Dáil Éireann díospóireacht -
Tuesday, 13 Feb 2007

Vol. 631 No. 3

National Development Finance Agency (Amendment) Bill 2006 [Seanad]: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

Ms C. Murphy

If a person agreed that PPPs are always a good thing, he would find little fault with this Bill. My problem is that some PPPs have been the equivalent of a winning lottery ticket for certain private interests. The M50 is an example of how public private partnerships do not always work in the best interests of the public. It is important to have a means to scrutinise and micromanage projects carried out under the PPP system but this double wraps the projects and ensures they remain protected from the scrutiny I would like to see.

PPP sounds like a good idea until we look at projects such as the M4 toll road to Kilcock, which cost substantially more to build than the section of the motorway that was not built under the PPP system. Not only was it more expensive, but the location chosen had maximum impact on the daily commuter.

During the planning stages, many of these projects go through local authorities. I was a member of Kildare County Council when the M4 was being planned and when we asked about tolls, we were told the council had no function in the area. When I raised the matter with the Minister for Transport, I was told it was a matter for the National Roads Authority. These projects are always one step away from accountability.

The selection of projects is a concern. The M50 project was not scrutinised. There are still some who say the operators of the toll bridge took a massive risk but the three largest population centres in west Dublin had been planned years earlier in the Myles Wright plan so there would always be a substantial number using this road. It has become a distributor road for people travelling to different parts of the city instead of a national primary route. How can we ensure that is not repeated? We are pushing projects further away from scrutiny.

The only locations where tolls are considered are in the commuter belt. Those who pay tolls on the M50 twice a day, five days a week for 50 weeks a year must pay €950, often substantially more than the cost of motor tax and insurance combined. Public private partnership projects cherry-pick, with only routes that will produce a major return being selected. It is just like knowing the winning lottery numbers before the draw takes place.

The M4 is tolled to Kilcock, then the road is constructed from Kilcock to Galway using taxpayers' money, then in Galway it is tolled again by a private operator. This is not an equitable way to raise money to finance a road. The sections that were subject to public private partnership were substantially more expensive to build. I cannot see how the person subject to tolls gets value for money under this system. There is no equity in the PPP system as it has been applied so far.

Mr. Boyle

The Bill before us indicates the extent to which the Government believes the debate on public private partnerships has finished and that it has become an acceptable method of financing public infrastructural projects. We have never had an adequate debate on why it is happening. Experience has shown that it is a flawed funding mechanism. Many projects have gone over budget and cost more than they would have through conventional funding and delivery means.

The strongest argument in favour of PPPs is that on the surface in most cases they seem to provide the infrastructure more quickly. However, it could be that our systems for deciding on public infrastructural projects are flawed and need to be reviewed. The Green Party has always argued for caution in the use of PPPs. They have become very much the fashion as a means of subverting proper accountability of public moneys in that they can be treated as current expenditure rather than capital expenditure taken over a significant time period. The ability of the political system to ask questions properly as to how public money is accounted for is severely compromised. On these grounds we need a wider debate on what PPPs are, why we are making so much use of them and why insufficient questions are asked about why they seem to fail in terms of cost to the public purse and the infrastructure they are meant to deliver.

This argument does not seem to ring true with the Government. While the rate of increase in their use does not seem as great as it was under the previous Minister for Finance, a significant amount of money is allocated in this way in the Government's development plan. I am slow to call it a national development plan, as I do not see the extent to which the nation has been involved in creating it and will benefit from it ultimately. Many elements of the plan need to be revisited. Approximately €16 billion of the €184 billion is designated to come from private sector finance sources, which is close to 10% of the total package. The people should be aware that the Government has embarked on somewhat of a gamble in asking that significant public infrastructure should be provided in this way.

We have seen various failures in PPPs, including cost overruns in several roads projects. A significant portion of the overspend that went from €5.8 billion to €18 billion in the national roads programme in the previous national development plan can be attributed to PPPs. What had been seen as solely public social service provision is now increasingly proposed to be provided through the PPP mechanism, including the group school projects and the use of public land for private hospitals. It is society's loss that we are increasingly going down this road.

