The Public Accounts Committee intends to carry out a comprehensive examination in the New Year of spending by the Office of Public Works across a range of projects where costs have over-run by millions of euro.
Committee chairman Seán Fleming has said that five such OPW projects have come to his committee’s attention in the past 18 months, where final costs have turned out to be millions of euro in excess of estimates.
They include the ambitious refurbishment of Leinster House; the new Department of Health offices at Miesian Plaza in Baggot Street, Dublin; the new Kevin Street Garda Station in Dublin and the Galway Regional Garda Headquarters; the new office for the Tax Appeals Commissioner; and OPW contracts for maintenance and small capital work.
The OPW has responsibility for managing and maintaining State-owned properties, with a total of 2,300 in its portfolio, 600 of which are in Dublin
Mr Fleming, a Fianna Fáil TD for Laois-Offaly, said that the quality of work done by the OPW was always good. However, he said the financial controls of the State body needed to be examined to ensure it was delivering the best value for money for the taxpayer.
“There is a history of projects coming in at a far greater cost than originally estimated and it seems to becoming a pattern lately. It is across the board in several major projects over the past few years.”
Budgets
Three major projects all over-ran their projected budgets in the past year. They were the Leinster House refurbishment, which cost €2.5 million more than its €15 million estimate and took six months longer than anticipated to complete. That was ascribed to unforeseen circumstances.
Two major divisional Garda offices – in Dublin’s Kevin Street and in Galway city – each cost €3 million more than projections. Both projects are now the subject of mediation between the OPW and the contractor.
In his 2018 report, Comptroller and Auditor General Séamus McCarthy carried out an investigation into how the OPW managed a measured-term maintenance contract, where there was a significant gap between estimates and actual costs. The contract with an outside contractor (who has tendered successfully since 2010) was for maintenance of State property and minor construction work with a value below €500,000.
The three-year contract estimated an overall spend of €9 million over that period. In the event, it turned out to be nearly €40 million. The C&AG report found that all of six projects it sampled were for values above the upper limit of €500,000 (one was for €2.5 million). It also pointed out to the continuing gap between estimated cost and eventual cost up until 2018.
In the PAC’s examination of the OPW’s management of the Department of Health’s move from Hawkins House to rented premises in Miesian Plaza, it found two factors behind a projected increase of €20 million in costs to the exchequer. The first was a dispute by staff from the department in relation to the move which delayed the move greatly and resulted in what the PAC described as “ineffective expenditure of €11 million”. The second was the decision to use a traditional form of space measurement on 15,0000sq m premises that did not tally with the standard of measurement used by the lessor. The PAC concluded that would cost the State €10 million over a 25-year time span.
Other OPW projects which have been discussed by the PAC were the new Tax Appeals Commission premises. The commission claimed the premises were substandard, with inadequate, furniture, bathroom provisions, technology and communications. These claims were strongly contested by the OPW.
