Dermot Ahern (Louth, Fianna Fail)

I propose to take the questions together.

There is no question of not proceeding with a prison development at Thornton Hall. The rationale for replacing the Mountjoy Prison complex has been well set out, fully accepted by the Government and acknowledged in the House, including by the Taoiseach this morning.

Today, more than 1,100 prisoners are being held in cramped conditions in the Mountjoy Prison complex, which the Government is committed to replacing with a prison at Thornton Hall. This initiative was always intended to be a longer-term project and it is for this very reason that we have moved to increase prison accommodation in recent years. In the short term, the issue of increasing bed capacity in our prisons will be addressed by the provision of an additional 400 prison spaces this summer. Excluding these spaces, which have been built and are ready for commissioning, the Department has, since 1997, added close to 1,400 spaces to the prison estate. Our record shows significant investment in the criminal justice system, not least in the prison system.

The money spent to date on the Thornton Hall project is not wasted expenditure. The site will be used for the new prison and in any event, the cost of acquiring it - €29.9 million - was effectively met by the sale of prison lands at Shanganagh, County Dublin. The Thornton Hall site is an excellent location for a major prison development as it is located fewer than ten miles from the city centre, approximately three miles from Dublin Airport and is accessible from the M2. It is large enough to allow the development of a major prison complex with a range of facilities and to establish a cordon sanitaire around the complex to stop drugs and other illicit goods being thrown into the prison, while having sufficient capacity for future expansion.

An additional 8.7 acres have been acquired to provide a dedicated access road to the main prison site. This was done following representations from the local community which reflected concern about the effect of increased traffic generated by the prison development. The cost of the additional land was €1.3 million.

A total of €10.3 million was expended to the end of March 2009 on professional fees and preliminary site works, including surveys, landscaping, security, site preparation and maintenance of the property. As is the case in all major infrastructural projects, comprehensive geological, engineering and archaeological surveys were conducted at the site. The work covered by this expenditure is not wasted as it is required, irrespective of which tenderer is eventually selected to develop the prison complex at Thornton Hall.

Public private partnerships continue to be suitable for certain types of projects, including in the justice area. They allow us to bring forward major long-term infrastructural projects while spreading the financial impact on Exchequer expenditure over a 20 or 25-year period.

On the decision taken by the Irish Prison Service to break off negotiations with the preferred bidder, the Léargas consortium, to design, build, maintain and finance the project, the negotiations with the preferred bidder were lengthy and complex and conducted in good faith. I am disappointed they did not lead to a successful outcome. The banking crisis gave rise to complications and delay. While my Department was aware that the crisis would have an effect on the availability and cost of finance, the question was to what extent this would be the case and whether this effect could be offset by reductions in construction costs. These negotiations came to a head recently.

Léargas was formally asked to submit its final financial offer to the project. Following a detailed evaluation of this offer by the Irish Prison Service and its advisers, the offer was deemed not to be affordable. This was because the figures quoted were significantly higher then the original quotation which resulted in Léargas being chosen as the preferred bidder. Increases in the cost of finance were a significant factor and no significant reduction in construction costs was put forward to offset the increased costs of finance.

As I have stated on many occasions, including in the House, other options are available and we will now pursue these options. While Thornton Hall will proceed, we must find a more affordable solution for the taxpayer who must secure better value, taking into account developments in prices in the construction industry.

I confirm that it is my intention to bring comprehensive new proposals to the Government in a matter of weeks on how we can proceed with building a new, modern, regime-orientated prison complex at Thornton Hall. I am confident my revised plans will meet the twin objective of giving us modern accommodation and best protecting taxpayers' interests. Following consideration by the Government, I will make a public announcement on the matter. While the project will proceed, if we have to suffer a delay to ensure we secure a more affordable and cost effective solution, that will be the only responsible approach to take.

An area of 20 acres was set aside as a potential site for the development of a new Central Mental Hospital. Although adjacent to the prison site, it is not directly linked to the prison development. A decision regarding its future is a matter primarily for the Health Service Executive and Department of Health and Children.

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