Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach díospóireacht -
Wednesday, 24 Nov 2021

National Development Plan Update: Minister for Public Esxpenditure and Reform

Vice Chairman

I welcome members and those viewers who may be watching our proceedings on Oireachtas TV. The purpose of today's meeting is to receive an update regarding the National Development Plan, NDP. We are joined today by the Minister for Public Expenditure and Reform, Deputy Michael McGrath, and his officials. The Minister will make some brief opening remarks and this will be followed by a question-and-answer session with members.

Members and all those in attendance have been asked to exercise personal responsibility in protecting themselves and others from the risk of contracting Covid-19. They are strongly advised to practice good hand hygiene and to leave at least one vacant seat between themselves and others attending the meeting. They should always maintain an appropriate level of social distance during and after the meeting. Masks, preferably of medical grade, should be worn at all times. I ask for full co-operation in this regard.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable. I remind members of the constitutional requirement that they must be physically present within the confines of the place in which the Parliament has chosen to sit, namely, Leinster House, in order to participate in public meetings. I now invite the Minister to make his opening remarks.

Minister for Public Expenditure and Reform (Deputy Michael McGrath)

I thank the committee for the opportunity to appear before it today. I am joined by departmental officials, Mr Ronnie Downes, assistant secretary, and Mr. Kevin Meaney, national investment office, both of whom are available in the event that committee members wish to ask them any questions.

Last month, along with the Taoiseach, the Tánaiste and the Minister for the Environment, Climate and Communications, and Transport, I launched the revised national development plan, NDP, the largest and greenest investment plan ever delivered in Ireland, with a particular focus on supporting the largest public housing programme in the history of the State. The NDP sets out a clear long-term strategy of planned investments of €165 billion for the coming decade to 2030. It is an ambitious plan, one which will provide the infrastructure needed to accommodate a growing population and the digital transition of our economy, and tackle the climate challenges that we face, as well as our housing requirements.

I welcome the opportunity to discuss the NDP with members of this committee. In my opening remarks, I will briefly emphasise the benefits and certainty that this NDP brings to our public investment priorities, while acknowledging uncertainties that inevitably exist in relation to such plans, and I will highlight measures being taken to improve value for money and governance, as well as the measures to support the construction industry and public sector to improve on delivery capabilities. It is important to note at this point that as Minister for Public Expenditure and Reform my role, and that of my Department, was to agree the overall capital and departmental allocations set out in the plan. It is the role of individual Ministers to determine how expenditure within their departmental allocation is distributed to their priorities, programmes and projects.

Achieving the high quality stock of infrastructure that we aspire to will require elevated and sustained investment over an extended period of time. The €10 billion allocated by this Government to capital expenditure for 2021 is the highest annual level in our State's history and this level of investment will continue to rise under the NDP, with €165 billion included out to 2030. Our investment target of 5% of GNI* is well above the recent EU average of 3%. This investment is producing results. Some 20 major projects are expected to be finished this year, including the recently opened N4 upgrade to Sligo and the north runway project at Dublin Airport. In recent days, we saw the completion of the runway reconstruction at Cork Airport. Looking at the education sector, an average of 150 to 200 school building projects will be delivered every year over the period 2021 to 2025. However, while the NDP provides a level of certainty, it is at its core a high-level financial and budgetary framework. The NDP sets out the broad direction for investment priorities over the coming decade. It is not, and does not aspire to be, a comprehensive list of every project that will be delivered over that period. In addition, external factors, some of which are unknown, can impact on our plans in any number of ways, be it through cost or time constraints. Given that this is a decade-long plan, we need to be flexible as to when and how projects are delivered. Effective management of the public investment portfolio requires such flexibility. It would not be wise to provide a false sense of certainty on exactly how projects will fare as they proceed through all the necessary approval processes. Projects which are further along the project lifecycle have more accurate cost and timeline estimates, and longer term projects will continue to be monitored and updated throughout the project management process.

While we cannot be certain of what will happen, we can learn from mistakes of the past, where inadequate scrutiny of projects led to failings and poor value for money. I have brought a particular focus to improving governance over our investments. First announced in the revised NDP, a new external assurance process, EAP, for major capital investment projects is commencing this month to provide independent project scrutiny at key decision stages. This EAP process is our pledge to restructure the oversight and implementation of capital projects to strengthen scrutiny of major public investment proposals. This additional scrutiny will highlight issues which can be resolved as they arise, which will drive improved project performance while balancing value for money in the public finances. To support the external assurance process, a new major projects advisory group has been established to further strengthen project management of public projects. External experts on the group are being appointed to complement the public service leadership currently in place. This brings Ireland in line with our international counterparts. Tracking ongoing projects more closely is also key and we will aim to update the capital tracker in a more timely fashion going forward. I will also shortly add up to five external members to the Project Ireland 2040 delivery board to bring additional expert knowledge, independent perspectives and an enhanced challenge function to the deliberations of the board.

As well as improved governance, a renewed emphasis on construction innovation is key to delivering high quality outputs. To assist in the timely and effective delivery of projects, the Government will continue to work collaboratively with the industry through the construction sector group and offer support as set out in the building innovation report. Earlier this month, I announced that a consortium led by TU Dublin was the winner of a €2.5 million grant to deliver the build digital project. This will support the construction industry to deliver future public projects to a higher standard using digital efficiencies. The capability of the public service to deliver the large-scale capital programme was also reviewed for the updated NDP. The resulting report sets out actions to support excellence and improve co-ordination among various bodies and the quality and coherence of guidance provided. A range of further measures to improve delivery include the development of the Office of Government Procurement commercial skills academy to enhance procurement and introduce further legal and planning reforms. I am aware that recent price increases in construction materials are having an impact on the delivery of certain public works projects. I have been working with my officials over the last while considering the optimum means to bring greater certainty with respect to future tenders in light of these cost increases.

In regard to future tenders, interim amendments to the provisions in the public works contracts will be introduced next month, which will, within certain parameters, reduce the level of risk of extraordinary price inflation that contractors will have to bear. These will address the period between tender submission and award through limited indexation of the tender price, and reduce the fixed price period to 24 months and permit mutual cost recovery within the fixed price period for material price changes in excess of 15%.

Overall this NDP will deliver increased levels of public investment across the country to support our Project Ireland 2040 ambitions. A particular focus has been placed on improving governance and supporting those involved in the delivery of these investments in the construction and public sector. I look forward to discussing the plan further with members of the committee today.

Vice Chairman

I thank the Minister and I call Deputy Mairéad Farrell.

