Writes Lisa Boyd, Projects Construction and Procurement Partner at Eversheds Sutherland. Article first published in the Belfast Telegraph on Tuesday 11 June.
Lisa Boyd, Projects Construction and Procurement Partner at Eversheds Sutherland
Following the return to Stormont, the Infrastructure Minister for Northern Ireland no doubt had a bulging in-tray with huge demands on a tight budget. With competing interests, increasing delivery costs and budget not keeping up, it seems tough choices may be needed as to which projects are worthy of taking forward. Perhaps some outside-the-box thinking is required as to how we can progress capital projects in the region so as to not delay much needed lifelines to services that are already at breaking point.
Throughout the late noughties, we saw the rapid decline of public-private partnerships (PPPs) private finance initiatives (PFIs). These delivery mechanisms, whereby the public sector enters into partnership with the private sector for the delivery of infrastructure, have fallen out of favour. However, a reintroduction could see more projects break ground sooner rather than later, and PPPs carry with them a number of benefits.
PPPs allow the private sector to assume specific risks associated with project delivery, such as construction, operation, and maintenance. By transferring risks to private partners, the Government can focus on policymaking and oversight, reducing its exposure to financial and operational uncertainties, which is now of grave importance given the funding deficit in Northern Ireland. PPPs can also often expedite project delivery, with private partners bringing efficiency, expertise, and streamlined processes. Timely completion of infrastructure projects benefits communities, businesses, and the economy as a whole.
In Northern Ireland, we have dealt with clients whose large projects are being delayed due to the fact that our public infrastructure is often not up to the standard required to take on new capacity. Often, clients in this position will offer to fund the improvement of such infrastructure in order to speed up the delivery of their own projects, but find that there is no avenue to do so.
In this vein, PPPs can contribute to regional development by targeting investment in areas that need economic stimulation. Infrastructure projects create jobs, boost local economies, and enhance connectivity, promoting balanced growth across Northern Ireland, which is one of Conor Murphy’s priorities as Economy Minister.
Although PPPs have not been proposed of late due to the block grant, the recent budget has shown the serious holes in public finance in Northern Ireland. Couple those holes with the significant infrastructure projects needed for Northern Ireland to reach the next level of economic development – from our wastewater system to our outdated road system – and the question must be asked: could the return of PPPs bring our economy to where it needs to be?