Dáil Éireann - Volume 508 - 29 September, 1999

Written Answers. - Public Private Partnerships.

406. Mr. Yates asked the Minister for Finance the precise procedure for the selection of public private partnerships to be included in the national development plan, both in terms of independent economic and transparent appraisal on the relative costs of the public private partnerships versus the conventional public capital programme, as well as the competitive selection process for those who would be granted the contracts. [18167/99]

Minister for Finance (Mr. McCreevy): As I have said before, there are a number of criteria for the selection of potential PPP projects, including: the economic case for the project; the impact, if any, on the general Government balance; the cost effectiveness of any private funding; efficiency gains which private sector involvement could secure; the potential to generate revenue; legal and regulatory aspects and possible supply constraints in the economy.

The key criteria are that any PPP project be a national priority and that it show value for money over the lifetime of the project. In relation to the first criterion, whether any particular proposal for investment in infrastructure is a national priority will depend on how that proposal advances national policy in the sector in question. The question of priority will also depend on other issues such as the economic case for the project. Essentially, the first key criterion is whether a project is worth pursuing in itself, irrespective of the route adopted – particularly if public money will be required for the project.

Moving onto the second key criterion, the question is essentially whether the PPP route is the appropriate one to take – whether a PPP [313] approach can deliver value for money for the public sector over the lifetime of the project. An assessment of the cost effectiveness and value for money over the lifetime of the project, which would facilitate comparison with other mechanisms, including conventional capital expenditure, is an important part of the evaluation process for PPP projects.

Ensuring as competitive a procurement process as possible is central to delivering the objective of value for money. In terms of the procurement process, all public projects, including PPP projects, are in any case subject to EU public pro[314] curement rules and the general requirements fairness, competition and transparency.