Deputy Mairéad Farrell

There are many different areas to be covered so I will try to mix up the questions a little bit. My first question is in regard to the interest limitation rules. We know from the Finance Bill that the interest limitation rules will not apply to public private partnerships, PPPs. Interest rate manipulation on inter-company loans can be used as a mechanism for tax avoidance. We know that there are significant cost risks in the use of the PPP model of funding. Is the Minister concerned that their use as part of the NDP could mean a loss in tax revenue as well? The State would be spending more as a result of their use and, potentially, taking in less tax revenue. In effect, we would be burning the candle at both ends and we could soon find ourselves at the end of our wick.

Deputy John McGuinness took the Chair.

Deputy Mairéad Farrell

My second question in regard to PPPs and their in the NDP is with regard to the third level sector and its role in the NDP. I note that PPPs could play a part there. Although Irish universities have independent borrowing power and can often access funds at very competitive rates through the likes of the European Investment Bank, the newer technological universities and institutes of technology cannot and they have to rely on PPPs, the risks and costs of which are well known and well accepted. Prior to 2020, only two higher education projects had been delivered through the PPPs, namely, the National Maritime College of Ireland and the Cork School of Music, beginning in 2004 and 2007, respectively.

Their contracts will run until 2029 and 2032, respectively, with a combined cost of €406.6 million including annual PPP payments. Under the higher education PPP in 2021 the project in Grangegorman TUD has managed to eclipse this with a total value of €589 million. Eleven other projects related to technological universities and institutes of technology are currently out for PPP procurement in two bundles. Does the Minister believe this shows good fiscal prudence or good financial management?

Deputy Michael McGrath

I thank the Deputy for her question. The vast bulk of this NDP will be direct Exchequer capital and we will also be involving capital investment proposals by the commercial State sector. The vast bulk of the €165 billion, of the order of €136 billion, will be direct Exchequer capital that we provide every year as part of the annual budget. We now have agreed ceilings out to 2025. Every Minister and Department know exactly what they have so that they can plan the delivery pipeline of projects over the coming years. That is an important degree of certainty. It is also an important level of certainty for the industry.

The key measure for public private partnerships will be value for money. If public private partnerships offer value for money, it will be open to individual line Departments to consider using PPPs in certain instances. We have worked with line Departments, as the Deputy has acknowledged, in a number of instances where PPP bundles have been developed. The role of the National Development Finance Agency is particularly important in that regard and I get regular updates from that body on a range of PPP bundles. The Deputy has highlighted the third level sector, including the technological universities. As the Deputy knows, the old institutes of technology did not have the capacity to borrow; the new technological universities have the capacity to borrow. We expect that many of them will do so to develop student accommodation, for example, and to invest in their own capital infrastructure stock.

One area that will develop in the upcoming period relates to energy performance contracts where bodies across the public service will be involved in significant retrofitting initiatives, for example. We are examining what role we can play in supporting energy performance contracts as part of that process. In essence, PPPs are an option, but they are only an option where value for money on behalf of the taxpayer can be clearly demonstrated. That is the essential bar that we are setting for their use. The vast bulk of the funding provided under the NDP is direct Exchequer capital that we are providing every year to the line Departments.

Deputy Mairéad Farrell

We have had many debates on cost overruns on large capital projects. In other countries the procurement regime for large capital projects will often require the contractor to provide a bond, giving added security to the state in the event of a cost overrun. Has that option been considered here?

Deputy Michael McGrath

Strengthening the governance and the external assurance relating to individual projects has been a key part of the review of the national development plan and has been an important part of reforming the whole process. I know we have discussed it previously at this committee and in the House. With the introduction of a new external assurance framework, we now have a panel of external experts in place as a support for line Departments and two key decision points in respect of individual projects. In addition, in the next few days, following the completion of an open competitive process, I will appoint the members of the major projects advisory group. They will be there to support my Department at two key decision gates - in the consideration of the business case and then prior to giving the green light for going to tender.

In addition, we have embarked on a process through stateboards.ie to add five external members to the Project Ireland delivery board. As I said in my opening remarks, it is an effort to add some rigour, to add new perspectives and to add people who have experience in both the public and private sector in Ireland and abroad of delivering major capital investment projects.

We constantly review the public spending code to strengthen the provisions and to safeguard the interests of taxpayers. There was a major update of the public spending code in 2019 to deal with cost estimation, risk and so on. We are now reviewing it again because of the way in which the new NDP is aligned with the climate action plan and contains very strong methodology for the assessment of the climate impact of different projects that needs to be reflected in the public spending code.

Regarding material and other cost increases, my opening remarks touched on some practical changes we are now introducing which I brought to Cabinet yesterday and which will make a real difference to new contracts that have been entered into. It is very difficult for contractors at the moment to lock in a price for 30 months, which is the current minimum, and not be compensated for increases that are genuinely outside their control. There is a balance to be struck here. I need to protect the interests of the taxpayers, but I also need to ensure we can deliver on the NDP. That is why we are reducing the fixed price period from 30 months to 24 months.

We are including an indexation element in respect of the materials component of the tender price and also a cost adjustment mechanism for cost increases, but also for cost decreases, where the level of the increase or decrease exceeds 15%. This recognises that there are challenges at the moment because the difficulties contractors face in committing to a particular price have resulted in some delays. Some projects went out to tender where the contracting authority had to go down to the fourth, fifth or sixth lowest tenderer in order to successfully place it. That is a risk we need to avoid because if we do not fix this the ability to deliver the NDP will be put at risk.

Deputy Mairéad Farrell

The Minister has given us a lot of information. Specifically on that issue, would he consider the bond? I am aware of the new things he has brought in, including the two points where it is to be reviewed. I am interested specifically in the bond issue. Will he consider that?

The western rail corridor is very important to the people in my part of the world. As we are discussing the NDP, it would be remiss of me not to mention the western rail corridor when I have the Minister in front of me. There were no dates for commencement or completion nor was specific allocation made for this project. I ask the Minister to clarify the status of the western rail corridor.

Deputy Michael McGrath

There are a series of safeguards for taxpayers as part of the public spending code which was strengthened in 2019 and is now being reviewed again. There is no provision at the moment for the kind of bond situation the Deputy has referred to. We will need to consider what the impact would be on tender prices with contractors, and factor in the additional cost of putting in place a bond. Will it result in costs actually increasing? It is an issue that I will examine but at this point we are satisfied that we have put extra safeguards in place through the external assurance process and the strengthened governance process we have put in place.

