The chair of the powerful new Oireachtas Committee on Infrastructure has said it will examine the practice of “lowballing” on public capital projects, where estimates of cost are pitched low but the price escalates afterwards.
Sean Fleming, a long-serving Fianna Fáil TD with ministerial experience, has said one area he would focus on would be preventing huge disparities that emerge between the projected cost at the beginning of a project and the actual costs when it is completed.
Examples include the Shannon to Dublin water pipeline, the long-running plan to establish a Metrolink line in Dublin, and the national children’s hospital, which is set to cost about four times its initial estimate of €600 million.
Mr Fleming, a TD for Laois, said the practice of lowballing “undermines public confidence in big projects”.
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“Those planning a project will come in with a low figure for a big project, say €500 million. That will allow it to get through the system because it is politically acceptable. The problem is it is not realistic. It does not take into account inflation, or changing standards, or design changes that they should have known would be needed,” he said.
“And then the costs begin to escalate and it ends up costing €2 billion.”
Mr Fleming said that “with scarce resources they probably feel they can get it through in dribs and drabs rather than as a whole”.
“It’s not a good way of doing it. It leads to higher costs and to delays and it angers the public,” he said.
Mr Fleming said he wanted the public to get accurate information on the costs of big projects, their timelines, specifications and completion dates before the project starts.
His committee, which will also look at all National Development Plan projects, has a wide remit to examine all big public capital and infrastructure projects at the conception stage. He says its purpose is essentially to ensure the public is not led astray on the cost of such big public projects.
He said his committee would be the flip side of the Public Accounts Committee, the public spending watchdog.
“They look back at what was spent or misspent. We are looking forward, making sure we have accountability every step of the way,” said Mr Fleming.
He said the secretary general of the Department of Public Expenditure, David Moloney, would be the first person invited to attend.
The committee would be looking to understand what was involved with every step of big public projects, he said.
He said he was also keen to call in representatives of An Bord Pleanála and the Court Services to examine why significant delays occur when appeals are made against large projects during the planning process.
The committee will be able to examine projects commissioned under all 15 Government departments.
Labour’s housing spokesman Conor Sheehan has already written to Mr Fleming asking for the new committee’s first action to be issuing an invite to Minister for Housing James Browne to set out his proposals for the Housing Activation Office, the new Government office aimed at speeding up the building of homes to ease the housing crisis.
