DÁIL PQ WITH MINISTER OF PUBLIC EXPENDITURE ON PPPs

  1. Deputy Thomas P. Broughan asked the Minister for Public Expenditure and Reform the estimates of public private partnership, PPP, expenditure in the context of the multi-annual capital allocations in respect of the period 2018 to 2021; the major PPP projects in the water supply sector; the costs of same; and if he will make a statement on the matter. [21624/18]

Deputy Thomas P. Broughan

As the Minister knows, there has been much criticism and two major debates about public private partnerships, PPPs, in this House. Our parliamentary budget office has carried out an overview of PPPs in Ireland, asking that we address the pretty opaque nature and the lack of transparency in the whole area of PPPs. There is a difficulty in measuring true value for money down to the 2040s or 2060s. The overview made some specific proposals on water contracts and the multi-annual budget.

Deputy Paschal Donohoe

This week we have taken steps looking at how we can increase the information available relating to PPPs. My Department has published two separate sets of financial data. This can be accessed on the www.ppp.gov.ie website. The first set of data provides an update on the existing financial commitments table. This table contains detailed information on all PPP projects for which contracts have been signed and which are either operational or in construction. Information is broken out by individual project on the type of PPP model being used, the operational date of the project, the capital contractual value of the project, the total unitary payments made to the end of 2017, the projected future unitary payments for each project, other PPP-related costs, the total cost of each project and the year of final payment of the project. All told, it is a considerable amount of information.

The Deputy should note that the published data is intended to provide indicative information on PPP projects based on information provided to my Department by the relevant responsible 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 on the details of specific projects should be confirmed directly with the State authorities responsible for those projects.

The estimated expenditure on PPP unitary payments will amount to approximately €1.2 billion up to 2021. This represents 4% of the total. With regard to water, Irish Water has statutory responsibility for all aspects of water services planning, delivery and operation at national, regional and local levels. This includes taking on responsibility for the water-related PPPs from the local authorities.

Deputy Thomas P. Broughan

I welcome the Minister’s point on greater transparency or information but he was to publish a major review of PPPs going over the past couple of decades and into the future. I do not know if his Department has done that yet. He mentioned a central expenditure evaluation unit and that clearly has a key role along with the National Development Finance Agency in evaluating PPPs. There still seems to be an opaque nature when we look at the multi-annual capital framework and the spending of each Department. We still need clarification on how PPPs are performing, particularly with respect to water supply and drainage. This relates to the way money is drawn down and the way projects move forward. We have the major River Shannon water supply project, the Ringsend project and so on. There is much work to be done in treatment, and the Minister of State, Deputy Moran, has done much work in the area. There are also flood relief schemes and so on. It seems hard to disaggregate the PPP structure despite major criticism. We had the Comptroller and Auditor General report of 2011, when the Government took power, which is very critical. The Economic and Social Research Institute has been equally critical over the years.

Deputy Paschal Donohoe

The Deputy mentioned the challenges of disaggregating the data and that is why we have now provided the information project by project and Department by Department. In the past too much information was not made available relating to PPPs under the auspices of the claim of commercial sensitivity. We can get a better balance and there is much information we can share that does not undermine the ability of the State to get good value while respecting the contractual obligations that we have to people involved with delivering projects. I have believed this since I was a member of the Committee of Public Accounts, and it is one of the reasons we published the data. As a Member of the House, the Deputy is entitled to know as much as we can make available to him on certain projects.

I have the report on PPPs and I anticipate publishing it soon. With respect to water, Irish Water has now been brought fully on to the balance sheet of the Exchequer so virtually all the capital projects it is involved with are no longer classed as PPPs.

Deputy Thomas P. Broughan

I welcome the news that we will get more full information. The point made about commercial sensitivity and so on reminds me of the spurious reasons that were given. We are spending the people’s money and it is a mortgage for the people. I note some projects going to the 2060s.

There is the 10% figure in the investment policy framework and the rule relating to the capital budgets of each Department. It is important this is kept. We need to carry out major capital investment projects in water, housing, education and health across the country. In many Departments the Government is constrained because of an ever growing unitary payment bill relating to existing PPPs. There has been much criticism both here and in the UK, as the leader of the Opposition in the UK has said there will be no more public finance initiatives there because of the performance of Carillion and various others. Is it time, given that we can expect a reasonable surplus over this calendar year, to go back to funding the major kinds of works being carried out by the Minister of State, Deputy Moran, and other Ministers ourselves?

Deputy Paschal Donohoe

The majority of works which the Minister of State, Deputy Moran, is delivering are fully funded by the Exchequer because it is appropriate in those cases. Many of those projects are of a scale where a PPP model is not appropriate and they can only be funded by the Exchequer.

On whether we are squeezing out other capital commitments because of the value of unitary payments to which we are committed, it is fair to say that the value of unitary commitments which are coming up is significant. It is now an average of €410 million per annum between 2024 and 2035. However, at this point it is not squeezing out other capital investment because it forms part of the Ireland 2040 plan. We are increasing capital investment by a quarter next year alone, and my attitude towards future projects is clear, namely, that we should decide PPPs on a case-by-case basis.

We should bear in mind that, regarding the unitary payments that I touched on, in many cases they pay for the maintenance of projects that are built. We should decide if PPPs are appropriate on the basis of the project rather than any broader policy.