Regarding the western rail corridor, as I said in my opening remarks, the NDP is not an exhaustive list of every capital project that will proceed over the next nine years out to 2030. The Department of Transport has an overall allocation of €35 billion over that period. When maintenance and the commitment to active travel are taken out, we are committed to a 2:1 ratio in respect of new investments in favour of public transport instead of road infrastructure.

The all-island strategic rail review has commenced and is being conducted in full co-operation with the Department for Infrastructure in Northern Ireland. We look forward to the conclusion of that.

Deputy Mick Barry

I wish the Minister a good afternoon. I wish to raise points about the national development plan as it relates to Cork. As the Minister knows, it is predicted that the city's population will increase by 115,000 people up to 2040. That is a 55% increase on the current number. That raises a broad range of issues, including that of public housing which I intend to make some points about.

The Docklands, which are now a very important point in the planning for Cork, are very much in the news this morning, so let us start there. A project for the Odlums Mills site has been announced. It is a €350 million development driven by O’Callaghan Properties. There are many aspects to it, but some of the key ones are three nine- to 12 -storey office buildings, 80 new apartments built to sell and a new private rehabilitation hospital. The development has been hailed this morning by the media, Government politicians, the chamber of commerce and others. I want to hold the horses for a moment and raise some questions about what the position is here. The apartments are to be built for sale. Perhaps the Minister has more information, but it is unclear from what I have seen whether the intention is to sell the 80 apartments to 80 new owner-occupiers or to one landlord, such as an investment firm of some kind, that will, in turn, rent them out. Either way, it is safe to say the people affected by another news story that hit the headlines in Cork last week are not going to get many of these 80 apartments. The story I refer to is about the housing assistance payment, HAP, tenants, or would-be HAP tenants, who last week found headlines in the newspapers about a situation they were well aware of themselves, namely, that there was only one property available in all of Cork city and county where the rent being charged was within the framework of the HAP scheme. Many of those would-be HAP tenants, as I and the Minister know from our respective clinics, are going to be forced to move out of the city. They will be forced to move out further and further and deeper and deeper into the county in the hope that they will find places with lower rents that fall within the framework of the HAP scheme. We can see here an outline of a variation - and it is a variation - of what has happened in Dublin. There we have had the gentrification of areas whereby people who can afford high rents move in and people are forced to move out of the city as a whole in search of lower rents. I put it to the Minister that in the context of a development plan, that is not the way we should be going. At the same time as this process is underway we see more and more office blocks soaring, potentially, towards the skyline. The three proposed nine- to 12 -story office buildings are not going to be the largest structures by any means. Nearby, on the outskirts of the Docklands, we have plans for the tallest building in all Ireland in the form of hotel accommodation. I have described this previously as a capitalist glory project, and I stand over that.

On the proposal for a new private hospital, we await more information but we know the hospital will be run by a French corporation called ORPEA. Last week, we read that there were 836 patients, most of them presumably living in the Cork area, who have been waiting more than 18 months for inpatient care in a Cork hospital for day care procedures and that there were 20,000 patients waiting more than 18 months for appointments. On the one hand, that is the picture for our public healthcare and, on the other, we see private healthcare provision striding forward, exemplified in this new development in Cork, which is just one such example. While I am on the subject, we had Government Deputies announcing to the Evening Echo at the start of October that the details about the new publicly owned Cork elective hospital would be available within a week. We are now coming towards the end of November and there is still no news. I am not sure whether the Minister is in a position to advise on whether we will get any news on that in 2021 but I put the ball into his court. Are those people on the waiting list going to be forced to wait until next year before we even have an announcement of the details of our new elective hospital?

I want to bring a few points together. The Docklands site represents a huge opportunity. First and foremost, it is in my book a new opportunity to tackle the housing crisis. There is splendid potential for the development of public housing, by which I mean genuinely affordable housing built at cost price in order that we cut out profiteering from it, and directly housing people from the social housing waiting lists. There are in the region of ten sites in the Docklands that are publicly owned. I will not list them; they are well-known. Without the State needing to take over any private lands, these sites would provide splendid potential for public housing on public land. Unfortunately, the plans for those public lands mirror, to a greater or lesser extent, the plans that have been announced at the Odlums Mills site overnight. Where, oh where, I ask the Minister, is the social and affordable housing in these plans. It is shunted to the sidelines. It is not a priority. It is pushed way down the list. Meanwhile, the question of private apartments, for which we can only imagine the rent that will be charged, office blocks that reach higher and higher towards the skyline, and now it seems private hospitals are all part of the agenda here. I do not see how the Minister can square that with the idea of a national development plan that prioritises the needs of the people of the country and the needs of the people of Cork. I mean the ordinary people, as opposed to a minority who have the money and the deep pockets to be able to go down this road.

I have raised some points there in a sharp fashion. There needs to be a debate on these issues and I look forward to the Minister's reply.

Deputy Michael McGrath

I thank the Deputy for his comments. I will make a few points in response. Cork City Council has proven itself one of the most progressive in the delivery of social housing across our city. I welcome that. We have a team of officials there doing an excellent job and sites under way across the city. They have significantly increased the delivery of social housing across Cork and that is to be welcomed. They are to the fore and will probably develop the first affordable housing scheme in the country, which is well advanced in the Deputy's constituency. That is to be welcomed.

There is great potential for the development of more social housing in the city centre, and that is where the role of the Land Development Agency comes in. It will deliver exclusively social and affordable housing in Cork city, working closely with Cork City Council. The agency has set up a delivery office in Cork.

I will not go into detail on the plans launched today because they will be the subject of a full planning application and consideration by the executive of Cork City Council as to whether they are consistent with the city development plan and so on. In principle, I welcome investment in our city and all parts of the country. It is the policy of Government and of Cork City Council that the docklands area be developed. We have provided more than €350 million in public funding under the urban regeneration and development fund. We need mixed-use developments in the area with offices and residential accommodation, including social, affordable, cost rental and private housing.

We have not seen the development of apartment schemes in Cork for a long time. The Elysian was the last major development of an apartment block in Cork city and that goes back to 2008-9. There has been a significant viability challenge and it remains to be seen what the composition is of the residential offering in the south docks plan launched earlier. I do not have that detail but, from the Government point of view, we are committed to increasing the development of social housing across Cork, including the city centre, and that is why we are providing funding for the enabling infrastructure to support such development.

I welcome the developments in the docklands areas in recent years. Horgan's Quay, Navigation Square and Albert Quay are areas that have been transformed. We cannot just develop offices; we need places for people to live as well. Cork City Council will take that into account, as will the Government in the plans we bring forward.

