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Dáil Éireann debate -
Thursday, 12 Dec 2002

Vol. 559 No. 3

National Development Finance Agency Bill, 2002: Report and Final Stages.

Amendments Nos. 1 are 3 are related and may be taken together by agreement. Is that agreed? Agreed.

I move amendment No. 1:


These amendments follow from an amendment proposed on Committee Stage by Deputy Burton. I agreed that an Irish language version of the title of the agency should be included in the legislation and I undertook to check the precise translation.

Is it acceptable to conclude on the Irish language text without the version being there? The Minister said he needed to check the translation. I am in agreement with the Minister but this strikes me as unusual.

Deputy Burton's amendment proposed the inclusion of the Irish language translation in this section and I have agreed to do so. I gave an undertaking on Committee Stage to check the translation and I am informed it is correct.

Amendment agreed to.

Amendments No. 2, 23, 24, 25 and 26 are related. Amendment No. 24 is an alternative to amendment No. 23 and amendment No. 26 is an alternative to amendment No. 25. Amendments Nos. 2, 23, 24, 25 and 26 may be taken together by agreement. Is that agreed? Agreed.

I move amendment No. 2:

2. In page 3, between lines 21 and 22, to insert the following:

"‘Committee of Public Accounts' means the Committee of Dáil Éireann established under the Standing Orders of Dáil Éireann to examine and report to Dáil Eireann on the appropriation accounts and reports of the Comptroller and Auditor General;".

This is a technical amendment to define the term "Committee of Public Accounts" used in the Bill.

I am not happy with the extent to which the Minister is providing in this Bill for accountability to this House. This legislation provides that major capital projects envisaged by many Government Departments will be referred to this agency and that agency will recommend funding packages which may involve public-private partnership. There will be very significant public interest involved in such cases in that projects that would heretofore have been funded on the basis of public funding will now be handed over in considerable measure to the private sector operators. Issues regarding the appropriate use of tolling or pricing will arise as will issues regarding what happens in the event of the private sector project failing, be it a hospital, prison, etc. What happens in the event of the project failing? Where will it end up?

Significant issues of public interest are wrapped up in the funding packages and contractual obligations of the private sector participants in such projects. The Minister proposes to restrict accountability of this body to the narrow basis of where they got the money and if they spent it efficiently. The issue of efficiency is further circumscribed by the fact that the Minister provides in the legislation that any spokesperson of the agency appearing before the Committee of Public Accounts cannot comment on the hair-brained nature of some of the projects presented to him. We could very well have a situation such as prevailed in the Stadium Ireland project. Everyone knows it was ill-considered and never properly costed. Its benefits were never properly assessed. The Minister admitted on Committee Stage that if such a project were funded by this agency and it had to present itself before the Committee of Public Accounts to deal with the efficiency with which it had used money, it need not answer any questions on whether it spent the money prudently.

What the Minister is proposing is far too restrictive. He does not accept where public projects are funded by private sector money that this House will continue to have a legitimate interest in ensuring these projects are run in a way that protects the public interest. As a result of borrowing restrictions, which the Minister is imposing on his capital budget, more and more Departments will be forced to enter into public private partnerships as the only available route for them to fund some of their projects, and there will not be proper public scrutiny in this House of whether these decisions are being made in an appropriate manner.

While the Minister indicated on Committee Stage that his Department would be conducting comparisons between the cost of PPP projects and a simple public borrowing format for running the same projects, he indicated that he would not make available to the House the details of the assessments. The Bill is riddled with provisions to cover up proper procedures of accountability. No doubt the Minister in his reply will say Ministers are responsible and can account. If public private partnerships are to become the source of many thousands of millions of euro of public spending, as the Minister envisages, the process must be publicly accountable. We must be able to draw comparisons across different projects run under PPPs to ensure public projects are being handled properly and appropriately.

The Minister is introducing the Bill, getting approval from spokesmen on finance, and that will be the last we will hear of it. We have a role to play in regard to holding both the Minister and the agency accountable. As I outlined in my amendments, I would like to see far more accountability and openness in regard to the extent to which agents of this agency account to this House. They should not have unreasonable and unfair restrictions imposed on what they can say to Members of this House who have a legitimate public interest in pursuing these issues.

The Minister's approach throughout Committee Stage was extremely disappointing and no progress was made in this regard. The Minister and his colleagues will come back to this House and say they need more vigorous legislators, there should not be a dual mandate, legislators should devote their time to important public issues, yet he is happy to introduce legislation which at every hand's turn denies legislators the opportunity to hold to public account decision makers who make important decisions about the future management of public projects.

I will press my amendments, which are grouped with the Minister's amendments, because important issues of principle are involved. He must recognise that he is embarking on an experimental route which has not been successful in every instance. There are many cases where PPPs have resulted in more expensive private sector funding for something that could be done cheaply by the public sector. One of the major driving factors behind the Minister's action is undoubtedly the restrictions of the stability pact, which forces him and other Ministers in developing countries to restrict the amount of money they can put into necessary infrastructure. We are being forced down this road by inflexible rules agreed regarding the stability pact. The Minister would have a better opportunity to seek amendments in Europe to the stability pact rules rather than put us into this straitjacket whereby, if we exceed 1% public borrowing for capital purposes, we will be forced into this PPP route and have to try to take projects off balance sheet without proper accountability in respect of such funding. I must continue to hold the line that the Minister's approach does not provide adequate accountability for a new and important approach, which has potential in certain instances, but could go wrong in other cases.

I made the point on Committee Stage, which I repeat again, that the new agency, which will cost a good few million euro per year, is entirely superfluous. All the work of the agency could be subsumed perfectly well within the National Treasury Management Agency and the amendments the Minister has tabled prove that point. He has already trumpeted the fact that SPC companies and other projects will not be subject to State guarantee. The Minister, presumably acting on advice from the NTMA which would be trying to get the cheapest rate for State projects, has reconsidered and there is now provision for guarantees. This is a major climbdown and U-turn, which proves the agency was a Fianna Fáil election promise.

While circumstances have changed, it was designed to get certain Irish projects off balance sheet and not reported in terms of the stability pact. These conditions are now changing. The agency is an example of how the Government in six years allowed public expenditure in certain areas to spiral out of control, with no benefit to taxpayers. There has been the setting up of board after board, agency after agency, consulting group after consulting group, all of which have taken their cut off the backs of taxpayers. This is another device to cost taxpayers more money in respect of a function which can be more than adequately carried out within the existing State structure and organisation, particularly that of the NTMA.

I said already that I am dissatisfied with the reporting mechanisms which have been arranged. This body, which will oversee and advise on the spending of billions of euro of taxpayers' money and PPP money will be, in effect, hidden from public scrutiny. The only device available to scrutinise the process will be the annual accounts six months after the end of the year. The West Link toll bridge is the best example to date of a public private partnership where the vast bulk of the profits have gone to the private sector and unfortunate tollpayers in the greater Dublin area have paid for the largest traffic jam in Europe. In future if projects are conducted through the mechanism of this agency, as the Minister proposes, it will not be possible to ask sensible questions or seek reasonable information and accountability, which the Dáil should be capable of exercising in regard to the spending and commitment of taxpayers' money. The reintroduction in the Bill of the notion of the State as the guarantor of last resort, on which the Minister did a U-turn, means that if the public private partnership project fails, the State will have to pick up the tab. The notion of transferring the risk from the State to the private sector in respect of a public amenity like a hospital, school or stretch of road is nonsensical because, if the public private partnership project fails, the State cannot close down the school, hospital or road.

The Minister's amendment represents a climbdown. It recognises and acknowledges that the State must be, in effect, the guarantor of last resort. Why is it necessary to create a separate agency to perform functions that could be done by existing bodies?

