The Ulster Canal 08: the funding

In 2002–2003 the two government departments, north and south, commissioned a report on funding options. I do not know who carried it out or what it said, and it does not seem to be publicly available.

Northern Ireland politicians have several times mentioned the possibility of getting funds from sources other than the central exchequer: public-private partnerships, local government, the private sector, the Heritage Lottery Fund. But since at least 2007, the Irish government has insisted on buying the round. After the Inland Waterways Association of Ireland had submitted an unsuccessful application for European (InterReg) funding, Éamon Ó Cuív TD said:

The opening of the Ulster Canal, taking into account the scale and costs of the project, estimated in 2000 to be 90 million Sterling, is a matter for the two Governments in conjunction with Waterways Ireland. I do not believe a voluntary body could carry out such a sizeable project. A major project requires major decisions. […] I said I believed it was not a project that a voluntary body could undertake. If it is to happen, it will happen under the aegis of Waterways Ireland.[i]

In February 2007 he said:

In terms of larger-scale projects, work is under way to explore the possibility of restoring the Ulster Canal to provide a major inland waterway for the border region. There are currently no plans to fund any of the above programmes through other sources such as Public Private Partnership mechanisms or user charges.[ii]

And in 2008 he ruled out European funding:

I can confirm that my Department has not applied for EU funding for the progression of works on the Ulster Canal.[iii]

So the then minister rejected the notion of raising resources — whether funding or voluntary labour — from any source other than the Irish Exchequer, and he wanted this to be Waterways Ireland’s job. His funding point was agreed by the North/South Ministerial Council (Inland Waterways) in October 2007:

Restoration of the Clones-Upper Lough Erne Section of the Ulster Canal

[…] Ministers noted that the full capital cost (estimated at €35m/£23.8m) of the project will be met by the Irish Exchequer with annual maintenance costs on the completion of the project, in the order of €300,000/£201,000, to be met by the Northern Ireland Executive and the Irish Government […].[iv]

Well, that’s clear enough: the “restoration” will cost €35m (£23.8m) and the Irish Exchequer will pay the bill.

Funding Waterways Ireland capital spending

Move forward to 2010, and the southern state is broke, with a deficit for the first quarter of 2010 of 36.51% of GDP (and no doubt a much higher proportion of GNP). The government has been trying to find cuts in public expenditure, and it seems that at least €1 billion will come from capital spending.

On 26 July 2010 the Irish Department of Finance 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.[v]

Chapter 14 covers the Department of Community, Equality and Gaeltacht Affairs. Under 14.2 Rationale for Investment, the document says:

14.2.6 Waterways

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.[vi]

And under 14.3 Assessment of Sectoral Capacity and Anticipated Medium-term Demand it says:

14.3.5 Waterways

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.[vii]

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.[viii]

The allocations to the Department of Community, Equality & Gaeltacht Affairs under the Public Capital Investment Programme 2010 – 2016 (I regret to say that these figures are called a “reprioritised envelope”) will be:

  • 2010 €105 million
  • 2011 €86 million
  • 2012 €86 million
  • 2013 €86 million
  • 2014 €40 million
  • 2015 €30 million
  • 2016 €30 million.

Much of the reduction is because some of the department’s programmes overlap with those of other departments, and the Department of Finance thinks that the investment would be better concentrated on the others. Thus it is unlikely that there will be an across-the-board reduction in capital allocations to all DCEGA programmes.

Waterways Ireland usually gets its capital funding from the government in whose jurisdiction the money is to be spent (the Irish offer to pay for the canal to Clones, on both sides of the border, is an exception). WI is unlikely to find that its capital allocation is reduced from the €10 million it got in 2009, and the €8 million due in 2010, to €2.25 million. And WI can take some comfort from the statement that

[…] it is recommended that a level of investment continues into the medium-term.[ix]

Unfortunately the document does not say exactly how much WI can expect to get. I have twice asked the department how much money WI is likely to get:

Can you tell me please what capital allocation Waterways Ireland is likely to get from your department in each of the years covered by “Infrastructure Investment Priorities 2010-2016: A Financial Framework”?

Whether deliberately or inadvertently, the department has twice left that question unanswered, and Waterways Ireland has refused to tell me how much it expects to get. However, even if WI’s allocation remains at the 2010 level of €8 million, it is clear that it is not enough to cover €35 million for the Clones canal over the construction period from 2011 to 2013. So where is the money to come from? I’ve tried asking the public bodies that should know the answer, but they won’t tell me. However, if any of them wants to correct anything I’ve written here, I’ll be glad to hear from them and to publish the information. In the meantime, here is what I think.

Does the Irish Exchequer include Waterways Ireland?

