Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 322: To ask the Minister for Justice, Equality and Law Reform if, with respect to the proposed Thornton Hall prison project, recent increases in the cost of debt financing may impact on either the financial viability of the project or on the cost to the Exchequer; if he has set a deadline for the completion of the tendering process for the project; when construction of the prison will begin; and if he will make a statement on the matter. [46955/08]

Dermot Ahern (Louth, Fianna Fail)
Link to this: Individually | In context

Negotiations are currently underway with a commercial consortium, which was selected following an EU tender procedure as the preferred bidder for the design, construction, finance and maintenance of the proposed prison facilities at Thornton Hall, North County Dublin. While these negotiations are advanced stage they have not yet been completed to the point that the Project Agreement can be signed. I am advised by the Irish Prison Service that it is anticipated that it will not be possible to have a contract signed this year. The aim would be to have a contract signed early in 2009. Construction will commence immediately after contract award and should take no more than 3 years. This timeframe is subject, of course, to the successful completion of the contract negotiations. If, for any reason, these negotiations are not successfully concluded there are other tenderers and other options which can be considered.

The Thornton Hall project is a complex Public Private Partnership Project which involves the construction of more than 30 buildings, including 8 prison facilities on the site, a major internal road network, extensive perimeter security and a vast array of security systems both physical and electronic. Additional matters have had to be addressed following the extensive public consultation involving the publication of the Environmental Impact Assessment and consideration of the development by the Oireachtas. Pressures on the international financial markets have had implications for a number of major capital projects including Thornton. In particular the availability and cost of finance has been affected.

The National Development Finance Agency, as the financial adviser to the Irish Prison Service, is keeping the financial impacts of the current international "credit crunch" situation under review. Before a contract is awarded the final cost must be within the budget (capital envelope) allocated to the project and be under the Public Sector Benchmark. 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 delivery the project using 'traditional' public sector procurement. The National Development Finance Agency will advise my Department whether the project represents value for money when compared to the Public Sector Benchmark.