Dail Question No: 14

Dail Question No: 14

To ask the Minister for Public Expenditure and Reform the cost to the exchequer of all planned PPP projects for the coming period; if his attention has been drawn to research that suggests such projects ultimately cost the State more than alternative funding models; and if he will make a statement on the matter.

- Bríd Smith.

* For Oral answer on 13/04/2017
Ref No: 18712/17

Reply

Minister for Public Expenditure and Reform (Paschal Donohoe):

Aggregate information on the future costofeachPPP project in place is available on my Department's PPP website Department is currently updatingthe projections forthefuture costs of the projects, with the assistance of the various Sponsoring Agencies, as part of the regular annual updating of PPP statistics. However, provisional figures indicate that the aggregate cost to the Exchequer of all outstanding unitary payments for existing PPPs is some €6.6 billion.

Projects that are currently in planning or procurement will, of course, add to this figure, and once these projects are finalised my Department will update the table to include the relevant costs associated with the new projects.

PPPs offer an alternative model for delivering infrastructure that can be effective in particular circumstances.However, the long-term nature of the financialcommitments arising under PPPs require that the use of such arrangements must be carefully planned in order to ensure that they are used to address infrastructural needs in a manner that is sustainable in the long term and which the public finances can afford.

It was for this reason that the last Government introduced an Investment Policy Framework for PPPs, in 2015. The purpose of the framework was to set a limit onthe extent to which the annual costs of PPPs wouldpre-commitcapital funding available to future Governments forinvestment purposes,in terms ofthe overall aggregate Exchequer capital allocation projected to be available in any individual year.

The framework applies to the future cost of unitary payment charges in respect of both existing PPPs already in place and new PPPs currently in procurement or planning, together with the up-front Exchequer costs associated with procuring the planned new PPPs. The current requirement is that, taken together, such future costs in respect of PPPs should not pre-commit more than 10% of the overall aggregate capital funding projected to be available to future Governments in any individual year.

In relation to the research referred to by the Deputy, that suggests that PPPs ultimately cost the State more than alternative funding models, I do not know the precise research or indeed the alternative funding models to which the Deputy refers, but I would be happy to have any such material reviewed by my Department and the NDFA.