The initial position:

[…] Ministers noted that the full capital cost (estimated at €35m/£23.8m) of the project will be met by the Irish Exchequer with annual maintenance costs on the completion of the project, in the order of €300,000/£201,000, to be met by the Northern Ireland Executive and the Irish Government […].[x]

In the Dáil, October 2007:

On Waterways Ireland, two major steps forward are being taken in this regard. In the first instance, I held a historic meeting with my colleague, the Northern Ireland Minister for Culture, Arts and Leisure, Mr. Edwin Poots, and a decision was made to proceed with the planning of the Ulster Canal. We are doing this on a phased basis. The first phase will be totally funded by the Exchequer and will take approximately six years to complete.[xi]

One year later:

The restoration of the south west stretch of the Ulster Canal, from Upper Lough Erne to Clones, is being funded from within Waterways Ireland own resources.[xii]

In July 2010 the Department of Community, Equality and Gaeltacht Affairs told me:

There is some uncertainty in the current economic climate about whether the cost will — as was intended — be met by sale of Waterways Ireland assets in Dublin (where there is some property vested in WI that has commercial potential).[xiii]

I’ll return in a moment to the sale of property. But I hadn’t been reading all the Dáil debates, and had missed the statement from 2008, so I had not been aware that it had been intended that the cost of the Ulster Canal would be met from the sale of WI property in Dublin. I asked the Department how that statement was to be reconciled with the statements from 2007; I got no reply.

Now, I am open to correction here, but to me “the Irish Exchequer” neither means or includes “Waterways Ireland”, so it seems to me that there was some sort of change of mind between 2007 and 2008. It is not clear to me that either public or politicians, north or south, appreciates that the Ulster Canal will be paid for by Waterways Ireland. If anyone was to understand this, and to state it clearly, I would expect the Chief Executive of Waterways Ireland to do so. But in the Restoration Plan published this year he says:

This project commenced in 2007 and is programmed to be completed in 2013. The full capital cost of the project (estimated at €35m/£23.8m) will be met by the Irish Exchequer with annual maintenance costs on the completion of the project, in  the order of €300,000/£201,000, to be met by the Northern Ireland Executive and the Irish Government.[xiv]

I see no hint there that the project is to be paid for by Waterways Ireland.

Furthermore, it seems to me — and again I would welcome correction by persons more expert than I am — that the assets of Waterways Ireland are not at the disposal of the Minister for Community, Equality and Gaeltacht Affairs (or indeed of any other minister). Here is an excerpt from a Seanad debate of 1999:

Mr Mooney: This may seem a naive question, but we are here to get information. The waterways are currently in the ownership of the Government. The transfer of powers means that the body corporate being set up will effectively become the owner of the waterways of Ireland. Am I to assume that the Irish and United Kingdom Governments will become the joint owners, so that the Republic of Ireland will have technical ownership of the Erne, the Ulster canal and all the other lakes and rivers in the North and, conversely, the United Kingdom Government will have legal ownership of all the Southern waterways, rivers, lakes, etc.?

Éamon Ó Cuív: This is a body corporate and, as such, it will own all the assets. There is provision here to hold or dispose of land or property. It is not that it is joint ownership – the body will have the ownership as a body corporate. Like any body corporate, it will own the assets under its control.[xv]

I have never really understood the precise nature of the “body”, but I imagine that Éamon Ó Cuív TD does, so I’m happy to take his word for it. If anyone can correct anything I’ve misunderstood, please do so.

Next: whether it’s affordable.


[i] Dáil Éireann 14 December 2004 priority questions

[ii] Dáil Éireann 28 February 2007 Written Answers National Development Plan

[iii] Dáil Éireann 16 October 2008 Written Answers Inland Waterways

[iv] Joint Communiqué North/South Ministerial Council Inland Waterways Sector 17 October 2007

[v] Department of Finance Infrastructure Investment Priorities 2010-2016: A Financial Framework 26 July 2010

[vi] Department of Finance Infrastructure Investment Priorities 2010-2016: A Financial Framework 26 July 2010

[vii] Department of Finance Infrastructure Investment Priorities 2010-2016: A Financial Framework 26 July 2010

[viii] Department of Finance Infrastructure Investment Priorities 2010-2016: A Financial Framework 26 July 2010

[ix] Department of Finance Infrastructure Investment Priorities 2010-2016: A Financial Framework 26 July 2010

[x] Joint Communiqué North/South Ministerial Council Inland Waterways Sector 17 October 2007

[xi] Éamon Ó Cuív TD, Minister for Community, Rural and Gaeltacht Affairs, Dáil Éireann 24 October 2007 Pre-Budget Outlook

[xii] Éamon Ó Cuív TD, Minister for Community, Rural and Gaeltacht Affairs, Dáil Éireann 16 October 2008 Written Answers Inland Waterways

[xiii] Email from Department of Community, Equality and Gaeltacht Affairs 27 July 2010

[xiv] John Martin, Chief Executive, Waterways Ireland, in Ulster Canal Upper Lough Erne to Clones Draft Restoration Plan August 2010

[xv] Seanad Éireann 11 March 1999 British-Irish Agreement Bill, 1999: Committee and Remaining Stages

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