Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank Senator Barrett for his amendments. I think it is actually quite a big jump to add in expenditure under the public capital programme and I will outline the reasons for saying that. NewERA has been set up to provide financial and commercial advice to shareholding Ministers on designated bodies and also, at the request of other relevant Ministers, advice in relation to other State bodies that have not been designated.

Amendment No. 7 would allow Ministers to request NewERA to provide advisory services or project management on expenditure under the public capital programme. I have a basic reservation about this proposed amendment. We have defined - I refer to my exchange with Senator Reilly - NewERA's primary role as an adviser to Ministers on commercial semi-state companies. We further built upon that to say that NewERA can provide project management or oversight in relation to acquisitions and disposals of State assets and winding up and restructuring of State bodies generally where a Minister has an interest. However, it is a big jump to extend the remit beyond that to advise and project manage in relation to the public capital programme generally. We have already done something like this with the National Development Finance Agency. As Senators will be aware, the NDFA procures public private partnerships on behalf of the Exchequer and provides financial and risk advice on capital expenditure projects in excess of €20 million. Its remit was extended further in 2013 to allow it to procure schools directly from the Department of Education and Skills, because it was realised that additional resources were needed to ensure that the extensive programme of school building was delivered successfully. We can redirect resources when needed, but we would not be inclined to do so unless we felt there was an immediate need.

In respect of amendment No. 8, in the name of Senator Barrett, it goes without saying that one of the foundation stones for NewERA is improving the rate of return on public investment. That is why we want to bring together this expertise and that is the reason we want to have an option for Ministers to engage and seek advice from such expertise. Senator Barrett proposes to insert the phrase "improving the rate of return on public investment" in section 22. While we may not have used that precise formula of words, I think it is clear from section 19, which defines NewERA's core advisory role, that it refers to NewERA advising on the "financial and commercial operation, including the rate of return on capital expected for the designated body and the appropriate dividend policy for the designated body".

Subsection 4 requires the agency to have regard to the objective of seeking the effective and efficient application of capital by the designated body taken as a whole. I think it is fair to say that improving the rate of return on public investment is part of what NewERA is about and I feel it is adequately addressed in those sections.

Turning to amendment No. 16, we are carrying over the NDFA provisions from the NDFA Acts 2002 and 2007, adjusted to take account of the dissolution of the NDFA board and the fact that the NTMA will be taking over the NDFA function directly. The role of the NDFA is to provide a financial advisory service to State authorities in respect of capital projects over a certain size, at present €20 million. The third Schedule to the Bill lists the State authorities to which the agency in its NDFA role provides advice and financing on public investment projects. The list is quite extensive, covering Departments, local authorities, colleges, transport bodies and harbour authorities - in short, the public bodies that one would expect to have significant capital expenditure. This list is carried over directly from the National Development Finance Agency Act 2002 and section 29 of the Bill provides that the list of bodies can be added to by order of the Minister for Public Expenditure and Reform. Given that the NDFA provides advice on projects costing more than €20 million, it does not seem necessary to extend the list of bodies to include any public body that has money to spend under the public capital programme. It is a straightforward procedure to add bodies to the list and the Department of Public Expenditure and Reform is vigilant in ensuring that public bodies have access to the financial expertise of the NDFA where appropriate. Therefore I feel it is adequately addressed in that Schedule, and I do not propose to accept these amendments.