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Joint Committee on Transport and Communications debate -
Wednesday, 6 Apr 2022

Transport Infrastructure Ireland Projects and Related Issues: Discussion

The purpose of the meeting today is to receive an update from Transport Infrastructure Ireland, TII, on its projects and related issues. On behalf of the committee, I welcome Mr. Peter Walsh, chief executive, and Mr. Nigel O'Neill, director of the capital programme. They are both very welcome and I thank them for their forbearance.

All witnesses are reminded of the long-standing parliamentary practice to the effect that they should not criticise or make charges against a person or entity by name or in such a way as to make him, her or it identifiable or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity. Therefore, if their statements are potentially defamatory in relation to an identifiable person or entity, they will be directed to discontinue their remarks. It is imperative they comply with any such direction. For witnesses attending remotely from outside the Leinster House campus, there are some limitations to parliamentary privilege and, as such, they may not benefit from the same level of immunity from legal proceedings as a witness who is physically present does. Witnesses participating in this committee session from a jurisdiction outside the State are advised that they should be mindful of domestic law and how it may apply to the evidence they give.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the Leinster House complex to participate in public meetings. I will not permit a member to participate where he or she is not adhering to this constitutional requirement. Therefore, any member who attempts to participate from outside the precincts of Leinster House will be asked to leave the meeting. In this regard, I ask any member participating via MS Teams prior to making his or her contribution to the meeting to confirm that he or she is on the grounds of the Leinster House campus.

Members and all those in attendance in the committee room are asked to exercise personal responsibility in protecting themselves and others from the risk of contracting Covid-19.

I call Mr. Walsh to make his opening statement.

Mr. Peter Walsh

Before I start, I acknowledge the privilege of being here before policymakers. Having witnessed President Zelenskyy's address to the Oireachtas earlier today, the privilege of living in a democracy is something that I do not take lightly. I thank the Chairman for the opportunity to address the committee. I am joined by my colleague, Mr. Nigel O'Neill, director of the capital programme.

I understand the committee wishes to examine the ongoing work of Transport Infrastructure Ireland and receive an update on all projects. Before providing an update, I will briefly describe the duties and functions assigned to TII through legislation. The National Roads Authority, operating as TII since 2015, was established under the Roads Act 1993. It is the general duty of the authority to secure the provision of a safe and efficient network of national roads, having regard to the needs of all users. TII is the approving authority for national road projects.

In 2015, the NRA was merged with the Railway Procurement Agency. The Roads Act 2015 added the function of securing the provision of or providing such light railway and metro railway infrastructure as may be determined by the National Transport Authority. The NTA is the approving authority for metro and light rail projects. For that reason, I will defer to the NTA in relation to light rail and metro projects. In September 2021, TII became the approving authority for greenways.

I will now give an update on the delivery of the national development plan's national roads and greenways programmes. A briefing paper providing an update on delivery of the NDP national roads and greenways programmes has been provided to the committee. I hope it is of assistance. I wish to highlight some significant recent developments on national roads major projects, recommend some enabling actions and suggest an equitable approach to inflation in the civil engineering sector.

Roadbridge Limited is the contractor for the N5 Ballaghaderreen to Scramoge major project. Roscommon County Council is the employer for the construction contract. TII is providing the funding for the project and overseeing its delivery. The contract form is the public works contract, which is required to be used for civil engineering works in Ireland. Roadbridge went into receivership on 11 March and construction has stopped. The receiver is exploring the options available. At this time, TII and Roscommon County Council are considering the commercial and legal options available to secure the delivery of the project. I cannot say more than that because the receivership process is live. However, I can say that the project will be delayed.

There are three judicial review proceedings challenging the decision by An Bord Pleanála to approve the N6 Galway city ring road scheme. Galway County Council is the lead local authority for the scheme under a section 89 agreement with Galway City Council. Currently, there is a stay on progressing the scheme pending the outcome of the proceedings. In TII's experience, judicial reviews cause very lengthy delays to project delivery. Accordingly, it seems likely at this stage that delivery of the ring road will be significantly delayed.

In my opinion, the setbacks to the delivery of the N5 and N6 projects point to the need for the State to consider implementing three enablers for delivery of the national development plan, which would be applicable to national roads, greenways and, more generally, other types of infrastructure being delivered by the State. First, there is the alignment of stakeholders. In TII's experience, when it comes to implementing infrastructure mandated by the NDP, there is often a lack of alignment between the interests of stakeholders, including other public bodies, and the interests of those bodies responsible for delivering such infrastructure. It is only right that the implementation of infrastructure should adequately deal with the impact on stakeholders.

However, in my opinion, the balance is excessively weighted towards stakeholders’ interests. To ameliorate this, I suggest that the State considers establishing suitable forums for stakeholders, including other public bodies and State-owned enterprises, chaired by senior people of recognised standing, to achieve alignment supporting delivery of necessary infrastructure.

On resourcing the planning and regulatory processes, the planning process in Ireland is highly complex and time-consuming. Gaining necessary approvals from regulatory and approval bodies is extremely challenging, often leading to delays or onerous conditions or both. The planning approval of projects is also subject to extraordinarily long delays from judicial review challenges. Delays are measured in years, not months. TII does not object to public scrutiny or judicial supervision. We suggest the State ensures that public bodies with statutory approval and regulatory approval functions are adequately resourced so they can perform their functions efficiently and within reasonable time periods. TII also suggests the State ensures adequate levels of judicial resourcing so that challenges to vital public infrastructure can be determined in months rather than years.

On reform the public works contract, such contracts are lump sum, fixed-price contracts that are to be used on all public works projects. Contractors based in Ireland have long-standing objections to the public works contracts. This contract type is expensive to tender for and the risk transfer is extremely onerous for the contractor. Civil engineering contractors have withdrawn from the Irish market in recent years. I believe the use of lowest price award criteria and the very high level of risk transfer within public works contracts have combined to achieve very good value for the taxpayer but with a consequence of a much-reduced number of contractors in the Irish market.

It is a matter of concern to TII that the number of tenderers has reduced for civil engineering construction tender competitions. Civil engineering contractors are needed to build the infrastructure required to deliver the national development plan. Consideration should be given to the use of internationally recognised civil engineering contract forms such as the new civil engineering contract, NEC, or the FIDIC form of contract. These forms of contract would be acceptable to domestic and international contractors and would be suitable, from the perspective of protecting the State’s interests, in the delivery of civil engineering infrastructure.

On inflation in the civil engineering sector, while it is not uncommon for contractors to own inflationary risk, it is reasonable to suggest that since the second quarter of 2021, inflation has been increasing at a rate that was not expected by the market. It is widely considered that it is not sustainable for contractors to continue to absorb price escalation at the rate the market is currently experiencing. Due to price escalation of fuel, materials and labour experienced in 2021 and since the beginning of the war in Ukraine, there are significant financial pressures being placed on contractors in projects being funded by TII. While these are pressures that are being experienced globally, there is limited relief offered to contractors under the public works contract in Ireland, which is predominately used to deliver projects funded by the Exchequer. While the public works contract has succeeded in offering client organisations financial protection for price escalation, among other risks, there are now clear signs it is having a detrimental impact on the market’s appetite and ability to deliver. There is a very high level of volatility in building material prices currently. The price of oil directly influences the cost of bituminous products such as asphalt and macadam. If the tenderers are required to take the risk on inflation, they will either include for a possible increase in the oil price, which will result in a self-fulfilling prophecy of inflated prices, or not include for an increase, which will result in a commercially unsustainable price and a risk to the viability of the contractor. Some form of indexation would allow for changes in raw material prices, either up or down, with an equitable outcome for the State and the contractor.

The delivery of NDP projects currently faces significant and systemic threats. What to do? First, TII respectfully suggests that the State implement the following: ensure alignment of stakeholders, by, for example, establishing an NDP stakeholder forum chaired by, and accountable to, an appropriately experienced person; ensure adequate resourcing of approval bodies and of the Judiciary to speed up planning and regulatory approval processes; reform the public works contract, preferably by permitting the use of either the NEC or FIDIC forms of contract, which are internationally recognised; and implement appropriate risk-sharing mechanisms to ameliorate the current inflation volatility on public works construction contracts with a view to securing a viable civil engineering sector in Ireland. Implementation of these measures in a timely and effective way, would do a lot to protect delivery of NDP infrastructure.

I thank Mr. Walsh. When he was here before, he spoke about difficulties in the planning process and he has been more clear here. I think we all realise the changed circumstances we are in and what is referred to as the cost-of-living crisis. It has a huge impact on building at every level of project.

I will raise two things. Previously we discussed how planning is being looked at by the Government. The Attorney General is carrying out his review. I had asked if there had been any interaction between his office and TII. I think there has been. Will Mr. Walsh update the committee on that? I imagine that, if TII has been given a forum, it has put to it what it has put to the committee. Where are the conversations at? Then it is a case of how we can move this on.

Mr. Peter Walsh

We are engaged. A member of staff is attending a forum. There have been two meetings of the forum so far. It has a very large number of members. My understanding is it has been more procedural to date. There has not really been a significant engagement with the topics that I can report on.

That is fair enough. Therefore, it is not the forum TII needs to get the proposals that it has put at this meeting. Has TII had any other engagement with the Government on this?

Mr. Peter Walsh

We are constantly engaged with the Department of Transport. It is fully aware of our concerns and advice on this. It has definitely been listening.

It has been listening but has it given any answers?

Mr. Peter Walsh

I suppose it has been difficult. We have not had too many contracts out lately. The dramatic event of 11 March with Roadbridge going into receivership is one people are being very cautious about reacting to because it is a legal process that needs to be followed. There are parties involved. We cannot really comment on that. However, the sense I get is that it does understand this was a very good contractor. For this circumstance to arise, it warrants a review of the manner in which we contract to deliver this work. I cannot say more than that.

No, and there are obviously a large number of subcontractors and so on.

Mr. Peter Walsh

I do not have knowledge of that and I do not really wish to-----

No, that is all right. We will speak in generalities. We want a system that works. Mr. Walsh has spoken on the tendering process and how the lowest cost wins model does not work. He referred to the NEC or FIDIC forms of contract. Will he go into some specifics on how that would work better?

Mr. Peter Walsh

Where I believe we should be going, and I do not think I am alone in believing this, is towards a partnership approach. In civil engineering, you are dealing with significant elements of risk associated with the actual construction of the project. Ground conditions will vary. Weather conditions will vary. Each of those will have a very significant effect. You will be coming across services and things you do not expect in the ground when you start digging it. A partnership approach to the delivery of a project is by far the best way of doing so.

With the approval of the Government's contracts committee we went out with a new engineering contract, NEC, partnership approach and, by way of illustration, in 2017, we had nine tenderers for the Dunkettle interchange. There was a very high level of engagement by the contracting community and what I considered to be a very positive response to it. As things worked out, it was not possible to proceed with that but it was possible for both the contractor - we were the contracting authority at the time - to part our ways with the tenderers because it was not possible to agree a target. For reasons of expediency and the need for compliance in following a public works contract, we went out with a straightforward public works contract on the second occasion and we got two tenderers in the end. The job is going okay. I am not suggesting that there is a problem with it, but two tenderers the second time around is indicative of what the market saw as a much more onerous contract to deal with. It was the contractor which had brought the contract through the first part of the two-part contract who eventually won it because I believe it had a very good understanding of the site and it knew comprehensively what it was dealing with. It has been getting on with the job since and it is going fine.

By way of further example, we have had a number of other competitions. In 2016, with the M7, we had eight contractors wishing to tender for it. Over the years since then, in 2017, 2018 and 2020 - no contracts went out in 2019 - we were reducing continuously down to three tenderers for the N5, the Ballaghaderreen to Scramogue road. I see that as illustrative of how the industry sees that risk transfer. If we could move to a more collaborative approach where risks are shared in order that what we are then dealing with is trying to solve the problems of civil engineering, that would be much better outcome.

I get the idea of partnership, of everybody being involved from an early stage and where the due diligence is done. Beyond that risk sharing, particularly in the circumstances where we have such price volatility at this point in time, that is probably a given. I do not think anybody is going to take on a contract they may have looked at six months ago. Where is the conversation with Transport Infrastructure Ireland, TII, and with others in that regard? I would say that has moved on considerably in the past month.

Mr. Peter Walsh

It has not moved on with us. We have been saying we are at a point where it is unsustainable. We have been hearing from the contractors that they are nervous about tendering for this year’s pavement work, for instance, because if they are being asked to hold their price and something dramatic happens to oil prices, they will be in serious trouble.

