Seán Sherlock (Cork East, Labour)
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Question 42: To ask the Minister for Education and Science further to Parliamentary Question No. 38 of 26 February 2009, the reasons the contracts could not be signed as was promised; the outstanding details which have yet to be resolved; if the terms and conditions of the contracts will be made known publicly in the interests of transparency and accountability; the duration of the contract and the annual percentage rate of interest for the duration of the contract; and if he will make a statement on the matter. [12227/09]

Batt O'Keeffe (Cork North West, Fianna Fail)
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The first bundle of post-primary schools announced by my Department in November 2005 comprises Coláiste na Síonna, Banagher; Gallen Community School, Ferbane; Scoil Chríost Rí, Portlaoise and St. Mary's CBS, Portlaoise. A preferred tenderer, Macquarie Partnership for Ireland, was appointed for this bundle in October 2007. Full planning permission for all four schools was secured by Macquarie in August 2008 and I am now pleased to inform the Deputy that the contract for the provision of these four schools was signed by the National Development Finance Agency on 6 March 2009. A total of 2,700 pupil places will be provided when these schools are completed. The contractor, Pierse Group, moved on to the three sites immediately and construction work commenced on 9 March. It is expected that the schools will become operational in September 2010.

During the finalisation of contract details for this bundle, the financial landscape has changed considerably and this affected the timeframe for closure of the bundle. Specifically, the original bank proposed by the consortia withdrew from the market in the third quarter of 2008 and a replacement bank had to be found.

Regarding the interest rates for this project, I have sought the advice of the National Development Finance Agency and have been advised that this information is considered commercially sensitive and cannot therefore be provided. While I am not in a position to provide details on the terms and conditions of specific bundles, I will provide the Deputy with a copy of the project agreement template which outlines the terms and conditions that apply to all PPP contracts.

Ruairi Quinn (Dublin South East, Labour)
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I thank the Minister for his reply. I appreciate he is not responsible for the nonsense with which we are confronted. We are supposed to live and work in a market economy and be able to access what prices are so that there can be adjustments for other competitors. Would the Minister not agree that it is unacceptable for scarce taxpayers' money to be used to fund contracts the cost of which the Minister is denying to this House? He is not doing it personally but is being instructed to do it. This is a time when the rate of interest available in the open market for a project with banking certainty such as schools building is considerably below anything that PPPs traditionally demanded. The Minister is the prisoner of this nonsense and I wonder whether he is going to continue with it. It seems to be a denial of democracy for him to say here that we have entered into contracts, the total value of which must be in the millions. A very good building contracting company is undertaking the project but we need to know if we are getting value for money. This is the nonsense we have been getting from the bank since last autumn. We simply do not know and, incidentally, nor does the Minister, who is the prisoner of the secrecy this system has imposed upon him. Will the Minister undertake to open up the system? There are many builders who would love to have a go at providing this kind of work on the same terms and conditions that are in place. It is wrong in every sense of the word that the terms and conditions are commercially sensitive. What does that mean?

Batt O'Keeffe (Cork North West, Fianna Fail)
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It means two other bundles will be going out to the market, one in the middle of 2009 and the other at the end of 2009. It is the NTMA's view that it would be commercially sensitive to give that information now. To be fair, on a previous occasion when the Deputy raised the issue of interest, I gave him the details of the interest charge.

Ruairi Quinn (Dublin South East, Labour)
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Which was way over the market rate.

Batt O'Keeffe (Cork North West, Fianna Fail)
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I will be in a position to give the Deputy the details of the interest as soon as the other bundles have been cleared and clarified. As a former Minister for Finance, the Deputy more than anyone else would understand exactly what is the situation.

On the question as to whether I am satisfied that the contract is not more expensive than funding this via the Exchequer, the bid accepted by the National Development Finance Agency passed all value for money tests as prescribed in the Department of Finance public private partnership guidelines. These guidelines apply to all PPP projects regardless of whether they are funded by direct Exchequer funding, by deferred annual payments from the Exchequer, by user charges or by any other means. Four formal value for money tests are completed during the PPP procurement process. The first two tests are the responsibility of the Department prior to the handover of the project to the National Development Finance Agency for procurement, and responsibility for the third and fourth formal tests rests with the National Development Finance Agency itself. The bid accepted by the National Development Finance Agency passed all of these tests.

Ruairi Quinn (Dublin South East, Labour)
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In the current market conditions, which are totally different to the ones applying when the PPPs were first conceived, I ask the Minister to reconsider this and to think again. I cannot see why we do not publish what was the price for this contract in better times in 2007, and subsequently in 2008 with a falling market. If that is publicised, surely we are likely to get better value. One would not run a cattle fair the way the Minister is running this kind of school programme. Farmers going to market know what the price of cattle was last week and the week before. Why can we not know the same kind of information in this context? That is what the market economy is supposed to be about.

Batt O'Keeffe (Cork North West, Fianna Fail)
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I am rather surprised at Deputy Quinn. As a former Minister for Finance, he will understand that sometimes commercially sensitive information must be kept from the public view. The important point is whether we got value for money and whether the PPP projects now in place are giving value for money. There is a public sector benchmark which provides a key measure for my Department and the NTMA to test the extent to which bids are good value for the State. In the case of the schools bundle 1, the final tender amount, inclusive of interest, remained below my Department's public sector benchmark. The Department and I are well satisfied that we have got good value for money.

Ruairi Quinn (Dublin South East, Labour)
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I disagree.