Road contract reform to deliver, says Cullen
Mr Cullen said the fixed contracts will stop developers putting in a low tender to secure a Government contract and subsequently adding overrun costs, which the taxpayer picks up.
"The price you see must be the price you pay fixed-price contracts can ensure this is the case," Mr Cullen said.
He made the announcement yesterday at the official opening five months ahead of schedule of the €120 million Dundalk western bypass.
The Government and the National Roads Authority (NRA) have been criticised for the spiralling costs of road projects and Mr Cullen said lessons needed to be learnt from the past.
The move to fix the price of contracts follows revelations by Comptroller and Auditor General John Purcell that the cost of delivering roads under the six-year National Development Plan has risen from €7 billion lessons needed to be learnt from the past.
The move to fix the price of contracts follows revelations by Comptroller and Auditor General John Purcell that the cost of delivering roads under the six-year National Development Plan has risen from €7 billion due to inflation, new projects and the failure to cost projects adequately.
The first step the Government took to combat this was to bring in a design-and-build contract three years ago, ensuring the developer built the project in accordance with his own design.
Now Mr Cullen is changing the rules to ensure developers bear the construction risks involved.
Mr Cullen said he will meet the chairmen of the taxpayer-funded transport agencies the NRA, CIÉ and the Rail Procurement Agency to progress the delivery of fixed price contracts. The outcome will feed into talks between the Department of Finance and construction industry interests, Mr Cullen said.
NRA chairman Peter Malone said: "The M1 Dundalk western bypass is the first Public Private Partnership (PPP) road scheme to open in Ireland, coming in five months ahead of schedule."
This project did not cost the taxpayer because the revenue from the toll at Drogheda funded the project, Mr Malone added.
However, the Construction Industry Federation (CIF) has responded angrily to the announcement of fixed price contracts.
The CIF claimed last week the fixed price contracts planned for schools, hospitals and prisons were dangerous as they were legally untested and could end up in the courts.
The CIF said rather than make savings, the contracts would cost the country more.
Their spokesman said yesterday they did not want to comment further on the announcement until they meet Mr Cullen on October 12 and separate talks with the Department of Finance are completed.
