Mr. Seán Ó Foghlú:

They are good questions we must keep on asking ourselves. I am aware that the value for money question about PPPs is an issue that concerns this committee greatly and we have taken and are taking a number of steps to ensure this is the case. The publication by the Department, at the committee's request, of the public service benchmark, PSB, for school bundles 1 and 2 is an example of the Department attempting to increase transparency and understanding regarding what we are doing. We also are reviewing some of our bundles to ensure the value for money and a review of that is under way that we hope to conclude by the end of the year. In addition, Cork Institute of Technology also is undertaking a review. It is something we must keep under constant review. We work out the public sector benchmark in all its different ways. Again, when I say "we", it is with the support of the National Development Finance Agency, NDFA. We then must ensure that when the tendering takes place, it comes in under that, in order that we know there is a value-for-money aspect to it. Were a number of tenders to come in as a result and were the outcome tender to be above the PSB because of an under-supply of builders willing to get involved, we would have concerns. It is not a concern we have at present.

There are several aspects to the market, including the availability of funding and so on. Obviously, things are slightly better now on that front than was the case two or three years ago. As the Deputy is aware and as we discussed here previously, we unfortunately were obliged to cancel our three third-level bundles. However, we now are well advanced on planning with our fifth schools bundle and the Grangegorman project also is advancing very well. We are pleased about the value for money so far but we must keep it under review. We think it is useful to have some of our building programme delivered through PPPs. We must be careful and do not wish to be completely involving PPPs. Given the increasing school population, we do not want every PPP to be for a new school that needs to open for demographic reasons. There are several different reasons for this, one being that a PPP does not suit new schools if such a new school is going to open gradually because it will not be used fully in the first year. Another reason is that there can be particular deadlines whereby one must have the school opened by a particular day. Consequently, were there some slippage over financing, this could mean it would be necessary for some other solution to be put in place. We like a balance of new schools and perhaps amalgamated schools. We are taking that balanced approach in respect of bundles 4 and 5 and certainly will be considering the possibility of further bundles, obviously in consultation with the Department of Public Expenditure and Reform for the future, as we are going into a capital review.

The Deputy also referred to the equity returns and obviously we are conscious of the issues in the United Kingdom. Again, we discussed them here last year as well. We must be careful because if one procures something, one does not get behind what is the profit for the person from whom one procured it. However, one must be careful, if there are not enough people in the market, that the profit-taking may be too high.

I suppose that is something that we have to keep talking to the NDFA about. It is in that balance. Some of the issues in the UK involve the state taking some sort of an interest in it, but that seems to make the whole thing very complicated and involve an up-front investment from the state, which is one of the issues that this approach avoids. It is a balanced approach.