Seán Sherlock (Cork East, Labour)
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Question 7: To ask the Minister for Transport if he will report on his recent approval for a new tranche of public private partnerships for the National Roads Authority's national road maintenance and building programmes; the amount the new round of PPPs will cost; if his Department has carried out a value for money review of the previous PPPs and taken into account the views of the Comptroller and Auditor General and the Committee of Public Accounts; the reason he has chosen to fund this programme through a new PPP scheme; and if he will make a statement on the matter. [17336/08]

Noel Dempsey (Meath West, Fianna Fail)
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As the Deputy is aware, as Minister for Transport I am responsible for overall policy and funding issues relating to the national roads programme element of Transport 21. However, the detailed planning, design and implementation of individual road improvement projects, including those carried out by way of public private partnerships, PPPs, is a matter for the National Roads Authority, NRA, under the Roads Act 1993. This includes the carrying out of cost-benefit analyses for such projects.

Earlier this year, the Government reviewed the financing arrangements for Transport 21. As a result, it is now proposed that a number of national road projects, involving a capital expenditure of the order of €1 billion, should be undertaken as unitary payment or non-tolled PPPs. There will be a corresponding reduction of the order of €1 billion in Exchequer funding for the national roads programme. The result is that overall funding for the programme, at approximately €18.6 billion, will remain unchanged.

The NRA has carried out some initial work to identify a number of projects that could be carried out as unitary payment PPPs. Significant further analysis remains to be done to definitively determine the full details of such projects. It is expected that the PPP process will ensure that the projects chosen will be delivered at an earlier stage than would otherwise have been the case.

The NRA carries out exhaustive financial, legal and technical evaluations of the PPP mechanism for national road contracts. It possesses full value for money and tender evaluation reports for all schemes for which PPP contracts have been awarded. The NRA is fully committed to facilitating, in as far as is practicable, a thorough examination of the PPP process in order to allow a full value for money assessment to be carried out in regard to national road PPP projects. I am satisfied that these arrangements are adequate to facilitate parliamentary oversight of PPPs.

Tommy Broughan (Dublin North East, Labour)
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I met Mr. Barry, the chief executive of the NRA, a few months ago. At that stage, the Minister was refusing to approve any further PPPs. Why has he changed his mind? I welcome the fact that he is proceeding with a unitary payment system rather than with a concession, which would inevitably have resulted in the imposition of tolls.

Media reports indicate that two sections of the N20, the N11 Gorey to Enniscorthy route and the N17, Galway to Claremorris route, which are all extremely important, all require work. Are there any other proposals in respect of this particular tranche of PPPs?

Why do PPPs not come under the remit of the centre of excellence of the National Development Finance Agency? Why is the NRA allowed to proceed with PPPs on its own? International opinion is beginning to be extremely critical of PPPs, particularly in the context that borrowings by a private company will usually be that bit more expensive than those relating to the State sector. In addition, the private sector can obtain massive rates of return. One need only consider the ongoing debacle with the M50 and the €600 million the Minister will pay out in the coming years in respect of a project that originally cost approximately £20 million. Is it not time to engage in a fundamental evaluation of PPPs? Perhaps it should again be the case that we will not proceed with PPPs unless an important value for money result can be obtained.

The Minister for the Environment, Heritage and Local Government, Deputy Gormley, appeared to make some ambitious proposals regarding the cost of land. The latter has often accounted for 25% of the cost of PPP projects rolled out by the NRA. Is an in-depth evaluation of PPPs being carried out? Is such an evaluation not the correct way to proceed?

Noel Dempsey (Meath West, Fianna Fail)
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An in-depth analysis is carried out in respect of every PPP that is proposed in order to discover whether the best value for money will be obtained. I do not have an ideological hang-up about these things.

Tommy Broughan (Dublin North East, Labour)
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Nor do I have such a hang-up. I am referring to the people's money. Why pay more money for something that could be done at much less expense?

Noel Dempsey (Meath West, Fianna Fail)
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If the Deputy will allow me to finish——

Tommy Broughan (Dublin North East, Labour)
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On a point of information, this is nothing to do with ideology. I am glad the Minister, Deputy Dempsey, did not become Minister for Finance yesterday.

Charlie O'Connor (Dublin South West, Fianna Fail)
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The Deputy should allow the Minister to reply.

Noel Dempsey (Meath West, Fianna Fail)
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If the Deputy is stating that the Labour Party does not have an ideological hang-up in respect of PPPs, it is news to me.

Tommy Broughan (Dublin North East, Labour)
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We are discussing finance.

Noel Dempsey (Meath West, Fianna Fail)
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I listened to members of that party condemn the fact that we were able to build six schools through the mechanism of PPPs. When one refers to the cost of PPPs——

Tommy Broughan (Dublin North East, Labour)
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We are discussing the roads.

Noel Dempsey (Meath West, Fianna Fail)
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Even if it is necessary to spend a little bit more on a PPP, when one balances out the cost over the lifetime of the project, one will see that good value for money is obtained. When the project has been completed, a road will be in place which would not otherwise have been constructed if one was obliged to wait until the money became available. If we had not put in place the PPP project, only many of the roads built in recent years would not be in place because we would not have had the money to proceed with their construction.

PPPs are used to generate finance. The reason the roads to which the Deputy refers are being considered in the context of PPPs is in order to release funding for use on public transport projects. I am sure he would have no difficulty with that. It is why I wanted to move in this direction. The roads to which the Deputy refers — two projects on the N20, Cork to Limerick route, the N17, Galway to Claremorris route, and the N11, Gorey to Enniscorthy route incorporating the New Ross bypass — are under consideration in this regard because they are deemed to be most suitable.

The reason tolls will not apply is because it is the considered view of the NRA, based on its experience, that any of the roads it would be reasonable to toll and to obtain a return on are already being tolled. The NRA has not identified any other road projects which should be the subject of tolls. The taxpayer will pay for the projects to which the Deputy refers on a unitary payment basis.

The Minister for the Environment, Heritage and Local Government, Deputy Gormley, will be addressing the cost of land in a designated lands Bill.