Wednesday, 20 May 2009
Dáil Eireann Debate
Deputy Enda Kenny: I listened to the Minister for Justice, Equality and Law Reform this morning and it seems that the Government has an inability to plan and finish projects. It also seems that the Minister may eventually revert with an entirely different entity.
The hallmark of the Taoiseach’s Ministry for Finance and Government has been to waste money. The Government spent €60 million on e-voting machines, €200 million on the famous PPARS computer system and €100 million on consultancy fees and site clearances for the Abbotstown development. That amounts to €360 million, to name but three examples. The Government that the Taoiseach leads and in which he was Minister for Finance does not seem to be able to plan——
Deputy Enda Kenny: ——and carry through projects once they enter the system. With that €360 million, the Government could have built a major portion of the national children’s hospital on a greenfield site or 100 schools. It could have dealt with many of the country’s infrastructural requirements.
Last week, I visited Neilstown where I met the mother of a young child who can read 15 words, but whose teacher will be removed in September. The Government says that it is trying to rectify the public finances and eliminate the national debt, but what has occurred under the Taoiseach’s stewardship as the Minister for Finance and the Government’s leader is a complete inability to deliver projects on time and within cost. I have given the most famous examples.
It may be the case that there could be another five Ministers for Justice, Equality and Law Reform before what the current Minister discussed this morning sees completion. Despite this, a man was arrested on Holy Thursday and kept in Mountjoy Prison over the weekend for not having a dog licence. The spectrum of incompetence and money wastage is incredible. It was appropriate for the Taoiseach to say that he wanted to get value for money, but he would not know what that was even were it to jump up and bite the Government in the face.
As a former Minister for Finance, does the Taoiseach accept that the money spent on e-voting machines, where returning officers were given no criteria for their storage, the PPARS system and the consultancy fees wasted on the Abbotstown development and the Thornton Hall proposal is dead money?
The Taoiseach: In relation to PPARS, that was commissioned under Deputy Noonan when he was the Minister for Health. That was when that issue started. In relation to the question of money that could go to a children’s hospital, I think that Fine Gael’s proposal was that we should build two.
The real question to be answered here today of course relates to the decision that was taken by the Irish Prison Service to break off negotiations with the preferred bidder in relation to the design,——
The Taoiseach: ——build, maintenance and financing of the Thornton prison project. That project was unaffordable at the price being quoted by Léargas, as the cost had risen by over 30%. Obviously, the cost of financing such projects under a PPP was a major factor in that change.
While this decision has been noted by Government, I want in the strongest terms to say that we are fully committed to replacing the Mountjoy Prison complex with a new prison complex at Thornton Hall. The Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, will bring his comprehensive new proposals to Government in a matter of weeks.
The Taoiseach: ——to the question of prison places being an important facet of having a prison system in this country that, during Fine Gael’s own term when it was last in office, it cancelled Castlerea and the women’s prison. No new prison places——
Deputy Enda Kenny: The Taoiseach did not answer the question I asked. I asked him if he accepted, as a former Minister for Finance and as the current Taoiseach, that the money spent on e-voting machines, the PPARS computer system, consultancy for Abbotstown and a proposed development at Thornton Hall is now dead money. It was wasted by his Government and by him, as a former Minister for Finance. It is taxpayers’ money, it is dead and gone, but the Taoiseach does not have the courage to admit that. It is gone.
If one stands in a house in Longford where a husband, wife and three sons are unemployed, it is a situation replicated all over the country. The Taoiseach comes in here and says: “We will rectify the public finances, we are getting great value for money, we are a Government that delivers projects on time and budget, which are very necessary for the people.”
The model the Taoiseach has adopted was under the PPP system. The urban regeneration programme and the prison are now dead. It is perfectly obvious that major finance for major public projects is in serious difficulty. What is the Taoiseach’s plan to deliver on the interconnector, the schools building programme, the DART interconnector and other major pieces of infrastructure? If the cost of borrowing under the PPP scheme is too high, and apparently it is, with urban regeneration and the prison gone, and other programmes to follow, does the Taoiseach have a plan?
Deputy Enda Kenny: If the Minister, Deputy Ahern wants to be continually smart as he seems intent to be, fair enough. He will get his answer on 5 June. The Fine Gael plan proposed by Deputy Richard Bruton——
Deputy Enda Kenny: ——for the finance of major infrastructure over a long period is to use the European Investment Bank and private pension funds, and would not cost the taxpayer a cent by borrowing from broken banking institutions.
In respect of the other pieces of major infrastructure proposed, can the Taoiseach say if the PPP system has failed, in view of the cost of borrowing for urban regeneration and prison programmes? Can the Taoiseach tell me if this system, which has already failed, will work, in terms of the DART interconnector, the electricity interconnector and other major proposals for school buildings, hospitals and so on, that are in place?
Are we to have more examples of a litany of waste and more waste, which is the hallmark of Fianna Fáil in government over the past 12 years? We are witnessing it again here. There are two absent people who have no courage to stand up and say a stop must be put to this. The people will give their answer on 5 June.
