Brian O'Shea (Waterford, Labour)
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Question 72: To ask the Minister for Finance the amount of capital spending for 2010 that has already been contracted; the average reduction in tender prices in school building, road building and public transport; the scope that exists for re-negotiating pre-existing contracts to avail of lower prevailing tender prices; and if he will make a statement on the matter. [44872/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The latest information available to me is that contractual commitments for 2010 amount to approximately €4 billion.

Data received from the Department of Environment, Heritage and Local Government shows that by end 2009, construction tender prices are expected to be about 20 percent lower than in 2006. According to this information, total construction inflation was 6.2 percent for 2006; 2 percent for 2007; minus 8.2 percent for 2008 and minus 9.6 percent for the current year. The Department of Education has noted reductions of up to 30 percent under the schools building programme. I understand from the Department of Transport that the transport implementing agencies have indicated that there is a general downward trend in the cost of land purchases and tender prices. These changes benefit new projects going to tender. In 2009, there has not been a sufficient number of tenders or land purchases in the transport sector to be precise as to the scale of the reductions.

Because approximately 60% of the annual capital spend is for projects of €500,000 or less, the State has benefited considerably from this downward trend as contracts of this size are capable of being constructed easily within a matter of months. A good example of this is the Department of Education and Science's summer work programme for school buildings carried out earlier this year. Furthermore, there are also a significant number of projects between €500,000 and €5 million that are capable of being constructed within nine to twelve months.

EU procurement rules under restricted or open procedures prohibit negotiation on price. To do so would be in breach of the law.