I am very pleased to introduce the 2007 Revised Estimate for the Office of Public Works. The gross allocation for the OPW Vote will see a 21% increase on last year's allocation amounting to an unprecedented allocation of €637.622 million for the office. This level of funding again reflects the Government's firm support for the OPW and in particular, the implementation of the decentralisation programme. I welcome this commitment and the commitment provided in the recent National Development Plan 2007-2016 allocation of €2.4 billion to the Office of Public Works which will allow for key infrastructural developments for which the OPW will be responsible.
Our success in securing this inclusion in a seven-year plan means that we can now plan programmes and projects with greater certainty than ever before, because we know that there will not only be ongoing support but assurance of the availability of funding to deliver. The introduction of the national development plan; the reforms of procurement processes, which will provide fixed price contracts and professional fees; the enhanced project management skills of the OPW, and the new reporting requirements such as the annual output statement to be introduced today will bring greater certainty with regard to the planning, scheduling, timing and delivery of projects. Ultimately this will also ensure upfront clarity on costs, enhanced accountability with regard to the achievement of targets and goals, and better value for money.
As part of the reporting reforms, I am pleased to be able to provide the committee for the first time with a statement of annual outputs to be achieved with the allocation provided in 2007 under four main programmes of expenditure: property acquisition, maintenance and management, including the procurement of properties for decentralisation; new building works, payment of grants and the provision of accommodation for decentralisation; flood risk management; and heritage services.
Although the gross allocation for the OPW Vote for 2007 amounts to €638 million, this does not reflect the full range of activities of the office. In addition to expenditure on Vote 10, the OPW also acts as an agent and incurs expenditure on behalf of a range of other Departments and agencies. Funding for this expenditure is provided to the OPW by the sponsoring Department or agency and appears as a charge on the account of the client organisation. The cost of providing these services in 2006 was in excess of €130 million, the main areas of expenditure being major capital works, €60.6 million; maintenance works, €15.6 million; purchase of school sites and buildings, €13.8 million; leasing of accommodation, €10.1 million; Courts Service work, €14.8 million; and prison projects, €14.9 million.
Other major areas of activity not reflected in the Vote include the agency work of the Government Supplies Agency in placing €80 million in drawdown contracts for the procurement of printing, stationery, uniforms, advertising, energy and transport vehicles for other Departments and agencies in 2006. The architectural services certify the payment of sports grants for the Department of Arts, Sport and Tourism, with a capital value of €55.7 million in 2006. The project management services of the office provide specialist procurement and technical advice to the Government and Departments on major projects such as Campus Stadium Ireland, the new Lansdowne Road stadium, the national conference centre and the redevelopment of the Mountjoy Prison site. These do not appear as expenditure items on the Vote but provide a valuable contribution to the overall process.
Let us consider the four programmes as set out in the annual output statement. The first — property acquisition, maintenance and management, including decentralisation — has a gross budget of €203.8 million. The function of this programme is to continue to achieve best use of State property assets through a balance of ownership, leasing and disposal, and to maintain and upkeep the State property portfolio.
Some €35 million has been provided for site acquisition for the decentralisation programme to be progressed. Sites where legal formalities are expected to be concluded this year include those in Youghal, Waterford, Wexford, Drogheda, Newbridge, Mullingar, Enniscorthy, Donegal, Roscommon, Portlaoise, Listowel, Kilrush, Carrickmacross, Clifden, Ballina and Macroom. Site acquisitions will be advanced at a number of locations, including Portarlington, Roscrea, Fermoy, Athy, Arklow, Ballinasloe and Kanturk.
Temporary decentralised accommodation is being actively sought in 2007 at a number of locations. Locations where we expect advancement include Roscrea, Claremorris, Navan, Limerick, Wexford, Donegal, Athy, Carlow, Portlaoise, Clonakilty, Cavan and Tipperary town. On the decentralisation of my office to Trim, I am glad to say planning permission has been granted and the contractor will go on site shortly.