They cannot do it.

Mr. Peter Walsh

A two percentage point change would be €8,000 on a contract. For a contractor, that is an impossible hit, as it may be hoping to do 20 to 30 of these contracts.

Here is the question. I imagine that any time we review the tendering process, contracts or anything, this takes a significant amount of time. What sort of timeline would there be in changing this?

Mr. Peter Walsh

I can see no reason it would have to be such a significant amount of time. Indexation is a process that has been used before in the 1980s. It takes resources on site and, with the contractor, there is quite an amount of accounting and assurance required around it but it is quite possible.

The fact is that Mr. Walsh has had nothing back to say that anybody is looking at or putting a plan in place in regard to this other than listening to him and hearing his problems. We can all do that on some level.

Mr. Peter Walsh

Yes, but I cannot say that I have made a proposal. My colleague, Mr. O’Neill, may wish to come in on that point.

Mr. Nigel O'Neill

Yes. TII is a member of the Government's construction contracts committee. Most public bodies in Ireland which are involved in delivering infrastructure are members of that committee. It is under the auspices of the Office of Government Procurement, OGP, I believe, and is therefore under the remit of the Department of Public Expenditure and Reform. As of mid-January, a circular has issued saying there is an amendment to the price variation clause in the public works contract. Previously, the threshold for the contractor to obtain relief on inflation was where prices increased by 50% or more, and that would be after a period of 30 months. As of mid-January, that percentage was reduced to 15% and the fixed-price period is 24 months. My view is that does not go far enough because civil engineering is a low margin business; it is highly competitive and we do not think contractors can price in a 15% materials price risk. These are the debates going on.

Could we possibly get something closer to a proposal, even if it is not absolutely nailed down, that we could possibly put to multiple Departments to get some kind of movement?

There is clearly an issue in this area. In layman’s terms, this is a fixed-price contract for 24 months and there is no inflation link within the first two years of a contract. Typically, how long would a contractor, being the preferred tenderer, put in that tender for the contract prior to starting it? Could one be looking at three, four or five years of, in essence, a fixed-price contract? It may have got the contract or have even been the preferred tenderer and have tendered for the contract three to four years before, or, typically, we will say, two years before starting the work.

Mr. Peter Walsh

I will give the Chairman an example. We had tenders in for the N5 Ballaghaderreen to Scramogue road in December 2020. As it was for more than €100 million, it required Government approval. The business case was approved in June.

June of what year?

Mr. Peter Walsh

June of 2021.

But TII had a preferred tenderer selected in the previous December.

Mr. Peter Walsh

Yes. Its price would have predated the submission and the analysis of the tender.

So TII could bring it back six months, to perhaps June of 2021 prices?

Mr. Peter Walsh

I do not know how much, but it appeared-----

We are talking about December 2020 if we go to June-----

Mr. Peter Walsh

December 2020 was the price-----

To June 2021.

Mr. Peter Walsh

-----and there is a validity period required within the contract. For that contract, it was a validity period of six months, so the contractor was expected to hold it for at least six months. It took the six months to get approval through. From that point, the contractor needs to start the design.

Some years ago when we had a good pipeline of projects and we were turning them over more quickly, contractors were proceeding with the design at risk. Now our experience is that they start the design when they get the contract. One then has another period prior to purchasing any materials.

Had any physical work started on the N5 contract? Mr. Walsh was talking about December, so let us bring it up to December 2021, so one is then looking at two years from that date, I presume. This then brings one up to December 2024. Mr. Walsh is talking about where the contractor put the price in in December 2020, which ends up as four years fixed.

Mr. Peter Walsh

That is correct.

Okay, enough said. The contractor was Roadbridge.

I welcome our witnesses from TII to the committee and thank them for their presentation.

My reading of this presentation sets off alarm bells. TII's role, obviously, is critical at a time when we need to enhance and improve our infrastructure. The improvement of this obviously contributes to the growth of the economy. Transport Infrastructure Ireland outlined some serious issues for us here today. The reality is that we have a national development plan which is fully funded and is in place on paper and in theory, but the stark fact is that the implementation of this plan is obstructed and delayed for a variety of reasons which TII set out here. I find it is disturbing to see that many projects are held up for legal reasons and due to the planning and regulatory process, and for reform of public works contracts. I find TII's closing remarks and the recommendations it is making to be precise, logical and sensible. Whatever this committee has to do to bring this to the attention of Government and to get action on it has to be an absolute priority for us.

There are four steps outlined here that should be and need to be taken. We must put the committee's weight behind this to get responses. I know what it is like to make presentations to the Departments, to play volleyball with them and not to make progress, but we are at a critical point and we simply must resolve some of these outstanding issues.

I live in the mid-west. Many of my constituents in Tipperary have been greatly impacted by the collapse of Roadbridge and its going into receivership. It has been a devastating blow to the workforce, their families and the communities in which they live. Then we have the knock-on effect on so many subcontractors, which run the serious risk of going out of business as a result of this. The contracts that are in place must be changed. The reality of modern-day commercial life is that it changes every day. We cannot expect contractors to take all the risk. As the witnesses outlined, the reality is that the contractors will not be there any more. The system itself will break down because contractors determine competitiveness. If a contract becomes so binding, so tight and so inflexible, it does not pay the contractor to take the risk. As a result, instead of there being five or six competing for a job, there will be one or two, or none, and that holds up everything. We need to address that.

Can the witnesses give me an update on the N24 to Limerick Junction? We have on several occasions had discussions with the Minister, Deputy Eamon Ryan, about this and he has been very favourably disposed to the provision of a bypass for Tipperary town. It is part of the Town Centre First policy. We have made huge progress and enormous strides to get this in place. We got a commitment from the Minister that this would be prioritised as part of the new N24 dual carriageway and that, effectively, it would start in Tipperary and work its way to Limerick Junction and down to Cahir. We recently had a meeting with the Minister about the N24 from Waterford to Cahir. As public representatives, we were happy that the technical advisers had been appointed to phases 1 to 4, inclusive, of that project, but my immediate priority today is to find out what progress has been made on the N24 Cahir to Limerick Junction project. Route options, we were told, would be available in March. Can Mr. Walsh or Mr. O'Neill say when we can expect the preferred route option to be announced?

How many projects are impacted at the moment by Roadbridge's being in receivership? How many jobs are held up and how many can progress? I know that the witnesses are restricted in what they can say, but, in a general sense, what are the implications of this for TII?

Mr. Peter Walsh

There were only two major contracts on which Roadbridge was the main contractor. One was the N4 Collooney to Castlebaldwin project, which was finished in July of last year. There is retention money held that we believe is more than adequate to cover any of the remaining works, so I think we can take it that-----

Roadbridge was the principal contractor on the N5 as well.

Mr. Peter Walsh

Yes, it was the principal contractor on the N5 Ballaghaderreen to Scramoge project. Work on that has stopped but, as the Chairman rightly pointed out, no work had been really started on site, so that site is still clear. We therefore do not see any complications there other than legal ones to get to the point at which we can get back to the market. A decision on that has not been made, however, and I do not wish to announce one here. We are still in discussions, as is Roscommon County Council, with legal advisers to make sure we do not do something-----

Are there any other joint contracts with other contractors, apart from those two?

Mr. Peter Walsh

There are no major ones. The only other contract TII has in which Roadbridge was involved in a joint venture is for one of our motorway maintenance and renewal contracts, MMaRCs. Under that contract Roadbridge was in a joint venture with Colas. The contract has the flexibility and provisions within it to allow for a seamless transfer of responsibilities to the remaining joint venture partners, so we do not see any difficulty there.

As for the N24 Cahir to Limerick Junction project, Deputy Lowry will find a comment on that in the document we have supplied. We expect that the public consultation on it will commence in June, with the preferred route expected by June of this year. Does that answer the Deputy's question?

Do you wish to ask anything else, Deputy Lowry?

Do the witnesses understand that this is a priority for the Minister? Is TII looking at it? Will the witnesses address the general principle of the bypass for Tipperary town being a priority also for TII? I think Mr. O'Neill is familiar with the project.

Mr. Nigel O'Neill

It is very much part of what we are looking at now. It is a matter of looking not only at the Tipperary town bypass section as part of the overall scheme but also at phasing a delivery of the bypass section. It is a significant section in its own right. That is what we are looking at.

That will be the priority within the overall-----

Mr. Nigel O'Neill

Yes.

The committee will follow up on that. We will probably look to bring before the committee the Department of Transport and probably the Department of Public Expenditure and Reform to discuss the structure of contracts. TII, which is the body responsible for infrastructure provision in Ireland, is before us as a public committee of national representatives. As Deputy Lowry said, this sets off alarm bells. The committee will follow up on the matter in a structured way and make recommendations. Following on from what the witnesses have submitted, perhaps we will look to see exactly what the position is. Ultimately, the two principal Government partners in this matter, I would have thought, are the Department of Transport and the Department of Public Expenditure and Reform. Am I correct on that, Mr. Walsh?

Mr. Peter Walsh

For TII?

Mr. Peter Walsh

The Department of Transport is our parent Department. It will engage with the Department of Public Expenditure and Reform.

The Department of Public Expenditure and Reform is a key partner as well, though.

Mr. Peter Walsh

Yes.

We will take up the matter relatively soon after Easter.

I express my support for Deputy Lowry's comments on Mr. Walsh's closing remarks. They are very serious, and the committee should take on the issues that have been outlined. So many projects throughout the constituencies of all members of the committee, and indeed all Members of the Dáil, are being held up for various reasons, whether legal, planning or procurement. We really need to cut through those reasons, particularly given the newly published national development plan and the ambitious targets that have been set out in it.

One key project in County Clare is the Blake's Corner project, that is, the N67-N85 inner relief road. The project is critical for connectivity in north Clare. There is massive disruption there, particularly in the summer months, with tailbacks entering and exiting Ennistimon, a thriving market town in north Clare. This project has been put forward, is being led by Clare County Council and is critical. There was an oral hearing on it over two days last year, on 9 and 10 June. We are nearly a year on and there is no progress, no report and no further advancement of this key project. It just goes to show what Mr. Walsh said about what is happening on the ground.

These issues need to be resolved. We need a massive shake-up of An Bord Pleanála, what it does and how it deals with projects. This is key infrastructure, whether roads or even green energy projects.

An Bord Pleanála sits on those and does not deal with them in the expeditious way they should be dealt with. In that regard, could Mr. Walsh provide me with an update on the key critical project for north Clare, the Blake's Corner project? What type of engagement has TII had with An Bord Pleanála? Obviously, TII is limited and is waiting for the independent report, but to what extent can TII push that at all? Perhaps someone might respond on that.

In addition, the remit of TII includes the roll-out of greenways, which is very exciting. There are two serious projects in Clare that are advancing and taking on a little pace, particularly the greenway that is proposed for west Clare, the west Clare greenway. It starts in Ennis-Clarecastle and goes down to Kilkee. Some €200,000 has been spent on development works and €800,000 was committed last December for more works to progress the project. Perhaps I could get an update on that and also on the Shannon greenway from Limerick city to O'Briensbridge and on to Scariff, which is another exciting greenway development.

Another issue has been brought to my attention by a number of landowners in Meelick in County Clare, which is just beside Limerick. I have been dealing with the local community there and the local GAA club. There is a problem with flooding. I have been engaging with the Minister of State at the Department of Public Expenditure and Reform, Deputy O'Donovan, and he arranged for works to be carried out there last year. There is an extension of this work but it involves a culvert there that is in the control of TII. I understand the Minister of State, Deputy O'Donovan, has been in touch with TII, but I would appreciate if Mr. Walsh could make sure that TII plays its role to alleviate the flooding on that key culvert near Meelick under the N18.

Perhaps Mr. Walsh will respond on those issues.

Mr. Peter Walsh

With regard to Blake's Corner, it is slightly worse than the Deputy recounted. The oral hearing was on 10 and 11 May last year and a decision is awaited. There is nothing we can do in terms of engagement with An Bord Pleanála. The planning process is sacrosanct and we are absolutely careful not to interfere with it in any way so as not to damage the process or make it vulnerable. We do not, nor will we, make any contact with An Bord Pleanála while it is deliberating on a project. All we can do is prepare the project as best we can with the local authority, fund it to prepare the documents as best it can and give An Bord Pleanála the best opportunity to assess the appropriateness of the proposed development. We do not know what constraints and difficulties An Bord Pleanála is operating under so I do not want to be party to any criticism of An Bord Pleanála today. It is increasingly difficult for the board to perform the level of scrutiny that is expected and required of it under European directives. I do not wish to imply that there is any fault being suggested, but there may well be a constraint issue. I hope that answers the question about Blake's Corner. It is fair to say we will progress it as fast as the planning process will allow.

