Costs of ‘reprofiling’ capital funds become clear

Posted on Friday, 15 February 2019

The Minister for Finance and Public Expenditure has announced details of the projects that would experience reductions in funding or be delayed as a result of the over run. 

In 2019 the €99m to cover overrun will come from the following projects/Departments:

  • €24m from the Department of Health capital budget to be diverted from repairs, replacement and maintenance of smaller projects within the Department.
  • €27m from the capital budget for the N2/A5 road, serving Meath, Monaghan and Donegal and connecting to Northern Ireland
  • €10m from the National Forensic Science Laboratory;
  • advance payment of a sum of €10m from the Department of Education and Skills in respect of higher education facilities at the National Children’s Hospital;
  • an updating of the scheduled draw-down of €16m from the two Project Ireland 2040 Regeneration Funds, which are being profiled for expenditure throughout the course of both 2019 and 2020 without delays in project planning, design and delivery;
  • €4m from certain programmes of investment in Communications, Climate Action & Environment;
  • €3m from the Flood Risk Management Programme of the Office of Public Works;
  • Delayed drawdown of funding in the PER and Finance Groups of Votes totalling €3m;
  • €2m from capital works by the Department of Culture, Heritage and the Gaeltacht

It is disappointing that €24m which had been allocated to repair, replacement and maintenance within the Department of Health will now be diverted to the cost overrun.  What facilities will this affect?  Will it delay repair and maintenance of community nursing facilities, day care facilities or rehabilitation facilities? It is vital that our health infrastructure in towns and communities across the country is maintained and upgraded.  People depend on these services daily, and the postponement of infrastructure maintenance simply costs us more in the long run.

Is the €10m from the Department of Education and Skills in respect of Higher Education Facilities at the National Children's Hospital being allocated to cover the over run or have these facilities have already been built despite construction on the hospital being incomplete?

The delay in allocating funding for the N2/A5 road will have a significant impact on people living in Meath, Monaghan, Donegal, Derry and the border region.  The commencement of this project could become much more urgent depending on the outcome of the UK leaving the EU on 29th March. 

It is worrying that Ireland 2040, the National Development Plan launched in May 2018 is already subject to funding changes due to ‘reprofiling’ of funds.  A further €350m must be found to cover the cost overrun which will have implications for many of the projects in Ireland 2040 earmarked to begin in 2020.  Government should publish the list of projects that will be affected due to the need to divert €350m to the cost overrun as soon as possible.

The Minster announced a list of reforms in terms of procurement of future capital projects.  These are welcome but a much more robust system of expenditure oversight of capital projects with an early warning system to bring any costs concerns to cabinet and to the Oireachtas must be put in place.  

It is important that these reforms are made in order for Ireland 2040 to work and for people to have confidence in the programme.  The Minister referred to the Luas Cross City Works and the M17 Gort to Tuam Motorway as Ireland 2040 delivery successes.  The Luas Cross City works commenced in 2013 and were completed in December 2017.  The M17 Gort to Tuam works (originally due to commence in 2010 and finish in 2014) commenced in May 2014 and opened in September 2017.  Ireland 2040 was launched in May 2018.  Attributing two projects that started and were completed before it was launched is misleading.  It undermines confidence in Government's pledge that there will be very little distruption to the rollout of key infrastrucutre projects in Ireland 2040.  The current overrun on a single capital project must not be allowed to derail or undermine the badly needed projects that are contained in Ireland 2040.