Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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21. To ask the Minister for Public Expenditure and Reform if the recent collapse of a company (details supplied) and previous problems with public private partnerships will lead the Government to review its commitment to such funding models for infrastructure and services; and if he will make a statement on the matter. [13009/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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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 and unforeseen 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.

I am advised by the NDFA, who are procuring this PPP project on behalf of the Minister for Education and Skills, that in accordance with international best practice, this PPP contract includes detailed provisions that apply in the event of the liquidation of a consortium member to ensure that the project proceeds on a “business as usual” basis with minimal disruption.

Given the advanced state of these schools (approximately 90% completed) the NDFA does not envisage material disruption or delay to the works. However the NDFA is actively monitoring the position in the context of the robust contractual protections provided for under the PPP contract. The NDFA are making every effort to ensure delivery of the schools in as timely a manner as possible.

PPPs continue to provide benefits to the State as a procurement method which enables the public sector to harness the innovation, commercial and management expertise and efficiencies of the private sector to design, build, finance, operate and maintain State facilities with a specified residual life on handback. PPPs will also continue to be a procurement method available to the State for appropriately structured projects where they demonstrate value for money over a traditional procurement option.

While the liquidation referred to in the Deputy's question will give rise to a delay in completing the remaining construction works on Schools Bundle 5, 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.