Has TII any indication, or does it ever receive any indication, of when a decision is likely from An Bord Pleanála? Does it consult with TII at all-----

Mr. Peter Walsh

No.

-----or give an estimated date?

Mr. Peter Walsh

No. There is a date on the website. On its website it issues and updates dates, but it will reserve the right to change those dates. There is an aspiration in legislation for a decision to be made within 18 weeks of the closing date of receipt of observations, but I believe that is an increasingly difficult target for An Bord Pleanála to meet. I hope that answers the question about Blake's Corner.

The greenways is a new process for me. I am not familiar with the different greenways, but my colleague, Mr. O'Neill, might be able to give some information on those.

Mr. Nigel O'Neill

It is a new area for TII. We are the approving authority for greenways since September 2021. In the briefing document for the greenway at Kilkee the technical advisers have been appointed for the planning and design stage. That is positive and forward motion on that. The other one the Deputy mentioned, Shannon greenway, is currently at phase zero of TII project management guidelines. That is the very start, which is concept and feasibility. There is a strong push behind greenways, so once it gets past concept and feasibility it should then move on through the other phases as fast as we can appoint technical advisers and do the work.

A working group has been set up on the Shannon greenway. It is being led by Waterways Ireland and Mr. Éanna Rowe, the western regional manager, has brought together Clare County Council and Limerick County Council on the project. The group intends to hold some public hearings on proposed routes for the greenway. It is welcome that progress has been made on both greenways.

Perhaps Mr. Walsh might respond to me on the issue I raised regarding Meelick and the culvert that is causing the flooding there. It is probably a small issue, but it affects many landowners in Meelick as well as the local GAA club, which has been in contact with me as well.

Mr. Peter Walsh

I should point out with regard to greenways that there is very good funding from the Government for greenways this year. Previously, we have been pointing to the constraints that funding has created with regard to some road projects, but there is very good funding for greenways and we will make whatever progress we can make. Greenways are different from road projects, and the support of local representatives and of the community will make a very significant difference in terms of the level of progress that can be made with those. It is a different type of development.

I have looked up the allocation for Blake's Corner. There is €2 million for that this year. The only thing that might impede the progression of it is the speed at which the planning approval is achieved.

Will Mr. Walsh respond on Meelick?

Mr. Peter Walsh

I have some awareness of it, but I do not want to start guessing. It is a complex issue.

Perhaps Mr. Walsh will call me or drop me a line on that.

Mr. Peter Walsh

I will.

Deputy O'Rourke has approximately seven minutes.

I thank the witnesses for the presentation and the update. I support the proposition that the committee must take this very seriously. That has all been said. In his conclusion, Mr. Walsh said, "The delivery of NDP projects currently faces significant and systemic threats." On the last occasion TII was before the committee, we talked about its overall budget envelope. I cannot remember the exact figure but I think it was €1 billion up to 2025 and was it another €5 billion-----

Mr. Peter Walsh

It has been clarified a little since.

It is €1.1 billion for new roads up to 2025. The figure for protection and renewal is €1.3 billion.

Is it safe to say the situation has grown considerably more constrained, in that the budget does not go as far now due to inflation?

Mr. Peter Walsh

One would have to conclude that.

We have a large list of projects and there is a question mark over the progress that will be made on many of them in the years ahead. Has TII made an assessment of individual projects' situations and the front-loading or prioritising of some of them over others, and how is it going about that work if that is the case?

Mr. Peter Walsh

The circumstances are relatively the same as when I was before the committee previously. At the time, we were projecting on the basis of the contract sum for the N5 Ballaghaderreen-Scramoge road. Plainly, that is not going to apply anymore and that particular piece of the jigsaw is going to be reshaped.

The constraint of €1.1 billion in the years 2021 to 2025 did not allow for the progression of any other project besides possibly the N52 bypass. As such, what projects will be delivered within the period will not change. We were hoping to progress in a meaningful way the planning and design. That work may be confined-----

Does it reduce the prospect of the N52 Ardee bypass?

Mr. Peter Walsh

It probably does but I would still be hopeful that, provided we can get through the current judicial review of An Bord Pleanála's screening of that, it will be possible to progress the project.

There was some interesting manoeuvring in the early months of the year. In January, eight road projects were shelved. What was the decision-making process in that regard? When I went through the projects to see whether there was a pattern, each was at a different stage. What was the logic behind the decision? Was it determined by the national investment framework for transport in Ireland, NIFTI? In March, two of the projects – the N24 Waterford to Cahir road and the N4 Mullingar to Longford road – were put back on the table. What was the decision-making process there?

Mr. Peter Walsh

I might address that question backwards. Of the eight projects that we were not in a position to fund at the beginning of the year, the N4 and N24 were at a point where route options were still being considered. From a planning perspective, they covered a large portion of the study area through which they were passing. We were expecting a result on the Limerick-Adare-Foynes project at the end of 2021, but the date on which we would expect an outcome on that has been moved on time and again. The judicial review of the Galway city project has meant that the commitments relating to property acquisition will now not fall within the year. As a result of these delays, it was possible for us to redirect funding. The N4 and N24 projects were the ones where the impact of a delay was significant in terms of the areas covered and the restrictions they were placing on planning. They were also the projects where the most progress could be made, in that we could agree selected routes. For these reasons, they were regarded positively. There were also requests through elected representatives to review them because of the sensitivities involved. A number of reasons were involved in those two being favoured.

Consideration is being given to the remaining six major projects that we were not in a position to fund at the beginning of the year. That process is under way and will take some time. It will take weeks; I do not expect it to take months.

I was going to ask about the N2 road from Clontibret to the Border. According to this documentation, the scheme's next steps are under consideration.

Mr. Peter Walsh

Indeed.

I wish to ask about a number of projects. Will Mr. Walsh provide me with an update on the Slane bypass and the Kilmoon Cross to Rath roundabout project?

Mr. Peter Walsh

I will refer the Deputy to our supporting documents. We are referring to the Rath roundabout to Kilmoon Cross project as a transportation corridor. At the previous meeting, the Deputy said that, although he was not expecting a particular design solution, something had to happen. We have tried to reflect that thinking in the title. The third public consultation on the emerging preferred option commenced on 4 March and will run until 22 April. The phase 2 option selection report was published on 16 February. The proposed carriageway type will be considered and assessed by TII and Meath County Council. We are progressing topographical surveys.

I see that and the update on the N2 Slane bypass in the briefing document. Is it safe to say that, given the available funding, construction on both projects will not commence before 2025?

Mr. Peter Walsh

It is.

What is the prospect of construction commencing on both projects in the 2025-2030 period?

Mr. Peter Walsh

From the figures communicated to us, it is a strong prospect.

In the final few seconds available to me, I wish to ask about something else. I do not know if Mr. Walsh is familiar with the town of Stamullen in County Meath. I am interested in his perspective on planning and his first request that there be an alignment of stakeholders. Meath County Council, as the local planning authority, wants to deliver a link road at junction 7 on the M1 for the growing community in Stamullen. The majority of people in that community want a link road. People are being forced to take a circuitous route to the motorway. Three planning applications have been granted by the council but appealed to An Bord Pleanála by, among others, TII. As with everything, there is not a uniform perspective in the local community. What is TII's position on the link road? To the local authority and many people, it makes sense from a climate perspective, a connectivity perspective and a public transport perspective to link up with the motorway. In its submissions, TII makes an argument about overall transport infrastructure policy, but it seems that we do not have an alignment of stakeholders and the necessary conversations. TII points to the need for an assessment of the likely implications of the link road on the existing junctions and transport movements. That is fair enough, but the relevant stakeholders – TII, Meath County Council and prospective developers – do not seem to be talking to one another in whatever safe way they have those conversations.

Mr. Peter Walsh

I do not know enough about that project or whether my colleague does. I will have to revert to the Deputy on it.

I ask that TII review its position, revert to us and engage with the council to see what reasonable accommodation can be found.

Mr. Peter Walsh

Certainly.

From the opening statement, it sounds like an appeal to us and letting the world know just how difficult the process of dealing with contractors and getting people even to bid for work is. When we were doing the motorway programme, there were many people looking for the business and many people tendering. The risk was being pushed back onto the contractor at that point because there had historically been many road projects that came in at the lowest price but then there were all kinds of extras so that the lowest price did not really reflect anything close to what was going to be the final price. The risk was pushed back then. However, we are now saying we need to go back a bit from we had gone, in putting all the risk onto the contractor because, in the case of Roadbridge, which is in receivership, something went there. Maybe the witnesses cannot talk about it but is there a particular reason we can identify as to why what happened with Roadbridge happened?

There is the planning process as well. Is there a better example in Europe of where it is done more efficiently than it is here? It is not that we want to exclude public consultation or the public? Is there best practice in other parts of Europe or the world? New engineering contracts, NEC, or Fédération Internationale Des Ingénieurs-Conseils, FIDIC, contracts were mentioned. I am not sure whether what they are was outlined. What do they actually mean relative to what we have now?

Mr. Peter Walsh

I thank the Senator. I cannot comment on Roadbridge and I will not speculate as to what may have happened. It operates internationally, so I am not even suggesting it is purely down to the Irish market. In regard to the risk transfer, we started the motorway programme using the FIDIC contract in modified form and what was the IEI third edition, the engineering contract that had been around for some time. Both of those identified circumstances where if additional cost arose, it would be the subject of a claim for additional payment and the initial tender sum would be adjusted according to the assessment of what had happened. There was nothing wrong with that. There was a perception that in some way the industry was making exorbitant profits out of this. It was not. I worked in it since the early 1980s and I can be fairly sure that it was not making extraordinary profits.

Was there a situation where they came in with a low price knowing full well that they were going to be able to add bits on to it along the way?

Mr. Peter Walsh

The circumstance of taking the lowest price is one that creates optimism among the tenderers and they will bid the most optimistic price they can. All going well they might get out for that price but things do not always go well over three years on a 36 km strip of Ireland. Things happen. The contract had within it mechanisms for dealing with those things. They were applied but there seemed to be a misunderstanding, to put it that way, as to what the meaning of the initial tender sum, the initial contract sum, was. It was always going to rise but for some reason it seemed to cause dismay.

Why was it always going to rise?

Mr. Peter Walsh

It is because things happen. It is civil engineering and if you dig a hole, it will not be exactly what you expect it to be. Where you meet services, they will not always be able to give you the outages on the transmission lines or close down water mains in the way that you would like. I do not think there was anything terribly wrong but the wisdom at the time was to transfer the risk.

Then they charged a higher price but-----

Mr. Peter Walsh

No. What happened at the time, from my perception of it, was that we came to 2007-2008, and we launched the new public works contracts and the contracting industry was in trauma. Contractors took on contracts in order to keep working. The outturns were far less in terms of the differential between the initial tender sum and the outturn and this was interpreted in some way as being a fairer mechanism but in fact they suffered, in my opinion. They took it on the chin in order to survive. Unfortunately, it was seen as proof positive that this level of risk transfer is acceptable to the industry. We did nothing for quite a few years.

We were now at the stage where the contractors took the work because it was guaranteed State work and they were going to get paid for it and it kept employees in work and kept them going. They managed to keep going at the time and perhaps did not make much. Ultimately, some of them fell away or just decided not to dip their toes back in this water because it was just not lucrative enough. Is that it?

Mr. Peter Walsh

It would be speculation on my part but that is not an unfair assessment.

That is the contracting side of it. In terms of the alignment of stakeholders, the whole NDP stakeholder forum - I heard Deputy Lowry's contribution - we have a huge national development plan and a huge roads programme within that. Mr. Walsh outlined some of the problems in Scramoge, Galway and so on, but if you were looking at a long list of road projects you would not be very positive after reading his opening statement that too many of them are going to happen. This stakeholder forum needs to happen pretty much immediately. Is the argument that there are agencies funded by the State which are actually going out to make it harder for TII to build roads?

