Jack Wall (Kildare South, Labour)
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Question 47: To ask the Minister for Finance the implications for public private partnership projects of the current economic difficulties; and if he will make a statement on the matter. [45362/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The general tightening of credit markets has implications for all privately funded projects, including PPPs. These include an increase in the cost of private finance, changes to the terms and conditions of finance deals and a reduction in the number of lenders in the infrastructure market. These challenges have to date required more detailed contract negotiation. It is still too early to assess whether more strategic changes may be required. It should be noted that in the longer term, PPPs are likely to remain relatively attractive investment targets for financial institutions because of their national dimension and Exchequer-funded unitary payments.

The situation is slightly different in relation to the PPP housing regeneration projects that have been the subject of media attention recently. These projects are based on a Design, Build and Finance model and are closely linked to the value of private housing output obtained by the developer. The market for private housing has substantially changed in the past 12-18 months which has made it much more difficult in the current economic climate to advance this model. Nonetheless, there are a number of options that can be developed to make such projects viable again and these are currently being examined by Dublin City Council.

The overriding principle to be followed in assessing whether a specific project is suitable for procurement as a PPP remains value for money. PPP has demonstrated that it has a role to play, along with other procurement options, in delivering investment in our economic and social infrastructure. The Government remains committed to the use of PPPs in appropriate circumstances as an option in delivering certain public investment projects.