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State Authorities (Public Private Partnership Arrangements) Bill, 2001: Report and Final Stages.

Wednesday, 6 February 2002

Dáil Éireann Debate
Vol. 547 No. 4

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An Ceann Comhairle: Information on Séamus Pattison Zoom on Séamus Pattison Amendments Nos. 1 and 2 are related and, by agreement, will be taken together.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I move amendment No. 1:

“In page 4, line 37, to delete “relating to an asset”.”

We had a discussion on Committee Stage regarding these two amendments, which I am sure the Minister of State will recall. The case that we are putting forward is that PPP arrangements should not be specifically asset-based. One could have a situation whereby PPP arrangements could be put in place in regard to services as well.

An example of that was the NCT, where the national car testing service is provided in a PPP type relationship and that is the provision of a service rather than goods. In that regard we were anxious that an amendment be made to this Bill to facilitate the broadening of the PPP theory that more arrangements could be entered into that might involve the provision of services as distinct from necessarily just assets. The Minister of State agreed on Committee Stage that he would have a look at this and come back to us on Report Stage so I am anxious to hear what he might have to say.

Minister of State at the Department of Finance (Mr. Cullen): Information on Martin Cullen Zoom on Martin Cullen When I spoke on amendment No. 1 during the Committee Stage debate, I explained that its effect, if accepted, would be to involve PPPs in the provision of a wider range of services than currently envisaged. This would run contrary to the thrust of this section of the Bill by widening the definition of services to be provided under a PPP. This would create future difficulties for stakeholders and take us into new territory to a wider range of service provision not related to this legislation or to PPPs at all.

I can confirm that the example of the NCT and of services in general which are not physically attached to an asset, given by Deputies McGrath and McDowell on Committee Stage, is not excluded by the legislation. This has been looked at in some detail. As I said on Committee stage, the definition of 'asset' contained in this section of the Bill is sufficiently wide to encompass the provision of services. Combined with the current wording of section 3 (1)(a)(iv) this ensures the widest feasible use for PPPs, while at the same time ensuring an identifiable limit.

I am again opposing the amendment. With regard to amendment No. 2, I am advised it would have the same effect as the previous proposed amendment. I am quite happy that the point being raised is more than catered for in the Bill.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell We had a very lengthy discussion of this on Committee Stage and I do not [1404] want to go over it again. I have some difficulty understanding the explanation of the Minister of State because the definition of ‘asset' given in the Bill is unclear. It says it includes an existing asset or an asset to be provided under a public private partnership arrangement. That is not a definition at all. It certainly does not define the word asset as I normally understand it; a good or a chattel – something tangible. I do not see how it can be said to include a service as there is no clear definition. The point is not a fundamental one in terms of the Bill so I will not push it.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen There has been lengthy discussion with all the providers in the partnership involved in this and that is the balance with which everybody was most happy, from the trade unions' point of view and that of IBEC and so on. There is an understanding that the guidelines will further amplify that.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath Based on the assurances given to us by the Minister of State and noting what he has said on Committee Stage and on Report Stage, that other aspects are covered and would not be prohibited, I am happy to withdraw this amendment.

Amendment, by leave, withdrawn.

Amendment Nos. 2 and 3 not moved.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I move amendment No. 4:

In page 5, between lines 36 and 37, to insert the following:

“(6) The Landlord and Tenant (Amendment) Act 1980 does not apply to leases entered into under section 3 (1)(d).”.

Amendment No. 4 was raised on Committee Stage. The Minister of State's response at that time indicated that there were some concerns about PPP arrangements and how the Landlord and Tenant (Amendment) Act, 1980, might impinge on those. The rights that might be granted in a PPP arrangement might well be able to be superseded by the provisions of that Act.

The Minister agreed that he would seek legal advice, indicate to us on Report Stage what that advice was and give us assurances that there would not be any difficulty arising. Based on his response we will decide on how to proceed.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell On Committee Stage we raised concerns that somebody who had a 20 or 30 year concession which involved the lease or a licence to use land could develop rights under existing landlord and tenant legislation where it was clearly not intended that they should. We had a detailed discussion on this on Committee Stage, some of it in private session, and the Minister of State accepted that there was a net point here which would have to be dealt with in landlord and tenant legislation.

