Momentum is building up around the Phase 1 PPP Programme which was announced last July 2012. A number of measures have been taken to instil confidence and maximise market participation:

• Length of tenders: The normal timeframe is generally around 21 months.  NDFA, the advisors on the PPP programme are working with the Department of Public Expenditure and Reform to compress the timeframe to 15 months - in line with what is permitted under the PPP guidelines and procurement rules.

• Reimbursement of bid costs: The Government agreed in 2012 to introduce the reimbursement of bid costs in the context of the roll out of Phase 1 of the new PPP Programme on a limited and temporary basis.  A fixed amount will be paid as compensation for cancellation and a compliant tender fee would also be paid to a max. of 3 short listed tenders. A cap at the capital value of €100m will be applied.

• Construction Performance Bonds: The Department of Public Expenditure and Reform has reduced the level of construction performance bonds required on public works contracts (Circular 07/13). The tightening in the market is leading to tendering delays where it is proving increasingly difficult to award contracts should the performance bond level required in the tender exceed 12.5%. Revised requirements now mean that performance bonds are capped at 12.5%.

The Irish Government states that the PPP market sentiment has improved over the past few months and a positive market response to the project tender competitions is anticipated.

The Department of Public Expenditure & Reform is also actively engaging with EIB in relation to their support for projects. Engagement has also commenced with the Council of Europe Bank. The National Pensions Reserve Fund is also expected to finance PPP projects.

The Government said in a presentation in May that part of the proceeds realised from the sale of "State assets" are available to fund project elements that require up"front exchequer spending.

The successful closing of Schools Bundle 3 PPP in November 2012 and the N11/Newlands Cross PPP in April are important confidence building measures for the Irish PPP market.

Update on Phase 1 PPP projects

The projects included in Phase 1 of the Stimulus Package are progressing well. Please, find below the update of each project:

Education: The schools bundles were the first to market as this is one of the sectors where Ireland has a well-established track record. The OJEU notice was issued in May.

• In Tender - Ireland School PPP Bundle 4
• In Tender - Ireland School PPP Bundle 5

These are due to be followed by the Grangegorman project in September 2013.

Health: There will be two bundles of Primary Health Care Centres with approx. 10 centres in each. Preparation of these bundles is on-going and they are due to issue to market in August.

Justice: Technical preparations for the Justice Bundles (Garda and Courts) are well advanced. The target is to be ready to proceed to tender in Q4 2013.

Roads: The tender has issued for the New Ross bypass and the next tender will issue by end June. Competitions are underway for the appointment of technical advisers for the other projects. The final negotiations on Financial close for the Gort-Tuam N17/N18 are underway.

Sources: Department of Public Expenditure Reform & NDFA