Richard Bruton (Dublin Bay North, Fine Gael) | Oireachtas source

I thank all the Deputies who contributed and many more as well for their views. The Minister of State, Deputy Doyle, the Minster, Deputy Harris, Deputy Deering, the Minister of State, Deputy D'Arcy, the Minister of State, Deputy Kehoe, and many others have raised this with me. I do not in any way undervalue the concern.

I welcome those associated with the schools to the Gallery. Every one of these schools is important to its local communities. The reason they are being rebuilt in this way is because they are in serious need of it. I am pleased to get the chance to come to the House to clarify the position.

The compulsory liquidation of Carillion, announced on 15 January, is regrettable. lnspiredspaces, which is a joint venture between Carillon and the Dutch Infrastructure Fund, DIF, was awarded the contract for the schools bundle 5 public private partnership programme in 2016. Inspiredspaces is the PPP company responsible for the construction, finance, operation and maintenance of the five schools and one further education college included in the programme. Those buildings are approximately 90% complete, with two almost ready for occupation.

I wish to reassure Deputy Donnelly and others that there is best international practice in the way this bundle has been put together. The contract includes detailed provisions that apply in the event of liquidation of a consortium member, or an entity under the contract, to ensure that the project proceeds to completion. This means that, following the liquidation of Carillion, DIF is now required to intervene, with the approval of the project funders, to ensure that the project is completed to the satisfaction of the State. DIF has confirmed that resolution of the situation is its top priority. It is currently working to put in place a rectification plan to ensure that the schools are completed as soon as possible.

The National Development Finance Agency, which is part of the National Treasury Management Agency, is responsible for management of these projects on behalf of the Department of Education and Skills. The NDFA is working to ensure that the taxpayers' interests are protected and that the schools are delivered as quickly as possible through the implementation of the contract provisions. I assure Deputies that this issue is being treated with the utmost urgency by my Department and the NDFA. Officials in my Department are in constant contact with those in the NDFA, who are, in turn, liaising closely with DIF.

I have met with officials from NDFA and I am satisfied that everything possible is being done at this time to ensure that the schools can be delivered in as timely a manner as possible. I wish to acknowledge the very understandable concern of the school communities and all connected with the projects in respect of the current lack of certainty around dates for completion of the schools.

The outcome of the ongoing process will provide greater clarity on likely completion dates. While it had been initially hoped that an interim solution would be agreed - genuine efforts were made to achieve that - it has not been possible to date. Now, a more detailed rectification plan is being finalised by DIF in consultation with its lenders. This comprehensive rectification plan will address, among other things, the completion of the construction and the provision of services over the lifetime of the PPP contract. Importantly, this rectification plan does not place any financial obligations on the State and its implementation is a matter for the private sector parties. While I cannot be definitive on the timelines for the agreement and implementation of the rectification plan, it is a feature of this PPP contract, and PPP contracts more generally, that there are legal, contractual and financial imperatives for the PPP company and the funders to deliver the buildings within the shortest possible timeframe.

Apart from site costs, no money has been expended on the six schools in the bundle, which has an estimated value of €100 million. Construction, which is 90% complete, has been funded entirely by the parties involved. They will not secure a licence agreement providing for the payment of a universal charge each year for the next 25 years unless the schools are handed over and can be occupied and used by pupils. The State is, therefore, in a strong position.

A key advantage of the public private partnership model is that the construction and funding risk is transferred to the private partner. For this reason, DIF, rather than the State, is now responsible for ensuring completion of the schools. It is also the reason we have six buildings close to completion and in State ownership, for which no payments have been made, other than for off-site works.

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