Skip to main content
Normal View

Seanad Éireann debate -
Tuesday, 17 Dec 2002

Vol. 170 No. 24

National Development Finance Agency Bill, 2002: Committee and Remaining Stages.

Section 1 agreed to.

I move amendment No. 1:

In page 4, subsection (1), line 32, after "Finance" to insert "and Project Management".

This acknowledges that the problem with the national development plan is not one of funding but of managing the projects. It is with that in mind that I tabled the amendment. Given that the Minister has gone to the trouble of setting up the new agency, he should take into consideration the primary problem in regard to the building of all types of infrastructure, which is the managing of projects rather than funding.

My reservation about the amendment is that financing is a separate issue from that of project management. Project management relates to the execution of a project according to technical and perhaps financial parameters. The Bill has to do with something rather separate such as financial mechanisms. Therefore, I am not sure whether it is a sound amendment.

The proposed national development finance agency is not intended to undertake project management. The functions of the agency, which are very specific and are set out in section 3, include providing advice and, in certain circumstances, finance in respect of public investment projects, including public private partnerships. It will be a matter for the relevant Ministers or, where there is delegated sanction, the accounting officers or their equivalent, to decide on the financing structure of projects. The management of projects will be a matter for the appropriate State authority. In other words, the NRA will manage its projects and the DOE, or a local authority on its behalf, may manage another project. The Department of Education and Science or one of its subordinate agencies may manage another project. It will not be a matter for the new body to be involved in the management of projects. Consequently, is dona liom nach bhfuil mé in ann glacadh leis an leasú.

Amendment, by leave, withdrawn.
Section 2 agreed to.

I move amendment No. 2:

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".

The amendment seeks to 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 and we might have the opportunity to find others who could finance packages on better terms in a more innovative manner.

Section 3(3) provides: "In carrying out its functions the Agency shall comply with all guidelines and instructions that the Minister may, from time to time, issue to the Agency." Such guidelines will be drafted by an interdepartmental group of experts and will be subject to the advice of the Office of the Attorney General. They will take full account of national and EU procurement procedures which are designed to ensure fair, competitive and transparent practices. For that reason, it is not necessary to amend the functions of the agency and I regret that I will not, therefore, be able to accept this amendment.

I would like to ask the Minister of State about this amendment, in so far as it relates to projects such as group water schemes, extensions to sewerage schemes or the provision of sewage treatment units. There is a lot of merit in the amendment proposed by Senator John Phelan. I understand that a number of companies will tender for specific PPP projects, such as group water schemes or schools. The tendering process has been put in place so that a successful tendering company will be assured that its proposal represents the best deal in terms of finance, maintenance, machinery and all other aspects. The successful group will know that it is the only group that can provide a certain PPP as all the other tenders will have been different in some respects. This amendment proposes that tenderers will be open to receiving advice from the NDFA.

I am not sure how this section of the Bill will work and I would like the Minister of State to explain it to the House. The expert agency that is being established in this Bill will give financial advice to local authorities and Departments about the commencement of PPPs. How will the agency be able to give financial advice to a company that is tendering for a contract for a group water scheme or a sewerage scheme? How will the agency's advice be of benefit? Each company will tender independently and will claim that it has made the best proposal in terms of finance, maintenance and so on. Advice will be received from the National Development Finance Agency only after the tenders have been received. I do not know when the agency will become involved.

I support Senator Phelan's amendment because if the agency can give advice, the groups who are tendering should be able to hear it. The advice should be made available to them so it can be taken into account when tenders are being drawn up. We are trying to get the best possible deal for the people of a town or a community – the people who will be served by the PPP project. I hope the Minister of State can understand the point I am making. I am in a haze about how those who will tender – several companies will want to tender for PPP projects – will benefit from the financial experience and advice of the NDFA and I would like the Minister of State to explain the matter. There is merit in the amendment, as all groups should be able to avail of the agency's advice.

The wording of this amendment does not seem to be in accordance with the point made by Senator Paddy Burke. The amendment seems to be superfluous, as section 3 of the Bill clearly covers all possibilities in its reference to, "the optimal means of financing the cost of public investment projects." As the Minister of State, Deputy Treacy, has stated, the EU has strict tendering procedures. I do not understand Senator Burke's point that the agency's role should include giving advice to other groups, as the Bill clearly says that the role of the agency is to advise the State. We should not forget that the State represents the entire community, including taxpayers. While the agency may hold discussions with other groups about financing, its clear responsibility is to advise the State. I do not think we should invite the possibility of a conflict of interest by allowing it to advise private groups that are tendering for a project, unless it is acting on behalf of the State in doing so.

