PPP Procurement in Ireland: An Analysis of Tendering Periods

Abstract

The relative complexity of procurement under public–private partnership (PPP) means that tendering periods can be longer compared to traditional procurement models. Reducing the tendering period is therefore an important challenge if PPP is to deliver infrastructure on time and within budget. Using data from 59 PPP projects in Ireland we find that the average tendering period has been 34 months. Analysis using duration analysis shows that tendering periods have fallen over time and are positively but not strongly associated with the capital value of projects. Tendering periods are longer for projects that do not involve private finance with the majority of such projects procured by local authorities. We use two case studies of PPP procurement to explore these issues further. Both cases highlight the complex array of factors that can impact on tendering periods some of which are outside the control of the procurement authority.

Key Words:

• Public–private partnerships
• procurement
• tendering periods
• Ireland

Notes

1. For the 17 projects omitted from our sample it was not possible to source accurate data on both the tender and contract award dates.

2. Etenders.gov.ie is the website of the National Procurement Service in Ireland where all public sector contracting authorities advertise procurement opportunities and award notices. Mytenders.ie is a privately-run website that publishes every tender and contract award notice procured by Irish public sector contracting authorities.

3. Other sources included publicly available documents (e.g. reports by the C&AG), the websites of individual procurement authorities (e.g. the NDFA, NRA, local authorities, etc.). In a limited number of cases it was necessary to rely on reports in national and local newspapers to determine the date of contract award.

4. Other specifications such as the non-parametric cox proportional hazards model were also estimated but not presented here. Although the results of the model presented in Table 4 were similar to those from the cox specification, the parametric specification (Weibull) was chosen due to the greater precision provided. Various other distributions, such as the exponential distribution, were also considered within this parametric framework. However, these were rejected based upon diagnostic and goodness of fit measures such as the AIC and BIC criteria. The significance of the term ln/p in Table 4 also supports the Weibull specification.

5. The proposed cap was designed to ensure that the aggregate capacity of licensed incinerators should not exceed 30% of municipal solid waste arisings, and from 2015 should not exceed 25% of municipal solid waste arising (Gorecki, Acheson, and Lyons 2010, 44).

Additional information

Notes on contributors

Eoin Reeves

Eoin Reeves is a senior lecturer in economics at the Kemmy Business School in the University of Limerick. He specialises in the economics of infrastructure regulation. This covers different forms of privatisation such as the sale of state owned enterprises, contracting-out and public–private partnerships (PPP). He is the author (with Dónal Palcic) of Privatisation in Ireland: Lessons from a European Economy published in 2011 by Palgrave Macmillan.

Donal Palcic

Dónal Palcic is a lecturer in economics at the Kemmy Business School in the University of Limerick. His primary area of research is in public sector reform with a particular focus on the privatisation of state-owned enterprises. He is the author (with Eoin Reeves) of Privatisation in Ireland: Lessons from a European Economy published in 2011 by Palgrave Macmillan, and has also published a number of refereed journal articles and book chapters on the same topic.

Darragh Flannery

Darragh Flannery is a lecturer in economics at the Kemmy Business School in the University of Limerick. Darragh's primary area of research is in applied microeconometrics with a particular focus on the economics of higher education policy. He has recently published articles in journals such as Applied Economics, Economics of Education Review and the Economic and Social Review.