Mr. Peter Walsh

I would not suggest that for a moment. Agencies of the State are given responsibility to look after various elements of the State and in the process they do a very good job of it. However, they may not be very flexible when it comes to accommodating projects that are going to impact significantly on whatever aspect of the State they have been made custodians of. It might be helpful if I give an example of what worked well. The NTA is the approving authority which will answer to this committee in terms of any public transport projects, light rail and metro. TII did Luas cross-city through the centre of Dublin with many stakeholders who were worried about the impact it would have on their livelihood and their viability. That was not an unreasonable worry. A stakeholder forum was convened by the Minister for Transport at the time and we were required to report to that forum on a regular basis. At first I was surprised because I thought nobody had a contract here so how did we expect it to work, but it worked. It worked because when these meetings were coming up, the question an individual had to ask himself or herself was whether he or she was really going to go into a forum with all the people who would benefit from the completion of this project and say his or her sectoral interest is such that he or she was willing to impede the project. My experience of it was that they did not. They went to those meetings-----

Compromise happened and people understood the other side.

Mr. Peter Walsh

Correct. Compromise happened prior to those meetings. There may well be an assessment that the memo to Cabinet and the cross-divisional review of business cases and so on brings about that consensus of opinion but that is very late in the process. That all needs to be ironed out before then. I believe that would help.

On adequate resourcing of approval bodies and of the Judiciary, does Mr. Walsh believe they are inadequately resourced at the moment?

Mr. Peter Walsh

I cannot really say because all I can say is-----

Mr. Walsh is asking for them to be adequately resourced which would suggest to me that he believes they are not adequately resourced.

Mr. Peter Walsh

I can only look at the timelines. We look at the judgments. I cannot find any reason to be critical of the judgments - not that I am in a place to be critical. The quality of the assessment of circumstances as put before the High Court in judicial reviews is excellent.

It is understanding of what are really complex projects that have taken years to get to that point. I have never read an outcome I thought it did not understand.

Is it just the length of time it takes to make the decision?

Mr. Peter Walsh

It is the length of time. I do not know whether it is unreasonable to assume that is because it has to deal with an awful lot of stuff.

Okay. The public works contract has gone to the non-NEC form of contract. What would be the practical difference in that? I do not know this, and I am sure many people looking in do not know, but what is the difference?

Mr. Peter Walsh

It is risk sharing. There are two aspects. One is that NEC and FIDIC are an international form of contract. Training is available to people in those contracts. There are guidance books and materials to help. These are complicated contracts. Where we have a well-established contract with suitable levels of training and materials to explain it available internationally then international firms know what they are getting involved in. They know what the risk is in engaging in that contract. I am surmising, but from what we can gather and the level of growing disinterest that international companies would appear to have in the Irish market, the appetite for the risk transfer within the Irish contract is diminishing and the level of understanding of that contract is obviously less. They cannot be looking at every jurisdiction in Europe. For those two reasons, I think it would be desirable to move to that.

How many contractors in Ireland are likely to be looking, roughly speaking? If TII put out a contract for a road building project, how many tenderers based in Ireland are likely to be looking at that? Is it two or three or 20 or 30?

Mr. Peter Walsh

I made some notes of how it has been over the last few years. In 2017, we had nine contractors actively engaged in a competition for an NEC contract. In 2020, we received three tenders for the N5 Ballaghaderreen to Scramoge project.

That was a public works contract.

Mr. Peter Walsh

It was a public works contract.

When did it change from one to the other?

Mr. Peter Walsh

We sought a derogation from the Government's construction contracts committee and the Office of Government Procurement, which we got, for the use of the NEC-type contract in 2017 because we wanted to try something different. We felt we were facing a much more-----

So, on getting that derogation, TII had nine people interested in applying.

Mr. Peter Walsh

There were more than nine entities but nine joint ventures applied.

This time around with the public works contract, only three applied.

Mr. Peter Walsh

Three tendered, yes.

Does Mr. Walsh feel that if it went back to the NEC-type contract, he would be more likely to get nine or maybe more?

Mr. Peter Walsh

I do not know that. It would be speculation.

Does he think it is worth an experiment to try it again?

Mr. Peter Walsh

I do.

While Mr. Walsh is here, is there a timeline in terms of the Galway ring road project? I know Mr. Walsh more or less said it will take much longer than it should. If all these judicial reviews were not successful and the approval was to take place, has he any idea when might people be able to use that road?

Mr. Peter Walsh

No work can happen on it at the moment. There is a stay on further progress. Having cleared the planning process, we would then have to develop the contract documents, tender it and then construct it. One would have to take it that the construction will not be less than three years. The tendering process will probably be in the order of a year and the preparation of the documents to get out to tender is probably going to be approximately one year.

If every judicial review vanished tomorrow morning and Mr. Walsh had permission to proceed, it would be five years.

Mr. Peter Walsh

Yes, and that is optimistic.

That is optimistic. In terms of judicial reviews, I know there is probably an element of asking how long is a piece of string? Generally speaking, how long do they take?

Mr. Peter Walsh

I can give the Senator an example of our latest one. Cork County Council applied for the Cork to Ringaskiddy project in April 2017. We got out of the judicial review process with a positive result in March 2021.

So, it was approximately four years.

That was TII's fault.

Senator Buttimer can come in in a minute.

The eastern bypass has been removed as an objective and has vanished. There are road reservations along that route. Has Mr. Walsh any ideas or otherwise for greenways or anything else TII might do on any of that route?

Mr. Peter Walsh

TII does not, no. In general with greenways, we are in receipt of proposals from local authorities and we seek to support them as best we can.

Mr. Nigel O'Neill

Urban greenways are with the National Transport Authority, NTA.

Mr. Peter Walsh

I am sorry; Mr. O'Neill just reminded me that urban greenways would be under the remit of the NTA. The Dún Laoghaire–Rathdown County Council element of that would be with the NTA.

The council would be dealing directly with the NTA.

Mr. Peter Walsh

Yes.

We now move to Senator Buttimer, who has approximately seven minutes.

I will not take the seven minutes because much of what I wanted to ask has been asked. I welcome Mr. Walsh and thank him for the update and presentation. I very much look forward to the N28 both being started and completed. We had this conversation in the past and I will say it again for the public record that the lack of meaningful engagement at a very critical time slowed the whole process up. We will not have that argument today, however. We will continue.

In the context of the question Mr. Walsh was asked by Senator Horkan and his own very thought-provoking opening remarks, the national development plan, NDP, is the critical document, blueprint and roadmap for projects in our country. I would say to Mr. Walsh that project visualisation and delivery is absolutely imperative. Based on his experience in terms of inflation and the reforming of public works contracts, does Mr. Walsh think we will see significant delays in the NDP or will we not?

Mr. Peter Walsh

I do not think there is any reason projects should be delayed because of inflation. If we can incorporate a more equitable means of assessing inflation and share the risk relating to it, then there is no reason it should impede the progression of projects. That is simply a matter of changing the contract terms and doing the sums.

What is the import of that then for projects in terms of the actual cost addition or delay, if any?

Mr. Peter Walsh

The volatility around inflation us quite extraordinary at the moment. I do not think anybody can predict what way it is going to go. I would suggest that if we had an indexation mechanism, then whether it went up or down, we would not be asking either side to take a gamble on it. We are simply trying to reflect the reality of it. There is more work in it but that is all it is. It is paperwork.

In the context of his presentation to us in terms of the number of tenders being reduced for civil engineering construction for tender competitions and then some of the suggestions he made around resources for the planning regulatory processes, along with the reform of the lump sum fixed price public works contracts, what does Mr. Walsh envisage? As a resident in Bishopstown and Ballincollig, I know that the Turks came in, if I can use this phrase without being derogatory, to build the Cork-Ballincollig bypass and they did a tremendous job. In fairness to the company at the time, its investment in community and sporting facilities in the area is to be applauded. Does Mr. Walsh envisage that internationally recognised civil engineering contract forms will be extended to that sort of process again?

Mr. Peter Walsh

The contract form we were using at that time was an internationally recognised contract form. I would imagine it contributed to creating a confidence for international contractors that they could come into our jurisdiction and be treated fairly. I do not know if I can expand on that.

Has Mr. Walsh spoken to Mr. Tom Parlon in the Construction Industry Federation and other stakeholders in the context of what we are discussing today?

Mr. Peter Walsh

We have contact with the CIF. We have not sought advice from CIF. Our main concern would be combatting the spread of Covid-19 and keeping projects going, on which we have had considerable interaction. We have been aware of the civil engineering contractors' dislike of the public works contracts. There was nothing we could usefully bring to the table on it. I am raising it today because it is incumbent on me to share with the committee what we see as the consequences of Vladimir Putin's actions. We believe we should bring to the attention of the committee the possible consequences and possible ameliorating actions that could be taken.

The aims of the NDP could fall short which would have infrastructure and political ramifications which we should try to avoid. Regarding Cork Metropolitan Area Transport, CMAT, the NTA is the approving authority for metro and light rail projects. I ask Mr. Walsh to outline TII's interaction with the NTA on that. What is the status of that project's delivery?

I invite Mr. Walsh to meet the people involved in the Lee to Sea greenway. Funding was recently allocated to that potentially exciting greenway. I ask TII to support this transformative project, which will be great for Cork.

I thank Mr. Walsh for his engagement. I apologise to him that I now need to attend another meeting which is on at the same time as this.

Mr. Peter Walsh

I will need to defer to the NTA on the Cork light rail project. It is developing the transport strategy along with the Cork local authorities. As an agency required to deliver light rail infrastructure, we will do what is required to deliver what is decided. I cannot comment further on that.

Regarding the greenway, regional management is under Mr. O'Neill and our head of roads and greenways, Geraldine Fitzpatrick. I am sure our regional manager there, Paul Moran, is in regular contact with Cork County Council and will continue to do so. I believe we had about 80 greenways on the books as of last October. I do not know I can promise to meet with representatives of individual greenways. I do not mean it in any disrespect to this particular greenway, but our regional management is very well placed to deal with those projects.

I accept there is no disrespect and I thank Mr. Walsh for that. I know every greenway is unique, but this is uniquely different. It can be transformative in having the potential to bring a whole new level of tourism to Cork. I just want to advocate on its behalf.

Roadbridge is a big company in Limerick city. Its collapse brought shudders of shock in the mid-west region affecting 630 staff and several projects. We will do a body of work on the reform of public contracts. There are three items. As far as I am aware, the Irish Government Economic and Evaluation Service, IGEES, is currently looking at resource planning and the regulatory process. Am I correct that it is currently under consideration by the Department?

Mr. Nigel O'Neill

I believe the Chairman is referring to the reform of the planning legislation. We have not really expressed a view on the planning legislation-----

However, TII has expressed a view-----

Mr. Nigel O'Neill

-----but it is the resourcing. As Mr. Walsh said earlier, the time it takes for decisions to be made seems to be a resourcing issue.

Is it more a resourcing process issue?

Mr. Nigel O'Neill

We do not know because we are not on the inside.

When Mr. O'Neill talks about a resource issue, is he talking about An Bord Pleanála?

Mr. Nigel O'Neill

And the time it takes to get through judicial review, which can take years.

Am I correct in saying that Government is looking at that issue as we speak.

Mr. Nigel O'Neill

We do not know.

Our understanding is that it was. We will follow up on that. Okay, I understand that specific one.

I ask Mr. Walsh to explain the alignment of stakeholders because I do not quite understand it.

Mr. Peter Walsh

If a large number of State bodies are given remits to look after elements of the environment, such as water, protected habitats, heritage, collections of art, museums or whatever the issue might be, not unreasonably their first and foremost responsibility is to protect what they have been asked to protect and work with the resources they have. If we had a forum where the issues that are of concern could be aired and a direction given as to what would lead to achieving the outcomes-----

I ask Mr. Walsh to give me an example.

Mr. Peter Walsh

For example, Luas cross-city was being constructed through the streets. The contractor would come up with the means of taking possession of a street and carry out the construction of that piece of rail through that section of the street and organise the traffic management. It is only possible to predict to a certain extent how that would operate. The Garda might review it and determine it to be too dangerous because it is unacceptable for pedestrians to be making their way out into the traffic. We need to be able to decide to take it down and start again.

I would have thought alignment of stakeholders and then resourcing, planning and regulations are all related. There are aspects that feed into that. Again, TII projects are being delayed because bodies have terms of reference for their particular issue.

Mr. Peter Walsh

That is it. I am reluctant to comment too much because-----

I am not asking Mr. Walsh to comment. Regarding the reform of public works contracts, let me distil it down. Roadbridge had a very good reputation. It was one of the premier civil engineering contractors in Ireland and had gone international but has now collapsed. We have seen other collapses. With the current fixed-price contract tender process, how long will it be before we see others collapsing?

