Mr. Robert Watt:

That is the full package, which would be funded, without a concession, by unitary payments from the Exchequer. I ask the committee to think about the building of a school. Let us say the school costs €5 million. Traditionally, one would take two or three years to build the school and the cost would be charged to the Exchequer in the normal way. This is the normal appropriation with which members would be familiar. It is a standard, traditional approach. It is how most schools, for example, are procured. PPPs involve a contract whereby we enter into an agreement for 20 or 25 years. The private sector builds, as it would in the case of traditional appropriation, but under design-build-operate-finance, DBOF, it would also provide the finance and would enter into an agreement to sustain, maintain and hand back the school after 25 years. There is therefore a difference between this type of contract and the way in which we traditionally procure. The unitary payments then would be made over 20 or 25 years. That would be the standard. These unitary payments would be a charge on the Exchequer each year over the period of the contract. The unitary payment in effect would cover the capital cost, the financing cost and the operating and maintenance costs of the project. That is the commonest standard form.

Road projects are a combination of concessions whereby tolling is involved as well, so there is a combination of user charges and unitary payments. This is a little more complex, but in effect we enter into an agreement whereby company X would build a motorway and there would be a concession. Some of the projects could be tolled, and the toll could meet a significant part of the payment. Then there could be issues regarding guarantees. Our colleagues from Transport Infrastructure Ireland can talk in more detail about some of these contracts. They are quite complex. Again, they are a subset of PPPs which are different. Outside of tolling, the main one would be a DBOF, which is as I have described.