Ms Geraldine Tallon:

It is more cost-effective to operate through the PPP for large-scale projects that are covered by PPPs or for the bundles of projects that are covered by PPPs. We have the specific information in the case of the whole-life cost pertaining to those schemes that have gone down the PPP route. However, I have also said that we have many contracts over the same period procured by way of traditional procurement methods, and they are operated in the traditional way by local authorities. For example, the contracts completed in the period 2002 to 2012 contained 54 wastewater treatment plants contracted in the traditional way through the local government system. There are 35 contracts, encompassing 65 wastewater treatment plants, procured by way of DBO. In terms of water, there were 27 treatment plants procured by standard, traditional procurement, and three by way of DBO contract.

Consequently, the decision and the analysis are on a site-specific basis in each case. We are not taking a decision in principle that design-build-operate, DBO, is right and traditional procurement is wrong or that DBO confers a particular set of advantages that in no circumstances could be achieved through the traditional procurement system. In each case, the decision and the evidence are based on site-specific analysis.