Getting more people working and living in the city means we have to invest in our public transport infrastructure. The Deputy will be familiar with the Cork metropolitan area transport strategy, CMATS. There is an outstanding opportunity for the delivery of that infrastructure because the funding envelope is in place and we have the Cork commuter rail strategy, which will benefit from European funding, and the BusConnects plan, which went out to public consultation recently. We are also seeing investment in a range of other infrastructure, including in arts and culture, with the Crawford Art Gallery, for example, and the development of the Dunkettle interchange under way. There are many more projects in the pipeline.

I and the Government want to see more social homes built in Cork city. I acknowledge the progress the city council has made and agree that the docklands is a suitable location for social, affordable, cost-rental and private housing. We would like a mix of tenures developed in that important and strategic location in our city centre.

Deputy Mick Barry

I thank the Minister for that reply. There is a debate kick-starting here. He referred to social and affordable housing in Cork city as a whole. That is a debate I am interested in having but will not drill down into today. I will focus on the issue of the docklands. Where is the social housing, the affordable housing and the plans for such housing in the numbers we need to talk about, given the housing emergency in the State?

The Minister referred to mixed-use developments in the docklands. I do not see too much mixed use here. The mixed use on this site is a private hospital, three office blocks and 80 apartments. If I were to ask the Minister whether he thinks the 80 apartments will be priced so that young people or working people on average or lower than average wages can afford them, I would await his answer with interest. I think if he went onto the streets of Cork and asked people for their prediction on that, they would have firm opinions on how that will play out. One could argue that is a mix comprising a hospital, office blocks and apartments, but it is not the mix we need. That is the essential point I am making.

The Minister says he is in favour of investment. I too am in favour of investment but the key investment we need in the greatest housing emergency in the history of the State is public investment in public housing that is genuinely affordable and social housing to take people off the lists. We have a marvellous opportunity in Cork docklands where a series of publicly owned sites could be used for public housing on public land and the price of the land could be set by the State. It could provide the land free of charge and reduce the price of those houses. Instead, the planned developments on the public land mirror, to a greater or lesser extent though they are not exactly the same, what we saw on this site in the news this morning. In general, it will be big gleaming office blocks reaching towards the sky and nowhere near enough social and affordable housing.

It points towards a form of gentrification. It is a point the Minister did not address in his reply and might comment on when he comes back in. Low-income households in the city of Cork, particularly young people and young couples, who are being forced out of the city and further and further into the county in search of cheaper accommodation and rent they can afford or which is within the framework of HAP. The people who will move into many of the docklands developments are more affluent and can afford expensive new apartments. One group is forced in one direction, another comes in from another direction and a form of gentrification takes place. It is not the way we should go in our city or with our national development plan.

I asked another question, which was not just a rhetorical flourish on my part. The Minister is smiling. I was going to say it is because he knows he dodged it but he did not quite.

It had to do with the Cork elective hospital. There is clearly frustration among the Sláintecare officials. There were resignations relatively recently and this issue was part of the mix. However, the Minister and I know that their frustration is as nothing compared to the frustration felt by the large number of people on our hospital waiting lists who have shown tremendous patience but whose patience is running out. Why would it not be when some of them are not just in discomfort, but actual pain? The Cork elective hospital is dangled in front of people - "it is coming, it will be next week, it will be next week, it will be next week". Government Deputies stated at the start of October that it would be announced within a week. Are we going to hear something about it this year or will an announcement be put back to next year?

Deputy Michael McGrath

I assure the Deputy that I have no interest in gentrification, as he called it. I know full well the value of public housing. I grew up on a local authority housing estate and I know the value of the State's investment in council housing, public housing or social housing, call it what we may. It is a priority for the Government to provide homes for our people. My primary job in the office that I have the privilege of holding is to prioritise housing and the allocation of funding. By any yardstick, we have done that. In the national development plan, the direct Exchequer capital envelope, which is the money used to build housing, is increasing from approximately €2.76 billion this year to €3.4 billion next year. There are other sources of capital, including Land Development Agency, LDA, funding from the Ireland Strategic Investment Fund, ISIF, and so on that will complement that. This is a clear demonstration of the Government's commitment.

I want to see our public bodies - local authorities, approved housing bodies, AHBs, and the LDA - bringing forward proposals to develop public housing, affordable housing and cost rental. The money is in place to do that and there is Government support. We are seeing some local authorities performing better than others. We need to see delivery now because there is a window of opportunity and Government support is available.

Regarding apartment developments, we have to acknowledge that there has been an issue around the viability of building apartments for sale to end users in Cork and elsewhere around the country. It is no accident that even the private sector has not built apartments in Cork for the past 12 years or so. If such developments were viable and there was loads of money to be made, we would have seen thousands of apartments being developed, but we did not because it is not viable. Apartments are expensive to build and the funding costs have to be carried right the way through until they are sold. I want to see apartments being built for sale to young couples and individuals in Cork and all over the country. That is not entirely within the Government's control but we will see increased investment from our public bodies and Part V delivery of social and affordable units in respect of new applications. In the Housing for All strategy, we have included a fund of up to €500 million over the next number of years. This is the Croí Cónaithe fund, which is meant to help bring about the development of apartments in our cities for our people to occupy, buy or rent and for the State to get a share of those units. There is a viability challenge, though, and there is no point in us denying it.

The elective hospital is a project to which we are committed. It is at the very final stages of consideration and I expect it will be going to the Cabinet in the coming weeks. I cannot give the Deputy an exact date. It will be brought to us by the Minister for Health, Deputy Stephen Donnelly. The project is being prioritised by the Department of Health and the HSE. There has been extensive consultation. I agree with the Deputy that a decision is needed now. Not everyone will be happy with it, by the way. Wherever we decide to put the elective hospital in Cork, there will be opposition to it, including from within the medical community. We must be honest enough to recognise that. However, the Government will make a decision and we will proceed to get the new elective hospital built because that will reduce pressure on the existing acute hospitals. We look forward to the Deputy's support when we make that decision. I expect it will be very shortly.

Deputy Mick Barry

Will it be before Christmas?

Deputy Michael McGrath

That is up to the Minister, Deputy Stephen Donnelly, but it is a live issue and I expect it to be done in the coming weeks. That is my hope but I cannot give the Deputy an absolute guarantee.

Deputy Pearse Doherty

I appreciate members' questions. Some of the questions I had been thinking about raising have already been asked.

I will start by focusing on value for money in the national development plan. It is one matter to allocate money to projects but the Minister's role is to ensure value for money. How much will the national broadband plan cost us now?

