Ireland publishes €116bn infrastructure investment plan

The new national planning framework, 'Project Ireland 2040' (182-page / 6.98MB PDF), will be given statutory status. It sets out plans to cater for an estimated one million additional people in Ireland by 2040, of which three quarters will be based outside of Dublin.

An accompanying National Development Plan sets out €116bn worth of planned projects over the next 10 years, including investment in transport, housing, hospitals and schools. It anticipates €91bn in funding directly from the Exchequer, as well as nearly €25bn in investment from state-owned commercial companies.

The plan includes four new funds designed to encourage additional investment in rural and urban areas, the environment and innovation, as well as €22bn to tackle climate change in the transport and energy sectors as well as commercial state-owned agencies.

Infrastructure law expert Adrian Eakin of Pinsent Masons, the law firm behind Out-Law.com, said that the "well-thought out, strategic plan" would be welcomed by the market, "at a time when other countries are struggling to articulate their own needs".

"The plan targets a level of growth in the northern, western and southern regions, combined to at least match that projected for the east and midland regions," he said. "Whether the fact that the plan was launched in Sligo will do anything to alleviate fears that Ireland's infrastructure strategy is too urban-centric, however, remains to be seen."

"Obviously, everyone is keen to see more detail on the proposed schemes, including how they are to be financed, and whether the lender community will take a tighter approach to lending in the context of contractors bidding at low margins to secure large public sector contracts," he said.

The Irish government described the plan as a change in approach, linking spatial planning and investment for the first time. It anticipates a shift from relatively low levels of public investment to one of the highest rates of public investment as a percentage of national income in the EU, reaching 3.8% of GDP by 2021 and 4% by 2024.

The single biggest capital project in the plan is the new €3bn 'Metro Link' project, which will connect Swords in north Dublin to the city centre and then on to Dublin Airport. The spending plans also include extensions of the DART light rail system in Dublin and four new Luas tram lines, plans to prioritise bus corridors in Dublin, Cork and Galway, a substantial programme of regional road upgrades, a second runway for Dublin Airport and €350 million investment in Ireland's ports.

The plan commits the government to the provision of 112,000 new social housing homes by 2027, at an anticipated cost of €11.6bn. Half of this new housing will be built on brownfield sites in urban areas, and 30% on other brownfield sites. A new National Regeneration and Development Agency will be established, which will have the power to use compulsory purchase orders to free up land for housebuilding.

The government intends to create four new funding streams: a €2bn Urban Regeneration and Development Fund; a €1bn Rural Development Fund; a €500m Climate Action Fund and a €500m Disruptive Technologies Fund. The plan also includes €8.4bn worth of investment in primary and post-primary schools; 2,600 extra acute hospital beds and three new dedicated elective-only hospitals in Dublin, Cork and Galway; €2.2bn investment in higher education infrastructure and a major investment programme targeting culture, national parks, sports and regional arts centres.

Infrastructure law expert Jonathan Hart of Pinsent Masons said that the document presented a "promising big picture".

"It will be interesting to see what the ultimate split is between capital funded and project financed schemes, given the strong track record of public-private partnerships in Ireland and the paucity of other infrastructure opportunities for funders and sponsors in the broader European market," he said. "It will also be interesting to see the extent to which the plan leads to a greater level of interest from international players in the construction and construction services sectors."