Dublin rail, children’s hospital and schools in €27bn capital plan

The Government will on Tuesday announce a capital plan worth €27 billion over the next six years in a move to underpin its belief in a strongly recovering economy.

The capital programme, with a higher than anticipated budget, has provided for major infrastructure projects, primarily a new rapid transit system from Dublin city centre to Dublin Airport and Swords.

It will also include funds to allow the quick completion of the National Children’s Hospital and a substantial increase in expenditure for school buildings. The Government has estimated 45,000 jobs will be directly created during the construction phase.

The six-year project will be announced by Minister for Public Expenditure and Reform Brendan Howlin, along with Taoiseach Enda Kenny and Tánaiste Joan Burton. Such plans are normally five years in duration but the addition of a sixth year allows a substantially increased allocation.

Transport project

A further announcement will be made by Minister for Transport Paschal Donohoe, who will unveil details of his multibillion spending envelope, including the preferred rapid transport project. One of the six options being examined was a revised metro system costing over €1.5 billion, which seems the likely choice.

The next single largest project in the plan is the children’s hospital. It will be allocated €650 million, of which €200 million will come from the lottery licence.

The Department of Health will be given €450 million to fund the repairs of nursing homes. Exchequer funding will provide €300 million, with the remaining €150 million being raised through public-private partnership schemes.

The Department of Education will see its capital envelope significantly increase from slightly over €2 billion in the last plan to over €3 billion. This is to accommodate an expansive school building programme to cater for the large increase in children expected to enrol in schools.

Social housing

Most of the capital spending for housing was announced last year in a €4 billion package. In the new programme, the Department of the Environment has secured an additional €500 million for social housing. The Government will also allocate €1 billion for flood relief schemes.

Mr Howlin is said to have told colleagues the investment is being made on a fiscal sustainability basis. “Not every department will be 100 per cent happy with its allocation as he favoured an approach that was realistic and sustainable,” said a source.

A review of the plan will occur in 2017 and, based on the performance of the economy, a decision may be taken to increase capital spending if it remains inside the limits set by EU fiscal rules.