PPPs contract details to stay secret

CONTRACTS to build and maintain schools and hospitals worth hundreds of millions of euro under the Government’s new Public Private Partnership system are to remain secret.

The Department of Finance has confirmed that details of agreements with private firms will not be disclosed because it says they are commercially sensitive.

While the full initial cost to the Exchequer is available, key details such as the firm’s obligation to maintain a building, their sources of financing and the cost for breaching a contract are not known.

The Government is using Public Private Partnerships (PPPs) for building a range of projects including roads, hospitals and water treatment plants.

The system works by making private firms shoulder much of the risk in a project which eventually comes into the hands of the State once the Government has paid for it over a number of years.

However, while the system is an established way of paying for major capital projects abroad, it has stoked up controversy over whether it delivers real value for money.

A construction company which is building five schools in partnership with the Government, for example, is at the centre of an investigation by the British authorities following accusations of corner-cutting and poor workmanship.

School principals in northern England have accused Jardis plc of shoddiness and routinely failing to meet deadlines in 20 schools it built.

Jardis has built schools in Tubbercurry, Co Sligo, Dunmanway, Co Cork, Clones, Co Monaghan, Ballincollig, Co Cork and Shannon as part of a €70 million public private partnership project.

Teachers in the schools, however, say they are extremely happy with them and say the buildings are of the highest standard.

The contract for the schools was awarded on the basis Jardis would design, build, finance and operate the schools for 25 years. After this period, once the State has fully paid for them, they will be controlled by the Government.

A spokesperson for the Department of Finance said the refusal to disclose the full details of a contract was not unusual and that contents of contracts of this type were generally not divulged.

In Britain the question of whether PPPs, or private finance initiatives as they are known, have provided value for money has been a subject of hot debate.

A left-leaning think tank, the Institute for Public Policy Research, found scant evidence they were providing increased value for money in the areas of health and education.

Overall, however, the British Government insists it has had a positive experience.