Saturday 20 January 2018

Private cash critical to ensure €2bn plan works

Minister for Public Expenditure and Reform Brendan Howlin TD during a media briefing at the Department of Finance, Dublin.
Minister for Public Expenditure and Reform Brendan Howlin TD during a media briefing at the Department of Finance, Dublin.

Fionnan Sheahan Political Editor

THE funding of the Government's new €2bn stimulus is heavily dependent on money rolling in from the private sector.

The launch of the coalition plan yesterday to invest in roads, schools and health centres was overshadowed by questions over the source of the funding.

And the projected numbers of jobs to be created by the plan was also in doubt.

The total package will be made up of funds from the European Investment Bank (EIB), National Pension Reserve Fund and domestic banks.

But it also means releasing €850m from the sale of state assets and a new licensing arrangement for the National Lottery.

The Government will face fierce resistance from unions who fear that selling state assets will result in jobs being cut by new private sector owners.

Public Spending Minister Brendan Howlin repeatedly refused to give figures on how much would be raised from each source, yet was confident the Government would have €2.25bn at its disposal.

But Mr Howlin was also unable to give a timescale for achieving the target figure, as major questions remained over the fine detail of the stimulus plan.

The key problems with the plan included:

• Vague explanations of how money will be raised;

• The long timeframe for some of the projects, with some work not expected until 2016 or later;

• No clarity on the number of permanent jobs to be created. Most will be construction jobs which will exist for a limited time only while a project is being completed.

The most noteworthy parts of the stimulus plan include:

• The go-ahead for the new DIT campus at Grangegorman in Dublin.

• The N17/N18 Gort to Tuam road;

• The M11 Gorey to Enniscorthy motorway.

• The N25 New Ross bypass.

• 20 primary care centres around the country.

• Six new schools.

lNew courthouses and garda regional headquarters.

• State pathology lab.

The Galway city bypass is currently held up due to legal proceedings but may also be added to the list.

Public Private Partnerships (PPPs) will form a core part of the plan.

Mr Howlin said the economic crisis made these types of deals very difficult over the past number of years but he was now confident the funding system was in place.

"That structure will involve a combination of funding from a number of sources including our domestic banks, the EIB and the National Pension Reserve Fund," he said.

Taoiseach Enda Kenny said international confidence in Ireland was improving and Europe had "come round to Ireland's way of thinking.

"The success of our policies to date means that international confidence in Ireland is improving, our exports are growing, new foreign direct investment is coming in.

"The next year will be a vital one in terms of Ireland's journey of recovery.

"Yes -- it has been tough and it will be tough. But with this announcement our national journey continues and improves," the Taoiseach told reporters.

Irish Independent

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