[1405]I appreciate that the Minster of State cannot do that now but perhaps he could indicate to us that both he and the Department are satisfied that it will be possible in drawing up individual contracts to ensure that this sort of unintended legislative right will not actually arise.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen We had some lengthy discussion of this and since we met on Committee Stage and following on from that. As I stated then, the Minister for Justice, Equality and Law Reform is currently in the process of reviewing elements of landlord and tenant legislation. Accordingly, it would be premature, as well as inappropriate, to try and deal with this issue in this Bill. However, to reiterate a reply I gave to a question from Deputy McDowell, it is not possible to exclude the provisions of existing landlord and tenant legislation by way of specific contract. It should also be noted that this issue may not arise in all PPP situations and in any event it may also be possible when drawing up a contract to establish a relationship that would not be of the landlord and tenant variety. That is a key part of what I am saying.

I am advised, however, that careful conveyancing practice can be used to meet the needs of a PPP arrangement. An example of where this has been done is the contract recently signed by the Department of Education and Science for the provision of a bundle of five schools and the Deputy will be aware of this. The relationship established for the purpose of this contract was that of a licensee and licensor, rather than that of lessee and lessor. This is an issue to which some thought has been given within the central PPP unit of the Department of Finance. Relevant guidance material is in course of preparation by the unit to address this and other issues in relation to provision of PPP contracts. This guidance will issue to all State authorities in the near future. This is a complex legal question and I am advised that, while it needs to be dealt with – that is, I think, the net point on which we agree – once again, this Bill is not the appropriate vehicle for doing so. The question is wider than PPP and, consequently, needs to be dealt with in that context, that is, within the scope of the landlord and tenant legislation. It is possible, through careful conveyancing, to ensure the landlord and tenant relationship is not created. That is the net position I have taken on the matter.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I am somewhat concerned by what the Minister of State has said. He has indicated very clearly that it will be a difficult legal point to address in relation to PPP and that there could well be difficulties unless it is done extremely carefully. I think he is also saying that one is stepping into uncharted waters and, because of that, he feels it will ultimately end up in the courts for decision. Perhaps my amendment may be a simplistic way of addressing the issue and the Minister of State has made the point that one cannot necessarily eliminate the rights [1406] under existing legislation in a subsequent Bill. Is there any other way it can be addressed in this Bill? Huge contracts will be entered into in future and one which is imminent is the Kilcock to Kinnegad bypass, for which the estimates are running close to €200 million. If legal difficulties are going to arise on such contracts, threshing it out in court will be a small proportion of the cost but it could have severe consequences for Government. In that context, I am disappointed by what the Minister of State has said. I would like to see something more definite coming forward. Perhaps he will respond further with a more definite statement on this matter.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell This is a very fundamental issue, though I accept we are unlikely to resolve it here today. In essence, it is part of a PPP arrangement that we are not looking to confer tenants' rights in almost all cases on operators. We are looking to have operators maintain a road, the management of a school or a water facility. We are not looking to make them tenants of the State. I know from my relatively limited experience in these matters that it is open to the courts to construe what one would like to think of as a licence arrangement as, in fact, creating a tenancy. Even very careful conveyancing can easily fall short of the mark. I do think it will be necessary to explicitly address this issue in the context of landlord and tenant legislation, to exclude arrangements that are defined as PPP arrangements in this Bill from existing landlord and tenant rights. I appreciate the Minister of State is not going to do that now but it is important that we flag it up and that the matter is dealt with before we learn, by hard experience that it is a problem.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen I do not disagree with the Deputies and I have spent some time, with my Department officials, looking at the issue. An important point has been raised and if it was possible to deal with it through this Bill, I would have done so. However, I cannot supersede the landlord and tenant legislation and the Deputy, as a lawyer, would understand that better than I. For that reason, I have been in consultation with my colleague, the Minister for Justice, Equality and Law Reform. It is a complex issue and I fully agree it needs to be addressed with some urgency. It has implications wider than the PPP process and of course the proper forum to deal with it is through the landlord and tenant legislation. I want this matter dealt with as quickly as possible but, given the complexity of the issue and the fundamental points that have been made, I cannot deal with it outside the framework of the landlord and tenant legislation. In the meantime, as I have outlined, where projects are going ahead, we have been as careful as we possibly can in terms of those arrangements. I have given one example of the licence arrangement by the Department of Education and Science in relation to the project involving five schools. I take Deputy McDowell's [1407] point that the matter could be eventually in the hands of the courts, where a judge might decide that was not strong enough and that, in his view, it was a lessor-lessee arrangement. The fundamental point made by the Deputies has to be dealt with, it does have implications and we are trying to deal with it through the landlord and tenant legislation.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath Everybody has expressed concern about this issue. Noting that concern, does the Minister of State not agree he should ask Government to bring forward the promised landlord and tenant Bill as quickly as possible to address those issues within this session so that the contracts currently being drawn up can be covered by this? The tendering procedure for the new N4 will close next week and that implies moving very quickly into a contract situation. Unless the Bill to amend the Landlord and Tenant Act is brought forward, it will be too late as the contracts will already have been drawn up and signed. Is it possible for Government to bring forward that other Bill very quickly to address this issue?