Deputy Michael McGrath

There is no change in the overall cost of the broadband plan. The project is being led by the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan, and his Department. The essential role that I have in the NDP is to provide the funding. It is a high-level document. The national broadband plan is managed out of that Department. If the Deputy bears with me, I have with me some information on it. He may already be aware of it. The final estimates for the cost to build, which I believe was the Deputy's question, and the associated likely upper levels of cost to the State were arrived at following the submission of a final tender in 2018 by the remaining bidder in the process. However, draft bids had been received previously from two bidders, each of which showed a higher cost than that presented at final tender stage. This landed on the overall capped subsidy of €2.1 billion with a contingency of €480 million. It is only during the construction stage, which commenced early last year, that the actual cost becomes known and any underrun or overrun arises. I am told that, to date, the project has largely been within the initial budget presented at final tender stage. However, the build is only in year 2 of a seven-year build and the overall outcome will not be known until the build is complete. The Department of the Environment, Climate and Communications receives monthly, quarterly and annual updates from National Broadband Ireland of actual returns versus those forecast. This is the information that I have from the Department.

Deputy Pearse Doherty

The upper amount that the State could be hit for in the plan's roll-out is just shy of €2.6 billion. Is that correct? There is no likelihood that it will go above that.

Deputy Michael McGrath

The information I have is that the overall capped subsidy is €2.1 billion with a contingency of €480 million. As with any contract, there may be provisions for cost increases in claims but they would have to be adjudicated as part of a process. I am not in a position to give the Deputy an absolute guarantee as to what the final figure will be but that is what the capped subsidy is. It would require an examination of the detailed provisions of the contract to see whether there was any possibility of the cost going above that.

Deputy Pearse Doherty

Has the State received any claim so far?

Deputy Michael McGrath

I am not aware of any but it would not come to me. Instead, it would come to the Department of the Environment, Climate and Communications. If additional funding was required within any given year above and beyond the capital allocation, that is when it would come to us in the Department of Public Expenditure and Reform. I am not aware of any additional unforeseen cost in respect of the broadband plan at this point in time but I will double check, and if I am incorrect, I will let the Deputy know.

Deputy Pearse Doherty

How much will the national children's hospital cost us?

Deputy Michael McGrath

This is a project that is being managed by the National Paediatric Hospital Development Board, NPHDB, and the HSE. The Minister, Deputy Stephen Donnelly, brought an update on the project to the Government recently. The difficulties in the project are well documented. It is important to say that the State is enforcing the existing contract that we have in place. The contractor, BAM, has lodged a large number of cost increase claims. I understand that just under 900 substantiated claims with a claimed value in the order of €540 million have been lodged.

However, it should be noted that these are the value of claims made by the contractor. Those have not been agreed or approved. They are considered by the hospital development board to be overinflated and include costs that are already part of other claims.

To give a sense of the process, over 700 of these claims have already been determined by the employer's representative at a value of €15 million compared with a claimed value of approximately €420 million. However, 650 of these claims have been disputed by the contractor and have been referred to the dispute management process under the contract. There is a process under way. Where the State believes that claims made by the contractor are unjustified, they are rigorously contested. That process is well under way at this point.

Deputy Pearse Doherty

We have claims that are being disputed in relation to the cost of the claim and maybe even the claim itself. Beyond that, how much does the Department estimate the national children's hospital will cost at this point in time? We understand the cost could increase if claims are adjudicated in favour of the contractor. What is the estimated cost?

Deputy Michael McGrath

The published figure remains unchanged, at €1.433 billion. The Deputy is aware of the difficulties that have undoubtedly arisen with the contract as well as the delays. This has been a source of frustration because we want this hospital built. It is badly needed for the children of this country.

As of now, there is not a revised figure. There are figures for claims that have been submitted. I have given the Deputy some information on those and provided some context for them but the claims are not the same as representing an increase in the cost of delivering the project because they are being contested. In line with the contract that is in place, there is a process that has to be followed in relation to consideration and adjudication of all of these claims. It would be wrong and, indeed, unwise for me to put a figure on the record. I do not have one in any event because there is no estimate of what might be the outcome of the consideration of all those claims. If I were to put out a figure, it would become a target and be viewed as the floor in terms of any change in the cost. As of now, there is no change in the cost and €1.433 billion is the agreed published figure. There is significant cost increases in claims that are going through the system and those will have to be worked out over a period. Where the State believes these are unwarranted and cannot be justified, it is defending its position. This will take some time to work its way through the system.

Deputy Pearse Doherty

Of the €1.43 billion that is the published cost for the national children's hospital, there are 900 claims, as the Minister said. Some of these have been accepted as valid claims, perhaps at a reduced level. Is there no estimate in the Department of what the new figure will be? How convinced is the Minister that the project will not breach the €2 billion mark?

Deputy Michael McGrath

On the adjudication of claims, as I said, over 700 claims have been determined by the employer's representative at a value of €15 million. That figure is immaterial in the overall context. The vast majority of claims have not been accepted. The €15 million, for example, compares with a claimed value of approximately €420 million. The contractor has referred 650 cost increases in claims to the dispute management process under the contract. Expressing a level of confidence or otherwise as to where the final ultimate figure will land is not a road I can or should go down because it would be used by the contractor to leverage additional resources. In any event, there is no up-to-date overall estimate at this point in time.

Deputy Pearse Doherty

As the Minister for Public Expenditure and Reform, the Minister is the person the State empowers to ensure value for money in this project. Is the Minister confident that this project will not breach the €2 billion mark, which is in excess of €500 million higher than the published figure? Can he give that assurance? That is a simply question.

Deputy Michael McGrath

I am not sure if the Deputy is including the satellite centres, equipment costs and so on in that figure. We must be very careful in our use of language and figures, as I know the Deputy is. He has asked me to give an estimate of where the cost figure will land. I am not prepared to go there because I do not have such an estimate. The agreed figure is €1.433 billion. That is the contract price. There is an ongoing process whereby the contractor is submitting cost increases in claims. Those are being contested, by and large, by the National Paediatric Hospital Development Board and they will go through a process. We are some distance off arriving at what is a final estimate of delivering the children's hospital. I am not going to give an guesstimate. That is not the way we should do business.

Deputy Pearse Doherty

I agree with the Minister that he should not guess. The fact that he has said we were some distance off arriving at a final estimate is appalling. We are talking about billions of euro. It is shocking and damning that the Minister and his Department do not have an estimated cost at this point for the cost of the national children's hospital. He mentioned the published figure of €1.4 billion but acknowledged that it will increase. I am not asking him to land on a figure but to give assurances to the public and this committee that he believes the final cost will not go beyond a figure of €2 billion. The fact that he cannot say that shows we do not have a process in place to manage capital projects. This leads me to the bigger question of how Fianna Fáil and Fine Gael can be trusted with taxpayers' money.

