Although I have been a local authority member for almost 25 years, I cannot figure out how this scheme will operate. I have asked the county manager and several other council officials, but no one has to date been able to outline how the design, build and operate aspects of the scheme will affect the lives of people in the town, especially those in the business community. I have reservations about the design, build and operate scheme which will have major cost implications for the business community. There will be no real accountability. Under the conventional system there was accountability to local authority members who were able to address cost issues in the local authority estimates. Once a design, build and operate scheme is agreed and put in place local authority members will have no say. The county manager will receive a bill once a year and local authority members will have no choice but to levy charges across the business community. In this instance, it will not only be the business community which pays, farmers will also pay. The charge will probably relate to the amount of water used and the amount of sewage generated. While there is no way to control the amount of sewage generated, it will be possible to control and monitor the amount of water used by each business premises or farm.

I would like the Minister to outline in detail the way in which the Castlebar scheme will operate and be funded. I would also like to know what consequences will face the business community. Design, build and operate schemes are put in place for a 20 to 25 year period. Once the local authority is locked in to a scheme, there is no way out. Given the multi-billion euro investment proposed, it is time the Government told local authority members and Members of the Houses of the Oireachtas how these schemes are to operate. Nobody can tell anyone how a design, build and operate scheme or, for that matter, a public private partnership will work. I hope the Minister of State can outline to the House the way in which they will operate over the next 20 years.

The Department has already approved the commencement of certain advance elements of the scheme at different locations around the town in order to alleviate pressure on the existing treatment plan from infiltration of surface water and to tie in with other improvement works. Last month, as an environmental protection measure, the Minister approved funding for Mayo County Council to begin work on two contracts to extend the out-fall from the treatment plant to a point further downstream where dilution rates are greater. The Minister also recently approved the invitation of tenders for a major sewer, surface water pipeline and pumping station contract. All these works are being procured by conventional contracts, which will see them undertaken mainly by contractors to the council's own specifications and design.

In accordance with established departmental procurement policy, the treatment plant element of the scheme is being provided under a public private partnership, PPP, employing the design, build and operate model, DBO. The decision to adopt DBO procurement in this case accords with the outcome of the PPP applicability assessment undertaken by the council itself as part of the standard procurement process for water services projects. The assessment, which considered the issues of cost, performance, time and risk in detail concluded that the DBO approach offered the optimum prospect of an innovative, reliable and economical procurement solution. The treatment plant contract is a significant one, involving an increase in the capacity of the existing plant from a population equivalent of 20,000 to 35,000 people.

The national development plan sets ambitious targets for providing Ireland with a world class water services infrastructure. The Department is determined that its approach to procuring and managing this infrastructure will also be first rate and a number of initiatives are being progressed to ensure that this will be the case. The key example of this is in the area of procurement itself, where the DBO approach is now the preferred route for water services treatment facilities.

Based on experience to date, we are satisfied that DBO best ensures that value for money continues to be a central focus of investment under the water services investment programme. DBO offers many advantages. Single point responsibility for design, construction, operation and maintenance incentivises the private sector contractors to optimise the whole life cost of the project. The use of DBO contracts results in greater certainty in the final out-turn cost of the project.

DBO encourages newer technologies which have been shown by other water services schemes to produce significant technical and economic advantages. It gives long-term protection to the capital investment, since the DBO contractor must return the plant to the local authority in good condition at the end of the 20 year operational contract. DBO also ensures a high degree of service during that 20 year operational period, as the contractor is required throughout to meet performance standards which are subject to financial penalties.

Procurement of the treatment plant in Castlebar by way of DBO will ensure that all these advantages accrue to the town. The procurement of the Castlebar treatment plant under a PPP will not affect the method of financing this scheme by my Department. Capital costs associated with the domestic component will be funded by the Exchequer under the Department's water services investment programme. The marginal capital costs attributable to the non-domestic sector will be funded by that sector, in accordance with Government water pricing policy. The operating costs will also be funded by the same combination of local government funding and non-domestic sector water charges as apply in any other case.

As a result of the efficiencies associated with DBO and in light of experience to date, it can reasonably be expected that both the capital cost and the operating costs for a given level of service will be lower than if the scheme was entirely procured under the traditional route. This will be particularly welcome news to non-domestic sector consumers in Castlebar who would be liable for the same proportion of those costs, whatever procurement route was adopted.