Vol. 568 No. 1
621 Mr. R. Bruton asked the Minister for Transport if he has set criteria for the NRA in respect of the manner in which private rates of return for investors in tolled road projects would compare with the costs of borrowing by the Exchequer; the form of reporting on these comparative rates which he requires from the NRA to his Department and to the general public; and his views on the reports he has received to date on this matter from the NRA. [15587/03]
The statutory power to levy tolls on national roads, make toll by-laws and enter into toll agreements with private investors in respect of national roads is vested in the National Roads Authority under Part V of the Roads Act 1993, as amended by the Planning and Development Act 2000. The NRA is required by the NDFA Act 2002 to obtain the advice of the NDFA in relation, inter alia, to the financing of national road projects. The development and implementation of toll based PPP projects by the NRA also takes account of Department of Finance draft interim guidelines on the assessment, approval and procurement of PPP projects.
Within this statutory and administrative framework, it is a matter for the NRA to negotiate PPP agreements for the funding, construction and operation of toll funded national road projects. The NRA carries out extensive financial, legal and technical evaluation for each national road project to be procured on a PPP basis. This evaluation focuses on ensuring that value for money is obtained and not on a comparison of private sector rate of returns and Exchequer cost of funds.
In assessing value for money, the NRA prepares a financial comparator which represents the cost under traditional procurement. This is compared to the cost to the public sector under a PPP arrangement to assess which offers better value for money. This value for money comparison is undertaken at different stages of the PPP procurement process. At the final stage the best and final offer submission which has been judged most economically advantageous is compared against the financial comparator to confirm that a toll-based PPP offers better value for money. In view of this approach to the assessment of PPP projects, it is neither necessary nor appropriate to set criteria for the NRA in relation to rates of return to private investors in tolled road projects.
