Brendan Howlin (Wexford, Labour) | Oireachtas source

Of the eight public private partnerships, or PPPs, in the current programme announced in 2012, the position is as follows. Two projects are currently in construction; the N17/18 Gort-Tuam PPP and schools bundle No. 4. A preferred tenderer has been appointed in a further five projects; the M11 Gorey-Enniscorthy PPP; the N25 New Ross bypass PPP; the Courts Service PPP; the primary care centres PPP, and the Grangegorman PPP. The preferred tenderer is expected to be appointed at the end of the summer for the final project, which is schools bundle No. 5. I expect that contracts will be signed in 2015 for the two roads PPPs and also the courts and primary care centres PPPs with construction then commencing on those projects this year.  It is likely to be 2016 before the contracts are signed on the remaining two projects; schools bundle No. 5 and Grangegorman.

In regard to value for money, I am satisfied that the PPP model has the potential to offer value for money for the Exchequer for a number of reasons.  First, PPPs enable the public sector to harness the innovation, expertise and efficiencies that the private sector can bring to the delivery of certain facilities and services traditionally procured solely by the public sector.  PPPs also facilitate the assigning of risks to the party best positioned to manage and mitigate the risks, which has value for money benefits for the State.  In addition, PPPs involve long-term contracts where payments are linked to performance and availability over the lifetime of the project and deductions apply when the facilities are not performing or are unavailable.  This has the benefit of making PPP bidders focus on the whole life-cycle cost of projects and not just on the upfront capital cost.  These factors combined ensure that added rigour and controls are brought to the planning and delivery of PPP projects.

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Under the PPP guidance there are four specific value for money, or VFM, tests that are applied over the course of the planning and procurement process, which focus on assessing whether or not the PPP approach compares favourably with the alternative cost of using traditional procurement to achieve the same result as the PPP. The purpose, sequence and format of the four VFM tests in the PPP approval process are set out clearly in the central PPP guidance in order to ensure that all PPPs are regularly assessed and do, indeed, offer value for money.

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