The Government’s Capital Investment Plan still has €2.6bn in unallocated funds that could build infrastructure and mitigate the effects of a hard brexit, according to KPMG.
The funds, earmarked for capital investments up to 2021, remain unused in advance of a public consultation and review of the Capital Investment Plan, with a new ten-year plan expected to be published later this year.
“Despite the advances in the decade pre-recession, and current government commitments, Ireland is still playing catch-up on infrastructure compared to the rest of Europe,” said KPMG head of corporate finance Michelle Connolly after the International Project Finance Association’s conference in Dublin this week.
“When the economy outpaces infrastructure investment we end up underperforming, with consequences for quality of life, economic activity, employment and other important metrics.”
Public investment peaked at 5.2% of GDP in 2008, but now remains far below the EU average after a low of 1.8% in 2013, the conference heard.
“It is critical that the new ten-year plan properly prioritises projects according to need and economic value-add delivered,” said Connolly. “The historic approach of simply allocating funding to a broad sector pool rather than a specific list of prioritised projects is outdated. We need to plan now for the capacity needed by the next generation and develop projects accordingly.”
Connolly also highlighted the social and economic cost of the housing crisis, which she said constrains capacity in the economy and is a barrier to dealing with the negative fallout of Brexit.
She also acknowledged that public debt is a priority, but said: “capital investment can still all be planned in a prudential manner focusing on value for money. What is critical, however, is that this is started now, rather than waiting until our debt burden disappears.”