Brian Cowen (Laois-Offaly, Fianna Fail)

Under the Department's February 2005 guidelines for the appraisal and management of capital expenditure, a full cost-benefit analysis or CBA is required to be carried out by public sector agencies as part of the detailed appraisal for all major projects over €30 million in value. It is the responsibility of the project sponsoring agency to carry out the cost-benefit analysis. The cost-benefit analysis is an important input into the appraisal of major capital projects and it must take place prior to entering into any commitments to proceed with the project.

As a general rule, the cost-benefit analyses are not published. They contain commercially sensitive information, the publication of which could be prejudicial to the State's capacity to get best value for money in the procurement of capital projects; for example, they include the estimates of the capital and operating costs of projects. It would not be in the interests of getting best value for money to share this information with potential tenderers in advance of procurement.

There are, however, a number of checks in place as part of the Government's value for money framework to ensure reporting on and scrutiny of the appraisals undertaken by Departments and agencies for capital projects, without compromising the confidentiality of commercially sensitive information. Under the arrangements applying to the multi-annual capital investment framework, Departments must put systems in place to carry out spot checks of compliance with the various elements of the value for money framework, including appraisal and cost-benefit analysis where appropriate, and they must report the findings of these spot checks annually to the Department.

The central expenditure evaluation unit, which I recently established in the Department, will review these spot check reports and will, both on its own initiative and as part of this review process, also directly undertake a series of spot checks of individual capital projects. More generally, the new unit has a remit to promote best practice in pursuit of value for money, including appraisal and cost-benefit analyses. Individual projects and the associated appraisal processes, including the cost-benefit analysis, may also be subject to audit or examination by the Comptroller and Auditor General.

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