Jack Wall (Kildare South, Labour)
Link to this: Individually | In context

Question 112: To ask the Minister for Finance the person who will be accountable for negotiations on PPPs for the National Development Plan 2007 to 2013; the measures in place to ensure that the State gets value for money in these negotiations; and if he will make a statement on the matter. [3872/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Public-private partnership arrangements, or PPPs, are a means of procurement for public investment projects and, as such, are subject to the requirements which apply to public capital investment generally. Under my Department's Capital Appraisal and PPP Guidelines, Departments and agencies are responsible for the appraisal and management of their projects, including PPPs.

Value for Money in PPP procurement is considered at a number of stages of the process, including four formal tests at specific stages. The key test compares the best bid against a public sector benchmark or PSB, which represents the relative cost of procuring the project by traditional means against the costs of procuring the project by PPP. The PSB takes account of issues such as risks transferred to the private sector. Other factors, such as faster delivery of infrastructure, or the use of performance-related payments, may be relevant to establishing if a particular option is the best value for money solution overall in a particular project.

Departments and other Sponsoring Agencies must seek the advice of the National Development Finance Agency (NDFA) on the optimum means of financing the cost of public investment projects or groups of PPP projects over €20 million in order to achieve value for money and on all aspects of financing, refinancing and insurance of public investment projects to be undertaken by means of Public Private Partnership.

Negotiations on projects in individual areas will generally be a matter for the Sponsoring Agency concerned. The exception to this is where PPP projects funded by unitary payments from Departments' or Agencies' Votes will be procured by the Centre of Expertise for PPP procurement in the National Development Finance Agency (NDFA). The Centre of Expertise will undertake the procurement after the setting of project budgets, output specifications and other service requirements.