PPP initiative for Eire

The Irish government plans to set up a public/private partnerships unit within weeks to tackle infrastructure needs when the EU structural funds fuelling the current construction boom begin to be reduced next year.

Far less EU money will come following the improvement in the economy and infrastructure. All of Ireland has Objective 1 status at present but it is expected that Dublin and parts of eastern Ireland may qualify for Objective 2 status, which involves lower co-financing rates and tight limits on the categories of projects eligible for EU funding.

The Government plan follows a report by a team of three consultants - Chesterton Consulting, Farrell Grant Sparks and Goodbody Economic Consultants. The team was commissioned in June to "develop criteria for and advise on the issues arising in implementing the public/private partnerships."

In the report the consultants highlighted skills shortages and Ireland's relatively poor road and rail infrastructure as barriers to continued economic growth. Funding of Ireland's infrastructure needs has been estimated at £12 billion (IR£14 billion) by one source, according to a spokesman for Chesterton.

While PPPs give access to alternative or additional sources of capital and take some risk away from the public sector, the consultants warned that the procurement system is not an "all or nothing approach."

The consultants said that relevant PPP projects should be introduced in a targeted fashion, possibly calling for a priority list. In particular, they recommend that a number of pilot projects should be developed, covering such areas as roads, rail, sewerage/ water treatment and education.