Olivia Mitchell
Question:84 Ms O. Mitchell asked the Minister for Finance if he has satisfied himself with the performance of PPP projects to date; and his expectation for expenditure funded in this way in 2005. [29893/04]
View answerTuesday, 23 November 2004
Questions (37, 38, 39)
Olivia Mitchell
Question:101 Ms O. Mitchell asked the Minister for Finance if, in view of the lack of involvement by the private sector in PPPs, including public transport projects, he intends to introduce reforms to make PPPs increase private sector involvement in such schemes; and if he will make a statement on the matter. [27008/04]
View answer
John Gormley
Question:149 Mr. Gormley asked the Minister for Finance his views on the use of public private partnership finance initiatives; and if he will make a statement on the matter. [29982/04]
View answerWritten answers
I propose to take Questions Nos. 84, 101 and 149 together.
The Government first approved a programme of pilot PPP projects in 1999. Substantial progress has been made since then. We are still learning and continue to keep our processes and procedures under review. PPPs are acknowledged to be complex, involving, as they do, a long-term financial commitment for both the private and public sector partners for a period of anything up to 30 years.
The pilot projects which have been completed are the bundle of five secondary schools in Ballincollig, Clones, Dunmanway, Shannon and Tubbercurry, and the second Westlink bridge. Both of these involved private financing. Both were completed in time. A number of additional projects are in progress across a range of sectors including education, roads, and environmental services. Not all PPP projects involve private financing. There are differing PPP structures, including design build operate, which is the predominant type of PPP in the environment sector in regard to water and wastewater services.
Lessons gained from the initial pilot phase have been incorporated into our processes, structures and procedures, including the establishment of the National Development Finance Agency, NDFA. On foot of the learnings in the pilot phase, my Department prepared and issued guidelines for Departments and agencies in regard to the assessment, approval, audit and procurement of PPP projects. More guidance is in progress.
The Comptroller and Auditor General recently completed a value for money report on the bundled schools, which I have noted. This report provides a useful contribution to the development of the PPP process in Ireland. As noted in the report, a number of the issues which were highlighted had already been identified and had been incorporated into guidance issued by my Department.
The multi-annual investment framework, which was first announced in budget 2004, included estimates for PPP-NDFA investment. Based on the latest information available from Departments in respect of PPPs, there will be a shortfall in PPP projects funded by unitary payments at construction stage in 2005, relative to the Estimates announced in 2004 in relation to such PPPs. I will be reviewing the position between now and the budget and I will be announcing a new multi-annual capital envelope for the period 2005 to 2009 on budget day. The new capital envelope will take account of the PPP shortfall in 2005, overall investment priorities and the wider expenditure and budgetary position.
The PPP procurement option should be available to Departments and State authorities for application to appropriate projects where there is the right scale, risk and operational profile to harness the benefits of this new approach. That is not to say that it should replace traditional methods where these are considered more suited to the individual project or projects under consideration. The ongoing challenge for my Department is to have in place balanced and proportionate procedures for the appraisal, assessment and evaluation of proposals, which would facilitate the selection of PPP projects offering quality public services, value for money and timely delivery.
My Department is continuing to keep under review how the resources and skills required to manage the process can most effectively be marshalled and applied and how the procedures used in this form of procurement can help drive value for money outcomes.