Pilot PPP Schools Bundle

1.8  A PPP is a partnership between public and private sector organisations with shared objectives for designing, building, financing, and operating new infrastructure. PPP is a form of procurement available to the public sector which differs from the more traditional method of upfront Exchequer funding, with design, build, financing and operational services either procured or provided (in the case of operational services) by the public sector.

1.9  Following the Government approval of a pilot programme of PPP projects for development, one of these projects was the Pilot PPP Schools Bundle. The Pilot Schools Bundle is a 25-year design, build, finance, and operate PPP of five post-primary schools which went into operation in 2002. As of January 2020, the Pilot PPP Schools Bundle is in year 18 of the contract term. The five Pilot PPP Schools are shown in Table 1.1.

1.10  The DoE had four key objectives in delivering the Pilot PPP Schools Bundle:

•  To test the value for money of delivering school provision on a design, build, finance, manage and maintain basis over a long period (i.e., using the PPP procurement model)

•  To obtain new ideas and private sector innovation on school design through an output-based approach

•  To relieve school Principals of the responsibility for managing school buildings, allowing them instead to concentrate on their core educational and school management functions

•  To achieve better use of State-funded school buildings outside of regular school hours.

1.11  The procurement process commenced by way of a notice in the European Journal (OJEU) in June 2000. The DoE, as the contracting authority, selected the PPP consortium in 2001. A Project Agreement is in place between the DoE and PPP Project Company. The DoE details the requirements for the delivery of the services, financing, and operation of the facilities over the term and the Unitary Charge that is to be paid by the DoE for the PPP. The Project Company is liable for all Lifecycle and maintenance works during the 25-year contract term but does not have a role in the delivery of education services.

1.12  A key element of PPPs globally is optimising the risk allocation between parties to ensure that the risk sits with the party best placed to manage the risk. Typically, risks are transferred from the Procuring Authority to the Project Company for construction risk, maintenance risk, funding risk and insurance. This is the case with the Pilot PPP Schools Bundle and all payments are managed through an availability and performance-based Payment Mechanism where deductions can be levied for non-performance of services or unavailability of spaces.

Table 1.1 - Pilot PPP Schools Bundle