Thursday, 19 January 2023
Department of Public Expenditure and Reform
Public Private Partnerships
146. To ask the Minister for Public Expenditure and Reform if he intends to provide sanction to the Office of Public Works to make a payment to a centre (details supplied) that is not required under the public private partnership contract in respect of activity carried out during the period of Covid restrictions. [1967/23]
The OPW has not, to date, requested sanction from the Minister for Public Expenditure & Reform to waive a deduction for non-achievement of a target number of International Conference Delegates (ICDs), as necessary due diligence is ongoing and therefore a request for sanction would be premature.
The National Convention Centre was built by the private party to a Public Private Partnership agreement where the private party designed, built, financed and is operating and maintaining the Convention Centre for a 25 year term. This PPP is governed by a detailed Project Agreement. One of the key targets in the Agreement is the attraction of between 32,000 and 34,000 ICDs per annum. ICDs are estimated to be worth c. €1,600 each to the economy. The Project Agreement provides a scale of deductions from the annual Unitary Charge (c.€24m) if the ICD targets are not reached.
Due to Government-imposed Covid restrictions, the CCD were unable to host events so they fell short of their ICD target in Payment Year 10 (Aug'19 - Jul '20), Payment Year 11 (Aug '20- July '21) where there were zero ICDs, and Payment Year 12 (Aug '21 - July '22). Cumulatively the deductions from the Unitary Charge for non-achievement of targets would come to c.€1.5m.
The OPW, as the public party to the Agreement, is completing normal, necessary due diligence in this case and has not yet reached the stage where a final decision can be made on the application of any deduction. Therefore, no sanction request can yet be made to the Department of Public Expenditure & Reform. The issue is finely balanced as the CCD had to comply with Government Covid 19 related restrictions and also hosted the Oireachtas rent free during the Covid restrictions period. All of these issues need to be carefully considered.
The OPW has consulted with the sponsoring Department, with the Operations Monitor - the NDFA, and with its legal advisors and will consider all views on the issue so as to enable an appropriate decision be reached.
The OPW intends to conclude its consideration of this matter shortly, and if necessary will then seek sanction from the Minister for Public Expenditure & Reform. Should the CCD be unhappy with the decision made they may invoke the dispute resolution procedures in the Project Agreement.