Martin Mansergh (Fianna Fail)

The National Treasury Management Agency, of which the NDFA is an extension, was an excellent Opposition initiative of a type that the Senator should examine. Twenty years ago the late Charles Haughey was one of its prime movers and it has helped to reduce the national debt from 125% of GNP — virtually the highest in Europe — to its current level of 25%, as it is now measured.

One of the arguments made against PPPs is that the State, as a sovereign borrower of good financial standing, can borrow more cheaply than the private sector. However, those who will advise on the adoption and negotiation of projects will be members of a branch of an agency which has helped us to dramatically reduce our sovereign borrowings in the past 20 years. The agency has an exceptionally good track record and will be able to compare options in determining the correct decision on a project. Central expertise is important to ensure Departments and agencies will not constantly have to try to reinvent the wheel. While some bodies such as the National Roads Authority and local authorities have developed expertise in this area, a number of Departments will benefit from the work of the proposed agency. Civil servants tend towards caution in their advice because they do not want to enter situations which could cause them to be investigated by the Comptroller and Auditor General. However, such timidity can lead them to avoid matters about which they feel they have insufficient expertise.

Senator Phelan rehearsed the usual list of problematic projects but every Government faces similar issues. I doubt, for example, that the rainbow parties are proud of the sale of Irish Steel or the second mobile phone licence which allowed certain individuals to make vast profits, despite the presence of famous programme managers in various Departments. Governments will always face challenges in that regard but the question remains of how we can make the system as efficient as possible to minimise mistakes.

I am reminded of a conversation I had at a summer school many years ago with a former Fine Gael Taoiseach who had extensive ministerial and economic experience. I expressed regret about an unsuccessful initiative which my party had taken in 1987, to which he replied that not every initiative was successful. As Senator Quinn knows given his business background, if guarantees are sought before any decision is made, little will ever be done.

The private finance initiative which was introduced across the water has had a chequered experience of overruns and bad value for money. Such an experience is precisely what we want to avoid in Ireland. One of the great advantages of our current comfortable financial circumstances is that we do not have to resort to PPPs as a means of getting around the 3% borrowing requirement. We only need to follow that route when it represents the best option.

I am familiar with the road projects to which the Minister referred. The Dundalk bypass, the Fermoy-Rathcormac bypass and the M4 are all welcome additions to the road network. One could spend a long time getting around Dundalk or be stuck in traffic entering or leaving Fermoy or Mitchelstown, although the latter is not a PPP project. At certain times of the week, the N4 was a nightmare. The Minister might be amused to know that Wolfe Tone and his men complained about Kinnegad 200 years ago, although purely from the perspective of its being a transport bottleneck.

The Minister mentions three areas where PPPs will operate. The new prison at Thornton Hall is a very ambitious project, and in this House we have heard a great deal about it from the Tánaiste and Minister for Justice, Equality and Law Reform, Deputy McDowell. Schools projects are very important, and all public representatives spend a great deal of time in schools meeting principals and boards of management. The way in which the country is developing means that the population is growing, and fairly constant work is needed on schools, with different demographic profiles emerging. It is important that we get on with that work.

Senator Phelan mentioned problems with the West Link and East Link toll bridges. Those very early projects ran into trouble, but that does not mean to say that they were not badly needed. Unfortunately, in life, including political life, there is a fair amount of trial and error. One will not always get everything perfectly right on the first occasion, and there are times when one must mend one's hand. It does not follow, however, that neither project should ever have been embarked upon in the first place. I do not know what the situation will be after the port tunnel opens, but at least the East Link toll bridge has not been a source of problems. I joined the Taoiseach's office in 1981 and was proud that it was the very first example of the new approach, which will also be valuable regarding health, an area in which vast expenditure is needed.

The Minister stated quite rightly on page 11 of his speech, regarding the national development plan, to which we all look forward early next year, that while PPPs are not the main procurement option for the capital investment programme, he expects them to play a more significant role in the next NDP. That is only right, since their use must be kept in proportion. In other countries there have been times when people suggested that PPPs were a panacea, which they are clearly not. They will work best if operated on a focused, selective basis where they genuinely represent the right solution.

Senator Phelan questioned the expansion of the board. To be fair, he accepted that there would be merit in having a trade union representative. It would also be useful to have a quantity surveyor. We must get away from the idea that elected representatives can always second-guess quite technical decisions and provisions. We obviously have a general monitoring and review role, focusing very closely when things go wrong to see what the problem is, but we should not delude ourselves. The State has substantial expertise available to it in different areas, and it is not necessarily our role to second-guess every decision systematically.

On the contrary, much of the time I would put my faith in judgments made after careful consideration, consultation and advice. Each of us has an individual perspective and experience and may have something to contribute to the discussion, as is clearly our role.

I very much welcome this legislation, which is a better, more concrete value-for-money initiative than any I have seen in Opposition policy documents. We have enjoyed tremendous growth over the past ten years, and that has created pressures. We did not get everything right, but PPPs provide a means for us to come much closer in that regard in future.