Fergus O'Dowd (Louth, Fine Gael) | Oireachtas source

I move amendment No. 46:

In page 45, after line 14, to insert the following:

“PART 8
MISCELLANEOUS

Amendment of section 6 (directions) of State Authorities (Public Private Partnership Arrangements) Act 2002
54.The State Authorities (Public Private Partnership Arrangements) Act 2002 is amended in section 3 by inserting the following subsection after subsection (5):

"(6) An appropriate Minister may provide, with the consent of the Minister for Finance and the Minister for Public Expenditure and Reform, a guarantee or indemnity, in such form and manner and on such terms and conditions as the appropriate Minister thinks fit, in respect of the obligations of a State authority (other than where the State authority is a Minister of the Government) under or in connection with a public private partnership arrangement.".".

This is a proposal to amend the State Authorities (Public Private Partnership Arrangements) Act 2002 by adding a section that will allow Ministers to issue guarantees or indemnities in respect of public private partnership projects with the consent of the Minister for Finance and the Minister for Public Expenditure and Reform. Such indemnities or guarantees have been essential in recent years to secure funding for projects from international financial institutions, such as the European Investment Bank, where a sub-sovereign entity, such as the National Roads Authority, is procuring that project. A ministerial guarantee may also be required to ensure an appropriate credit rating for a PPP in such cases.
The purpose of the proposed amendment is to provide a legislative basis where a Minister issues a letter of indemnity for or guarantees to fund PPP companies or PPP projects. The office of the Attorney General has indicated that such a provision is appropriate if the practice of Ministers issuing such letters is to continue. The provision formalises an implicit State liability because a Minister providing the guarantee will generally be funding the State authority through the departmental Vote. In the case of roads, for example, it is simply the Minister for Transport, Tourism and Sport vouching that he will be liable for the payment of obligations of the NRA should the NRA fail to pay, as per the terms of the PPP. In simple terms, the Minister is vouching that he or she will make the payments to the NRA that he or she would be making anyway.