An Ceann Comhairle: Information on Séamus Pattison Zoom on Séamus Pattison Is the amendment being pressed?

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath Based on what the Minister of State has told us, it is a major problem. I think my amendment does not address the problem and, in that context, I am happy to withdraw it. However, it is important that the Minister of State would give a commitment to ask Government to bring forward the proposed new landlord and tenant Bill so that this issue can be addressed as quickly as possible.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen I do not wish to create any doubt in the House about the veracity of what we are doing with regard to contracts that are in place. There is an issue which the Deputies have rightly raised and which, as I have stated, will be dealt with in the landlord and tenant legislation. I am urging the Minister for Justice, Equality and Law Reform to bring forward that legislation to deal with this matter as quickly as possible. To date, we have good experience with the contracts that are in place and it is clear that all parties to them are satisfied. However, as the Deputies have said, we need to have certainty in the context of the landlord and tenant legislation and I urge the Minister for Justice, Equality and Law Reform to bring forward that Bill.

Amendment, by leave, withdrawn.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I move amendment No. 5:

In page 6, between lines 15 and 16, to insert the following:

“(2) A Ministerial Certificate will be issued if an appropriate Minister has not objected to a public private partnership arrangement of [1408] direct agreement within 3 months of being formally notified.”.

This matter also arose on Committee Stage and at that time the Minister of State indicated that this provision was not necessary – that it was a “belt and braces” arrangement to copperfasten what was already contained in the Bill. He said he would look at it again. Has he had an opportunity to do so? Perhaps he would give the House the benefit of that wisdom.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen I have considered the matter and I have to repeat what I said on Committee Stage – that this provision is not necessary. A ministerial certificate is not required to establish a PPP. An arrangement or indirect agreement is either a PPP or it is not. The proposed amendment would introduce uncertainty which would be difficult to remove by this legislation. The purpose of this Bill is to give certainty as to what legally constitutes PPP. The possibility is that, in certain cases, there would be a waiting period and a necessity for a certificate could undermine the actual purpose of the Bill. I am happy to assure the Deputy on this point. I understand where he is coming from but, in practice, the amendment would have the opposite effect to what he is trying to achieve.

Amendment, by leave, withdrawn.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell I move amendment No. 6:

In page 6, between lines 37 and 38, to insert the following:

“(3) A person seconded or transferred to a company established under this section or as a result of an arrangement entered into under section 3, shall not receive less remuneration or be subject to less beneficial conditions of service than the remuneration to which that person was entitled and the conditions of service to which that person was subject prior to the secondment or transfer.”.

This is an important amendment and it reflects in some ways the concerns of individual trade unionists and workers within the public service about the PPP process. As the Minister of State is aware, there has been a high level debate in the past few years with the social partners involving Members of this House, the Government, the relevant unit in his Department and, more recently, units in other Departments. As a result of that debate, a code of practice has been agreed with the social partners which deals, among other things, with this issue.

This is a critical issue for workers employed by local authorities, health boards or the State. They want to ensure that if they end up working for a private company, a consortium or a joint venture company, their conditions of employment and pension rights will be no worse than they would have been had they remained directly in the employ of the State.

[1409]Much of this debate is informed by what happened in the United Kingdom where the PFI initiative in the 1980s was deliberately used by the Tory Government then in power to casualise labour and substitute private investment for direct public investment. The trade union movement in the UK feels its members were greatly disadvantaged as a result of the operation of the PFI initiative. That has slowly but surely changed over time, but it was certainly the initial experience in the 1980s.

It is important, in terms of trying to build a strong as opposed to a superficial consensus on this issue, that we should offer the reassurances required by individual union representatives and, to some extent, congress. I am aware the Minister of State – his senior colleague may also have done so – has met representatives of congress in recent times and discussed this issue with them. He has indicated, at least privately, that he is willing to consider a legislative response if he deems such action necessary. I assume he will not accept the amendment and I invite him to give an assurance on the record of the House that, if necessary, he will proceed to put in place a legislative response. I also invite him to give whatever vocal assurances he can to workers, trade union members and people who work within the public service that they will not be transferred, against their will, into the employ of joint venture or private companies on conditions that will be less favourable than those which currently apply to them.

