Mr. Robert Watt:

There is a judgment to be made here in terms of PPPs. It is set out that the financing costs of PPPs are more expensive than the costs for the Exchequer because it is private finance so it is more expensive. There is the cost of planned maintenance over a period, which can be expensive. The higher cost to the State needs to be balanced against the benefits and the risk transfer, and that is always the calculation. We are very cautious about PPPs.

We have a policy approach which reflects that caution. Public private partnerships, PPS, will play probably less of a role in the future than they have done in the past, reflecting that caution. It is a very difficult calculation to make. Members would have seen the public sector benchmark and the details. It is very difficult to make a comparison between a PPP project, which sets out the financing cost, the maintenance and so on, against a traditionally procured approach where the maintenance cost or something like that is a budgetary over time. It is very hard to make that comparison, and members can see in the papers the discussion that is set out in reaching that conclusion. I do not think PPPs will play as significant a role in the future but they do have a role to play and, as I mentioned, we are cautious about this type of financing because it can be expensive for the State.