Dáil Éireann Debate, Wednesday - 15 December 2004
9 Mr. Kenny asked the Taoiseach if he will report on the November 2004 meeting of the cross-departmental team on infrastructure and public private partnerships; and if he will make a statement on the matter. [32018/04]
Amharc ar fhreagra10 Mr. Sargent asked the Taoiseach if he will report on the meeting of the cross-departmental team on infrastructure and public private partnership in November 2004; and if he will make a statement on the matter. [33157/04]
Amharc ar fhreagra11 Mr. Rabbitte asked the Taoiseach when the cross-departmental team on infrastructure and public private partnership last met; the number of meetings held during 2005; when the next meeting is due; and if he will make a statement on the matter. [33215/04]
Amharc ar fhreagraI propose to take Questions Nos. 9 to 11, inclusive, together.
Since I last reported to the House, there have been two meetings of the cross-departmental team on housing, infrastructure and public private partnerships. The meetings took place on 17 November and 1 December. Discussions at the November meeting focused on public private partnerships and broadband technology. The team noted major progress in the public private partnership programme in the roads and water services areas and considered how it might be improved in terms of deal-flow and capacity at Government level. In its discussion of broadband, the team focused on the significant progress made during the past year. Improvements have included reduced prices, increased demand and, crucially, a major expansion in supply, especially through the ongoing roll-out of the metropolitan area networks programme.
To date, experience has shown the cost of public private partnership projects to be between 8% to 30% more expensive than traditional methods. Have we learned anything from the experience in the education sector? I was in Clones recently to visit a new school built through public private partnership which emerged very quickly and is a beautiful building. However, I understand that as the company which built it has the maintenance contract, the cost incurred for relatively small items can be excessive. Has the cross-departmental team examined the nature of the costing of the public private partnership process? In the Estimates and multi-annual budgetary envelopes for the next few years, provision is made for a number of public private partnership proposals.
Has the cross-departmental team considered the response received on foot of 13 expressions of interest in a second terminal at Dublin Airport? Has the team examined the expressions of interest and will it make a decision on the provision of a terminal under the public private partnership system?
As the Deputy knows, we have not been using public private partnership to the extent we should. There are not many companies involved and, as happened in other countries, the process has been pressed back. We have learned a great deal from partnership projects. We benefited from the recent report of the Comptroller and Auditor General and made modifications as a result. The ongoing maintenance of schools must be dealt with in the context of the contracts issue. The project has been successful in terms of providing schools.
Public private partnerships have a valuable contribution to make in delivering the ambitious infrastructural agenda set out in the national development plan. Progress has been good on roads, water services and schools, but slow in other areas. The Minister for Finance acknowledged openly in his Budget Statement that targets set last year for public private partnership projects funded by unitary payments from the Exchequer will not be met. The Minister adjusted the figures accordingly and the process is being examined to discover what changes might be desirable to achieve an accelerated level of delivery of public private partnership projects.
Already, the Government is pursuing a number of initiatives designed to achieve greater efficiency and improve cost-effectiveness in the delivery of the project. In particular, we have made modifications. New guidelines are being developed covering process auditing and stakeholder consultation. The capital appraisal guidelines, which have been in place for some ten years, are being revised. Steps are being taken to improve integration between the national development plan and expenditure review processes. At the end of the day, however, the PPPs, as with all forms of procurement, have to be considered in the light of factors such as value for money, affordability, quality of output and speed of delivery. All of those issues are under way.
On the issue of the terminal, while it is not being dealt with in this particular committee, the Minister is making progress with the new board in Aer Lingus in trying to come to a resolution on that matter.
Will the Taoiseach indicate whether the cross-departmental team on infrastructure and public private partnership is proceeding on the basis that a critical infrastructure Bill will not now be in place, given that it has been taken off the agenda? I am aware the Taoiseach talked about it yesterday but as we speak it is off the agenda. Is that the basis on which the cross-departmental team is proceeding?
In addition to the lessons the Taoiseach says have been learned from the Comptroller and Auditor General's report, will he indicate whether any further lessons can be learned or information gained with regard to the €60 million project for the Cork School of Music, the construction of which under the PPP process was planned by Jarvis plc., although I understand that contract has been sold on to a German group, Hochtief Developments, which is expected to make a proposal before Christmas? Is the Taoiseach confident that proposal will be received before Christmas?
