Dáil Éireann Debate, Thursday - 18 November 2004
89 Mr. R. Bruton asked the Minister for Finance the number of projects referred to the NDFA in each of the past 12 months; the number whose funding profile has been approved by the NDFA in each of the past 12 months; and the number for which a PPP model has been recommended by the NDFA in each of the past 12 months. [29539/04]
View answerThe role of the National Development Finance Agency is to advise Departments about the optimum means of financing the cost of capital projects in order to achieve value for money, whether procured through a PPP approach or through traditional procurement. Departments and agencies, which are the decision-making bodies, are obliged to seek the advice of the National Development Finance Agency on all capital projects or grouped projects valued in excess of €20 million. For projects valued under that amount the advice of the agency may be sought but is not obligatory. The National Development Finance Agency does not have a project approval role.
I am advised that, since its establishment, more than 60 referrals for advice have been received by the NDFA. Of these, several projects had already been identified as candidates for PPP. I am advised by the agency that 17 new projects have been referred to it in the 12 months from November 2003 to October 2004. There is a long lead in time involved in the procurement of public capital infrastructure projects, particularly as regards PPP projects. Many projects referred to the NDFA are currently in procurement and the agency has been providing advice on an ongoing basis.
Under the procurement guidelines as set down by my Department, there are a number of steps in the process on which the NDFA is consulted. A key step in the appraisal of a PPP project proposal is the preparation of the public sector benchmark. This represents the estimated costs of the project were it to be provided by the public sector and forms the basis for setting an overall budget for the process and the subsequent evaluation of private sector bids on a value for money basis. The NDFA plays a key role in the project team responsible for devising the public sector benchmark for approval by the project board. The outcome of the tender process for each project is compared to the public sector benchmark in a value for money test in deciding whether or not to opt for the PPP route. Other steps in the procurement process in which the NDFA is providing ongoing advice include optimal financing package, bidder evaluation and commercial negotiation.
There are cases in which the NDFA recommends a PPP, especially in circumstances in which there is a high degree of risk that can be carried more effectively by the private sector and speed of delivery is a key consideration for the State. The final decision on any project is one for the relevant Accounting Officer or the Minister involved, as appropriate. Many projects on which the NDFA is advising were already designated as suitable for PPP prior to the establishment of the NDFA. In such cases the NDFA advises on current aspects raised with it.
Seven projects have reached the contract signing stage, four of which are PPPs, with finance for the remainder arranged by the NDFA. In a number of cases the projects were already designated as suitable for PPP prior to the establishment of the NDFA. The NDFA advises on the value for money analysis of PPP projects with regard to the financing and risk aspects of a project.
