In December 2023, the new Infrastructure guidelines were released by the Department of Public Expenditure, NDP Delivery and Reform replacing the Public Spending Code 2019. The aim of these new guidelines is to enhance the delivery of the National Development Plan (NDP). Our Infrastructure team explain the new guidelines below.
The Infrastructure Guidelines set out the value for money guidelines for the evaluation, planning and management of public investment projects, including purchase or acquisitions of assets or shareholdings, in Ireland. The arrangements set out in the Guide apply to all public bodies and all bodies in receipt of Exchequer capital funding.
While the changes are not exhaustive, they are welcome, with the Guidelines providing further clarity on the business case requirements and targeting a more streamlined approval process.
We have highlighted below key changes to the guidelines, business case requirements and our insights regarding the guidelines aim to enhance the delivery of the National Development Plan (NDP).
Key changes to the new Infrastructure Guidelines
With shorter form Strategic Assessment Report informing the development of the Preliminary Business Case at Approval Gate 1.
Threshold for projects needing a detailed project brief and procurement strategy (i.e. Approval Gate 2) has increased from €10m to €20m.
Threshold for Major Projects Advisory Group (MPAG) assessment increased from €100m to €200m.
Detailed Business Case replaces the Detailed Project Brief at Approval Gate 2.
External Assurance Process and MPAG assessment for major projects focused at Approval Gate 1 but with provision for projects to revert to MPAG pre tendering where further scrutiny is warranted.
Final Business Case (Approval Gate 3) remains in place. The Guidelines specify some additional requirements for business cases.
Key changes to business case requirements
Further details on the procurement strategy with reference to supply chain capacity and appetite, approach to risk management and achieving value for money.
An assessment of climate and environmental performance, including the impact of the project/programme on greenhouse gas emissions and the resilience of a project/programme to the impacts of climate change.
An assessment of construction productivity requirements, in particular in relation to modularity.
Proposed implementation of the International Cost Management Standard to provide for a common reporting framework showing the interrelationship between construction costs, lifecycle costs and embodied carbon emissions. Further guidance on this to be published by the OGP.
Consideration of likely objection levels with the planning process.
A recommendation for independent reviews of projects base costs by two separate reviewers, and where possible cost ranges be included.
Infrastructure Guidelines – Lifecycle and decision gates
Our view on the new guidelines
"While the changes from the Public Spending Code are not exhaustive, they are welcome, with the Guidelines providing further clarity on the business case requirements and targeting a more streamlined approval process."
"The introduction of additional business case requirements such as construction productivity and climate and environmental performance is important but remains to be tested and what this means in practice in informing business case development and project delivery."
"Clarity on the role of Approving Authorities and Sponsoring Agencies is one thing but the Guidelines need to act as a catalyst to accelerate the delivery of infrastructure projects rather than create undue delays as has happened with the Public Spending Code."
"The National Development Plan provides the platform for the delivery of an ambitious capital programme which must be leveraged through the Infrastructure Guidelines as we look to progress much needed projects and deal with challenges and issues across the industry effectively as they arise.
Capital programmes also need to be treated for what they are – long term, multi project delivery programmes with funding certainty to match over many years, rather than through an annual budgetary cycle as is typically the case."
How can KPMG help?
We have extensive experience helping develop Public Spending Code compliant business cases in order to help you understand the underlying economic impacts of a potential project or programme.
With KPMG and our team of experts, you can have confidence that you’re partnering with the best team in the market with unrivalled experience, insight and commitment.
Our multidisciplinary infrastructure team work with a wide range of clients in both the public and private sectors on various projects of differing size, scope and complexity. By combining valuable insight with hands-on local experience, we can help address the challenges you face at any stage of the project life-cycle; from strategy and planning, to construction, operations and hand-back.
If you have any queries on the new Infrastructure Guidelines, and their impact for your business, please contact our team below. We'd be delighted to hear from you.
