State stick­ing to €4.1bn cap­i­tal spend­ing plan

The Irish Times - Business - - NEWS - EOIN BURKE-KENNEDY and COLIN GLEE­SON

The Gov­ern­ment has re­it­er­ated its com­mit­ment to an ad­di­tional €4.1 bil­lion in cap­i­tal spend­ing be­tween 2018 and 2021.

The ex­tra money an­nounced in the Gov­ern­ment’s mid-term re­view of its cap­i­tal plan, pub­lished yes­ter­day, had al­ready been flagged in Bud­get 2017 and the spring eco­nomic state­ment, and does not rep­re­sent any new al­lo­ca­tion.

The lat­est re­view is seen as a pre­cur­sor to a new 10-year na­tional in­vest­ment plan, which is ex­pected be­fore the end of the year. Since the Gov­ern­ment’s cap­i­tal plan was first an­nounced back in 2015, ap­prox­i­mately €6 bil­lion has been added to the orig­i­nal €20.9 bil­lion cap­i­tal bud­get, against a back­drop of in­fras­truc­tural bot­tle­necks in hous­ing, wa­ter, health and ed­u­ca­tion.

Ear­marked for hous­ing

Some €2 bil­lion of this ad­di­tional spend has al­ready been ear­marked for hous­ing projects while the resid­ual €4 bil­lion will go to ad­dress other in­fras­truc­tural deficits.

Launched by Min­is­ter for Fi­nance Paschal Dono­hoe, the re­view noted that the con­text for pub­lic cap­i­tal in­vest­ment had “changed dra­mat­i­cally” in the rel­a­tively short pe­riod since the Cap­i­tal Plan – Build­ing on Re­cov­ery was pub­lished in 2015. “The sig­nif­i­cant progress made in restor­ing the pub­lic fi­nances and the trans­for­ma­tion in eco­nomic per­for­mance has en­abled Gov­ern­ment to sup­ple­ment the €20.9 bil­lion al­ready com­mit­ted to pub­lic in­vest­ment be­tween 2018 and 2021 by a fur­ther €6 bil­lion,” it said.

‘Ac­tion plan’

“Tak­ing ac­count of the sig­nif­i­cant re­sources of €2.2 bil­lion which has been pro­vided to sup­port the de­liv­ery of the ac­tion plan for hous­ing over the pe­riod, €4.1 bil­lion in ad­di­tional cap­i­tal ex­pen­di­ture is to be al­lo­cated on the ba­sis of this re­view in Es­ti­mates 2018.”

Fer­gal O’Brien, di­rec­tor of pol­icy at Ibec, said while the re­view did not an­nounce any ad­di­tional money it recom­mit­ted the Gov­ern­ment to bol­ster­ing its cap­i­tal plan, which was pos­i­tive. He said Ibec hoped to see ex­tra money in next month’s bud­get and/or in the 10-year plan as Ire­land still lagged be­hind com­peti­tor coun­tries for cap­i­tal spend­ing.

Mr O’Brien said the ad­di­tional €4.1 bil­lion would bring Ire­land’s cap­i­tal spend to about 2.5 per cent of gross do­mes­tic prod­uct (GDP), but he said it needed to be about 4 per cent if in­fras­truc­tural deficits were to be ad­dressed.

The re­view said the planned to­tal in­crease in pub­lic cap­i­tal in­vest­ment was now al­most 40 per cent greater than ini­tially en­vis­aged.

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