John Bruton
Ceist:1 Mr. J. Bruton asked the Taoiseach when he will next meet the Ireland-America Economic Advisory Board. [14332/98]
Ceisteanna — Questions. - Ireland-America Economic Advisory Board.
No date has yet been fixed for the next meeting of the Ireland America Economic Advisory Board. It is my intention, however, if a suitable date can be identified, to meet with the board again during the autumn.
When the Taoiseach last answered questions about the board he said he hoped it would be able to assist in bringing private sector investment into infrastructural projects here. In view of the urgent need to bring private sector money into the development of water, sewerage, telecommunications and other infrastructural projects, what progress has been made in that regard?
One of the issues discussed on 18 March at the meeting with members of the board was private sector investment and the supply of venture capital. It was not a question that they would bring in the money, but since those individuals are involved in finance companies and other companies dealing in this business, their advice would be important on this matter. If some of the companies involved were asked about investing in such projects I have no doubt they would be interested, but they would see it more as an issue for the Irish market.
When those companies come here, hopefully in the autumn — it is a question of attracting a large number of them — they will make a significant input to the private-public partnership initiative. They have an amount of experience in this area which will be useful to this country. I would like them to talk to people in the finance world who could invest money in projects here rather than do so directly themselves.
Will the Taoiseach agree there is a very large amount of funds in the United States looking for a home, that one of the reasons the United States stock market is seriously overvalued on a price earnings basis is that there is so much money, particularly mutual fund money, that cannot find an appropriate home and that this is an ideal opportunity to bring funds into Ireland and place them in infrastructural developments where there will be a long-term return suitable to the pension requirements of many of these funds?
That is the case, but there is a huge number of Irish pension funds and insurance funds with an enormous amount of money looking for a home and I would rather that money had a home here than be put into the Far East. Those funds receded from that market in the past few years.
I hope so.
In 1993-4 I undertook the initiative to develop seed capital and venture capital, which is working well. The issue is not a shortage of money in the Irish market, it is to get public-private partnership to work here, and that is what the Government is engaged in.
Will the Taoiseach agree it is the Government's job to put in place opportunities for private-public sector partnership in infrastructure? If the funds available are not being invested it is because the Government has not produced the financial investments into which the money can be placed. What is the Taoiseach doing about that? I disagree with his view on where pension funds should invest. Given the nature of pension funds, they should spread their risk across a number of economies.
The Deputy is widening the scope of the question which asks when the Taoiseach will meet with the board.
Perhaps Deputy Bruton does not fully understand how this matter works. Pension funds spread their risk very thinly in the Irish economy and have done so for many years.
I understand perfectly well how it works and I do not need to be patronised by the Taoiseach.
I am amazed Deputy Bruton does not know that we have already moved on Telecom, which is going through the due diligence process. That will be the first major company that will, hopefully, receive vast amounts of money. I hope other semi-State companies follow in that regard. Various Ministers are moving to bring private sector finance to such companies.
Have the proposals prepared by IBEC and others for a public-private partnership been referred to the advisory board for its comment, having regard to its experience in raising bonds for various US states and cities? When the board meets the Taoiseach in the autumn perhaps it might be useful to get a detailed analysis of those proposals.
I discussed that matter with and received comments from a number of members of the advisory board. The Government has since moved on from the IBEC document. The Department of Finance recently put a comprehensive memorandum before Government on this issue, which is due for discussion again. I hope to discuss that matter with a number of Irish financial institutions. I have already got their views so that the Department of Finance can proceed on this matter.
Deputy Bruton is correct in that there is an enormous number, £1.5 billion worth, of water, sewerage and drainage projects in the Department of the Environment and Local Government and it is important that we find a mechanism to progress this matter. I had a number of meetings with Ministers about progressing the capital programme for roads and the Minister for the Environment and Local Government has been working on initiatives in that area. We should use private finance in these schemes because we will never have a sufficient capital programme to deal with them.
In view of the fact that IBEC made a detailed submission to the Taoiseach and the Minister for the Environment and Local Government about private-public sector partnerships in regard to water, sewerage and roads, will the Taoiseach consider inviting IBEC to join him the next time he meets the Ireland-America Economic Advisory Board? Perhaps that might be the most appropriate way to advance this project so it will be able to attract American as well as domestic funds into these urgent projects, the lack of which is driving house prices through the roof.
I am not opposed to that. I met IBEC and, as I said, its document is being used partly as a catalyst for an existing Department of Finance document. It has shown initiative in this area, which I appreciate. I hope the Americans will be able to meet some of the banks and finance houses here to try to get the scheme to work. There were many problems with public-private finance schemes or partnerships developed in the United Kingdom. It has worked through them but faced many downs as well as ups. We should look at the experience in America and the United Kingdom to try to get it right. That is the way to go, which I support.