Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

Thank you. I am glad to have the opportunity to speak about the national development plan, NDP. This plan was first launched in 2018, with the revised version published in 2021. It is the largest, greenest and most ambitious plan of its kind to date and will have a value of €165 billion out to 2030. My Department will play a central role in supporting the delivery of the plan and making its ambitions a reality. Such significant investment does not come without delivery challenges. The NDP sets out the range of actions that are being taken to strengthen delivery of infrastructure, maximise value for money and ensure, to the greatest extent possible, that projects are delivered on time.

The Government has decided to sharpen the focus on delivery even further in 2023, putting responsibility for that focus with my Department, which is now known as the Department of Public Expenditure, National Development Plan Delivery and Reform. Reflecting its change in name, my Department is examining how the support structures and levers at the Government’s disposal can be used to drive delivery of very important infrastructure, such as housing, schools, hospitals, roads and public transport.

The plan is undoubtedly ambitious. I am confident that it will support a more resilient, sustainable future for our country. It is built on the foundation of evidence-informed analysis which shows that more than 80,000 additional jobs will be supported in the construction sector as a direct result of investment relating to the plan over the coming decade. Our analysis also shows that there will be an increase of 3% in the total number of persons employed by 2030 because of this plan against a base where public investment is held constant at 2021 levels. The country has seen a step change in capital investment in a short period of time. In 2017, the figure stood at €4.6 billion in a year, while the equivalent figure in 2023 will be €12.1 billion.

As Senators will be aware, delivery of projects has been adversely impacted over the past three years as a result of the pandemic and the inflationary impacts from both Covid and the war in Ukraine, with significant knock-on impacts on the supply chain for construction materials. However, we are seeing tangible outcomes across regions, with many projects having been delivered since the plan was first launched in 2018. Examples include: enhanced educational facilities, including a new university campus in Grangegorman; better transport links, including upgrades on the N4 from Collooney to Castlebaldwin and from Gort to Tuam on the N17-N18; better health facilities, including the National Forensic Mental Health Service Hospital in Portrane, four major hospital extensions in Drogheda, Limerick, Clonmel and Waterford, and new primary care centres all over the country; high-quality cultural and sporting amenities, such as the indoor arena and elite training facilities at the National Sports Campus in Blanchardstown; improved connectivity, for example, the north runway project at Dublin Airport; and hundreds of projects funded under the rural and urban regeneration and development funds, the disruptive technologies innovation fund and the climate action fund. The continuing development and implementation of the NDP will help to improve quality of life and maintain economic growth through investment in ongoing projects such as: the National Children’s Hospital; the Dunkettle interchange; the roll-out of the national broadband plan; and transport projects such as BusConnects, Metrolink and the DART+ programme.

With the scale of capital investment in the national development plan, it is vital that proper oversight and governance procedures are in place and that capital projects are appraised in a manner that ensures value for money and that the projects are delivered on schedule and within budget. This is critical to the delivery of the plan overall. All options to improve delivery and ensure that capital allocations are best utilised are currently being examined and a review of the public spending code is ongoing, with the objective of streamlining the capital appraisal requirements for Departments in order to improve NDP delivery and maximise delivery of vital infrastructure, such as housing, schools, hospitals, roads and public transport.

A number of reform options are continuing in the Department to ensure the robust, transparent and considered oversight of public funds through reforms to the public spending code. A major projects advisory group that supports Government decisions in outlining the merits of a project has been established. In 2022, this group completed four reviews of major project proposals, namely, BusConnects, Metrolink, the Clonburris urban regeneration development fund, URDF, project and the elective care centres proposed for Cork and Galway. The reviews focused on issues such as project risks, delivery feasibility and robustness of costings, governance and procurement, and were a key element of the Government’s consideration of these proposals.

Experience from other countries which have introduced similar independent assurance processes shows that such arrangements reduce project schedule delay and cost overruns, as well as being in line with leading international performers and meeting a recommendation of the IMF’s public investment management assessment, PIMA, of Ireland. Further to this, an enhanced challenge function, expert knowledge and independent rigour have been introduced to the deliberations of the Project Ireland 2040 delivery board by the appointment of five external members to the board in 2022. These experts have brought a different viewpoint on the delivery of the NDP, the governance structures in place and the consideration of risks to successful major project implementation.

Capacity, innovation and digital adaptation 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 2021, my Department announced that a consortium led by Technological University Dublin were awarded €2.5 million in grant funding 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. The Government will continue to foster innovation and digital adaptation through initiatives such as the Build Digital project, the construction technology centre known as Construct Innovate and the demonstration park for modern methods of construction, which is located in Mount Lucas.

The Office of Government Procurement, OGP, is currently progressing its review of the capital works management framework and the public works contract. Among other elements, the review will look at means to measure the performance of a project and its key actors during the course of its delivery and beyond into its operation and maintenance. Furthermore, the OGP is engaged with bodies charged with delivering the national development plan to finalise a plan for the adoption of building information modelling, BIM. External advisers have been engaged to draft contract amendments to incorporate this form of technology into the capital works management framework and to prepare template procurement documents for publication.

I am acutely aware of the challenges that the construction industry has faced over the last two years in terms of material price inflation and supply chain disruption. In order to safeguard the delivery of key NDP projects, in January 2022 my Department introduced measures to address inflation for new contracts and tenders. In the same month, the OGP introduced measures to address the impact that price increases in construction materials were having on public works tenders.

The NDP will deliver significant and essential infrastructural projects to transform our country’s employment prospects, economic development and regional growth. As part of the new remit of my Department, we will consider how we can optimise delivery. I look forward to collaborating with my Government colleagues to make this a reality and to hearing the views of Senators on this important need.