Vol. 467 No. 7
14 Miss Harney asked the Minister for Transport, Energy and Communications the steps, if any, he is taking to attract private sector investment into major transport infrastructural projects; and if he will make a statement on the matter. [14159/96]
I am in principle favourably disposed towards any form of investment which facilitates the cost effective implementation of major transport infrastructure projects which fall within my area of responsibility. However, there are a number of major issues which have to be addressed in considering the potential for such private investment:
How can the private investor obtain an adequate return within a reasonable timeframe? Transport infrastructure projects tend by their nature to have long payback periods.
How can there be a genuine sharing of risk between the public and private sector?
How do we ensure that there is significant equity participation where private investment is proposed. Otherwise there may be no real value in pursuing the option, particularly if it is just another form of borrowing.
Where loan financing is involved the cost has to be comparable with direct borrowing by the State or the relevant public authority. Loan-based investment in projects where the State is the eventual owner is likely to be regarded as public expenditure under the Maastricht debt and deficit criteria.
Is private investment a cost effective option for the State? This has to take account of the total rolled up cost of private investment compared with direct public financing.
We have to ensure that private investment can be obtained and used in a way which is compatible with EU and national public procurement rules and, that where EU assistance is being sought, the proposed private investment is compatible with the rules of the particular EU fund.
We also have to ensure that any such investment would be compatible with overall public policy and in particular with the relevant sectoral policy for transport.