Perhaps the Minister of State will also address the point raised on Committee Stage, namely, the transfer of the undertakings directive from Brussels which was agreed approximately six months ago. Will he indicate whether it is his understanding that pensions, for example, will be covered by that directive? When is it intended the directive will become law in Ireland?

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen We have spent an enormous amount of time dealing with this issue, even since Committee Stage, and further high level discussions have taken place with the different parties involved. The debate was quite lengthy and an absolute understanding of where we are going was reached. In my opinion, we have arrived at that point.

I have already spoken on this issue on several occasions, most recently on Committee Stage. I repeat that the Government fully accepts that employees who transfer to a company established under PPP arrangements should have no less beneficial remuneration and terms and conditions of service than those to which they were previously entitled. The inclusion of a provision to this effect in the framework for public private partnerships, which was agreed with the social partners and launched by the Minister for Finance last November, is a measure of the Government's commitment to addressing this issue. Furthermore, the Government is also fully committed to giving legislative effect, wherever it considers this is [1410] necessary, to its commitment to the employees in question. The statutory framework for the treatment of these employees is in the course of being developed and in the interim it would be premature, as well as inappropriate, to attempt to deal with it in the type of enabling legislation represented by the Bill.

Having discussed this matter at length with the social partners, I am of the opinion that they want the bigger issue resolved and not merely the specific issue with which the amendment deals. A commitment to resolve the larger issue, which covers a range of areas, is important to them.

I explained on Committee Stage that I simply cannot accept the proposal, as resubmitted here by Deputy McDowell, to amend the Bill. I assure the House that very careful consideration has been given to this matter. Since the debate on Committee Stage I have taken further legal advice and have consulted with a number of parties who are centrally involved in this issue, including representatives of the trade union movement. It is not possible to accept this amendment for reasons I will now outline.

The current Bill is not the appropriate instrument in which to deal with this issue. This point was well made by Deputy McDowell on Committee Stage when he acknowledged that this concern of the trade union movement is not dealt with in the Bill. I welcome his appreciation of the difficulty posed by trying to deal with this issue in enabling legislation of such narrow scope. I am not in disagreement with the aim of his amendment, it is simply that this is not the correct vehicle for dealing with it.

With regard to terms and conditions of employment and remuneration, there is already an extensive body of law and regulation in place which is currently in the course of supplementation. These issues fall properly to be dealt with within that legislation, in the context of our existing industrial relations machinery and in the context of EU development.

As the Deputy may also be aware, my colleague, the Tánaiste and Minister for Enterprise, Trade and Employment, is currently in discussion with the social partners on the implementation in law in this area and it would be prudent to await the outcome of same. We have had discussions with her Department with regard to the overall issue on foot of the important points raised on Committee Stage. The social partners are aware of this and are also involved in direct discussions on the wider issue.

I wish in particular to stress, and take this opportunity to formally put on the record of the House, that S.I. 306/1980 and S.I. 487/2000, which give effect to the EU's acquired rights directives, will apply to PPPs. Furthermore, any subsequent primary or secondary legislation on this issue will also be applicable to PPPs.

I reiterate the Government's commitment to delivering an appropriate framework for dealing with the issues of transferred employees. In the meantime, the central policy unit of my Depart[1411] ment will address this and other key issues in the interim guidance which will issue to State authorities on the overall operation of PPPs. It is vital for the success of the PPP process that best practice is applied across a range of issues, including human resources.

In proposing this amendment on Committee Stage, Deputy McDowell quoted the experience of employees involved in PFI projects in the UK. As the Deputy knows, the PPP process in Ireland is substantially different in many respects from the PFI process in the UK and particularly so in the case of transferring staff. The experience of PFI in the UK has led many public authorities and bodies in that country to adopt a dramatic change in approach and move towards the model being operated in Ireland. A major factor in the success to date of PPP in this country, as is widely acknowledged, is the partnership approach we have adopted which ensures the interest of all those involved in PPP projects are catered for by consensus.

I hope the detailed points I have placed on record outline the precise current position in respect of this issue.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell I am grateful to the Minister of State for placing so much information on record. He went some distance towards meeting people's concerns. However, I invite him to be more specific on one point. In the guidelines his Department will issue to the various bodies under its aegis, will it ensure – pending the introduction of any legislative framework that will be put in place – that no workers are transferred, contrary to their will, to employment where levels of remuneration and conditions are less favourable?

