Brendan McDaid’s story in last Friday’s Journal about the £163 million cost to the public of two Derry schools deserves close attention.
Public Private Partnerships always benefit the private interests involved but can cost the public an arm and a leg. This is the very point of the exercise.
The basic idea is that private companies build and manage a public facility, then charge the public an annual fee to cover their costs and make a profit. If anything goes wrong, Joe and Josephine Public pick up the pieces as well as the bill.
This wheeze was dreamt up under Mrs. Thatcher’s Government and has been applied in Northern Ireland both under Direct Rule and by devolved administrations.
Take Balmoral High in Belfast, among six schools commissioned through private finance deals under Martin McGuinness back in 2001. Martin expressed some concern at the time - but not so much as to call a halt. By 2006, the scheme, and others like it, had descended into chaos.
In August 2007, Balmoral’s board of governors announced closure. Total enrolment for 2007/08 was 67. “This is a best-case scenario,” said the governors. “We dread to think what the worst case would be.”
The school, they suggested, had been “built in the wrong place”. Quite. Somebody had made a massive blunder. But the consortium which had built the school didn’t have to worry. Their payments were secure - rather in the way that home-buyers have keep up the monthly payments even if the value of the mortgaged property - or the property itself - has collapsed.
The consortium involved in the Balmoral fiasco was Northwin, comprising three of the biggest NI construction companies - Farrans Limited, Braidwater Enterprises and John Graham (Dromore) Limited.
The shambles should have marked the end of PPP contracts in the North. But two years later, the St. Cecilia’s/St. Mary’s contract was signed. Minister Catriona Ruane estimated the total cost at £38 million. This was accurate insofar as it referred to construction costs. But add in maintenance and management and the figure soars to the £163 million mentioned by Brendan McDaid.
This ability to play fancy footwork with the figures is seen in some circles as a valuable political asset. Proves you have matured into a “responsible” politician, fit to govern. That’s something we can debate for the next 22 years, as we continue to pay for the deal struck by the Minister on our behalf.