Richard Bruton (Dublin North Central, Fine Gael)

There is consensus across this House on the major need for investment in social and economic infrastructure. We have fallen behind in many key areas of infrastructural availability, which jeopardises the continuance of our economic success. That is the background against which every proposal, whether PPP or otherwise, has to be judged. We need investment and if PPPs have a constructive contribution to make, we should facilitate them.

The National Development Plan 2000-2006 was an ambitious programme which experienced successes as well as failures. The crucial question we must ask is whether we can be confident that the new NDP addresses the problems which led to failures in significant areas. Have the flaws that arose in the last NDP been corrected? One of the disheartening aspects of the NDP is the failure to honestly appraise what happened between 2000 and 2006. The appraisal included in this programme is anything but honest.

There is no mention of any of the failures. It adverts to the fact that PPP collapsed as a source of funding but does not analyse why it happened or whether changes are needed. We have had dismal failings. The health strategy is just one of them. We were to have 3,000 extra hospital beds and 600 extra primary care centres. Housing is another area. We should have twice as many affordable and social houses as have been delivered at this stage. Whatever about the gloss the Minister wants to put on it by claiming that the Government is very competent, he and his officials need to face up honestly to those failures and analyse what was the ambition that collapsed in many of these cases. Was it bad project formulation? Was it bad design? Was it badly thought out? Were they just presenting no more than glossy press releases that were not really based on hard thinking?

The Minister is right that PPP needs to be considered as a very serious instrument. As he has admitted, it is not a panacea. It is a tool that needs to be carefully used. We need to be confident that it is delivering better value for money when it does so. It has the scope to deliver better value in certain cases, most of which are complex projects where the private sector brings expertise that clearly is not available to us. It is all very well to have in the NDFA a champion of the case for PPPs, who brings together expertise to progress them. As the Oireachtas is ultimately responsible for ensuring that the taxpayer is getting value, we need to have some vehicle to determine whether the projects deliver better value.

I know the Minister is sceptical of the one evaluation carried out by the Committee of Public Accounts of the schools. He believes that just because of that evaluation we should not feel that PPP is damaged, with which I agree to an extent. However, the Minister and his officials who champion this cause need to present in some forum the evidence that these projects are delivering. The annual report of the NDFA contains no evaluation. It claims to have considered the funding of projects worth €4 billion. At no point has it done an evaluation to identify how PPP can add value, in what sort of projects it adds value and what are the pitfalls and strengths. We need to build that confidence. The Minister expects some 15% of the Government's capital programme to be funded by PPP in time. If that is to happen we need to have confidence that it will not result in a rip-off for the consumer who must pay bloated tolls or result in Departments needing to pay too much in various shadow charges, etc.

I welcome the changes in the Bill. The 2002 Bill was very hastily conceived. It came from the programme for government to try to kick-start activity. That we are discussing so soon a new Bill to radically change its mandate and effectively jettison many of the elements of the original mandate shows that the original Bill was not well thought out. Perhaps it could be claimed that PPP was in its infancy and that justifies it to an extent. However, there was an inherent conflict of interest built into that Bill between the role of advising on the one hand and participating in the financial packages on the other. That inconsistency and conflict emerged as the process went on and needed to be addressed. However, it had been flagged in this House long before it became an issue that needed to be resolved. There was an element of hastiness in the Minister's predecessor's move to push this ahead without anticipating such matters.

The special purpose companies were to be the key vehicles for PPPs. I have not heard mention of them since. The Minister's speech made no mention of them. To what extent has the €5 billion of guaranteed borrowing afforded to the NDFA been drawn down? We are greatly changing the NDFA, which is not a bad thing if we are now moving on the right track.

One of the flaws in the old Act was the gagging order on the NDFA and I ask the Minister to reconsider it. When its representatives appear before committees of the Houses, they are gagged from commenting on demerits, projects put together poorly, bad ideas and shoddy projects. If the NDFA is the main unit for driving these projects forward, it should not be gagged from presenting an honest appraisal of what it handles. It has had €4 billion worth of projects. As the people who vote taxpayers' money, we should ascertain whether it finds many of these projects are shoddy and ill thought out. It may be finding them wonderful. However, it should not be gagged from saying so. We need much more evaluation and transparency on the performance of such projects.

