Poor value from Structural Funds highlighted by ESRI

The most damning assessment by the ESRI in its mid-term evaluation of the current tranche of EU Structural Funds is reserved for the "Europeat 1" power station planned for the midlands which, it says, would "easily fail" the investment criteria used by the IDA and Forbairt.

The ESRI study describes the project as "uneconomic" and says it has been "primarily designed as an income-maintenance measure" for Bord na Mona workers. "Applying the standard IDA/Forbairt cost-benefit methodology to this project would lead to its rejection."

The project would also add substantially to Ireland's carbon-dioxide emissions. And if stricter carbon-dioxide emission standards were adopted within the EU, the cost of abatement elsewhere in Ireland "would be very high indeed - a multiple of the total subsidy now proposed", according to the ESRI.

"For all of these reasons, the project would be a high candidate for withdrawal of budget," it says, adding that the number of jobs it would generate was "not enough to justify the grant". Stopping the scheme "should save all of the £21 million" pledged in EU aid.

On transport, the ESRI study suggests that Irish roads are being over-designed and says there is "scope for greater economy" in this area. Several roads being completed as dual carriageways or motorways would have been adequate at a lower design standard.

In addition, poor initial costings meant that the number of road improvements envisaged in 1994 "will not be achieved within the budget provided - the shortfall will be of the order of £100 million" - while traffic growth was running at double the level originally anticipated.

The study says that concrete and steel are not the only, or even the most important, elements of transportation policy. Planning and research on road pricing "should go ahead now so that state-of-the-art technology is ready to be implemented as early as possible".

Road pricing, whereby motorists in urban areas would be charged for creating congestion, is justified because much of the increased demand for transport is caused by the fact that it is "under-priced". Therefore, the optimal policy would be to reduce demand by increasing the cost.

This would include "electronic collection mechanisms" as well as tax reforms, including the abolition of subsidies for city centre parking. "However, road pricing is extremely unpopular and the political will to introduce it is unlikely to exist in the short term."

It calls for a "more coherent and better-funded approach" to urban transportation, particularly in Dublin, and says this would include a third Luas line, "probably to Ballymun". However, additional funding "may also be necessary" to finish the Luas project to an adequate standard.

The study also queries the high levels of expenditure planned to bring coastal sewage treatment works into line with EU directives, saying that more attention needed to be paid to the pollution of inland waters - largely by agricultural wastes and the over-use of fertilisers.

It suggests a two-pronged approach to this problem, with increased spending on farm pollution control - for example, by switching funds from sheep headage payments - and also by imposing taxes on "polluting behaviour, including excess fertiliser application".

The ESRI also points out that bigger sewage treatment plants, operating to much higher standards, would add 20 per cent to the annual budget for water services - and that the extra costs should be passed on to domestic and other users in water charges.

If these costs are not passed on, it warns that "unsustainable behaviour" would be encouraged, with users imposing additional demands on water and sewage treatment services, "not to mention the extra taxation that will be required" to finance their operation.

It points out that the Royal Canal will soon have insufficient water, "owing to shortages in the Dublin region, potentially aggravated by removal of the option of domestic charging. Additional funds will be needed for extraction from Lough Owel to supply the Royal Canal."

DEALING with the environmental impact of agriculture, the study accepts that switching a "substantial block" of funding from headage payments to farm pollution control, "preferably even more targeted at the less well-off farm families", would run counter to Partnership 2000.

But it says headage payments contribute to the "serious" problem of over-grazing in the uplands of the west - notably in Galway, Mayo, Leitrim, Sligo, Donegal and Kerry - where "excessive damage" had occurred before any serious attempt was made to control it.

This was related to "the inadequacy of the information available to measure environmental impacts . . . The environment was put at risk and some irreversible damage occurred owing to the lack of `evidence' of damage. In some instances, warnings of third parties went unheeded."

It also expresses reservations about the impact of fish farms, saying that the most up-to-date scientific research "is persuasive in linking the adverse pressure on sea trout stocks to finfish culture", and adding that it remained to be seen whether new controls would be effective.

On tourism, the study warns that the official goal of doubling visitor numbers by 2010 "needs to have a process in place - monitoring, laws and, where appropriate, pricing - to prevent unsustainable demands on the asset" represented by Ireland's landscape.

"The absence of such safeguards brings to mind the example of the Parthenon, which is said to have suffered more damage from the past 25 years of tourism than it sustained over the previous 2,500 years. Only with a well-developed process firmly in place can such threats be reduced."

Among the assets that are "in danger" from tourism, according to the ESRI, are isolated wilderness areas, scenery that has evolved through long-term, small-scale human intervention, special ecosystems, village streetscapes, historic vernacular architecture and interiors.

It recommends that comprehensive area management plans be drawn up for areas where the landscape is particularly sensitive and subject to increasing tourism pressure, including the Burren, Connemara, the Ring of Kerry, the Dingle Peninsula and the Wicklow Mountains.

The study also concludes that bog conservation "provides many benefits and is worthy of support" because of its value as a "sink" for greenhouse gases and because only 20,000 hectares of pristine raised bog now remains from an area 15 times as large 50 years ago.

The ESRI concedes that the current programme of EU investment "was not drawn up with the environment as its major consideration". The criterion for investment was that projects should show the highest return; environmental issues were "discretionary considerations".

In order that these issues are addressed, it recommends that a new EU-funded programme, the "Environment Initiative", should be established to provide information to help with policy, backed up by local monitoring groups involving non-governmental organisations.