Dáil Éireann Debate, Thursday - 15 September 2022
98. Deputy Seán Canney asked the Minister for Rural and Community Development if she will increase the amount of funding available for the 2022 allocation under the rural regeneration development fund; if she will provide additional funding to projects that have already received a grant allocation due to the unprecedented increase in construction costs; and if she will make a statement on the matter. [44766/22]
View answer141. Deputy Seán Canney asked the Minister for Rural and Community Development if she will advance the necessary additional funding to bridge the gap between existing grants allocated through the Rural Regeneration Fund and the actual cost which is far higher due to the exceptional increase in the cost of construction; and if she will make a statement on the matter. [29033/22]
View answerI propose to take Questions Nos. 98 and 141 together.
The Rural Regeneration and Development Fund has to date approved funding of €279 million for 191 projects nationwide costing over €379 million.
Projects which emerge as successful from calls for applications to the Fund are initially approved for funding in principle and then progress through a further comprehensive approval process before final confirmation of funding is provided by my Department. At each stage of this approval process, the project is reviewed by my Department to ensure it continues to meet its stated objectives, including financial sustainability. This review includes an assessment by an independent quantity surveyor to ensure all costs and contingencies have been included by the lead party for the project.
In line with best practice project management, all applicants to the Fund are asked to put in place a contingency budget at a level appropriate for the type of project being undertaken.
While I recognise the challenges currently faced by capital projects in terms of rising construction costs, a carefully calculated contingency budget will meet many of these challenges. Notwithstanding this, it is open to project lead parties to make a case to the Department for additional funding if the cost of an approved project significantly increases once the procurement process has been completed and the final cost of the project is confirmed. Any such case must be supported by a detailed justification from the lead party setting out the reasons for the increased cost, detailing exactly where the additional costs arose. As the project would have been approved based upon the original budget, a full value for money review with an updated business plan must be provided by the lead party before any additional funding could be considered.
Support is also available in relation to the significant ongoing effects of construction inflation, including through the recent Inflation Co-Operation Framework announced by the Minister for Public Expenditure and Reform, and my Department is in close contact with lead parties in order to manage issues arising in that regard.
