Information Seminar on the Framework for Public Private Partnerships in Ireland

1. Information Seminar on the Framework for Public Private Partnerships in Ireland Alexander Hotel, Dublin 3rd June 2003

2. Background • Government policy- provision of public infrastructure and services • NESC- PPPs could: • Support accelerated delivery of infrastructure • Give long-term Value for Money • Ensure quality public services • Program for Prosperity and Fairness (PPF) • Framework for selecting and developing projects

3. What are PPPs? • Contractual arrangements between public and private sectors • Consistent with a broad range of possible partnership structures • Clear agreement on shared objectives • For delivery of public infrastructure/ services • Would have been provided via traditional public sector procurement

4. Key Characteristics • Shared responsibility for provision of infrastructure or services • Significant level of risk taken by the private sector • Long term commitments by public sector to provision of quality public services • Better value for money and optimal allocation of risk.

5. PPP No irrevocable transfer of assets Public authorities responsible for policy and levels of service Mechanism for delivering services Sharing risk/ reward PPP involves partnership Privatization Transfer of ownership of assets Public authorities responsible for regulation Authorities withdraw from service Transfer risk/ reward Privatization involves shareholder interest PPP’s are not privatization

6. Why PPP’s? • Pressure on infrastructure-especially transport • Higher environmental standards • History of private sector involvement in public projects- East and West Link • History of other partnerships - Health and Education sectors

7. Benefits of PPPs • Accelerated delivery of NDP and of individual projects • Risk transfer- allocation of risks to party best able to manage them • Exchange of skills and expertise between public and private sectors • Increased value for money over lifetime of projects

8. Building the foundation for PPPs • Cabinet Committee on Infrastructure and PPPs • Cross-Departmental Team • Interdepartmental PPP Group • Public Private Informal Advisory Group • (includes Employers, Trade Unions and Construction Industry) • Working Groups- Legal and Tax

9. Building the foundation for PPPs • Central PPP Unit- to lead, drive and co-ordinate the PPP process • PPP Units in - Department of Transport • Department of Environment and Local Government • Department of Education and Science • Department of Health and Children • Office of Public Works • National Roads Authority • Rail Procurement Authority • Courts Service

10. Pilot Approach to PPPs • Learning by doing - gain experience and learn lessons across a range of projects and sectors • Develop process speedily - • Concentration on economic infrastructure • An integral part of NDP

11. Sectors and Projects • Roads and Transport - • -2nd Westlink Bridge • N4 Kilcock/Kinnegad Motorway • Luas Line A • Environmental Services - • - Dublin Waste to Energy Project

12. Sectors and Projects (contd.) • Education Infrastructure • 5 Post Primary schools • National Maritime College Housing • Cherry Orchard and Mulhuddart affordable housing scheme Further project details on www.ppp.gov.ie

13. Consultation with Stakeholders • Stakeholders: employees, unions, public, users of assets and services, local community groups and sectoral interest groups • Communications Strategy • Existing structures/ agreements • Workplace partnerships • Pay and conditions in line with norms and national/ industry wide agreements

14. Irish PPPs different to UK PFI • Drivers- UK severe downturn and deficits/ Ireland surpluses and capacity constraints • Approach- UK- no stakeholder/ union consultation- Ireland- partnership • Accounting UK- off balance sheet- Ireland- transparent and Eurostat rules • Profits UK private sector gains from re-financing/ Ireland - gainsharing • Focus UK private sector perspective/ Ireland VFM for Exchequer

15. Putting Partnership into Practice • PPPs are an important part of modernization • Emphasis on quality public services • Collaborative styles • Development of consensus and understanding of objectives • Must be consistent with the objectives of social partnership

16. National Development Finance Agency (NDFA) • National Development Finance Agency Act, 2002 • NDFA established 1 January 2003 • Department of Finance Guidelines issued to all Government Departments – 14 February • Borrowing by NDFA subject to €5bn ceiling • Debt may be guaranteed by Minister for Finance

17. Main Functions • Advise State authorities in respect of financial aspects of infrastructure projects • Recommend to State authorities the optimal financing mechanisms for major capital projects • To provide financing directly for projects or through the creation of Special Purpose Companies (SPC’s)

18. Benefits of NDFA • Increased Value for Money • Application of commercial standards to public procurement projects • Underpinning PPP approach to public service provision • Centralising expertise

19. Next Steps • Communications Strategy Implementation • Policy Guidelines and Standards • Market Development • Training • Review

20. Central PPP Unit Department of Finance pppinfo@finance.gov.ie www.ppp.gov.ie