Joe Higgins
Ceist:308 Mr. J. Higgins asked the Minister for Education and Science if he will make a statement on his Department's plans to use public private partnerships in the construction of new school buildings. [21594/02]
Written Answers. - Schools Building Projects.
Joe Higgins
Ceist:309 Mr. J. Higgins asked the Minister for Education and Science if his Department has plans to introduce more schemes similar to the grouped schools scheme pilot project; and if so, the number of these schemes which are scheduled to go ahead and when. [21595/02]
Joe Higgins
Ceist:310 Mr. J. Higgins asked the Minister for Education and Science the initial outlay cost of building the schools involved in the grouped schools scheme pilot project. [21596/02]
Joe Higgins
Ceist:311 Mr. J. Higgins asked the Minister for Education and Science the annual payment to a company (details supplied) for designing, building and operating schools under the grouped schools scheme pilot project over the duration of the contract. [21597/02]
Joe Higgins
Ceist:312 Mr. J. Higgins asked the Minister for Education and Science if his Department has the ability to buy out the capital involved in building schools through public private partnerships if something unforeseen should happen the company involved in the operation of the schools; and the terms on which this could take place. [21598/02]
Joe Higgins
Ceist:313 Mr. J. Higgins asked the Minister for Education and Science if a company (details supplied) has the option of refinancing under the grouped schools scheme pilot project after a number of years when the risk element of the project has been eliminated. [21599/02]
Minister for Education and Science (Mr. Dempsey)
I propose to take Questions Nos. 308 to 313, inclusive, together.
The contract for the provision of a bundle of five post-primary schools under the first education public private partnership project was signed in November 2001 with Jarvis Projects Limited. This pilot project was developed on a design, build, finance and operate basis. While the maintenance and operation of the buildings is a matter for Jarvis for the duration of the service contract, in this case 25 years, the management of the schools and their day-to-day running will remain with the school management authorities. The State will retain legal ownership of all properties.
The principal of "everything works" applies under the PPP process – classrooms, laboratories, heating, lighting, all have to be available every day during the lifetime of the project to avoid deductions to the operators unitary payment. No additional school PPP projects have been added to the pilot programme. However, I am actively identifying other possible education PPP projects.
The initial outlay cost to my Department in the provision of the five schools is €2.07 million, comprising the cost of the land for three of the schools and local authority capital contributions associated with planning permission. The capital cost of the schools is €60.64 million. The operator will receive an annual unitary payment of €10.122 million in years one to three of the contract and €9.716 million thereafter – the information technology element of the contract is for three years supply and maintain. This figure comprises the cost of repaying the capital cost of the project, the provision of furniture and equipment and the maintenance and operation of the schools. However, under the PPP process no money is paid to the operator by my Department until the schools have been built, fitted out and are ready to be officially handed over.
The project agreement between my Department and the operator is intended to cover all aspects and eventualities over the 25 year period of the contract. Provision has been made in the agreement for the termination of the project in certain circumstances. If the operator breaches the requirements or defaults on the agreement, there is a mechanism available by which the contract may be terminated by my Department. It is also open to my Department to voluntarily terminate the agreement at any time and to purchase the outstanding debt.
Under the provisions of the project agreement it is open to Jarvis projects to refinance the project but only subject to the approval of the Minister and provided that the refinancing does not increase the liability or potential liability. The agreement also ensures that my Department will benefit from savings generated through refinancing the project by a reduction in the unitary payment.