We talked about the national broadband plan, which is running at a cost of €2.1 billion, with a contingency cost of €2.6 billion. That project was originally costed at €500 million. The national children's hospital, the cost of which the Minister is unable to confirm will not exceed €2 billion, was originally costed at €790 million. Yet the Minister and the Minister for Finance, Deputy Paschal Donohoe, are refusing to sign off on a 100% redress scheme for homes that are crumbling in counties Donegal and Mayo and elsewhere. How can we hold the Minister to account for ensuring value for money when he refuses to give an estimate as to where the cost of this project will land? Is it the case that the Minister with responsibility for ensuring value for money does not have a clue what will be the ultimate cost or estimate of the national children's hospital at this point in time?

Deputy Michael McGrath

What the Deputy is asking me to do would play into the hands of the contractor and I am not going to do that. We have a contract. The State is enforcing that contract. We are standing behind the public works contract, which will be enforced and implemented. We have an agreed contract price. There are provisions whereby cost increases in claims can be assessed and that is exactly what is happening. I am not going to give a figure that would play into the hands of anyone. This contract is being rigorously managed. It is a contract that this Government did not enter into, likewise the national broadband plan, but these are contracts that we will manage. I am satisfied that the hospital development board and the HSE are doing everything within their power to limit the costs while also ensuring the project is delivered because we all know the pressure existing hospitals are under providing paediatric care.

The Deputy touched on the issue of mica and drew a parallel. He should not make any assumptions. The Government will make a decision very shortly - I expect it as soon as next week - to address that issue. We have given really careful consideration to the matter because we know how life-changing living with mica continues to be for individuals and families in the county the Deputy represents and in a number of other counties.

Deputy Pearse Doherty

Let me ask a question on the national children's hospital. Forget about making an announcement to the committee. To tell the truth, this committee is supposed to hold the Minister to account and we are not discussing State secrets. Does the Department have an estimate of what is the likely cost of the national children's hospital?

Deputy Michael McGrath

This is a project that is being managed by the hospital development board, the HSE and the Department of Health. They have responsibility for the day-to-day management of the project. Our essential role is to provide annual capital resources for the implementation of the public capital programme within their areas. At this point in time, we have not been given a revised estimated cost for the delivery of the children's hospital.

We have, though, been given all the information we need now to be assured this process is being properly and rigorously managed to minimise the costs for the Exchequer and to ensure the hospital is delivered as quickly as possible.

Deputy Pearse Doherty

It was reported that 45,000 premises included in the NBP have already been connected through Eir's network, and that the duplication has cost taxpayers €245 million. Is that accurate?

Deputy Michael McGrath

That is not a level of information I would have. It is a more appropriate question for the Minister for the Environment, Climate and Communications, Deputy Ryan, and his Department. I can seek an answer to that question, but it is not information I have available to provide to the Deputy today.

Deputy Pearse Doherty

The Minister holds the portfolio of Public Expenditure and Reform.

Chairman

Deputy Doherty-----

Deputy Pearse Doherty

His Department is supposed to road test these projects to ensure we are getting value for money. If we are wasting €245 million on a part of the NBP for connections that already exist, then surely he should be aware of this situation.

Chairman

Before the Minister answers, I just want to bring to the committee's attention that we were due to conclude this portion of our meeting and go into private session at 4 o’clock. Senator Higgins has indicated she wishes to contribute, and I also have a question for the Minister. Therefore, I would like, by agreement, to extend this section of the meeting by 15 minutes and then meet in private session for 15 minutes. Is that agreed? Agreed. In this context, I ask Deputy Doherty to consider leaving some time for me and Senator Higgins.

Deputy Pearse Doherty

Okay. Let me just put three questions to the Minister, if that is okay, and then allow him to respond as quickly as possible. I have previously raised my concerns regarding the role of the Minister’s Department in managing State projects. That topic has also been flagged by the Irish Fiscal Advisory Council, IFAC, recently in respect of the national children’s hospital, the national broadband plan, etc. There are many examples of poor planning and execution and governance failures. The Minister will be aware the International Monetary Fund, IMF, carried out a review in 2017 and made several recommendations. Will the Minister tell me how many of these three specific recommendations have been implemented? I hope it is all of them. I refer to the development of "a central register of infrastructure assets" to include the management of assets and the maintenance funding; encouraging the Comptroller and Auditor General "to carry out performance audits of major investment projects"; and the preparation of "a biennial summary of government-wide lessons from the reviews of the 10 largest projects completed". The IMF called on the Minister’s Department to do that four years ago. Have those recommendations been implemented and, if not, why not?

Turning to the Dublin MetroLink project, no cost and no completion date have been provided for that project. Therefore, will the Minister tell the committee, or perhaps he will say this is also going to play into the hands of the developers or some excuse like that, the estimated completion date for this project? We have already spent €70 million on it from 2018 and October 2021, despite construction having yet to commence. Will the Minister outline to the committee the scale of that investment?

Following on from Deputy Mairéad Farrell’s comments regarding rail infrastructure, there is no provision within the national development plan to extend a rail line to Donegal. I see these promoted tweets coming up on my timeline all the time asking people to book the train and to use the rail network. Such promotions are running on the back of Dublin Bus vehicles as well. As I said, though, the last time a train ran to Letterkenny, or anywhere in Donegal, was when my mother was a teenager in the 1960s. What are the plans in this regard? Have reviews been carried out? A strategic rail review is taking place on an all-island basis. A company was allocated that contract in July and it is likely to report next year. Has the Government made any commitments to examine the situation in the counties in this State without an inch of rail network? Those include Donegal, Cavan and Monaghan. I refer in particular to direct access to the capital.

The Minister touched on this last aspect in respect of mica. There is no provision in the national development plan regarding the costs associated with addressing the mica issue. The Minister voted for the provision of 100% redress in this regard and to ensure no home would be left behind in this context. Will he confirm he still holds that position?

Deputy Michael McGrath

I thank the Deputy for those questions and I will do my best to get through them. Regarding the specific recommendations from the IMF which were referred to, those have been or are being implemented. The recommendation currently being implemented concerns the asset register. The other recommendations have already been implemented.

