Schools Building Projects

Tuesday, 9 November 2010

Seanad Éireann Debate
Vol. 205 No. 9

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Senator Denis O’Donovan: Information on Dennis O'Donovan Zoom on Dennis O'Donovan I welcome the Minister of State, Deputy Seán Haughey, and thank him for replying to this Adjournment matter, which concerns the current situation regarding the construction of two schools in Bantry, a new gaelscoil on a greenfield site and a new community school, or community college as some call it.

This is a pet project for me. Approximately 15 years ago we eventually persuaded the powers-that-be to combine the two existing second level schools and construct a new school in Bantry, to construct a new gaelscoil on the site and to provide much needed sports facilities. This was to be provided under a public private partnership, PPP, and construction commenced six months ago. Significant progress has been made. I inspected the site at the start of construction and two or three times during the course of construction. It has been advanced considerably. However, the High Court has appointed an examiner to one of the two companies that won this contract, Pierse Construction.

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My concern, and that of the community, is that this job might be delayed for a considerable period. There is also concern on the part of the labourers working on the project, the tradesmen, the suppliers of machinery, concrete and other materials and all others involved that they might be left high and dry. At one stage, the site appeared to be closed for a few days. There is another company involved in the construction and I am sure it is bonded. I am acting as devil’s advocate and asking the Minister of State to clarify the position and to ensure the project will be completed in so far as possible within the timeframe envisaged. I am not seeking special treatment. If it is delayed for a month or two, so be it. It is important the workers and suppliers of materials would be paid, that a bond would be in place and that the work would proceed as normal, especially given that a partner development company was involved in the very difficult and technical application in response to the advertisement in the EU Journal for the tendering process.

I hope my fears are unfounded and that the Minister can allay them. I might wish to comment further at the conclusion of his response but it will be very brief.

Minister of State at the Department of Education and Skills (Deputy Seán Haughey): Information on Seán Haughey Zoom on Seán Haughey I am taking this Adjournment matter on behalf of my colleague, the Tánaiste and Minister for Education and Skills, Deputy Mary Coughlan. I thank the Senator for raising this matter as it [563]gives me the opportunity to outline to the House details of the Department’s public private partnership programme for the delivery of primary and post-primary schools as well as the delivery of third level projects.

Modernising facilities in our existing building stock as well as the need to respond to emerging needs in areas of rapid population growth is a significant challenge. The Government has shown a consistent determination to improve the condition of our school buildings and to ensure the appropriate facilities are in place to enable the implementation of a broad and balanced curriculum. Since 1999, the Department of Education and Skills has procured projects via public private partnerships, PPPs, and currently has four separate PPP contracts in operation. These contracts cover the five pilot schools, the National Maritime College, the Cork School of Music and schools bundle 1. The Department’s current public private partnership programme was announced in 2005 and includes four primary schools, 23 post-primary schools and 16 third level projects in nine institutions. Currently, the Department is progressing a total of two primary, 12 post-primary schools and 16 third level projects through the various stages of procurement. All these projects are scheduled for delivery in the next four years.

Under the public private partnership model, the schools and third level projects are designed, built, financed and maintained by the PPP company. The contract between the company and the Department will last for 25 years after completion or construction. Unlike traditional procurement where the State provides the capital funding for the project, under the PPP model the PPP company provides private financing, primarily in the form of bank borrowing from private financial institutions. The Department does not make any payments to the PPP company until after the schools have been completed. It is at this point that the Department commences payment of a monthly unitary payment to the PPP company over the course of the 25-year contract. A portion of this monthly payment covers the cost of construction as well as the successful delivery of specific services by the PPP company.

The Department is responsible for all aspects of the assessment and approval of project bundles, including the decision to procure as a public private partnership, the setting of project budgets, output specifications and other service requirements, and agreeing the public sector benchmark. The National Development Finance Agency is responsible for procuring the project and handing the bundles back to the Department after construction is complete and the schools are operational.

The first bundle of post-primary schools was announced in November 2005 comprising Banagher College-Coláiste na Sionna, Gallen community school, Ferbane, Scoil Chríost Rí, Portlaoise, and St. Mary’s CBS, Portlaoise. The contract for the delivery of the first bundle was signed by the National Development Finance Agency on behalf of the Department with Macquarie Partnerships for Ireland in March 2009. The four schools in the first bundle became operational in September 2010. The second bundle of primary and post-primary projects, to which the Senator refers, was announced in November 2006. This bundle comprises Bantry community college and Gaelscoil Bheanntraí, County Cork, Kildare town community school, Abbeyfeale community college, Athboy community school, and Wicklow town community college. The contract for the delivery of these six schools was signed in early June 2010 with Macquarie Partnerships for Ireland and construction works on all six schools commenced immediately.

The third bundle of primary and post-primary schools was announced in December 2008. This bundle comprises Coláiste Ailigh, Letterkenny, County Donegal, Ballinamore community school, County Leitrim Doughiska post-primary and Doughiska primary school, County Galway a post-primary school in Gorey, County Wexford, Tramore secondary school, County Waterford Athlone community college, County Westmeath and a community school in Doon, [564]County Limerick. This bundle was handed over the National Development Finance Agency in August 2010 and is currently in procurement. The two new schools in Bantry are included in the school bundle of primary and post-primary schools to be delivered under the Department’s PPP programme. Macquarie Partnerships for Ireland was awarded the contract and the construction company concerned was contracted to build four of the six schools in this bundle, Bantry community college, Gaelscoil Bheanntraí, Kildare town community school and Athboy community school, while another construction company is contracted to building the other two schools, Wicklow town community college and Abbeyfeale community college.

The contract signed with Macquarie Partnerships for Ireland provides that should there be any difficulties with regard to a contractor being unable to continue with the delivery of the schools, the responsibility falls to the consortium to make alternative arrangements to deliver the schools. The building company with responsibility for the construction of four of the schools went into examinership on 12 October 2010 and subsequently into liquidation. The National Development Finance Agency has been in constant contact with the consortium, Macquarie Partnerships for Ireland, on this matter and arrangements are in place to provide for the continuation of the construction of all the schools. The second construction company has taken over full management of all four sites as is required under the provisions of the construction joint venture contract in such circumstances. The PPP company is confident there will not be any significant delay to the delivery of the six schools as a result of this matter. The responsibility for the management of issues which may arise in connection with the delivery of the schools in this bundle as result of the liquidation continues to rest with Macquarie Partnerships for Ireland.

I thank the Senator again for giving me the opportunity of outlining the current position on the delivery of the second bundle of primary and post-primary PPP projects.

Senator Denis O’Donovan: Information on Dennis O'Donovan Zoom on Dennis O'Donovan I thank the Minister of State for his response, which has covered the areas of concern. I am reassured the situation as outlined will ensure the projects will be completed as far as possible within the approximate timeframe originally envisaged.

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