Mr. Peter Walsh

I could not comment on that.

Let me put it another way. In the current model for the fixed-price contract where it is fixed for two years when they physically commence work, that contract may have been tendered for two years previously meaning that the pricing could have been done four years before turning a sod on the ground to commence the works.

How sustainable is the current fixed-price model?

Mr. Peter Walsh

Where you had no inflation it worked. We had a decade of low inflation and in those circumstances it worked. Where we have inflation volatility the way we have right now, it will not work.

What is TII putting inflation running at currently, where contracts are concerned? It must be seeing it with contracts.

Mr. Peter Walsh

It is very subject-specific. Take steel, for instance. Last December, I believe reinforcing steel was in the order of €600 per tonne. I believe it is now in the order of €1,750.

It has gone up by the bones of €1,050. Which is-----

Mr. Peter Walsh

Three times the price, effectively. With bituminous products there has been an increase in the order of 20%.

On what?

Mr. Peter Walsh

On bituminous products. There has been a 40% increase in the oil element and it is about 40% of price of the------

If we, therefore, take the contract at the moment-----

Mr. Peter Walsh

-----end product, so-----

-----oil has gone up by 40%. That affects diesel. That is being used on road contracts.

Mr. Peter Walsh

Or even to make the product. For bituminous products in road-making materials the increase is in the order of 20%.

Since when?

Mr. Peter Walsh

This is the thing. It is only since the turn of the year.

What about diesel?

Mr. Peter Walsh

I guess that is similar. I do not know what the impact of that would be. Obviously, a lot of diesel is used for-----

TII will have an idea of the way contracts have been priced, so if the materials have increased in price across the board in the order of 20% to 25%, are these contracts in a profit- or loss-making situation now, based on the way they were priced on day 1?

Mr. Peter Walsh

I cannot really say because the manner in which-----

When companies price a contract, they are going to tell TII what their margin is. I have no doubt TII will-----

Mr. Peter Walsh

No. They will not.

But TII would have an idea. It would have its own modelling where they give it a contract price. Would all of these fixed-price contracts have been awarded based purely on price, that is, on the lowest price?

Mr. Peter Walsh

They are awarded on price.

Is that on the basis of lowest price?

Mr. Peter Walsh

Yes.

We are hearing anecdotally that many of these would make up the balance of the price on claims at the end. That is anecdotal; it is what we hear.

Mr. Peter Walsh

They will lodge claims for additional payments they believe they are entitled to and they-----

If you have a fixed-price contract that starts today and it is a two-year fixed price then I can put in for inflation in two years' time. Say the contract is for three years, I can only put in for inflation from the start of the end of the three years. Am I correct?

Mr. Peter Walsh

The restrictions under the current form of contract Mr. O'Neill was explaining earlier mean for the new contracts there is a 15% threshold below which the contractor carries the risk. It will take that on.

Explain the 15%.

Mr. Peter Walsh

It must go beyond 15% before you start having an entitlement to additional payment.

Will the contractor get the additional payment it claims retrospectively based on the works it has done since the start of the contract?

Mr. Peter Walsh

No. I defer to Mr. O'Neill on this.

This is very important. I have spoken to contractors. At the moment they are getting killed on diesel costs and materials costs. They will have been allocated contracts and they might have to wait. They would be the preferred tender but that cannot be awarded until it has been approved. The devil is in the detail. If they have a fixed-price contract for two years, when they come along and put in a claim for inflation after two years, what can they claim for with respect to inflation increases?

Mr. Peter Walsh

I defer to Mr. O'Neill on this. He is better with the numbers.

Mr. Nigel O'Neill

They can claim for the proportion of inflation above 15%.

From when?

Mr. Nigel O'Neill

After the two years. After the 24 months.

If they have done works and been paid for works done in the two years, can they claim for that?

Mr. Nigel O'Neill

I do not believe so, no.

Then that makes it impossible. What margins would they typically be making on these contracts?

Mr. Nigel O'Neill

We are not privy to their margins if they are private companies, for instance. Anecdotally, we are being told they are on margins of 1% or 2%.

If contractors are on margins of 1% or 2% and diesel has gone up by between 20% and 25% and materials by at least 20%, with the steel price alone increasing by 40%, they are in severe loss-making situations. From my own observations, what then happens is they are chasing the dragon of cash. They are chasing payments from TII to cover pay, materials, contractors and subbies, in many cases maybe on older contracts. It is just keeping them in operation and they are not making a profit. I understand there are about three principal Irish civil engineering road-building contractors in the Irish market at the moment. Is that correct?

Mr. Peter Walsh

Three or four.

All right. If the fixed-price contract is not reformed could we be looking at a situation where none of them might survive?

Mr. Peter Walsh

I cannot really speculate on that.

Okay but is it fair to say Mr. Walsh would not be coming in here as CEO of TII and putting in writing that he believes that implementation of these measures in a timely and effective way, would do a lot to protect delivery of NDP infrastructure if he were not concerned? If these changes are not made could it have an impact on the delivery of the NDP?

Mr. Peter Walsh

Yes.

Okay. Mr. Walsh referred to his belief that consideration should be given to the use of internationally recognised civil engineering contract forms such as the new engineering contract, NEC, or the FIDIC form of contract. In layman's terms, what would be the difference between those and the current contract? Would it be fair to say that of the three elements, namely, alignment of stakeholders, resourcing of the planning and regulation process and the reform of the public works contract, the third is the biggest risk to the NDP at the moment?

Mr. Peter Walsh

It is certainly an immediate one. We also have to consider the ones that are currently in place.

Does Mr. Walsh mean contracts that are about to start?

Mr. Peter Walsh

No, ones that are in place and-----

Under construction.

Mr. Peter Walsh

Yes.

Then the question is how the contract will be changed. With respect to what Mr. Walsh is looking to put in place, what will the difference be in the terms of the contract?

Mr. Peter Walsh

Indexation relating to inflation is one aspect.

Would the 15% limit apply?

Mr. Peter Walsh

Currently, in a lot of the contracts there is a 50% limit.

In Ireland?

Mr. Peter Walsh

Yes. The reform Mr. O'Neill was referring to came into place in mid-January of this year.

That is the 15% limit.

Mr. Peter Walsh

Prior to that it was 50%.

If a contract was a preferred tender and was awarded prior to 1 January of this year, the contractor could have a 50% inflation limit, that is, inflation would have to be above 50% before it could put in a claim.

Mr. Peter Walsh

Correct.

Mr. Nigel O'Neill

It was also 30 months.

Instead of it being two years it was 30 months. Thus, TII has contracts out there at the moment where the contractor cannot make a claim on inflation for three years and if it makes that claim it is only on claims above 50% of inflation.

Mr. Peter Walsh

Correct.

Then those contracts are unworkable.

Mr. Peter Walsh

They worked while there was no inflation. They had-----

Yes but in the current environment-----

Mr. Peter Walsh

-----been there for years and I am sure-----

-----they are virtually unworkable. As it stands at the moment a contract is three years long. Is that correct?

Mr. Peter Walsh

There or thereabouts, yes.

Effectively, a contractor's claim for inflation under a 30-month contract would normally be once the contract is completed. It would be coming in in the form of claims. Is that correct?

Mr. Peter Walsh

Generally, they cannot submit a claim. There is a schedule K within the public works contract where one has compensation events identified and then the price variation clause identifies the rules under which one can make a claim.

So 50% inflation.

Mr. Peter Walsh

Yes. They generally will not make a claim because they cannot establish grounds.

Historically, one would never be able to establish grounds for 50% inflation.

Mr. Peter Walsh

They will not have made claims but that does not mean they had not suffered.

The contractors could not put in a claim for 30 months and then only if inflation had risen 50% above the price in the tender. The new contract stipulates two years and only where inflation rises above 15%. At the moment inflation is running at double that figure, between 20% and 30%.

Mr. Peter Walsh

Probably the national inflation figure is around 8%, which I think is what was announced the other day. For certain elements of construction and civil engineering-----

I am not an expert in this area but I have looked into it and diesel, materials and costs are key elements. Please explain how the new contract will work differently.

Mr. Peter Walsh

I do not want to claim any expertise in this. I appreciate that we are on the record so I do not want to.

What type of contracts are the new engineering contract, NEC, or the FIDIC form of contract? They are existing contract types.

Mr. Peter Walsh

Yes.

These contracts are internationally recognised.

Mr. Peter Walsh

There are schedules within those contracts where one can impose restrictions. One could point, I am sure, to an NEC contract where it has been so restrictive.

We are in an inflationary environment because circumstances are outside of our control in the Ukraine in terms of oil, material and other costs. We also have a considerable number of people who work in the construction sector, more particularly on contracts with TII. We have a national development plan to roll out projects the length and breadth of the country. Roadbridge brought into sharp focus the impact of a contractor collapsing in terms of specific projects, in particular the N5 and other projects. We have only three or four main Irish contractors left. Can I assume they are all working on existing contracts? So the risks and consequences are enormous. If a contract is to work then what form must it take? One may have situations where the current contracts are not viable. I do not want to see a further collapse of companies. I do not want to pre-empt a reply because the witnesses are the experts in the area but what type of contract would work?

Mr. Peter Walsh

We have a contract in place. We cannot change the form of contract that is in place but we can look at assessing the schedules within the contract that allow for compensation events. It is possible within the public works contract to review what is allowable in terms of compensation events. We would be happy to work with the Office of Government Procurement to establish a fair mechanism and that office is under the remit of DPER.

Is it correct to say the areas being looked at concern inflation?

Mr. Peter Walsh

That is the most pressing circumstance, yes.

Is there an option within existing contracts to vary the circumstances under which claims can be made? Does such a facility exist? Is that legally possible?

Mr. Peter Walsh

I believe that where two parties are in a contract it is legally possible to agree changes to the terms of a contract. The restrictions that are on State agencies in terms of what is and is not allowable to protect the interests of the taxpayer is a restraint.

Has the TII had direct discussions with the Department of Transport, the Office of Public Works or DPER on this matter?

Mr. Peter Walsh

As Mr. O'Neill said, TII is a member of the Government's construction contracts committee. Input has been given in that committee around concerns relating to inflation.

How often does the contracts committee meet?

Mr. Peter Walsh

Quarterly.

Mr. Nigel O'Neill

Yes.

Did that committee meet recently on this?

Mr. Nigel O'Neill

We did, yes.

Did TII express its major concerns?

Mr. Nigel O'Neill

I am not the representative on it. The meeting is taking place today. These are live issues. I am not going to talk about these mechanisms in detail but they are discussed.

Did TII have discussions with the Department of Transport on this?

Mr. Peter Walsh

I cannot-----

What is the name of the committee?

Mr. Peter Walsh

The Government's construction contracts committee.

Is the Department of Transport represented on the committee?

Mr. Nigel O'Neill

Yes, I believe it is.

Mr. Peter Walsh

Yes.

For us, as a committee, it is clear that we have an alarming situation developing in terms of inflation, particularly with contracts. I shall put this in stark terms. First, we have existing contracts that are bound to put no claims in for inflation for 30 months and then they can submit a claim only if inflation is 50% above the contract price. Second, the newer contract has existed since 1 January and contractors cannot submit a claim for 24 months and only where inflation rises above 15%. Has TII had any claims concerning inflation in recent times?

Mr. Peter Walsh

I am not aware of it. Please bear in mind that it is the local authorities that are the contracting authorities.

The witnesses have said that in many cases contractors would not make a claim because it was not an inflationary period but we are now in an inflationary period.

Mr. Peter Walsh

The contractor has to mind the resources he has. A contractor will not put resources into making a claim when there is no prospect of success.

The likelihood is that with the old contracts inflation is not above 50% although in some areas it is, but a contractor must wait 30 months. However, the new contracts have only started since 1 January and those contractors can do nothing for two years about inflation because the contracts are time specific.

The committee will follow up automatically. We will write to the Department of Transport, the Office of Public Works, DPER and the respective Ministers. Then we will follow up with pubic hearings on this issue after Easter. The consequences of this issue are so grave for the roll out of the national development plan that this matter requires urgent attention and the collapse of Roadbridge has brought this matter into sharp focus.

I welcome the fact that the Limerick to Cork project has reached a period of specific route selection and TII is currently looking at the options of a tier 1 dual carriageway or motorway along the routes. We wish TII well with that work. Does TII anticipate that its deliberations will be completed by the end of this year?