Turning to MetroLink, the next significant step in that project is for a preliminary business case to be submitted to my Department. One has been submitted in respect of DART+ and one is awaited for MetroLink. We will then be able to see the commencement of the statutory planning phase for the project. The reason the Minister for Transport, Deputy Ryan, did not put a particular year next to that project for completion is because there is a degree of uncertainty about how long the planning process will take. He is anxious, however, to have the project progressed as quickly as possible. Once that business case comes into my Department, we will deal with it as quickly as possible. We will, of course, check it through the lens of the public spending code and all the capital appraisal requirements with which we must comply.

Moving to the question regarding rail and Donegal, as the Deputy acknowledged, an all-island strategic rail review is under way. It will be completed next year and we will await that outcome. I reiterate that there is also an overall 2:1 ratio of new investment in public transport relative to new investment in roads. That will also create many funding opportunities for public transport in the next decade.

On the mica issue, the people affected want a decision made. From their perspective, they want the right decision, but they want a decision and they want to know the Government’s plan. I have been involved in several discussions, as would be expected, regarding the details of this scheme. My understanding is the Minister for Housing, Local Government and Heritage, Deputy O’Brien, intends to bring a proposal to the Cabinet as soon as next week, so we will have an answer then.

Senator Alice-Mary Higgins

I have three or possibly four sets of questions. Starting with the overall common goal of achieving quality in the projects and output we get from our public expenditure, I could take over from where Deputy Doherty left off regarding the national children’s hospital. I want to go a little beyond that project, however, and look at one of the core concerns regarding the context of how that project was set up and how we can avoid similar mistakes with other projects in the national development plan. On the specific issue of lowest cost bidding versus a price:quality ratio, the Minister will be aware I brought forward legislation that has passed Second Stage and is awaiting consideration on Committee Stage. It is focused on making the best price:quality ratio the default means of procurement assessment, for large-scale public expenditure projects in particular. I refer to those projects costing more than the €5 million threshold set by the EU for public works. My legislation proposes that such projects should have quality as the criterion which counts for a minimum of 50% in assessment.

The Minister will be aware the contract for the national children’s hospital was awarded based 75% on price and only 25% on quality. It is perhaps one of the clearest examples of what happens when that approach is taken, namely, that we see many supplementary claims emerging later. We have discussed the issue of such claims in this committee previously, and the Minister and Deputy Doherty have gone back and forth on the matter. Is the Minister planning to ensure a best price:quality ratio criterion will be used and that the standard will be set at a minimum of 50% quality, at least, and it should probably be higher, on all major public works projects? I say that because these are once-in-a-generation projects and we cannot afford to be getting them wrong.

I am also concerned about some of the measures mentioned in the Minister’s statement. He mentioned the idea of a price freeze for only 24 months to avoid costs for contractors. I am worried that potentially creates a liability for the State. I do not want to see situations where we encourage or reward underbidding by contractors who know they can then add and change the prices later, and I am worried about creating a hostage to fortune in that regard. I will return to the subject of specific quality measures in the context of disability and climate and environmental tracking, and I ask the Minister to comment briefly on this question of quality.

Deputy Michael McGrath

Sure. I thank the Senator for her questions, and I acknowledge her track record in this area. She has been a consistent advocate for the inclusion of quality measures at a more significant level in the procurement process. I am, of course, aware of the legislation she has brought forward. The Minister of State, Deputy Ossian Smyth, in my Department is working on this issue. As the Senator knows, quality is a factor in public procurement.

The ultimate test, or net measure, is what is the most economically advantageous tender. The issue that the Senator is raising really is the balance within that measure between cost and quality. It is an issue that we are open to examining. I have engaged with the Office of Government Procurement, OGP, in relation to this. It has pointed out that it is open to the contracting authorities, currently, to place an elevated level of priority on the question of quality. I am happy to engage with the Senator further in relation to that.

On the question of cost inflation and the Senator's concerns at the proposals that I have brought forward, first, I make the point that the issue has been under consideration by the officials in the Office of Government Procurement for quite some time. They are recommending these changes. One concern that they have is that given that there is such volatility in prices and in the costs of materials at the moment, contractors are over-providing. They could potentially overestimate if they are locked into a 30-month fixed-price contract and there is no price variation at all. Even if there is significant inflation in the cost of their materials, they could seek to over-provide for that at the point of submitting a tender. It is almost the other side of the coin to the issue that the Senator raised.

The proposals are well balanced. We have encountered some difficulties in relation to public tenders. As I said earlier, there are certainly instances, even in the case of major school building projects, where the Department has had to go the fifth and sixth lowest bidder to successfully place a contract. Certainly, we are at risk of significant delays in the delivery of the programme, and potentially an inability to successfully place contracts. That will impact on our ability to deliver on the NDP. There is a balance to be struck. However, these are the recommendations that I received from the OGP. I value the office's experience and track record. I am happy to go with it, but we will keep it under review.

Senator Alice-Mary Higgins

To come back, and it builds on the points made by the Minister, the cases of Western Building Systems and Carillion are examples of why I believe we need legislative measures in terms of quality rather than relying on each individual contracting authority and particularly, on national development projects, which are of a different tier and level of seriousness. That is why I hope the Minister will go past the 50% I am recommending in weighting for quality in order that we can avoid problems.

As I have limited time, I wish to ask about the climate and environmental measures. Again, I think this is a way of doing better in terms of anticipating the cost of material. On scope 3 emissions, we know that what is coming down the line from Europe is that companies are going to be required to measure scope 3 emissions in terms of their supply chains. In other words, in emissions measuring, it is not just the energy usage that is measured, but the supply chain carbon emissions.

Chairman

To remind the Senator and the Minister, we are due to finish at 4.15 p.m..

Senator Alice-Mary Higgins

I am wondering if we could possibly extend the meeting, because I have not had very much time comparative to others.

Chairman

We have already agreed to extend the meeting from 400 p.m. to 4.15 p.m.. I know the Minister has commitments and we have to go into private session.

Senator Alice-Mary Higgins

With respect, I might raise all of my questions together and then allow the Minister to answer them, rather than speaking a few more times.

Chairman

If you would, please.

Senator Alice-Mary Higgins

My questions are as follows. On scope 3 emissions, are we going to start measuring supply chain emissions? There is a lot of focus on energy efficiency in the national development plan, but increasingly, at a European level, in terms of building regulations, there is a recognition of the need to look at embodied energy. That includes, for example, the emissions which are front-loaded in cases of demolition and the embodied energy in the materials that are used. Energy efficiency within buildings is only a very small component in terms of emissions. I have not really seen a lot on embodied emissions within the plan. I am concerned about that and am wondering how it might be addressed.

