1. Government should aim to spend 4% of GDP per annum on capital expenditure by the year 2020:
Since 2008 infrastructure expenditure has fallen significantly. In the period since 2008 capital
expenditure has made up over 70% of total expenditure cuts of 7.7 billion. Ibec believes the Irish
economy can grow at an average rate of 3-4% per year, over double the EU average, for the next 20
years. In this context the Irish state should look to confront serious long-term competitiveness and
demographic challenges by spending 4% of GDP on infrastructure development by 2020. This is below
peak values of just over 5% and comparable to levels last seen in the early part of the last decade. This
commitment will guarantee that we do not repeat the mistakes of previous economic downturns when
cutbacks in capital expenditure led to the development of bottlenecks which proved costly to overcome
in subsequent years.
2. Government should develop an infrastructure 2020 strategy: 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. The current capital expenditure framework
until 2016 is necessarily cautious; by 2016, however, the plan will result in the vast majority of the capital
budget being spent on maintaining existing capital stocks. The new infrastructure plan for 2020 must be
more ambitious in order to avoid a loss of international competitiveness and serious demographic
pressures on infrastructure over the next 20 years.
3. Government must embrace innovative funding sources: Public private partnerships (PPP) 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.
4. 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.
5. Designate a Government champion for infrastructure: There are too many departments responsible
for infrastructure policy, early project development and subsequent delivery. Government should
formally assign responsibility for infrastructure to an existing minister. This would ensure better coordination
and integrated delivery of spatial and infrastructure planning across all elements of the State.
This minister would also take the lead in championing investment in Irish infrastructure internationally.
- Infrastructure 2020 Building beyond the bailout.pdf - 579 Kbytes
- Ibec Building Beyond the Bailout slides.pdf - 654 Kbytes
Thursday, 24 October 2013