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National Development Plan

Dáil Éireann Debate, Thursday - 28 April 2022

Thursday, 28 April 2022

Questions (125)

Alan Dillon

Question:

125. Deputy Alan Dillon asked the Minister for Public Expenditure and Reform the measures his Department is undertaking to deal with construction inflation and the impact that this is having on State projects within the national development plan. [21461/22]

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Written answers

My Department monitors construction sector trends, including inflation, on an ongoing basis. Materials such as timber, structural steel and energy have increased significantly, as a result of pent-up demand following Covid-19 and the conflict between Russia and Ukraine.

These developments, if persisting for a prolonged period of time, would represent a risk to delivery of the ambitious public investment programme set out in the NDP.

In January the Office of Government Procurement introduced measures applying to new public works contracts. Under these arrangements the fixed price period is reduced to 24 months and mutual cost recovery is permitted within the fixed price period for material price changes in excess of 15%. The new arrangements also introduce indexation of the materials element of the tender sum from the point at which the tender is submitted to the award of the contract.   

These measures are intended to provide greater certainty to contractors to aid project delivery over the course of a contract.  

In addition to tracking inflation in the built environment, my Department is in constant communication with multiple stakeholders including CIF, SCSI, IBEC, etc. through the Construction Sector Group and its subgroups. 

While these are short-term actions, my Department is also pursuing medium-term policy initiatives to support resilience and sustainability in the sector. These include increasing the pipeline of apprenticeships and supporting policies to improve productivity. In this regard, my Department has established and funded the Build Digital project which will support enhanced innovation and  increased digital adoption across the Irish construction sector.

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