On the transport infrastructure, as planned, the Minister mentioned the strategic rail review. Will the rail review incorporate the recommendations on the reform of cost-benefit analysis in the transport review of the Oireachtas Joint Committee on Environment and Climate Action? The Minister will be aware that the committee put forward a report on transport in which we explicitly suggested that the current cost-benefit analysis that is being used in transport projects needs to be reformed. I will not list them now, given the time constraints, but the committee made five specific recommendations on the reform of cost-benefit analysis, with particular focus on the undervaluing of the co-benefits, the excessive weight that is given to time savings, and the fact that the cost-benefit analysis does not favour smaller transport projects, which can sometimes add together in a really important way.

The Minister will be aware that Ireland has signed up to the UN Convention on the Rights of Persons with Disabilities, UNCRPD. The Oireachtas Joint Committee on Disability Matters, of which I am a member, made a lengthy submission on the NDP. The current Part M building regulations are deeply inadequate. These are major scale projects. As with the climate issue, how do we ensure that we do not sign off on lots of projects and contracts before the new building regulation standards come in from Europe? As these are big building blocks of our nation, we must ensure that we are getting them right in terms of emissions. However, we must also ensure that we are getting them right in terms of universal design and disability access. I see this as the laying down of the next stage for our country for future generations in a national development plan. How do we ensure that it is fit for purpose on climate and universal design and disability access?

Lastly, and this is a concern in relation to transport projects as well, the Minister will be aware that Mr. Peter Walsh appeared before the committee recently. He stated that in the first five years of the plan, the funding was not available to Transport Infrastructure Ireland. Next year, and possibly over the next two years, we will have a waiver on the fiscal rules. We will have a direct level of access to funding that we did not have previously and we have access to 0% loans. Does the Minister not think it would be more prudent for us to be drawing down the public moneys that are needed for these major infrastructural projects during this four- to five-year period, rather than putting them on the long finger for an unknown economic climate in 2025 to 2030, where instead we may find ourselves forced into private partnerships or into taking money at a less preferential rate? I am concerned that we are not making the best economic use of the fiscal space that is being presented to us and we are still building in a private delivery component, rather than using this opportunity for direct and more cost efficient public delivery.

Deputy Michael McGrath

 I thank Senator Higgins. I will do my best to address some of the points she raised there. Perhaps we can revert to her on some of the others or we can set up a bilateral engagement with my officials. I will first make the overall point that this NDP has at its heart a significant climate assessment and climate methodology.  I know that the Senator will be familiar with the detail of the NDP.  In particular, pages 35 to 37, inclusive, take one through the much of the detail on that. 

  The reform of the public spending code is under way in relation to climate change. We have assessed all of the projects that were included here against seven different measures under the climate assessment methodology, which we have agreed with the Department of the Minister for the Environment, Climate and Communications, Deputy Eamon Ryan. In addition, one of the revisions on which we are working relates to the shadow price of carbon. As the Senator will know, we have to estimate the cost of the associated carbon emissions relating to an individual project. Add that, let us say, to the cost side of the equation, and then have the benefits side, and discount them both back by 4%.  In 2019, the shadow price of carbon was trebled under the public spending code. The public spending code is now being reviewed again.

  I want to say that we are working with the OECD on induced carbon and not just on direct carbon.  The Senator raises an important point. Under the Build Digital agenda and initiative, building information systems incorporate carbon emissions as part of their design. This national development plan will introduce a building information modelling mandate in the early years of the NDP. The Senator will see that in section 18.

I am happy to engage with the Senator offline or to set up an engagement with my officials on the detailed, technical aspects of this, and I welcome her interest in this area. It is a key test of the NDP that we can properly align it with the climate action plan and prioritise projects that will help us to meet what are very onerous and challenging objectives we must nonetheless meet.

Senator Alice-Mary Higgins

Finally, on universal design in the context of disability, I do not know whether the Minister has prepared a comment. If not, he might follow up.

Deputy Michael McGrath

I will have to check with the HSE and the Departments of Health and Children, Equality, Disability, Innovation and Youth. We will revert to the Senator on that.

Senator Alice-Mary Higgins

Our hope is it will become part of all buildings, that is, not just health buildings but all public buildings and all public design.

Deputy Michael McGrath

I will revert directly to the Senator on that.

Chairman

Before the Minister leaves, I have some questions for him, on which he might revert to me later. I am deeply concerned about the cost of the national broadband plan, how it is being rolled out and the messages being given to people about when they will have broadband, particularly in rural Ireland. I would like to see more detail on how it is being rolled out, how the cost is being controlled and whether we can get greater efficiency into its delivery. I have been asked by business people in Tullow to have certain estates prioritised. People in rural Kilkenny are working from home now, which drives much of the demand. Will the Minister come back to us with responses to those questions?

The financial action task force, FATF, is an intergovernmental body, with 39 countries involved. Is it the Minister who sits on the body or is it an official? Again, he can revert to me later if he wishes.

On social housing, the Minister deals with overruns, costs and so on. There are now many projects throughout the country that are on a fixed-cost price, but the contractors are running into difficulty because of the increased costs they are experiencing and they are back to lobbying local authorities to have those costs covered. I believe the costs are quite substantial. Will a facility or fund be introduced to examine these costs in order to prevent any hassle at the end of construction in the handover to local authorities?

On roads, railways and so on, we will await the report on railways. I have mentioned the ring road in Kilkenny to the Minister previously. We all have our own wish lists. While there was a mention of it earlier, I am anxious to put on record that the sooner we get it fully completed, the better it will be for everyone.

Finally, in light of the sums being spent by the State, is it not beyond time we looked at how we monitor in a real way the spend of that money? I refer to the reform of the Committee of Public Accounts to give it greater powers, the reform of the Office of the Comptroller and Auditor General to create one office that would look at all expenditure on behalf of the State and the modernisation of our approach to policing the spending of taxpayers' money. I would love to know how many recommendations that come from the Committee of Public Accounts are ever implemented. There seem to be quite a lot of recommendations but no action on them.

The Minister might come back to us on those questions. I do not expect him to answer now and we are caught for time in any event. He might wish to make some concluding remarks.

Deputy Michael McGrath

That is fine. We will examine the Official Report and revert to the Chairman and his colleagues on all the issues on which they require us to revert to them. My understanding of the FATF is it does not relate to the Department of Public Expenditure and Reform but rather to either the Department of Justice or the Department of Finance. I will get to the bottom of it and revert to the committee.

Chairman

I thank the Minister for his very positive engagement. We will now go into private session to deal with some matters.

The joint committee went into private session at 4.25 p.m. and adjourned at 4.44 p.m. until 1.30 p.m. on Wednesday, 1 December 2021.