I would like to ask the Minister of State about the NDFA, the role of which is to advise, as Senator Mansergh has mentioned. Staff of local authorities were traditionally the best placed persons to give advice on the ground. Will the new agency seek advice from representatives of local authorities? If not, where do we stand in relation to the last Government's policy, as outlined in Better Local Government? Does this Bill create another layer of bureaucracy that is tightening the purse strings of the Government when it comes to funding local authorities? It is understandable that confusion exists, as the role of local authorities in the tendering process is unclear if another agency is giving the ultimate advice and is charged with ensuring that value for money is assured.

I have listened with great interest to the important points made by Senators Paddy Burke, Mansergh and Ulick Burke. Senator Paddy Burke raised the question of tendering for PPPs and asked about the companies that put forward the best overall deal. The NDFA will advise State authorities on the financial elements of the tenders and will assess and evaluate what has been proposed. Invitations to tender will make clear that the NDFA may give such advice and the Office of the Attorney General will watch out for illegalities in the procedures. Several stages are involved in the tender process and the agency will assess all of them. The public invitation to tender by State bodies and Departments will specify that the NDFA will be involved in giving advice.

Senator Paddy Burke is a decent man and he comes from a great county, but his suggestion involves a request for the State, through the NDFA, to act as a public consultant to various groups and to disperse advice to them before allowing tenders to proceed. Over the years, the relevant Department or State agency involved in seeking tenders for a large project had to appoint national or international consultants that sometimes received large amounts of money to evaluate the proposals and make recommendations to the State. The new professional agency will give advice about tenders, assist the procurement of finance and make recommendations, but the final decision will be a matter for the appropriate Minister or body, based on an independent assessment carried out by the NDFA. That is a new departure for the State, which is bound to save a lot of money.

To move on to the point made by my colleague, Senator Ulick Burke, better local government has been delivered with massive new structures, systems and numbers of staff. I hope it is working. If it is not, God help us, in view of the resources which have been ploughed into it.

The Minister is losing touch.

I would not say that. The Senator is in the middle of it and I hope he can use it to the maximum advantage of our constituents. He was on that local authority for a long time. I hope all of these innovations and structures are working.

Looking at construction inflation over recent years, huge money, allocated by the Government for various public projects has been eaten up. It was in double digits last year and has gone up massively over the past five years. Surely we need an independent assessment to ensure we get real value for the taxpayers' euro. That is the purpose of the agency. By getting the real value we will have extra resources to spend, be able to carry out more projects, improve our infrastructure and meet our targets within the national development plan.

Senator Paddy Burke's question on group water schemes highlights a good example of how the NDFA adds a new and necessary dimension for project development. The NDFA can advise the project managers of the best financing mechanism to deliver the scheme and, if it is the best value for money, provide funding direct or through a special purpose company. The question was raised as to what they can do for various group schemes. A special purpose company can finance them if that is relevant, prudent and practical. The advice will be provided, not to the tenderers, but to the bodies delivering the project. That will meet the needs of the users by putting in place a financially viable project and give much better value to the people.

Surely this is just another layer of bureaucracy, in the light of what the Minister of State has said. The National Development Finance Agency is only going to advise about finance. It will have no role other than obtaining finance for some of the public private partnerships and advising about the financial package. There is much more to those public private partnerships than just finance. There is, as I have already pointed out, the running of the business, the construction of it and so forth.

Senator McDowell said earlier that he did not know what the Bill was about. I was also at a loss and I am at a greater loss now. The Minister of State has spelt out in detail that this is only another layer of bureaucracy. We have established that and the Minister of State should tell it as it is.

When a company tenders for a group water scheme or a sewerage scheme this agency will evaluate the available financial packages and financial status of the tender. It will advise the local authority or the Government. However, it will not have the expertise, unless it employs it either inside or outside the State, in relation to the construction, the maintenance or the type of machinery. I am at a loss to know why the Government should set up a national development agency just to advise on the financial packages that will be available or as a vehicle for companies to raise the funding to carry out the public private partnership.

The Minister has confirmed what I thought, that it is another layer of bureaucracy. There is some merit in the proposal made Senator Phelan that the role of the agency should be given to other operators. There is no basis for setting it up for the sake of it and for advising about financial packages and funding.

