Aindrias Moynihan (Cork North West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

92. To ask the Minister for Public Expenditure and Reform the number of capital projects that have made an application under the Price Inflation Agreement; the value of each; the number of these applications that have been approved to date; the value of each approved application; the number of these applications that remain outstanding to date; and if he will make a statement on the matter. [48276/22]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The “Inflation/Supply Chain Delay Co-operation Framework" was introduced on 10 May in the interest of safeguarding public projects that are already under construction by mitigating against the risk of insolvency or contract repudiation in light of the exceptional increases witnessed in the price of construction materials, fuel and electricity.

The Framework facilitates both parties to a public works contract to engage with one another for the purpose of addressing the impacts of this most recent onset of exceptional inflation and supply chain disruption and operates on an ex gratia basis. The Framework sets down the approaches and the parameters within which parties to a public works contract calculate additional costs attributable to material and fuel price fluctuations on an ongoing basis using price indices published by the Central Statistics Office.

Any increase that is determined as attributed to inflation may be shared between the parties with the State bearing up to 70% of the additional cost. Any additional costs that are identified are to be met from within the capital ceiling allocations for each Approving Authority.

Whilst the use of the framework is voluntary, participation by the parties is strongly encouraged since it represents a pragmatic and proportionate response to the current challenges caused by inflation that are not within either party’s control.

The measures available under the Framework strike an important balance between the additional costs incurred by the State to support contractors engaged on public projects and the State’s ability to deliver the NDP including housing delivery, whilst providing value for money for the taxpayer.

The detailed information being sought is not collated centrally. Management and delivery of capital projects and programmes are a matter for the Sponsoring Agency and Approving Authority in each case.

The feedback that has been received by my Department would suggest that the parties are engaging and, crucially, works are progressing in the majority of cases whilst this engagement is ongoing.

The additional cost attributed to inflation for each project will not be known until it is completed and the measures introduced are intended to operate until completion or where they are no longer required.