[PR] IBEC-KPMG report on how to deliver future infrastructure

[Colm Moore]

http://www.ibec.ie/IBEC/Press/PressP...t?OpenDocument

IBEC-KPMG report on how to deliver future infrastructure
Monday, 7 March 2011

IBEC and KPMG today launched a new report, 'What next for infrastructure?', which sets out how best to meet Ireland's infrastructure needs in the current difficult economic environment. The report calls for a new long-term capital investment plan, a new National Infrastructure Authority and a fresh approach to funding, including much greater use of public private partnerships (PPPs).

The report says that a clear business case exists for the greater use of PPPs, as they have a track-record of delivering infrastructure projects on time and within budget. The report recommends:

* A new long-term capital expenditure plan that prioritises specific projects
* A much greater use of non-Exchequer funding, with all significant infrastructure considered for procurement as a PPP
* A new National Infrastructure Authority, that brings together the expertise of the National Roads Authority, the Railway Procurement Agency and the National Development Finance Agency


IBEC director of policy Brendan Butler said: "Ireland still lags behind much of Europe when it comes to infrastructure. New investment will help stimulate economic activity, create jobs and restore competitiveness. The government has a lot less to spend on infrastructure, but the private sector has the capacity to step in and fill the gap. There has never been a more compelling argument for increasing the number of projects delivered by PPP.

"Our experience from the 1980s demonstrates that a decade of under-investment in infrastructure can undermine economic growth and competitiveness. It can also result in costly, long-term socio-economic problems, most evident in the areas of social housing, health and education."

Michele Connolly, partner, KPMG said: "Notwithstanding our current economic difficulties, we still have gaps in our infrastructure that remain to be filled – both to improve quality of life in areas such as healthcare and education and also to help attract new industry to Ireland. The current pressure on government finances and borrowing levels means alternative solutions need to be found to fund that gap.

"Private finance and PPPs in particular have been a proven mechanism both internationally and in Ireland to do so. Infrastructure in Ireland could be delivered quicker and at no or limited upfront cost to Government. We are not taking full advantage of these opportunities, which will create jobs and economic activity with lasting benefits,” she concluded.

InfrastructureInsightsforIreland.pdf - 4,797 Kbytes

http://www.irishtimes.com/newspaper/...291484253.html

CIARÁN HANCOCK, Business Affairs Correspondent

A NEW long-term capital investment plan, a new national infrastructure authority and greater use of public-private partnerships (PPPs) are the key recommendations included in a new report on capital spending in Ireland produced by employers group Ibec and accountants KPMG.

The report, published yesterday, states that a clear business case exists for the greater use of PPPs, as they have a track-record of delivering infrastructure projects on time and within budget.

About €2.1 billion of private sector funding was used to extend the national road network in recent years.

But some PPP projects, like the Thornton Hall super prison in Dublin, failed to take off.

The report recommends that a new long-term capital expenditure plan be drafted that prioritises specific projects.

It also calls for a greater use of non-exchequer funding, with all significant infrastructure considered for procurement as a PPP.

The report cites water services as an example of an area where private funding could be used.

It argues that a defined PPP spend should be agreed to provide clarity as the the extent of the State’s long-term financial commitment in this area.

Typically, it can be 25 to 30 years.

PPPs are potentially attractive to the cash-strapped exchequer as a means of paying for infrastructure as this funding is not counted as part of government borrowing.

Ibec and KPMG have called for a new national infrastructure authority to be set up. This would bring together the expertise of the National Roads Authority, the Railway Procurement Agency and the National Development Finance Agency.

They also argue in favour of responsibility for the delivery of infrastructure being added to the portfolio of a minister.

Ibec director of policy Brendan Butler said Ireland still lags behind much of Europe when it comes to infrastructure.

“New investment will help stimulate economic activity, create jobs and restore competitiveness,” he said. “The Government has a lot less to spend on infrastructure, but the private sector has the capacity to step in and fill the gap.”

Michele Connolly, a partner with KPMG, said there were still “gaps” in the infrastructure that remain to be filled.

The four-year plan for the public finances envisages a near 60 per cent cut in capital expenditure by 2014 from its peak in 2008.