I completely reject Senator Paddy Burke's contention that it is another layer of bureaucracy. It is substituting for consultants who often cost much more than bureaucracy. We are talking about a procedure which is already there, not adding another procedure. The experience with bodies like the NTMA showed that there is a possibility of saving significant amounts of money and of broadening the range of financial instruments which can be used to fund projects. It is failure to understand it that would lead any Senator to say it was another layer of bureaucracy. If that was all it was, there would no point in the Bill.

Will the Minister confirm what Senator Mansergh has said, that it is a substitution for consultants? If this body is to substitute for consultants and there has to be an assessment by it of all projects throughout the country, surely it will have to call in consultants' expertise. If not, then the agency will be nothing more than a stalling group for endless projects, as in the Department of Education and Science. There are no architects but there is a list of 400 national schools that are begging for the go-ahead. Now there will be another agency that will take control, in order to give advice. Nothing will be given the go-ahead or the green light until this body has vetted it as to its value for money. With a range of projects throughout the country awaiting a final decision, there will be further delays. Maybe this is a kind of interim agency to legitimately hold and freeze everything. The Government does not know where it is going with this Bill.

It is not the first time that the charge has been levelled at the Government that it is creating another layer of bureaucracy. It is not the first time that the Opposition has been wrong. We have created agencies—

At the rate the Government is going it is proving itself wrong.

Always remember that it is very important for a politician to be optimistic. Tomorrow will always be better than today.

He is beginning to sound like Rhett Butler.

Do I hear my old friend, Senator Brian Hayes? It is good to hear him. As my colleague, Deputy McCreevy said, it is not another layer of bureaucracy. It is an added dimension, providing financial expertise to Ministers, Government Departments and State agencies and authorities to get the best value for money. If we wanted to create another layer of bureaucracy we would do what the Opposition said and give all of the responsibilities to the new agency so that there would be duplication of effort and a slowing down. The agency is to expedite projects, it is to expedite the national development plan and bring a new stream of opportunity through new financial decision-making processes and new procurement procedures.

The responsibility for any project will rest with the relevant Minister or the relevant agency or authority, as always. The agency will not be another layer of bureaucracy. It will not duplicate any of the project development, project management or implementation structures that are already in place and the expertise already there. The agency will be involved with the financial side of projects. It will draw on the acknowledged expertise of an existing agency, the National Treasury Management Agency. We were lambasted for setting it up.

What about the consultants?

The NTMA is saving, on average, €1 billion per annum for the Exchequer and taxpayer. It has an outstanding record of success and outstanding people. It is a small, focused agency, able to deal in the international marketplace, give advice to the Central Bank, the Department of Finance and the Government of the day, do the job and deliver to the people.

What about the pension fund?

This is a similar body with a different role and it will work parallel to, and in co-operation with, the NTMA. Expertise on technical and structural issues will be found in the NRA or any other agency this new body will be dealing with and need not be duplicated in the NDFA. The new agency will bring many benefits. It is expected that these will include maximising value for money by helping State authorities avail of the best finance package for capital projects from non-Exchequer sources, taking the pressure off the Exchequer and off the taxpayer. It will be able to identify the funds, the system and the mechanism of delivering the finance in co-operation with the other agencies. It will apply commercial standards in terms of evaluating financial risks and costs for each project. It will be able to evaluate those risks and decide whether there will be a strain on the finances of the State if a particular route is followed.

One would not have to be an expert to know that.

It will underpin the PPP approach to the delivery of infrastructure and will centralise commercial, financial and legal expertise, reducing dependence on external consultants with consequent cost savings to the State. What more can we do? How could one do it better? How are we to get rid of the delay caused by tendering for consultancies, going through the interview process, advertising and making the decision? The consultants must then decide how to handle the project and then there is more advertising for the tenders. This will all be streamlined by this new agency.

The NDFA will help to maximise value for money for the Exchequer by clearly identifying the best financing packages and applying commercial standards in evaluating financial risk and costs for each project. In addition, when the NDFA is able to borrow at better rates than the private sector, less State subvention may be required for capital projects. It can look at the expertise of the NTMA and the international financial marketplace and see where opportunities exist. It will see the mobility of currencies across the world and be able to make recommendations.

Will the Minister of State give way for a question? What is his definition of value for money?

My definition of value for money is very clear.

That is the third time the Minister of State has said that.

Value for money is what I judge to be value for money by my standards. Value for money for the taxpayer is different. As public representatives we, along with bodies, authorities and agencies working for the State, are obliged to ensure that in the delivery of any public project we get the best deal for the taxpayer by tendering publicly, operating according to best international practice, encouraging transparent systems and proper conclusions and ensuring that we deliver the project on time, or ahead of schedule if at all possible.

A Bertie bowl Dáil.

