James Reilly (Dublin North, Fine Gael)
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Question 120: To ask the Minister for Justice, Equality and Law Reform the status of the proposed prison at Thornton Hall; if funding is in place to build the facility; if a binding contract has been entered into with the preferred bidder under PPP; his views on recent media speculation (details supplied) that 25 banks have withdrawn funding and support for the €400 million prison; and if he will make a statement on the matter. [34334/08]

Leo Varadkar (Dublin West, Fine Gael)
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Question 128: To ask the Minister for Justice, Equality and Law Reform if he will proceed with building a prison at Thornton Hall in view of the fiscal crisis; and if he will make a statement on the matter. [34353/08]

Dermot Ahern (Louth, Fianna Fail)
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I propose to take Questions Nos. 120 and 128 together.

Negotiations are currently at an advanced stage with a commercial consortium, which was selected following an E.U. tender procedure, as the preferred tenderer for the design, construction, finance and maintenance of the proposed prison facilities at Thornton Hall as a PPP.

It is a matter for the commercial consortium, under the PPP process, to arrange the funding of the project. Obviously, closure of the contract cannot be completed without the necessary funding being in place and it would not be appropriate, for commercial and procurement reasons, for me to comment on the specific financial funding aspects of the PPP contract negotiations.

For all PPP projects a Public Sector Benchmark is determined in advance of the project being tendered. The Public Sector Benchmark is a monetary value that represents a risk adjusted cost, over the construction and 25 year maintenance period, to the Sponsoring Agency of delivering the project using "traditional" public sector procurement.

Before the contract is awarded the final cost must be within the budget (capital envelope) allocated to the project and be below the Public Sector Benchmark. The National Development Finance Agency provides a letter to my Department indicating that the project represents Value for Money when compared to this Public Sector Benchmark, if this is their opinion.

In the current fiscal situation facing the country it is important that we all strive to reduce costs, live within our budgets and avoid any cost increases. The Irish Prison Service is currently examining all issues that have arisen in relation to the project and in this regard all options available are under review.

The bidder must meet all the criteria, including the financial criteria, in the tender. Although a preferred tenderer was selected, there are other tenderers and other viable options which can still be considered if for any reason the negotiations referred to are not successfully concluded.