Some people are starting to ask questions. It may be that we have insufficient experience of using this mechanism to know what its real effects are. The Comptroller and Auditor General has already carried out several value for money reports on specific PPPs, including the group schools project. Several chapters of his annual report outline some of the more obvious effects. One chapter several years ago referred to the difficulties arising in my constituency regarding a long-awaited facility, the Cork School of Music, which thankfully is approaching completion and will be opened in the near future. After an analysis by the Comptroller and Auditor General, the end-use cost to the taxpayer after a 25-year contract, will be €200 million. That figure has astounded many. Many of us believe the same facility could have been provided at a cheaper cost and certainly with quicker delivery except for the difficulties that arose with that project. The history of that project was informed by the insolvency of the original contracting company, Jarvis, a company that has made its living on the back of what are referred to as PFI projects in the United Kingdom. It has had a very poor record of delivering such projects on behalf of the British Government and yet was the chosen contractor for the group schools project and the Cork School of Music project. I have yet to see evidence that those lessons have been fully learnt to date.

In other areas the report of the Comptroller and Auditor General shows that PPPs cost more than conventional financing of these projects. A question of political accountability arises when public money could be better spent if the resource was better directed and targeted. On the surface the Bill before us tries to introduce some form of regulation and control where none exists at the moment. However, it does so in a way that recognises the permanence of PPPs as a funding mechanism, which is to be regretted. The National Development Finance Agency and its parent organisation, the National Treasury Management Agency have both done good work in ensuring that the country pays back as little as possible of its external debt and the management of public finances are carried out to extremely high standards by both agencies. This could be done more effectively if we had more public public partnerships and fewer public private partnerships. The Bill does not address that issue.

There are ways in which State agencies can combine together. The remit of the National Treasury Management Agency permits the use of the National Pensions Reserve Fund in providing funding for public infrastructure projects, but the Government has never taken this route. Why do we need to approach the private sector for funding infrastructure projects, when we have a pension fund available to provide finance and get a return on it having provided the infrastructure? While this course seems logical, logic seems to defeat the Government. I suspect the Minister inherited the policy from his predecessor. However, if he feels there are difficulties with public private partnerships he should have had the courage of his convictions in challenging their continued use and not just slowed down the rate of increase in their use but defined a timeframe for their elimination.

The Committee of Public Accounts, of which Deputy Fleming and I are members, has asked questions about accountability in the use of public money by private sector companies in public private partnerships. The Bill might go some way to introduce State control. However, for the sake of wider accountability we need to have as much information as possible available to the public so that when projects go wrong they can be seen to be addressed in the right public forum. The Committee of Public Accounts has addressed these concerns to the Department of Finance and as yet the Department is not willing to accept the need to introduce new mechanisms. As a result the committee has drafted a report on which I am rapporteur. The committee will review it in coming weeks and I hope it will be published with the committee’s agreement. In other areas where PPPs, PFI projects or PFPs — as they tend to be called in other countries — are used, they are accompanied by a more detailed state system of accountability. Examples in the UK, Australia and Canada show that our system of accountability for PPPs is lacking. Notwithstanding the ability of the National Development Finance Agency, accountability as provided for in the Bill is still deficient.

I have already made the substantive point on my feelings on PPPs and whether this Bill sufficiently addresses their regulatory control. However, the fact that shadow directors have been appointed prior to a Bill being discussed and voted on in this House is a practice that happens far too frequently. The whole area of public appointments is discredited as a result. I appeal to the Government not to treat the House with such disrespect, even though the individuals involved have ability and will do a good job. One of the more disappointing aspects is the assumption that something will happen before it is provided for. That is not something that should accompany any legislation.

Mr. Crowe

Sinn Féin will oppose this legislation which places the centre of expertise for public private partnership procurement, already established in the National Development Finance Agency, on a statutory footing and which seeks to improve the capacity of Departments or agencies to undertake public private partnerships. Sinn Féin is fundamentally opposed to the use of PPP, which has an atrocious track record to date. We therefore cannot support any legislation which is designed to promote its increased use.

