Dáil Éireann Debate, Wednesday - 20 March 2024
312. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform to provide details on the indexation of PPP contract indexation; and if he will make a statement on the matter. [13210/24]
View answer317. Deputy Rose Conway-Walsh asked the Minister for Public Expenditure, National Development Plan Delivery and Reform the average share of unitary payments that are subject to inflation increases across all sectors that use PPP contracts; and if he will make a statement on the matter. [13215/24]
View answerI propose to take Questions Nos. 312 and 317 together.
During the life of the PPP contract (typically 25 years after construction), a portion of the unitary payment is adjusted annually by an inflation factor to reflect changes in a general inflation index specified in the contract (the Consumer Price Index or the Harmonised Index of Consumer Prices). This indexable portion represents costs incurred by the PPP company over the operational period (e.g., facilities management, maintenance, and lifecycle costs); it excludes construction and finance costs. As part of the annual indexation process, the indexable portion is adjusted by the actual inflation rate over the preceding 12-month period. The indexable portion for each project depends on the specific features of the project, i.e., the operational period costs as a proportion of the total costs will differ by project. For the PPP projects procured by the NDFA up to 2024, the average indexable portion is circa 34%.
