Joe Higgins
Ceist:13 Mr. J. Higgins asked the Minister for Finance if the ESRI review of the national development plan has been studied by his Department; and if he will make a statement on the matter. [26521/03]
Written Answers. - ESRI Review.
In my reply to Priority Questions Nos. 2 and 3 and oral Questions Nos. 10, 11, 76 and 82 of 6 November last, I set out in some detail the broadly positive assessment of the NDP by the ESRI. Key conclusions in the ESRI evaluation are: the NDP strategy remains valid; the NDP has made significant progress towards attaining its objectives; the plan is having a sustainable positive economic effect with expenditure adding a permanent increase of 3% to GNP and an overall rate of return of 14% for 2000-2003 is being achieved on investment; infrastructural investment should remain a core priority for Government investment.
In the Estimates published on 13 November 2003 and the budget on 3 December, I have taken a number of steps which are consistent with the ESRI evaluation. I have provided €5.6 billion for infrastructure investment in 2004, the highest ever in the history of the State, an amount close to 5% of GNP, double the European average.
In my Budget Statement, I announced a major change in the financial treatment of capital spending. Building on the successful rolling investment programme or financial envelope in place for public transport I extended this approach through the introduction of five-year multi-annual envelopes for all investment areas. The envelopes include a commitment to keep the level of capital investment at close to 5% of GNP during 2004-2008, a total investment of €33.6 billion during the period.
In implementing the new envelope system I intend, with effect from financial year 2004, to allow Departments to carry over to the following year any unspent Exchequer capital allocations, up to a maximum of 10% of each annual capital subhead. The introduction of multi-annual capital envelopes was recommended by the ESRI in their mid term evaluation of the NDP. It ensures that infrastructure investment will remain a priority for the Government to end 2006 and beyond. The global amount and sectoral allocation of the envelopes is also broadly in line with the ESRI recommendations.
To complement the new capital envelope system, I announced, in the budget, my intention to introduce significant changes in the areas of public sector contracts for construction and construction-related services. In particular, there will be greater use of contracts in which more of the risks of inflation and other cost increases will be borne by contractors. All these measures will greatly assist in the better planning and execution of infrastructure projects thereby meeting a key concern raised in the ESRI evaluation.