Cowen seeks to speed up PPP projects

THE CABINET has given the go-ahead for a plan to inject €3.6 billion of private funding in key investment projects to speed up the completion of schools, health facilities and other investment projects over the next four years.

Finance Minister Brian Cowen confirmed yesterday that this initiative is aimed at the speedy delivery of Public Private Partnerships (PPP) for key projects.

A PPP project is where the private sector designs, builds, finances and runs major projects for 25 years and the State repays them the cost over that period.

Under the new deal, responsibility for planning and building certain projects will be taken away from government departments and handed over to a central body the National Development Finance Agency (NDFA) which will be charged with delivering them faster.

"The Minister for Finance is confident that this new initiative will significantly accelerate the delivery of PPPs for key new capital infrastructure projects over coming years," a spokesman said.

Up to now, the NDFA advised the Government on how to finance projects, but its role will now be expanded to manage the procurement of PPP projects and bring them through completion.

The Government has planned that 10% of the €36 billion earmarked for public investment between 2005 and 2009 will come from PPP projects.

And it is expected that €3.6 billion will be generated from PPPs projects before the end of the decade.

To uptake of PPPs has been relatively slow to date and the Government hopes to speed this up by handing over responsibility for most of projects to the NDFA.

"A centre of expertise will be set up in the NDFA which will take over the responsibility for the procurement of all new PPP projects except roads and rail," Mr Cowen's spokesman added.

Initially, the NDFA will focus on progressing new projects suitable for PPP procurement in three key departments health, education and justice to avoid spreading resources too thinly.

These three departments are set to spend €7.7bn over the next four years, with €1.2bn due to come from PPP finance.

But after the initial phase, the Government will consider expanding this initiative to other Departments.

Mr Cowen's spokesman stressed that the Ministers for Health, Education and Justice will continue to take responsibility for all aspects of the assessment and approval of such projects including the decision to procure a project as a PPP and setting the budget.

The NDFA will then be responsible for procuring these projects within these limits and will be given extra staff to handle its expanded role.

The Agency will also be given two new board members to cope with its extra responsibility.