Tuesday, 27 February 2018

Questions (62)

Eoin Ó Broin

Question:

62. Deputy Eoin Ó Broin asked the Minister for Housing, Planning and Local Government his views on whether the first tranche of 500 public private partnership social houses to be delivered under Rebuilding Ireland will represent value for money and will not contain the type of contractual problems evidenced following the collapse of a company (details supplied). [9687/18]

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Written answers (Question to Housing)

The Social Housing Public Private Partnership (PPP) Programme involves an investment with a capital value of €300 million. It is to deliver 1,500 social housing units in total, via three bundles. The first bundle, as referred to by the Deputy, comprises a total of six PPP sites, and will provide over 500 units in the Greater Dublin Area. The tender documents were issued to the three candidates in December 2017 and the dialogue period is presently on-going. Tenders for this bundle are due to be submitted in June 2018.

Regarding the value for money (VFM) for this project, the Central PPP Unit in the Department of Public Expenditure and Reform provides guidance in relation to PPP projects. It sets out four specific VFM tests that are applied in the case of PPPs over the course of the planning and procurement process. These tests focus on assessing whether or not the PPP approach compares favourably with the alternative cost of using traditional procurement to achieve the same result. The purpose, sequence and format of the four VFM tests in the PPP approval process are set out clearly in the central PPP guidance.

Bundle 1 of the Social Housing PPP Programme is at a stage whereby it has successfully met the criteria under the first two of these VFM tests. The first of these was the Provisional PPP Assessment Report that was prepared by the National Development Finance Agency (NDFA) in 2014 on behalf of the Department of Finance, Department of Public Expenditure and Reform, and my Department. It has also passed the Public Sector Benchmark (PSB) test, which was signed off in December 2017. Two further VFM tests will be carried out on this project prior to financial close on the final contract. As a result of this rigorous process, I am confident that this PPP project will provide value for money to the State.

This process also entails robust financial evaluation of proposed bidders at various stages, which is relevant to the Deputy's query concerning contractual problems. In addition to these evaluations, under the terms of the PPP contract, in the case of liquidation of a consortium member or an entity under the contract, the PPP consortium's funders and remaining shareholders are required to intervene and implement rectification measures to ensure the project is completed to the satisfaction of the State. These measures would also apply in the case of the PPP contracts delivered under Rebuilding Ireland.

Question No. 63 answered with Question No. 46.
Question No. 64 answered with Question No. 61.