The Bill removes from committees of the Oireachtas the regular and reasonable power of scrutiny and the opportunity to hear the advice that members of the board have proffered to Ministers about the suitability of certain projects and financial structures. A vast amount of public money has been spent on consultancy for the Abbotstown project in my constituency. All we have to show for the taxpayers' money that has been spent is a swimming pool which has cost about three times what it might have cost as a direct project. I know the problems with the Abbotstown development can be attributed in part to inter-party squabbling within the Government about its merits, but the cost in terms of money lost to the public purse is astonishing.

I welcome the swimming pool that has been constructed, but nothing else has been built on the site and millions of euro have been wasted. The limited Oireachtas scrutiny the Abbotstown project has received will be almost impossible in future cases if this Bill is passed and Members of the House will have to engage in a form of parliamentary or accounting archaeology to uncover what happened. It will be almost irrelevant as the money will have been spent and infrastructural opportunities may have disappeared.

The Minister for Finance is well known for being averse to receiving advice. The agency established in this legislation was a Fianna Fáil election promise and taxpayers will have to fund it to soothe the Minister's vanity. I retain the opinion I expressed on other Stages of this Bill, that it contains deep flaws. I welcome, however, the fact that the Minister's amendment reasserts the primary control of the National Treasury Management Agency over the functions of the National Development Finance Agency. Certain advisory decisions will be difficult for Ministers to resist when they are desperately anxious to commence a project such as a school, hospital or road. Could Ministers resist the opportunity to get some or all of their Departments' capital projects off the ground? The Dáil will not be allowed to carry out public scrutiny of the comparative costs and efficiency of the projects.

It will be a bad day's work if we allow this Bill to pass. While I do not think we will encounter many examples of projects not going ahead, as Ministers and communities will be anxious for projects to proceed and offers to construct schools, hospitals or roads under PPP schemes will therefore not be rejected, society will have to fund the consequences of such schemes over a 25 year period. As we know, taxpayers will be the ultimate guarantor in most cases as it is not possible for risk to be transferred entirely from the State to private projects. It is mumbo-jumbo economics to suggest that it is possible and it recalls the thinking that was popularised in New Zealand in the 1970s and 1980s. Many senior public servants studied the New Zealand model and I wish they would go there now to see the ultimate consequences of the policies of that time. It is as bad for Ireland to adopt this deeply flawed model now as it would be for us to accept the economic ideas of Reagan or Thatcher almost 20 years after they were abandoned elsewhere.

I retain my objections to the Minister's amendments, as I outlined on Committee Stage. I regret that he has not seen fit to rethink this matter, especially in the context of changes in the conditions governing the stability pact. The Commission and the European Union are correctly rethinking the terms of the stability pact as they apply to necessary infrastructure in the member states. Eurostat, which will judge how the projects will be treated for national accounting purposes, has made clear that it will prioritise substance over form. If the State is investing in a public good, Eurostat will probably include it in our national accounts, regardless of the off-balance sheet structures attempted by the Minister. I do not know what the Minister will gain from this legislation other than the vanity of keeping an election promise which is now redundant.

In the run-up to the budget, the Minister acknowledged that an additional €75 million will have to be spent on the SSIA scheme to allow him to boost it. The Ministers for Education and Science and Health and Children are white-faced as a result of the decreases in funding made available for essential services in their Departments. The Minister for Finance, however, is content to spend €75 million on the SSIA scheme next year and a total of €300 million over the life of the scheme. Similarly, the agency being established in this Bill is largely redundant. It will cost the taxpayer money while reducing the capacity of this House, the public and the media to critically analyse what is happening in relation to necessary national projects.

I agree with Deputies Bruton and Burton, as it is superfluous either on Committee or Report Stage to seek to amend a Bill to create a flawed and unnecessary agency. It calls into question some of the reasons we are in this House. It is right, however, that we should discuss the amendments before the House. Amendment No. 2, in the name of the Minister for Finance, reveals the ludicrous nature of this Bill and the agency it seeks to create. The Minister is attempting to provide that the agency will be accountable, in so far as it will be accountable at all, to the Committee of Public Accounts, of which I am a member. I cannot attend this morning's meeting of the committee, however, as I am unable to practise bilocation. It is typical of the way in which the business of the House is organised. When important legislation such as this Bill is debated, we often refer to giving committees an advisory role, but there is no point in doing so if a committee is sitting while the House is discussing a related Bill. We should ensure that Members are able to contribute to all debates in which they have an interest as we consider the future organisation of the business of the House.

The proposal before the House is far from adequate, as it seems to underline the original proposals in the Bill. It seems that the agency is being established to operate apart from the busi ness of the House and, as far as possible, from the business of the Department of Finance. Such a provision is a throwback to the culture of secrecy that has dogged Ireland's political maturity and development. As my party's finance spokesman I am not happy with the provision and my party is not willing to support it in the House. As other Opposition speakers have said, committees of the House should, as a matter of course, contribute to, examine and oversee public private partnerships that relate to capital projects in the Department relevant to the committee. The Green Party believes that PPPs are a fraud, as while they might assist the fast-tracking of infrastructure, the overall cost to the taxpayer will be higher. Public private partnerships are riddled with risk.

The establishment of this agency and the provisions in relation to the State, through the agency, acting as a guarantor and in effect becoming a lender of last resort to private enterprise underlines the poverty behind the Bill. We know that the present method of putting in place public infrastructure through public sector borrowing has its flaws but if legislation was needed it should have been in the area of public procurement improvements. The Minister should look at the idea that many of these projects have cost overruns because of provisions in the contracts that do not encourage the contractors to achieve value for money, the whole idea of ad valorem payments for contractors, professions, architects and engineers, the idea of a percentage of the overall cost rather than a set price, the fact that there are no penalty clauses in many contracts and so on. That is the road he should have gone down and still should go down. Nothing speaks louder of that failure than the indications that the National Development Plan will deliver one-third of the suggested projects for 50% of the projected costs.

I attended an event last Monday in Cork University Hospital where the Minister for Health and Children, who seems to be entangled, either publicly or privately, with the Minister for Finance over the very projects which we are debating, was talking about how his Department was more in line than other Departments to meet the initial National Development Plan costs for capital projects. He was able to make this boast by being merely 15% over budget. If the best Department is 15% over budget it says a lot about the accounting procedures within the Department of Finance and the Government.

Regarding the scrutiny suggested by the Bill, through the Committee of Public Accounts, the committee already has an enormous workload and we have a very efficient and well-informed Comptroller and Auditor General. There is still a great deal of uncertainty that providing the agencies' accounts will reveal the full picture. Will they be consolidated accounts? Will they take account of the myriad of companies that can and will be formed by the agency? I suspect not and, if they do, they will come in a drip-feed fashion so that we will never see, at any one time, the work of the agency as a snapshot of the amount of money that it spends on the public's behalf.

In general terms, the idea that the agency can form these companies is a further illustration of the Minister's intention to engage in what has been referred to as "off balance sheet accounting". We should not go down this road for reasons of accountability and, more importantly, because of the likelihood that public finances will get further out of control.

The Minister's amendment should be rejected on all of these grounds and the amendments suggested by other Opposition spokespersons should be accepted, especially in the area of the Freedom of Information Act. I am surprised to hear that the value-for-money comparisons that the Department will make against public private partnerships will not be included for public inspection at the earliest possible opportunity. As a result it will be left to the Comptroller and Auditor General to do subsequent audits which will show that many of these comparisons were erroneous and cost the State money. This is unnecessary and is a road we should not go down.

It is likely that, because of the cloak-and-dagger secrecy involved, what Deputy Bruton mentioned about EUROSTAT will come to pass. The attempt to avoid calling this borrowing, which it is, will be exposed and stated as such by EUROSTAT. The Minister has already had the experience of trying a budgetary measure in last year's budget and that bluff was called. It ill-serves the use of the House's time to introduce legislation which will not have its intended effect and will be exposed as an attempt to obscure the reality of public finances in this country.

