Written answers

Tuesday, 14 February 2012

Department of Public Expenditure and Reform

Public Private Partnerships

9:00 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 268: To ask the Minister for Public Expenditure and Reform his understanding of the number of financial institutions willing to participate in public private partnerships, PPPs; his views of the operation of the marker for PPPs; and the steps he intends to take to assist a more efficient operating of the market. [8480/12]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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It is widely acknowledged that there is limited liquidity in the European PPP market as the majority of the large international project finance banks have refocused activities on home markets. Furthermore Ireland's fiscal and banking difficulties has meant that such international banks are additionally, for the first time in modern times, taking 'country risk' into account before considering funding a project in Ireland. In reality, this has led to the absence of international project finance banks in the Irish PPP market.

However the European Investment Bank (EIB) continues to be a strong supporter of our PPPs and we appreciate the support and confidence shown by EIB's continued engagement to help us meet our infrastructure needs. In addition, our domestic 'pillar' banks continue to give positive indications of support for our PPP projects. My Department has worked closely with the NDFA and the Department of Finance to secure funding from a mixture of EIB and domestic bank funding for the two 'live' PPP projects on a value for money basis for the State.

The principle rationale for pursuing projects as PPPs alongside traditionally funded exchequer projects is that they provide value for money for the State and that they are affordable. With respect to the operation of the PPP market, to date the reduction in liquidity has had limited impact on the operation of the small/ medium PPP market and it continues to operate efficiently. Recent experience of PPP tender competitions here indicate that there remains a market for well defined projects with relatively low funding requirements and with clear Government support.

My Department and the National Development Finance Agency are actively engaged in identifying and incentivising additional sources of funding for our PPP's, for example there is engagement with the Council of Europe Development Bank (CEB) with a view to it supporting some of our capital projects in 2012 /2013 and engagement with our domestic pension funds similarly remains ongoing with a view to investing in Irish infrastructure. Furthermore we maintain close links with international best practice to ensure that there is consistency of approach across our projects in order to remain competitive in what is a very competitive international market.

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