Michael McDowell (Dublin South East, Progressive Democrats)

The Government has approved in principle the development of a new prison complex on the Thornton site on a value for money PPP basis. The Irish Prison Service is preparing a detailed assessment of the project in accordance with the Department of Finance guidelines for the provision of capital projects through public private partnerships which will result in a detailed business case being provided. The National Development Finance Agency is advising the prison service on these matters.

The PPP procurement method allows full access to the expertise of the private sector in the development and management of major capital projects and allows for the transfer of risk from the Exchequer to the private sector. The National Economic and Social Council has concluded that PPPs have the potential to play a pivotal role in supporting the accelerated delivery of strategic national infrastructure, to yield long-term value for money for the Exchequer and to ensure quality public services.

Initial discussions with the Department of Finance and the National Development Finance Agency indicated that this project was suitable for a PPP procurement approach on the basis of a design, build and maintain basis. It was also established that it would not be feasible to have a proper competitive process unless a suitable site was acquired in advance.

The PPP has a value for money test built into the process. This exercise evaluates the preferred tenders against the public sector benchmark, PSB, to ensure the selected tenders deliver value for money for the Exchequer over the duration of the contract. It is envisaged the new prison at Thornton will be delivered on a design, build, finance and maintain basis over a 25 year period.

The PSB consists of a comprehensive, detailed risk adjusted costing of the project elements using conventional State procurement methods. The drawing up of the public sector benchmark and associated detailed business case is a complicated process.

A business case and public sector benchmark will be completed for the proposed new prison development. This will cost the project both as a PPP project and as a normal Exchequer finance project. It is anticipated this will be completed in February 2006. This will be the subject of discussions with the technical consultants on the substantive project. These consultants will be appointed shortly. The National Development Finance Agency is advising the Irish Prison Service on this process and the Department of Finance will evaluate this process, ensuring the most economically advantageous option to the State is selected.

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