Dail Question No: 20
To ask the Minister for Public Expenditure and Reform his views on a direct labour public works scheme for infrastructure projects; if he will report on plans for future public-private partnerships and other such collaboration with the private sector in delivering public services and infrastructure; and if he will make a statement on the matter.
- Joe Higgins.
* For Oral answer on 09/10/2014
Ref No: 38260/14
Reply
Minister for Public Expenditure and Reform (Brendan Howlin):
My Department is currently undertaking a review of the public capital programme, in parallel with the comprehensive review of expenditure, which will culminate in the publication of the Government's five year investment strategy on Budget day. The focus of the Framework will be on infrastructural investment that can aid economic growth and address urgent social requirements. While this is theprimary purpose of public capital infrastructure investment, the positive employment impact in the shorter term during the infrastructure delivery or construction period is alsoa notable benefit.
A 2009 survey, carried out by the Department of Finance, found that the labour intensity of capital projects generally falls within the range of 8 to 12 jobs for every €1 million invested. While this estimate for labour intensity is used as a general rule of thumb, it is important to note that the amount of employment generated by capital expenditure depends on how that expenditure is invested. For example, the purchase of new rail rolling stock would typically generate little direct employment in Ireland as such stock is generally produced abroad. Furthermore, different types of public construction project have different levels of labour intensity. Smaller scale projects such as school building and repair, or smaller local and regional road-works, tend to be more labour intensive than major national infrastructural projects.
As part of the capital review process, my Department has revisited the 2009 Department of Finance work in this area and updated the analysis. The results of that piece of work will be published on my Department's website in the coming weeks.
In July 2012, I announced a new Government Stimulus Initiative amounting to a package of €2.25 billion aimed at leveraging funding to support a new PPP programme of projects in key areas of infrastructure across the Education, Health, Justice and Transport sectors. This is a significant construction programme and the projects are of the construction type that promote employment.
All of the projects have been issued to market. Construction has started on the N17/18 Gort to Tuam route and financial close is targeted for the remainder of the programme at varying dates during 2015. Construction commencement will follow shortly thereafter.
The National Development Finance Agency Act, 2002 provides that all Government Departments and Agencies must seek the advice of the NDFA on the best financing approach, traditional or Public Private Partnership, before undertaking a capital project. This requirement applies to all projects that have a capital value over €20million.
Officials in my Department keep under regular review possible opportunities for further investment in PPP projects in a sustainable affordable manner.