The Taoiseach: It was precisely to make sure we provide value for money that this project did not go ahead under its present guise. It is precisely because the PPARS project was not properly scoped when Deputy Michael Noonan instigated it that we brought it to a halt because it would not have given value for money.
The Taoiseach: It is precisely because we want to get value for money that we made this decision. I reiterate it is our intention to proceed with a prison at the site concerned. The site was purchased as a result——
The Taoiseach: It is precisely because of the fact that in managing the Prison Service estate, where 19 acres were sold in Shanganagh for the purpose of funding the purchase of 150 acres at Thornton Hall, that we were able to proceed with a prison there. Legislation was introduced and enacted in this House for this particular project. What is clearly the case now is that because of the increased cost of financing under the PPP system, in this particular instance, it is not possible for the Government to proceed because we want to get value for money and, therefore, want to ensure we go back out to the market for——
The Taoiseach: It is precisely because of the fact we have that asset in place that we will be able to proceed with a prison, which is needed. The Mountjoy complex is nearly 160 years old and we need to replace it. Therefore, we will proceed with this project in a different way, on the basis of a proposal that will come from the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, in the coming weeks. There will be 400 extra places available to come into commission in the meantime at Wheatfield, Castlerea and Portlaoise. They are already built and should be ready to come on stream during the course of this year. It is important that we continue with a prison building programme.
Regarding the PPP system itself, it will continue to be a feature of how we finance capital projects. I was in Shannon during the week where an excellent community school was built by PPP. There are four schools in my own constituency built by PPP. There are excellent examples in, I believe, Tubbercurry in Sligo, where there is a similar arrangement. There are certain times, in meeting the various criteria in which public-private partnerships have to operate, where it can be an option to go ahead. It has worked well in many instances, including regeneration projects in this city. There are other projects where, because of financial problems, they have not been proceeded with and we have to find other options.
It is clear to me that we need to replace the Mountjoy complex and do so in a manner that recognises the market conditions in the building industry, the changed economic circumstances we are in today and, ultimately, protects the taxpayers’ interests. That is the basis for the decisions which have been taken. It is the change in the marketplace, in terms of the cost of financing, that has been the main issue here, and I want to make that point.
Deputy Kenny asked what would happen regarding certain other major projects. Urban regeneration, on which we spent €190 million last year, will continue to a similar scale this year. We will continue to roll out public transport projects, as we have been doing in this city, increase capacity and user numbers and provide a very modern and impressive stock of public transport. Previously, our investment in our public transport system totalled a princely sum of zero when the Opposition was in office.
Deputy Eamon Gilmore: The Taoiseach says the Government is getting out of the PPP arrangement for the Thornton Hall project because of concerns about value for money. These concerns about value for money on this project are coming very late. I suggest the Taoiseach is now desperately playing catch-up on the value for money issue.
Just three weeks ago, on 22 April, my colleagues, Deputies Pat Rabbitte and Mary Upton asked the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern, about this project. Deputy Upton’s question asked specifically if the Minister was satisfied about the capacity of the preferred bidder to deliver this project. The Minister told her negotiations with the preferred bidder were then at an advanced stage. A few weeks later, we are told the Irish Prison Service has discontinued that arrangement for reasons of value for money.
This side of the House has been telling the Government since this project was initiated that there were questions about value for money thereon. When we raised it in 2005, for example, the then Minister for Justice, Equality and Law Reform, Mr. McDowell, told us, “I am confident that in five or seven years, when the full campus at Thornton Hall is completed, the public will look back on these days and be grateful for the foresight and leadership the Government has shown”.
Deputy Eamon Gilmore: Yes, and where is Thornton Hall now? We already know that the cost to date is approximately €41 million, between the cost of the site, the cost of buying up the extra land for the road, and the cost of the professional fees and the siteworks——
In addition to that, we have to add in the €26 million that was paid in 2007 for the two acre former cash and carry site adjoining Mountjoy Prison in anticipation that Mountjoy would be closing down and moving out to Thornton Hall and that the Mountjoy site would be redeveloped. The Taoiseach should remember that purchase because, as Minister for Finance, he approved the payment of the €26 million for the two acre site. It is now locked up. The plan was that there would be a great development of a new commercial village on the site of the old Mountjoy Prison when it moved out to Thornton Hall. Now we are told that the plan for Thornton Hall is awaiting some new proposals from the Minister for Justice, Equality and Law Reform.
What is the alternative method by which the Thornton Hall project will now be advanced? The then Minister, Mr. McDowell, anticipated that the completion date for the entire Thornton Hall project would be 2010 or 2012 at the latest. What is the revised target date, if it will be built at all?
The Taoiseach: ——and to do so on the basis of a proposal to be drawn up by the Minister for Justice, Equality and Law Reform. The prison will meet the functionality and requirements of a prison in a way that will provide better value for money than that which is currently available under the existing arrangements and on the basis of the current design.
