The Sunday Business Post has reported that Finance
minister Brian Lenihan has reversed a decision by his department
that would have seriously delayed €150 million worth of water
Almost 50 water schemes nationwide were
under threat after the Department of Finance sent a circular
to local authorities on May 6, ordering them to re-tender
all schemes under a new tendering process. The contracts had
been secured under the former Institute of Engineers Ireland
process, but the department ordered that they be re-tendered
as fixed-priced contracts.
The projects - which can now begin - are
part of the government’s Water
Services Investment Programme (Wisp) and involve water
and sewerage schemes that are considered strategic to water
services infrastructure. The schemes will provide about 1,000
Contracts for the projects were initially
awarded by the Department of the Environment, Heritage and
Local Government. A senior department source said it had ‘‘argued
with Finance over the need for re-tendering, when it was our
intention to keep these projects moving along’’.
The contractors involved conveyed their
concerns to the Construction Industry Federation (CIF), whose
director general, Tom Parlon, wrote to Lenihan about the issue.
The minister’s office responded to Parlon last week - and,
in a letter seen by The Sunday Business Post - he agreed
to ‘‘flexibilities in relation to the use of contracts under
According to the letter, Lenihan has written
to the Department of the Environment, Heritage and Local Government
to inform them that tenders secured before May 6 should be
allowed to go ahead. A department spokesman confirmed this
was the case. However, he said there were ‘‘obvious merits
to the taxpayer of fixed-price contracts’’ and that ‘‘these
will apply to all future tenders’’.
Don O’Sullivan, director of tendering and
contracting with CIF, said the decision by the finance minister
also meant six school building projects could go ahead. ‘‘Water
and sewerage schemes are vital infrastructure. Re-tendering
these contracts would have set them back by around 18 months
and would have had severe consequences for a lot of communities”
- he said.
‘‘Devising new tenders would have been
very costly for contractors too, because they would have to
be designed to a higher level and specifications when a fixed
price is in place. Jobs in construction are also badly needed
at the moment as a result of the industry downturn” - he said.
Source - The Sunday Business Post