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PPPs to break new ground in 2002 Back  
The first PPP contract signed at the end of 2001 by the Minister for Education and Science Michael Woods is to lead the way for a number of new PPP developments. The contract, which was the first awarded under the Government’s PPP programme, is also the first education PPP project. According to the minister, the project, which granted Jarvis plc a E81 million contract, is to be the first of many education projects.

Education however, is not the only sector which will benefit from PPP investment this year. Late last year the government produced its ‘Framework for Public Private Partnerships’ document which assessed the appropriateness of PPPs for infrastructure projects as well as guiding their implementation with regard to wider economic, social and environmental objectives. According to the Minister for Finance, the framework reflected the government’s determination to harness the potential of PPPs. As part of the National Development Plan, IEP1.85 billion has been provided for PPP projects.

The bids for the first road PPP, the Kilcock Kinnegad road, are due on February 18th. The estimated capital cost of the project is between E250 million and E350 million. According to Kevin Feeney, partner at A&L Goodbody, the roads are the most interesting. ‘Given the proposed transfer of traffic risk to the private sector it will be very interesting to see how the private sector carry/view/price the risk,’ he said. The Waterford bypass project should also come to preferred bidder stage this year.

The contract for the LUAS operator is in the latter stages of negotiation, and tenders are currently being evaluated. Proposals for additional light rail lines to link up with or extend the LUAS system are currently being developed. These include an extension of Line A of the LUAS into the Docklands, a new north-south line from Ballymun via the city centre to Dundrum, and a new east-west line from Lucan via Ballyfermot to the city centre. The Light Rail Project Office of CIE are conducting initial assessments of the options for these additional lines.

The Light Rail Project Office of CIE are also conducting initial assessments of the options for the metro, which looks like being the biggest job in the history of the state. According to Aidan Walsh, partner at PricewaterhouseCoopers, the project is comparable with the Docklands Light Rail in London and will probably take around 15 years. The new Railway Procurement Agency, will soon take over the Light Rail Project Office’s work and the aim is to go to the market for a private sector partner in the first quarter of this year.

Several water and wastewater projects will also be furthered this year, although without private finance as they are of a relatively small size.

The Government is also keen to bring increased private investment to the health sector, and the last two budgets featured tax breaks for developers of private hospitals. The Finance Act, 2001 introduced capital allowances for expenditure incurred on the construction or refurbishment of buildings used as private hospitals if certain conditions were satisfied. It is understood that some developers are proposing to buy and take over the operation of private facilities in a number of public hospitals. According to some analysts, the sale of a substantial number of private beds in public hospitals to outside investors could generate well over E600 million.

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