Amendment put and declared lost.

I move amendment No. 3:

In page 5, subsection (1), between lines 10 and 11, to insert the following new paragraph:

"(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.”.

This is an important amendment. Much time was given on Second Stage to the issue of the national pensions fund. While I was the first to admit to the Minister that the idea of setting money aside for future pension commitments was admirable, we have borrowed about €1.5 billion this year to invest in the pensions fund. This money is being invested in stock markets around the world while our infrastructure – not just roads but also sewerage schemes and so on – is groaning and under pressure, in many cases out of date and dilapidated. It is not appropriate for us to take that €1.5 billion out of the economy and invest it in other countries.

The Minister made the point that he did not want to influence the economy unduly at a time when things were going quite well, but by the Minister's own admission the Celtic tiger has become a bit quieter. It would be appropriate for the Minister of State to accept this amendment because it does not commit the Government to using funds from the national pensions fund but would allow the NDFA to manage an investment from the fund if it decided to invest in infrastructure in order to obtain the best possible return. I urge the Minister of State to consider this amendment because it is a reasonable one.

While I understand the sentiment behind this amendment and its superficial attraction, I think it would be a bad move. We heard the Minister say that there was no obstacle to the money from the national pensions fund being used for infrastructural projects, but this subordinates the judgment of those who manage the fund to the NDFA and this should not happen. Those who manage the fund should concentrate on where to invest: they must make that judgment, not the NDFA. I see this amendment as hollowing out the independence and autonomy of the national pensions fund.

The fund is critical for our economic future, especially for our younger people. Many European countries, including Germany, are in a state of total stagnation because of huge pension liabilities. We are provident in providing for the future and we must resist the temptation of the Opposition, both before the election and since, to undermine the integrity of the national pensions fund. The amendment is not a good one.

That is not correct.

Far from being superficial, as Senator Mansergh said, this amendment is entirely appropriate. If he reflects upon it in greater detail he will see why. My party, before the last election, proposed no diminution of the funds to be set aside for pensions into the future, irrespective of other views from the Opposition. Those views, as the record shows, did not emanate from this party. It seems sensible to co-ordinate the moneys rightly put aside by the State for the provision of infrastructural services. Nothing can stop that, as the Minister said in his Second Stage speech. There is considerable merit, however, in the amendment as proposed by Senator Phelan. In effect, one is asking experts, in the Minister's own words, to manage money and ensure that as much as possible is invested in the State. In a sense, we are suggesting the addition of a function to those set out in section 4. I do not see it in any way as undermining the existing arrangements.

I went into this debate with an open mind. As other colleagues have said, I have not yet heard an over-riding argument for the establishment of this new quango. We should give it the financial teeth it is looking for. The suggestion for the most significant additional function to come out of the debate so far is Senator Phelan's. It is worthy of consideration.

I support Senator Phelan's amendment. I am amazed at Senator Mansergh, who said earlier that he worked in the Department of Finance.

No, the Office of the Taoiseach.

Higher up again.

I worked with the Department of Finance, not in it.

Perhaps the Senator chose to ignore the content of this amendment. Public private partnerships are set up to make money, no private company would go into partnership to lose money. Some of the pensions fund should be used to make money.

Which body would make the decision? The national pensions reserve fund or the National Finance Development Agency?

Perhaps there are too many agencies but we should not lose out for the sake of making a decision, no matter if it is the pensions board or this agency that makes it. It would be too bad if we cannot use the money that we are providing in the pensions fund to invest in projects that will make money.

No one said we cannot do that.

This agency will have the best financial expertise available from one of the most progressive countries in the world. If there is so much advice available, surely those people would be able to use our pensions fund in the best possible projects. They will have a choice. I cannot see why Senator Mansergh opposes this amendment. The agency will adjudicate on all public private partnership projects and will be able to chose where to invest the pensions fund.

The Minister of State did not answer my question about the engagement of consultants by the agency. Section 4(3) of the Bill clearly states—

We are dealing with section 3 of the Bill.

Senator Paddy Burke is correct – of course public private partnerships are commercial entities that exist to make money. There is nothing wrong with that. We are giving a new dimension to the State financing and procurement area, giving it commercial teeth and taking it away from the situation where it has been a constant drain on the Exchequer, where the tap is run and the nation is bled dry. We have to ensure that does not happen and that we give an opportunity for private sector resources to be deployed to improve public infrastructure. A new vehicle is being created to assist that, the National Development Finance Agency.

