Eamon Gilmore (Dún Laoghaire, Labour)
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Question 102: To ask the Minister for Finance his views on the establishment of a national investment bank mandated to support and underwrite strategically important infrastructure projects; and if he will make a statement on the matter. [18960/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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Notwithstanding the severe budgetary problems we face, this Government is spending very substantial amounts on public infrastructure over the next five years. This year, we will be spending 5% of GNP from the Exchequer on public infrastructure, one of the highest ratios in the EU15. Over the next four years, Exchequer capital investment will amount to an annual average of over 4% of GNP.

This is already a strong support to employment and the reductions in tender prices means that we can do more with less.

The Government is prepared to look at new ways to fund needed capital investment and support more jobs provided:

• the terms are right and in the taxpayers favour;

• the investment makes economic sense;

• value for money is secured; and

• the private sector shares the appropriate level of risk so as not to have a disproportionate impact on the public finances.

I would like to see monies now invested abroad or other private capital put to work here if a sensible workable proposal emerges.

Department of Finance officials have actively engaged with several parties to discuss alternative funding proposals; both the likely sources of funding and what would be needed to access such funding.

A number of meetings have taken place and further meetings will take place in the near future as needed.

Any proposal to establish a national investment bank or similar entity to support and underwrite strategically important infrastructure projects would need to be considered in the context of the significant measures already taken by the Government in response to the financial crisis to support the banking system as well as the planned establishment of a National Asset Management Agency. The purpose of this Agency is to ensure that banks have a clean bill of health, their balance sheets are strengthened and uncertainty over bad debts is reduced. This will ensure a sustained flow of credit on a commercial basis to individuals, households and businesses in the real economy. Existing banks will, as a result, continue to have an important role in funding strategically important infrastructure projects in conjunction with existing state bodies such as the National Development Finance Agency.

In this context, the Government does not think it necessary to consider setting up a dedicated bank for infrastructure.