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen This is an important issue and our experience to date in respect of it has been extremely positive. It would clearly not be in the interests of any of the parties involved, particularly the State, to end up in a situation such as that about which the Deputy is concerned because it would become impossible to deliver individual projects. The social partners and the Government are fully aware of that. As already stated, discussions are taking place.

I would like the directive to which the Deputy referred to be implemented, but a decision on that matter is not my responsibility. Discussions are also taking place on that matter. As the Deputy stated on Committee Stage, one would have thought the directive might have been implemented last year. The delay has been caused by the complexity of the discussions between the partners involved and the difficulty in reaching a conclusion. I am satisfied there is an intent on all sides to resolve this fundamental issue, but it is not for me to resolve it in the context of this legislation. I reiterate that the legislation, when introduced, will apply directly to PPPs. I do not believe I made it clear to the Deputy that, in the [1412] interim, we will deal with this issue in the guidance.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell The Minister of State did not give me the assurance the trade union movement seeks, that no workers will be transferred into less remunerative employment in the interim.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen It will be set down in the guidance in agreement with the social partners, who are fully aware of this. It is not for me to speak on behalf of anybody else, but my sense is that the real thrust of the social partners in their discussions, particularly the Irish Congress of Trade Unions, was to have the broad issue dealt with. They accept that I cannot deal with it specifically here and to do so might undermine it. The aim was to emphasise across the spectrum that this is needed, and I have no disagreement with that.

Amendment, by leave, withdrawn.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I move amendment No. 7:

In page 7, between lines 34 and 35, to insert the following:

“10.–The Minister for Finance will report to the Select Committee on Finance and the Public Service on a six-monthly basis on the operation of this Act.”.

We discussed this amendment on Committee Stage. It deals with accountability, the need for the Minister to be accountable to the House for what happens in the context of public private partnership arrangements and for a mechanism whereby they can be reviewed and commented upon by Members of this House on a regular basis. The committee procedure in this House is ideal for undertaking such work. In that regard we felt it important that the Minister should be compelled to report to the Select Committee on Finance and the Public Service on a six-monthly basis. Public private partnership arrangements are relatively new in Ireland. They will involve new procedures and arrangements for many public services. It is important, therefore, that the House is kept abreast of how they are developing and what is happening.

Will the Minister, perhaps today, give us a brief description of how PPP arrangements will work and what procedures will be in place for reviewing and reporting on what is happening in relation to them. Let us take the example of the proposed N4 from Kilcock to Kinnegad, which I mentioned earlier. It is assumed that the price of that will be in the region of €200 million. Will the Minister give us a rough idea of the proportion of capital that will come from State funds for projects such as that and the basis on which such capital investment will be made by the State? Will it be based on a guaranteed return for the private company that enters into the agreement? For example, if it is decided to charge a toll of £1.60 or €1.60 and that is based on a certain number of cars using the road, what happens if that target is [1413] not met and the returns expected on the tolls are not achieved? Will the State have to pay the additional funds?

The proposed bypass of Fermoy is a case in point. We have all received literature about it. It is now expected that a toll will be charged for using that bypass. The calculations were based on a throughput of 20,000 vehicles per day travelling from Fermoy to Cork on that road. Now the number of cars expected to use the road has diminished considerably because of resistance around Fermoy to paying a toll. In that case, will it be the private end of the partnership that will have to pick up the tab for the reduced number of vehicles or will the contract be so tight that the State will have to pick up the tab? If that is the case, is there any risk for the private investors?

The toll bridge on the M50 has made enormous profits. The company involved there entered into an agreement to build a bridge and operate it for a certain length of time, which comes to an end fairly soon. It made enormous profits and is now building a second bridge to enhance the situation there and, it is hoped, improve the flow of traffic. Again it will have a contract for several years. It is interesting to note that in the run-up to Christmas it cost 80p to cross the toll bridge. Shortly before Christmas that was increased to £1 and now it is €1.30. The company cannot be accused of increasing the fare because of the euro. I would say it got in just before the euro was introduced and imposed a very substantial increase in the toll in anticipation of a review in the context of the euro. That also begs the question in relation to a point made by Deputy McDowell in the course of debate on the Finance Bill last year about whether a reduction in VAT from 21% to 20% would be passed on. In the event, the reduction was not passed on at places such as toll bridges and car parks at Dublin Airport, and the Minister for Finance, Deputy McCreevy, in his wisdom perhaps, put the VAT charge back up to 21% this year.