I oppose the amendments tabled by Deputies Burton and Bruton. It is not a matter for the boards of the NDFA to report to a committee of the Oireachtas on a project, or projects, which it funds. It will be a matter for the relevant Minister, accounting officer or equivalent to report to the Government and the Oireachtas in the normal manner, in keeping with existing democratic accountability arrangements. I consider that the requirement of section 18(6) for the chairman and chief executive of NDFA to give evidence to the Committee of Public Accounts, whenever so required, provides for sufficient accountability by the agency for reforms of it functions. I do not consider it appropriate that the chairman or chief executive of the NDFA should express views on Government policy when appearing before the committee. There are similar provisions to this in other legislation such as the Employment Equality Act, 1998, and the Competition Act, 2002. I gave a list of those acts on Committee Stage.

The objectives of the NDFA is to ensure that the private sector does not profit unduly from PPPs. Centralisation of financial expertise in the NDFA will ensure that only the best, or optimal, finance projects are accepted. That is the purpose of setting up the NDFA, to ensure that the State can provide the optimal financial arrangements for PPPs.

Section 20 sets out detailed provisions on what the accounts of the agency should contain. These include the items mentioned by Deputy Boyle. Returning to what the Deputy raised about EUROSTAT, every year EUROSTAT excludes, includes or recasts items in Governments' accounts. It happens all of the time, with all countries. To my knowledge, recently Italy and Portugal have had some of their items excluded. There is nothing unusual in EUROSTAT deciding earlier this year not to allow the items referred to concerning the Central Bank against the general Government balance. This goes on all the time and will continue to do so. Even items from next year's figures are subject to the same type of scrutiny. There is nothing unusual in that, it is what EUROSTAT does all the time with all countries.

There seems to be confusion, deliberate or otherwise, on the part of some Opposition spokespersons regarding the Stability and Growth Pact. When we put forward the idea of the National Development Finance Agency in the last general election I gave examples for the next five years of the possibilities regarding moneys raised by the NDFA. These moneys would be outside the Exchequer borrowing requirement. Depending on the type of project, it might count against the Government's general balance. I gave examples in the statistics, going forward for five years, time and time again in the Fianna Fáil election manifesto launch and at various press conferences. I said if €2 billion were raised by the NDFA over the next five years it would count to reduce the Exchequer borrowing requirement but I gave the example that perhaps only 50% would count against the general Government balance.

If Deputy Boyle looks at the documentation he will see €2 billion on the top line and below it, €1 billion in taxes which come back to the general Government balance in order to give the figure for that balance. This is what enthralled the people for the first ten days of the election campaign, when we kept talking about the economy and the figures for next year. Those figures also showed that expenditure increases would be of a moderate amount, although after the election, when I began to implement that policy, that seemed to come as a surprise. We certainly spent the first ten days of the election campaign speaking of nothing except the economy. There were great debates between me and the Opposition spokespersons about who had the correct figures, but they were all there. It should not have been a surprise to anybody.

It is quite clear that the activities of the NDFA will be outside Exchequer borrowing requirements but, depending on the project, may or may not be within the general Government balance. The EUROSTAT rulings on these matters will not occur before the event but after it. In simple terms, the more remote the project will be from the Government, the more likely it is that it will be outside both the Exchequer borrowing requirement and the general Government balance. The nearer it is to the Government, the less likely it is to be counted off the general Government balance. It really depends on the transfer of risk. If the risk is wholly transferred, for example for a toll road with no recourse to the Government, it will be off the EBR and off the general Government balance. If there is recourse to the Government, it will be off the EBR but likely to count against the general Government balance. EUROSTAT will make those rulings after the event.

I tried to explain the question of borrowing on Committee Stage, but obviously not to great effect. After the start of the year, Departments must stick with the Government's decision on borrowing requirements. If we decide that a certain amount is to be done by the NDFA, that will be part of the overall borrowing or capital requirements for that year. Departments will not be able to go off, pick up projects and send them off to the NDFA, because that would cause difficulties for me. If the project counted against the general Government balance that would be outside the rules of the Stability and Growth Pact. Departments will not be able to send a project off to the NDFA and forget about it, thinking it will not count against the general Government balance requirements – depending on the project, it may count against the balance and be subject to the rules regarding the capital requirements for Departments.

I will hardly be able to convince the Opposition of the merits of the NDFA in this limited time, but in time it will be a useful tool to the Government in assessing financial packages. We discussed this on Committee Stage. The agency will provide advice regarding optimal financing. It will not give views on whether the project is a good or a bad one. The object of this agency is to deal with money – finding the best possible financial arrangement. I gave some examples of public private partnerships – if the NDFA had been there when these were being set up it could have offered a better way of financing them, resulting in a far better package in terms of money. It will deal with bonds and so on. In PPPs, the project operator must bring in the finances and it will always cost more than the State can borrow.

Most people in the House – with the exception of Deputy Burton and her party – believe that PPPs have other advantages such as efficiency, speed of delivery and so on. There will also be failures, of course. There are failures everywhere this approach is used, but there are also many successes. We have tried to learn from the successes and failures of other countries, noting their mistakes and trying not to repeat them. This agency is concerned only with financing arrangements.

The proposition was put forward that the NDFA could be an adjunct of the National Treas ury Management Agency. Although it will be closely allied to the NTMA, the function of the latter is to manage the national debt, while the NDFA will be concerned with providing finance for capital projects, a totally different matter. They are somewhat related, but it would not be possible for us to have one agency doing these two jobs. I have given other functions to the NTMA, such as its role in the national pensions reserve fund – it is the first manager. I have also set up the State Claims Agency, which works in conjunction with the NTMA, and the NDFA will also work in conjunction with it. The chairman of the NDFA will be the chief executive officer of the NTMA and they will work closely together. I am convinced that this will be a good agency. We will be able to see in three or four years whether it has been effective. I believe that it will be, and it should be given a chance.

I admire the Minister's conviction. A test of his conviction would be to allow the House to participate in deciding whether this agency is a success. If he decides, for example, to build a new hospital and puts it out to a private contractor, this House will have a legitimate interest in knowing whether it ended up being cheaper than a public project and whether it respects the public policy requirements of a public hospital to care properly and fairly for its patients. If the financial package put together by the agency results in the project being more expensive or results in charges being imposed on public patients, for whom we want to provide free care, this House will want to know that. We will also want to know if the agency insists on the project being funded from certain sources not in accord with public policy.

The House can question the Minister for Health and Children on that matter.

What if the private sector developer goes belly-up and proposes closing the hospital and putting it into liquidation? We will want to know what protection there is for the public so that the hospital may continue to provide a service.

The Deputy will be able to challenge the Minister for Health and Children. Those problems would be under his remit.

We want to be able to evaluate whether we got value for money on a project so we are asking the Minister to agree to publish freely each comparison he said would be done by his own Department, showing how the costs would compare with taking the traditional public sector route of funding the hospital with Government borrowing, with the Government controlling the tender and the contract. We want the Minister to make this public information, available to Members. He is refusing to do this. That is the first vital piece of evidence this House will want so that it can make judgments. The Minister is confident that he will be proven right, so why not give us that evidence and let us agree that the Minister for Finance was right and that we, the sceptics, were wrong?

I look forward to Opposition Members ever saying that.

He will not give us that information, however.

I was surprised that the Minister did not comment on amendment No. 24, which provided for the Public Accounts Committee asking questions about the policy adopted by the agency in implementing its functions. If the Minister refuses that amendment I will despair. That is the most basic level of accountability we demand from an agency.

I sometimes despair, in a friendly way, of the capacity of the Minister for Finance for listening to advice. The Minister said the last day, in his introduction to the Bill, that Departments will be required to seek the advice of this agency. There are young students in the Gallery. If their school needs an extension or their town needs a hospital or their area needs a road, they will be so anxious to secure that investment in infrastructure that no one can realistically ask them to be concerned about the method of financing and its cost. They will want the investment to go ahead but the taxpayer will have to pick up the tab if and when the NDFA gets it wrong.

