€150m water investment will not be delayed


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 improvement schemes.

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 jobs.

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 Wisp’’.

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