Bernard Durkan (Kildare North, Fine Gael)
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Question 371: To ask the Minister for Communications, Marine and Natural Resources his views on whether, following his recent comments to a magazine (details supplied) that the ESB Aghada plant will cost between €350 and €400 million, other companies have produced equivalent power stations, such as the two Huntstown power stations built for €250 million; if he has enquired of the ESB the reason their plant will cost much more than that amount to construct; and if he will make a statement on the matter. [12629/07]

Noel Dempsey (Meath, Fianna Fail)
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The estimated cost of ESB's construction of a 430MW Combined Cycle Gas Turbine (CCGT) plant at Aghada reflects a fundamental shift in worldwide market dynamics for CCGT plant, fuelled by rising commodity prices for speciality steels and other prefabricated materials, in addition to increasing labour costs. The availability of engineering resources is also becoming a limiting factor restricting suppliers' ability to scale up production to meet the increasing demand. This shift is a worldwide phenomenon and is not restricted to projects in this country.

Prior to granting my approval for the relevant capital expenditure on the Aghada project, I received clear assurances from ESB that it had independently validated this upward movement in commodity prices and labour costs as part of its contract negotiation process and that it had satisfied itself that the cost of the power plant in Aghada reflects current global market prices and represents the best value for money outcome in difficult power plant market circumstances.

With construction commencing in December 2000 and October 2005 respectively, the cost of constructing the two Huntstown power plants was reflective of more favourable market circumstances at the time the EPC (Engineering Procurement Construction) contracts were awarded.