PAC Meeting | Nov 20, 2014

Courts Service

[Extract]
Deputy John Deasy: That is fair enough. May I ask Mr. Ryan about Waterford courthouse?

Mr. Brendan Ryan (CEO, Courts Service): Yes, of course.

Deputy John Deasy: My understanding is that the tender process is to be completed by March 2015.

Mr. Brendan Ryan: We are down to four companies that have bid for the bundle of seven
courthouses. By May 2015 we will be down to a single company and anticipate that contracts will be signed by October 2015 approximately, with site work to begin straight away. As the Deputy is aware, we are getting the site in Waterford and will have six courtrooms. I have the details to hand-----

Deputy John Deasy: Will Mr. Ryan give me an idea of the date of completion?

Mr. Brendan Ryan: Everything will be completed. All seven projects will start at the same time. To let the Deputy know what they are, they include the courthouses in Drogheda, Waterford, Wexford, Cork, Limerick, Letterkenny and Mullingar. We expect work on all of them to be finished by the start of 2017 approximately.

Deputy John Deasy: In 2017.

Mr. Brendan Ryan: Yes, it is in the interests of the public private partnership, PPP, developer to get things finished earlier. It is like the Newlands Cross project, on which work finished three months early. The developers started to be paid three months earlier; consequently, it is in the interests of the people concerned to finish early.

Deputy John Deasy: Mr. Ryan believes the work will be completed at the start of 2017.

Mr. Brendan Ryan: Yes, in the first few months of 2017.

Deputy John Deasy: It has just changed from the start of 2017 to some time in 2017.

Mr. Brendan Ryan: Yes, it depends on the particular project involved; some of them are small enough. For example, in Drogheda it is a greenfield site as such and the courthouse is small and will go up easily. The Deputy will appreciate that in Waterford there is a lot of conservation work involved. Moreover, it is an extension to an existing building in respect of which there are preservation issues; consequently, it will take a little longer to complete.
I was delighted when the courts bundle was included in the stimulus package announced by the Government couple of years ago. We have 12 projects outstanding. While we have carried out numerous building projects, 12 county towns remain and once these seven projects are completed, only five county town venues will remain to be dealt with. They will all be significant and efficient buildings; consequently, I was delighted when they were included in the stimulus package. I am also delighted that the work has proceeded to this extent. We have handed over the procurement process to the National Development Finance Agency which is working on it.

PAC Hearing | April 3, 2014

Mr Robert Watt, Secretary General Department of Public Expenditure & Reform, called and examined.

[Extract]
Deputy John Deasy:
First I’m going to ask you about what I regard as the largest, potentially, public-private partnership that this country has seen in many years, and possibly has ever seen. And that is something I know your Department is involved in: that is the Irish Strategic Investment Fund. It’s not listed here in your opening statement or dealt with, but I think it’s something your Department might be leading on with regard to the inter-departmental committee with Finance and the NTMA (National Treasury Management Agency). 
As much as I know about this, it’s a €6.8 billion fund which comes from the National Pension Reserve Fund, which is being turned into an Investment Fund, that is looking for commercial investments from the private sector. That €6.8bn hopefully will be matched by another €6-7bn of private money, and the Government’s idea — well, it’s started already — is that it’s being farmed out to private equity funds in Dublin, in London, to look for those commercial investments. And that’s fair enough. 
What I am interested in is: has any thought been given to where this money is going to be spent, or is this random with regard to commercial investments coming into the Government; the equity funds taking a look at these and some kind of process within Government — is there any sense, or has any thought been given to parts of this country that frankly are stagnating? 
We’ll say, for argument’s sake, there’s some truth to the idea that Dublin, for example, has seen some kind of a recovery. But other parts of the country have not. Surely because this is the largest stimulus fund this country has ever seen, or will see for years, has anybody in Government thought about diverting some of this money, as a critical policy measure, towards those parts of the country that are stagnating, that are regressing in some cases when it comes to unemployment. And that have seen no recovery. 
Has any thought been given to that considering the amount of money that’s involved here? Going through your statement, you talked about the PPPs in the past, and I’d make the point to you that many of these PPPs were targeted, they were infrastructural projects, and they would have been strategic projects that were targeted around the country for various reasons — infrastructural reasons. There was a different mindset and thought process involved in targeting that money, those billions, to those different parts of the country. 
In this case I have a suspicion that the €6.8bn and the money on top of that, that may come in from the private sector investments, is not targeted around the country at all.