People are concerned about how well these matters will be policed in the future. How can we be assured that a toll that starts out at €1.60 on the road from Kinnegad to Dublin will be kept within reasonable limits and will not escalate at a tremendous rate? People in that area, in Kinnegad, Rochfortbridge and Mullingar, are commuting on a regular basis. If toll roads are in place it will become very expensive to work in Dublin and that will have a hugely detrimental effect on those hinterlands. I wonder what the Minister has to say about that.

This amendment deals with accountability and the ability of the select committee to hear from the Minister on a regular basis on how this Act is working, how it is affecting the Exchequer and the taxpayer and the possibility of input from Members on how it is working. We are anxious that such a procedure be formally in place and that it not be just an ad hoc arrangement.

[1414]Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell There are several different levels of accountability that we need to address. One relates to the process as it is rolled out over the next two or three years. It seems clear that public private partnership arrangements will take up a greater part of the infrastructural projects rolled out in recent years. If the recent Exchequer returns for the month of January are anything to go by, the days of large Exchequer surpluses which could directly fund many capital projects are, at least for the moment, no longer with us. Clearly we will see more PPP arrangements in the next few years than we might otherwise have done. The Minister has acknowledged that to do this – this strain has been running through our entire debate at various stages here – will require a framework and guidelines at different levels both within line Departments and in other public authorities, between the social partners and so on. There will be a need for some supervision there, which I am sure the Minister acknowledges and which can easily be achieved by virtue of the Minister or other line Ministers attending various committees of the House.

A greater difficulty arises in relation to individual projects. There is obviously a danger that once a project is in place it will effectively disappear off the radarscope altogether and we will not hear of it again. Whenever a question is raised we will be told that it is a PPP arrangement and, therefore, there is no direct accountability on the part of the Minister to the House. That means that individual Members of the House are not in a position to query anything. Clearly, these are projects that will involve a stream of income into the State and, doubtless, money going from the State to pay the concessionaire over a period of years. The Minister indicated during Committee Stage that the Comptroller and Auditor General would still have functions in relation to that. I invite him to repeat that because I was not totally clear about what was said on Committee Stage.

However, beyond the competence of the Comptroller and Auditor General to look at those payments, is there accountability to the House or to individual committees on the part of the Minister in relation to those payments? If there is accountability in relation to the payments, there can be some sort of supervisory role in relation to the contract and to the workings of a given road project. There is a need to ensure that we still have some focus on accountability for particular projects and that we do not lose all control over them once a licence agreement is signed.

Mr. Stanton: Information on David Stanton Zoom on David Stanton I support the amendment. In my constituency at Fermoy there is a welcome proposal to bypass the town. However, there is also a proposal to establish a toll plaza at Rathcormack. This is causing many problems for people in the area and is a form of double taxation. The issue of accountability has to be taken into account. Who will account for the money that will be taken in? Is it an open-ended situation with [1415] regard to time? The practicality of the situation means that people may avoid the toll and drive through the town, which will defeat the purpose of the bypass. It is important that we have accountability and this is a good amendment.

Members often talk about the democratic process. The citizens, who are sovereign after all, are concerned that bureaucracy is getting further and further away. Many Members on all sides have voiced the concern that we do not seem able to interact with many of the agencies involved. On writing to them, they do not write back; on telephoning them, they will not return calls; and if one puts down a question in the House to a Minister, one is told the Minister does not have responsibility in that area. It is no surprise that people are apathetic, annoyed and are not voting. They are voting for fringe candidates, as is their right. It is up to the Government to rein this situation in. There is a small opportunity to do something about the situation with this amendment.

State agencies should be accountable, at least for information purposes, to Members of this House and to the citizens. That is not happening and it is causing annoyance and anger. Members on all sides have voiced opinions on this but I have seen no action taken. The Minister should tell us whether the Government plans to do something about this so that at least this House will be treated with an amount of respect when Members contact such bodies. The Minister should let us know his plans.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen The debate has gone way beyond the scope of the amendment but I will try to deal with all issues raised. As I said on Committee Stage, I cannot accept the proposed amendment. While I have no disagreement with the principle of accountability, I cannot with good reason accept this proposal. This Bill is simply enabling legislation to ensure that the listed State authorities have the power to enter into PPP arrangements. It is not intended to deal with reporting arrangements for public private partnerships. These issues will be dealt with under existing provisions for Government accounting and financial procedures. Furthermore, the central PPP policy unit of my Department is preparing policy guidelines for the conduct of PPP arrangements which will make provision for reporting and accountability of public private partnerships.