It is surprising that the Government is pressing ahead at this time with the increased use of PPP despite the problems associated with this method of financing public infrastructure and the complex process of procurement referred to by the Minister in his contribution on Second Stage in the Seanad. For example, the use of PPPs is recognised as a key factor in delaying the roll out of the cancer strategy. It is accepted that the aim of the Minister for Health and Children to improve radiotherapy services throughout the State by 2011 by way of public private partnership cannot be met. It has emerged that a HSE board meeting was told in December that the plan would not be in place until 2013 or 2014 if delivered by PPP.

A progress report on the delivery of the State plan for radiation oncology sent by the Health Service Executive to the Minister for Health and Children, Deputy Harney, in July 2006 stated that even the Minister's plans to make interim improvements to radiotherapy services by 2008 could not happen by way of PPP until 2012. It advised that interim improvements could be made by 2009 if radiotherapy machines were provided outside the PPP model. The Minister had to accept this and two extra radiotherapy machines for St. James's and Beaumont hospitals in Dublin are being sourced at a cost of €45 million.

Is the Government blind to the fundamental faults of PPPs, to international experience and to our own experience to date? While the Government has sought to stress that lessons have been learnt and improvements have been incorporated into the PPP procurement process, there is little evidence of this. Those who have examined the PPP process have found that the economic case for PPP is highly questionable. This makes sense when one considers that private finance is more expensive than Government debt.

There is a considerable body of international evidence that demonstrates the difficulties in executing successful procurement under PPP. Experts such as Dr. Eoin Reeves, director of privatisation and PPP research group at the University of Limerick, has noted, "It is quite astonishing that the PPP programme is expanding so rapidly given that the experience with PPP in Ireland has been either unfavourable or untested." Dr. Reeves went on to advise, correctly in Sinn Féin's view, "Given the widespread concern about poor value for money from Government expenditure, the Government would be well advised to conduct rigorous ex post analysis of other PPP projects before committing to what is still an unproven model of procurement."

Notorious examples of PPPs include the case of the Cork School of Music and the grouped schools project. In 2004 the Comptroller and Auditor General published a value for money report into the use of public private partnership for the construction of five second level schools and for the maintenance and running of the school buildings over a 25-year contract period. That report raised concerns in regard to the ultimate costs of those PPPs to the State and suggested that the costs and benefits of adopting the PPP approach should be assessed relative to the performance of a comparable group of schools procured conventionally. It estimated that the projected cost of the PPP deal was 8% to 13% higher than the projected cost of procuring and running the schools using the conventional approach. The Government is telling us that education is one of the main areas where the State will use PPPs in the future. Given the experience to date of PPPs for schools, this is totally unacceptable.

It has been stated by the Minister for Education and Science that one of the advantages of the PPP model is that payment for schools would be phased over the contract period, approximately 25 years. What this actually means is that PPP is more attractive to Government because it has a lesser impact on annual Exchequer balances compared to conventional procurement where the bulk of the capital investment is accounted for in one year. Let us make no mistake about it — PPPs are being adopted because they are useful in terms of the optics of the public finances. The Government is taking a short-term view, primarily for its own selfish electoral reasons, that ignores the fact that the assets and services must still be paid for.

Sinn Féin was particularly disappointed that the recently published national development plan proposed to continue and expand the use of the discredited system of PPPs. This is despite the fact that the ESRI mid-term review of the previous National Development Plan 2000-2006 stated that public private partnerships should only be used where they bring efficiency gains. They are likely to be an expensive means of financing new investment. Yet under the new plan 39% of the spending on public transport is to be by way of public private partnerships.

Sinn Féin has called for the Comptroller and Auditor General to take a comprehensive look at the use of PPPs across all Departments. I reiterate that demand. In 2004 the Comptroller and Auditor General published a value for money report into the use of public private partnerships for the construction of five second level schools and for the maintenance and running of the school buildings over a 25-year contract period. That report raised many concerns in regard to the ultimate costs of those PPPs to the State and suggested that the costs and benefits of adopting the PPP approach should be assessed relative to the performance of a comparable group of schools procured conventionally. There is a need before the Government takes us any further down the PPP road to carry out a thorough evaluation of the true costs to the State of the range of PPPs embarked upon to date. From the experience in other states there is every reason to suspect that PPPs will prove the biggest misuse and waste of public money.

