Irish Programme for Government sends positive signals to construction sector

Catherine Burns, construction specialist, and Garrett Monaghan, energy and infrastructure expert, of Pinsent Masons were commenting following the release of the document.

The draft, titled Securing Ireland’s Future (162 pages/1.1MB), was published on 15 January following talks between two political parties, Fianna Fáil and Fine Gael, which have now entered into a coalition agreement. It opens with a commitment on “delivering a strong and stable economy, the homes that people will need, providing high quality and accessible public services and the infrastructure required to sustain a growing society”. Throughout, the programme outlines a mix of political, social and economic policy statements that “if implemented into solid capex commitments, will lead to an increase in activity across the construction sector in Ireland”, said Burns.

As well as restating government support for existing projects such as the implementation of the National Development Plan for road and rail infrastructure projects and fast-tracking offshore wind development, the programme outlines diverse new policies across the infrastructure and energy sectors. This includes the building of 300,000 new homes by 2030, building integrated data centres and district heating systems, four new hospital projects and increasing the number of publicly available EV charging points across Ireland.

Monaghan said: "On its face, the programme for government recognises the need for deep and sustained capital investment in well-established areas such as housing but also in relatively niche, but economically critical, areas like grid, private wire structures and clarity on data centres.”

“In previous downturns, capital investment was subject to disproportionately large cuts and the infrastructure deficit has grown as a result. The common thread in the programme is an acceptance of the need for consistent delivery of major energy and infrastructure projects but for this programme to be delivered, a clear pipeline of policy and implementation steps and an ambitious legislative agenda must also be deployed," he said.

Whilst the programme refers to utilising the new Planning and Development Act 2024 to fast-track projects, the act has yet to be commenced. “This has to be a priority for the new government if any meaningful progress is to be made on the programme’s infrastructure agenda. It will also be important to provide clear routes to market for developers,” said Monaghan.

The energy sector also awaits the publication of the Private Wires Policy Framework, further detail on the integration of data centres within the district heating systems, and the pipeline for critical investment in the grid.

To deliver on its ambitious plans, the programme also incorporates some important policy signals that will be pivotal across the construction sector. For instance, the government has outlined plans to target 12,500 new apprentices annually by 2030, with two thirds of these in the construction sector. The government will also review the public procurement process to make it more transparent and encourage greater small and medium sized business (SME) participation.

The creation of a dedicated infrastructure division in a re-named department of public expenditure, infrastructure, public service reform and digitalisation to centralise decisions on major infrastructure projects is also included, as well as plans to broaden the remit of the National Development Finance Agency (NDFA) in the National Treasury Management Agency (NTMA). This will provide expert advice for major infrastructure delivery as required by sponsoring departments or agencies.

The government will establish a central housing construction supply unit in the department of housing to coordinate, monitor and track all major public sector construction projects to ensure accelerated delivery and set up a ‘modern methods of construction’ innovation fund via the Ireland Strategic Investment Fund (ISIF). This fund will be used to directly fund new housing factories, and the expansion of existed factories.

Burns said: “The construction sector will welcome the plans to address the skills shortage in the sector and incentivise contractors to invest in Ireland. However, this is an ambitious programme, and adequate resourcing will need to be given to these new government bodies to deal with the quantity and variance of projects on their agenda.”

“The programme for government is a statement of intent. Progress on these ambitions, will be measured by how quickly the government can create and communicate a pipeline of work that the construction sector can rely on to attract inward investment and recruit and retain the skilled labour required to build out this programme of energy and infrastructure work,” she said.