Minister Donohoe announces measures to ensure delivery of Exchequer-funded capital projects under Project Ireland 2040

The public health measures, introduced on 27 March 2020 to halt the progress of Covid-19, necessarily imposed restrictions on many areas of the economy including the construction sector. The measures are working but they are not without impact. Mindful that a sustainable and flexible construction sector is crucial to the delivery of Project Ireland 2040 and the continued contribution of public investment to our economic well-being, Government is conscious of the need to proactively manage risks that arise from these necessary impositions.

Therefore, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe TD, has today (Tuesday), announced a suite of measures to manage these risks in the short term, safeguarding the integrity of Project Ireland 2040 and providing for a timely restart to construction, when circumstances and public health measures allow.

The measures include:

Detailed consideration by the Project Ireland 2040 Delivery Board and key delivery agencies as to how a phased and orderly restart can best be achieved.
Continuation of the planning and preparation of projects in the Project Ireland 2040 pipeline by Departments to facilitate a timely restart and acceleration of certain projects to support construction activity as the sector recovers.
Extending the tender deadlines by 6 weeks for all tenders associated with construction and construction services contracts, giving businesses an opportunity to assess the impact of restrictions on their tender.
Deferring the award of contracts for construction and construction services contracts unless there are compelling reasons to do so.
Ensuring that pre-construction design work continues up to a state of pre-tender readiness so that projects are ready to go to tender once the Public Health Measures are relaxed.
Extending ex gratia interim payments to contractors on public works contracts to cover certain non-pay fixed costs associated with site closures from 12 April 2020 until midnight on 4 May 2020 and subject to further extension should the current restrictions continue.

Minister Donohoe said: “The necessary public health measures we are all adhering to, pose risks to delivery of capital projects under Project Ireland 2040. The measures I am outlining today, clearly demonstrate how prudent management of identified risks, in the short term, will allow for a timely restart to construction, when circumstances and public health measures allow. Public investment will continue to play an important role as the economy recovers. Accelerating the delivery of key projects will ensure that construction activity is stimulated, as well as delivering the homes, schools, liveable places and other infrastructure our people will need. The planned continuity in public investment under Project Ireland 2040 will act as an economic stabiliser while continuing to address the well-established demand for public infrastructure.”

ENDS

Notes to Editors: Ex-Gratia Payment

Following the announcement of the public health measures aimed at helping prevent the spread of Covid-19, work on non-essential projects ceased and Contractors closed their sites. The Public Works Contracts do not provide an entitlement to the Contractor to recover costs associated with a delay arising from site closure in the current circumstances. While this does not entitle the contractor to any payment it is recognised that as sites remain closed, contractors incur liabilities and have ongoing fixed costs associated with securing the site, maintaining insurance on the works and making lease payments on certain items of plant, machinery and site welfare infrastructure.

Government, has agreed an ex gratia payment to contractors engaged under the conditions of the standard Public Works Contracts to cover agreed reasonable non-pay fixed costs incurred for the period that the Public Health Measures extend.

The ex gratia payment will be determined as a daily rate with reference to the contractor’s fixed costs as set out in their detailed price break down on a case by case basis.