Public private partnerships (PPPs)

Description:

Ireland still lags behind much of Europe when it comes to infrastructure and new investment will help stimulate economic activity, create jobs and restore competitiveness. Greater use of private finance through the public-private partnership (PPP) model would advance infrastructural development while easing the financial burden on the taxpayer and Government.

Implication(s):

On 10 November 2011, the Department of Public Expenditure & Reform published the Infrastructure and Capital Investment Programme 2012-16 programme. It will amount to approximately €17bn (it represents roughly half of what was originally envisaged for capital spending). In 2012 the allocation will be €3.9bn, reducing to €3.3bn in 2013 and stabilising at €3.2bn in the following three years, which will result in the vast majority of the capital budget being spent on maintaining existing capital stocks by 2016. Government should begin work on a comprehensive medium-term plan for the country’s capital needs beyond 2016; with specific focus on a new National Spatial Strategy and infrastructure plan to 2020. A new medium-term strategy is necessary to avoid a loss of competitiveness and addressing serious demographic pressures on infrastructure over the next 20 years.

Current Position:

In our Infrastructure 2020: Building beyond the bailout report, Ibec calls on government to spend 4% of GDP on infrastructure development by 2020 to confront long-term economic and demographic challenges. Government must embrace innovative funding sources and PPPs should be the key delivery mechanism for infrastructure funding. Diversification of funding streams must occur and Government must be ambitious in availing of external sources (e.g. EU/European Investment Bank, institutional lenders such as pension funds etc) to fund infrastructure delivery over the lifetime of the current capital programmes and in planning for subsequent initiatives. Non-exchequer finance is a valuable source of foreign direct investment. We also need to ensure effective delivery of projects: The infrastructure delivery process in Ireland should be streamlined. Delays due to planning or the public procurement process can undermine confidence in Irish projects, potentially damaging Ireland’s reputation as a place in which to do business. All unnecessary non-construction costs and delays should be rationalised. A project pipeline containing clear timelines should be produced and regularly updated. The planning process should be reformed to take into account economic and strategic considerations.

Download documents:

Infrastructure-and-Capital-Investment-2012-16.pdf - 456 Kbytes
IBEC_Submission_CAPEX_Review_2012-2016.pdf - 509 Kbytes
InfrastructureInsightsforIreland.pdf - 4,797 Kbytes

Contact:

Aidan Sweeney
Phone: +353 1 605 1642
Email: firstname.lastname@ibec.ie

Last Updated: 02/01/2013