Thursday, 1 February 2018

Questions (29, 46)

Richard Boyd Barrett


29. Deputy Richard Boyd Barrett asked the Minister for Education and Skills his views on whether the implication of the collapse of a company (details supplied) is that all PPPs should be taken back into public ownership; and if he will make a statement on the matter. [4646/18]

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Mick Wallace


46. Deputy Mick Wallace asked the Minister for Education and Skills his plans for the services in the six schools and colleges under the remit of a company (details supplied); if his Department will take over the running of the non-academic services in these schools and colleges; if a new tender process for private contractors will be established; and if he will make a statement on the matter. [4859/18]

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Written answers (Question to Education)

I propose to take Questions Nos. 29 and 46 together.

In respect of the Schools Bundle 5 PPP programme, a contract exists between my Department and the Principal contractor, referred to by Deputy Wallace.  This company is the Special Purpose Vehicle (SPV) responsible for the design, construction, finance, operation and maintenance of the Schools Bundle 5 PPP programme.  The SPV is a joint venture between the company referred to by Deputy Boyd Barrett and the Dutch Infrastructure Fund (DIF). 

DIF is now required to intervene to ensure that the schools in the PPP programme are completed to the satisfaction of the State.  DIF is currently in the process of developing a rectification plan, which will include arrangements both for completion of the construction and for the facilities management. It remains in close contact with the National Development Finance Agency (NDFA), which manages the contract on behalf of my Department.  DIF has confirmed that resolution of the situation is its top priority.

It is unfortunately the case that companies involved in both traditional and PPP projects can go into liquidation. In the case of PPPs, the construction and funding risk is transferred to the private partner. It is a feature of these contracts that there are legal, contractual and financial imperatives for the SPV and its funders to deliver the buildings within the shortest possible timeframe.  This is why DIF is now responsible for ensuring completion of the schools.  

It should also be noted that the State does not commence payments to the SPV until construction is complete. The PPP company is incentivised to ensure that the buildings are completed as soon as possible in order to secure payment from the State.