There is one outstanding example of a public private partnership in this State, the Westlink toll bridge. All profits from the toll bridge have been made by the private sector while the cost to the public in tolls and traffic jams is extraordinarily high. Neither the public nor this House has any way to force a change to this fiasco in traffic management in Dublin. It goes to the heart of the reservations about the mechanism the Minister has chosen. It is another agency that will cost a lot of money and which is entirely superfluous. We need input over and above the National Treasury Management Agency, which has great expertise and has used it wisely, into project management and project delivery. This agency will not do this.

I asked the Minister, in the context of the partnership structure, to allow a representative from ICTU and the employers' organisations to be part of the agency's board so they could express social concerns to help the board to reach its decisions and I am disappointed that the Minister has refused that request.

The Minister is philosophically driven in his politics, an admirable quality, but he ignores the central philosophy behind many public private partnerships, whereby essential public services will now be provided on a profit driven basis. An existing gymnasium in a school in Bal lincollig, County Cork, is being knocked down to be replaced by a new facility which will then be hired out by its owner, Jarvis PLC, on a commercial basis and to the detriment of community services. This Bill and the agency it establishes will multiply that effect and will undermine social and community services while imposing additional costs on the Exchequer and the taxpayer. That is a high price to pay for a political philosophy. I ask the Minister to accept the proposed amendments and take time to consider further this badly thought out Bill.

I am not going to convince the Opposition at this point of the merits of the NDFA Bill.

Amendment agreed to.

I move amendment No. 3:

In page 4, line 25, after "as" to insert "an Ghníomhaireacht Airgeadais d'Fhorbairt Náisiúnta, or in the English language,".

Amendment agreed to.

I move amendment No. 4:

In page 4, line 41, after "authority" to insert "provided that the opportunity to offer a financial package is open to competitive offer by other providers".

This will ensure that the sponsoring Department does not find itself restricted only to public private finance packages put together by the agency. If there are competitors who can offer better arrangements, and there is a body of experience in other European countries, we should allow them to offer their services. The agency should be solely responsible for providing financial packages for public projects when we might have the opportunity to find others who could fund financial packages on better terms in a more innovative way.

Section 3(3) provides that on carrying out its functions, the NDFA will be subject to compliance with guidelines I will issue. These will be drafted by an interdepartmental group of experts and will be subject to the advice of the Attorney General. These guidelines will take full account of national and EU procurement procedures designed to ensure fair, competitive and transparent practices. For that reason it is not necessary to amend the functions of the agency.

I hear a note of doubt in the Minister's voice.

I will say it again in a different voice.

Many people would have to be consulted under the guidelines and Deputy Bruton raised valid points about how these guidelines will meet EU requirements. We will have to wait and see what happens. The Attorney General will have to have an input into the guidelines but it all comes back to the fundamental issue of transparency. Only if transparent information is available will it be possible to judge if this approach will constitute real value for money over the 25 year period of these projects. Earlier Fianna Fáil Administrations built low cost housing in parts of Dublin that turned out to be the most expensive housing for local authorities to maintain. Sometimes the cheapest and most attractive option is not the best.

Deputy Boyle mentioned Jarvis PLC and its contract to build schools. The Minister, on Committee Stage, rightly said that school principals are thrilled about this. Of course they are. They are thrilled they are no longer on the telephone to Tullamore and someone is now building the school. Why would they look a gift horse in the mouth? The principals, however, do not have the job of looking at the overall balance sheet in terms of the gains to the public compared with the losses under this system. We have already heard about the huge problems in Britain in school buildings constructed by Jarvis PLC, the disastrous problems with its maintenance contracts and the tragic consequences of its involvement in transport in London. That has still not been sorted out.

As a result, surveys by the ACCA in Britain have shown that the balance of opinion among experienced accountants has shifted away from the glorification of PFI. This is a copy of that system and sensible voices are saying that it is not the cheap, value for money solution that people thought when it first became fashionable.

This amendment adds to other amendments seeking that the maximum amount of information be available at any given time. I am also concerned that the guidelines, like the Bill, will not address the use of information gained through membership of the agency and the activities of former members who become involved in the private sector later. This agency will have access to sensitive information of a commercial nature.

We have too often seen the lack of guidelines within the Civil Service which allow people to go from prominent local government positions to positions in the private sector and, what is more worrying, allow those involved in important public sector projects on behalf of national Government to go a similar route. An agency is being set up and peopled with those who will have information that can subsequently be used for personal benefit and this is not addressed in the legislation. To be promised future guidelines that may or may not address the problem is something the House should not stand for or approve.

I am pressing the amendment.

Amendment put and declared lost.

I move amendment No. 5:

In page 4, line 45, after "arrangements" to insert "or within the public sector".

This amendment follows from an amendment proposed by Deputy Bruton on Committee Stage. I indicated I wished to clarify the wording with the Parliamentary Counsel. The amendment incorporates the purpose of Deputy Bruton's amendment.

Amendment agreed to.

I move amendment No. 6:

In page 5, between lines 3 and 4, to insert the following:

"(e) to manage the investment on behalf of the National Pension Fund of moneys assigned by the Fund each year for the purpose of investment in infrastructural projects that yield an adequate return to the Fund.”.

There was considerable discussion of this issue on Committee Stage and it is important the House consider it. The issue is whether the function of this new agency be extended to effectively offer a management service to the national pension fund whereby the pension fund could put money into infrastructure projects that would yield a return. The Minister is determined not to amend the national pension fund legislation, which is his prerogative. This does not seek to amend that legislation or to impose on that fund any obligation to consider public projects for their investment, much though I would like to see a requirement in that regard. The amendment simply requires that the agency take the opportunity, and have as a specific function the delivery to the national pension fund of suitable packages that would attract resources for which the taxpayer is already paying.

The background to this is that the taxpayer is this year borrowing €1.5 billion to devote to the pension fund, which in turn invests that money on foreign stock exchanges at a time when our infrastructure is groaning under the weight of congestion. This situation does not make sense and, much though the Minister might want to avoid putting pressure on the pension fund, it ought to be encouraged in the small way proposed to give greater consideration to public infrastructure projects that can yield a return. This is a sensible proposal and does not undermine the freedom of operation of the pension fund which the Minister is determined to protect. It is to ensure that the tolls motorists pay on roads will not go solely to line the pockets of private sector providers but may well go to fund their future pension commitments. It would be a happy concurrence of events if that could be achieved and I hope the Minister will at least facilitate the new agency in encouraging the pension fund to go down this road.

We had a very good debate on this aspect of the Bill the other night on foot of Deputy Bruton's amendment. This would constitute a significant amendment to the National Pensions Reserve Fund Act, 2000. I have no plans at present to alter the arrangements with regard to the fund. There is nothing in that legislation to prevent the pension fund commissioners investing in any infrastructure project subject to the overriding requirement in the legislation to invest prudently and seek the optimum return. Consequently, I oppose the amendment.

As I explained the other night for the umpteenth time, the legislation underpinning the National Pension Reserve Fund Act allowed total discretion to the commissioners to invest in anything they so wished subject to them getting an optimum return.

This amendment does not interfere with that.

There was considerable debate in drawing up the National Pensions Reserve Fund Act in both the Department and the House as to the best way to do it. I decided the best way was to have the functions of the Act the same as any ordinary pension fund; that is, to get the optimum return. The commissioners must act prudently as trustees of pension funds do. That is the road I have decided to travel and it is as far away as is legally possible from the Minister for Finance. I do not influence the fund or anything else and that is deliberate. My instructions to my officials were to ensure the Act did not have any piece in it—

Will the Minister yield so that I can ask a question?