Mr. Peter Walsh

Yes, although I might check with my colleague as to the date for when we expect to conclude.

Mr. Nigel O'Neill

We have public consultation starting on the preferred routes.

Mr. Nigel O'Neill

That period will happen over the next while and we will get the feedback from the public.

Is that the one with the landowners?

Mr. Nigel O'Neill

Yes. Design, including road cross-section and junctions, will be done this year and into 2023. Then we have to put together the business case and get through the public spending code's decision gate 1, and that will be towards the end of 2023.

Does TII anticipate that when that comes through it will go to An Bord Pleanála?

Mr. Nigel O'Neill

Decision gate 1 is a Government decision so if we get that-----

Then TII goes to An Bord Pleanála. Will that take a year to 18 months?

Mr. Nigel O'Neill

Yes or even longer.

That would go to 2024. All going well, the process would continue. Is it a two-year build?

Mr. Nigel O'Neill

I expect it to be longer.

Would it start in 2024?

Mr. Nigel O'Neill

I could not say 2024.

What about 2025?

Mr. Nigel O'Neill

Perhaps 2026.

Mr. O'Neill will appreciate that I am an advocate. I wish him well with the work as it continues. Closer to home, is there an update on the N69-N21 route between Limerick, Adare and Foynes? The bypass at Adare is with An Bord Pleanála. Is there any indication of when An Bord Pleanála will make that decision?

Mr. Nigel O'Neill

We recently got a notification from An Bord Pleanála that it will issue its decision at the end of May.

After that decision, what is the next step for TII to commence work on that route?

Mr. Nigel O'Neill

It would be to prepare contract documents and go through the next public spending code decision gate, which is permission to go to tender.

Does that go to the Department or to Cabinet?

Mr. Nigel O'Neill

The Cabinet.

What will the total value of the contract be?

Mr. Nigel O'Neill

I will have to get back to the Chair about that. I do not have the information here.

If it goes through An Bord Pleanála and Government makes a decision, does TII have resources to commence it?

Mr. Nigel O'Neill

It is within the profiling under the national development plan. It would fit within the €4 billion from 2026 to 2030.

So there would be no reason TII could not commence.

Mr. Nigel O'Neill

Not from a funding perspective.

Good. How long will the project take?

Mr. Nigel O'Neill

I expect construction would take between three and four years.

Mr. O'Neill will appreciate that the Ryder Cup is coming to Adare in 2027. That gives a lead-in period of about five years. I anticipate that Mr. O'Neill is aiming to have it completed prior to that date.

Mr. Nigel O'Neill

If someone wants to give us direction on that and other people want to align on that strategy, they would need to do so.

Mr. O'Neill is open to-----

Mr. Nigel O'Neill

I have nothing against the Ryder Cup, but many decisions need to be made by others outside TII.

We hope that Mr. O'Neill will visit Adare for the Ryder Cup.

Mr. Nigel O'Neill

I have visited and love it. It is a very nice place.

Page 7 refers to the N24 at Beary's Cross. It is a dangerous crossroad on the Tipperary Road. The scheme was confirmed by An Bord Pleanála and preparations for tender are being finalised. Does Mr. O'Neill have any idea of when it will go to tender and contractors will be in place?

Mr. Peter Walsh

We anticipate that it would be this year. It is difficult to say.

Does Mr. Walsh have any idea how long it would take to build?

Mr. Peter Walsh

I do not.

TII is looking to have documents go out this year, with a contract hopefully being in place at the end of this year.

Mr. Peter Walsh

Yes.

I have a question about the greenways programme, from University of Limerick to Montpelier, via Castleconnell and Limerick to Scariff and to Montpelier. They are currently at phase 0 of TII's project management guidelines. In layman's terms, where are those projects?

Mr. Nigel O'Neill

Montpelier is at the scope and feasibility stage, figuring out what the project might consist of.

That is under way. The N59 Newport village project delivered route options to be considered for the village enhancement scheme. I assume TII is awaiting the deliberations of Tipperary County Council.

Mr. Nigel O'Neill

I think the Chair is correct.

Is it with Tipperary County Council?

Mr. Nigel O'Neill

Will the Chair repeat the name of the project?

Newport village, in County Tipperary, in my constituency.

The Chair will top the poll.

One has to do what one has to do. The witnesses can send me a note on this.

Mr. Nigel O'Neill

There are too many places called Newport.

Mr. Peter Walsh

It is a problem for us.

Newport in County Tipperary is unique. It is a great village.

Mr. Nigel O'Neill

I found one in Mayo.

It is a great village with great people and I am glad to represent it.

I am from the part of Clare that is geographically close to Limerick. I tune in when the Chair starts to talk about these projects, because I travel on the roads too. I think there is a clear message to deliver before the Ryder Cup. TII is always welcome. We enjoy engaging with it at the committee. I raise the receivership of Roadbridge. There is a project close to me, the Limerick northern distributor road. It is not under the patronage of TII but is a local authority project. It straddles the county boundaries. It is in a state of flux. We do not know what will happen. I know the witnesses probably cannot comment on that project. Is TII concerned about Roadbridge-related projects that are at risk of falling apart altogether or that may not happen? Will they outline how this has impacted on their ambitions for 2022 and the next couple of years?

Mr. Peter Walsh

Roadbridge was the main contractor for two major projects in our programme. The N4 Collooney to Castlebaldwin was completed in July last year. We will not see any impact there. The second is the N5 Ballaghaderreen to Scramoge project. Work on that has stopped. Roscommon County Council and TII are working to see what the options are to ensure delivery of the project. No decision has been made. It is in the receivership process. It is not appropriate for me to comment on that. We will do whatever we can with Roscommon County Council to get that project up and running. No work is really done on site, so there are no complications over half-built structures or such. It is clean enough from our perspective. It is unfortunate, but there are no great complications.

I respect that Mr. Walsh cannot get into the details of this. A project is sadly under way and many people will lose jobs. I met some Roadbridge employees. It is a major employer in the mid-west. Workers are trying to bring back machinery from places as far away as the Scottish Highlands, where it had contract work. After we discuss its immediate needs, it is looking at redundancy and where it will position itself next. There has to be a discussion about how it got to this point. Its answer, which is perhaps applicable to all public capital work projects, is that costs were spiralling. The fuel costs on one project alone had increased by €5 million for a three or four-year build. It said this was unsustainable. It commits to rigid contracts, with penalties for being late and all sorts of overspends. One employee said that it is Roadbridge today and it will be another contractor next month. Given the inflation of aggregate costs of construction, material and fuel, have TII and the Department of Transport looked at this? Are they concerned that other contractors may fall in the same way that Roadbridge has?

Mr. Peter Walsh

We discussed it earlier. I feel I cannot comment on any concerns we might have. We see significant volatility in the prices of materials. What we are proposing to the committee today is that indexation within contracts would be helpful and would reflect either increases or decreases in prices, which may happen too. Asking contractors to tender for work with fixed prices and trying to include what they think will happen will either add to the inflation pressures or lead to unsustainably low contract values if the price change materialises.

I do not know whether I can usefully comment further than that. The Chairman talked about interaction with other elements-----

We will seek to bring in representatives of the Department of Transport.

That would be a good exercise.

Mr. Peter Walsh

We are certainly not suggesting the Department of Transport has not been sensitive. I acknowledge the Chairman was asking whether we have outlined our concerns. This is something very immediate. It has occurred over recent months that we are-----

Deputy Crowe and I are familiar with this. We have had representatives of Roadbridge before us as a committee and we know the people who work for the company. We know the subcontractors. They have brought this matter into stark, human terms. We as a committee will expedite the review of this. Changes will have to take place, or the three or four Irish contractors that remain in civil engineering and road building may not be around much longer, and that is a severe worry for us as parliamentarians.

The Chairman is absolutely correct. Although I accept the northern distributor road does not come under the patronage of TII, I could not wait for it to happen because there is a commuter benefit. Leaving that to one side, there is an area straddling the Clare-Limerick county boundary, Redgate in Caherdavin, which is well known to the Chairman. At the moment, three or four bungalows have been fenced off because they are wedged between a new build and the extension row build, and the owners do not know whether, for the next year, two years or three years, their homes will become a fenced-off piece of road with traffic cones all around them. This is happening in the Clare-Limerick area but it could happen in any other county, with the way trends in inflationary costs are going. I am glad TII has a developing thought process on this. It merits further discussion.

The N67 is a beautiful spinal route along the west coast of County Clare and the Wild Atlantic Way. Buses and tourists travel up and down it every day. Along the road, there is Rineen national school, west County Clare. It is the most beautiful setting for a school, with a lovely yard where the kids can play, but one of the most dangerous roads in the country passes in front of it. I have met the principal and visited the school. Clare County Council has brought forward some proposals to TII and the matter is in a state of flux. While I do not expect our guests to have the answer here today, they might revert to indicate what the agency will do about it. The issue relates to a form of traffic calming. A national road and a primary school do not sit well together, with tourism and a lot of other things happening in the area.

The Cork-Limerick motorway matters a great deal to all of us in the west of Ireland and it is great to see a bit of progress through a definitive route line emerging. The Chairman was pressing our guests on when this might happen. The worry is that the route is several years off yet. As I have seen in my county, when a new road is mooted, all focus and attention goes onto the new road route and other, ancillary stuff planned around it to make it safer may fall by the wayside. I am concerned about junctions such as O'Rourke's Cross, Banogue and all the way to Charleville. Many people in the west of Ireland traverse those communities on their way from Ennis and Limerick and down to Cork. I am concerned they might be left by the wayside now that a preferred route, a few fields over, has been decided. That needs to be on TII's agenda.

On the matter of road safety, the N18, the Limerick-Shannon-Ennis dual carriageway, becomes a motorway after Shannon. There have been a number of accidents, including two fatalities, in that Bunratty-Cratloe area since November. There is a lot going on there. A fast-moving carriageway bends on the road near Setrights Tavern in Crathloe. There is the Radisson hotel, a series of roundabouts and the Limerick tunnel. It is hectic. There is a need for some measures there, certainly on the exit ramps at Cratloe and perhaps at the roundabout at the Radisson, to control traffic somewhat. If I am not mistaken, the speed limit for coming into that roundabout, until recently at least, was 100 km/h. There was no graduated reduction from 80 km/h to 60 km/h coming into the roundabout; it was a full-on, 100 km/h, which is wrong and is in breach of guidelines. Again, our guests do not have to have all the answers here today, but they might take away my questions for further consideration.

Many new road builds have footpaths and cycleways alongside them. The design of roads has improved an awful lot, but I have continuously seen that when the infrastructure opens, the maintenance does not necessarily follow well. The cycleway will have thistles growing through it two or three years later. Maintenance does not always follow the works and the infrastructure starts to decay. I have seen good and bad examples in my county. An excellent contractor maintains the N18, but some of the ancillary stuff beside it is not so well maintained. The Scandi countries have started installing new cat’s eyes along the road whenever something new is being built. There is a small thermostat within the cat’s eye that lights up in blue when there is ice on the road, and it turns out this cat’s eye is the same price, when bought in bulk, as the standard cat’s eye that is used in Ireland. While our guests might not have the answer to this question either, they might examine the idea as a simple change, when new roads are being built, to install temperature-sensitive cat’s eyes in order that motorists will know if there is ice ahead and they need to slow down. Given other countries are doing it, it should be factored into our road design build in Ireland as well.

If our guests could send a note on some of the questions, that would be very helpful.

Mr. Peter Walsh

Yes, we will indeed.

I thank Mr. Walsh. They were all specific questions, so a note will suffice. The cat’s eye proposal is very simple. It is a design feature on which TII could form a position very quickly to support them being used on new build roads from here on. They have been transformational elsewhere. I have seen it myself in one country. I was driving by night, and as I reached a certain section of the road, I saw it was lit up with blue cat’s eyes. I knew in that moment that, irrespective of the speed limit, I had to make a decision to slow down and approach with caution. The cat’s eyes are the same price as our standard cat’s eyes. It is a simple change we should consider in Ireland.

I welcome Mr. Walsh and Mr. O'Neill. First and foremost, I compliment TII on all the work going on at the Dunkettle interchange. It is fantastic to see the level of progress and the project is really starting to come together. I travelled over the junction in recent days and over the past three or four months, and it is staggering to see how quickly it is moving along. I say "Well done" to Mr. Paul Moran and everyone working on the project.

Similarly, I compliment the work being done in Ballyvourney and Macroom. It will have a significant impact on travel between Kerry and the rest of the country. Particularly for people in our neck of the woods who travel in that direction, it will make a big difference, so I am delighted to see it happen.

