Dáil Éireann debate -
Wednesday, 27 Nov 2002

Vol. 558 No. 2

Adjournment Debate. - Public Private Partnerships.

Mr. Allen:

I thank the Ceann Comhairle for allowing me to raise the issue of public private partnerships. I previously asked whether there is an embargo by the Department of Finance on PPPs and whether some people in the Department are blocking the progress of these projects. One of the examples I gave – I am glad to have the opportunity to put it to the Minister – was the Cork School of Music. The school is a dilapidated product of the 1950s or 1960s and needs to be replaced. In June 1999 the then Minister for Education and Science said that a new school of music would be built in Cork. I understand that, under the PPP process, three companies were invited to bid and in April 2001 the preferred bidder was announced. To date no decision to proceed with the project has been taken even though the Department of Finance was represented on the vetting committee. In the expectation that everything was in order, the academic and administrative staff and students vacated the building last year. They now occupy space in a hotel in Cork city and about 15 other venues throughout the city, and there is resultant mayhem and disorganisation caused by this multi-centred activity.

Why is this public private partnership on ice? Why has the Department of Finance not given it the go-ahead? Cork is to be the European City of Culture in 2005. It could be without a school of music and a centre for the performing arts in dance, spoken arts and music unless the project is given the go-ahead immediately. The developer can begin work in January. It is a two year project so the building would be ready just in time for the European City of Culture event. A decision is needed urgently and the students deserve a favourable decision because the School of Music, despite its lack of resources and shortcomings, has contributed hugely to the musical life of the city. I declare a vested interest in that my three girls attended the school and have come out of it with the gift of being able to play instruments, something I regret not having. The Minister would do a good day's work if he announced the go-ahead tonight.

Mr. Parlon:

I thank the Deputy for giving me the opportunity to outline to the House the position regarding this matter. As the Deputy will be aware, the new Cork School of Music, a constituent part of Cork Institute of Technology, is being procured under the public private partnership model. The Cork School of Music provides training in a wide range of musical instruments, music theory and speech and drama. The school caters for first, second, third and fourth level students, whether they are amateur musicians, music teachers or performers.

Following a project launch in July 2000, 12 consortia expressed interest in bidding for the project. Following the presentation of outline proposals the number of bidders was eventually reduced to three. These bidders were issued with an invitation to negotiate in November 2000. Final bids were submitted in February 2001 and were subject to detailed evaluation under the four headings of design and technical, financial, legal and operation. The evaluation was undertaken by a project board established to oversee the procurement process and consisted of officials of the Departments of Education and Science and Finance together with specialist advisors appointed to support the process.

Following the evaluation of the bids, Jarvis Projects Limited was selected as the preferred bidder in March 2001. The initial advertised tender for the project was for the refurbishment and rebuild of the school and the provision of a range of facilities management to include building maintenance, cleaning, security, grounds maintenance and specialist equipment support by way of a public private partnership.

During the bidding process, the project scope changed substantially with all three bidders independently coming to the same conclusion that a complete new building was the most appropriate solution and that the current building should not be retained. Following the granting of full planning permission by Cork Corporation – now Cork City Council – an appeal was lodged to An Bord Pleanála. During the appeal process, it was not possible to progress the detailed financial, legal and operational issues until a definitive answer to the appeal was announced. This was because the original bid was costed in respect of the operation and service elements based on the design approved. Any major changes to the design because of the appeal could have had serious consequences for the operator in providing the services as outlined in their bid. An Bord Pleanála rejected the appeal on 24 December 2001.

It is therefore incorrect for the Deputy to state that the project was waiting to proceed from January this year. Following the rejection of the appeal, the Department of Education and Science was only in a position to commence the detailed contract negotiations with the preferred bidder. The present position is that my officials are having discussions with the European Investment Bank regarding its participation. That would provide for the refinancing of the project two years into the operations phase, thus reducing the overall cost. A similar arrangement with the EIB is about to be signed for the post-primary schools PPP project.

As with the schools bundle of PPP projects, the last of which are in the process of being handed over to the Department of Education and Science, final approval for the Cork School of Music will be based on an assessment of the affordability of the project in the context of the competing demands on the available capital funding envelope. The Minister expects to be in a position to communicate with the Cork Institute of Technology regarding the Cork School of Music project in the very near future.