Public-private partnership: Major changes to public-private partnership rules will be announced by the Government in the Budget, following serious Cabinet concern about the lack of progress made on key projects. Mark Hennessy, Political Correspondent, reports.
Publishing a five-year programme last December, Mr Cowen's predecessor as Finance Minister, Mr Charlie McCreevy then believed that nearly €600 million worth of projects would be built next year by private companies in public-private partnerships.
"It is now clear that there will be a major shortfall on the 2005 public-private partnership component of the existing envelope," Mr Cowen said, adding that he would announce a new five-year programme next month. He added that he would make up some of the shortfall with money that was not spent in 2004.
This year, government departments failed to spend €320 million of the €5.5 billion capital expenditure budget allocated to them, though €250 million of the savings will be agreed upon for spending next year.
"When taking this into account, departments will have some €730 million additional cash for capital spend, or 14 per cent higher than in 2004," Mr Cowen said last night at the publication of the estimates.
Last night, IBEC's transport director, Mr Reg McCabe, said businesses want the Minister for Finance to set up a special PPP agency that would operate outside of the influence of the Department of Finance. During a recent meeting with Finance, IBEC bluntly made clear that it believed the Government's PPP programme is a mess, badly hindered by Finance's dislike of private sector involvement.
The Minister for Finance, Mr Cowen, heard sharp complaints from the IBEC delegation, led by Mr Jim Barry, the head of the employers' business group's public-private partnership committee.
Top Department officials, Mr Tom Considine and Mr David Doyle, and the chairman of the Office of Public Works, Mr Seán Benton, accompanied the Minister.
Businesses complain that the Department's rules are contradictory and unintelligible: "They keep going on about value-for-money, but they cannot define it for you," one senior source said last night.
The delays in carrying out PPP projects is causing serious concern to the Cabinet's infrastructure sub-committee, which is chaired by the Taoiseach, Mr Ahern. The sub-committee discussed the matter in recent weeks.
The other members of the sub-committee are the Minister for Finance, Mr Cowen, the Minister for Transport, Mr Cullen, the Minister for Environment and Local Government, Mr Roche, and the Tánaiste, Ms Harney.
Finance's dislike of PPPs has been hardened by the problems encountered with the proposed construction of the Cork School of Music due by a UK company, Jarvis - which is late and over budget.
Under the programme laid down by Mr McCreevy, €8 billion was to be spent on infrastructure between 2004 and 2008 by all Government Departments - €1.1 billion of which was to be covered by PPPs.
The Department of Finance has so far this year not cleared any PPP project, including a proposal to privately build two community nursing homes favoured by the Department of Health.
Finance argues that the nursing homes could be built by the State more cheaply, though supporters of the project disagree: "The State might be able to do so, but it hasn't done so," said one said last night.
The difficulties have been further compounded by the loss of key corporate finance staff from the National Development Finance Agency, which was set up initially by Mr McCreevy to raise off-balance sheet borrowing.
The body, which is part of the National Treasury Management Agency, is to hold a second round of interviews next week to fill the vacancies, said NDFA chief executive, Ms Anne Counihan.