Dara Calleary (Mayo, Fianna Fail)
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115. To ask the Minister for Finance the rationale for the imposition of a restriction on public-private partnerships whereby private investment cannot be more than 10% of the final project cost; and his views on whether this poses a barrier to making use of the European Fund for Strategic Investment to increase investment in State infrastructure projects. [9108/17]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by my colleague the Minister for Public Expenditure and Reform, who has responsibility for national policy on Public Private Partnerships (PPPs), that PPPs offer an alternative model for delivering infrastructure that can be effective in particular circumstances. He adds, however, that the long-term nature of the financial commitments arising under PPPs require that the use of such arrangements must be carefully planned in order to ensure that they are used to address infrastructural needs in a manner that is sustainable in the long term and which the public finances can afford.

It was for this reason that the Government introduced an Investment Policy Framework for PPPs in 2015. The purpose of the framework is to limit the extent to which PPPs should pre-commit future funding available for capital investment relative to the overall aggregate Exchequer capital allocation available in any individual year. This includes unitary payment charges in respect of existing PPPs and up-front costs associated with new PPPs, in recognition of the reality that, PPP procurement is a minority procurement option. There is no limit on the percentage of a PPP that can be privately funded. In fact PPPs are generally 100% privately funded as off balance sheet projects. However, it has been agreed that, taken together, costs in respect of PPPs should not pre-commit more than 10% of the overall aggregate capital funding available to future Governments in any individual year.

The European Fund for Strategic Investment (EFSI), to which the Deputy refers, is the joint initiative of the EIB Group and the European Commission aimed at mobilising private financing for strategic investments through loan funding. Since EFSI's inception, Ireland has seen the main potential beneficiaries of EFSI are likely to be commercial investment projects (including PPP Companies). In this regard, I am pleased that the Department of Health's Primary Health Care Centres PPP has successfully drawn down EFSI funds.

EFSI is an important additional funding possibility alongside others such as the EIB's normal lending, the State's borrowings through the NTMA and other mechanisms such as PPPs and off-balance sheet vehicles. However it should be remembered that each EFSI loan entered into by the State pre-commits funding for the repayment of such loans, and has to be considered in the context of the expenditure benchmark under the EU's fiscal rules. The answer, therefore, is not simply about spending more; it is about matching the most appropriate source of funding with investment needs, and ensuring that taxpayers' money is spent wisely.

As the Deputy will be aware, the Government's Capital Plan is also overseen by my colleague, the Minister for Public Expenditure and Reform. In accordance with this, that Minister has responsibility for the approval of Exchequer capital projects, PPP projects and borrowing-led investment, within the broader context of considering the full range of available funding options for State investment.