Record PPP starts in 2008 can deliver construction jobs boost

So it's bye bye, Bertie, hello, Brian! It can be a daunting task to understand Minister speak in any country. In Ireland one strategically placed, or misplaced, phrase can have a myriad of meanings. And Bertie was a master of the political soundbyte, in many instances more by accident than intention. Over the years of the many quotes that baffled the nation, one that he will never be let forget was his 2004 comment on conspiracies, “There are kebabs plotting against us”.

But now it is time to close the Bertie speak book and open a new one for Taoiseach in waiting, Brian Cowen, who famously referred to the Department of Health as “Angola” during his tenure there. Known for not holding back, we can expect the Offaly TD to at least entertain during his jousts with opposition leaders.

With recent falling Exchequer income in Ireland Irish ministers have been going to great lengths to carefully phrase the Government’s commitment to the National Development Plan 2007 – 2013 (NDP). Transport Minister Noel Dempsey said if there are to be cutbacks the NDP will the last area to suffer. If this is the case the NDP will be a major source of construction jobs over the next five years, with infrastructure roll out and public contracts being the backbone of the Irish construction industry.

One method that has been very effective in delivering timely public works is the Public Private Partnership Programme (PPP). PPPs are schemes where the private sector takes responsibility for the design, construction, financing and operation of an asset for a set period of time. The private sector is typically not paid until the asset is operational and performing to the contracted standard.

Since 2003 in Ireland a total of 73 PPP projects have been completed, started or are in planning. Projects operating under the PPP mechanic include roads, rail, schools, health, prisons, wastewater management and social housing.

Of the 73 projects in the system, to date 13 have been completed and as of March 08 of the remaining 67 projects, 14 are currently under construction.

If all goes to plan, according to the latest report (March 2008) from the Irish Government’s Central PPP Policy Unit (www.ppp.gov.ie), 2008 will be a record year for PPP schemes getting off the ground. It is planned that a large majority of the remaining projects will go to tender or start on site. The goal is to start construction on a record 28 schemes before the end of the year. A further eight projects are scheduled to go to construction during 2009. Because of the scale of these projects – many of the planned projects having indicative values of €250m plus – it can be expected that demand for construction professionals in Ireland will continue to be strong over the coming 18months.

Of the 28 schemes scheduled to go on site this year, projects of interest include a bundle of three new motorway service areas (Indicative value €50m - €€100) and a bundle of three decentalized Government offices in Portlaise, Mullingar and Carlow (Indicative value €100– €250m).

In the summer the relocation of Mountjoy Prison to Thornton Hall in North Dublin is expected to get under way. The contract was awarded to a consortium that includes Michael McNamara & Co and Barclays Bank. It has an indicative value of €250m plus.

The majority of project starts planned for this year will be carried out under the Department of Environment, Housing and Local Government (DEHLG). Projects ranging from housing to waste and wastewater management are scheduled to begin construction. These include the controversial Dublin Waste to Energy scheme (Indicative value €100 – €250m), scheduled for a summer start. Indicative values on DEHLG projects start at about €10m and rise to €250m for a number of the social housing projects.

So on the basis of the Government’s PPP ambitions for this year and with a further eight projects to go on site next year, several billion euros will be pumped into the Irish economy over the coming years through PPP, with completion dates spreading from 2009 to 2013.