On 29 September 2015 the Government announced its capital spending plan, entitled Building for Recovery 2016 – 2021 (the "Plan"). The Plan is worth an estimated €27 billion in direct investment by the Exchequer over 6 years. This amounts to an average of €4.5 billion per year and is expected to create in the region of 45,000 jobs during the construction phase. Along with direct investment, the Plan includes a third phase of PPP investments of about €500 million and State-owned sector investment of around €14.5 billion. The Plan is said to represent over 3.5% of GNP each year over its duration. According to the Plan, the €14.5 billion non-Exchequer component will be delivered by State companies, which include ESB, Irish Water, and Ervia (formerly Bord Gáis Éireann). These investments will primarily be targeted at energy infrastructure development including renewable energy and smart metering and on the enhancement of water and wastewater infrastructure. The key sectors set to benefit are as follows:
- Transport: The Department of Transport, Tourism and Sport is to receive the largest slice of the package, with approximately €10 billion allocated to it.
- Metro North: The biggest single project in the Plan is the rapid transit system from Dublin city centre to Dublin Airport and Swords. The project will cost an estimated €2.4 billion. Construction of the project is expected to commence in 2021 with a view to delivery by 2026/27. Almost 8.5km of the route (through Dublin to Dublin Airport and to the commuter town of Swords) will be tunnelled with 8 overland and 6 underground stops. The Plan is silent in relation to the method of financing this project.
- DART Expansion programme: A multi-phase DART expansion programme will begin with the extension of the DART line to Balbriggan. The design and planning for the further phases, which include expansion of DART services to Maynooth in the west and Hazelhatch in the southwest, will also be progressed.
- DART Underground PPP Project: This project has returned to feasibility stage, looking at a more cost effective solution.
- Roads: The roads programme will total €6 billion over seven years. €4.4 billion of the programme will be devoted to essential maintenance and strengthening works on the existing network, with a further €600m allocated to on-going development of the PPP roads pipeline. €860m will be targeted at progressing new priority roads projects.
- Public Transport: €2.6 billion is to be invested in essential maintenance and asset renewal including: »» Bus fleet replacement and capacity enhancement;
- Upgrading of Bus Corridors;
- The completion of the Luas Cross City project in Dublin;
- Health: Investment in health infrastructure will amount to €3 billion overall. The principal health projects to benefit are:
- The National Children's Hospital will receive €650 million in funding.
- The National Maternity Hospital will be relocated to the St. Vincent's campus, and towards the later years of the Plan the Rotunda, the Coombe and Limerick maternity hospitals will move to Connolly Hospital, St James's Hospital and University Hospital Limerick, respectively.
- Nursing Homes: A spend of €450 million is earmarked to fund the repairs of nursing homes, with Exchequer funding of €300 million and the remaining €150 million will be used on PPP schemes.
- The National Forensic Mental Services Facility is proposed to be undertaken as a PPP.
- Primary Care: Over 80 primary care centres are proposed through a combination of State investment, PPP and operational leases.
- Education: A school building programme is set to provide an additional 19,000 primary school places by 2018 and more than 43,000 secondary school places by 2022. Along with a new digital strategy for schools worth €210 million, the package is worth an estimated €3.8 billion.
There will be an extra €200 million invested in the third level sector through PPP.
- Social Housing: An additional €500 million has been allocated on top of the €4 billion announced last year in the Social Housing Strategy 2020. The Strategy provided for €1.5 billion in Exchequer investment from 2015 to 2017. €400 million is earmarked for the Strategic Housing Fund to leverage further private investment. €300 million will be invested in social housing through PPP which is expected to deliver 1,500 social housing units. Potential sites have been identified and details of the first PPP bundle for procurement of 500 units will be announced soon.
- Climate, Energy, Utilities
- Flood Relief: The Plan allocates €430 million for flood mitigation initiatives.
- Renewable Energy: The Plan allocates €444 million for investment in energy efficiency and renewable energy programmes. The Plan details a Renewable Heat Initiative aimed at incentivising larger commercial and industrial installations to convert to renewable heating, primarily biomass.
- Energy Networks: An estimated €5.75 billion will be invested in energy transmission and distribution networks, renewable and conventional power generation and smart metering.
- Water: Irish Water plans to invest €4 billion in addressing deficits in drinking water and capacity, wastewater and repair and maintenance.
In total, €875 million in capital funding has been allocated to the Justice sector. Projects include:
- Investment of €205 million will be made in new Garda Síochána technology and systems;
- Funding is to be provided for the construction of a Forensic Science Laboratory in the Dublin area.
The PPP projects will include:
- A sizeable PPP investment to deliver a number of new Garda stations and facilities (details to be announced by the Department of Justice at a later date); and
- Development of a Family Law and Children's Courts building, together with additional Court rooms for the Supreme Court and other Courts offices in Dublin.
- Broadband: The Plan contains direct Exchequer funding of €275 million for the National Broadband Plan.
The State will establish a Connectivity Fund to provide support for connectivity themed projects.
The Plan is due to be reviewed in 2017 and, based on the performance of the economy, a decision may be taken to increase capital spending if it remains inside the limits set by EU fiscal rules.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.