Robert Watt: You’re right in terms of the investment fund. It’s €6.8bn. It previously was the NPRF, I suppose a passive investment fund which was global, which invested in property and equities and bonds across the world. The fund is in the NTMA. The Department of Finance has a role, we have a role — we’re not leading: we are part of a group ... we are absolutely involved. The fund is being reoriented towards investment in projects in Ireland that can provide a return, an economic impact, a jobs impact; also that are commercial, that provide a commercial return to fund. And they have to get the balance right between projects that for whatever reason the market won’t fund ... maybe because there’s more uncertainty about the project or because it’s a start-up activity. So it won’t be delivered by the market yet it’s commercial. It’s going to be tricky for them to identify projects.
There is legislation being drafted, a Bill is being prepared. The Minister for Finance, Mr Noonan, will be publishing it I think after Easter, around Easter time, which will set out the mandate: they’ll be obliged to set out an investment strategy, and that investment strategy will have to reflect or listen to the views of Government. 
Based on what I’ve seen there’s no regional angle or perspective to this. So their job is to invest in projects that have an economic impact, a jobs impact, and which are commercial. But as far as I’m aware at this stage there’s no regional impact.

John Deasy: And I suppose what I’m asking is, should there be?

Robert Watt: Should there be? Well, this is something to debate. You know, we look at exchequer funding or PPPs [and] we have regard to spread. Naturally, the political world and the way monies are allocated, reflects the spread.

John Deasy: That’s been the case in the past.

Robert Watt: That’s been the case in the past. So, a commercial fund, an investment fund investing in projects, is there a role for it to take account of a regional remit? That there’s regional balance? It’s something that I haven’t thought about. It’s something that could be debated. You know, clearly that there is, based on the evidence that we have, a two-tier economy emerging, that the Greater Dublin area is different — I think all the evidence suggests that it’s out of recession, and growing. You might say, well, that suggests there are greater opportunities elsewhere in parts of the country that haven’t moved as quickly out of recession: for example property values are lower or opportunities might be cheaper. But it’s something that I, Deputy, to be honest, haven’t reflected on. I don’t see any reason why a fund which is being orientated to jobs and economic activity in Ireland, why in theory it can’t have regard to a regional spread or a regional balance.

John Deasy: You know the basic figures with regard to, for example, Foreign Direct Investment: Dublin, Cork, Galway — it’s about 82%. It’s an inordinately huge number when you consider the country as a whole. And the disparity between those three urban areas and the rest of the country is... it’s immense. So here we have something that could amount to €12-13bn, and nobody’s given any thought to any regional aspect at all. And I think it’s a deficit, potentially.

Robert Watt: I may be doing them a disservice but from what I’ve seen, in terms of the legislation, I don’t see that, but that’s not to say...

John Deasy: This has started already. [The Dept of] Finance has given the presentations. He [the Minister] has said we’re open for business, bring it on. As you know, and you’ve been around the financial worlds long enough, equity funds don’t really take into consideration public policy that much. And what we’ve done is, we’ve actually given them the job to find these commercial investments. And I don’t believe that anyone has actually taken into account the fact that we may be looking at not only a two-tier economy, but a two-tier recovery. And that’s what I want to avoid. And that’s what I think this legislation should try to avoid. Now, someone might say to you, if you do that, and if you go down that line, well it makes some sense. But with regard to commercial investments, would you be actually negating, or would you be blocking some decent investments, if you made the case that a lot of that money, or some of that money, be earmarked for the areas that were suffering the worst from the recession. At the very least I think we need to start talking about that.

Robert Watt: My understanding of the legislation is that the Minister for Finance, the Government, would input into the overall strategy, the focus, but obviously the individual decisions are commercial decisions then for the body then, the ISIF set up within the NTMA. So there is a role for public policy and there is a role for Government... as you mentioned it, Deputy, no, I don’t see any reason why you can’t have regard to the regional impact of the investment, have regard to exactly the types of projects and the impact they might have. And that would have to be reflected back in some sort of mandate then to the people who are responsible for making the decisions.