The Government has argued that the PPP approach can provide value for money and the timely delivery of infrastructure. That is the opposite of our experience to date. Projects have ended up more expensive and have not been completed within the envisaged timeframes. PPPs are never the optimal means of financing public capital investment projects within the State sector. It is time to call a halt to this madness.

Sinn Féin will oppose this legislation. It is not in the public interest. It is a case of knowing the cost of everything but the value of nothing.

Mr. Fleming

I welcome the opportunity to contribute to the National Development Finance Agency (Amendment) Bill 2006 because it will have immediate and practical benefits for many projects around schools, especially some in my home town of Portlaoise. I look forward to the enactment of the legislation as quickly as possible.

The purpose of the Bill is to establish a centre of excellence in the National Development Finance Agency. It is important to recognise that the National Development Finance Agency has the function of advising Departments and agencies on all major capital investment projects over €20 million. The centre of excellence has the specific function of advising on the procurement of public private partnership projects. Section 3 will enable the National Development Finance Agency to carry out two new functions: to enter into public private partnerships with a view to transferring the rights and obligations under any such arrangement to any State authority, and to act as an agent for any State authority in entering into a public private partnership arrangement. It is expected and envisaged that in most cases, the National Development Finance Agency will act as an agent for the State authority. In reality, we all expect it to happen this way. Line Departments, such as the Departments of Education and Science or Justice, Equality and Law Reform, will have particular projects and when they bring them to a particular point, they will be handed over the National Development Finance Agency for onward procurement through the PPP process.

Section 6 of this Bill deals with the appointment of three additional board members to the board of the National Development Finance Agency, which is very important given the increase in activity as a result of the additional PPP projects and other activities in the agency.

I am also pleased to see that under section 8 of the Bill, there is provision to allow the National Development Finance Agency to disclose confidential information to the appropriate Minister, as well as the Minister for Finance. This is important because since the agency is effectively part of the overall National Treasury Management Agency, there has been a tendency for the reporting structure to go directly to the Minister for Finance. As we are now entering these new PPP projects, the National Development Finance Agency will effectively be acting as an agent in respect of several Departments and it is important the relevant and appropriate Minister receives information from the agency in respect of confidential commercial matters such that he or she can be fully informed and satisfied as well as the Minister for Finance, who, obviously, has an overarching role in respect of this issue.

So far, it has been mentioned that there has not been sufficient debate on the role of PPPs and the reason we are introducing legislation to deal with this matter. I genuinely believe people are getting hung up on issues that are not very important. We should take a pragmatic view on all these matters. I have no problem with a project being delivered by the public or private sector or by a combination of both once the project is delivered effectively and efficiently and carries out the function it was meant to achieve on behalf of the people in an efficient manner.

There are people who wish to have endless ideological debates on which bank the Government has dealings with. People should bear in mind that Governments must borrow from year to year to finance their capital expenditure on many occasions, especially if they are not operating with a major surplus. They go on the international market to borrow money. We do this through the National Treasury Management Agency. Governments borrow money from international banks and institutions so, in many cases, the private sector is advancing loans and finance directly to the Government which then commits money to the capital projects about which we are talking. Therefore, it is no great shakes for the project itself to borrow directly from these large international financial institutions and, in some cases, bypass the middle man in terms of going into the Exchequer, coming through the Vote through the House and the same money being wheeled out to pay for the project in the first place. It was never envisaged that PPPs would be a massive portion of our activity. It is envisaged that they will encompass a small percentage of expenditure under the national development plan.

So far, there has been considerable debate here on schools constructed under the PPP scheme. I am pleased that some time ago, the Government prioritised a number of areas for expenditure under the PPP projects and the Departments of Education and Science and Justice, Equality and Law Reform were among the Departments highlighted. A total of 21 projects were approved by the Department of Education and Science as being suitable for the PPP approach to public procurement. I am very pleased that of the first bundle of those projects, four are in my constituency. There are two new schools in Portlaoise, both secondary schools on Borris Road catering for boys and girls, respectively, and two schools in Offaly. They went to tender on 30 September 2006. I watched the project intimately and closely. I examined how it integrated with the local authority, planning and schools; the planning of the project; how it deals with the Department at local level; and, in particular, how it is operated at national level. I had discussions, particularly in respect of those projects, throughout last year to ensure they met their deadlines with everybody from local to national level.

