Brian Hayes (Dublin South West, Fine Gael)
Link to this: Individually | In context

Question 126: To ask the Minister for Finance if the accounting practice of public private partnerships takes account of the EuroStat decision of November 2004 that mandated that PPPs must be accrued as on balance sheet expenditure; and if he will make a statement on the matter. [9553/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

In February 2004, Eurostat published guidelines regarding the accounting treatment of PPP projects for the purpose of calculating the General Government Balance (GGB). In general, the position in this regard is that the assets of privately financed PPP projects will be off balance sheet in the National Accounts and therefore the construction costs will not affect the GGB upfront over the construction period, provided that the private sector partner carries the Construction risk and carries either the Demand or the Availability risk. The unitary payments which are made under the PPP contract will count as GGB expenditure in the years in which they are incurred over the life of the project.

Projects whose capital cost will impact on the GGB over the construction period include:

Design, Build, Operate, Finance (DBOF) projects where the public sector partner carries the majority of the risk in relation to a project. This includes cases where the public sector carries the construction risk or carries both the availability and demand risk.

Design, Build, Finance (DBF) projects where the contract is similar to a finance lease.

Design, Build, Operate (DBO) projects.

Conventional public procurement projects.

The CSO is responsible for determining how various PPP projects should be classified in accordance with Eurostat rules. I would like to point out to the Deputy that the "off balance sheet" status of a project is not the fundamental rationale for pursuing PPP projects. The main driver for PPPs is to achieve value for money for the Exchequer.

Brian Hayes (Dublin South West, Fine Gael)
Link to this: Individually | In context

Question 127: To ask the Minister for Finance the value of all public private partnerships that are due to be completed under the current national development plan; and if he will make a statement on the matter. [9554/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

It is not possible to quantify the value of public private partnerships that might be completed under the National Development Plan as project completion is dependent on a number of factors including the pace of negotiations and priorities as determined over the life of the Plan. The most recently published Multi Annual Capital Envelope published with the 2009 Budget multi-annual capital investment framework for the period 2009 to 2013 provides targets for Public Private Partnership (PPP) investment of €8.64 billion in privately financed PPP investment funded by future Unitary Payments. In addition the target for PPP investment funded by user charges is €795 million.

Brian Hayes (Dublin South West, Fine Gael)
Link to this: Individually | In context

Question 128: To ask the Minister for Finance if any delays have been encountered in getting lending to fund public private partnership projects; and if he will make a statement on the matter. [9555/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I have been advised by the National Development Finance Agency (NDFA) that the current global financial crisis is having an impact on the funding of all investments including Public Private Partnership (PPP) projects in all countries.

PPPs in Ireland, UK and other EU countries have experienced delays in getting banks to lend for long periods. However, it should be noted that a number of PPP deals, particularly smaller deals, are closing. The PPP model is still considered to be relatively robust and PPPs should remain an attractive class for investors. The NDFA has further advised that the momentum in PPPs, as well as other major investment mechanisms, should regain more traction as soon as the current credit crunch eases.