Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I thank the Chairman and select committee for giving me the opportunity to present this Supplementary Estimate. I am seeking members' approval to make provision for additional capital funding for the following: €10 million for the Industrial Development Agency, IDA, under subhead 5A; €3 million for the INTERREG enterprise development programme under subhead A10; €738,000 for the Tyndall National Institute under subhead B4; and €5 million for the programme for research in third level institutions, PRTLI, under subhead B6. These amounts are being provided from an underspend that has arisen within the Exchequer allocation for Enterprise Ireland under subheads B4 and A7 of my Department's Vote. The underspend has arisen because of reduced demand from companies for research and development grants and capital, employment and training grants and owing to timing issues in the payments to technology centres and drawdowns under the innovation fund Ireland's seed and venture capital fund.

Approval to reallocate funding is being sought on the understanding that the amounts to which I have referred will be expended by the agencies in question before the end of the year. With the exception of an Exchequer allocation of €1 million under subhead 5, IDA Ireland's property function is self-financing. However, due to the collapse of the property market, IDA Ireland is finding it increasingly difficult to generate income to meet obligations arising under its property programme. Moneys generated from property sales in recent years have decreased substantially. The funds which IDA Ireland has on hand to meet its obligations under its property programme have fallen from €63 million at the start of 2009 to slightly more than €8 million as we approach the end of 2012. In addition to meeting the day-to-day costs of running its business parks, IDA Ireland has a number of other property related contractual obligations. To ease the financial pressures on the agency, I am proposing to provide it with a further €10 million in 2012 in respect of subhead 5. Payment of mature liabilities before the end of the year will ease the financial pressures on the agency and enable it to meet contractual obligations that will arise in 2013 in respect of its property portfolio.

I am pleased with the progress IDA Ireland is making in delivering its Horizon 2020 strategy, which sets out the agency's job creation targets over the period from 2010 to 2014. This year was the best year in almost a decade in terms of the number of projects won and their job content. We must do everything possible to ensure the strong flows of jobs and investments continue. It is my intention that the proposals we are discussing, when implemented, will enable the agency to manage its resources, Exchequer and non-Exchequer, to optimum effect and successfully implement its Horizon 2020 strategy.

On the proposal to allocate a supplementary amount of €3 million to INTERREG, the 2012 allocation for INTERREG enterprise development under subhead A10 is €3 million. The INTERREG programme for the period from 2009 to 2014 funds cross-Border initiatives under several themes. My Department is responsible, with its counterpart Department in Northern Ireland, for funding the enterprise theme. I am proposing to provide an additional €3 million to INTERREG to enable it to meet commitments that will arise in respect of a wide range of projects such as the construction of a technology enterprise centre in Carrick-on-Shannon, County Leitrim, to provide support to a range of innovate, high growth, technology based businesses in the region, and a managing training initiative aimed at improving the management capabilities of manufacturing and traded service sector companies in all the Border counties, North and South, through the development of leadership and management competencies.

From the inception of the INTERREG programme until this year, good projects were late coming forward for approval from the relevant European Union managing authority. This meant the Departments rendered unspent funds back to the Exchequer for several years. However, the programme is now getting into its stride and a wide range of projects was approved over the course of 2012 and these projects are under way. All approved projects have gone through a rigorous vetting process and payments are made in stages. By securing and paying an additional €3 million for these projects at this point, we are proactively funding existing commitments and liabilities and avoiding a build-up of payments falling due in early 2013, thereby easing pressure on my Department's future capital budgets. I have no doubt the Chairman and his colleagues will agree with me that INTERREG cross-Border projects should have a high priority for political reasons and that funding should be provided accordingly.

The 2012 allocation for the Tyndall National Institute under subhead B4 is €3 million.

The Tyndall National Institute is Ireland's largest dedicated centre of research specialising in defined areas of information and communications technology. I propose to provide it with an additional €738,000 to fund the purchase of a new film deposition system for precision optical devices such as lasers and LEDs. At present the institute has an old film deposition system which is now severely limited in its capabilities due to its age and the related device technology needs have surpassed its abilities generally. The purchase of this new equipment is part of a long-term strategic investment programme clearly aligned to national priorities such as research prioritisation, FP7 participation and provision of support for start-up companies and the wider commercialisation agenda. It has broad national appeal to key Irish companies and SMEs in the high-tech photonics area and would facilitate them in developing new innovative products for the global marketplace.

The purchase this equipment is outside the normal grant capability of the institute. As such the use of capital savings from the Department's 2012 budget presents a valuable opportunity for the institute purchase this equipment at this point in time. Failure to secure this funding in 2012 would delay for a number of years the purchase of this equipment and the realisation of the benefits derivable from this purchase. As with all research infrastructure, as soon as it is installed, commissioned and operational it will be available for access by interested researchers and users in the third level sector and industry. I am happy to make this re-allocation to fund the purchase of this equipment which will allow the Tyndall National Institute to continue to undertake cutting edge research and lead the field internationally in the development of world leading photonics devices with the potential to deliver significant employment due to a combination of new spin-off company licensing to Irish MNCs and SMEs and new foreign direct investment.

The 2012 allocation for the programme for research in third level institutions, PRTLI, under head B6 is €27 million. Capital funding for PRTLI is largely for capital infrastructure for top-class research buildings and laboratories which are needed to maintain and enhance Ireland's competitive offerings in research and innovation. The PRTLI also complements other capital investments being supported through the Department of Education and Skills and in a number of instances the PRTLI forms an important part of much larger projects being led by that Department. The programme is administered by the Higher Education Authority and is a mixture of Exchequer, private and EU funding. Under PRTLI cycle five which supports 18 capital projects, we are supporting approximately 2,000 jobs in the construction sector.

I propose to provide an additional €5 million to PRTLI for a number of reasons. It will help to accelerate payments on existing matured liabilities in a number of universities and institutes of technology. This will facilitate earlier payoff of Exchequer commitments which have arisen in respect of a wide range of projects approved and commenced under PRTLI cycle five launched in 2010. Some higher education institutions have taken out significant loans from the European Investment Bank which must be repaid by 2016 or 2017. An earlier Exchequer payout through PRTLI reduces the future higher education institutions funding requirement which falls to the Department of Education and Skills.

PRTLI funding supports ongoing jobs in the construction sector in several colleges. Additional monies will contribute a quicker completion of such projects which in turn will assist the education and training of our future workforce talent. An additional payment of €5 million for PRTLI by the end of 2012 will also help ease pressure on the Department's future capital budgets thus allowing for redistribution of capital funds in favour of other enterprise programmes, particularly on critically important activities involving industry supported by IDA Ireland, Enterprise Ireland, and Science Foundation Ireland in 2013.

The main beneficiaries of the proposed capital transfer to PRTLI would be a number of large-scale projects spanning UCC, NUI Galway, UCD and TCD to name a few. To give a specific example, the new Trinity biomedical facility on Pearse Street is a €131 million overall project which has already been showcased repeatedly by IDA Ireland as a key element of its Ireland value proposition to prospective new FDI clients, as recently as the week before last to a high-level US delegation. This truly world-class facility brings together a critical mass of five medical schools and related research capability over 700 researchers in all in a single central location. I am happy to deal with questions committee members may wish to raise.