the heart of this NDP.

This NDP was drafted within the context of the ongoing challenges of Covid-19 and Brexit, and its design means it can endure uncertainty when future challenges occur, as they inevitably will. This flexibility lies in its approach in outlining the investment priorities for the coming decade, under which individual projects, timelines and costs can be adjusted in response to challenges and externalities.

It is important to note that my role, and that of my Department, in the review of the NDP was to engage with Departments across Government to set the overall capital allocations for each sector. It is the role of each Minister to determine how his or her departmental allocations will be invested and what sectoral priorities, programmes and projects will be funded. Given that this is a decade-long plan, it is important that there is flexibility in the delivery of projects while maintaining the overall objectives set out in the plan. In this context, it is important to note that the NDP is not an exhaustive list of projects to be undertaken over the next ten years. As part of the plan, I have brought forward policies to increase scrutiny and governance throughout the management process.

This NDP is built on the foundation of evidence-informed analysis that has allowed the Government to navigate a path to deliver on our future infrastructure needs. Well-targeted public capital investment can transform our infrastructure and increase the ability of our economy to grow in a fair and sustainable manner. Public investment can also have a dramatic impact on the wider economy. The NDP provides a clear signal to industry of the investment profile from the State over the next ten years. This will, in turn, encourage investment and job creation from the construction sector in particular. It is to be noted that we are sending a positive statement to the sector about the scale of the investment that the State is embarking upon over the next decade. It is estimated that the investment in the NDP will create over 80,000 direct and indirect jobs in the construction industry alone. It is also anticipated that just over €100 billion of direct spending in construction generates a further €60 billion in indirect output throughout the supply chain. When one takes into account the wider economy outside the construction sector, the economic benefits of sustained capital investment from the State is crystal clear.

The revised NDP is undoubtedly an ambitious plan, but the evidence base upon which the capital ceilings are set mean I am confident that it will support a more resilient, sustainable future for our country and improve the lives and living standards of all the people living here. This year alone, the Government has allocated €10 billion to capital expenditure, the highest annual level in our State's history. At 5% of modified gross national income, GNI*, our investment is well above the recent EU average of 3% of national income. This level of investment is set to grow under this NDP. This investment is producing real results. Some 20 major projects are expected to be finished this year alone, including the recently opened N4 upgrade to Sligo, the north runway project at Dublin Airport and, in recent days, we saw the completion of the runway reconstruction at Cork Airport. Looking at the education sector alone, an average of 150 to 200 school building projects will be delivered every single year over the period 2021 to 2025.

The revised NDP not only sets out investment levels over the next ten years, but also the manner in which capital projects are scrutinised to ensure quality delivery and value for money for the taxpayer. Our plans to improve the project appraisal process and reduce the risk of project overspends, as well as initiatives to increase the capacity of our public bodies, are all well under way. Enhancing the governance structure that presides over our public investments is imperative if we are to deliver much-needed projects on time and on budget. I recently announced the implementation of a number of new initiatives designed to strengthen the assurance process for major public investment projects that cost in excess of €100 million and to improve delivery. The first of these is the introduction of a new external assurance process for major capital projects to provide independent projects scrutiny at two decision points in a project's lifecycle.This will allow concerns to be addressed as they arise, which in turn will improve the delivery of projects and ensure that value for money is achieved.

To support the external assurance process, a new major projects advisory group has been established to further strengthen the management of public projects. External experts on the group are being appointed to complement the public service leadership currently in place. This brings Ireland in line with our international counterparts. In addition, I have decided to bring an enhanced challenge function, expert knowledge and independent rigour to the deliberations of the Project Ireland 2040 delivery board by adding up to five external members to the board. Again, this will be done through an open and public competition. Tracking project progress more closely is another key element to successful delivery and the national investment office in my Department is working on a revamped investment project tracker that will be published with increasing frequency. I reassure the House that all of these additional reforms and the strengthening of the external assurance and governance framework are not about delaying projects but about making sure we get them right and deliver them on time and on budget.

Increasing the levels of innovation in the construction sector through digital ambition supports will ultimately see public projects delivered to a higher standard using digital efficiencies. Capacity, innovation and digital adoption within the Irish construction sector are increasing through the Government's collaborative approach and continued regular engagement with industry representatives via the construction sector group.

In early November, I announced that a consortium led by the Technological University Dublin was the winner of a €2.5 million grant to deliver the build digital project. This project is one of seven priority action points arising from the building innovation report, which drew upon an extensive consultation and international benchmarking process and an economic analysis of the causes of productivity trends in the Irish construction sector. This funding will assist in the effective delivery of projects and ultimately will assist in us meeting our Project Ireland 2040 and NDP ambitions. It is very important that the construction sector continues to reform, innovate and embrace new ways of doing business and all the technologies that are constantly evolving.

The supporting excellence action team report, published last month alongside the NDP, examined the capability of the public service to deliver large-scale capital programmes and sets out a number of significant recommendations to support the agenda of improved delivery capability. The range of measures outlined include the development of the Office of Government Procurement's commercial skills academy to enhance procurement and introduce further legal and planning reforms.

I acknowledge that the delivery of the public works projects are being impacted by the recent surge in prices of construction materials and I have been working with my officials to consider the optimum means to bring greater certainty to future tenders in light of these cost increases. In reference to future tenders, interim amendments to the provisions in the public works contracts will be introduced in December to help reduce the level of risk of extraordinary price inflation that contractors are encountering. These will address the period between tender submission and awarding of a project, through limited indexation of the tender price. They will also reduce the fixed price period to 24 months, while permitting mutual cost recovery within the fixed price period for material price changes in excess of 15%.

This decade-long strategy of well-targeted public capital investment will have a dramatic impact on this country's employment opportunities, economic development and regional growth. The NDP will deliver significant and essential infrastructural projects through increased levels of public investment of €165 billion to support the ambitions set out in Project Ireland 2040, be they in health, housing, transport, arts, culture or our third level sector, to name just a few.

I have placed a particular focus on improving the governance and oversight of capital projects, as well as on supporting innovation in the delivery of these investments. It is now about delivery and implementing the NDP. We will have a significant underspend of our capital budget this year, as we did last year and Covid is one significant reason for that. As we move into a new phase, it is critically important that the budget is spent and that all of our colleagues across government and all the spending bodies deliver on the ambitions and the NDP because funding is available to deliver many of the projects we all want to see. I look forward to hearing the views of Senators over the course of the debate.