The Irish Department of Finance has today (26 July 2010) published Infrastructure Investment Priorities 2010-2016: A Financial Framework. The document begins:
This Review of capital investment sets out infrastructure investment priorities for the years 2010-2016 and in doing so fullfills the requirement to publish a revised set of investment priorities as pledged in the Renewed Programme for Government. The Review represents a reappraisal of the Government’s Public Capital Programme, designed to re-focus investment plans and ready the Irish economy for a return to growth. The pace and depth of the changes which have beset the national economy over 2008 and 2009 have altered the environment in which infrastructure investment takes place and challenged the assumptions on which previous investment plans were founded. It is necessary, therefore, to reassess investment priorities in light of both changes in demand for infrastructure and affordability constraints given the very challenging fiscal position.
Chapter 14 covers the Department of Community, Equality and Gaeltacht Affairs which, along with the Northern Ireland Department of Culture, Arts & Leisure, takes an interest in the doings of Waterways Ireland, the cross-border body that runs seven inland waterways. Under 14.2 Rationale for Investment, the document says:
The strategic objective of this programme is to maintain and restore Ireland’s inland waterways, providing recreational access along routes of waterways, thereby hoping to attract overseas visitors and stimulating business and regeneration in these areas.
And under 14.3 Assessment of Sectoral Capacity and Anticipated Medium-term Demand it says:
This programme supports the maintenance and upgrading of existing inland waterways. As these attract tourism and support local employment, it is recommended that a level of investment continues into the medium-term. There is a Government commitment to the restoration of the Ulster Canal. Where possible, Waterways Ireland’s own resources will be used in advancing this work. In the absence of readily available exchequer funding, the sale of other assets may be considered where appropriate, subject inter alia, to value for money considerations.
The document’s overall conclusions include this:
[…] the environment in which we appraise, plan and deliver infrastructure has undergone significant transformation. These developments can be summarised as follows:
§ The challenging fiscal position means that investment on the scale previously envisaged will not be possible;
§ Similarly however, the contraction in economic activity means that there will be a lower demand for infrastructure in the economy than previously anticipated;
§ The cost of investing in infrastructure has fallen markedly and so a very high level of capital stock can be delivered from a lower level of exchequer investment; and
§ The economy is undergoing a structural transition which will have implications for the type of infrastructure required into the medium-term.
These four broad considerations set the parameters in which this Review was conducted. Within this framework, the foregoing analysis has sought to identify the optimum level of investment and the sectors in which this investment will take place in order to:
§ Contribute to economic recovery;
§ Support employment;
§ Deliver important social infrastructure; and
§ Develop a low-carbon, Smart Economy.
Accordingly this analysis has given rise to changing priorities in infrastructure policy.
The allocations to the Department of Community, Equality & Gaeltacht Affairs under the Public Capital Investment Programme 2010 – 2016 will be:
2010 €105 million
2011 €86 million
2012 €86 million
2013 €86 million
2014 €40 million
2015 €30 million
2016 €30 million
The Summary Public Capital Programme for 2010 showed that the Department got €133 million in 2009, of which €10 million (7.5%) went to Waterways Ireland, and was due to get €105 million in 2010, of which Waterways Ireland would get €8 million (7.6%). If the same proportion applies when the Department’s allocation is down to €30 million, Waterways Ireland will get only about €2.25 million, less than a quarter of its 2009 allocation. (Note that these figures affect only capital, not current, expenditure.)
Today’s document does not show how Waterways Ireland’s allocation will be affected. It may continue to be favoured because of a presumed contribution to the tourist industry (despite this year’s drastic fall-off in traffic on the Shannon), but even so it seems likely to suffer a major reduction in capital spending.
It is not clear what the Department of Finance intends should be done about the restoration of the Ulster Canal (the Irish government undertook to fund its restoration from Lough Erne to Clones, a short stretch that crosses the border several times). Is it saying that Waterways Ireland will receive no extra funding for the project? Is it expecting WI to sell other assets to restore the Ulster to Clones? According to the most recent set of accounts available on the WI website, those for 2007, WI had €25 million in “non-operational heritage assets”. Are they what the Department of Finance calls “Waterways Ireland’s own resources”? What is there that WI could sell to pay for the Ulster?
This is, I think, the end of a golden era for spending on the Irish waterways. And I will be very surprised if the Ulster Canal is reopened within my lifetime.