In what way will this interfere with the pension fund's freedom of operation? The amendment says the agency, an entirely separate body, will manage investment on behalf of the fund of moneys assigned by the fund – not the agency – each year for the purpose of investing in infrastructure projects that yield an adequate return which is decided by the fund, not the agency.

I will not go down the road of asking the fund—

The Minister should not offer the House inaccurate reasons for rejecting this.

I remind the Deputy this is Report Stage not Committee Stage.

I was explaining what the fund does. There is always a temptation to ensure that the Minister for Finance has some recourse to change the National Pensions Reserve Fund Act. I deliberately decided that the Act would ensure that the Minister for Finance has no role with the pensions fund commissioners, despite the temptation for the Minister for Finance in particular to have that kind of residual power in the event of a very rainy day. The legislation underpinning the national pensions reserve fund is as far away from the maws of Government as it is legally possible to be.

I have had recent advice from the Opposition that perhaps this year – temporarily of course – I should reduce the 1% GNP contribution. Even the most naive Deputies will know that if it was reduced once, it would always be. One would never get back to putting in the 1% because there would always be an excuse not to do it. Ministers would push for more spending in particular areas; the Opposition would demand more spending in other areas as would outside groups, and it would not be possible to get back to putting in the 1%. The most naive politicians should know that.

Even the 1% of GNP, which under the National Pensions Reserve Fund Act must go into the fund each year, will not be enough to meet the problems of an ageing population in the years ahead. Deputies may have read in recent days the report received by the European Commission on ageing and how it will affect all types of economic activity in a few short years. Those who read the Financial Times will have seen the report two days ago stating that this will be a drain on resources for years to come and which asked how it is to be funded. A sum of 1% is to be set aside for the national pensions fund and a kick-start given to it with the substantial amount of money that came from the privatisation of Telecom Éireann. However, it was estimated that that money would only mean about 30% of the additional cost in 25 to 50 years time.

Provision for pensions is as real a liability as the electricity bill for this House; it is occurring as we speak and it was decided for good reasons to establish the pensions reserve fund to meet the liability that is certain to be there in years to come. Europe has looked at the problem of how to fund pensions as have we. The 1% set aside each year will not meet the additional cost in years to come though it will ease it.

Many people have mentioned the high costs that come with an ageing population but the recent report to the Commission looks at this from another angle also. It says that the ageing of the population will lessen growth in the European Union in coming years. It compares Europe unfavourably with the United States which, it states, has a more open immigration policy.

The Minister should tell that to the Minister for Justice, Equality and Law Reform.

There are different angles to it. The report highlights that one of the reasons the United States is growing is that younger people are going to the United States. That compares unfavourably with Europe. We will not only have the costs associated with pensions, but there will be lower growth in Europe over the next 20 years to fund pensions and everything else. We have been complimented for having the foresight to do something. However, it is not the only way to address this problem.

The European Commission is pushing to increase the retirement age because people, who have better health nowadays, must be kept working to ensure greater economic activity. The European Commission has been examining this issue for some time. The retirement age will probably be increased. We are out of step in that regard because we have always considered earlier retirement. The rest of Europe and the Commission is considering increasing the retirement age.

Our approach in setting up the National Pensions Reserve Fund Act is a way of addressing part of the problem. We should try to keep it going for a few years without politicians interfering and taking money out of it. The people would respond badly if a Minister or Government said it was going to take money from people's pensions. Despite all the negative publicity about the Bill both inside and outside the House, surveys done prior to the election showed that the people supported the pension fund. Why? They did so because they are sensible and they know that we should provide for the future when things are going well. The Government is doing the right thing in putting money aside.

As regards the amendment, there is nothing to prevent the pension fund commissioners from investing in infrastructural projects. They are likely to do so if they get a good rate of return. If there are attractive options, they will get a good rate of return, subject to normal prudent arrangements. However, I will not issue a specific requirement. I oppose the amendment. I am glad of the opportunity to once again put on the record of the House the benefits of the National Pensions Reserve Fund Act.

I would have listened with respect to the Minister's lecture on his genius if he was not the same Minister who last year raided the social insurance fund to the tune of several hundred million euro and who refused, together with his Government, to give workers who were made redundant a decent redundancy payment from the funds to which they contributed. If the Minister believes in the funding and contributory principle, then he should not have raided the social insurance fund last year and people who became redundant should not have been refused a decent level of redundancy payment from the funds to which they contributed. The principles of funding contributions and mutuality do not require less than that.

There is a fundamental error in the Minister's philosophy on the national pensions reserve fund, which can be attributed to his ideology. He always likens the country and our society to a small family company. While one might argue that the directors and family members would be well advised to create a pension scheme – I am sure the Minister, as an accountant, has advised people to do that on many occasions – it is wrong to compare a society and an economy with a small private company and to use that as the model for everything we do in terms of our national finances and society's needs. That is one of the reasons, despite our recent affluence, we have fallen short of the mark in terms of providing the necessary infrastructure.

The public is rightly attached to the notion of providing for themselves in the future. However, the people do not yet realise – I am sure the Minister's spin doctors and his lack of transparency have kept it from them – that much of the money in the national pensions reserve fund will be used to fatten the commission fees of brokers and advisers across the world. We do not have a proper road and rail infrastructure and much of our hospital infrastructure is a disgrace. We, as a society, not as a small private family firm which telephones an insurance company for a deal on a policy, are looking at a massive infrastructural deficit, yet we are paying people in stockbroking houses, who are perfectly happy to boost the Minister's vanity, fat fees to invest borrowings and our hard earned money in the infrastructure of Hong Kong, New York and anywhere else from here to Timbuctoo.

When the national pensions reserve fund laid its first annual report before the House in the middle of the year, which covered the 12 months to last December, it showed that because of falling equity markets around the world the initial investments from the Eircom sell-off and the subsequent national contribution had lost significant elements of their capital value. The Minister should not tell me it is a 25 year timescale. It is like Senator O'Rourke's small print on the Eircom offer that the value of a share may rise and fall. We know the Minister's belief that the value of equity investments may rise over a 25 year period. However, that is not the issue.

This country has an incredible infrastructural deficit. The chamber of commerce said that it takes longer to transport goods in the greater Dublin area than in almost any other developed capital in the world. The American Chamber of Commerce, which the Minister's friend, Deputy Harney, addressed at its Christmas lunch, struck a strong warning note about our infrastructural deficit. Like Deputy Glennon, I represent an area where there is a significant amount of foreign direct investment. The chief executives of those companies are seriously concerned at the infrastructural deficits in a number of areas. The Minister is defending himself. He mentioned the problem of controlling the cost of capital projects and he said that if he released more money, the cost would rise. Perhaps he should talk to his friends in Fianna Fáil or to the contributors in the tent in Ballybrit about how they should control their costs. That is the problem. We are putting money into funds abroad when we have a significant infrastructural deficit.

The Minister argued about saving for future pension liabilities and alluded to the economy of the United States. The Friedman-Reagan years did immense damage to the American economy, which is now acknowledged by all sides there. That damage was the result of following absolutely the free market theory. The USA's economy is sustained by net population increases including immigration growth. The Minister's comments moments ago in regard to the importance of maintaining a young population and a net inflow of people reflect something that is vital to the European economy given that the population is ageing. Sustaining a young, trained work force is essential to sustaining investment and competitiveness. I wish the Minister would pass that on to the Minister for Justice, Equality and Law Reform.

We are turning our backs on some of our oldest traditions and notions of society in order to close the door on anyone who wishes to come here. I welcome the Minister's remarks in regard to the economic success of the United States of America's use of appropriate immigration policies, such as the green card lottery, to meet labour shortages. It has pursued that sensible policy since its origins. The remarks show that somebody in the Government has a little sense.

