Dáil debates

Thursday, 3 February 2005

3:00 pm

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)

My colleague, the Minister for Finance, provided a capital envelope of €555 million in respect of education PPPs for the period 2005-08. My officials are examining how this may be best utilised. A number of issues will have to be determined before I make a decision on the allocation of these funds.

Those include the type of PPP model to be used, the level of operation and service to be included in any new programme, how the projects should be bundled so as to provide the most cost-effective procurement and the size and geographical spread of the bundles. Only new building projects on green-field sites that have been prioritised using the criteria agreed with the education partners and published by my Department are eligible for consideration under my Department's PPP programme. I will be announcing the programme in the near future.

One of the most striking aspects of my Department's PPP programme to date is the high quality of design and materials. By investing up front in design and construction, the cost of ongoing maintenance over the 25 year contract is significantly reduced.

Speed of delivery is one of the very attractive aspects of PPPs. The total time required to procure the five schools using the PPP approach was around three and a half years. Under the traditional approach to the procurement of new schools, the comparable elapsed time typically averages four to five years. The pilot project has provided the State with five exceptional schools, fully serviced and maintained over the next 25 years.

Ultimately, the full value for money represented by PPPs, including my Department's grouped schools project, will be determined over the 25-year life cycle of the project. It is too early in the life of the contract to carry out such an assessment. That point was acknowledged by the Comptroller and Auditor General in his report on the grouped schools' pilot project.

My Department is an active participant in the interdepartmental group on PPPs headed by the Department of Finance's central PPP unit, whose remit is to provide guidance and support to the PPP process in the public sector. The lessons and experience gained during the schools' pilot project have significantly assisted the formulation of that guidance. In addition, the National Development Finance Agency was established as a result of the pilot PPP programme to provide expert financial advice and assistance to the public sector for major capital projects.

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