CIF warns of PPP funds being used to boost spending

Public Private Partnerships: The construction industry last night accused the Minister for Finance of using private funds to put a gloss on capital spending plans next year.

The Minister has included €150 million in funds from public private partnerships (PPPs) to augment Exchequer spending on the improvement and maintenance of the State's national roads.

Until now, PPP funds have not been included in the Estimates although they have contributed to defraying the costs of capital projects, such as the Kilcock-Kinnegad road.

Had that practice been continued this year, the capital programme for roads would have increased by less than 1.5 per cent on last year before allowing for inflation, a figure the Construction Industry Federation (CIF) says is nowhere near enough to sustain investment in our road network.

"It is obvious that spending by the Exchequer on infrastructural projects will fall by 3 per cent in volume in 2004," CIF director general Mr Liam Kelleher said last night.

Fine Gael transport spokesman Mr Denis Naughten said the Estimates flew in the face of public pronouncements on transport. "They have been saying consistently that it will be 'steady as she goes'," he said. "It is only when you break down the figures that you see how Exchequer funding has been curtailed."

He said the €150 million of PPP funding included in the Estimates related to the completion of the M1 motorway, including the Dundalk bypass.

IBEC said the inclusion of PPP funds in the public capital programme figures was a logical move as PPPs were becoming a real funding option for capital projects rather than just a theory on paper.

Mr Reg McCabe, the IBEC spokesman on transport and PPP issues, said there were likely to be further significant announcements on PPPs in Mr McCreevy's Budget speech.

He also said the Government was switching its focus on PPPs. Until now, value for money had been the overriding concern but this was changing to a concentration on projects that could be kept off the balance sheet, giving the Government more scope for investment while staying within the confines of the Stability and Growth Pact.