Mr. Brian Murphy:

The establishment of the NDFA in 2003 addressed the need to develop in the public sector a centralised and permanent in-house financial expertise to provide expert advice on the financial risk and insurance aspects of the public sector capital programme. The first objective of the NDFA is to ensure the State gets value for money on all public capital investment projects referred to it for financial advice. Since 2007 the NDFA has been responsible also for managing the procurement of public private partnership projects, PPPs, outside of the transport and local authority sectors. In performing its duties the NDFA is required to have due regard to the guidance and directions issued by the Minister for Finance and the Minister for Public Expenditure and Reform in the financing and procurement of public investment projects.

The NDFA has two quite clear and specific statutory mandates. The first is the provision of financial advice to State authorities. Once a project is referred for advice, the NDFA is responsible for maintaining the financial integrity of a procurement process for the specific contract and ensuring value for money is achieved in that process. The mandate does not include advising on policy or economic matters relating to projects or other project budget issues that remain the responsibility of the sponsor and sanctioning authority. Consequently the NDFA has no role in project identification or selection or the basis on which a project may proceed. The second mandate is the procurement of all PPPs outside of the local authority and the transport sectors. The NDFA acts as a procuring and delivery agent for the relevant State authority within the budgetary and project scope as defined by the sponsoring and sanctioning authorities.

In the past year the education sector has been the most active for the NDFA. The second bundle of PPP schools, having reached financial close in June 2010, was delivered ahead of the programme time, with the final school completed in October 2011. These six schools provide accommodation for 4,700 students in Cork, Limerick, Kildare, Wicklow and Meath. The preferred tenderer for the third bundle of schools, BAM public private partnership, was appointed in September 2011. Planning permission was secured for all schools by May 2012. On 9 November 2012, the NDFA awarded the contract for schools bundle 3 to BAM public private partnership PGGM Infrastructure Cooperatie, a joint venture between BAM public private partnership and Dutch pension fund administrator PGGM. Construction has now commenced. When completed, the eight schools in bundle 3 will provide accommodation for approximately 5,700 students in Donegal, Galway, Leitrim, Limerick, Waterford, Westmeath and Wexford. In the meantime the project will have created 1,100 jobs, of which 200 are already on-site.

The NDFA continues to work with the National Roads Authority in its role as financial adviser on PPPs. Good progress is currently being made in moving the N11-Newlands Cross public private partnership to financial close. The preferred tenderer for the N11-Newlands Cross PPP is also BAM public private partnership PGGM Infrastructure Cooperatie.

In March 2012, the Minister for Education and Skills announced details of 219 new major school building projects as part of a €2 billion capital investment programme. The NDFA, together with the Office of Public Works, the vocational education committees and county councils, will assist the Department with the delivery of more than 80 major school projects. The NDFA has commenced work with the Department on the delivery of 18 of these 80 school building projects.

The NDFA continues to provide financial advice on all projects referred to it and is currently advising State authorities on 25 active projects. Developments in the past year included the opening in July 2012 of the new cystic fibrosis unit in St. Vincent's University Hospital, for which the NDFA provided financial advice to the Health Service Executive. In August the NDFA was involved in the successful drawdown of a direct loan of €100 million to the Exchequer to finance a programme of school building improvement projects that are to be procured on a traditional - that is, non-PPP - basis for the Department of Education and Skills. In late November a further €100 million traditional loan contract was signed between the European Investment Bank and the NTMA in respect of traditional water-wastewater projects.

Recognising the continuing infrastructure deficit in certain sectors and the need for job creation, the Government announced a stimulus package on 17 July 2012 to provide investment amounting to approximately €2.25 billion on a range of important new projects designed to stimulate economic growth and create employment.

The package will involve raising €1.4 billion for investment in public infrastructure PPP projects from the EIB, the NPRF, domestic banks and other sources of funding. The financing of these investments will be structured as being off-balance sheet, in line with standard PPPs, design, build, finance, maintain models. The balance of the programme, approximately €850 million, will be funded from the proceeds of asset disposals, including national lottery and newERA asset sale activities.

The NDFA will work closely with the various stakeholders in order to ensure a sufficiently competitive environment to generate value for money for the taxpayer. We have commenced an intensive market engagement with a view to attracting interest from investors, contractors and other relevant stakeholders. In general, as the vast majority of equity for PPPs comes from overseas investors, such investment is analogous to foreign direct investment. It is used in the formulation of real assets and job creation.

I look forward to taking questions from members. In the event that I do not have the information available to me, I will revert to the committee within two weeks.