I accept the Minister's point that technically the commissioners of the fund are at liberty to invest it where they see fit. However, those appointees have no stakeholder interest or reporting requirements. They are individuals selected by the Minister, largely on the basis of experience in capital markets, but their objectives are those of a private fund management over a 25 year period. They have no commitment to growing the economy. There is another point of view about pension provision in an economy which looks at it from the perspective of the social insurance fund principle. It is by growing the economy that you provide for the 25 year olds who 25 years hence will be at an age when they are looking to pension funds. That is how it is done by a society rather than by use of the small private company model which the Minister has chosen. In the polls it conducted before the election, Fianna Fáil found that people liked the idea of saving for the future, which is natural. However, they will not be very forgiving when they realise they have no public transport, public infrastructure is in a mess and hospitals resemble some I have seen in Africa. Visiting some of our hospitals at the weekend makes one feel ashamed, despite the very fine staff.

This is the richest period of our lives but because of our infrastructural problems everything is being done on the basis of public private partnerships. The Minister should think again in a social context of society's needs. Growing our infrastructure will produce a significant economic return which, in turn, will sustain foreign direct investment and local investment. I laud the Mini ster for wishing to provide people with pensions, but to do it he must grow and sustain the economy.

The Minister's intransigence on this issue, while typical, represents one of his least endearing qualities. The sermon he has just delivered ignores several salient facts which do not suit his need to convince himself of the rightness of his policy. The demographic time-bomb is likely to hit Ireland several decades after it hits the rest of Europe, but for now we have significant demographic advantages which we should be building on and encouraging to help meet future needs.

The concept of a national pension fund is not opposed. The argument has been the extent to which it is added to every year and in what circumstances. Given current budgetary circumstances, some of us have argued that the annual increment should be pro rata. It is nonsense to say you can put in the same percentage of GNP when the rate of growth in the economy is one-fifth what it was at its height. These are the mechanisms which should be put in place if we are serious about prudent economic management.

The fact that we are adding to a fund which has become depleted already because of investment decisions is something this House is concerned about. Whatever assurances the Minister gives that whatever is invested in equities will recover, there is no degree of certainty. We may find that having made these large contributions annually the fund we created is much less than the sum of the annual increments. It is not a good use of public resources. The Minister is probably aware that we were preceded in this policy by Norway where the existence of a sinking fund became an election issue during the last campaign. The coalition which succeeded in that election convinced the electorate that sinking fund was available to meet short-term electoral considerations. The Minister should not think, therefore, that the fund is ringfenced and protected in perpetuity from future political change. The fund's existence will be a temptation.

I agree fully with the central point of the amendment. I cannot understand why the money within the national pension fund cannot be used to finance roads infrastructure. Why is it that the return which accrued to National Toll Roads from the West Link cannot accrue to the national pension fund? If we insist that the fund should invest in equity, why are we turning up our noses at potential investments worth ten times the original sum put in? Deputy Bruton's suggestion seems to be the height of common sense and logic. However, I understand that logic does not form the basis of the financial and economic policies of this Government. I urge the Minister to consider this matter even to the extent that an amendment of the original pension fund legislation is required.

The Minister has successfully raised a red herring. I was not questioning the pension fund contribution, I was simply looking for this amendment to be made.

Amendment put and declared lost.

I move amendment No. 7:

In page 5, line 10, after "Agency" to insert "and the Minister, after issuing such guidelines, shall present them to the Oireachtas or the appropriate committee of the Oireachtas and provide 21 days during which time the guidelines could be amended or revoked by the Minister or by a motion in either House of the Oireachtas".

With this amendment I ask the Minister to take a baby step in terms of providing a modicum of accountability to the House. The Minister and his colleagues continually urge Deputies to devote their energies to legislative work instead of bothering ourselves about mending potholes. I presume the Minister will follow the logic of that. From our session during the week, he will be aware that the finance committee is very interested in seeing the policy guidelines he will be issuing to the agency. He should therefore give the Oireachtas the opportunity to do what he and his colleagues say we do best, to hold to account the implementation of Government policy.

I ask the Minister to make a small gesture towards democracy by allowing the guidelines, which he is taking on himself the right to make, to be presented before an Oireachtas committee which he has already attended and where they would be given a spirited assessment. The guidelines would be the better for that and the agency would be the better for having the opportunity to study the transcripts of the discussion on the guidelines at committee.

In relation to this amendment it is my intention that these guidelines would be widely available. They will issue to Government Departments and the NDFA and will be on the PPP and Department of Finance websites. For that reason I have no difficulty in submitting the requisite number of copies of the final version of the guidelines to the Oireachtas Library. However, under section 3(3) the responsibility for issuing guidelines and instructions to the agency rests with the Minister. It is also a matter for the Minister to revoke such guidelines and instructions. I oppose the amendment.

I hoped the Minister would have had second thoughts on this amendment. The mechanism of the agency will be desperately important to a range of institutions and Government Departments in seeking funding for projects. The Minister is requiring Departments and projects to seek the advice of the agency. He said in his initial speech that it would be compulsory to seek the advice of the agency. It is important, therefore, that the House has an opportunity to examine the guidelines. The Minister has been at pains to suggest that the advice of the agency will be entirely in relation to financial packaging but I suspect the structure of the guidelines will, effectively, offer the mechanism and structure by which projects will be pitched. All of us are concerned that the guidelines would be genuine and allow for flexibility and the maximum benefit to the public and the taxpayer. However, in view of the way the Minister is going about it, I fear we will get a straitjacket. For that reason it is important that the guidelines be available for debate by the House and the appropriate committee.

This is an excellent amendment and I am disappointed the Minister is unwilling to accept it. It would go a long way towards addressing a concern I have already expressed on Report State in relation to members of the agency subsequently finding themselves working in the private sector with possible access to information gained within the agency. It is important that such guidelines are put in place and that the House has the maximum involvement in helping to shape, amend and review them. I hope the Minister will reconsider his reluctance to accept this amendment.

I am often bewildered by the attitude of the Minister. This is the minimal level of accountability we could be expected to accept. We are setting up a new agency to do something entirely new in relation to how we handle public projects and the Minister will not allow a provision whereby, before making or changing the guidelines, he would be required to come before a committee and the House could, by motion, seek to amend those guidelines if it so wished. This is a very low test of accountability to which the Minister is being asked to agree. I am concerned about the agency given that the Minister is adamant it will not be accountable in any real sense to the Oireachtas. This undermines my confidence in an agency in which I still have some hope, albeit less than that of the Minister, that it can be of some value, and I am concerned that the Minister wants to protect it from this minimal level of accountability to the specialist committee of the House which has an interest in these matters. To say he will send us a pack containing his guidelines or that he will place them in the Oireachtas Library is different from saying he will come before a committee, be held accountable, and allow the House, if it deems fit, to table a motion seeking modification of those guidelines. That is the minimum we should expect from a Minister under the Constitution of a Republic.

Amendment put and declared lost.

I move amendment No. 8:

In page 5, between lines 10 and 11, to insert the following:

"(4) The guidelines referred to in subsection (3) shall require in respect of each project where a public private partnership is anticipated that an assessment shall be published in advance of the following:

(a) the principles underpinning the pricing policy to be pursued,

(b) the provisions which will apply in the event that the project does not fulfil its revenue expectations for the private partner,

(c) the method whereby the cost performance and physical progress of the project will be reported on a quarterly basis to the Oireachtas,

(d) the cost benefit analysis and the analysis of the benefit of a public privatepartnership over an exclusive publicly funded alternative approach.”.

It is important given the time constraint that I do not spend too much time on this amendment. This amendment which was debated on Committee Stage seeks to set out the principles involved in PPPs that would probably be neglected by the agency which the Minister envisages. These are the issues we ought to have in policy guidelines and that we ought to have the opportunity to debate in committee with the Minister. We will not have such a debate in committee and, no doubt, none of these issues will feature in the policy guidelines.