The OPW has responsibility for the purchase of Garda sites and, in conjunction with the Department of Justice, Equality and Law Reform, has identified a number of priority locations where sites are actively being sought, including those in Wexford, Dromad, Limerick, Swords and Portlaoise.
A sum of €124 million has been provided in 2007 for property portfolio tasks, such as lease renewals and rent reviews, which fall due to be settled within market benchmarks or rates. Rented accommodation affords the office the necessary flexibility to respond to urgent requirements for Departments while the OPW's reputation as a gilt-edged tenant allows it to secure optimum value for money.
A sum of €35.503 million has been provided in 2007 for property maintenance tasks, which tasks will be carried out to schedule. As an innovative measure, a pilot scheme of measured term contracts has been introduced in the east region for the delivery of maintenance services linked to measurable relevant performance indicators. The progress of the scheme will be carefully monitored and, if successful, it will be rolled out nationally.
Facilities management services are being delivered at Dublin Castle conference centre, Farmleigh, Áras an Uachtaráin and the Department of Education and Science in Marlborough Street.
In mentioning aspects of OPW's work not included in Vote 10, I refer to our major programme of disposal of surplus State assets. One of the Government's principal objectives for the OPW and one of my primary aims when taking this office was to transform underutilised State properties and turn them into realisable assets. The rationalisation and consolidation of office accommodation has resulted in the release and sale of surplus office accommodation in Dublin and, since the Government's decentralisation announcement in December 2003, the OPW has realised in excess of €362 million on the sale of properties.
Another element of the asset disposal process worth noting is the fact that sites at Infirmary Road, Inchicore, Harcourt Terrace and Broc House, which were identified as surplus to Government requirements, have been transferred for use under the Sustaining Progress affordable housing initiative. These four sites had an indicative value in the order of €71 million. Sites and buildings scheduled for disposal have been identified and a target of €50 million from the proceeds of these sales has been set for 2007.
The second programme — new works, payment of grants and decentralisation — has a gross budget of €297 million. The function of this programme is to deliver on the annual work programme and to respond to the accommodation provision needs of Departments, deliver on the decentralisation accommodation programme in line with priorities set out by the decentralisation implementation group, and carry out the payment of grants.
For the first time, framework contracts, under new conditions of engagement, for the provision of professional and technical services will be in place in 2007 throughout the office. This year will also see the introduction of the new forms of fixed-price contracts for major projects to be carried out by the OPW. This is a key reform and has been discussed at this forum in previous years. It should lead to greater price certainty and clarity of roles and accountability.
A sum of €135 million has been allocated for the provision of accommodation for decentralisation. I am pleased to say the decentralisation programme is progressing to plan and 2007 will see a major acceleration. It is anticipated that contracts to be placed in 2007 for the provision of accommodation will include Trim, Athlone, Killarney, Knock, Newcastle West, Clonakilty, the public private partnership projects for Carlow, Portlaoise and Mullingar, Wexford, Newbridge, Claremorris, Roscommon and Dungarvan. A number of projects will also be advanced during the year, including those in Cavan, Donegal, Drogheda, Fermoy, Kanturk, Youghal, Portarlington, Thomastown, Clifden, Tipperary town, Edenderry, Roscrea, Athy, Enniscorthy, Ballinasloe, Arklow and Waterford.
A sum of €141.35 million has been provided for project development and management. A number of individual projects and ongoing programmes will be managed in 2007, including the Garda station programme, estimated at €46 million. Garda projects scheduled to advance during this year include stations at Leixlip, Oranmore, Castlerea, Irishtown, Ballymun, works at Garda headquarters, the Forensic Science Laboratory and others.
