Martin Mansergh (Fianna Fail)

I very much welcome this report. I wish to comment briefly on the history of the National Development Finance Agency. It was born out of the National Treasury Management Agency which is one of the most successful initiatives that has been undertaken in the past 20 years. I was privileged to have witnessed its inception. It was part of the policy platform for the February 1987 election, adopted by the late Taoiseach, Charles J. Haughey, who had the vision to engage in initiatives which have helped to save this country millions. Mr. Dermot Desmond, of course, was one of the inspirations for this initiative.

While the Department of Finance did a very professional job, when it was responsible, it became clear, given that the debt had grown to about £25 billion, as then measured, in March 1987, that a professional full-time agency was needed which could recruit staff directly, rather than civil servants who would move on to other functions. This agency has presided over a reduction of roughly 120% in GDP, depending on the measure one uses, down to well under 30% or indeed under 20% if the National Pension Reserve Fund is taken into account.

I spoke in the debate in 2004. One of the reservations one has about PPPs concerns the State as a sovereign borrower. A State in such good standing as Ireland is at present could obviously borrow at very keen competitive terms, which might be more difficult for any private sector enterprise, however good its standing. The excellent feature of this is that it effectively brings together — albeit under two hats — the people who manage our debt and who therefore are responsible for borrowing on behalf of the State, at the keenest rates. They are charged with getting the national debt down to as low a level as possible and for vetting the PPP projects so that we do not end up with projects that are very costly.

Our neighbours in Britain have had relatively bad experiences with what they call the private finance initiative, with large over-runs and heavy costs. They have been involved in something we do not have to do, namely, massaging the budget figures to keep borrowing in or around the 3% level. Fortunately, we do not have that problem and can examine the issues strictly on merit in terms of trying to get better value for money. That is excellent, instead of having different Departments and agencies — particularly those with not much experience in this field — trying painfully to invent the wheel. Instead there is an agency with experience across the board which is able to supply all the professional advice. It can give civil servants and, indeed, Ministers the confidence to proceed with valuable projects, whether housing, education, roads, rail or whatever so that they do not have to face heavy criticism, for example, from the Comptroller and Auditor General.

It is essential in the financial and other fields that the Civil Service equips itself with a proper specialised agency to provide professional advice and expertise so that civil servants are able to advise Ministers and can have the courage to take decisions in the national interest which are necessary. By all accounts, this is proceeding very well. Different Members of the House will have experiences of different projects. The M4 project, for example, which now stretches out to Kinnegad, is an excellent improvement which I assume is substantially, though possibly not wholly, self-funding. We can go back to 1990, to the West Link toll bridge, which has been discussed a good deal in this House. With the benefit of hindsight that does not appear to be a very good PPP deal. However, we have to be realistic as regards many new projects of this type, in particular, where there is bound to be a certain amount of trial and error. It takes time before the mechanisms are refined so that there are not over-runs, waste and so on.

I was more than a little surprised by Senator Finucane's contribution. I do not know how his stereotype of private sector efficiency and public sector waste appeal to his putative partners in the Labour Party, but I believe he is being simplistic in the extreme. We have an example, only today, of the private sector falling down on the job, as regards Smart Telecom. That type of ideological approach is certainly not followed by Fianna Fáil — and neither, I believe, is it followed by the Labour Party. When he mentions something such as Punchestown — excuse the pun — one can only say that this is flogging a dead horse.