Ireland 'may miss out on private sector infrastructure investment'

Ireland - north and south - is in danger of missing out on major investment in key infrastructural projects unless the authorities are able to provide a tangible flow of deals in the years to come, an expert of the public private financing of infrastructural projects has warned.

Roger Alexander, head of the European Project Finance at international accountancy firm Mazars said: "Today Dublin is hosting a major all-island conference on infrastructural investment which is being attended by many of the key stakeholders of Public Private Partnerships in Europe, but we are in danger of many of these investors looking elsewhere unless we can provide a greater level of certainty about a flow of projects."

Mr Alexander said European investors - some of whom have invested heavily in infrastructural developments in recent years - are becoming frustrated at the lack of certainty about future deals and their structure.

"These potential investors need a tangible deal flow. They need to know what projects are planned, when they are expected to begin, where they are planned, how much the projects are worth and their complexity. If they don’t have that certainty then they are going to look somewhere for their investment, and if that happens it would have serious implications for the pace of infrastructural development north and south," Mr Alexander said.

"At the moment, we know there is a potential healthy pipeline signalled for the next 18 months in the form of school and third-level education PPP projects, the National Concert Hall PPP, the Abbey Theatre PPP and social housing PPP’s in the Republic as well as the Ulster Hospital and waste projects in Northern Ireland.

"Investors need more information on the specifics - the when, the where, the how much - information that is crucial for the construction industry.

“The public sector must be aware of this changing mood within the industry and to ensure that there is a clearly identifiable pipeline of significant projects coming to the market. Aspirational statements will not hold the market’s attention."

"With the fragility in the market and investor expectations still demanding constant growth, the construction industry will migrate to where there is certainty and opportunity.

Mr Alexander said that "the island of Ireland has to compete and provide that required level of certainty."

He said that reportedly €100bn worth of projects has been identified in priority areas such as health, education, waste, transport and renewables.

He added that with the slowdown in the economy, this is the perfect opportunity for the public sector to release the resources to deliver investment in public assets and achieve optimum value for money.

"But this needs to be done in a coherent fashion which gives the industry reassurance that projects are going to be developed," he said.

He said that Ireland is still in a strong position in the PPP market - in 4th place behind the UK, France and Greece - but is going to come under pressure from other locations which are taking a more coherent approach to infrastructural development.

There are significant opportunities throughout Europe on major infrastructure and accommodation projects.

Irish investors are already utilising the wealth of knowledge gained here over the past decade and exporting this in strategic partnerships with other European partners. #

Mr Alexander is of the opinion that this trend will continue.