I have taken on board the comments made by Deputies McGrath, McDowell and others with whom I had no disagreement on Committee Stage on this matter. I agree there should be a mechanism to allow the Dáil and its committees to receive updates on what is happening. In the guidance documents, which as a result of discussions are being prepared by the central PPP unit of my Department, I have arranged to introduce relevant reporting and accounting procedures. As Deputies know, all Ministers can be called to committees at any stage with regard to any issue. That is becoming much more common. [1416] I confirm to Deputy McDowell the role of the Comptroller and Auditor General in this. There is no question about that.

The Deputies addressed wider issues and I understand the concerns about road projects such as those at Kilcock, Kinnegad, Fermoy and elsewhere. While the Deputies will appreciate that I cannot go into the details of individual contracts at this stage, it is the policy of the Government that road tolls be part of PPPs but that an alternative non-tolled route would be available in every case. Also, it is not intended to toll existing routes. I have a similar problem to other Deputies in my constituency at Waterford where there is a substantial bypass. That is not specifically for people living close to the city and I do not see them using the toll road on every occasion. There are obvious occasions when they will use it but it will not be convenient on other occasions.

Toll charges are an integral part of the toll scheme determined by the National Roads Authority. The benefits of congestion-free, high class roads and shorter journey times must offset the cost of toll charges. Many who have travelled on the continent come home merrily saying how great it was to be able to get from A to B. They believe it was the best way to travel despite having to pay for the service. It is the same in Ireland. The notion that it is compulsory to travel on the bypass and pay the toll is wrong. It will clearly be cost-beneficial for those using the toll roads in terms of time saved and transport costs lowered.

In an overall sense, the pilot schemes in the PPP process are part of a learning process for us. I am not saying everything is absolutely perfect. We will learn as we develop the system. However, I am confident that the basis on which we are starting in the PPP process, and the way that we have approached it with the social partners and others involved, give us the best possible opportunity and is the approach we should take. We have learned from the wrong direction taken in the UK with PFIs, something we would not touch at all. The UK is now coming much closer to our legislation. On balance, there is now real accountability and I am putting that into the guidelines also. I have gone a long way to meeting the requirements.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I welcome the Minister's commitment because the key to any of these programmes and arrangements will be accountability. We must account for taxpayers money and that has to be accountable to the people that matter. Surely, the Members of the House are the people who matter in this regard in that they can then report back to their constituents. I hope the kind of arrangements the Minister will put in place will be adequate to meet those needs. Perhaps, at a later stage, he might bring before the Joint Committee on Finance and the Public Service the proposals he has to insert into these arrangements so that we can discuss them. We [1417] are anxious that there be accountability in this regard.

As Members of this House, we have passed away accountability over the years to all sorts of bodies. The one that jumps at us and which we all talk about is the NRA. We set up the NRA; it was supposed to be the be-all and end-all of everything. What has happened? We have given the NRA complete control and authority over what is happening with our roads. We have no input into what it is doing. If we ask a Minister what is happening regarding the NRA and the roads, we are told the Minister is neither accountable nor responsible. The NRA does not come before committees to account for what it is doing, or it does so rarely. We need to claw back many of the areas of responsibility that we have given away. It is a mistake for Members not to be in a position to review such things and make their views felt.

On the basis that the Minister is prepared to come back before the committee with his proposals and the recommendations that he will build into the guidelines for these arrangements, I am prepared to withdraw the amendment.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen I am prepared to go before the committee to discuss the guidelines for this issue if it convenes a meeting.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell I am concerned about the accountability of specific projects. We appreciate that a contract cannot be changed unilaterally and that policy is not being made by this House when it comes to a contract for the operation of a particular road, but Members need access to information on how a contract is being operated, if a toll is changed or a bypass works in a particular way. I am not satisfied that such information will be available under the guidelines as they currently stand. I suspect that in two years we will be told that the Fermoy bypass is a PPP arrangement and outside the scope of the House and even the NRA in so far as its functions have been supplanted by the PPP and that, therefore, no information can be given. That is an undesirable situation and a mechanism must be put in place to ensure it does not happen.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen I agree with the broad thrust of what the Deputies are saying. Dáil Éireann has the ultimate responsibility in these matters. I subscribe to that view, not just in this context, but in many others. In some issues I would prefer to see accountability and control returned to Ministers; we rushed to distance ourselves from certain projects for the right reasons, but in some cases it was the wrong approach. As provision for accountability was not included, I am changing the approach to include provisions that had not been thought of before the discussion on Committee Stage. The new approach will strengthen this area and insert a reporting provision. That is a step forward.

