Download Framework for Public Private Partnership in Ireland

Information Seminar on the
Framework for Public Private
Partnerships in Ireland
Alexander Hotel, Dublin
3rd June 2003
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
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
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.
PPP’s are not privatization
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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
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
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
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
Building the foundation for PPPs
• Central PPP Unit- to lead, drive and co-ordinate
the PPP process
• PPP Units in - Department of Transport
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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
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
Sectors and Projects
• Roads and Transport • - 2nd Westlink Bridge
– N4 Kilcock/Kinnegad Motorway
– Luas Line A
• Environmental Services • - Dublin Waste to Energy Project
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
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
Irish PPPs different to UK PFI
• Drivers- UK severe downturn and deficits/ Ireland surpluses and
capacity constraints
• Approach- UK- no stakeholder/ union consultation- Irelandpartnership
• 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
Putting Partnership into Practice
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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
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
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)
Benefits of NDFA
• Increased Value for Money
• Application of commercial standards to public
procurement projects
• Underpinning PPP approach to public service
provision
• Centralising expertise
Next Steps
• Communications Strategy Implementation
• Policy Guidelines and Standards
• Market Development
• Training
• Review
Central PPP Unit
Department of Finance
[email protected]
www.ppp.gov.ie