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Information Seminar on the Framework for Public Private Partnerships in Ireland. Alexander Hotel, Dublin 3 rd June 2003. Background . Government policy- provision of public infrastructure and services NESC- PPPs could: Support accelerated delivery of infrastructure
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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 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
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 • 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- 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
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
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 pppinfo@finance.gov.ie www.ppp.gov.ie