Mr. Kevin Meaney:

I thank Senator Higgins. I will take the first part, about the overall policy level and strategy level which the IMF report probably went into and then how that translates to the value-for-money and cost-benefit analysis aspect or economic appraisal. The IMF was very much at the strategic level. Essentially, what it was saying was that PPPs should be used in comparison with any other type of traditional procurement and should only used where there is value for money for the State and that can be demonstrated. There should be no preferential treatment given to, for example, off balance-sheet treatment or the 10% of Exchequer limit we had previously.

The main change in how we introduced that is that there is now this charge against the sector's Exchequer amount for the construction cost in the years that it happens. By doing that, we are telling any sector that this is to be treated in the same way as any traditional procurement. There is no extra to be necessarily gained by going down the PPP route. If they go down the PPP route it is because they, within their analysis, have assessed that they will get better value for money for the asset being built, plus the 25 years, and that they will get it back at the end of that time period in as good or better condition than they would using traditional procurement. That is the key criterion.

In terms of an economic appraisal, all of these projects, and any projects that are put forward by State entities, initially have to go through the infrastructure guidelines for that preliminary business case step, of which that economic appraisal, as the Senator says, is a key criterion. A long list of options is weighed up to begin with. They are then reduced to a shortlist of options, of which PPP may be one. Then an economic appraisal has to be done to compare the different options on the shortlist. That happens at an early stage.

They also do a PPP assessment if they think the PPP route might be the best value for money for the infrastructure in question. Further value for money around the public sector benchmark is brought in at that point.

In terms of the overall strategy and policies, we have some really robust and substantial safeguards on early-stage assessments and assessments that happen at each point, from pre-tender to when a tender arrives and then before the contract is signed, all of the value-for-money assessments have to be done again. However, there is a comparison with potentially going down the traditional route at that preliminary business case stage.