Mr. Russell Grainge:

I thank Senator Fitzpatrick for her question. My colleagues in other AHBs have set out the mechanisms by which we operate. The Senator's question was around what is a better option. I do not think there is a better option. There is only really a risk profile associated with the different types of delivery mechanism we use. There are three, really. There is the forward purchase development agreement, which would be the turnkey; a forward-fund development agreement, which is design and build and is the kind of approach Respond and Mr. Dunne have discussed; and direct delivery, where you are procuring the design team, procuring the contractor for a procurement route and going through a public works contract.

In terms of risk profile, the risk to the organisation in terms of a turnkey type delivery is probably far lower than the other two types of delivery stream. Ultimately, for a smaller organisation that is more attractive initially because you are purchasing a product at the end of a process and you do not have to cash flow it. There is no need for the cash reserves or restrictions around cash there would be with the other two types of delivery mechanism, but those other two methods provide more certainty in terms of outcomes. Where you are wholly dependent on the developer to deliver a product for you, there is less certainty around timeframes for delivery and things can drag sometimes. There is not so much control over that. There are mechanisms that can be put into the development agreement to try offset some of that but it does not always work in your favour.

There is much more control over direct delivery because you are procuring your design team and contractor. However, there are the restrictions Ms Cormican mentioned in terms of cash flow to try to get a lot of them to site, and land has to be procured. That in itself has risks around planning and land purchase and other elements associated with that.

Design and build is a happy medium in between, in some respects. You are working with a developer and have a degree of certainty over the output and the quality of the end product, but ultimately you are not wholly responsible in terms of the procurement of the initial contract because you are dealing with one entity so there is less risk around that process.

Due to the different risk profiles associated with it, it very much depends on the risk appetite of the AHB's board in association with it and, ultimately, the size of an organisation and what it can afford to deliver and what it can do in the delivery in terms of how much finance and support it has in terms of its own cash reserves. Ultimately, there will be a lot more output through direct delivery or design and build than through turnkey, but they all have their place within the overall structure. As an organisation going forward, we would want to do far more direct delivery and forward funding of development agreements-design and build type projects, but you have to get to a size and scale to be able to do a lot of that, which is what we work towards as an organisation.