The essence of the project was to transfer the risk from the public sector to the private sector. This was achieved, as it is in most of these situations, in that outline planning permission was obtained by the line Department in the first instance so that when the project goes to tender under the PPP scheme, there is certainty that it will qualify for planning permission. If the people who were tendering could not be sure of obtaining planning permission for the project, they certainly could not build it and would face enormous risk.

I will explain to the House how these contracts work because they are some of the first projects under the new PPP arrangement out of the traps. I am sure the legislation will be enacted and by the time the contracts come to be finalised and contractors appointed, it will all be under this new legislation. The tender is for final design so the successful tender must then submit a final application for full planning permission on the basis of the outline planning permission already granted. I have seen how the State can be very intelligent in minimising the risk to itself and exposure and making the contract more straightforward and certain for the people who are tendering for it.

In respect of the particular case to which I referred, these types of problems happen everywhere. It will happen in respect of the new prison at Thornton Hall and these schools. There will be issues directly affecting the project in terms of the delivery of services, water and other public services and amenities to service a particular project. There might be boundary issues in respect of Portlaoise, or roads issues. The Department has cleverly taken all aspects of the project outside the site boundary out of the contract and if there is any difficulty in terms of access, roads or services from the local authority to the site, the Department will pay for that separately and directly in the normal manner that it would have always used and the PPP contract will only deal with that element within the site boundary that will be within the control of the contractor once he or she gets the job.

I am a member of the Committee of Public Accounts and was surprised to hear such misquoting of the Comptroller and Auditor General's value for money report on the five school projects to date. Everyone said they were excessively expensive, which I do not think is a full and fair assessment of the report. The Committee of Public Accounts issued a report on the Comptroller and Auditor General's value for money report. It felt that some of the report did not give a fair overall view of everything involved in those five school projects.

The Comptroller and Auditor General's report was generally positive. He stated that he believed the cost was higher by 7% or 8% than the cost of using a traditional method. There is a major caveat here which I will revisit. The project provided for a larger school than would have been provided under the traditional method. The corridors and circulating and recreation areas for people to move about within the school were 15% higher than the normal Department specification so those five schools have got better projects and school buildings than would have been the case traditionally.

It is important that we objectively examine the report of the Comptroller and Auditor General. Some Members of this House quote him as though he was infallible. However, he knows he is not infallible and so do we and he is happy when we have constructive comments to make. One thing he ignored in his report and which must be a factor is that these schools were delivered earlier than they would otherwise have been. There was an educational advantage to all the students in the schools because they occupied the new schools earlier than they would otherwise have done. It is almost impossible to put a cost-benefit analysis on that type of issue, but it is a relevant factor to be taken into account when one is comparing the PPP project to the traditional, slightly slower method. No attempt was made to examine that aspect of it.

Another matter ignored by the Comptroller and Auditor General's report was that one has a contractor who will be responsible for the final design, build and operation of the school. These are what I call practical school issues, rather than pure book-keeping and accounting issues. The operator will be responsible if the electricity goes, if there is a leak, if a door is broken or if the padlock on the shed is broken and the company will, therefore, be responsible for the maintenance and operation of the school. This issue was ignored by the Comptroller and Auditor General. However, this would free up the school principal to do what he or she should do, that is, look after the educational needs of his or her students. All principals spend much of their time overseeing minor Mickey Mouse maintenance issues such as broken windows, leaks, heating breakdowns and so on. The five proposed PPP school projects offer major advantages whereby the principal will be freed from such duties and this has been ignored by the Comptroller and Auditor General. Those factors must be taken into account and not only the cost inputs.

