PAC chairman: close public contract ‘loopholes’ to reduce risk to taxpayer money

‘Major overhaul’ needed in how public bodies and government are signing off on contracts, says Brian Stanley

The Narrow Water Bridge in Co Louth will connect Cornamucklagh near Omeath with Narrow Water near Warrenpoint, Co Down. Image: PA

The Public Accounts Committee (PAC) chairman has called for “loopholes to be closed” to reduce risk to taxpayers’ money when public contracts are being signed.

Brian Stanley was responding to a question about the appointment of building firm BAM Ireland as the main contractor on the new €100 million Narrow Water Bridge in Co Louth that will connect Cornamucklagh near Omeath with Narrow Water near Warrenpoint, Co Down.

BAM Ireland was strongly criticised in the Dáil last week by Tánaiste Micheál Martin over its involvement in the national children’s hospital.

That project has been beset by delays and cost overruns with the first patients unlikely to be treated there until the autumn of next year at the earliest.

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BAM has rejected the claims made by Mr Martin.

“It made me pause for a moment” Mr Stanley told Newstalk Breakfast in reference to the appointment of BAM Ireland on the Narrow Water Bridge project. “But I do think that all public bodies, local authorities, local councils and government departments need to be able to exercise a certain amount of discretion here with contracts.

“They do need to be done in a professional way, they need to be legally approved. The loopholes need to be closed. “We need to reduce the risk to the taxpayer. We need to get jobs coming in on time, projects completed. Because these hospitals and bridges and road services are all badly needed.”

Mr Stanley said it was important that the record of any company being considered for a public contract must be taken into consideration.

Any details in relation to persistent problems, delays, escalating costs, legal contest regarding claims “all need to be taken into consideration”.

Although some projects had been carried out on time and within budget, there were many other examples of public projects that were beset by persistent problems, he added.

I think what we need to do, in fairness, is we need a major overhaul of the actual terms of the contract. That’s what needs to happen here, where public bodies and government are signing off on contracts, that we need a major overhaul.

“We’ve seen the situation with various projects where costs continue to skyrocket. A lot of contracts don’t, and that’s welcome. We see where contractors are supposed to have a certain number of people on various sites. And public bodies and the taxpayer need to know that the public purse can be protected against that,” Mr Stanley said.

“All governments now and in the future need to be sure about where the weaknesses are in the terms of the contracts. And I think what government need to do is say we have we have an Office of Government Procurement,” he said.

“That office, I think, needs to engage in a major overhaul of how we do it. There are some legal constraints and, you know, legal minds need to be put to work on that to see how they can be tightened up, how loopholes can be closed, and how we can reduce the risk on the taxpayer.

“We can’t have a situation where we have open contracts and open-ended prices,” he said.

Rejecting the claims made by Mr Martin about the national children’s hospital, BAM said it is fully committed to the efficient completion of the project.

“We have always fully resourced this project beyond the level required for the original programmed works – largely to cope with the high level of design change and disruption – and will continue to do so until the building is completed,” it said.

BAM maintained the project was currently resourced “at 54 per cent above the anticipated levels for this stage”.

The Irish Times reported last Friday that an independent conciliator had recommended that it should receive an additional payment of €107 million due to delays that could be attributed to the client.

BAM Ireland executive director Alasdair Henderson said the company had a “proud legacy of delivering critical infrastructure across Ireland for over 60 years”.

In reference to the Narrow Water Bridge, he said: “Using the most modern construction practices, this bridge will offer a safe, green route for cyclists and pedestrians, supporting our own vision of building a sustainable tomorrow.”

BAM has built other significant projects in recent years including the Rose Fitzgerald Kennedy bridge in Co Kilkenny.

Martin Wall

Martin Wall

Martin Wall is the former Washington Correspondent of The Irish Times. He was previously industry correspondent