The Deputy can askgeneral questions to the Taoiseach but specific questions are more appropriate to the line Minister.
I understand that but the Taoiseach has a knowledge of this matter because we discussed it previously and the Cork School of Music is seen as representing the PPP way of working. Perhaps the Taoiseach might refer to it as an aspect of PPP policy.
On the Cork School of Music, the Government has approved it. The company has faced its own difficulties and it is trying to restructure but from a Government perspective, we had approved this project. That one has experienced a long delay and difficulties. Others, including the Maritime College, have worked very well. As I said, we are reviewing the issue.
The Deputy asked about the critical infrastructure Bill. As I stated yesterday, we remain committed to that Bill but the Minister has stated clearly that he is examining the various aspects of it. I am not clear what that review is, but he is to report early in the new year. What was the other question?
Is the Taoiseach confident that the proposal will be received before Christmas, given the difficulties with the Cork School of Music? Does he expect it to run according to plan?
Yes. I hope when that is resolved — I am not sure if it is resolved — we can get on with it. It is a very good proposal which the Minister, Deputy Dempsey, and I worked on and approved after some considerable time. If I recall correctly, the issue was discussed in one of our final meetings before Christmas last year and we gave it the green light but the company ran into its own problems on it. It was committed to it, however, and I hope it will be taken up again because it is a good project management——
As the song goes, "What's another year?".
The Taoiseach will accept that our experience of building schools is that the schools have been of very good quality but will he agree that there is a significant cost involved in using the PPP process, which does not denote value for money? Has the experience not shown that? The Taoiseach said that in some areas progress has been made at various levels of speed but in the health area no progress whatsoever has been made. A total of 850 long-term nursing beds were promised by way of a PPP process. That proposal has been with the Department of Health and Children for years. Will the Taoiseach accept that it has not delivered on the promise given, that this is having a direct impact on the failure of the Government to tackle the accident and emergency crisis in that there are not sufficient acute beds available, many people continue to be inappropriately placed and the capacity promised under the PPP method was not delivered? Those 850 long-term nursing beds would have made a huge difference and perhaps the Taoiseach——
That question might be more appropriate to the Minister for Health and Children.
I would like to know the Taoiseach's view. Does he accept that whatever promise was made, it has not been delivered upon? Will he now accept that he needs to do the business in another way?
A general question on PPPs is in order.
Some of these schemes are extremely good and their value is obvious. To give the example of the schools, the maintenance of the schools continues for 25 years at the end of which the public sector takes over. It is obliged to do that. It puts the maintenance contract in writing and hands that function back to the State at the end of that period. That is the benefit of it. Many of these schemes have a much longer life than others throughout the country. Major problems arose with schools built 25 years ago using asphalt roofs in that the schools do not appear to get even ten years out of the roof.
There are downsides to PPPs, but the real benefit is that projects can be done speedily. In my constituency, I turned the first sod on a site for a very large hotel on the first working day in January 2003. I opened a 200 bed hotel in September——
I am talking about nursing beds.
Will the Deputy listen to the point?
I am not interested in hotel beds.
Will the Deputy listen to the point? Within 20 months the hotel was built. Under our structures working on the capital programme we will not achieve that type of progress.
The Taoiseach said we would under the PPP process.
The Tullamore Hospital and other hospital projects were completed quite speedily, but they will not reach that timescale, and that is the difficulty.
The Taoiseach promised them under PPP.
Deputy McManus, please allow the Taoiseach continue.
They were to be provided under PPP.
If the Deputy listens to contributions on Question Time, most people criticise the PPP projects. I am saying the benefit of them is speed. The redevelopment of St. Vincent's Hospital is not being done under the PPP process. We are not using PPPs to build our hospitals.
A total of 850 nursing beds were promised.
We are building the hospitals but we are not using the PPP process because of the issues that arise here time and again to the effect that we get much better value if the State does it.
Where are the nursing beds?
The hospitals are being built. Tullamore Hospital is finished.
I call Deputy Joe Higgins.
We are talking about nursing beds.
Deputy McManus, I have called Deputy Joe Higgins. There has to be order to Question Time.
The St. Vincent's redevelopment project is almost finished. The project at Blanchardstown is finished. They have been built but not under the PPP process.
The Taoiseach did not answer the question I asked.
