Dáil Éireann Debate, Thursday - 6 April 2017
201. Deputy Dara Calleary asked the Minister for Public Expenditure and Reform the rationale for imposing the rule that the total cost of public private partnerships, PPPs, including up front direct Exchequer costs, must be limited to 10% of the total annual Exchequer capital spending; if he has reviewed this rule and if he will consider revising the rule; and if he will make a statement on the matter. [17354/17]
Amharc ar fhreagraPPPs offer an alternative model for delivering infrastructure that can be effective in particular circumstances. However, the long-term nature of the financial commitments arising under PPPs require that the use of such arrangements must be carefully planned in order to ensure that they are used to address infrastructural needs in a manner that is sustainable in the long term and which the public finances can afford.
It was for this reason that the Government introduced an Investment Policy Framework for PPPs in 2015. The purpose of the framework was to set a limit on the extent to which the annual costs of PPPs would pre-commit capital funding available to future Governments for investment purposes, in terms of the overall aggregate Exchequer capital allocation projected to be available in any individual year.
The framework applies to the future cost of unitary payment charges in respect of both existing PPPs already in place and new PPPs currently in procurement or planning, together with the up-front Exchequer costs associated with procuring the planned new PPPs. The current requirement is that, taken together, such future costs in respect of PPPs should not pre-commit more than 10% of the overall aggregate capital funding projected to be available to future Governments in any individual year.
In the context of the mid-term review of the Capital Plan, I have asked my Department to consider the scope for further use of PPPs to complement the direct provision of infrastructure using Exchequer funding, on a basis that is sustainable and affordable in the long term. A senior level group has been established, comprising relevant officials from the Departments with experience of procuring projects by PPP, together with the Department of Finance, the National Development Finance Agency and Transport Infrastructure Ireland, to review past experience of PPPs and to provide an evidence based analysis of the potential for further use of PPPs (and concessions) as a procurement option for the delivery of capital infrastructure. The terms of reference of this Group includes consideration of existing PPP guidance and governance which encompasses the investment policy framework for PPPs set out above.
