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

102. To ask the Minister for Public Expenditure and Reform if further investment in public private partnerships, PPPs, will be paused following the collapse of a company (details supplied) and the recent difficulties experienced by another company; the extent of PPP by the Government from 2005 to 2017, and to date in 2018; and if he will make a statement on the matter. [6234/18]

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

103. To ask the Minister for Public Expenditure and Reform the implications for the provision of services and the completion of incomplete contracts here in view of the recent difficulties being experienced by British PPP companies; and if he will make a statement on the matter. [6235/18]

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

104. To ask the Minister for Public Expenditure and Reform his views on PPPs in view of the collapse of a company (details supplied) and the difficulties experienced by another company; and if he will make a statement on the matter. [6236/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 102 to 104, inclusive, together.

The Public Private Partnership (PPP) model is an internationally recognised model to design, build, finance, operate and maintain public infrastructure. In accordance with international best practice, PPP contracts already typically include detailed provisions that apply in the event of the liquidation of a consortium member of the PPP company, or an entity under the contract, to protect the public interest and ensure that the project proceeds to completion.

Under the terms of such PPP contracts, in the case of liquidation of a consortium member, or an entity under the contract, the PPP consortium’s funders and remaining shareholders are required to intervene and implement rectification measures to ensure that the project is completed to the satisfaction of the State. Liquidation of a company involved in delivering a public infrastructure project is an unfortunate development but would impact on any project where a supplier became insolvent during the delivery process, regardless of whether the project was being procured by PPP or by traditional means. The issue, therefore, is not PPP-specific, but where it arises in a PPP project, the provisions of the PPP contract ensure that the public interest is protected.

It is worth bearing in mind that this is not the first time a PPP in Ireland has experienced issues with its construction contractor, which is not uncommon given the risks inherent in the construction market. In all previous similar cases, the projects were completed successfully and are now fully operational. These examples demonstrate the resilience of the PPP contractual structure and underline the importance of adhering to the contractual documentation in resolving issues - which has previously been raised as a negative feature associated with PPPs.

While Carillion’s liquidation does give rise to a delay in completing the remaining construction works, payments under the PPP contract will not be made until the full works and services as set out under the project agreement are satisfactorily delivered for each school.

For these reasons, I do not see any need to pause PPPs currently in procurement or planning, as the contract terms of the PPP project will deal with the potential situation whereby a contractor or partner in the PPP company may become insolvent during the term of the contract.

However, as the Deputy may be aware, I established an Inter-Departmental / Inter-Agency Group last year to review Ireland's experience of using PPP and to make recommendations on the future role of PPPs, in the context of the new 10 year capital plan. I would expect the Group's deliberations to take account of any implications for future national PPP policy of the development referred to in the Deputy's question.

With regard to the extent to which PPPs have been used by Government, a summary update on PPP projects which are either operational or where contracts have been signed is available at the website . A copy of the table is set out for the Deputy's information. The table summarises information on PPP projects across the public sector indicating for each project, the value of the contract, the operational date of the project and the name of the company to which the contract was awarded.

The Deputy should note that the table is intended to provide indicative information in relation to PPP projects generally, based on information provided to my Department by the sponsoring Departments or Agencies. The Central PPP Policy Unit in my Department endeavours to ensure that the information is as accurate as possible but any queries in relation to specific projects should be confirmed with the State authorities responsible for those projects.

Exchequer funded financial commitments under Public Private Partnerships and Concession Projects

* Education figures to be validated

**Figures include a provision for a VAT bullet payment when due.

[1] The Payments for Limerick Tunnel include payments required to be made under the traffic guarantee contract mechanism. The nominal value of remaining payments as at 31 December 2015 does not include any amounts for future payments under this mechanism.

[2] The Payments for M3 Clonee Kells include payments required to be made under the traffic guarantee contract mechanism. The nominal value of remaining payments as at 31 December 2015 does not include any amounts for future payments under this mechanism.

Notes

1.Estimates of future nominal committed payments are calculated on an assumed future annual inflation of 2 per cent per annum.

2.PPP Unitary expenditure by TII relates to construction, operation and availability payments.

3.Other PPP expenditure relates to VAT, rates, enabling works, authority variations etc.

4.A review of "Other PPP Payments" is currently being undertaken by the Dept. of Education and figures will be provided following completion of the review. Total PPP cost figures are also subject to change in that context.

5.Rounding effects totals.