Dan Boyle (Cork South Central, Green Party)

The Bill before us indicates the extent to which the Government believes the debate on public private partnerships has finished and that it has become an acceptable method of financing public infrastructural projects. We have never had an adequate debate on why it is happening. Experience has shown that it is a flawed funding mechanism. Many projects have gone over budget and cost more than they would have through conventional funding and delivery means.

The strongest argument in favour of PPPs is that on the surface in most cases they seem to provide the infrastructure more quickly. However, it could be that our systems for deciding on public infrastructural projects are flawed and need to be reviewed. The Green Party has always argued for caution in the use of PPPs. They have become very much the fashion as a means of subverting proper accountability of public moneys in that they can be treated as current expenditure rather than capital expenditure taken over a significant time period. The ability of the political system to ask questions properly as to how public money is accounted for is severely compromised. On these grounds we need a wider debate on what PPPs are, why we are making so much use of them and why insufficient questions are asked about why they seem to fail in terms of cost to the public purse and the infrastructure they are meant to deliver.

This argument does not seem to ring true with the Government. While the rate of increase in their use does not seem as great as it was under the previous Minister for Finance, a significant amount of money is allocated in this way in the Government's development plan. I am slow to call it a national development plan, as I do not see the extent to which the nation has been involved in creating it and will benefit from it ultimately. Many elements of the plan need to be revisited. Approximately €16 billion of the €184 billion is designated to come from private sector finance sources, which is close to 10% of the total package. The people should be aware that the Government has embarked on somewhat of a gamble in asking that significant public infrastructure should be provided in this way.

We have seen various failures in PPPs, including cost overruns in several roads projects. A significant portion of the overspend that went from €5.8 billion to €18 billion in the national roads programme in the previous national development plan can be attributed to PPPs. What had been seen as solely public social service provision is now increasingly proposed to be provided through the PPP mechanism, including the group school projects and the use of public land for private hospitals. It is society's loss that we are increasingly going down this road.

Some people are starting to ask questions. It may be that we have insufficient experience of using this mechanism to know what its real effects are. The Comptroller and Auditor General has already carried out several value for money reports on specific PPPs, including the group schools project. Several chapters of his annual report outline some of the more obvious effects. One chapter several years ago referred to the difficulties arising in my constituency regarding a long-awaited facility, the Cork School of Music, which thankfully is approaching completion and will be opened in the near future. After an analysis by the Comptroller and Auditor General, the end-use cost to the taxpayer after a 25-year contract, will be €200 million. That figure has astounded many. Many of us believe the same facility could have been provided at a cheaper cost and certainly with quicker delivery except for the difficulties that arose with that project. The history of that project was informed by the insolvency of the original contracting company, Jarvis, a company that has made its living on the back of what are referred to as PFI projects in the United Kingdom. It has had a very poor record of delivering such projects on behalf of the British Government and yet was the chosen contractor for the group schools project and the Cork School of Music project. I have yet to see evidence that those lessons have been fully learnt to date.

In other areas the report of the Comptroller and Auditor General shows that PPPs cost more than conventional financing of these projects. A question of political accountability arises when public money could be better spent if the resource was better directed and targeted. On the surface the Bill before us tries to introduce some form of regulation and control where none exists at the moment. However, it does so in a way that recognises the permanence of PPPs as a funding mechanism, which is to be regretted. The National Development Finance Agency and its parent organisation, the National Treasury Management Agency have both done good work in ensuring that the country pays back as little as possible of its external debt and the management of public finances are carried out to extremely high standards by both agencies. This could be done more effectively if we had more public public partnerships and fewer public private partnerships. The Bill does not address that issue.

There are ways in which State agencies can combine together. The remit of the National Treasury Management Agency permits the use of the National Pensions Reserve Fund in providing funding for public infrastructure projects, but the Government has never taken this route. Why do we need to approach the private sector for funding infrastructure projects, when we have a pension fund available to provide finance and get a return on it having provided the infrastructure? While this course seems logical, logic seems to defeat the Government. I suspect the Minister inherited the policy from his predecessor. However, if he feels there are difficulties with public private partnerships he should have had the courage of his convictions in challenging their continued use and not just slowed down the rate of increase in their use but defined a timeframe for their elimination.

The Committee of Public Accounts, of which Deputy Fleming and I are members, has asked questions about accountability in the use of public money by private sector companies in public private partnerships. The Bill might go some way to introduce State control. However, for the sake of wider accountability we need to have as much information as possible available to the public so that when projects go wrong they can be seen to be addressed in the right public forum. The Committee of Public Accounts has addressed these concerns to the Department of Finance and as yet the Department is not willing to accept the need to introduce new mechanisms. As a result the committee has drafted a report on which I am rapporteur. The committee will review it in coming weeks and I hope it will be published with the committee's agreement. In other areas where PPPs, PFI projects or PFPs — as they tend to be called in other countries — are used, they are accompanied by a more detailed state system of accountability. Examples in the UK, Australia and Canada show that our system of accountability for PPPs is lacking. Notwithstanding the ability of the National Development Finance Agency, accountability as provided for in the Bill is still deficient.

I have already made the substantive point on my feelings on PPPs and whether this Bill sufficiently addresses their regulatory control. However, the fact that shadow directors have been appointed prior to a Bill being discussed and voted on in this House is a practice that happens far too frequently. The whole area of public appointments is discredited as a result. I appeal to the Government not to treat the House with such disrespect, even though the individuals involved have ability and will do a good job. One of the more disappointing aspects is the assumption that something will happen before it is provided for. That is not something that should accompany any legislation.

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