Theo Cullinane, Chief Executive, BAM Ireland, has criticised Government procurement processes for facilitating a “race to the bottom”. Speaking at the opening of the new M11 Gorey-Enniscorthy motorway, he also warned that the current process is “leading to a very fragile and under-resourced industry with questionable capacity to meet the demands of Building Ireland 2040 Plan”.
Speaking in front of An Taoiseach Leo Varadkar at the official opening of the new €400m motorway, Theo Cullinane warned that State procurement systems needed to change. He also said that Irish contractors are in demand across Europe as companies such as Facebook and Google that invest heavily in Ireland are looking to Irish contractors to deliver projects elsewhere.
Government Procurement Problem
“The main problem with the procurement models is the allocation of uncontrollable risks,” he said. “This issue is the focus of many governments throughout Europe as the largest of the construction companies cannot and will not take these risks.”
Theo Cullinane said that BAM has been involved in delivering a number of PPPs totalling 600Km of motorway, as well as school bundles and the New Children’s Hospital.
“The issue of uncontrollable risk management is the main problem facing the Irish Government from the procurement point of view, and it must be addressed,” he said.
“These risks do not go away – they just go elsewhere.
A Cost to Society
“In the end, they will end up costing society. These risks, if they are not addressed early on in a project, will trickle down through the supply chain or will revert to the Government and will cause a lot of legal issues and take up an awful lot of time.
“So, I would say that it is better that these uncontrollable risks are addressed early on in these large projects.”
A Partnership Approach
He added that the risks could be managed through partnership.
“That can be seen where we see Irish contractors now being asked by the likes of large multinationals such as Google and Facebook to operate all over Europe and outside of Europe. These companies feel that Irish contractors are the best.”
He said the fact that these multinationals are contracting Irish contractors is “an expression of confidence in Irish construction”.
The M11 Gorey to Enniscorthy Public Private Partnership Scheme comprises 39km of the M11 motorway.