Representatives of the Irish Road Haulage Association recently appeared before the committee and explained some of the main challenges road hauliers are facing. Fuel efficiency is, obviously, a considerable concern. Another issue that has been raised me - I think it is a fair point on which, I hope, we can make a bit of progress together - relates to barrier-free tolling for hauliers, whether eFlow tags can be given to them such that they will not have to stop at the port tunnel, or in general. We could do some work on that issue. I would greatly appreciate if TII could examine the issue to make the motorway system more efficient for lorries such that they will not be held up at barriers. I refer in particular to Dublin Port Tunnel, where it has been highlighted as an issue. Will our guests engage with Mr. Eugene Drennan and the Irish Road Haulage Association in regard to the issue?

Mr. Peter Walsh

On Dublin Port Tunnel, a fairly comprehensive response was recently given to the Committee of Public Accounts. There are two reasons for the barrier for heavy goods vehicles, HGVs, which are not charged the toll. One reason is operational, relating to the safety of the use of the tunnel. Boats that arrive in or discharge tend to do so in platoons of significant number.

It is important to be able to marshal the flow of heavy goods vehicles into the tunnel, and it gives that control. The second is that it is a significant toll. The toll there is unique in that it is to discourage vehicles other than HGVs and maintain the capacity for the HGVs because it is Ireland's first and last mile, as it were, in terms of connections with the rest of the world. For that reason it is a very significant toll at peak times. It can be €10 although I cannot remember the exact figure.

I am not underestimating the tunnel's safety aspect.

Mr. Peter Walsh

What can happen then, and this was contemplated from the start of the tolling arrangement there, is that if there are lanes that do not have barriers, one could have vehicles other than HGVs seeking to avail of the barrier-free lanes and that is not a circumstance we want to encourage. For operational and safety reasons, the tolling and barrier there are likely to remain. We are looking at the possibility of modernising it and that may have an effect, but I do not want to make promises.

On that issue, I know it is difficult and tunnel safety is extraordinarily complex. I know that from the Jack Lynch Tunnel and the training and everything that have to go into it. It is exceptionally difficult and people are not wholly aware of it. However, it would be great if TII would engage further with the road hauliers. I believe they have a few decent and valid points to make. It is great to hear that TII is looking at it. That is good. The witnesses are the experts so I will leave them to it.

My next question relates to the N73 Clogher Cross-Waterdyke scheme. We have had much discussion about this issue. From our last discussion it appears that this will be going to tender shortly. Has Mr. Walsh an update in that regard?

Mr. Peter Walsh

I will defer to Mr. O'Neill. He might have an update on it.

Mr. Nigel O'Neill

Yes, that is due to go to tender in the middle of this year.

Excellent. That is good to hear.

Mr. Nigel O'Neill

Tender documents are being prepared.

That is great news.

The next issue I wish to cover is one we have spoken about many times. It is very difficult to explain to people with regard to Burgess and the N25 issue I raised with TII regarding the installation of an island. Unfortunately, and this has been raised previously, there has been a fatal accident and I have stressed multiple times that there will be another very serious accident. The local gardaí are very concerned about a major multi-fatality accident taking place there. There is 100 kph traffic on a very fast section of the road. It is a big, open, wide road and it is the type of place where people would be likely to accelerate and use the full scope of the speed limit. There is a planning issue with the garage that is being resolved at present. Can Mr. Walsh give me an update on the public record? It is important that people know the current position. Many people feel it is not being raised. I have raised it with Mr. Walsh umpteen times, but could he put something on the public record to let people know the current position? Mr. Walsh has spoken to me about the redrawing of national road markings and said that TII will be undertaking work on that. Perhaps there is some scope with that.

Mr. Peter Walsh

In fairness to the Deputy, he has raised this a number of times. As I understand it, unless Mr. O'Neill has an update, the planning issue is not yet resolved. We must observe the deliberations of the planning authority in respect of developments of that nature, and we will react accordingly. We do not wish to interfere with that process.

We have discussed this previously. In Lemybrien in County Waterford and at the Dawn Meats plant in Waterford, there is a lot of work ongoing on the N25 on junction upgrades in terms of safety work. I know some of those areas have village status. To my knowledge, Kilmacthomas does not have village status on the N25, but the safety works are being done there. I am pleading with TII. I would nearly get down on my hands and knees here if I thought it would be of any use. It has to be done because the consequences could be devastating. There have been multiple incidents there through the years and some have been fatal, unfortunately. People in my community are very aware of it. I live less than a kilometre from that area as the crow flies and I really want to get it resolved. I ask Mr. Walsh to take that on board.

I wish to make a couple of brief points. The toll bridge at Watergrasshill is not in great condition. In fact, the automatic barriers for the eFlow section there, as I have heard from others and have experienced myself, are not as responsive as the ones on the Waterford bypass, for example. Perhaps that is something TII could examine. They are getting old and might be due for upgrades and replacement works. It would be great if TII would take a look at that.

In addition, I understand there is an update on the Mallow relief road. Can Mr. Walsh give an update on the current position with that? It is very important to Mallow town and for improving connectivity to the N73.

Mr. Peter Walsh

I believe we included an update on the Mallow relief road in the document the committee will have received. The emerging preferred route for the scheme was announced, with active travel being considered as part of the scheme. I do not have any more detail to hand. This is a project that Cork County Council was very keen to keep separate from any developments on the M20, and it is being developed as a separate project.

I will correspond with Mr. Walsh.

My last question is probably the most important one for Mr. Walsh and Mr. O'Neill. With regard to funding certainty, where is TII in terms of undertaking some of the items in the national development plan, NDP? Is it in a position where it can progress with some of the items that have been listed in the NDP? We are getting quite close to another budgetary cycle. We will be heading into the Dáil recess when things intensify. Do the witnesses wish to take the opportunity to outline where things are from a funding point of view and how much it will be seeking in next year's allocations to progress a number of projects?

Mr. Peter Walsh

I do not think anyone from the Department would thank me for canvassing for money at this committee. What we set out in the submission to this committee last year is pretty much what we are faced with. There is €1.1 billion for new road construction for the years 2021 to 2025 and €1.26 billion to €1.3 billion for protection and renewal in the same period. For that reason, we are significantly constrained with regard to any of the major projects other than the ones that are currently at construction. There is the possibility-----

How much is it? Is there any ballpark figure for how much extra? I am not trying to cause this figure but to give Mr. Walsh the opportunity-----

Mr. Peter Walsh

We have provided profiles to the Department of Transport.

Mr. Peter Walsh

It is fully aware of what can be progressed with the available money. It is fair to say that, outside possibly the Ardee bypass from the list of projects, we are not going to see another major project going to construction in the years to 2025.

I thank the witnesses.

I welcome Mr. Walsh and Mr. O'Neill back to the committee and thank them for the engagement they always show at the committee and for the responses from TII to questions we submit. I will address a number of local issues in Wicklow, if I may, and they are referenced in this report, the national development plan national roads capital programme and greenways delivery update. There are two projects ongoing on the M11. There is the N11/M11 upgrade or improvement scheme and the express bus way, on which I believe the National Transport Authority, NTA, and Wicklow County Council are working with TII. Can the witnesses provide an update on the current position of both of those projects, how they interact with each other and the likely progress, particularly on the express bus service?

Mr. Nigel O'Neill

Work is progressing on the bus priority measures. We are working collaboratively with the NTA on that. Wicklow County Council is the local authority doing the work and we are funding it. That bus priority project will fit within the N11/M11 junction 4 to junction 14 scheme, which is about retrofitting side roads, junction improvements and so forth. There is a legacy road layout on several of the sections there so it is about optimising that existing infrastructure.

I am sorry to interrupt Mr. O'Neill. Junction 4 to junction 14 is the geographical limit for that priority bus service as well.

Mr. Nigel O'Neill

I believe the bus priority measure is a shorter section within that. I cannot quite recall the exact junction numbers but it is a shorter section within that. We did not allocate funding this year for the overall project. That is under consideration at the moment. It is the bus priority measure with which we are progressing.

I suggest junction access and egress improvements should be a priority. We know about that. They need to be looked at. Mr. O'Neill is right; I think the last substantial work done on the road was in the 1990s. Much of it probably could be considered substandard in terms of some of the exits I use anyway. There is a very short run-off and run-in to them. I really think the junction improvements are important. There might also be some drainage issues out there, which are particularly important as well.

I would stress to Mr. O'Neill that the express bus service is a real priority and of real importance. To me, the N11 has sufficient capacity if we invest sufficiently in the public transport systems that run on it and the other one that runs parallel to it, which is the rail line. I really think the express bus investment and the rail line will lead to sufficient capacity on that road for those who choose to use the road or for those who do not feel they have sufficient access to public transport. I would stress to Mr. O'Neill that the express bus route needs to go back further than junction 8. It has been suggested that it only comes back to junction 8 at Kilmacanogue but it really has to go back further south past Newtownmountkennedy because that is where the congestion builds at the moment. Newtownmountkennedy is a town that has undergone significant growth. We really need to have proper reliable bus services there, not just in frequency but also in journey times. There is no point in people getting on a bus in the morning and hitting all that car congestion. We might have a bus with 60 or 70 people on it in the same position as a car with one person. I really think we need to prioritise the public transport element of it.

There seems to have been an increase in noise issues for residents in Kilmacanogue. The witnesses will be aware that a road safety improvement project on a parallel road at Kilmacanogue was recently completed and it is a good job. It seems to have created noise issues for residents in Kilmacanogue, however. I do not know if this is related to increased Rosslare Europort travel in heavy goods vehicles or the removal of the central median or the road surface but it seems to be significant. It is not just one or two residents; it seems to be many residents. Residents further back on the southbound lane at junction 6 are also complaining of increased noise levels. Can TII explain what the process is to retrospectively fit noise baffling or what are the noise mediation measures?

Mr. Peter Walsh

I think it is fair to say there is not one. We are conscious of noise being a matter of concern. We receive quite a bit of correspondence from a number of parts of the country, not least the M50 and M11. Noise mapping is something we have undertaken. The information has been made available to the local authorities, which are required to draft plans around how to deal with it. I am not aware of having received any output from those plans. We do not have a programme for retrofitting. I cannot, therefore, really offer any kind of comfort in terms of the manner in which we as a country are engaging with the implications of noise or how to mitigate it. We do have noise barriers as part of projects.

Is it generally new projects where TII builds a road?

Mr. Peter Walsh

Yes, indeed. They would have been part of environmental impact statement, EIS, and environmental impact assessment report, EIAR, requirements to mitigate for existing properties. Inevitably, however, development has extended well beyond any shelter or mitigation that would have been provided by those barriers. I do not doubt that there is a significant element of impact out there.

I might write to TII about these two particular locations where the noise level seems to have increased. I am saying it seems to have increased based on constituents contacting me. I stood out in one of their gardens recently and the noise was quite significant. It would really detract from the enjoyment of one's property. I suppose that is a consequence of car dependency and increased car numbers, however. It is the noise of the wheels. The friction on the road is the cause of it. That would be my suggestion anyway.

The Kilmacanogue greenway from Bray to Kilmacanogue is being constructed at the moment. TII's note said it goes to part 8 towards the end of this year. Is that funded by TII? Is it fully funded so that once the part 8 has passed, we will be good to go on that?

Mr. Nigel O'Neill

Yes, we are funding it and planning to progress it. Obviously, it is subject to approvals and so on. There will be business case approvals and such.

That is another important piece of infrastructure. When the N11 was constructed, it really severed Kilmacanogue from Bray. There is actually no really safe way for a pedestrian or cyclist to get from Kilmacanogue to Bray. The construction of that greenway plus the overbridge will really provide that opportunity, even for people to cycle safely to school. It gets people into the Bray cycle network as well so it is a really important part. That is great. I would like TII to take away my view that the express bus route needs to extend as far south as possible - I would suggest to Newtownmountkennedy. I thank Mr. Walsh and Mr. O'Neill.

I thank the Deputy very much. I will now go to non-members. Deputy Kerrane has roughly five minutes.

That is fine; I will not even need it. Some of this might be slightly repetitive so the witnesses might bear with me.