I ask Deputy McManus to resume her seat and allow Deputy Joe Higgins to speak.
There will be more use of the single tender contract.
We will probably get them built quicker.
How can the taxpayer have any confidence in so-called public private partnerships when the so-called experiment implemented by the Minister sitting beside the Taoiseach, Deputy Dempsey, will cost the taxpayer much more than would be the case had those buildings been maintained publicly? We now face the incredible vista of private companies speculating on the maintenance of our public services? Does the Taoiseach agree that if structures are cumbersome, it is his responsibility to make those structures flexible and democratic so that they can move much more quickly? Reference to the quality of buildings is a red herring because the building specifications are determined by the instructions given to whoever carries out the contract.
Does the Taoiseach agree that taxpayers will regard with dread further public private partnerships for the delivery of major road projects given their incredible experience of National Toll Roads' management of the West Link bridge over the River Liffey? Does the Taoiseach know that €1 billion will have been taken at that location by 2020 and, despite the huge profits taken by the company and the huge stealth taxes taken by the State, the toll will be raised to €1.70 within the next 12 months? How can taxpayers not regard the prospect of further such examples with dread, especially given that the result is the greatest traffic blockage in the State at the West Link toll bridge?
In medieval times it might have been appropriate to pay a ha'penny to take one's ass and cart across London Bridge. In 2004, with tens of thousands of workers trying to get to their places of work via the M50 toll bridge, it is——
If the Deputy had had his way, the bridge would not have been built.
The Minister should allow Deputy Joe Higgins to submit a final question to the Taoiseach.
If the county council had been funded by the Department of the Environment, Heritage and Local Government, it could have built the bridge.
If Deputy Higgins had had his way, the bridge would not have been built. It would have been left to private sector speculators.
Deputy Higgins should be brief.
I would not mind if the Deputy were asking a question.
Deputy Higgins should be brief and not allow himself to be deflected by interruptions. The Minister should allow the Deputy to speak.
The Government has given carte blanche to private sector speculators. That is the point.
Does the Taoiseach not agree that motorists, who have paid high taxes and are trying to get to work——
They do not have to use the bridge.
——to make more tax for the State, are being subjected to the indignity and frustration of an hour's delay each way to make more money for a private company?
Deputy Sargent raised the question of PPP schools building projects. Those five schools would not have been built without PPPs, despite arguments that procedures should have been changed or things done differently. Nevertheless, a bundle of schools were built by the private sector and are up and running. Traditional procedures would have taken years, as every Deputy knows. Over a long period, the private sector will look after the maintenance of the schools and the cost will be recouped. I accept that the cost of those PPPs was higher than traditional procedures but their speed and efficiency was greater.
Can the structures not be changed?
Existing structures are much slower. I do not say the processes of accountability are not wrong but the stages which must be gone through make them slower. The private sector would have ten schools built while we were looking at the drawings. That is the reality and it will not change. It was the way when I came into the House 25 years ago and it will be the way when I am 25 years dead. A review or procedures will not change that. Let us be honest about that.
We are not using PPPs to the extent we had thought. In the budget for 2004 we examined five-year multi-annual financial envelopes for different infrastructural projects. We extended that in the recent budget to a ten-year timeframe in the area of transport. We have earmarked a proportion of capital envelopes for special projects and have tried to improve project management techniques. We have done that well and the Monasterevin bypass is a good example of this. It came in on budget and a year ahead of time. Under the Planning and Development Act 2000, we have improved timeframes and compulsory purchase order issues and we now have PPPs managed by local authorities and single tier projects. An Bord Pleanála has adjusted its procedures for dealing with projects. We have made considerable improvements in a host of areas and they are working well. Projects are coming in on budget and ahead of time, there is better transparency and construction standards have been developed.
We all want to see the M50 improved. We need to see it widened, working well and the toll bridge working better. Modern technology is being developed throughout the world and we hope to see some of that used sooner rather than later on toll roads so that people can get through more speedily. There are problems on the M50. Deputy Higgins is probably right in saying that if there had been local taxes and charges, as there are in other countries, Fingal County Council might have had sufficient money to build the road.
I did not say that.
They did not have the idea. In other countries that is how things would have been and Deputy Higgins is probably correct in saying it would have been done more efficiently.
I was referring to the money the Taoiseach's friends were sending offshore.