I cannot agree to this amendment. The purpose of the NDFA is as set out in section 3(1), namely, to advise and, in certain circumstances, to provide finance on public investment projects. It is a matter for Ministers or where there is a delegated sanction, the accounting officer or equivalent, to decide on the appropriate financing structure or projects. It is not the role of the NDFA to undertake PPP assessments of the type envisaged in the amendment. That is a matter for the relevant Minister, accounting officer or equivalent, to undertake in accordance with existing requirements and reporting arrangements and subject to audit by the Comptroller and Auditor General.

I support Deputy Bruton's amendment which addresses again the issue of accountability about which all of us on this side are concerned.

This amendment should be accepted. If the agency is to have any value it should be to engage in this type of assessment because the enthusiasm of any given Minister to proceed with capital projects will obviously compromise them in not having a proper assessment of the cost benefit analysis of each project. I ask the Minister to give positive consideration to the amendment.

I had expected the Minister to oppose this amendment. What is being created is a two-pronged approach to dealing with public projects. Previously the accounting officer would have been responsible for the project from beginning to end but now that responsibility would be diluted considerably because of the nature of the funding packages to be developed by the agency. It is likely that these important issues will fall between the two stools. Real issues, such as the nature and use of public policy pricing, and the provisions made in the event of the commercial failure of a project, are likely to be forgotten and downplayed in the headlong rush to get money from some source when the conventional route is not available. It is a pity the Minister cannot see when creating this two-pronged approach, that he needs to provide this type of protection to ensure the important public issues do not fall between the two stools.

Amendment put and declared lost.

I move amendment No. 9:

In page 6, line 3, to delete "such" and substitute "any".

This is a technical amendment to clarify section 6(3).

Amendment agreed to.

I move amendment No. 10:

In page 8, line 6, after "section 5” to insert “on such terms and conditions as he or she may determine”.

This is a technical amendment to provide that any advances made to the NDFA or a special purpose company from the Central Fund shall be on such terms and conditions as the Minister for Finance shall determine.

Amendment agreed to.

I move amendment No. 11:

In page 8, lines 12 and 13, after "subsection (1)” to insert “that are outstanding at any time”.

This is a technical amendment to clarify that the limit on advances made under the section applies to advances that remain outstanding.

Amendment agreed to.

I move amendment No. 12:

In page 8, line 34, after "members" to insert "one of whom shall be nominated by the Irish Congress of Trade Unions and one of whom shall be nominated by bodies representing employers".

I ask the Minister to reconsider this. I spoke already about it in the context of the partnership arrangements to which this Government is so committed. It is important that the social partners and stakeholders in society should have a role on the board of this agency. The agency will be in a pivotal position in regard to deciding on key public infrastructural projects. Projects must be referred to it for advice in regard, essentially, to the financial package. In essence, this agency, together with the National Treasury Management Agency, will have a pivotal role in saying "yea" or "nay" to important public infrastructural projects. Therefore, the social partners should be represented in some capacity on the board of the agency.

The board is small and the Minister wants to keep it tight. I have looked at the membership of the board of the National Pension Reserve Fund whose members were chosen for their financial and technical expertise. Because of that, they are investing our money in the infrastructure of countries from here to Hong Kong and to Timbuktu. That is great for Hong Kong, Singapore and the Asia Pacific area which is getting 6% of the annual contribution. The United States is getting 20% of it and the European Union area, over and beyond the Republic of Ireland, is getting 40%.

I want members on the board who are socially accountable to Irish society. I have said before that the Minister tries to run the economy as if it was a small private company. As we all know, small private companies can go into liquidation. The Irish economy and people cannot afford that. We cannot afford the kind of ideological straitjacket the Minister is creating in regard to our necessary infrastructure.

It is a comment on the restrictions and limitations of the social partnership model that the social partners have been unable to contribute to the debate in regard to this agency. I ask the Minister to consider this, in light of the commitments the Taoiseach has made time and again to the concept of social partnership, and in the context of the Minister himself arguing that it was the social partners who endorsed the public private partnership model. The projects the social partnership model identify as necessary to the future and sustainability of our economy will go through this agency. As it is often the person who holds the financial purse strings who will have the final "yea" or "nay" on the project it is appropriate that the people on the board should be people with expertise. That should not be just financial expertise but the people chosen should have a commitment to the wider concept of Irish society and to the interests of the various stakeholders.

In the Minister's reply to my question the other day in regard to the membership of the board of the Central Bank, he pointed out that he appointed to that board members and representatives of various groups representing different streams in society. Unfortunately, he was not in a position to appoint a woman among those ten people. He argued that the Central Bank was an important board with important work to do. Clearly, women did not come within the ambit of that kind of important work. Nonetheless, the Minister accepted the principle that fairly wide sectors of society should be represented on the Central Bank board, even if they are all men.

This argument applies even more in the case of this board. Board members, even if they are representative of wider interests in society such as the trade union movement, the social pillar or the employers' organisations, should also be people of appropriate technical expertise. It goes without saying they should have the qualifications and attributes necessary to be on the board. This would ensure that decisions made by the agency are not narrow financial decisions but are made considering the wider needs of society and the economy. It is also relevant that these people would have a sense of responsibility to those interests they represent. This, in turn, would increase the accountability that is, unfortunately, absent from the Bill.

We dealt with this at considerable length on Committee Stage and I do not wish to go over that ground again. I did not suggest or imply that the work of the Central Bank was so important that it could only be left to men. Even Deputy Bruton is laughing at that. Deputy Burton seems to have some particular hang-up with these matters.

It sounded very like that.

The Minister should re-read his comments.

This board will be small. It will consist of a chairperson and four other members. The chairperson will be the chief executive officer of the NTMA. I will not restrict it further by saying that so many members must come from particular areas. I will bear the comments of the Deputy in mind and will appoint people with the appropriate expertise to do a good job.

Deputy Burton referred to ideology. It seems to have become an offence to have one kind but if one has another kind it seems all right.

While I see the merit in Deputy Burton's amendment, the point of principle must be that the members of the board must not just be financial whizzes. There is a wider public policy issue at stake. There must be broader public membership of this board that will take into account the important issues of protecting the public whose assets we are building, creating and funding here. Whether this is represented by IBEC and ICTU, may not be the best or only way to represent this. The principle behind this amendment is that we need to see more than just stock market players, bankers or financiers on the board.

The purpose of the agency is to provide optimal financial arrangements.

Financial arrangements are not entirely insulated from the rest of the project. The financial arrangements impose upon the rest of the project certain modes of operation. If it has to produce a commercial return that means there has to be a certain approach to public pricing of the use of the asset.

The Minister of the relevant Department, or accounting officer will decide that matter. All this agency will do is will give the best advice as to the optimal financial arrangements. The Minister and my Department will take these other matters into account.

If the notion prevails that one can hive off funding of a project as if it has no bearing on the rest, and that the accounting officer will be a free agent to make decisions in the maelstrom in which they will be operating, where there will not be easy access to public borrowing in the normal way, there will be great pressure on them to go down this route. There will be a tendency to set aside sound public policy in regard to pricing or protection of risk in order to get the money or at least get the project built. The notion will be that someone else will look after it if it goes wrong because the Minister for Finance would never let a project such as a hospital go into liquidation.

It is important that the agency doing the funding, and which is advising the Secretary General in regard to this, would have a sense of the broader agenda. These are crucial advisers to the accounting officer and the Minister and it is important they have broader expertise and awareness. Deputy Burton's amendment imposes that obligation. While the Minister may say he will do it another way, the indications are that it will be a matter of the usual suspects turning up. That will include the Stock Exchange, bankers and financiers who have not got the wider view of the public good.

