2nd All-Island Infrastructure Investment Conference
14th February 2007
Speech by the Minister for Finance, Mr. Brian Cowen TD
I am delighted to have been invited to speak here today at the second All-Island Infrastructure Investment Conference. The inaugural conference, held last year in Dundalk, was a major success. It was attended by over 320 delegates and attracted the interest of the main players in infrastructure procurement and delivery from the whole island. Companies from outside the island also found it worthwhile to attend and to explore the opportunities for getting involved in the ambitious programme of infrastructure investment that will take place on this island over the coming decade or so. I want to congratulate both the National Development Finance Agency and the Strategic Investment Board for working in partnership again to organise this year’s conference.
Working together in an all-island context makes good sense whether it’s in relation to the building of a complete transport network, stronger trade linkages, improved public services or a healthier environment. By working together, we can maximise our potential, both socially and economically, and in doing so, make our island a better place to work, to invest, to grow up and grow old. Co-operation is not a zero sum game: It makes the North stronger, it makes the South stronger. In focusing today on co-operation in infrastructure, you are concentrating on laying the foundations for a stronger
The agenda for the conference is a wide-ranging and substantial one. Apart from embracing important sectoral areas such as Transport, Environmental Services, Education and Health, a number of key horizontal issues will be discussed. These include the potential of Public Private Partnerships, achievement of Value for Money and, perhaps most importantly, the challenges and opportunities posed by putting in place the infrastructure requirements of a connected and integrated island economy.
This Conference comes at a very important time in terms of the political situation. The next few weeks will be of crucial importance in bringing about the restoration of the devolved political institutions in Northern Ireland There has been important progress towards restoration since the St. Andrews Agreement in October last year. Practical changes to the operation of the Institutions on restoration have been agreed. Both Governments have announced financial packages to help underpin restoration and there has been progress across a range of equality, human rights, victims and social exclusion issues. Furthermore, the decision of the Sinn Féin Ard Fheis on policing on 28 January to support policing and criminal justice opens up the prospect for the first time of inclusive policing across the entire community.
Our primary focus now is to ensure that all of these positive developments can be built on through the restoration of shared accountable government. The Assembly election due to be held in a few weeks, on 7th March, is an integral part of the process and timetable agreed at St. Andrews. It is being held for the explicit purpose of endorsing the St. Andrews Agreement and of electing an Assembly that will form a power-sharing Executive on 26 March in accordance with that Agreement and timeframe. The Irish Government looks forward to working together with the new Executive to tackle common challenges and take advantage of common strengths and opportunities for the mutual benefit of all parts of this island.
We are all fully appreciative and welcoming of the political benefits of peace, benefits that we hope will become permanently embedded over the coming months. However, relatively little attention has been paid to the economic benefits of peace. Peace makes an immediate and direct contribution by releasing resources for spending on health, on education and on transport which would otherwise have been devoted to security. These direct effects are of course welcome but they pale when consideration is given to the indirect benefits of peace. I am referring to the transforming potential of peace on people’s confidence. By paving the way to a stable political environment, peace opens the way to new international investment, promotes local business activity and gives people the confidence to put their resources and efforts to work in the North. It has also an important and supportive impact on economic activity south of the border. I for one am convinced that the Celtic Tiger phenomenon would not have been as powerful or as long lasting without the achievement of peace on our island.
National Development Plan 2007-2013
The conference is taking place just three weeks after the launch of the Irish Government’s National Development Plan for the years 2007-2013. I will dwell shortly on the All Island dimension of the new Plan but firstly I wish to briefly refer to the totality of the Plan, especially insofar as it relates to Infrastructure. Some €100bn of capital investment is provided for under the Plan. The bulk (€63.7 billion) of this will be funded by the Exchequer with significant contributions from PPPs (€13.4 billion), the Commercial State Bodies Sector (€15.7 billion) and Local Authorities and other sources (€7.2 billion).
This adds up to a major increase in the level of capital investment especially by the Central Government sector. We estimate that over the period of the Plan, Central Government investment will average 5.4% of GNP over the period with peaks of 5.9% in 2009 and 2012. This compares with the 2006 level of around 4.7% of GNP. In resource terms we have a window of opportunity to fund this level of investment. In terms of the needs of our economy, we have no option but to invest at this level. Notwithstanding excellent progress under the previous Plan, we still have major deficits in key areas, notably, Roads, Public Transport and Environmental Services. Good quality infrastructure in these and other areas are essential to our competitiveness. The reality is that the competition in the global marketplace is fierce and we must ensure that all those elements of competitive advantage over which we have control ourselves are decisively tackled. The new Plan will do this not only in the areas of Infrastructure but also in other vital areas such as Education and Training.
