The Government has endorsed a public private partnership, or "PPP", approach, on a pilot basis, to public capital projects in Ireland. The initial concentration will be on economic infrastructure projects.
This approach reflects the recommendations of the report commissioned from Farrell Grant Sparks and Goodbody economic consultants in association with Chesterton Consulting by my Department last year. The Government also approved the establishment of a central public private partnership unit in my Department as recommended by the consultants. The PPP unit in my Department was set up in January of this year. A PPP unit has also been established in the Department of the Environment and Local Government. I understand that the establishment of a unit in the Department of Public Enterprise is being considered.
It is my intention to announce in the next few weeks a list of pilot projects on which I expect substantial progress to be made by the end of this year. My Department is discussing possible projects for inclusion in the list with the relevant line Departments. It would be inappropriate for me to specify today the candidates for inclusion in that list, as consideration of their suitability is not yet complete and a decision has not yet been made on their inclusion. However, I can say that the priority area for projects is roads. In respect of bodies for which I am directly responsible, the possibility of including in the list some projects involving the Office of Public Works is being considered.
The parameters to be adopted in deciding on the merits of the PPP approach in any particular case will depend on the economic case for the project; the impact, if any, on the general Government balance; the cost effectiveness of any private funding under PPP as compared with normal public funding; efficiency gains which private sector involvement could secure and other criteria including the potential to generate revenue, legal and regulatory aspects and possible supply constraints in the construction sector. In looking at the prospective pilot projects, the key considerations are long-term value for money and their priority at national level. However, their suitability for PPP and what we may learn from them for a wider application of PPP are also important.