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

I very much thank Members for their contributions and for passionately making the case for projects in their areas. I welcome all their contributions and Senators' ongoing engagement with the revised national development plan. Some important issues were raised. I welcome the opportunity to clarify and elaborate on these in particular.

Now that the NDP has been published, this is a critical time across all Departments in delivering on their strategic goals. In saying that, my Department is now focused on a number of key areas in the process of project delivery. Governance over our investment and ensuring value for money from our public finances in delivering on this NDP is key as we move into the implementation stage. This is something that I have emphasised the importance of, and that my Department has focused on, since the revised NDP was launched last month.

Since the publication of the revised NDP, we have welcomed a framework of external scrutiny and appraisal through the external assurance process, which includes setting up a major projects advisory group and the announcement that five external members will be added to the Project Ireland 2040 delivery board. These steps are essential in ensuring rigour in project assessment and progress of ongoing developments. While we have put these safeguards in place, we must remain agile in the delivery of this plan when challenges occur, and be forward-thinking in our approach to delivery.

The national investment office in my Department is working on improvements in delivery capacity through the build digital project and implementation of the supporting excellence action team, SEAT, report with this strategic foresight lens. This is a whole-of-government plan and one which will require ongoing investment beyond the lifetime of this NDP. I acknowledge the high levels of engagement and commitment in the development of this NDP across all capital Departments. It is also imperative that we continue to engage closely, and work in collaboration, with the construction sector to deliver on our Project Ireland 2040 aspirations.

The investment strategy we have laid out in this NDP will have a transformative impact on the future of our employment opportunities, economic development and regional growth. It will not only deliver the infrastructure requirements for a growing population but will also sustain wages and jobs, modernise our construction sector and allow for regionally balanced growth throughout the country. It will support Housing for All and create the infrastructure required to help us become a climate resilient society.

The purpose of the NDP is to give greater certainty and confidence to citizens of the State in the Government’s commitment to continue to improve in areas such as housing, climate change, schools, hospitals and public transport. It further gives public and private sector organisations confidence that funding commitments will continue over the next decade on an upward trajectory to allow them to plan and equip themselves to deliver. The NDP sets out a clear long-term strategy of planned investments of €165 billion over the next ten years. It is an ambitious plan, one that will provide the infrastructure needed to accommodate a growing population and a digital transition of our economy, and will tackle the climate challenges we face as well as our housing requirements.

In response to concerns about specific projects and programmes that may or may not be mentioned in the plan, the NDP does not aspire to be a comprehensive list of every project that will be delivered over that period. The Government will continue to work with our sectoral stakeholders in formulating sectoral plans for prioritising investments and developing projects for approval and implementation. The NDP will provide this certainty to sectors to allow them to do this planning over the medium to long term.

I thank Senators for their views on ensuring that the NDP delivers value for money for the State and mitigates the risks of cost overruns. The Government can and will continue to learn from the mistakes of the past. The PWC report commissioned to investigate cost overruns in the national children’s hospital highlighted shortcomings in the process and procedures that were in place in the planning, procurement and contract management of that project. Two of the 11 recommendations were also the responsibility of my Department in order to provide a more rigorous assessment of risk and governance prior to projects being approved and to provide an external challenge function to project proposals. As of late 2019, these reforms have been fully implemented in the updated public spending code, with greater focus on the project risks in Government for major projects of more than €100 million, of which we will have approximately 50.

As mentioned earlier, this month I announced a further enhancement of the external challenge function for major projects, with the establishment of the new external assurance process, EAP, to provide independent project scrutiny at key decision stages.In my Department, a new major projects advisory group has been established to further strengthen project management of public projects. It is important to say that the public spending code remains open to ongoing improvement over time, and staff within the Department of Public Expenditure and Reform have a series of improvements in planning to further enhance its effectiveness.

One series of amendments involves updating the public spending code to reflect the enhanced climate ambition. My Department has a full programme of works to ensure that the code is compatible with the climate action plan targets. In the first instance, the priority will be on significantly increasing the cost associated with any release of additional greenhouse gases into the atmosphere. This will require primary research to estimate the marginal abatement cost that will be faced by Ireland to achieve an emissions reduction of 51% by 2030.

In addition, my Department has commenced work with the OECD, funded by the EU Commission through the Directorate-General for Structural Reform Support, DG REFORM, technical support instrument, on evolving two further aspects of the public spending code. First, work will be progressed on a new model for assessing the emissions impact of infrastructure investment, including the induced carbon demand brought by new investments. There currently are no plans to address scope 3 or supply chain emissions at this point, but further enhancements to the consideration of carbon in the public spending code will continue to be progressed. Second, the work will examine how the Government should consider and appraise investments that may be vulnerable to the impacts of climate change and how best to protect infrastructure from the effects of climate change.

A significant increase in our climate action investments is planned in the NDP. Some €5 billion in additional carbon tax receipts over the period of the NDP has been allocated to increase capital investment levels in energy efficiency, including a retrofitting programme of 500,000 homes to building energy rating, BER, B2 standard. In addition, €360 million annually will be allocated to active travel programmes for walking and cycling infrastructure and greenways. Major public transport investments are planned in each of the regional cities of Cork, Galway, Limerick and Waterford, along with improved public transport in rural areas. A strategic all-island rail review will be progressed over 2021 and 2022 to assess the priorities for rail with a focus on access in the north west.

Every Department was required to perform a climate and environmental assessment of every measure they put forward for inclusion in the revised NDP. Seven relevant climate and environmental outcomes were selected by the Department of Public Expenditure and Reform, in consultation with the Department of the Environment, Climate and Communications. Departments performed a qualitative self-assessment to determine the potential impact of every spending proposal they put forward may have on each one of these outcomes. The seven climate and environmental criteria are: climate mitigation; climate adaptation; water quality; air quality; waste and the circular economy; nature and biodiversity; and just transition.

With reference to future tenders, interim amendments to the provisions in the public works contracts will be introduced in December which will, within certain parameters, reduce the level of risk of extraordinary price inflation that contractors will have to bear. These will address the period between tender submission and award through limited indexation of the tender price, reduce the fixed price period to 24 months and permit mutual cost recovery within the fixed price period for material price changes in excess of 15%. Boosting delivery capacity in the medium term will also mitigate some of the resource pressures that are currently evident.

To deliver the ambitious NDP, the Government will continue to work collaboratively with the industry through the construction sector group and will offer support as set out in the building innovation report. The recently published Housing for All plan further complements the drive to enhance capacity within the public and private sectors to allow Ireland to deliver its ambitious plans. I am working with the Minister for Housing, Local Government and Heritage, Deputy Darragh O’Brien, and other Government colleagues to deliver this enhanced capacity. In my Department, a €2.5 million grant was recently launched to deliver the build digital project, which will be led by Technological University Dublin. This will support the construction industry to deliver future public projects to a higher standard using digital efficiencies.

The capability of the public service to deliver the large-scale capital programme was also reviewed for the updated NDP. The resulting report sets out actions to support excellence and improve co-ordination among various bodies, in addition to the quality and coherence of guidance provided. A range of further measures to improve delivery include the development of the Office of Government Procurement’s commercial skills academy to enhance procurement and introduce further legal and planning reforms.I thank Senators for their discussion on the NDP. Focus will now turn to ensuring the plan can be delivered in the timely and cost-effective manner to deliver much-needed, sustainable infrastructure for our people. I believe the focus placed on improving governance and supporting those involved in the delivery of these investments will be key in delivering on our ambitious objectives.