Seán Fleming (Laois-Offaly, Fianna Fail)
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6. To ask the Minister for Public Expenditure and Reform the public private partnership projects where contracts have been signed and construction will commence in 2015; his views on the value for money offered by PPPs compared to direct Exchequer funding; and if he will make a statement on the matter. [26390/15]

Seán Fleming (Laois-Offaly, Fianna Fail)
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Can the Minister provide some details in relation to public private partnership contracts which have been signed and where construction will commence this year? I know there are ongoing projects from last year and the previous year, but what new ones are starting this year and where are we now?

Brendan Howlin (Wexford, Labour)
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Of the eight public private partnerships, or PPPs, in the current programme announced in 2012, the position is as follows. Two projects are currently in construction; the N17/18 Gort-Tuam PPP and schools bundle No. 4. A preferred tenderer has been appointed in a further five projects; the M11 Gorey-Enniscorthy PPP; the N25 New Ross bypass PPP; the Courts Service PPP; the primary care centres PPP, and the Grangegorman PPP. The preferred tenderer is expected to be appointed at the end of the summer for the final project, which is schools bundle No. 5. I expect that contracts will be signed in 2015 for the two roads PPPs and also the courts and primary care centres PPPs with construction then commencing on those projects this year.  It is likely to be 2016 before the contracts are signed on the remaining two projects; schools bundle No. 5 and Grangegorman.

In regard to value for money, I am satisfied that the PPP model has the potential to offer value for money for the Exchequer for a number of reasons.  First, PPPs enable the public sector to harness the innovation, expertise and efficiencies that the private sector can bring to the delivery of certain facilities and services traditionally procured solely by the public sector.  PPPs also facilitate the assigning of risks to the party best positioned to manage and mitigate the risks, which has value for money benefits for the State.  In addition, PPPs involve long-term contracts where payments are linked to performance and availability over the lifetime of the project and deductions apply when the facilities are not performing or are unavailable.  This has the benefit of making PPP bidders focus on the whole life-cycle cost of projects and not just on the upfront capital cost.  These factors combined ensure that added rigour and controls are brought to the planning and delivery of PPP projects.

Additional information not given on the floor of the House

Under the PPP guidance there are four specific value for money, or VFM, tests that are applied over the course of the planning and procurement process, which focus on assessing whether or not the PPP approach compares favourably with the alternative cost of using traditional procurement to achieve the same result as the PPP. The purpose, sequence and format of the four VFM tests in the PPP approval process are set out clearly in the central PPP guidance in order to ensure that all PPPs are regularly assessed and do, indeed, offer value for money.

Seán Fleming (Laois-Offaly, Fianna Fail)
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The Minister probably has a bit more information on file which I will ask him to send along. I know a couple of projects are due to commence this year.

Brendan Howlin (Wexford, Labour)
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If the Deputy has any particular projects in mind, I would be delighted to provide the information.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I am sure the Minister knows all about the N11 and the N25. He might send me a note on or include in the written reply included in the Official Report the details of courthouse projects and their locations. The Minister mentioned the schools in bundle No. 5 and he might provide a list of where the five schools are. I think he said schools bundle No. 4 is currently in the system and he might provide a list of where they are around the country. On Grangegorman, the Minister might provide a brief outline of that project. Is public private partnership intended to be the main method of progressing Grangegorman and the primary health care centres? I encourage the Minister to progress with as much haste as is reasonable with schools in view of the demographic pressures facing them. There is going to be an issue in meeting the requirements for classroom accommodation because most children are in schools with very crowded classrooms. With the demographic changes, we need to deal with that.

Brendan Howlin (Wexford, Labour)
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Rather than try to answer within a minute, I will send the Deputy a note on the public private partnerships to come on stream. I will go through a couple very quickly. I expect the contracts on the N11 project to be signed within weeks. There was a slight difficulty in regard to foreshore licensing in respect of the N25. That is being concluded and I expect the contract to be signed within weeks. As the Deputy knows, the tendering process for the Grangegorman project has been delayed because of legal proceedings. That is why it is likely to be next year before construction commences. Primary care centres are not mainly being provided through PPPs but there is a bundle of PPPs that will provide a number of them. I will send the Deputy the list. I am working on the capital programme with colleagues. While I am looking at PPPs as part of it, I want to have a ceiling on the proportion of the total capital that goes to bullet payments for PPPs. We will debate this in more detail and I will explain it further when we publish and launch the capital plan in due course.

Seán Fleming (Laois-Offaly, Fianna Fail)
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I thank the Minister. He might also provide the details in regard to the schools at the preferred tender-preferred contractor stage. He might give us a list in particular of the schools that are in the system but which have not got to that stage and which will probably commence next year and in subsequent years. I am sure there are quite a few which have gone through the planning and land acquisition processes but which are only at the initial rather than the preferred tender stage. It is so we can have a broader view of how PPPs are progressing into next year and subsequent years.

While there is a great need in regard to schools, the Minister might also consider if PPP funding can help with house building. Housing is probably the most significant problem which has arisen over the last couple of years. There was no housing problem previously but we have stopped building for the last few years. Finally, when does the Minister intend to publish the capital expenditure programme? It must be imminent.

Brendan Howlin (Wexford, Labour)
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The vast bulk of schools are being provided through normal Exchequer funding. While I do not have the details in front of me, from memory Deputy Ruairí Quinn announced approximately 272 schools when he was Minister. We have built all but 99 and those are in train and will be provided under the capital plan. It is an enormous number of schools. Obviously, we have supplemented that with PPPs. The PPP model is an interesting one. I opened a school in Gorey in my own constituency and the level of finish at that PPP project involved a complete fit-out, right down to automated grass cutters and a caretaker. The teachers were amazed when they walked in.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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There is an automatic caretaker.

Brendan Howlin (Wexford, Labour)
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No, the caretaker provided is a human being. What I am saying is that is all part of what is provided by a PPP.

The laboratory and science rooms are fully equipped. We have to compare like with like in terms of value for money and they maintain it for the duration of the public private partnership.

We have provided a huge sum of money in capital for direct social housing. We have also provided two other mechanisms, a special purpose vehicle using the resources we got from the sale of BGE, which will be leveraged to provide resources for housing and a PPP bundle and which is being negotiated with local authorities particularly in the greater Dublin area.

Seán Fleming (Laois-Offaly, Fianna Fail)
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What about the capital expenditure plan?

Brendan Howlin (Wexford, Labour)
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It is still a matter of debate.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Will it be this month?

Brendan Howlin (Wexford, Labour)
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I hope so. We are very close to the end of this term and I am still in bilateral discussions with all of my colleagues. I am trying to bring to a conclusion as quickly as I can.