An estimate of €45 million is provided for the office provision and rationalisation programme. Projects scheduled for advancement during the year are refurbishment projects for the Departments of Transport, Foreign Affairs, Justice, Equality and Law Reform and Social and Family Affairs. Also included are the Department of Finance, 7 to 9 Merrion Row, the Revenue Commissioners, the Department of Agriculture and Food offices at Backweston and the Assay Office. A sum of €5 million is estimated for the cultural institutions programme and €7 million is estimated for the universal access and health and safety programme.
The third programme in the output statement concerns flood risk management, which has a gross budget of €66 million. The function of this programme is as follows: to advise the Government on flood risk management and flood risk management policy; develop detailed programmes and measures to implement the recommendations of the report of the flood policy review group; deliver on flood risk management work programmes and projects; and maintain an effective programme of maintenance of river courses drained under the provisions of the Arterial Drainage Acts.
A budget of €32 million has been provided for the flood relief capital works programme in 2007. Major flood relief schemes will be advanced to construction stage at Clonmel, Ennis, Fermoy and Mallow during this year. Flood relief schemes will also be brought to statutory public exhibitions at Enniscorthy, Templemore and Tullow. A budget of €18.249 million is provided for the arterial drainage maintenance programme to maintain a scheduled programme of maintenance of river courses drained under the Arterial Drainage Acts.
The fourth and final programme, heritage services, has a gross budget of €54 million. Its function is to care for the conservation of heritage sites, deliver a premium visitor experience and promote education regarding the significant historic aspects of national heritage sites to visitors. Heritage services will continue to manage in excess of 700 sites catering for approximately 2.6 million visitors annually, and protect site fabric from deterioration and damage by a continuing programme of planned maintenance adopting best architectural and conservation principles. The OPW will manage and prioritise a works programme in conjunction with the Department of the Environment, Heritage and Local Government to include Castletown House, the site of the Battle of the Boyne, the Phoenix Park, St. Enda's in Rathfarnham, Durrow and Glasnevin Cemetery.
It might be useful at this point to draw attention to the centrality of contracts and procurement to the delivery of the OPW service. Most of our work is done by contract, which means that detailed specification, tendering, contract monitoring and performance evaluation are at the heart of our activities. The OPW is involved in placing thousands of contracts each year between construction, maintenance and supply contracts and property leases.
There is a detailed system of monitoring in place for major capital projects. The OPW and its clients are obliged to take steps to ensure that value for money is obtained and that controls are in place to ensure that projects are completed on time and within budget. This involves various steps, including pre-project appraisal and cost-benefit analysis, spot checking of progress, monthly reporting of expenditure, periodic reviews and detailed reports on completion by the OPW and its clients.
A major development the OPW has been fully implementing since the beginning of the year is a fixed price regime for major capital contracts which I referred to earlier and which will bring more price certainty and eliminate the scope for price variation and extras on major contracts in the future.
On the property side, the OPW is currently carrying out a value for money review of the property management service. In broad terms this analysis comprises a benchmarking of aspects of the property management service against similar aspects in a spectrum of organisations with similar services nationally and internationally. The range of organisations covers the State, semi-State and private sectors, providing a comprehensive tableau for credible and robust comparative rating of the OPW's property service. The type of measures and indicators arising from this qualitative study will better inform the range of output measures being developed by the OPW over the next few years and will provide a qualitative reference point to more standardised quantitative measures.
The OPW is also carrying out a value for money review of the office's flood relief programme. Preparatory work on this review has begun in the form of a qualitative study examining the approach taken to the planning and procurement of flood relief schemes. This analysis will examine alternative methods for the delivery of such schemes.
Further evidence of the high standards which obtain in the OPW is the fact that most business units within the office have not only achieved ISO accreditation but have retained this status following external audits. This highlights once again the quality and service-led ethos that exists in the organisation.
I assure members of this committee that the staff of the Office of Public Works and I will continue to advance its activities in all areas of responsibility entrusted to us by Government in a professional manner with a focus on governance, quality product, value for money and customer service. I will be happy to answer any questions that members of the committee wish to ask.