Above all, the Comptroller and Auditor General highlighted this was a contract for the operation and maintenance of the school over 25 years. It is clear the cost of the whole life project of a school is not available in the Department of Education and Science so a comparison can be made between the cost of a PPP and the cost of maintaining a traditional school over 25 years. That is not a criticism of the Department because it could not been expected 25 years ago to anticipate the need to compile annual maintenance costs on a school by school basis. When the Comptroller and Auditor General attempted to compare the whole life costs of a PPP project with a school built under the traditional model, the costs were not accurately available within the Department for understandable reasons. One of his key findings is it is not possible to give an absolute, accurate assessment of the costs under the two models because of the gap in the information. People conveniently forget this when they debate this issue.

I am a member of the Committee of Public Accounts and we believe there is a lack of transparency because of commercial sensitivities and, ultimately, there is a lack of accountability to the House regarding commercial contracts. The committee, which never divides on a party political basis, has suggested an all-party committee should have access to all the necessary confidential information. The Comptroller and Auditor General and relevant Ministers are entitled to this information and perhaps the Committee of Public Accounts could report to the House that it has examined the matter in camera, without disclosing confidential information. At least then the public would be satisfied that 12 Members examined the commercially sensitive aspects of a project and reached a conclusion. A mechanism could be developed whereby that could happen without breaching commercial sensitives. This would generate confidence and address the criticism regarding the vacuum in information.

A number of myths are associated with PPPs. The strangest aspect of the debate is that one would almost think PPPs are being invented under this legislation. However, they have been in existence for as long as I can remember. Local authorities and Government agencies have availed of such projects on the ground for years. However, they are being formalised in legislation and perhaps it is necessary because of our commitments to the EU and EUROSTAT to adopt a formal legal approach regarding such projects. For example, the Midlands Prison in Portlaoise in my constituency was an extensive project commissioned in 1997. It was designed and built by the successful contractor, Henry O'Rourke, and financed by Barclays Banks, which still owns it. The prison is built on State land but the Government will lease it for the remaining 25 years. That was a PPP in every respect. In addition, the Department of Agriculture and Food's office in Portlaoise were leased by a major company to the Government for a number of years but the Government felt it opportune five or six years ago to buy out the lease and the building is fully in State ownership. Throughout Dublin and every other county, there are several examples of the public and private sectors working together successfully on major projects. While such projects did not have the fancy title, they were more or less PPPs in practice. We are giving them their official title, yet some people think they are only coming into being.

I am disappointed PPPs have not been implemented more speedily in recent years. Reference has been made to the Cork School of Music, which will cost €200 million, but that amount relates to maintenance and operation over 25 years. While that is much higher than the original estimate, a number of Members are comparing both figures and saying the ultimate cost is expensive. That is not necessarily the case. The tragedy is figures are not available to verify either side of the argument but the conclusions drawn by certain Members cannot be drawn. One of the reasons the project was held up at EUROSTAT level was its query on how to account for the debt-GDP ratio in the context of the ongoing costs given the State would enter into a financial commitment from day one for expenditure over 25 years, notwithstanding that the liabilities would not mature over the period. Nevertheless, a legal contractual arrangement will be in place from the outset.

Generally, the NDFA and the National Treasury Management Agency should be used more. This legislation is important but I ask the Minister to enhance the role of both agencies to deal with complex commercial contracts in which many Departments and agencies are involved. The job of the Departments of Education and Science, Health and Children, and Justice, Equality and Law Reform is to deliver the services required of them. It is not the function of their senior personnel to be engaged in commercial contracts. Major capital projects only come before a Department on an intermittent basis and, therefore, a cadre of experienced people who have been through the process is not built up. When such projects are negotiated at departmental level, the Department of Finance will stand off from the negotiations, having issued guidelines and provided funding under the relevant Vote. That is not the best way for the State to ultimately ensure value for money. Expertise in PPPs should be developed through the NDFA because the public sector needs to deploy staff in one agency who can match the expertise of those they negotiate with from the private sector.

I welcome the legislation and I hope it is passed quickly. When it is enacted, the school projects in Portlaoise and County Offaly will be among the first to be undertaken. They are at a tender stage and I look forward to the NDFA signing the contracts on behalf of the Department of Education and Science soon.