[1418]There are two sides to this. We cannot go through the minutiae of a contract in terms of its commercial importance, legal position and primacy between the parties involved. In the broad thrust of the operation of a scheme, however, if there are any pitfalls, Ministers should be asked to examine the situation without getting into the fine detail of the contract.

The guidelines and the negotiations on any contract will work out the issues referred to by Deputy McGrath, particularly risk transfer. That is how PPPs have to be worked out – on a contract by contract basis within the framework. I envisage committees calling people before them to examine, not the fine detail of a contract, but its broad operation.

Amendment, by leave, withdrawn.

Bill received for final consideration.

Question proposed: “That the Bill do now pass.”

Minister of State at the Department of Finance (Mr. Cullen): Information on Martin Cullen Zoom on Martin Cullen As the Bill has passed through the House, the Government has taken on board the concerns expressed by a number of commentators. That is its strength. While some concerns I have outlined could not be addressed in the context of the legislation, the Government is committed to addressing key issues in other ways.

It is acknowledged that the questions of pay, pensions and terms and conditions of public sector employees transferring to PPP undertakings need to be fully addressed to which the Government is committed to doing. The Bill is enabling legislation. Its purpose is to ensure the State authorities listed in the Schedule to the Bill have the power to enter into PPP arrangements. There is already an extensive body of law and regulation concerning human resource issues which will be dealt with properly under that legislation and in the context of our existing industrial relations framework. It would not be good law to attempt to deal with them in this Bill.

The Bill can contribute to the creation of an environment that offers the private sector sufficient encouragement to avail of the many opportunities available in the State to participate in PPPs. Crucially, it also safeguards the interests of the Exchequer and, ultimately, those of the citizens. It is my firm belief that PPPs can offer a win-win situation for all concerned. I hope to see widespread support within the House for the Government's efforts to create the environment in which this new method of public procurement can flourish.

I thank those Members who have given so much thought to the Bill and been so constructive and helpful. I also thank my officials, the social partners and others involved for their constructive approach to the process. It has been most helpful.

[1419]Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath I welcome the passage of the Bill through to Dáil and hope it will be completed in the Seanad and passed into law quickly. The Minister of State has done a good job – he listened to the concerns of interested parties and has taken on board many of the amendments brought forward by us. That is how to do business – there is more than one font of knowledge, it comes from a variety areas and when pooled, the results are worthwhile. The Minister of State and his officials have been open to this and responsible in responding to us.

The Visitors Gallery contains many young people and in years to come as they travel in their cars along the various toll roads in the State—

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell Cursing.

Mr. McGrath: Information on Paul McGrath Zoom on Paul McGrath —they might remember the day they were in Leinster House and saw the rules being finalised to enable them to use toll roads. It is an historic occasion for them.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell I am not sure the Minister of State's own constituents in Waterford would be too happy that he is laying the basis for putting a toll on the Waterford bypass.

Mr. Cullen: Information on Martin Cullen Zoom on Martin Cullen If we build it, they will come.

Mr. McDowell: Information on Derek McDowell Zoom on Derek McDowell There has been some scepticism in the trade union movement and my party about the PPP process and it is important that we proceed with sensitivity. The essential project is the improvement and extension of public services and infrastructure. We do not want to supplant the management of existing public services or privatise them, we want to find a way in which additional and improved public services can be made available using the respective expertise of the State and the private sector.

It is important that we maintain a measure of perspective. We do not want to transfer excessive risk to the private sector, we should retain within the State sector risk appropriate to it. We should bear in mind that it is still the responsibility of Government and the House to ensure public services and infrastructure are delivered. We have the primary role and responsibility. While we should work with the private sector, where appropriate, we must not lose the run of ourselves, but remember that the primary duty is ours.

The PPP unit in the Department of Finance is now up and running and there is no doubt that its expertise will filter down to individual State authorities in years to come. A professional approach is being taken, one that is sensitive to the need to work in co-operation with the social partners. That is a good thing.

I thank the Minister of State and his officials for the amount of work they have put into the Bill. This is a permissive Bill that clears up any legal doubt there might have been about the propriety of PPPs. The proof of this pudding will be very much in the eating and while we should proceed [1420] with some ambition, we must also proceed with care and sensitivity in partnership with the social partners.

Question put and agreed to.


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