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.