PAC calls for oversight body to fight overspending on ‘megaprojects’

The Public Accounts Committee has called for a new cost-benefit analysis to be completed before the signing of a contract for the €5 billion National Broadband Plan (NBP).

In its sixth annual report, the committee found it was “unacceptable” that there was a “major escalation” in the cost of rural broadband without cost benefit analysis being carried out. The process of finding a provider fro the NBP is also criticised, with the PAC finding that it “may have partly deterred parties interested in tendering for the project from doing so”.

It also found that the potential for a reduction in premises contained in the broadband plan’s footprint still existed, raising the possibility that the winning bidder could be compensated for any homes or businesses connected commercially before the NBP is rolled out.

The chairman of the PAC also called for the introduction of a new oversight body to fight overspending on “megaprojects” like the children’s hospital and rural broadband.

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Fianna Fáil TD Sean Fleming said that civil servants do not have the commercial experience to manage the projects. The PAC yesterday launched its periodic report, which criticised "unacceptable" and "extremely worrying" overspendthese projects, which form a key part of the government's €116 billion National Development Plan.

Delivery agency

Mr Fleming said a dedicated delivery agency to negotiate and plan such schemes would be preferable, and will be examined by the PAC in the next Dail term.

“When you have the senior officials in any government department dealing with people who are doing multi million euro projects every year, there is not an equality of experience,” he said. “We don’t have the wisdom within the house.”

He said that the impact of managing such projects was also having a detrimental effect on the day to day work of officials. "The Department of Health and the senior management in the HSE are spending a large proportion of their time dealing with the NCH, and that's taking away from doing their main job, managing the health service.

“They haven’t the commercial experience. Civil servants are not employed because of their commercial experience,” he said.

Committee members at the report launch echoed Mr Flemings remarks, with Independent TD Catherine Connolly saying consultancy firms contracted to work on projects were "adding to their expertise (while) we are not adding to the expertise in the public service". This she said, was leading to a "higher level of dependency" on consultancy firms by the public sector.

‘Gamble’

Alan Kelly, the Labour health spokesman, criticised the management of the NCH project as "the worst in the modern history of Ireland" and a "gamble that has come back on the Irish taxpayer".

In its report, PAC said that the controversial two-stage tendering process for the NCH was “totally inadequate”, with the sudden increase in costs described as “extremely worrying”. It is recommended that the two stage process, which led to the main contractor for the NCH project being on site before the detailed design for the second phase had been completed, not be used in future “unless both phases of the project are fully designed in advance”. The Department of Health, PAC found, “has not provided proper oversight or ensured coherence on all aspects of the (NCH) project”.

The PAC found that a spend of hundreds of millions of euros on rent supports like HAP and RAS “does not represent good value for money”.