This amendment would constitute a significant amendment to the National Pensions Reserve Fund Act. There are no plans at present by either the Government or the Minister for Finance to alter the arrangements in relation to the national pensions reserve fund. There is nothing in that legislation to prevent the pensions fund commissioners investing in infrastructural projects, subject to the overriding requirement in the legislation to invest prudently and to seek the optimum return for the fund. That is what the commissioners are charged to do. The national pensions reserve fund has managed to achieve the highest rate of return on its investment.

The NDFA will seek value for money with the lowest cost of funds possible for delivering the project and develop value for money financing mechanisms for infrastructural projects. This amendment would place statutory requirements on the NDFA and that would not work. It would tie the hands of the NDFA and the pensions fund commissioners.

There is nothing, however, to stop the commissioners, as they see fit, from investing in these projects. It would be foolish to insert an amendment that could jeopardise the flexibility required by the commissioners and the NDFA. Consequently I cannot accept the amendment.

The Minister of State has missed the point of the amendment. We are not proposing that the new agency tells the national pensions reserve fund where to put its money. The amendment would allow the use of public funds by the NDFA. Different Government agencies are involved and it is logical that there should be contact between the National Development Finance Agency and the pensions fund when there is such an infrastructural deficit and the economic situation has changed in recent years.

This is not telling the national pensions reserve fund where to put its money. It is a mechanism to allow for this wording to be inserted in the Bill whereby funds could be put to use by the NDFA.

The Minister of State hit the nail on the head in his reply. There is a conflict of interest between the functions of the two agencies. It is important to stress that we all support pensions fund money going into infrastructure where it will get a good return for the pensions fund. The trustees must make that decision and must not have the decision made for them by the NDFA. There is a fundamental flaw in the amendment.

Amendment put and declared lost.

I move amendment No. 4:

In page 5, subsection (3), line 17, 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".

Last week, when debating the National Tourism Development Authority Bill, I tabled a similar amendment. The Minister would be allowed to issue an instruction to the new authority but it would be discussed by the appropriate committee of the Oireachtas before any final decision is made. Openness and transparency were mentioned earlier. In this age of transparency it would fitting for the Minister of State to accept the spirit of the amendment because there is merit in allowing the Houses to discuss and see directions the Minister might give to the new agency.

It is important that when we establish new legislation and give significant powers to the Minister to set out orders or guidelines there is some parliamentary accountability on the issuing of those guidelines. The Minister of State had a distinguished career in the Department of Enterprise, Trade and Employment and was responsible for many initiatives. It is important for all sides that there is some scrutiny of guidelines and orders set out by the Minister of the day, whoever that may be. This is a sensible amendment enabling discussion to take place at the relevant committee. There are significant guidelines to be issued by the Minister when this Bill becomes law. The idea that there can be no debate once he or she issues those guidelines is nonsensical from a parliamentary perspective.

This agency will be responsible to the Committee of Public Accounts and there will be plenty of options to scrutinise its management, operations and successes. Senators have raised the matter of the guidelines on State authorities seeking advice from the NDFA. The legislation provides that the Minister for Finance would issue guidance on the circumstances on which National Development Finance Agency advice should be sought, taking account of the type of project or programme of projects, the stage of development of a project and any other relevant factors.

The reason this guidance has not been prepared and published in advance is straightforward. Full guidance could not be provided in a vacuum. The guidance would be very detailed and specific, dealing with cases as they arise. It would be drafted with input from a cross-departmental team which would include a representative of the Office of the Attorney General in an advisory capacity and, before the guidelines are finally created, the NDFA will be consulted and involved.

With regard to the amendment, it is our intention that these guidelines would be widely available. They will issue to Departments and State agencies and authorities, and will be on the public private partnership and Department of Finance websites, fully available to everybody for scrutiny and public information. For that reason, we have no difficulty in submitting the requisite number of copies of the final version of the guidelines to the Oireachtas Library for Members of Dáil and Seanad Éireann to peruse and raise in whatever manner they see fit. However, under section 3(3), the responsibility for issuing guidelines and instructions to the agency rests with the Minister.

That is correct.

It is therefore a matter for the Minister to revoke such guidelines and instructions. The legislation is clear in what it proposes. Consequently, I regret I cannot accept the amendment but I assure the House that once the guidelines are available they will be available to everybody.

If the guidelines are to be freely available to all Members in the library or elsewhere, it is not much of a leap to have those guidelines discussed in the Houses. That is the purpose of the amendment and the Minister of State should consider it.

