However, some projects will face an “acid test” of proving they can create an “income stream” to effectively pay for themselves over time, potentially leading to new transport tolls and fares for already struggling members of the public.
Finance Minister Michael Noonan and Public Expenditure Minister Paschal Donohoe confirmed the moves at the launch of a review of the Government’s 2016-2021 capital project plan yesterday, during which they also revealed extra money will be sought from the European Investment Bank this year.
Under plans previously announced by the former Fine Gael-Labour government, the State is to spend €27bn on road, rail, and building improvements by 2021, with the figure rising to €42bn when semi-state and public private partnerships are taken into account. While the vast majority of this money has already been allocated, just over €5.1bn was added as part of last year’s summer economic statement, of which €2.5bn has already been ring-fenced for housing developments.
The remaining €2.6bn was due to be reviewed at the end of 2018, but Brexit and the need to entice British-based companies to Ireland, have seen Mr Noonan and Mr Donohoe fast-track the review to this year.
Mr Donohoe said he has told his cabinet colleagues to provide a list of their priorities to him by the end of February on how the €2.6bn should be spent before October’s budget.
Mr Donohoe said he was reluctant to become involved in “speculation” over which projects would be prioritised, but he name-checked improvements at Dublin Airport, the Metro North Luas line from the airport to the city centre, deepening Dublin and Cork’s ports, and wide-scale road developments that could prove vital to enticing Brexit-fleeing firms to Ireland.
Citing the need to spend the money so Ireland can have “competitive advantages in a competitive world”, Mr Donohoe stressed “capital investment is even more important than it has been in previous years” and that the plan is “as much to do with a preventative eye on what may happen in the future as to what is happening now”.
Asked about the reason for the fast-tracking of decisions on how the unallocated money will be spent, Mr Donohoe said: “Brexit will have an impact on our economy” and that “is the reason for the review now”.
Mr Noonan supported the remarks, and said he will seek extra off-balance-sheet funding from the European Investment Bank in the coming months to ensure additional money is made available for further capital projects.
However, sounding a clear note of caution, he said on three separate occasions that projects which can create their own “income streams”, such as tolls and fares, will be prioritised as part of any EIB funding scheme, potentially resulting in extra costs for the public.
“That is the acid test: Can the project generate income flow. We need to identify projects of that nature, but we’re only at the exploratory phase,” he said.