Pat Gallagher (Donegal, Fianna Fail)
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Question No. 8 is in the name of Deputy Michael McGrath. Permission has been given to Deputy Dara Calleary to take this question.

Michael McGrath (Cork South Central, Fianna Fail)
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8. To ask the Minister for Public Expenditure and Reform his plans to review the current 10% limit on public private partnerships; his views on whether the 10% rule and the controls and systems in place are sufficient to ensure that public private partnerships are used for the appropriate projects; his further views on expanding the PPP programme for appropriate projects; and if he will make a statement on the matter. [23532/17]

Dara Calleary (Mayo, Fianna Fail)
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This is probably a continuation of the discussion the Minister had with Deputy Burton. More importantly, it focuses on the 10% rule in public private partnerships. The Minister's colleagues, the Minister for Housing, Planning, Community and Local Government, Deputy Simon Coveney, and the Minister for Social Protection, Deputy Leo Varadkar, have been promising infrastructure projects like snuff at a wake around the country in the last two weeks. Have they spoken to the Minister about how they will be paid for?

Paschal Donohoe (Dublin Central, Fine Gael)
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As I said earlier, PPPs offer an alternative way for delivering infrastructure. The question refers to the 10% rule and whether we are seeking to review that. The current requirement is that, taken together, future costs in respect of PPPs should not pre-commit more than 10% of the overall aggregate capital funding projected to be made available to future Governments in an individual year. Against this background, we must formulate a clear view on the role PPPs can play to ensure they are useful in delivering additional infrastructure, but doing so in a way that is affordable.

One of the challenges we must deal with when we debate the merits of PPPs is that because the funding is not located on a country's balance sheet a misconception begins to form that the money does not have to be repaid. However, it does. I can give the Deputy some of the figures relating to this so the House will be aware of the scale of repayments for PPP projects. The latest projections available to the Department indicate that the cost of unitary payments in 2017 will be €240 million. It will increase year on year to €340 million by 2021 and the average cost for the 14 years after that will be €300 million per annum. The other side of that coin is that those bullet payments pay for the maintenance of the asset. They do not pay just for its construction but also for its maintenance. This is particularly relevant with regard to a road or a school building.

We are reviewing their use with the process I outlined to Deputy Burton. I am aware of the costs that exist. Just because they might not reside on the sovereign balance sheet in a given year does not mean they do not have consequences for the Exchequer in the future.

Dara Calleary (Mayo, Fianna Fail)
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Yes, there is a cost and these moneys must be repaid. We all accept that. However, consider the opportunity costs of not having proceeded with some of the projects that PPPs are currently funding. The costs we repay include maintenance of roads and so forth, so we must do something. I share Deputy Burton's concerns about the Minister's remark on whether we have capacity to deliver and whether there will be construction cost overruns. That is what the Department of Public Expenditure and Reform should be about. Again, I point to the need for a centralised infrastructure planning unit that should be able to negotiate all of that. However, we must have some indication of the Minister's views on PPPs ahead of the capital plan review and the Minister announcing that. In that context and in terms of proposals for PPPs, representatives of Transport Infrastructure Ireland, TII, appeared before the Committee on Budgetary Oversight some weeks ago and said their hands are tied in respect of developing new road projects because of the limitations on PPPs. We must have a signal one way or the other so that if the Minister intends to relieve this limit people can start planning and infrastructure can be put into the pipeline. If not, we will have to pursue other avenues for funding.

Paschal Donohoe (Dublin Central, Fine Gael)
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I will provide guidance on the role of PPPs as part of the capital plan review that is under way to allow agencies, if I believe it is appropriate, to deliver projects via the PPP model. The Deputy said he was concerned about my view on prices going up and cost overruns. One of the roles of my Department is to ensure that taxpayers' money is being used in the right way and that we are avoiding over-paying for the delivery of either services or capital projects. I make no apologies for saying that I wish to ensure that if we increase capital expenditure we will not end up paying a higher cost for the same number of projects we are currently planning to carry out. That outcome would not be acceptable to me or the taxpayer.

Dara Calleary (Mayo, Fianna Fail)
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I do not want that outcome either, but I am anxious to see a pathway to deal with the serious infrastructure bottleneck facing our country in so many areas such as housing, roads, ports and airports, which is being discussed at every hearing of the Committee on Budgetary Oversight. We all want the country to develop economically, but our current infrastructure is pulling down our chances of economic progress. In particular, it is pulling down the chances of regional economic progress. We must start thinking outside the box. I welcome the steps that have been taken with the European Investment Bank, EIB, in recent weeks. They must be given more urgency. However, we must provide some type of signal. The Minister must provide a signal that the Department and the Government understand the infrastructure cliff we are facing in this country and that they will stop us from driving over it.

Paschal Donohoe (Dublin Central, Fine Gael)
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On understanding the cliff, before the summer I will publish an analysis of where we are with the stock of capital investment in the country and our view on changes that need to be made in the future. On the quality of existing infrastructure, of course, I understand our needs pertaining to housing and higher education. The Deputy gave some examples of what he believed to be infrastructural opportunities. I point to the example of the progress made in Dublin Port with the development of the Alexandra Basin project, a project that is, incidentally, co-funded by the European Investment Bank. I point to the work that has been under way at Shannon Foynes Port to improve its capacity to handle a larger amount of stock and vessels than it was capable of handling up to this point. I also point to our airports and the success Dublin, Cork and Shannon airports have had in financing upgrades they needed to their own infrastructure and the fact that the Exchequer has been able to contribute to the upgrading of infrastructure there and at many other airports all over the country. There are needs, of which I am aware and which I will recognise, in particular, later in the year. In many cases, however, we have infrastructure that is meeting the economic needs of the country.