Brendan Howlin (Wexford, Labour)
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Question 55: To ask the Minister for Justice, Equality and Law Reform if the proposed development of the new prison at Thornton Hall has passed the preliminary PPP appraisal stage; if it has been approved by the NDFA as suitable for public private procurement; and if he will make a statement on the matter. [35717/05]

Michael McDowell (Dublin South East, Progressive Democrats)
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The Government has approved in principle the development of a new prison complex on the Thornton site on a value for money PPP basis. The Irish Prison Service is preparing a detailed assessment of the project in accordance with the Department of Finance guidelines for the provision of capital projects through public private partnerships which will result in a detailed business case being provided. The National Development Finance Agency is advising the prison service on these matters.

The PPP procurement method allows full access to the expertise of the private sector in the development and management of major capital projects and allows for the transfer of risk from the Exchequer to the private sector. The National Economic and Social Council has concluded that PPPs have the potential to play a pivotal role in supporting the accelerated delivery of strategic national infrastructure, to yield long-term value for money for the Exchequer and to ensure quality public services.

Initial discussions with the Department of Finance and the National Development Finance Agency indicated that this project was suitable for a PPP procurement approach on the basis of a design, build and maintain basis. It was also established that it would not be feasible to have a proper competitive process unless a suitable site was acquired in advance.

The PPP has a value for money test built into the process. This exercise evaluates the preferred tenders against the public sector benchmark, PSB, to ensure the selected tenders deliver value for money for the Exchequer over the duration of the contract. It is envisaged the new prison at Thornton will be delivered on a design, build, finance and maintain basis over a 25 year period.

The PSB consists of a comprehensive, detailed risk adjusted costing of the project elements using conventional State procurement methods. The drawing up of the public sector benchmark and associated detailed business case is a complicated process.

A business case and public sector benchmark will be completed for the proposed new prison development. This will cost the project both as a PPP project and as a normal Exchequer finance project. It is anticipated this will be completed in February 2006. This will be the subject of discussions with the technical consultants on the substantive project. These consultants will be appointed shortly. The National Development Finance Agency is advising the Irish Prison Service on this process and the Department of Finance will evaluate this process, ensuring the most economically advantageous option to the State is selected.

Joe Costello (Dublin Central, Labour)
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I thank the Minister for his reply. It contains a great deal of information, which I look forward to reading in detail. This is a stand-alone project and it qualifies as a PPP in regard to its appraisal. The Minister stated the design, build and maintenance of the project would be undertaken by a private company. Does he propose that such a company will also run the campus? Does he propose to privatise the escort service and so on? Will consultants be hired and, if so, will the contract be put out to tender? The Minister stated the building will cost a minimum of €200 million to build but it will probably be double that if consideration is being given to the combined institutions. Is the proposed site of the Central Mental Hospital factored into the cost of the project or will the site only house a prison? Will the Minister or the Prison Service outline their plans in this regard to the Oireachtas Joint Committee on Justice, Equality, Defence and Women's Rights?

Michael McDowell (Dublin South East, Progressive Democrats)
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With regard to the process envisaged, consultants will be appointed because that is justifiable in these circumstances. I visited the Midlands Prison last Monday. The new buildings were constructed there on a quasi-PPP basis in good time and to a high quality. It compares favourably with the construction of prison buildings in the past, which caused substantial problems.

Ruairi Quinn (Dublin South East, Labour)
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Is there a danger they will become Ceaucescu-like buildings?

Michael McDowell (Dublin South East, Progressive Democrats)
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No. This is a design, build and maintenance project and, therefore, the prisons will not be operated privately, similar to those in America and the UK. I intend to keep the operation of prisons within the public sector as long as that is economically feasible.

Joe Costello (Dublin Central, Labour)
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The Minister is almost a socialist.

Michael McDowell (Dublin South East, Progressive Democrats)
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"Almost" makes me a socialist but not quite. With regard to transport, it is not my intention, unless I am forced to do so in the future, to outsource escort services. On Monday I was informed that the new cellular transport vans are in operation and they are proving a success. They are operated by Prison Service staff.

Jim O'Keeffe (Cork South West, Fine Gael)
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The Minister stated the capital cost of the project would be between €200 million and €300 million. Did he come up with this figure off the top of his head or has he received expert advice? Perhaps he received more advice than when he purchased the site.

Joe Costello (Dublin Central, Labour)
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What is €100 million after all?

Jim O'Keeffe (Cork South West, Fine Gael)
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How much will the associated project, the relocation of the Central Mental Hospital to the same campus, cost? The Minister is giving himself a significant timeframe of between two and six years to complete the project. Can he give a more accurate timeframe?

Michael McDowell (Dublin South East, Progressive Democrats)
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I do not want to give misleading information and, therefore, I stated the cost would be between €200 million and €300 million because if I stated hundreds of millions, the figure would be leapt on and we would be at €1 billion before we finished.

Ruairi Quinn (Dublin South East, Labour)
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That is correct.

Michael McDowell (Dublin South East, Progressive Democrats)
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However, the private sector tenderers for a PPP must submit competitive tenders and I will not, therefore, outline the cost. Even if I could offer an educated guess, it would not be helpful.

Jim O'Keeffe (Cork South West, Fine Gael)
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It is not, therefore, an uneducated guess.

Michael McDowell (Dublin South East, Progressive Democrats)
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It is not being offered as an educated guess. If the Minister for Health and Children decides to relocate the Central Mental Hospital, land will be available at Thornton Hall for that purpose. A significant capital dividend will accrue to the State because the lands at Dundrum have a colossal redevelopment value. The premises on the site are wholly unsuitable for the purpose for which they are used.