Jobs pledge as Cowen puts €39bn to work

UP TO 30,000 construction jobs will be created from a multi-billion euro investment in school building, public transport and the retro-fitting of houses.

And Taoiseach Brian Cowen yesterday claimed that a further 270,000 direct and indirect jobs could be created over the next six years due to the increased capital funding being given to the State's two main job agencies, Enterprise Ireland and IDA Ireland.

The jobs boost came as the Government unveiled its revised national development plan to invest more than €39bn in the Government's revised capital works programme by 2016.

Money has been provided for major transport projects like Metro North and the Dart Underground, as well as 70,000 extra primary and 15,000 secondary school places.

The first jobs will come on stream in weeks as work begins on the new DIT campus at Grangegorman. Eventually 450 people will be employed building the new university.

The figures are significantly down from the €75bn set aside in the previous plan to 2013.

However, employers' group IBEC last night said the certainty that now existed would deliver a much-needed stimulus to the economy.

"This investment is an important vote of confidence in the Irish economy," IBEC director Brendan Butler said.

The boost came as shares in the country's two biggest banks surged after they passed last Friday's stress tests on the European banking sector.

Shares in AIB were up 5.6pc in Dublin at the close of business yesterday. Shares in Bank of Ireland were 4.9pc stronger. And struggling small businesses (SMEs) could soon be thrown a credit lifeline.

Three government ministers -- Brian Lenihan, Batt O'Keeffe and Eamon Ryan -- met AIB chiefs last night over the bank's lending record to small businesses. They told AIB chairman Donal O'Connor and chief executive Colm Doherty that the bank must prove it was not starving credible Irish businesses of credit.

Mr O'Keeffe said banks that did not meet the lending targets would be "named and shamed".

"If the banks do not lend, our recovery will be paralysed and we are determined not to allow that to happen," he said.

A political source said: "AIB have said they're going to lend €6bn to SMEs (over the next two years). The Government wants them to spell out exactly how they're going to implement that."

According to the new plan, the IDA believes it can win 640 new investments from foreign companies in the next six years -- with half of them going to locations outside of Cork and Dublin. That would create 98,000 direct jobs and 68,000 indirect jobs in the wider economy.

Enterprise Ireland estimates that another 63,000 jobs could emerge out of support given to the SME sector, plus another 44,000 indirect jobs.

As well as these 273,000 jobs, Mr Cowen said another 30,000 construction jobs would be created from the building of infrastructure such as schools and public transport. He also said the Government would get better value for money in the current economic climate.

Bang

"In the new situation that we find ourselves, emerging out of recession. . . what we're now seeking to achieve is where do we get the maximum bang for our buck?" the Taoiseach said.

A breakdown of the Infrastructure Investment Priorities 2010-16 includes:

• €12bn set aside for transport, with €5.7bn for Metro North and DART underground. A decision on the planning go-ahead is expected next month. Up to 4,000 will be employed on the Metro project.
• €8bn for environment, heritage and local government, including €3.4bn to upgrade and expand water infrastructure and €4.4bn for social housing, moving away from the build-and-buy policies to leasing existing properties.
• €4bn given to education, including €3.1bn to upgrade and expand schools and €650m for third level. Hundreds of jobs will be created in generating 75,000 new pupil places.
• €3.8bn given to trade and enterprise, with more than €1.2bn invested through IDA and Enterprise Ireland.
• €2.8bn for health, including €1.6bn to fund acute hospital facilities.
• €1bn for the Office of Public Works, including €480m for flood relief schemes.
• €700m for the Department of Justice, including €250m for additional detention centres.

Mr Cowen denied there had been a spectacular miscalculation in the 2007-2013 National Development Plan.

Public transport and housing were the hardest hit. Just three new roads will be built. And even though new school places will be provided, there will still be 10,000 primary school pupils in prefabs in 2016.

Fine Gael finance spokesman Michael Noonan described the €1bn reduction in annual spending on capital projects as extremely disappointing. "This reduction will have a profound effect on economic activity and on job creation," he said.

The Construction Industry Federation welcomed the plan, but said the real test would lie in the delivery of the projects.