Judicial reviews are the current scapegoat for delayed delivery of big infrastructure projects and housing developments. But even if there were no judicial reviews available, Ireland would still lag behind because of the State’s antiquated procurement systems, gold-plated regulation and an aversion to risk bordering on the pathological.
The Government’s recent Accelerating Infrastructure report aims to reverse at least 15 years of drift in the delivery of infrastructure in Ireland. Despite huge increases in the State’s commitment to capital investment in that time, the translation into infrastructure and housing has been undeniably slow.
The publication of the report coincides with a realisation within the political system that the housing crisis cannot be solved without infrastructure. The same goes for our climate change and energy crises. Some politicians, looking at the rise of populism, have made the connection between that and low levels of public infrastructure and community building.
The Accelerating Infrastructure plan is ambitious but it will live or die on whether Minister for Public Expenditure and Reform Jack Chambers and others can drive fundamental cultural change across many agencies, departments and, indeed, their own peer group rapidly in the next two to three years.
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It is an enormous challenge and hard choices will have to be made. And it means understanding, accepting and mitigating risk.
Government bodies, by inclination, avoid risk for reasons including an aversion to being asked to explain their actions in front of the Committee of Public Accounts (PAC). But no risk, no road, I’m afraid. Businesses explicitly set out their risk appetite and risk tolerance vis-a-vis their strategic objectives. Removing all risk from every project, as Government bodies have sought to do is, of course, impossible and, in terms of delivery, counterproductive.
The State’s risk aversion has driven an overly legalistic approach that militates against project delivery. Too much of the State’s investment on infrastructure is spent on legal fees, with engineers and those in the wider industry increasingly obliged to spend a disproportionate amount of time poring over legal documents rather than detailed project drawings.
One of the actions proposed in the report is to encourage contracting authorities to accept the reality of risk while attempting to realistically mitigate it. In this context, engineers hope to see the introduction of proportionate liability in public sector projects, for example. When a problem occurs, this would mean only those responsible for the issue have to cover any costs. As it stands now, all parties involved in the project get caught up in legal fishing expeditions.
This has the perverse effect of driving up professional indemnity insurance costs for engineers, architects and surveyors who could find themselves liable for the full cost of mistakes made by other parties, such as contractors, who often have multiple times their turnover.
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Faced with this sort of unbalanced legal environment, most professional indemnity providers have walked away from the Irish market in the past decade.
The inherent risk of “joint and several” liability means public sector projects are considered riskier, and hence less attractive, by engineering firms. As the sector gets busier and skills shortages bite, contracting authorities are reporting low levels of interest in tender processes for important projects.
Action 25 of the Accelerating Infrastructure report seeks deep reform of Government procurement and contracts. In future, contracting authorities may be empowered to adopt international best practice for better outcomes and accelerated delivery. As the engineering phase has the biggest impact on reducing risk, shortening timelines, avoiding disputes and life-cycle costs, better contractual conditions for engineers and other design professionals are essential to deliver solutions, not legal discussions.
The report does highlight construction capacity and productivity as limiting factors on delivery. It proposes more visas, apprenticeships, accelerated digital innovation and modern methods of construction as solutions. Our sector and the wider construction industry depend on foreign labour. The State needs an additional estimated 23,000 engineers and circa 50,000 skilled construction workers to deliver on its housing and infrastructure requirements. Everything necessary should be done to streamline and co-ordinate our visa and work-permit systems to facilitate more workers coming here.
But the key factor affecting the industry’s productivity and capacity is certainty in the pipeline of public sector projects.
The introduction of multiannual budgeting for the contracting authorities should help give the industry comfort to invest in technology, digitalisation and human capital. Many consultant engineers have hired in anticipation of a strong pipeline of work only for it not to materialise as a contracting authority has had to turn off the tap to meet an annual budget.
The reality is that engineering firms have become more productive in the past decade but infrastructure delivery timelines have doubled due to bureaucratic, regulatory and legal delays.
All these measures proposed in the report are important but generating public buy-in for infrastructure projects could be the game changer.
Engineers have learned that community confidence is built through genuine participation and consultation not messaging campaigns. Big projects succeed when people can see, test and shape options, rather than only having one avenue to engage – legal objection.
Spain and Australia, expert in delivering infrastructure at scale, have sophisticated community engagement processes based on consultation where the community’s views are considered and the public good can be balanced against objections.
The engineering sector can and will provide solutions to Ireland’s housing, infrastructure and climate crises. How quickly, efficiently and sustainably we do so will be determined by implementation of the actions in this report.
Shane Dempsey is director general of the Association of Consulting Engineers of Ireland (ACEI)
