asked the Minister for Finance if he will outline the implications for Ireland of the recently adopted EC directive which liberalises public procurement in the EC with particular reference to the opening up of the market to EC firms of all forms of Government purchasing and building contracts.
Written Answers. - Government Purchasing/Building Contracts.
36.
The EC Directive in the public procurement field to which the Deputy refers, namely, the revised supply contracts directive, was adopted by the Council of Ministers on 22 March 1988 and is expressed to take effect not later than 1 January 1989.
The new Directive, which does not apply to works, e.g. construction, contracts, extends the scope of existing EC regulations on competitive tendering for certain Government, regional and local authority purchasing contracts. It aims at opening up these contracts to greater competition by widening the type of contract covered. As well, with a view to deterring discrimination on national grounds, it requires greater use of open competition and introduces advance advertising of purchasing needs and the publication of the results of contract awards.
This is the first in a programme of measures which the Commission is undertaking designed to open up progressively to EC-wide competition all public-sector contracts both for purchasing and works. Public sector procurement is estimated to represent up to 15 per cent of Community GDP and its liberalisation, which has been given a high priority by the Commission, is regarded as an essential step towards the completion of the internal market by 1992. The other main measures in the programme comprise three draft directives dealing with, respectively, (1) the works area, (2) the means of redress for aggrieved firms generally and (3) the sectors at present excluded from the EC public procurement code.
The implications of the recent Directive, in particular the move to the greater use of open tendering, and the new publicity requirements, must be considered in our case against the general background that (i) we already operate open tendering to a greater extent than other member states and (ii), given the nature of our economy, the import content of our purchases is in any event very high. The directive will, together with the other proposals designed to open up public procurement, present for Irish industry a challenge and an opportunity. More Irish contracts will be opened up to foreign competition — and this may pose a challenge for the traditional sector of industry where public contracts in this sector are concerned. However, more significantly in the context of the completion of the internal market, the move will provide greatly increased export opportunities from which firms in the new industrial base and in the traditional sector which are competitive should be well placed to profit. In regard to the opening up of works contracts, the construction industry is considered to be sufficiently competitive to take advantage of the opportunities offered.
For most member states, as well as Ireland, the planned changes in regard to public procurement will present major opportunities as well as potential problems. Industries and individual firms that are competitive will achieve access to new Community markets while those that are uncompetitive will be at risk. At Community level, the liberalisation is expected to have a profound effect on the structure of European industry, make it competitive at world level and enable it to face up to the challenge posed by its major trading competitors.
Ireland shares the objectives of the liberalisation of public procurement while at the same time being conscious of the need, in looking at specific proposals to this end, to ensure that our particular circumstances and needs are taken into account to the maximum extent possible.