Ireland continues to have a substantial infrastructure deficit compared to the most developed European Union member-states, despite the rapid convergence of average income levels as a result of rapid economic growth. On transport, the environment, energy, telecommunications and educational expenditure it has been estimated in a report for the Irish Business and Employers' Confederation that the deficit will amount to £14.2 billion over the period of the next EU structural fund allocations. Since this is much more than will be funded by EU and exchequer resources combined, the Government's decision to endorse proposals for Public Private Partnerships should be welcomed as timely and appropriate.
It is suggested that certain schemes would be particularly suitable for such partnerships. They include the Luas transport scheme in Dublin, several large bypasses, waste, water and educational building projects. The private sector would put up the money, build and operate them under contract for a set number of years. Some projects are to be set up on a pilot basis and a working group comprising public officials, employers and trade unions will provide continuing advice. The report published yesterday advises on limited and targeted projects suitable for such co-operation, while industry representatives point out that continued economic growth will depend on high levels of investment if bottlenecks and congestion are to be avoided.
It is significant and revealing that few voices are raised in protest against such private-public co-operation. More pragmatic attitudes have emerged across the political divide, just as has been the case with privatisation. This is partly driven by EU competition rules, which reflect a new policy equilibrium at the international level. Ireland has been to some extent shielded from such pressures by the happy coincidence of EU structural funds and public need for infrastructural investment during this decade. Everyone concerned now realises that the flow of EU funds will reduce according to the outcome of the Agenda 2000 negotiations which are now set to conclude under the German EU presidency next March. As they intensify through the autumn they should capture more public attention. The crucial bargaining point for the Government concerns the need for a soft landing in the scaling down of EU structural fund aid to this State, taking full account of continuing infrastructure deficits. Closing that gap fully could take another generation of investment using mostly our own resources. It is quite clear that after 2006 Ireland will not be in receipt of anything like the same level of transfers and will be well on the way to becoming a net contributor to the EU budget. All the more reason, therefore, to welcome the thinking behind yesterday's report on such partnerships as a means of mobilising resources for future infrastructural investment. Calls from the Labour Party leader, Mr Quinn, for a greater emphasis on strategic planning over a ten year period in order to focus more clearly on such priorities could with value be taken up by the Government in similarly pragmatic vein.