Fianna Fáil calls for more PPPs to fund infrastructure

Fianna Fáil has warned that the Government's "aversion" to entering partnerships with private companies to co-build big infrastructural projects risks Ireland losing out on "significant investment".

Dara Calleary, Fianna Fáil's spokesman for public expenditure, said the Government was "dragging its heels" on further exploring public-private partnerships (PPPs) as a model to deliver large-scale infrastructure projects.

He said the Government’s “risk aversion to project specific PPP finance” could also see the State losing out on funds that might become available under the €315 billion so-called Juncker plan for capital investment across the continent.

Mr Calleary was speaking following comment from National Treasury Management Agency chief executive, Conor O'Kelly, to an Oireachtas committee hearing. Mr O'Kelly told the committee the Government should look more closely at using PPPs to fund infrastructure.

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Building momentum

The debate comes as fresh data shows a marked acceleration of Irish construction spending in February, after a three-month lull in which growth had eased “modestly”. The index shows, however, that civil engineering continues to lag behind the other sectors, with respondents reporting a fourth consecutive monthly decline in activity.

The Ulster Bank construction purchasing managers index (PMI) rose to 57.9 in February from 55.7 in January, indicating “a sharp and accelerated expansion of activity”. The index has grown monthly for the last three and a half years.

Housing activity drove most of the growth in the index in February, followed by commercial activity.

Ulster Bank said employment growth in construction in February was “considerable and was the third-fastest in the survey’s history”.

"Irish construction activity continues to grow at a robust pace," said Simon Barry, chief economist for the Republic of Ireland at Ulster Bank.

“There was a very encouraging acceleration in residential activity, which took the Housing PMI back to levels last seen in November . . . Survey respondents mentioned that improving economic conditions continue to underpin strong client demand . . . the Employment Index remains close to record levels, with this month’s reading representing the third-fastest rate of job creation in the survey’s 16 ½ year history.”