Minister of State Brian Hayes has welcomed the easing of insurance restrictions on the awarding of public works contracts.

Public works contracts are estimated to be worth in the region of €2.25 billion annually. The lowering of the burden on contractors is in response to increasing delays in the awarding of contracts, and in turn in delivering urgently needed capital investment projects.

Minister Hayes said: "We simply can’t have a situation where red tape is blocking much needed investment, particularly where job rich investment is in short supply. Government is committed to improving the quality of spending across the board by channelling it to where it will have most impact. Today's reduction in Performance Bond levels is a sensible and pragmatic reform. It reflects the need to bring stability to a Construction sector that has seen its share of economic activity plummet from an unsustainable peak of 20% of GDP to a moribund 6% today. We must return this sector to the more sustainable level of 11%-12% that applies in other developed economies."

-- Advertisement --

The Department of Public Expenditure & Reform Circular containing the new guidelines has been provided to all public contracting authorities and has immediate effect. Interim measures are provided for recently advertised and on-going tender competitions.

The decision to reduce the level of Performance Bond cover has been informed by available evidence, extensive stakeholder consultation, and by changed market conditions where insurance premiums have increased four- and fivefold since the collapse of the construction industry.

(CD)