Dáil Éireann Debate, Tuesday - 2 December 2014
236. Deputy Richard Boyd Barrett asked the Minister for Public Expenditure and Reform his views that the current approach of Government in terms of the use of off-balance sheet financing for capital and infrastructure projects across Departments is in fact the best way to finance such projects particularly in terms of value for money; and if he will make a statement on the matter. [46367/14]
View answerPublic infrastructure is funded primarily in two ways: Exchequer financing (the vast bulk of funding) and PPP-sourced funding for particular projects that are suited to the PPP approach while providing value for money for the State. The Exchequer capital programme for the next three years has been set at €10 billion. This will represent significant continued Exchequer investment in the maintenance of valuable infrastructure and the creation of new assets. I am very keen that we look at how we can use private sector funding to supplement our Exchequer investment. As the Deputy will be aware, PPPs have been used in Ireland for over a decade. The main driver for the pursuit of PPPs in Ireland has been the achievement of a value for money (VfM) solution for the Exchequer rather than the achievement of a particular balance sheet status. The Irish government has put in place a number of VfM initiatives designed to secure value in the procurement of all public investment projects including PPPs. In addition to these measures, PPPs are also subject to four specific VfM tests throughout the procurement process in order to determine whether the PPP approach has the potential to deliver a VfM solution. The Deputy will also be aware that we are setting up the Ireland Strategic Investment Fund (ISIF) to channel investment from the National Pensions Reserve Fund (NPRF) towards productive investment in sectors of strategic importance to the Irish economy. The ISIF will seek to leverage and maximise the resources transferred from the NPRF by attracting third-party co-investment. In this way, the Fund's assets can be used as a catalyst to attract additional capital for investment in the Irish economy.
On Budget Day I announced a significant capital investment of some €2.2bn in social housing. This is comprised of €1.5 billion direct Exchequer investment, a €300m PPP investment and at least €400m investment in Approved Housing Bodies through an off-balance sheet financial vehicle. The use of off balance sheet funding mechanisms has allowed us to increase the overall level of funding available for this priority area and thereby begin to address a critical need.
