Willie Penrose (Longford-Westmeath, Labour)
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Question 746: To ask the Minister for the Environment, Heritage and Local Government if he will review the operations of the design, build and operate models as currently operated by local authorities with a view to keeping more of the operation element within the power and control of county councils and local authorities; and if he will make a statement on the matter. [16994/07]

John Gormley (Dublin South East, Green Party)
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The Design/Build/Operate model of Public Private Partnership (PPP) is employed under my Department's Water Services Investment Programme in accordance with the Partnership Agreement — Towards 2016. The current Investment Programme covers the years 2005 to 2007 and contains 899 schemes. Of the schemes currently under construction, 16 have a PPP contract.

A fundamental principle of water services PPPs is that, while the infrastructure is operated under contract to the local authority, it remains at all times in the authority's ownership. The Water Services Act 2007 underlines that position by expressly prohibiting the transfer of any water services assets or infrastructure, or any part of such assets or infrastructure, to any person.

The PPP approach is employed in the water services sector only where it is clearly established that it provides best value for money overall. Local authorities are required to examine all potential procurement options in an even-handed manner before recommending an appropriate procurement option. The most appropriate procurement option is approved under the Water Services Investment Programme and the same level of Exchequer funding is provided by my Department, irrespective of the procurement route selected. The overriding consideration is that all projects must deliver value for money and to this end, the Public Sector Benchmark and Post Project Review processes are important measures in ensuring value for money.

The importance of the Public Sector Benchmark (PSB) is that it enables a comparison to be made on a like for like basis between traditional and PPP procurement. The PSB is an important tool to determine whether a PPP approach will deliver better value for money compared to traditional procurement. A PPP proposal must deliver value for money and must prove that it can do so before the route is chosen.

In a water services PPP, the infrastructure is owned by the local authority and operated and maintained by a service provider under contract to the local authority. Such contracts include a penalty clause for under-performance. The local authority is responsible for monitoring and managing the service provider's performance and, as such, the operational element, like the capital infrastructure, remains under the supervision and control of the local authority.