David Cullinane (Waterford, Sinn Fein)
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2. To ask the Minister for Public Expenditure and Reform the detail of the review his Department will undertake regarding the role and use of public private partnerships in future capital projects, further to his comments before the Select Committee on Budgetary Oversight; the lessons learnt in this regard; and if he will make a statement on the matter. [3599/17]

David Cullinane (Waterford, Sinn Fein)
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In response to a question asked at a sectoral committee hearing regarding the greater use of flexibilities in terms of the fiscal space for capital investment, the Minister said he and his Department were looking at "a greater use of public private partnerships". I ask him to outline the detail of any review that his Department will undertake regarding the role and the use of public private partnerships in future capital projects.

Paschal Donohoe (Dublin Central, Fine Gael)
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As I announced in my speech on budget day last year, this spending review will be carried out in advance of budget 2018. The economic and political landscape in Ireland has changed very considerably since this work was last done in 2014. There are now increasing and competing public service demands across a period in which expenditure growth is planned at a moderate pace. The approach taken to this review will therefore be tailored to reflect the changed context and lessons from previous reviews. We will systematically identify the cost of existing projects and, as part of doing this work, we will look at the role of PPPs.

PPPs offer an alternative model for delivering infrastructure that can be effective in particular circumstances.  Under the comprehensive policy framework for PPPs that has been put in place, there is detailed guidance on the value-for-money tests that must be applied at different points in the procurement cycle to determine a project's appropriateness for procurement as a PPP.

While I am open to considering, on the basis of this review, the role they may play in priority public capital infrastructure, as I said to the Deputy in the meeting of the Committee on Budgetary Oversight, the complexity of determining the off-balance-sheet status of a project can, in certain circumstances, introduce a level of uncertainty into capital planning. Consequently, at a point in the future the Government can find itself facing difficult choices over commitments made if it turns out that the planned level of off-balance-sheet funding simply is not feasible.

The affordability and fiscal sustainability of PPPs are particularly important considerations for the review in light of the higher cost of private finance and the long-term nature of the financial commitments arising from PPPs.

David Cullinane (Waterford, Sinn Fein)
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2 o’clock

Of course, PPPs can be presented as an alternative model. The question is whether they are viable and represent value for money. Even conservative economists such as Colm McCarthy have raised concerns about their use. There are significant oversight issues that need to be addressed but nothing in the Minister's response indicates this will be the case. The Comptroller and Auditor General says he does not have the resources to give the Committee on Public Accounts the reassurance it wants about value for money. He said there is a need for post-project reviews to be carried out. Very few of these reviews were carried out and presented to the Committee on Public Accounts for proper scrutiny. There are no real checks and balances and no opportunity, despite the Government's talk of reform, for us to assess the value for money of PPPs. Unless the Minister is prepared to present us with a value-for-money report and a review of the existing use of PPPs, it is unlikely that he will get support for further PPPs.

Paschal Donohoe (Dublin Central, Fine Gael)
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In the comprehensive spending review, we want to focus on the role of PPPs and to examine the benefits and costs relating to them. I am well aware of their operation from their extensive use in the provision of public transport. The Deputy continually presses me on the need for increased capital investment. He points to the projects that need to be delivered. Surely, therefore, it is appropriate that we consider the role PPPs may play in the future in delivering very important transport infrastructure projects. PPPs have enabled the delivery of five bundles of schools and a variety of road projects across the country, including those relating to the M11 and N25. We will deal with the benefits and costs of that approach in the capital review.

David Cullinane (Waterford, Sinn Fein)
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The Minister has not answered my questions on the viability of PPPs and value for money. There is already flexibility in capital spending whereby any investment can be spread over four years, which is why Sinn Féin provided for €1.2 billion of additional capital investment in our alternative budget. The Minister flunked that and missed an opportunity to have significant capital investment this year when it is most needed. According to a response to a query to the Minister's Department, only 11 post-project reviews of PPPs were carried out. The reports were never published or laid before the Committee on Public Accounts despite requests for them. In other jurisdictions, it is the norm to have pre and post-project reports. The level of monitoring and oversight in respect of PPPs in this State is very poor and lax. That is why we do not have the confidence that we are getting value for money because even the post-project reports are not being properly scrutinised by the Oireachtas.

Paschal Donohoe (Dublin Central, Fine Gael)
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The only one missing an opportunity here is Sinn Féin by the Deputy's not taking the opportunity to listen to the answer I gave. I made very clear that the capital spending review will consider the options, benefits and costs that such PPPs offer. Many projects have already been built but because they were pursued under the PPP model, there are payments the State will have to honour in coming years in respect of their maintenance. As the Deputy knows, many documents are not made public because they are commercially sensitive and because of the agreements we have made with Irish and international companies that have been paid to deliver significant infrastructure projects. I am not committing to more PPPs because I want to do the work to ensure I do the right thing for the infrastructure projects the State needs.