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Time to halt PPP madness - Ó Caoláin

31 January, 2007

Sinn Féin Dáil leader and Finance spokesperson Caoimhghín Ó Caoláin TD has said that it is time to stop the madness of the Government's continued use of Public Private Partnerships (PPPs). In a scathing attack on the PPP system Deputy Ó Caoláin characterised it as wasteful, undemocratic and inefficient, used purely for electoral optics. He was speaking ahead of opposing the National Development Finance Agency (Amendment) Bill 2006 in the Dáil this afternoon.

The Cavan-Monaghan TD said: "Sinn Féin is fundamentally opposed to the use of PPPs, which have an atrocious track record to date. We therefore cannot support any legislation which is designed to promote its increased use.

"Those who have examined the process have found that the economic case for these partnerships is highly questionable. There is a considerable body of international evidence that demonstrates the difficulties in executing successful procurement under PPP.

"Experts such as Dr. Eoin Reeves Director of the Privatisation and PPP Research Group at the University of Limerick have noted that "it is quite astonishing that the PPP programme is expanding so rapidly given that the experience with PPP in Ireland has been either unfavourable or untested".

"Notorious examples of PPPs include the case of the Cork School of Music and the grouped schools project. In 2004 the Comptroller and Auditor General published a value for money report into the construction of five second level schools, and for the maintenance and running of the school buildings over a 25-year PPP contract. It estimated that "the projected cost of the PPP deal was 8% to 13% higher than the projected cost of procuring and running the schools using the conventional approach". Now the Government is telling us that education is one of the main areas where the state will be using PPPs in the time ahead.

"The use of PPPs is recognised as a key factor in delaying the rolling out of the cancer strategy. It has emerged that a HSE board meeting was told in December that Minister Harney's plan to improve radiotherapy services state-wide by 2011 by way of public private partnership would not be in place until 2013 or 2014 if it was delivered by PPP.

"Interestingly in the past it has been stated by the Minister for Education that one of the advantages of the PPP model is that payment for schools would be phased over the contract period (approximately 25 years). What this actually means is that PPP is more attractive to government because they have a smaller impact on annual exchequer balances compared to conventional procurement where the bulk of the capital investment is accounted for in one year. Make no mistake about it, PPPs are being adopted because they are useful in terms of the optics of the public finances. The government is taking a short term view, primarily for their own selfish electoral reasons, that ignores the fact that the assets and services must still be paid for.

"PPPs are never the optimal means of financing public capital investment projects within the state sector. It is time to call a halt to this madness."


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