Issue 2 - 2024 200dpi

12 December 2002 Edition

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Sinn Féin TDs expose private partnerships racket


"In the long run, we are all dead," famous economist John Maynard Keynes once said. And that sums up Dublin government thinking on capital investment in essential projects like schools. For despite many protestations to the contrary, the government is looking to grow private public partnerships like mushrooms.

Last week, the first of five schools to be built under private public partnership opened its doors. St Attracta's Community School, at Ballyara, County Sligo, replaces two schools, one at Banada, and another in Tubbercurry, for some 500 pupils.

When initially announced, the then Minister of Education, Michael Woods, costed the project at €71.11 million. More recent figures from the Department put the capital costs at €79.54 million, a 12% increase over 18 months.

A crazy deal

But the payments by government (and taxpayers) for this basket of five schools will amount to €244 million over the 25 years of the contract. The government will have to pay Jarvis Plc more than three times the enhanced capital figure for the build.

Who is getting this colossal turnover from the national purse?

Sinn Féin TDs Seán Crowe, Martin Ferris and Caoimhghín Ó Caoláin are very concerned about this contract. They are particularly worried about the company the government has selected, not to build the school, but to take on the management of the finance for building the school, and to draw down this colossal turnover. Each has asked the Minister for Education and the Taoiseach how it could have been that the government has entered into such an appalling contract.

Jarvis Plc

The contract for the whole build of the Five Grouped Schools is with a company called Jarvis Plc, and Sinn Féin TDs supplied the government with the details. Jarvis is no two-bit backstreet lender. It is a British-based company, with a turnover of €1.1 billion last year.

Jarvis has been the British leader in winning private finance deals from the British Treasury, where it was contracted to provide 'improved educational facilities' in no less than 75 schools across Britain, with fairly disastrous results.

On one new school in Glasgow, the roof fell off. There are now 20 head teachers from schools in Kirkless, West Yorkshire, who have a litany of grievances, alleging sloppy, shoddy construction and repeated failure to meet contractual obligations to maintain schools. An inquiry will present its report shortly.

The rail business

But Jarvis has other fingers in the PPP pie, in particular the rail business. Its rail business order book in Britain is now €1.6 billion, far in excess of the Dublin government's total planned expenditure on rail in the National Development Plan. The value of public infrastructural projects for which it has preferred bidder status is a colossal €6.6 billion.

And this might all seem surprising when, as Deputy Seán Crowe pointed out in his question to the Minister about the 5 Grouped Schools, Jarvis was the company responsible for overseeing the maintenance of the rail track at Potter's Bar, last May, where a track fault caused a crash which killed seven people and injured 60 more. Jarvis denied at the time allegations that it had been alerted to possible track defects only days before the crash.

And then to cap it all, last August a director resigned over corruption allegations. Why would a government want to enter into a 'partnership' with such a company, Sean Crowe wanted to know. Jarvis shares rose from £1.25 to £4.58 when the company was selected as preferred bidder for the schools.

What is the Partnership?

And just why PPPs are called 'partnerships' is a mystery that calls for explanation. The only element put in by government is a contract to pay a huge secure income stream to the private company, in this case Jarvis, for something the government could have done, infinitely cheaper, itself. What Jarvis does is to borrow the money, in place of the government, subcontract to build the school, and then take on the maintenance of the building, cleaning, security and ground maintenance, and draw down a 'with profit' policy until such time as the contract expires, in this case 25 years on.

Jarvis states in its Annual Report of 2001: "We are committed to building long term predictable revenue streams, by focusing on markets such as education and transport."

If anyone was foolish enough to believe that 'profit' is a return for risk taking, then profit here shouldn't enter the equation, because the investment is blue chip, 100% secured, because the revenue's source is government.

Free community schools

There are people alive today, parents often, who believe that a school is a resource of the community - to be used for community projects from pantomimes to old people's Christmas dinners, or whatever. Furthermore, many believe that the school should provide free education for all of the children, as well as lifelong learning in the community, and that the children, or their parents, should not have to become fundraisers in the evening to enable the school to keep on the heating, or fix the windows.

But all these beliefs are out the window under private public partnerships. If Jarvis doesn't want to open its school doors to the community for adult education classes of an evening, because that needs security on the school after hours, and that costs money, under PPP, the school won't be available.

It all comes down to the impossibility of separating core activity (teaching) from ancillary activity, like maintenance and security.

The division is spurious. Who is going to provide breaktime, schoolyard security? Teachers or Jarvis appointees? And will Jarvis be funding teacher supervisors at teachers' rates, when they sacrifice their only break in the day to ensure the kids are safe in the yard? Not likely.

Nobody believes that education is free in today's Ireland, but undoubtedly it will become a lot less free when PPPs get their fingers in the pie, which is no partnership at all. It is, as Martin Ferris pointed out, a hire purchase agreement to allow a questionable company to make money out of subcontracting the means of provision of education to our children, when it suits their long-term revenue stream. Pity the people when it doesn't.

A dangerous path

PPPs are a dangerous road, fraught with inefficiencies and neglect of our communities and their interests. At present there are 60 PPPs being actively considered and in some cases implemented. These include 29 waste, water, and water-waste projects, 28 local service projects, 18 roads projects, 3 public transport projects and 3 education projects.

It is a subject of scandal that the government intends PPPs as a model for investment in waste management-incinerator white elephants, investment in rail and road, and now schools. And there are 338 schools on the list waiting their turn.

Was this what the cutbacks in government expenditure were all about? Get your school through PPPs or don't get it at all?

Last week, the Irish Times published a list of schools which are waiting for urgent funding to provide basic facilities in a safe, warm, light, clean, quiet environment. There are 388 schools on the list. Most of them have no chance of getting off the list by this time next year.

"Let no one be under any illusion," one school principal is quoted as saying. "We're talking of children sitting under tin roofs who can't hear when the rain comes down; kids sitting in hooded furry jackets to keep warm because the boiler system has broken down, and is too old to repair.

"We're talking of kids beside buckets to catch the drips from the ceiling; schools with no place for special or remedial class teachers to work except a passage, kids without science labs, gym, even a satisfactory play area. Two hundred year old schools, built by landlords for the education of the poor, schools with flaking asbestos roofs which have not been replaced."

The Irish National Teachers Organisation (INTO) estimates that the government would need to spend €250 million every year over the next decade if anyone is going to see a serious change in this situation. Noel Dempsey, current Minister of Education, has €147 million to spend in 2003 on major building works.

The PPP 'deal' with Jarvis is going to cost the government all of €244 million, for five schools over 25 years.

An Phoblacht
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