Cowen says 25% of funds to come from private sector

Funding: Almost a quarter of the funding for the €34 billion national transport strategy is to come from public-private partnerships, Minister for Finance Brian Cowen has said.

Speaking at a press conference after the launch of the plan yesterday, Mr Cowen defended the public-private partnership principle as being one that was "working well for us" and said there was also a need for the Government to put in place "sustainable funding arrangements".

Questioned as to whether or not 25 per cent was an achievable level of participation by the private sector, Mr Cowen said the State had gained considerable experience in such projects in recent years and all current projects were going well.

In considering a 10-year "massive and necessary commitment", Mr Cowen said the Government was faced with an annual transport bill which, at its peak, would be over twice current levels.

The accelerated level of funding was, he said, based on a number of assumptions:

that the economy would grow close to its potential rate, implying an average growth of about 4.5 per cent;

maintenance of prudent management of public finances;

and overall capital expenditure and investment of about 5 per cent of GDP each year, with the flexibility to increase investment above this level.

Mr Cowen said key questions he faced were whether the programme was warranted and whether the Government could justify its cost.

Secondly, he had to consider could it be achieved while maintaining sensible economic management. He was also concerned it would represent value for money.

He was now, he said, satisfied as to all these points. "Unless we make further improvements our competitiveness would be eroded," Mr Cowen said. The productive capacity of the economy would be enhanced by the investment for a long time to come.

He said the 10-year programme would see the 5 per cent spending level increase in some years, but he believed this would be manageable. It would be difficult to provide for all eventualities, but there were contingencies in the costings. He expected all agencies to deliver the projects on time and on budget.

"I note with approval that the recent record shows a number of transport projects coming on time, on budget," the Minister said.

In relation to value for money, he said intensive project-monitoring would be involved, while certain major projects would be brought to Government before they were given the go-ahead.

"The 10-year investment which we are unveiling here today is a vote of confidence in Ireland's future," he said.

"I am confident that by the end of the next decade our transport infrastructure will be transformed," Mr Cowen concluded.