I support Senator Phelan and agree it would not be much of a leap. When public private partnerships are in place, whether for water, sewerage of otherwise, the contracts will be for 20 to 25 years. Local accountability will be taken away. Heretofore, local authorities had annual estimates where local councillors could ask the county manager for a report regarding water, sewerage or otherwise. When public private partnerships are put in place, a contract for 20 to 25 years with annual inflation will be built in. As a result, there will be no local accountability and no local authority member will be able to question the cost. The local authority will get a bill at the end of the year and be asked to pay up using whatever criteria was worked out for the payment.

It is imperative there is openness and transparency with regard to the guidelines put forward. I support Senator Phelan as it would not be much of a leap to publish the guidelines and accept this amendment. When we go further down the public private partnership road, there will be problems. There will not be local accountability and, from what we are led to believe, there will no longer be the dual mandate with Oireachtas Members on local authorities. Deputies may always have the facility of a question to the Minister but he or she may not be able to say anything by way of reply because he or she may have no ministerial responsibility with regard to it. It is an important amendment and the Minister of State should accept it.

I am glad to hear the Minister of State say that the guidelines will be available because transparency is important. However, the amendment represents an encroachment on Government by the Legislature. Every ministerial act should not be immediately subject to debate and revocation. When Governments are elected, they must be allowed a certain discretion to act. Of course they must be accountable and the guidelines should be public, but I do not favour the amendment.

I listened with interest to what Senator Paddy Burke said about accountability. I served for six years on a local authority and became chairman on my second year there. The situation pertaining to local accountability has not changed. My recollection is that a project is advertised and tendered, it is decided who is to get the tender, it goes to construction, is opened officially and there is never another word about it unless something goes wrong with the project. The only time there are questions is at the estimates stage and the same situation will prevail here. If money is delivered by a local authority for the payment of a public project which has been managed through the NDFA advice system for one of the State bodies, there is no reason why there would not be accountability and querying of a manager at estimates time as to why money is being paid, how much and why there are variants. In the same situation at national level within the Oireachtas, there is no reason Members cannot get answers to questions, whether through the Committee of Public Accounts—

Did the Minister of State ever try?

It is not the case with parliamentary questions.

Parliamentary questions are not relevant in this case.

I would say they are not.

There are Adjournment debates, special notice questions and motions; these instruments are readily available to get to the bottom of any situation. There are other people sitting in other houses across the city trying to dig deep and they are finding it hard to get answers. I am quite confident about this new system.

We will give way on this if the Minister of State gives way on parliamentary questions.

That is a matter for the Minister, the Attorney General and the Clerk of the Dáil.

The Minister of State can sing that one.

I will not legislate or take powers for myself to say: "This will be the way, boys, and that is it." I will leave the system to evolve and ensure that sustainable legislative structures are put in that give—

That gives a whole new meaning to sustainability.

Absolutely. I am confident that we will have a good system in position and a good structure to give great public advice in the interests of the taxpayer.

Senator Paddy Burke raised the matter of ongoing costs with regard to priorities. This relates to ownership of projects. It is important to note that while the proposed legislation provides that State authorities would be obliged to seek NDFA advice, they are not obliged to take it. The final decision on the structure and financing of a project remains a matter for the appropriate Minister or, where there is delegated sanction, the appropriate accounting officer or equivalent. The Minister or equivalent will be democratically accountable as always and there is no doubt about that. The same opportunity will be there for everybody to question on these matters.

Amendment put.

Bannon, James.Browne, Fergal.Burke, Paddy.Burke, Ulick.Coonan, Noel.Cummins, Maurice.Feighan, Frank.

Finucane, Michael.Hayes, Brian.Henry, Mary.McCarthy, Michael.Phelan, John.Terry, Sheila.


Bohan, Eddie.Brady, Cyprian.Brennan, Michael.Callanan, Peter.Dardis, John.Feeney, Geraldine.Fitzgerald, Liam.Glynn, Camillus.Hayes, Maurice.Kenneally, Brendan.Kett, Tony.Kitt, Michael P.Leyden, Terry.MacSharry, Marc.Mansergh, Martin.

Minihan, John.Mooney, Paschal C.Morrissey, Tom.Moylan, Pat.O'Brien, Francis.O'Rourke, Mary.Ó Murchú, Labhrás.Ormonde, Ann.Phelan, Kieran.Scanlon, Eamon.Walsh, Jim.Walsh, Kate.White, Mary M.Wilson, Diarmuid.

Tellers: Tá, Senators U. Burke and J. Phelan; Níl, Senators Minihan and Moylan.
Amendment declared lost.