Mr. Connaughton

I am delighted to have an opportunity to contribute to the debate. I concur with much of Deputy Fleming's contribution and I do not share the view of many ordinary people who think that because PPP projects are not as transparent as they might be for many reasons, they could not be right. However, they have a role. I sat on the Committee of Public Accounts for years and we discussed this issue at great length on several occasions. It is a major flaw there is not more transparency. This House should have more of an overview of how an aspect of State funding is employed. I am fully aware of the commercial sensitivities involved. Many people in the private sector said they would not be interested in becoming involved in a project if their private business were put up in neon lights. That is not good enough. The Minister for Finance will be the first to appreciate the only reason for the private sector to become involved in public private partnerships is that there is money in it for them and it makes good commercial sense for them. The private sector is not composed of organisations like the Society of St. Vincent de Paul. The good news for the State is that it also benefits.

Individuals deeply involved in such matters have outlined to me examples of when the State did not come out well. What happened to the NRA, especially in the early years, may relate to uneven competition between the best brains available on the private side with the highest possible level of expertise. They were dealing with people who were very well intentioned and had every reason to want to make a good deal on behalf of the State but they did not have the expertise. For that reason I commend the Minister, Deputy Cowen, on the Bill.

Everyone understands the role of the National Treasury Management Agency, NTMA. Members on all sides of the House acknowledge it handled its remit extremely well. I was impressed with how the agency conducted itself in the Committee of Public Accounts and with what it proposes to do. The National Development Finance Agency, NDFA, is under the aegis of the NTMA. I would like to think the expertise involved in the NDFA would be at a similar level to that provided by the parent body, and that it would be able to draw on all available experience and expertise. When dealing in billions of euros it is important for partner organisations to work together on an equal basis because this business is so competitive. The expertise available to this group suggests we are unlikely to see anything untoward happening in the future. I do not cast aspersions on anybody but the expertise may not have been available previously.

Having read the proposed legislation I am unclear as to the role of the Minister for Finance. Some people hold the view that the further one keeps the Department of Finance from a project the quicker and better it will be.

Mr. Cowen

Heresy.

Mr. Connaughton

I do not subscribe to that view. Although it is not explicit in the Bill, the provision of an over-arching role to the Minister for Finance of the day would benefit the democratic process.

An economy that is going as well as ours and for so many years has many positive aspects. However, other aspects have not keep abreast of play. Numerous references have been made to the inability to provide an adequate road network. We all call to mind projects with which we are familiar. I was convinced the N6 would arrive in Galway city in 2006 but it will not be operational until 2010. Many other inter-urban road projects are gaining momentum but they will not be finished for up to six years after the completion dates envisaged in the National Development Plan 2000-2006.

Only two or three ways exist to tackle large scale public projects. When one considers the current state of the economy and the credit rating we possess on international financial markets, one could suggest access to private funding was more important in the past than it is currently. On the other hand, if a partnership arrangement means a project can be completed faster and with greater efficiency and at better value than could be provided by the State then that is the best option. That is the nub of this debate. Regardless of the chosen method, we must provide for the infrastructural projects that are required to improve competitiveness, enhance job creation and provide the social fabric that will enhance each individual's lifestyle.

In so far as PPPs are concerned, the model available has not worked well on several occasions. Design, build and operate projects are first cousins to PPPs. I accept they are best suited to smaller projects but in terms of a county's expenditure the projects in question are considerable in nature. Some projects have finished up in a mess and offered poor value for money because it took so long for them to be completed. I refer, for example, to a sewerage project in Galway. It was decided to amalgamate the villages of Kilkerrin, Dunmore and Leenane in Connemara for a design, build and operate sewerage project. The money was made available in 2000 and the service pipes were laid in the ground in 2006. Something has gone wrong with the contract to dig the treatment plants in each village and they have yet to go out to tender. We can rest assured that whatever amount of money was earmarked for those projects in 2000, by the time they are completed in another year or two, sewerage schemes could have been provided to two other villages in County Galway for the difference between the contract price in 2000 and what will be the eventual price. I hope the Bill will ensure the necessary expertise is made available. That will be a great step forward.

I wish to examine other aspects of the Bill.

Debate adjourned.