Dáil Éireann Debate, Wednesday - 17 April 2013
131. Deputy Patrick O'Donovan asked the Minister for Public Expenditure and Reform further to his reply of 20 February 2013 in relation to the Construction Contracts Bill, if he will consider the inclusion of a provision of project specific bank accounts as part of amendments which his Department are preparing; and if he will make a statement on the matter. [17947/13]
View answerAs noted in my replies of 20th February 2013 and also 27th February 2013 to PQs 9199/13 and 10194/13 tabled by Deputy O’Donovan, a range of security of payment options, including Project Bank Accounts were considered in the initial drafts of the Construction Contracts Bill and provision was made for devices such as bonds as part of the first draft of the Bill that was introduced to the Seanad by Senator Feargal Quinn. However such mechanisms were omitted from the current draft of the Bill in order to reduce the administrative and cost burden to the small businesses that make up a large proportion of our construction industry.
The key objective of the Construction Contracts Bill is to ensure that cash flows down the supply chain on all construction contracts. This is achieved by providing a statutory schedule of payments, prohibiting the use of ‘pay when paid’ clauses in construction contracts and, most importantly, it provides the means for subcontractors to enforce these rights; by suspending their labour and the provision of statutory adjudication. Given these provisions the requirement for security of payment reduces since the exposure of a subcontractor to non-payment is greatly reduced.
The Government Contracts Committee for Construction is currently reviewing the use of Project Bank Accounts in relation to the public works contracts and is expected to conclude that process shortly and report back to me on the matter.