I live off the N5 Ballaghaderreen to Scramoge road. Obviously, the receivership of Roadbridge has come as a great blow to the area. I know from travelling up and down to Dublin how busy the route and the N5 road is. That road is also dangerous in a number of spots and stretches, particularly around Tulsk and Strokestown. A number of constituents have reached out to me in the last year and particularly in recent months about the condition of that road. Unfortunately, until now, it has been said that we are not doing anything with the N5 because the new road is coming, which I understand to some degree. Now, obviously, that is unfortunately going to be delayed. Given that the receivership is live, I appreciate there is not much the witnesses can say. With regard to that project specifically, what are the next steps? When might we expect to hear more regarding what is actually going to happen? What is the earliest this project could be under way or at least started again?

With regard to the lands that have been acquired under compulsory purchase order, CPO, I have been contacted by a number of landowners who have not been paid yet. Could TII shed any light on what this actually means for them?

Mr. Peter Walsh

To take those items in reverse, it will have no impact on the CPO payments. The commitment to the project is one that TII has made to Roscommon County Council and any consequential costs relating to land acquisition will be met. In my experience, if there is a delay around the payment of CPO, it has generally been around reaching final agreement on the sum. It is separate altogether from any construction aspect, however. In terms of when we might see construction recommencing, it is very difficult to speculate. It is a stretch of road we were very keen to have addressed. It had a challenge in that Rathcroghan, being the archaeological gem that it is, required a 35 km realignment. It could not be done in pieces. We had to take it in one chunk. We were very pleased to have gotten Government approval to allow the contract to go to construction. It is a frustration to all concerned to see it being held up in this case. Whereas my tendency would be to try to be as optimistic as possible, the reality is that if the receiver is unable to reinvigorate the business that was Roadbridge then we may well be looking at having to go out to tender again.

Going out to tender may produce a very different price, and producing a different price may change the business case, which may require Government approval. It would be wrong for me to make promises when a number of other hurdles we had previously cleared could be created. I do want to make promises that will turn out to be disappointing or to raise false expectations.

The commitment to the project from a TII perspective is undiminished. The circumstance is fairly clear in that no real work had started on sites, so we do not have half-built structures, half-built drainage runs or issues of that nature to complicate the matter. We have a developed design from the contractor that had tendered previously, which should help in understanding the project. I cannot really offer any comfort. It is a very unfortunate circumstance in which none of us wanted to be, and it is difficult to put a positive spin on it.

I very much appreciate that. If it is the case the project will have to be retendered, that will, obviously, lengthen the process and the delay. The issue for many people living along that stretch of road relates to the current standard of the road, not least in Frenchpark, which I have raised with TII's head of road safety and on which we have engaged a number of times. There is a very dangerous junction in Frenchpark along the N5 and there have been several accidents. We cannot keep count of the number of accidents that have occurred at that junction. Roscommon County Council has been asked by TII to carry out a feasibility study on the traffic lights, which is really welcome and I hope it will move along quickly. Up to now, it has been a case of not doing anything about the junction because the new road is coming. That has been what we have heard from the council, while TII has been very helpful. The agency pointed out the danger at the junction a long time ago and was willing all along to put up the funding for that safety measure, so I thank our guests for that. I have engaged with TII and its head of road safety on a number of occasions and found them very helpful. I appreciate Mr. Walsh's comments to the effect that the issue is very difficult.

Mr. Peter Walsh

Quite often, local authorities will be reluctant to get into major works on a road that is about to be bypassed because a lot of existing traffic would be discommoded by the work. If there is a prospect of waiting a relatively short period before the traffic can be diverted, we will maintain a commitment to the old road to allow funding of those works that we could not get to in time because of the traffic. We have done this in Moate, Kilbeggan and various other towns that were bypassed. I would expect that, in the current circumstances, there would be cause for a review to be carried out, but it is the Road Safety Authority’s decision as to when it wants to make an intervention. Nevertheless, we would be supportive of an earlier intervention.

We have discussed the issues of contracts and tendering, particular during this period of volatile costs, and even planning. The onus is on us to chase up on what our guests have put in front of us, which we will do very soon. That is an absolute necessity.

Our guests spoke about the Ardee bypass. Will they explain how it is the only show in town and outline the timelines? As is the case in regard to every other major planning application, there will be difficulties.

Mr. Peter Walsh

I might have a greater sensitivity towards the Ardee bypass given the way matters developed a couple of years ago. Issues were raised relating to the junction treatment from a very old design that had been through a planning process. We looked into it with Louth County Council, which concluded there was some validity in the issues raised by public representatives, as I acknowledge. That has been addressed, but a judicial review in respect of the screening for appropriate assessment is under way. Until such time as that has been cleared, the project cannot progress. The Deputy might recall that in the 2018 national development plan, NDP, green boxes placed a significant emphasis on some projects. The Ardee bypass was one of them and we have not forgotten about it. I emphasise we do appreciate this project achieved a level of political commitment some time ago, so we are not shying away from it.

Yes, and I appreciate the difficulty that will always be caused when a period of time passes. Certain people probably missed some of the design issues at the beginning.

Mr. Walsh made a fair point earlier when he referred to making whatever changes are necessary to make the planning process more streamlined, but there is a necessity for the judicial element to be resourced to the hilt. Forgetting about the rights and wrongs of it, the delays in making decisions are of no benefit to anybody. I am fairly sure Mr. Walsh's view has not changed-----

Mr. Peter Walsh

Correct.

-----so I will not seek further comment on that. Does he have any further information on the upgrading of the N2?

Mr. Peter Walsh

Is the Deputy asking in a general sense?

Yes, but I refer in particular to the part that relates to my area, where the road passes through Monaghan and so on.

Mr. Peter Walsh

There are a number of projects on the N2, one of which received funding at the beginning of the year, namely, the Ardee-Castleblayney project. We were not in a position to provide funding to extend it from Clontibret to the Border at the time. With the changes that have occurred regarding where money is needed now, not least the N5 between Ballaghaderreen and Scramoge, it allows us the opportunity to review that. That, along with the other five of the major projects we were not in a position to fund in planning and design at the end of last year, is under active consideration.

Is that the same kind of language the Minister for Transport used recently when he talked about a competitive process in respect of planning and an acceptance that sometimes matters do not work out, on the basis of which somebody else will benefit? I am not suggesting it was something he was happy with, although I did not get all the answers from him that I was looking for.

Mr. Peter Walsh

I would not like to characterise the advancement of some projects as being on the back of an unforeseen and unfortunate circumstance with regard to another project or a planning delay, but the reality is a certain amount of money is available and we will avail of it if we can.

Obviously, there are multiple necessary works and this work will involve upgrading, which is what a large number of people had supported. Otherwise, it would involve moving a significant portion of road, which would impact negatively on many communities. The sooner, the better, therefore.

I forgot to raise one issue in my contribution, namely, the Wicklow-to-Greystones coastal greenway. It was welcome to receive the €350,000 towards carrying out the environmental assessments that are required for that. It is a fantastic scenic location and the project will be a fantastic link if it can proceed on that entire east coast trail greenway we are looking to create all the way from Sutton through to Dublin city and down through Dún Laoghaire, north Bray, Greystones and Wicklow town. It has great potential, although the area is a highly ecologically sensitive environment, so the construction will have to be carried out to the highest standards of environmental protection. I hope there will be engagement with environmental NGOs that are based there, such as BirdWatch Ireland, which has a bird sanctuary nearby.

Some local residents have a lifetime of experience of dealing with the sensitivity of that site. I hope that will be taken into consideration during all assessments so that project can proceed in a manner that does not impact the environment there. I just wanted to make that point which I know TII will take on board.

Mr. Peter Walsh

The Deputy raised a point that is a matter of concern to TII in that by their nature greenways will be most advantageous in areas that are ecologically sensitive. We will require a degree of engagement, co-operation and common purpose with all the entities which have the knowledge and expertise that would allow mitigation measures to be developed within projects that would be suitable. Far from trying to avoid that, we would very much like to engage with it. We understand for a road scheme the safety of the vehicles using the road and their occupants is paramount. The geometry, construction and everything are dictated in that light. This is not true for a greenway in the same way. We are very open to a different level of priority for them, but we will need help because we have not done this before. I am not suggesting we are insensitive; I am just saying these projects are new to us and we will need all the help we can get.

One of the negative responses to greenways is that we often get a tarmac strip. I know it is standard for them to be 3 m or 5 m. Are we open to using materials that are more sympathetic to the environment? It does not necessarily need to be tarmac. They are not taking heavy-weight traffic. There may be high volumes, but they are not heavy weights. Where we have pinch points in sensitive locations can we have that flexibility so that it does not need to be 3 m at that point? We can pull it into 2 m and people need to be a bit more careful and courteous to each other as they meet.

Mr. Peter Walsh

I would certainly like to think that we can because apart from anything else we are facing a climate crisis where we need to reduce our carbon emissions and bituminous materials are very carbon hungry. We are definitely open to suggestions. One of the earliest engagements we had with greenways was through Fáilte Ireland which conducted market research which identified tourists as the most likely customers. They like to have surfaces that do not leave their bicycles caked with grit at the end of a cycle.

I do not think that is a good enough reason to go with a tarmac product. The point that Mr. Walsh raised there about a greenway just being a tourist attraction limits the use of what a greenway could be. For example, we are considering closing exits from the N11, we need to concentrate on improving the inter-town connectivity where people from those towns would have been coming out onto the N11, using it as a short hop commute and back again. Let us get the connectivity right.

Mr. Peter Walsh

The only reason I mentioned Fáilte Ireland was that at the time we were given the task of doing a tourist product, the Dublin to Galway greenway. The first thing we generally do is to seek to understand what the demand is. However, it is not possible to traffic-model a tourist product. It needs the expertise the tourism industry can provide and that is where that information came from. That was the one piece of information that I am aware of. We are open to learning as we bring these projects forward. If we give the impression of being closed-minded, the Deputy should not take that as an indication of what TII as an organisation hopes to do with greenways.

I thank Mr. Walsh. I would be happy to introduce him to those groups in the Wicklow and Greystones area who wish to engage on it with whoever the consultant might be.

Mr. Walsh is going to be busy.

Mr. Peter Walsh

It will be Wicklow County Council. We are working through the local authorities, a very important aspect of these projects.

I thank Mr. Walsh and Mr. O'Neill for attending today's meeting. We obviously all have projects in our individual constituencies. There is a serious macro problem with the public works contracts system. The committee will follow up with the Department and more particularly we will hold public hearings probably in the second week back after Easter. We will prioritise it. Obviously, the Department of Transport is the line Department and the Office of Public Works under the Department of Public Expenditure and Reform is also involved. Is that the only section in the Department of Public Expenditure and Reform that deals with this?

Mr. Peter Walsh

No, it is the Office of Government Procurement.

Sorry, the Office of Government Procurement. Within the Department of Public Expenditure and Reform, is the Office of Government Procurement the body that deals with it?

Mr. Peter Walsh

I believe so.

We will inquire. Should we engage with anyone else on public procurement contracts?

Mr. Peter Walsh

I do not know. Can Mr. O'Neill think of any other body?

Mr. Nigel O'Neill

We might reflect on that.

They might reflect on that and write back to us. We are doing work on it. I have seen it at first hand with what happened with Roadbridge. It had a phenomenal staff of 630. It is generally accepted that it did top-quality work. The staff had been there for many years. Many suppliers and subcontractors ended up in serious difficulty when Roadbridge entered receivership. Do they have any recourse to get paid outstanding moneys for work they have done under specific TII contracts?

Mr. Peter Walsh

I cannot comment on specific contracts. One is finished with the final account closed and no real significant work had started on site on the other. There are elements within the public works contract that address the circumstance of a subcontractor, but I am not sufficiently expert to comment on that.

We might be able to follow up on that matter because Roadbridge had a large number of subcontractors and suppliers who are now in serious difficulty as a result of the collapse of Roadbridge. It is in receivership and the company has ceased trading. I might follow up with Mr. Walsh regarding the contracts. He might write to us specifically on the issue of the enablers for delivery of the NDP and reform of the public works contract. We will do work on that probably during the second week after the Easter break because we see it as being that urgent.

I again thank Mr. Walsh and Mr. O'Neill from TII for attending and engaging with the committee today. We look forward to further engagement. They have always been very good at appearing before the committee. As public representatives, we have a role in the delivery of projects. That is the role of democracy. It is a good one when we see what is happening in Ukraine. President Zelenskyy's address to the Parliament today puts it in context. We might not always agree, but at least we get the opportunity to express our views and work collaboratively.

The joint committee adjourned at 4.39 p.m. until 1.30 p.m. on Wednesday, 27 April 2022.
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