When and where PPPs are desirable should be openly debated. Most of the experts would claim that schools would not be the first area where they should be used. They are not particularly complex projects. They should be financed in the traditional way with the Government being the chief source of funds. They do not seem to be the projects that one would champion for this system. They may have represented an easy way for the agency to cut its teeth. Presumably it is on complex projects such as the metro that PPP will significantly add value in its capacity to conceptualise a much more complex project and arrive at innovative solutions. There is an onus on the Minister to provide to the House material from the NDFA showing that its selection of schools, radiation oncology services, prisons, etc, are genuinely well framed for the PPP model and that we can have confidence that it is going in the right direction. For example, if the prison project goes wrong, is it genuinely possible to transfer risk to the private sector? It is likely that the only risk that could possibly be transferred is the cost overrun risk. We are probably stuck with any other risks. We need to see this risk transfer occurring.

The public benchmark needs to be properly chosen. In the new arrangements the sponsoring Minister will sign off on the public comparator. The Minister for Finance and his Department seem to have no role in this regard. I understood the Minister wanted a strong level of independent evaluation included so that optimistic views from the sponsoring Department could not dictate bad projects getting approval. I wonder whether it is correct to give line Ministers this responsibility. Perhaps the Minister for Finance and his Department should continue to have a role. There seems to be a belief that the Department of Finance is the bad boy and it needs to be taken out of the mix. I do not share that view. I have a certain degree of confidence in the Department of Finance and its scepticism is well founded. That is not to suggest that PPP cannot do great things to accelerate badly needed projects if it is appropriately managed.

Perhaps the Department of Finance has been too traditional. However, its prudential concerns are good ones and it ought to play more of a role than is envisaged in the new model, beyond publishing the requirements to carry out evaluations and cost-benefit analyses. I have not seen any of those evaluations. I know the Minister said that every project of more than €50 million had cost-benefit evaluation. Since October 2005, every project of more than €30 million is required to have such cost-benefit evaluations. They are not being published and are not available. If they are to be serious tools in holding Minister's and sponsors to account, they must be published. We cannot seriously have evaluations that are not published as otherwise they would be internal and there would be huge temptation to doctor the figures afterwards if the outcome were different from the evaluation. It is about gamekeepers and poachers. The evaluation needs to be in the public domain so that we understand the basis on which we sign up to the project.

As the Minister rightly said, someone should be responsible for overseeing that process. If he keeps it a secret, his model will fail. It is important to publish these ex ante evaluations for which he has brought down the threshold. I have not seen them published or the responsibility nominated and pinned on projects, as it should be. Maybe the Minister will tell me in his summing up that it is there. Until I see evaluations published, and interested members of the public or experts in the field able to pull them apart and say whether the process is well or badly put together, we will not have made the crucial necessary changes.

Fine Gael and the Labour Party have thought a great deal about this because we hope to be in Government shortly, facing the problems the Minister faces now. It is important to make this material public and to have proper gateway systems. It should be a public function to announce successful passage through these gateways, that the person responsible has signed off on the critical factors and the information is available. The Minister has said there will be monitoring of this sort but it is private. There will be no public monitoring.

We in the Oireachtas receive no public monitoring of critical projects in the PPP cost-benefit process. That must change. The Government, the Minister and his advisers seem to want to be virtuous, but not yet. They are keeping back this information which is a mistake.

We must be careful about the PPP process because it has the capacity to go wrong if not properly managed. There are many up front costs and we must be careful in selecting projects to make sure that the process brings a benefit.

Against that background, I tentatively approve the Minister's proposal. It is right that if the NDFA is to become a centre of expertise it should have the authority to act as an agent on behalf of the sponsoring Departments. We will discuss the different elements of the Bill on Committee Stage. The important point is to build confidence here and in the public that the use of PPPs is well founded and that public sector organisations use sound and robust models to ensure that we use the PPP process only in appropriate cases, and handle and control it well as a tool. That confidence does not exist yet.

One way to build it is to commit immediately to the publication of these cost-benefit proposals, including some of the early indications on why the PPP process is chosen. As the project rolls through a public process of monitoring, we could see that it was delivering on its initial ambitions. That public element would concentrate minds magnificently and the Minister ought to make that change.

See this speech in context