‘No effective control’ of rising costs of tribunals and commissions

Draft Public Accounts Committee report is set to recommend mechanism to manage costs

Work in progress at the national children’s hospital site at St James’s Hospital, Dublin. Photograph: Dara Mac Dónaill

Work in progress at the national children’s hospital site at St James’s Hospital, Dublin. Photograph: Dara Mac Dónaill

 

An unpublished report by the Public Accounts Committee (PAC) has found there are no effective controls for managing the rising cost of tribunals and commissions of investigation.

The periodic report, which is due to be published next month, is set to recommend that the Government and Dáil work together to put in place a new mechanism to manage the costs.

It finds that “there is not an effective control of costs for a tribunals and commissions of investigation which take longer than anticipated or whose terms of reference are extended”.

Tribunals and inquiries answerable to the Department of the Taoiseach will cost more than €110 million when the final bills are paid, Leo Varadkar previously indicated.

The PAC is to recommend that the costs of tribunal and commission, and their original estimates, are published by the department on a six-monthly basis.

“The committee also recommends that department works with the Government and Dáil Éireann to establish an agreed set of appropriate escalating actions to be taken when costs associated with a tribunal or commission of investigation have exceeded or are expected to exceed the estimated cost on establishment.”

The draft report also looks at the Irish Prison Service, housing and homelessness, broadband and climate change.

It finds that the Department of Climate Action’s “failure . . . to implement actions to reach the agreed carbon emission and renewable energy targets by 2020 and avoid purchasing carbon credits is unsatisfactory”.

Elsewhere, the PAC says the rising cost of the national children’s hospital is “extremely worrying” and mitigation strategies should be developed by the Government to ensure the final spend does not rise further during construction.

The cost of the project has risen from an estimated €800 million in 2014, to €983 million in 2017, and €1.43 billion this year. The cost of equipping the building and providing IT systems will push this bill up to €1.73 billion.

“The continuous increase in costs for the ongoing construction of the national children’s hospital is extremely worrying and indicates that the original cost estimates were inaccurate and the tendering process for the project inadequate,” the committee’s periodic report states.

Earlier this year, a PwC report found there remained a “significant risk on this project, which will require careful monitoring and control”.

The cost could rise by almost €100 million if construction inflation increases to 10 per cent this year. Furthermore, elements of the design still have not been finalised.

The draft report also finds that the Department of Health “has not provided proper oversight or ensured coherence on all aspects of the project”.

It recommends that the department liaise “fully and regularly” with the hospital board, the HSE and the Department of Public Expenditure “to ensure the proper oversight and accountability is provided for the remainder of the project.”

Broadband plan

The committee’s report also says the procurement process for the National Broadband Plan (NBP) may have “partly deterred” potential tender offers for the project. It recommends the Department of Communications review the procurement process for the NBP in light of the outcomes. It also finds the original cost projections “became irrelevant” due to changes between the start of 2015 and when it went out to tender.

The renewal of a second telecommunications contract, for the State’s Metropolitan Area Networks (MANs), is also criticised in the report. It finds “there was a lack of transparency regarding the decision to extend the concessionary contracts for the operation of the MANs”.

The contract is held by Enet, which was partially owned by Irish American businessman David McCourt at the time of the contract renewal. Mr McCourt’s investment vehicle, Granahan McCourt, is also behind the successful bid for the NBP. The contract renewal was undertaken without a tender, which was within the terms of the agreement, but angered other industry operators, who complained to the department about the process.

Sinn Féin TD Jonathan O’Brien said the State was going to pay €200 million next year to “plug the hole” in the NBP. He described the broadband plan as “a badly thought out and terribly executed capital project that failed in every dimension, from procurement to the tendering process”. He said broadband should be delivered in public ownership, using existing infrastructure.

A Government source defended the plan, saying “it is an unprecedented investment and Ireland will be digital leaders in Europe once it’s complete. Several independent reviews and reports into the process concluded that the process was robust.”