Alice-Mary Higgins (Independent) | Oireachtas source

I thank our witnesses. I will pick up where Deputy Conway-Walsh left off. I feel it was almost a case of two different things being asked for and given. Much of the discussion was around value for money and the review of each project. When how these projects were assessed was being described, it was almost like they were being described as being assessed within themselves. The questions being asked included whether the project had delivered what was required, had it come in on time, were the unitary payments as expected and these kinds of elements.

In reviewing whether these were good decisions, it is not simply a matter of whether they delivered as expected by the contract. The question is whether it was the right approach to take in the first place in regard to PPPs. That is the wider analysis that needs to be done. It is notable that the IMF focused on the processes, strategy and policy. Is a PPP actually the most effective way? The IMF said it should only be chosen when it can demonstrate that it is a better approach than direct funding from the Exchequer. That is a high bar. When we talk about the value-for-money assessments or reviewing individual contracts, that is where cost-benefit analysis comes in, explicitly comparative cost-benefit analysis, namely, an analysis of doing something in a way that involves a PPP versus direct delivery in terms of costs and benefits.

That is relevant in that arguments have been made in the area of housing. During the period of austerity we saw a failure to either buy or build social housing in a meaningful way and instead had temporary leases which then expired. These have been demonstrated to be poor value for money overall for the State and a poor cost-to-benefit ratio versus buying a building. However, the argument at the time was that due the fiscal constraints, there was a limit on how much we could spend directly. The suggestion was that we were reliant on the private sector for its ability to access financing in a way that would be off balance sheet. However, those arguments have not stood up for the last number of years. We saw large reserves of money within Ireland during this time and the fiscal rules have been suspended for a long number of years. In addition, the State has access to low or no-interest financing. In fact, the State has access to finance at a far more preferable rate than the private sector has, yet we are still seeing PPPs. We still see the incorporation of the additional costs that come with PPPs. For example, the costs of financing the private partner and to build in a profit for a private partner is an additional cost. That cost does not arise when the project is not done for profit but in PPPs a profit is built in, as is a return to shareholders. All of those are additional costs being added to projects.

We still see a huge level of leasing of social housing where the State may end up paying for social housing. A recent example that has been quoted widely is a Dublin property with a 25-year lease agreed at a monthly rental cost of €3,200. The State is going to pay that for 25 years and will not own the property at the end of the lease. Can Mr. Meaney comment on that historical piece and why those policies of leasing have continued even though there is no longer the external physical constraint? I am interested in PPPs in general and leasing in particular.

Separately, in regard to the 29 projects mentioned, will Mr. Meaney inform us whether a comparative cost-benefit analysis was done? I do not mean just an analysis of whether we will get a benefit for the money we spend, but an analysis of whether we are getting more or less benefit than we would if we were to deliver these projects with direct Exchequer funding.