The Plan has been criticised in some quarters for lacking vision. I reject this. The reality is that the Plan is underpinned by vision in several key parts:
Ø Vision of a first class economic and social infrastructure which keeps
Ø Vision of a major programme of social inclusion measures costing some €50 billion over the period, including services for children, the elderly and the disabled;
Ø Vision of environmental sustainability backed up by a total investment of €25 billion in key areas including a quadrupling of investment in public transport over the levels in the last Plan;
Ø Vision for Regional Development which through a framework of investment and complementary land use policy can assist all regions to achieve their potential and promote a better environment and quality of life; and finally
Ø Vision of strong and tangible All-Island co-operation implemented in a co-operative way to the benefit of all citizens on the Island.
All Island Cooperation
North/South co-operation is clearly in the best interests of both parts of the island. Both communities in
Although there are significant differences in the relative positions of North and South, we face many similar economic challenges. These include greater competition from low cost locations, the need to promote investment in R&D, the need to deliver quality health and educational services to our citizens and the need to build world-class infrastructure. Through joint planning, the pooling of our resources and taking co-ordinated action, both North and South can better meet these challenges.
The British and Irish Governments have already agreed an ambitious agenda for strengthening North/South economic co-operation. Last October, the two Governments launched a groundbreaking Comprehensive Study on the All-Island Economy and agreed a range of important initiatives. These include further collaboration in research and development and a new targeted approach to enterprise training and to identifying labour market needs on an all-island basis. We agreed to pool our resources in trade promotion, including the opening up of trade missions to businesses across the island and the placing of the overseas offices of Enterprise
The Comprehensive Study on the all-island economy also set out the clear benefits to be gained by co-operation on infrastructure on the island. The Irish Government is already committed to investing heavily in projects that directly benefit
The two Governments’ partnership approach to funding the development of City of Derry Airport is an example of how we can jointly deliver better quality infrastructure to our citizens, North and South. The City of Derry Airport serves the entire North West region. Recognising its strategic importance, the Government has recently decided to increase its funding to allow the completion of development works at the Airport. The Irish Government will now contribute a total of €10.87 million to works at the Airport. The Government’s contribution is matched by the British Government.
NDP 2007-2013 and All Island Cooperation
The new National Development Plan sets out to give real meaning to the approach proposed by the All-Island study. The Irish Government has set out in the Plan a detailed, specific agenda for progressing such co-operation. We are prepared to back this up with significant investment North of the Border. Our current hope and strong objective is to deliver these commitments in partnership with a new Northern Ireland Executive.
The proposed package set out in the NDP includes:
· Joint investment in new strategic projects to benefit North and South; and
· The opening up of access to existing development funding on an all-island basis, and/or the introduction of new, agreed joint funding measures.
In the area of strategic projects, the Government’s priorities for agreement on joint projects with Northern Ireland include:
- the completion by 2013 of a high quality road network on the inter-urban routes linking the major population centres of Dublin, Belfast and the North West (especially the Letterkenny-Derry Gateway)
- the future development of the Dublin-Belfast rail line as part of an integrated rail network serving other major population centres, North and South
- improved access for tourism and other opportunities along the Eastern corridor, including better links between Co Louth and Co Down in Northern Ireland
- a significant upgrading of higher education capacity in the North West and the border region through strategic alliances between the educational institutions, North and South
- new schemes to promote graduate mobility, graduate retention and access for people from disadvantaged areas to higher education
- a comprehensive study on education co-operation to be overseen by the responsible Departments, North and South
- a comprehensive study on health co-operation to be overseen by the responsible Departments and agencies, North and South
- maximising the potential for cross-border cancer services, building on the project to provide services for Co Donegal
- The Ulster Canal project.
With regard to the concept of all-island funding, the Irish Government proposes to develop all-island funding in the following areas:
- education, skills, science and innovation;
- energy research, including renewable and sustainable energy;
- regional development;
- tourism development; and
- poverty, social inclusion and community infrastructure.
In some cases, these NDP proposals involve more effective use of existing funding on an all-island basis. Other projects will involve a significant investment by the Irish Government. Necessary provision will be ring-fenced within the overall NDP envelope to provide for that investment. The details will be finalised in discussion with the British Government and the Northern Ireland Executive on restoration.
We have had some opportunity to discuss our ideas with the parties in the Assembly. We have listened carefully and have tried to reflect the parties’ ideas and concerns in our proposals. I would hope that all the parties can recognise these proposals as substantial extra investment in the island economy and in Northern Ireland.
We are very clear that we wish to agree these proposals with the British Government and a new Northern Ireland Executive. We are facing into decisive weeks in working towards restoration of the Executive by 26 March. That is our focus. I look forward to developing these proposals with the British Government and, very shortly, with a newly restored Executive.
We are currently at an exciting juncture in our island’s economic, political and social development. By putting in place the right policies, the right investment and the hard work now, we will maximise the potential of Ireland, all of Ireland for generations to come. By co-operating, we will strengthen the entire island of Ireland to the benefit of all its citizens, North and South. I wish you well in your good work.