Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The public private partnership, PPP, model is an internationally recognised model to design, build, finance, operate and maintain public infrastructure. In accordance with international best practice, PPP contracts already typically include detailed provisions that apply in the event of the liquidation of a consortium member of the PPP company, or an entity under the contract, to protect the public interest and ensure that the project proceeds to completion.

Under the terms of such contracts, in the case of liquidation of a consortium member, or an entity under the contract, the PPP consortium’s funders and remaining shareholders are required to intervene and implement rectification measures to ensure that the project is completed to the satisfaction of the State. Liquidation of a company involved in delivering a public infrastructure project is an unfortunate development but would impact on any project where a supplier became insolvent during the delivery process, regardless of how the project is procured. The issue, therefore, is not PPP-specific, but where it arises in a PPP project the provisions of the contract ensure that the public interest is protected.

It is worth bearing in mind that this is not the first time a PPP in Ireland has experienced issues with its construction contractor, which is not uncommon given the risks inherent in the construction market. In all previous similar cases, the projects were completed successfully and are now fully operational. These examples demonstrate the resilience of the PPP contractual structure and underline the importance of adhering to the contractual documentation in resolving issues, which has previously been raised as a negative feature associated with PPPs.

See this speech in context