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Seanad Éireann debate -
Tuesday, 6 Mar 2001

Vol. 165 No. 11

Adjournment Matter. - Roads Projects.

I apologise for being behind time and to the Minister of State for keeping him waiting. The system of tendering used by the National Roads Authority is flawed and unfair. It excludes many people in an unjust way from the process of tendering. I appreciate the NRA is a statutory body established by the Houses of the Oireachtas and that the Minister has very little function in its day to day operations. However, I ask the Minister for direction on a policy matter pertinent to his position. It is inappropriate for the National Roads Authority and, in most cases, impossible for contractors to deal with the tendering procedure in place. If allowed to continue, a cartel will develop, where only a limited number of large companies will be in a position to tender for projects under the national development plan during the next six years. This should be nipped in the bud. The Minister should intervene and give direction on the tendering process.

It is proposed to build a road from Longford to Strokestown in the Longford-Roscommon constituency, at a cost of approximately £12 million. To take on that project, a contractor must have completed a contract involving at least one third of the cost of that proposed road project. That means a contractor, who has not completed close to a £5 million contract for the National Road Authority or a public contract to that value, would be excluded from tendering for this project. That excludes most contractors, as £5 million contracts are not completed on an annual basis in that work on them would stretch over two or more years. All contractors in my region and other regions who have completed projects costing £2 million or £3 million would be excluded from tendering.

The contracts engineer indicated this is such a difficult job that this type of tendering procedure should be put in place. The original part of the work on this contract, which cost only £1 million, was through a bog and this proposed project is a continuation of that work through the same bog. Having regard to that, the argument put forward does not stand up.

Contractors would be able meet the other criteria stipulated. They must have a turnover of £30 million. That would not be a problem for any of the contractors. That criterion is appropriate, as we want people involved in major business to tender for these projects and to be able to see them through.

Another stipulation is the setting up of a cartel system, in respect of which the Minister should intervene, as it would not be in the public interest. If a case was brought to court on this matter, it would be found to be an inappropriate tendering process. A judicial review is taking place in respect of a case in Clare. If this stipulation were proceeded with, that avenue of exploration might also be followed in this case. We should not wait for that. That is the reason I raise this matter.

I investigated this tendering procedure as well as I could and raised it with the county engineer of Roscommon County Council. He stepped aside from it on the basis that the contracts engineer has included a paragraph stating that this project is a difficult job, but that would not stand up to a major investigation. This an attempt to run a closed shop in terms of tendering for major road contracts to the National Roads Authority. I could be more direct, but it might be inappropriate. If the Minister does not intervene in this matter, the courts will straighten out this matter at a later stage.

In the interests of natural justice and of people being in a position to tender for projects in this area, the Minister should have discussions with the National Roads Authority and investigate the terms it set down in the limited tendering process it is using in the case of such projects with a view to varying them and removing the stipulations put in place, as they are an impediment to the natural system of tendering and natural justice.

I thank Senator Finneran for raising this matter. My colleague, the Minister, Deputy Dempsey, is unable to be in the House this evening to respond to this matter and has asked me to do so on his behalf.

The Minister is satisfied the tendering procedure for major national road improvements is fair and competitive. There are a number of safeguards in place to ensure the efficiency and integrity of the tendering procedure for major national road improvements.

Under section 17 of the Roads Act, 1993, the National Roads Authority has overall responsibility for the planning and supervision of works for the construction and maintenance of national roads. The Minister for the Environment and Local Government appoints the members of the authority, is responsible for the payment of block grants to the authority and for certain broad policy matters. The Minister also has power under section 41 of the Act to issue directions, policy or other guidelines to the NRA on any of the functions assigned to it by or under the Act with which the NRA must comply. Any such directions or guidelines must be laid before the Houses of the Oireachtas and none has issued to date. Section 15 of the Roads Act, 1993, as referred to in the Adjournment matter tabled for discussion, does not cover the issue of directions to the NRA but relates to directions to local road authorities only.

The policy framework for the improvement of national roads is set out in the National Development Plan 2000-2006, together with the Community Support Framework and the Economic and Social Infrastructure Operational Programme. Within this framework, it is a matter for the NRA to prioritise and schedule individual road improvement projects and to progress them in co-operation with local authorities. The Minister has no function in the day to day administration and management of the work programme on national roads or in the allocation of funds for individual projects.

In addition, the roads investment programme is subject to ongoing monitoring at national level by the Department, which is represented on the NRA board and by the Comptroller and Auditor General. At European level, the NRA is subject to ongoing EU audit.

All National Roads Authority procurement, including that by local authorities acting on behalf of the authority, must be undertaken in compliance with stated Government policy and EU directives. In particular, EU Directive 93/37/EEC, the Works Directive, as amended by Directive 97/52/EC, governs the procurement of works over the 5 million euro threshold. Detailed instructions to tenderers are contained in CONDOC and use of these standard instructions is mandatory in all cases. In general, the standard form of construction contract used is the Institution of Engineers of Ireland's Conditions of Contract for Works of Civil Engineering, third edition, with Government amendments. For design and build contracts, the Government contracts committee has approved the use of amended Institute of Civil Engineers Design and Construct and Scottish Office Alternative Tendering Initiative Forms.

The NRA, in conjunction with local authorities, has introduced measures to speed up project delivery, including investment in planning and design, improved project management procedures and public-private partnerships delivery mechanisms. The PPP roads programme will require a new type of contract for the projects covered by it. This is at an advanced state of development within the NRA.

In view of the comprehensive arrangements in place to establish a policy framework within which the NRA must operate and oversee its operations, including procedures to ensure the tendering procedure for major road contracts is fair and competitive, the Minister is not satisfied that action is called for at this time under section 41 of the Roads Act, 1993.

The Seanad adjourned at 6 p.m. until 10.30 a.m. on Wednesday, 7 March 2001.

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