On the question of the development of Mountjoy, people opposed to Thornton Hall have held the view that Mountjoy Prison could be developed. As we know, it is a fully operational prison. It is not feasible to redevelop Mountjoy as a prison unless one were to find alternative location for the 1,100 people who are currently in the prison, and to bring them back following the redevelopment. That is not a feasible option. We are still committed, upon the completion of a new prison at Thornton Hall, to proceed with a development at the Mountjoy complex and to provide an excellent project there for the people of that area.
In respect to what is different now to what was the case previously, discussions were taking place at an official level between the Prison Service and the consortium. The Minister was not directly involved in those discussions. The invitation to negotiate was on foot of the tender which was accepted in January 2007. Therefore, a series of discussions had to take place in terms of lining up the finance, the cost of that finance, the financial package and to see whether there was a prospect within the rules of negotiating an acceptable outcome in terms of the financing of the project. That was not possible because it was complicated by the fact that the cost of financing such projects is more expensive in the aftermath of the financial and banking crisis we have seen in recent months than was the case previously.
The bottom line in any event was that based on legal advice and the proper way to proceed people would have been put on notice to put their final positions. Those that were put were considered and the Prison Service made a decision to end the negotiations with the preferred bidder. The Minister has indicated that a revised proposal will be submitted to the Government. I accept that will involve some delay as the project will not now proceed in the timely fashion one would have hoped because of the inability to find a sustainable financial package from the point of view of the State that would represent the value for money we would expect. Therefore, we will proceed in this way. Thornton Hall will be utilised for the purpose for which it was purchased. It was purchased in the main out of moneys from the prison estate itself, from the sale of 18 acres in Shanganagh for 150 acres in Thornton Hall.
Deputy Eamon Gilmore: The Taoiseach made a couple of references to the prudence of the financial arrangements for Thornton Hall and he explained how it was purchased from the sale of the land in Shanganagh. I know the land in Shanganagh, it is in my constituency. There was a prison there for juvenile boys and the Government closed it down although it is not the kind of facility that deserved to be closed down, especially in these times. The Taoiseach should stop pretending that there has been a big saving to the State in this regard. The land was sold to the local authority. It is one arm of the public purse selling to another. The Taoiseach should not pretend there were big savings on the purchase of Thornton Hall.
On the discontinuation of the arrangement with the preferred bidder, why was that suddenly brought to a halt when only a couple of weeks ago the — I was going to say the Taoiseach, he probably has aspirations in that direction — Minister for Justice, Equality and Law Reform told us the negotiations were at an advanced stage. Twelve months ago to the day, one of the principals involved in the consortium pulled out of the PPP arrangement for urban renewal in Dublin. I recall raising the issue with the Taoiseach at that time. My colleagues, Deputies Costello, Shortall and Upton raised with the Government at that time the implications for Thornton Hall. The Taoiseach told us everything was fine. It was flagged well in advance that there was a problem with the project yet it has come suddenly to a halt.
The Taoiseach has told us a lot about the process by which the decision was arrived at but I want to know what is now going to happen with Thornton Hall. He told us he is going to build something on the site.
Deputy Eamon Gilmore: The Minister for Justice, Equality and Law Reform will come forward with some kind of proposal on it. Is the Government going ahead with a prison on the same scale as was originally intended? Does the Government intend to use substantially the same design? Is it intended to proceed with that project by PPP with another bidder or is it intended to proceed by way of direct provision? What is the plan for Thornton Hall? When will the building start and when is it envisaged that Thornton Hall will be completed?
The Taoiseach: The reason I mentioned the Shanganagh sale was to clarify the position in case people were under the impression that the €40 million was obtained from the Estimate from the Department of Finance. It was obtained by the management of the prison estate.
The Taoiseach: On the question of other money that was spent on the site, there were two High Court challenges, and there was a necessity to carry out various surveys in the interests of preparing the site in any case and in dealing with the High Court challenges that arose. Those were expenses which could not be avoided, given that there were other people who were entitled to make a challenge against the proposal being made.
The Taoiseach: The Deputy either wants an answer to the question, or he does not. I am prepared to give him an answer if he wishes to hear it. It can be done on a phased basis through direct procurement, or we can see if it can be done
The Taoiseach: This is pathetic. I know the Deputy wants to be taken seriously, but he is the only comic I know who does not smile. The prison can be built through public private partnership, and we need to take into account the changed construction cost conditions that are now in place. This tender was made in January 2007, at the height of the construction cost period, so savings and economies can be made through more functional design and reductions in costs. Given the current position we are in, we were not able to proceed with this project. I do not ascribe any blame to anybody in respect of the negotiations; that is the way things worked out. We now have to proceed quickly to an alternative, but——
The Taoiseach: ——as soon as we agree on a design, put it to tender in the normal way and proceed with it. Many of the capital projects are coming in on time and on budget, as the Deputy knows but will not admit.
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