THE GOVERNMENT SHOULD be able to walk away from projects, according to Secretary General of the Department of Public Expenditure and Reform, Robert Watt.
His comments come as questions continue to be asked about the National Broadband Plan and whether the government should spend around €3 billion to bring high-speed internet to over 540,000 properties in rural Ireland.
They also come against the backdrop of the mounting costs of the National Children’s Hospital.
Allowed to change your mind
“Critically, this is where the politics gets very difficult, it’s critical for this Government and for future governments to be able to walk away from projects to which they’re committed when they see that ultimately the cost is greater than they initially expected.”
He added: “It’s ok sometimes to change your mind.”
Watt caused controversy recently when documents warning the government against proceeding with the NBP were published. He warned Finance and Public Expenditure Paschal Donohoe that other projects could be at risk if the last remaining bidder in the tender process was awarded the contract.
Watt told the MacGill Summer School in Glenties, Co Donegal that he had nothing to add to what he said previously, before joking: “Unless it’s in the bar, privately.”
He said “we need to get better at managing larger projects and that involves spending more time I guess on the detailed specification of projects and having a more thorough view of the cost estimation and it’s complex”.
“So if you’re doing sort of bespoke projects or once off projects that we haven’t done before we don’t have as good an indicator of the costs. So if we’re building a school we know how much it costs, but if we’re building a tunnel for the first time we don’t know how much it’s going to cost.
“It’s about us getting much better at assessing those costs, having a thorough review of a culture of challenge and ultimately not making the decision to proceed until we know the final cost and that requires a lot of… that’s difficult for government because government has to have the capacity to walk away from projects.”
The top civil servant said in his speech that the government plans to change how the State spends money on infrastructure “mega projects” in the wake of the controversy over the national children’s hospital.
‘Bespoke projects’
Watt told the audience that the State has a problem delivering “bespoke projects” which cost more than €1 billion.
From September, a new approach to large projects, a more formal approval process that will go through various gates, will be rolled out, said Watt.
“We won’t get to the next stage until we’ve gone though the full cost benefit analysis and the government ultimately won’t approve a project until we see the final cost based on a detailed tender.”
Another speaker, economist Colm McCarthy, who said cost-benefit studies conducted by consultants do not meet standards of credibility.
“There is too much use of consultants in some cases,” said Watt, who added that there are a lot of in-house specialists in the Office of Public Works.
“They should be doing much more of cost benefit analysis,” added Watt. However, he pointed out that questions of independence is often raised in some cases.
“Thorough independent reviews are also needed,” he said, adding that there is “an optimism bias” operating in government at times.
“We need to be honest with ourselves,” he said.
Speaking about the National Children’s Hospital, McCarthy called for a tribunal-led investigation into the “egregious” scandal over the location of the hospital.
Technology expert and journalist Karlin Lillington told the audience at MacGill that the government was wrong to “plough ahead” with the broadband plan, stating that to go forward with the plan as it stands “is just full of insanity”.
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