I move amendment No. 5:

In page 5, between lines 17 and 18, to insert the following new subsection:

"(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 private partnership over an exclusive publicly funded alternative approach.”.

This amendment reflects expressions made by Senators during the debate on Second Stage regarding the possibility of private companies withdrawing from public private partnerships or suffering financial difficulties and being unable to maintain their part of the partnership. If, for example, a hospital was built by a public private partnership and was subsequently unprofitable, which caused the private partner to withdraw, what would the Government do? This amendment is intended to take account of such a possibility.

I am concerned that this amendment might lead to precisely what Senators opposite have been complaining about in relation to a different section, namely, another layer of bureaucracy. To fulfil these requirements, cover all hypothetical situations, provide quarterly cost benefit analysis, etc., will require many hours of work.

The purpose of the Bill is to enable us to proceed with projects. In many areas of policy one can be so busy monitoring, reviewing and watching every step taken that one adds to bureaucracy. I have reservations about this amendment on those grounds.

I have listened with interest to what both Senators have said. The purpose of the National Development Finance Agency is clearly set out in section 3(1). Its purpose is to advise and, in certain circumstances, provide finance on public investment projects. It will be a matter for Government Ministers or, where there is delegated sanction, the accounting officer or equivalent, to decide on the appropriate financing structure of projects. It is not the role of the NDFA to undertake PPP assessments of the type envisaged in this amendment. That is a matter for the relevant Minister, accounting officer or his or her equivalent to undertake in accordance with existing requirements and reporting arrangements and subject to the audit by the Comptroller and Auditor General.

This goes back to points raised earlier about accountability and opportunity to question the success or otherwise of the agency itself, the various projects and the manner in which they are delivered. The Comptroller and Auditor General will have a key role in carrying out a critical analysis. He will report to the Committee of Public Accounts which will carry out any appraisal it deems necessary on any project or decision taken by the agency. This gives democratic and financial accountability to the affairs of the agency.

I regret I will not be able to accept this amendment.

Amendment, by leave, withdrawn.
Section 3 agreed to.
Sections 4 to 11, inclusive, agreed to.

I move amendment No. 6:

In page 8, subsection (2), line 45, after "members" to insert "one of whom shall have relevant experience in public policy development and the appropriate role of pricing in the delivery of public services".

This amendment is self-explanatory. Section 12 states that the board of the agency shall consist of a chairperson and four ordinary members. I have mentioned in the House a number of times the issue of appointments to and qualifications for membership of boards of Government agencies or State-sponsored bodies. This amendment seeks to spell out the qualifications which at least one member of the board would have to satisfy to become a member of the authority.

It would be fairly extraordinary to pick out one member of a board and give that person special functions. Given that this is such an important agency, I have no doubt that the people appointed will be highly qualified and will have a wide range of expertise. I do not see how one can choose one member to have relevant experience in public policy development and an appropriate role in pricing. Therefore, the amendment seems inappropriate.

I agree with Senator Mansergh's conclusion. We cannot be selective in saying one person has to have this, that or the other. If we were to go down that road we would have to be specific and say that each member must have certain expertise or some area of expertise. The proposed amendment is too restrictive in the demands it makes on the composition of the board. It would restrict the board, the Minister in his or her appointments, and the Government in its consideration of the board. The agency has a unique financial remit which will require specific expertise. The Minister for Finance, in his advice to Government for appointments to the board, will be mindful of the requirement for gender balance as provided for in section 10(11) and will endeavour to ensure that appropriate expertise is represented on the board of the National Development Finance Agency, drawing from as wide a pool of potential appointees as possible across the nation. The Government's record in making appointments to boards is clear. We appoint the best people from across the nation and have a strong commitment to gender balance.

That is very Christian.

I am confident we will do the same again. I would not like to restrict the composition of the board and it would be unwise to do so.

Amendment, by leave, withdrawn.
Section 12 agreed to.
Sections 13 to 17, inclusive, agreed to.

I move amendment No. 7:

In page 13, subsection (4)(a), line 42, after “is” to insert “reasonably”.

This section primarily states that information expressed by the board or the Minister is confidential. As it stands the Minister can define anything as confidential. This goes beyond what would be desirable in this situation. This amendment would provide that information that is reasonably expressed would be permitted.

It is not necessary to include the word "reasonably" in subsection (4). The Minister and the National Development Finance Agency are obliged under law to act reasonably in the performance of all their functions. Reasonableness, fairness, equality, etc., have to prevail and we can be certain that will be the hallmark and track record of this agency. Consequently, I regret I cannot accept this amendment.

