Capital projects The Government has committed to spend €33.6 billion between 2004 and 2008 on areas such as transport, education and the environment and will be attaching new value-for-money safeguards to its investment.
The Minister for Finance, Mr McCreevy, has also re-affirmed his intention to have 15 per cent of spending on public capital projects funded by the private sector by 2008.
The €33.6 billion is equal to almost 5 per cent of Gross National Product(GNP) over that period and has been allocated as part of a new longer-term capital investment programme that should facilitate better planning and execution of projects.
In terms of infrastructural investments some €3.6 billion will be spent in 2004 under the Economic and Social Infrastructure Operational Programme of the National Development Plan. Of this, €1.7 billion will be spent on roads and public transport, €1.1 billion on housing, €300 million on water and sewerage and €500 million on health.
Other areas receiving funding next year include education, which will get €6.3 billion; research and development, €209 million, with a further €693 million earmarked for employment supports and training. Some €20 million has also been set aside to meet the initial up-front investment required to implement the ambitious programme to decentralise Government Departments and agencies.
The five-year rolling investment programme will allow Departments to carry over any unspent Exchequer funds to the following year, up to a maximum of 10 per cent of each capital sub-head and is designed to maintain consistency of spending.
The Minister believes that longer-term funding arrangements will help to avoid sudden spurts that drive up contract prices, followed by lulls in activity. "The objective should be an even flow of investment projects, getting real value for money as they roll out," he said.
As part of its quest to ensure its money is well spent the Government will be seeking to fix the terms of contracts awarded for public sector construction and construction-related services.
The Minister for Finance wants to ensure that the contractors bear the risks of inflation and other cost increases rather than the State. The Government will also move away from the traditional approach to hiring consultants on construction contracts as this drives up project costs and fees. More details of these proposals will be announced later.
The private sector investment in capital projects will be driven by Public Private Partnerships (PPPs). Yesterday the chairman of IBEC's PPP council, Mr Jim Barry, welcomed the Minister's commitment to allowing a greater proportion of this type of funding.
"The reality is that progress to date on PPPs has been, at best, laboured. The real challenge to both the private and public sector is to take these positive sentiments and turn them into a number of tangible and substantial PPP programmes, which provide the private sector with attractive investment opportunities and the public sector with value for money," he said.
Because of the certainty of funding the National Roads Authority will publish its work programme up to the end of 2008 early next year, the NRA announced yesterday.
The amount is €1 billion higher than the initial sum allocated to the NRA in the National Development Plan for the seven-year period 2000 to 2006, and reflects the importance of the roads programme to prosperity, according to the Minister for Finance.
Major projects continuing under construction next year and benefiting from multi-annual budgeting include the N2 Carrickmacross By-Pass; M4 Kilcock/Kinnegad; M7 Monasterevin By-Pass; N8 Cashel By-Pass; N11 Rathnew/Ashford; N21 Ballycarty/Tralee; N26 Ballina/ Bohola Phase 1; M50 South Eastern Motorway; and M50 Dublin Port Tunnel.