The number three seems to have become the Minister's magic number, with a three year budgetary strategy, three members on an bord snip and three members on the board to be established under this Bill. I support the intent of Deputy Burton's amendment that the board of this agency, if it is to come into being, should be broadly based. It should include representation from the social partnership process. ICTU has been cited in this amendment and a case could equally be made for a representative of the community and voluntary pillar, with which I assume the Minister is not greatly enamoured. It would be on the basis that many of the PPPs which would come into existence with the approval of this agency would have direct effect in the delivery of social services. In terms of value for money and security of the provision of the capital project itself, there is a need for outside voices of people who would be directly affected by the decisions of this agency. I support the amendment.

Amendment put and declared lost.

I move amendment No. 13:

In page 10, line 6, to delete "3" and substitute "4"

Because the board of the agency is exceptionally small, we have specified only two particular partners. I accept Deputy Boyle's comments in relation to others in the partnership process having a capacity to make a very strong contribution in this regard. In effect, decisions on vital infrastructural projects and financing could be made by three people. I regard that as too small. Also, because the National Treasury Management Agency has such a pivotal role and this body is really a sub-set of the NTMA and, strictly speaking, not necessary at all, it is just another layer of bureaucracy introduced by this Government. Nonetheless, the decisions should be made by more than three people, particularly if they are likely to be drawn from bankers and stockbrokers and there is no representation of a wider social interest. Such is the starvation of funding for public projects that Ministers and Departments will be lining up to secure projects if this is to be the only way of doing so. In effect, three people will make pivotal decisions about infrastructure, schools, hospitals and roads. That number is too small.

This amendment would raise the number of board members necessary to constitute a quorum from three to four. As the board will consist of the chairperson and only four ordinary members, this would place an unduly onerous requirement on the board. Accordingly, I oppose the amendment.

Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.

I move amendment No. 14:

In page 12, lines 43 and 44, to delete "(including dismissal)".

This is a technical amendment. The words I propose to remove are not necessary. Dismissal would arise in relation to employees whereas the subsection, as amended on Committee Stage, refers to consultants and advisers. The amendment will ensure consistency with the text of section 17 (8) which relates to staff of the NTMA.

As I understand it, this relates to technical matters concerning potential wrong-doing by staff. Will the Minister give an assurance that guidelines will be issued to staff on the matter of crossover by staff using their expertise and knowledge subsequently? They will be in possession of very sensitive information. I know it is not part of the Bill but I believe it should be addressed by the Minister. In my constituency, a former county manager became involved in the private sector within a few months of leaving the public sector. In the United States, as the Minister will be aware, there are severe restrictions, for quite long periods, on public officials crossing over into the private sector and making immediate use of the direct experience and knowledge gained in their public service roles for personal gain. I would welcome the Minister's assurance in that regard.

The Deputy has drifted into another area which I believe was dealt with in the House yesterday in response to a question from the Leader of her party to the Taoiseach. I understand that certain guidelines are being drawn up in that regard. However, as Deputy Burton will appreciate, from her background in accountancy, one cannot be unduly restrictive in this area. Efforts by companies to restrict former employees from setting up in competition for a certain period have been struck down by the courts many times. The Deputy has raised an interesting point which has been considered by the Government. There will be some guidelines but we cannot be overly restrictive. With regard to the Bill, section 18 provides for a prohibition on unauthorised disclosure of information. That applies to staff who might leave the agency.

Amendment agreed to.

I move amendment No. 15:

In page 12, line 46, after "satisfied" to insert "that".

This is a technical amendment.

Amendment agreed to.

I move amendment No. 16:

In page 13, line 19, to delete "shall be" and substitute "is".

Amendments Nos. 16, 17, and 21 are technical amendments to clarify the text in respect of criminal offences relating to unauthorised disclosure of confidential information and the prohibition of certain communications.

Amendment agreed to.

I move amendment No. 17:

In page 13, line 20, to delete "shall be" and substitute "is".

Amendment agreed to.

I move amendment No. 18:

In page 13, lines 27 and 28, after "information" to insert "in accordance with law or".

This amendment and amendment No. 19 deal with the application of the Freedom of Information Act. We wish to have this new institution subject to the Freedom of Information Act from the very start. Our legal advice indicated that the inclusion of the words "in accordance with law" would improve the section.

The first words of section 18 (1) are: "save as otherwise provided by law" which will allow for disclosure of information where permitted or required by another enactment or rule of law. Consequently, the proposed amendment is superfluous and I oppose it.

Amendment put and declared lost.

In accordance with an Order of the House this day, I must put the following question: "That the amendments set down by the Minister for Finance and not disposed of, are hereby made to the Bill; Fourth Stage is hereby completed; and the Bill is hereby passed."

Ahern, Dermot.Ahern, Michael.Ahern, Noel.Andrews, Barry.Ardagh, Seán.Aylward, Liam.Brady, Johnny.Brady, Martin.Browne, John.Callanan, Joe.Callely, Ivor.Carty, John.Cassidy, Donie.Collins, Michael.Coughlan, Mary.Cowen, Brian.Cregan, John.Cullen, Martin.Curran, John.Davern, Valera, Síle.Dempsey, Tony.Dennehy, John.

Devins, Jimmy.Ellis, John.Fahey, Frank.Finneran, Michael.Fitzpatrick, Dermot.Fleming, Seán.Gallagher, Pat The Cope.Glennon, Jim.Grealish, Noel.Hanafin, Mary.Haughey, Seán.Hoctor, Máire.Jacob, Joe.Keaveney, Cecilia.Kelleher, Billy.Kelly, Peter.Killeen, Tony.Kirk, Seamus.Kitt, Tom.Lenihan, Brian.Lenihan, Conor.McCreevy, Charlie. McDowell, Michael.

Tá– continued

McEllistrim, Thomas.McGuinness, John.Martin, Micheál.Moloney, John.Moynihan, Donal.Moynihan, Michael.Mulcahy, Michael.Nolan, M. J.Ó Cuív, Éamon.Ó Fearghaíl, Seán.O'Connor, Charlie.O'Dea, Willie.O'Donnell, Liz.O'Flynn, Noel.

O'Keeffe, Batt.O'Keeffe, Ned.O'Malley, Tim.Power, Peter.Power, Seán.Sexton, Mae.Smith, Brendan.Smith, Michael.Treacy, Noel.Wallace, Dan.Walsh, Joe.Wilkinson, Ollie.Woods, Michael.Wright, G.V.


Allen, Bernard.Boyle, Dan.Breen, Pat.Broughan, Thomas P.Bruton, Richard.Burton, Joan.Connolly, Paudge.Costello, Joe.Coveney, Simon.Cowley, Jerry.Crawford, Seymour.Crowe, Seán.Cuffe, Ciarán.Deasy, John.Durkan, Bernard J.Enright, Olwyn.Ferris, Martin.Gilmore, Eamon.Gogarty, Paul.Gormley, John.Gregory, Tony.Harkin, Marian.Hayes, Tom.Healy, Seamus.Higgins, Michael D.Hogan, Phil.Kehoe, Paul.

Lynch, Kathleen.McCormack, Padraic.McGinley, Dinny.McGrath, Finian.Mitchell, Olivia.Morgan, Arthur.Naughten, Denis.Neville, Dan.Ó Caoláin, Caoimhghín.Ó Snodaigh, Aengus.O'Dowd, Fergus.O'Shea, Brian.O'Sullivan, Jan.Pattison, Seamus.Penrose, Willie.Perry, John.Rabbitte, Pat.Ring, Michael.Ryan, Eamon.Ryan, Seán.Sargent, Trevor.Sherlock, Joe.Shortall, Róisín.Stagg, Emmet.Stanton, David.Timmins, Billy.Upton, Mary.Wall, Jack.

Tellers: Tá, Deputies Hanafin and Kelleher; Níl, Deputies Durkan and Stagg.

Question declared carried.
Sitting suspended at 1.45 p.m. and resumed at 2.30 p.m.