Amendment, by leave, withdrawn.
Section 18 agreed to.
Section 19 agreed to.

I move amendment No. 8:

In page 14, before section 20, to insert the following new section:

"20.–(1) It shall be an offence for any member of the Board, the Chief Executive Officer or a member of staff of the Agency or the National Treasury Management Agency or a consultant adviser or other person engaged by the Agency to receive any improper payment from persons involved directly or indirectly with the promotion of a project or scheme under consideration by the Agency.

(2) All persons acting on behalf of the Agency shall comply with requirements set out by the Public Offices Commission.".

The amendment seeks to reinforce earlier sections of the Bill which outline how members of the authority may have to disclose their interests. It seeks to provide that the Public Offices Commission would set out the requirements for those acting on behalf of the board in the context of the public office obligations of all State bodies. I urge the Minister of State to consider the amendment in this era of openness and transparency. It is reasonable.

This is not a piece of criminal law legislation. There are clear laws on corruption and on public ethics and it would be inappropriate to insert clauses which imply that but for this clause chief executives might well engage in the type of behaviour suggested. It is not particularly appropriate.

This matter was raised on Committee Stage in the Dáil by Deputy Richard Bruton and the Minister, Deputy McCreevy, informed him that he could accept it in principle, subject to consultation with the Attorney General. We have been advised by the Office of the Attorney General that the concerns, which have been expressed in both the Dáil and Seanad, which are sought to be addressed in this amendment are adequately dealt with in the Prevention of Corruption Acts, 1889 to 2001. The changes made in 2001 deal with the situation. Consequently, the amendment is not necessary because the corruption Acts already cover this area. Regretfully, I cannot accept the amendment.

Amendment put and declared lost.

I move amendment No. 9:

In page 15, between lines 27 and 28, to insert the following new paragraph:

"(b) the policies adopted by the Agency in implementing its functions,”.

The amendment is self-explanatory. It seeks to expand the role of the Committee of Public Accounts in dealing with the authority and the chief executive officer of the authority, whereby the committee can question the policies adopted by the agency and how those policies are implemented. It is not beyond the bounds of comprehension that the Minister of State would seek to take the contents and the spirit of the amendment on board.

It is not a matter for the board of the National Development Finance Agency to report to a committee of the Oireachtas on a project or projects which it funds. It will be a matter, as in the normal course, of democratic life for the relevant Minister, accounting officer, or the equivalent in a Department or agency or authority to report to the Government and Oireachtas in the normal manner in keeping with existing democratic accountability arrangements. It would be unwise if we were to change the structure which has served the country so well for so long.

There is a clearly defined structure in existence. The Minister is accountable to Parliament. The various accounting officers who are the secretaries general of the various Departments or the directors general of the various State agencies are responsible to the Committee of Public Accounts and to the senior Departments also. Given that situation it would be unwise to have a different structure in this case. The Minister for Finance considers that the requirement in section 18(6) for the chairman and chief executive of the National Development Finance Agency to give evidence to the Committee of Public Accounts whenever so required, provides for sufficient accountability by the agency in the performance of its functions. In other words, the chairman of the board, the chief executive of the agency – one responsible for the board, the other responsible for the staff – would be the two people who would be responsible to give evidence to the Committee of Public Accounts whenever they are required to do so. On that basis, we are satisfied that that democratic accountability in a public forum on behalf of the taxpayers, through parliamentary committee, is the proper way to proceed. Consequently, I regret I cannot accept this amendment.

Amendment, by leave, withdrawn.

I move amendment No. 10:

In page 15, between lines 39 and 40, to insert the following subsection:

"(7) The Chief Executive Officer and the Chairperson shall whenever required by a committee of the Oireachtas give evidence to that committee on any projects with which it is involved that fall within the terms of reference of the said committee.".

This amendment seeks to broaden the scope of the Oireachtas committee to question the chief executive officer and the chairperson of the agency. I would not envisage that this amendment, if accepted, would be used often but it would be important that the facility would exist. Obviously, the requests would have to be reasonable. There would be instances where the advice of the agency to the committee would be deemed appropriate. I urge the Minister of State to accept the amendment which would provide for that facility.

An Leas-Chathaoirleach

As it is now 10 p.m., I am required to put the following question in accordance with an order of the Seanad of this day: "That the amendment is negatived, that in respect of each of the sections undisposed of that the section is hereby agreed to in Committee, that the Title is hereby agreed to in Committee, that the Bill is accordingly reported to the House without amendment, that Fourth Stage is hereby completed and that the Bill is hereby passed."

Question put and agreed to.