Public-Private Partnerships in Ireland: A Review of the Experience 1999-2012

Abstract

In July 2012 the Irish government announced a stimulus plan for the beleaguered economy. The plan to spend €2.25 billion on capital projects is largely based on the use of public-private partnerships (PPP) to procure new infrastructure and services. This signals a renewed wave of PPP procurement that originally commenced in 1999 and to date has resulted in over €6 billion of investment in infrastructure and public services in sectors such as transport, health, education and water services. It is ironic that the planned expansion of PPP procurement in Ireland is occurring at a time when PPP activity levels have fallen worldwide. Moreover, the UK which is the world leader in PPP procurement has recently announced a major re-vamp of its Private Finance Initiative due to “widespread concern that the public sector has not been getting value for money and taxpayers have not been getting a fair deal now and over the longer term” (HM Treasury, 2012: 1). In this context this article reviews the international experience with PPP and examines the public policy objectives commonly ascribed to the model. It then turns to the Irish case and traces the origins of the country’s engagement with PPP and the extent of procurement under PPP to date. It assesses the extent to which these objectives have been met and concludes that there is no strong evidence to suggest that PPP has delivered better value for money for taxpayers. PPP has been used to keep capital investment ‘off-balance sheet’ but what is bought now must be paid for later so the net exchequer position is not necessarily improved. Finally the paper reviews some important governance issues around PPP and highlights significant shortcomings in terms of the accountability and overall legitimacy of the PPP model.