APPENDIX 8.3
LETTER TO CLERK THE COMMITTEE FROM THE DEPARTMENT OF FISHERIES AND FORESTRY
Committee on Public Expenditure sub-Committee on Public Capital Projects Howth Harbour Development Scheme
I refer to your letter of 27 November, 1984, about the meeting of the above Sub-Committee on Thursday, 29 November, 1984, concerning Howth Harbour Development Scheme, which was attended by M/s J. O’Connell and S. Reynolds of this Department.
The agenda for the meeting was based on a written questionnaire set out under six separate headings. The questions under five of the headings were dealt with orally at the meeting and due to pressure of time on the Sub-Committee, they requested M/s O’Connell and Reynolds to furnish written replies to the questions under the sixth heading viz “6.00 - MANAGEMENT.” In compliance with that request I enclose a memorandum covering this matter.
Yours sincerely
J O’Connell
Principal
13 December, 1985.
Howth Harbour Development Scheme
6.00 MANAGEMENT
1.Do you accept that the Department of Fisheries are responsible for the overall management of this project?
Answer: |
While the Department of Fisheries and Forestry accepts responsibility for the general formulating and financing of the project the Office of Public Works (OPW) is the State body who placed the contract and dealt directly with the contractor throughout the execution of the works on site.
It is the view of the Department that OPW are responsible for the design and overall management of the project as agent of this Department. |
2.Did you continuously review the feasibility basis on which you commenced this project and committed the funds in 1978 particularly in the light of the very large extras?
Answer: |
During the five year period of execution of the scheme the Department remained satisfied that the works done were fully warranted. |
3.In light of the very large over-runs did you at any stage between 1978 and 1984 reassess the project and decide on any reductions?
Answer: |
As the Department remained satisfied that the works being done were fully warranted having regard to the factors which gave rise to the over-runs (See reply to Question No. 8)
no reductions were made. To do so would have affected the overall benefits of the project. |
4.Did you in 1978 on the basis of the OPW cost to you on Stages I and II include in your assessment of the project a contingency sum adequate to cover the expected contingency items.
Answer: |
A sum to cover contingencies as estimated by the Office of Public Works was included. |
5.Did you have regular reviews of the final estimated cost of the project during the course of the construction?
Answer: |
During the course of the construction the Department regularly sought updated final estimated cost of the project from the Office of Public Works. When this information was received it was examined in the Department of Fisheries and Forestry and where necessary Department of Finance approval was sought. |
6.Have you a clear schedule of the various over-runs and the dates on which these were
-Advised to the Department of Fisheries
-Approved by the Department of Fisheries
-Approved by the Department of Finance
-Committed by the OPW.
Answer: |
The records of the Department of Fisheries and Forestry contain this information, apart from information relating to commitments by the OPW. |
7.Did you obtain approval in advance from the Department of Finance for all the extras amounting to £4,532,683?
Answer: |
The Department of Finance approval was obtained in advance for all extras which were notified in sufficient time to the Department of Fisheries and Forestry by the Office of Public Works. In other cases covering approval was sought. |
8.Can you explain the situation as reported by the Comptroller and Auditor General that in December 1982 the Department of Fisheries had approval in their vote for £5m but had actually spent £8m?
Answer: |
While certain works which were brought forward from what originally was called phase two of the scheme and additional works found necessary as the scheme progressed increased the cost of the scheme considerably, the approval of the Department of Finance was obtained for the proposed expenditure of which we were advised viz.
£4,998,200, before these works were commenced and before 31 December 1982 as referred to in report of the Comptroller and Auditor General.
The excess of expenditure of £2,969,777 referred to in the report of the Comptroller and Auditor General is accounted for mainly by:
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increased dredging cost |
: |
£0.993 million |
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increases under cost variation clause in the contract from date of commencement of the scheme |
: |
£1.672 million |
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collapse of West Pier |
: |
£0.154 million |
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V.A.T. |
: |
£0.120 million |
Total |
: |
£2.939 million |
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The approval of the Department of Finance for these expenses had not been sought by the Department of Fisheries and Forestry before 31 December 1982 because the expenses had not been notified to this Department by the Office of Public Works in sufficient time and detail to enable that to be done. The approval of Department of Finance has since been obtained for
£615000 as part of the over-run on dredging costs and their approval for the balance (viz £2.324m) has been sought but not yet obtained.
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9.Has the Department of Fisheries compared the actual out-turn on this project with the original 1978 basis on which they proceeded?
Answer: |
Pending the completion of the project the final out-turn is not yet available. The Department has, however, made a detailed comparison between the estimated final cost and the original 1978 Estimate.
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10.Is the economic return/benefit in line with what was expected?
Answer: |
So far as can be assessed at this early stage the answer is “yes”. The economic return from the project cannot be expected to become fully evident for a period after the completion of the project.
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11.Do the Department of Fisheries consider that this was a well managed project?
Answer: |
Having regard to the serious complexities of the project the Department of Fisheries and Forestry consider that this was a well managed project on the whole.
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