A pilot public-private partnership (PPP) project to build five schools, which could end up costing up to 13 per cent more than if the schools were built by the State, was strongly criticised at a meeting of the Oireachtas Public Accounts Committee yesterday.
In a discussion of last year's report by the Comptroller and Auditor General on the "value for money" offered by the pilot project, Michael Noonan, chair of the committee, said it "fell at the first fence" because it suffered from mixed objectives.
This meant there were too many variables when it came to assessing the cost-effectiveness of using a PPP to build, operate and maintain the five schools at Ballincollig, Clones, Dunmanway, Shannon and Tubbercurry. The committtee was still not getting precise answers to precise questions, Mr Noonan added.
In 2001 Jarvis Plc was apppointed to build, maintain and operate the five schools in return for a monthly payment from the Department over a period of 25 years.The buildings would then revert to public ownership.
But despite initial department estimates of a cost saving to the State of some 6 per cent, the report by the C and AG estimated that the final deal could end up costing between 8 and 13 per cent more than if the schools had been built by the State.
The entire project is now estimated to cost some €283 million over the 25-year term of the contract, although the report points out that the true value for money of the projects can only be established over the entire 25-year cycle.
However, the secretary general of the Department of Education, Bridget McManus, said the pilot PPP project had been an opportunity to "explore and test" what was a new procurement model.