Rose Conway-Walsh warns against PPPs for technological universities

Minister, the technological universities have the ability to deliver high quality third level education for many people including in Mayo and the West and to be a real driver for regional development. Technological universities are one of the most important developments in the third level education for decades. Why with almost no public debate is your government using controversial public-private partnership contracts for the development of our public education system? Minister, could you outline the reason for this drastic change of approach that will see public-private partnership contracts used for all building projects in technological universities? Thank you very much, Deputy, for raising this issue. My department's role in relation to public-private partnerships, PPPs, is to maintain and develop the general policy framework, including where necessary the legal framework within which PPPs operate. It also provides central guidance to other departments and state authorities in that context. My department has no direct involvement in the procurement or delivery of individual PPP projects. Therefore, the delivery of the technological higher education sector projects through the use of PPPs is, in the first instance, a matter from my colleague the Minister for Further on Higher Education, Research, Innovation and Science. PPPs are partnerships between the public and private sectors for the purpose of delivering a project or service and is an internationally recognised model to design, build, finance, operate and indeed maintain public infrastructure. Some of the advantages associated with PPPs are that they allow the public sector to avail of private sector expertise and innovation and the private partner assumes responsibility for a considerable portion of the risk. The contracts tend to be long-term arrangements, typically spanning 25 years or more, with the private provider required to maintain the asset at a suitable standard over that period. At the end of the contract, the PPP company must return the asset in year one condition. PPPs continue to provide benefits to the state as a procurement method. As such, it enables the public sector to harness the innovation, commercial and management expertise and the efficiencies of the private sector to design, build, finance, operate and maintain state facilities. PPPs will 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. In ensuring departments obtain the best value for money from public capital investment, PPPs are subject to the same robust and rigorous project appraisal process as traditionally procured projects. It is essential that projects are judged on their merits and in cases where PPPs can be demonstrated to give better value for money than traditional procurement, it is appropriate that they should be selected on that basis. PPP! PPPP, Minister, this government is spearheading a substantial shift in how the State delivers building projects in third-level education. PPP, essentially a public-private partnership, a misleading name for an agreement where a developer delivers a project and government agrees to pay, for 25 years, for the right to use the building. years for the right to use the building. It is essentially built to rent for government, good for the developer but bad for the public. We have not seen their use in third level education since the last time Fianna Fáil were in government. Now all new buildings of technological universities and IoTs are planned to be delivered exclusively through public-private partnership contracts. Huge questions remain for citizens about the value for money, accountability and the long-term impact on public finances. It also relates to the privatisation of public services. These contracts give rights to provide the related services which include building maintenance, cleaning, security, ground maintenance and IT support. Thank you very much, Deputy. I think it is important to say that the PPP method should only be used where value for money can be demonstrated. It is an option, it is one option in relation to the possible financing of a range of projects. There are currently 11 higher education projects in the pipeline for delivery by way of PPP. They are split into two bundles and you probably have all of the details but I am happy to provide them separately to you if necessary. It is important as well to make the point that if you are comparing the cost of the PPP with the exchequer funded option of delivering a capital project you do have to take account of the fact that the payments made by the exchequer over the life of the PPP contract include not just the construction cost but also the cost of finance, operations and maintenance and indeed the overall life cycle. So it is one option but it should only be used where value for money can clearly be demonstrated and where the interests of taxpayers are protected. But there are many examples of pieces of infrastructure that probably would not exist today if we did not choose the PPP option. You will remember us discussing in the Finance Committee the Carillion and what that cost people. This has huge implications for the finances for the State for the next 25 years. One contract signed in 2020 was valued at almost £600 million. These contracts typically mean that the public pay a lot for very little control. We cannot even have a real debate due to the complete lack of transparency and accountability. I cannot assess the estimate of the cost of any of the eleven projects due to the commercial sensitivity. The value of the contract is only made public after they are concluded. Even then the Government refuses to provide an estimate of how much it would cost to just a building under a normal contract. That information is withheld for five years, long enough for any Government to avoid real accountability. Accountability and transparency is at the core of all of this and value for money, Minister. We have seen what has happened before, in the case of Carillion and in other cases. We are not getting value for money with many of these projects and we do not have the transparency that is required. Minister, to conclude. I want to assure you that the appraisal process is rigorous and I think it is worth putting the figures in context. The annual cost of the unitary payment charges in respect of operational PPPs was approximately €320 million in 2020, at a time when the State's public capital investment programme was of the order of €10 billion. The contracted capital value of all PPPs in operation or construction is over €5 billion. We have now committed to a public capital investment programme out to 2030 of €165 billion. I agree with you in relation to the need for accountability and transparency about the metrics and the methodology and the criteria used to assess what is the best channel open to public bodies to deliver important pieces of infrastructure. As you know, technological universities have now been given the power to borrow for the first time for capital investment purposes and I think that is important in progress as well. Thank you.