Dinny McGinley (Donegal South West, Fine Gael)
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Question 94: To ask the Minister for Finance if he has satisfied himself with the effectiveness of the process whereby different funding options are being assessed for capital projects; and if he will make a statement on the matter. [29903/04]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Capital projects are procured primarily by the traditional means of Exchequer capital or by public private partnership, PPP. In both cases, projects are subject to appraisal for value for money in accordance with the relevant guidelines laid down by my Department. It is a matter for the sponsoring Department or agency, with the approval of the relevant sanctioning Department, to determine which project option represents best value for money.

Under the general conditions of sanction for the multi-annual capital envelopes introduced in budget 2004, Departments are required to comply in all cases with my Department's guidelines for the appraisal and management of capital projects. My Department is in the process of revising these guidelines in consultation with Departments. New guidelines will be published later this year.

To assist State authorities in determining the optimal means of financing public investment projects, the Government established the National Development Finance Agency, NDFA, on 1 January 2003. The NDFA's role includes advising on the financing and risk evaluation of Ireland's public private partnership procurement projects and raising or arranging finance for national development plan projects. In this respect it provides a centralised expert service to Departments and certain other State authorities.

The PPP procurement option should be available to Departments and State authorities for application to appropriate projects where there is the right scale, risk and operational profile to harness the benefits of this new approach.

Discussions will commence soon with sectoral interests on planned changes in the area of public sector contracts for construction and construction related services. The changes will involve the amendment and introduction of new standard forms of construction projects which will transfer appropriate risks to contractors where they are best placed to manage them. These initiatives seek to address the issues of improved project management and to reduce the potential for project cost overruns.