1.1 The DoE commissioned the Review to examine all aspects of delivering the Pilot Schools under the PPP model relative to delivering schools under the conventional delivery model, and to assess whether the Pilot PPP School objectives are being met at this stage in the PPP. The Review is part of a wider framework to assess and review the delivery of the objectives of a PPP project throughout its life. This framework consists of three key stages: Post Project Review, Mid Term Review, and Post Expiry Review. Only on completion of the Post Expiry Review it is possible to fully assess the success of the PPP in meeting the objectives.
1.2 The 2004 Comptroller and Auditor General (C&AG) Report on Value for Money was akin to a Post Project Review for the Pilot PPP Schools Bundle. The report assessed how the DoE developed and managed the project through the construction phase, evaluated the tender proposals and assessed value for money in the procurement process. The scope of the C&AG report was restricted to the early project stages and did not assess any operational matters.
1.3 The analysis within the C&AG report suggests that the projected cost of the final PPP deal was 8% to 13% higher than the projected cost of procuring and delivering services to the schools using the conventional procurement route, as opposed to a 6% saving forecast through a cost comparison exercise based on the preferred bidder price. The report highlights that ultimately, the value for money achieved from the project will be determinable only over the 25-year life cycle of the project and recommended that a review is conducted at a suitable later date to determine if the Pilot PPP Schools Bundle is delivering Value for Money. The report recommended that a review commencing after 5 years of operation would provide a suitable timescale to assess VfM. This Review was commenced in contract year 18 of 25, providing cost data over a longer period than originally envisaged. This assessment takes into consideration facilities management, energy and Lifecycle costs for the schools which would be less prevalent after 5 years when the schools would be expected to be in very good condition.
1.4 This Review is the first of its kind assessing the Government's PPP projects. As such, and as part of the scope of the exercise, AA Projects, with input from the NDFA and the DoE have developed a detailed methodology (explained further below) for use in future reviews.
1.5 It should be noted that since the pilot programme of PPPs, several recommendations from the C&AG report have been put in place and the NDFA was established to procure and manage PPP projects as requested by State authorities. Currently, all potential PPP projects must complete a Public Sector Benchmark (PSB) comparison, comparing the cost of the PPP with achieving the same standard facilities and services by traditional procurement. The PSB also systematically values the transfer of risk. Due to an absence of a PSB for the Pilot PPP Schools Bundle, this Review is unique in that it considers an actual operational comparator group, the services delivered to that group and the costs associated with it to date instead of a comparator to the PSB model. All subsequent PPP School Bundles have completed a PSB, therefore the Reviews of the subsequent PPP School Bundles would reference the PSB model.
1.6 The objectives of the Review are:
• To compare the Pilot Schools with a comparator group of conventionally delivered schools, hereafter referred to as the 'Conventional Schools'. Including comparison of design/functionality, energy efficiency, building condition, residual life, facilities and maintenance services, flexibility, administration required, risk, and TPU
• To assess the extent to which the DoE objectives in delivering the Pilot Schools have been achieved (the Pilot PPP School objectives are detailed in the following section)
• To develop a methodology and template for use by the DoE in reviews of other of PPP projects in the education sector
1.7 The full breakdown of the Review objectives is detailed in Appendix A as per the Scope of Services.