Mr. Andrew McDowell:

Yes, I was involved in those decisions in a previous capacity. I do not believe anybody would claim things were perfect in terms of the decisions that had to be taken to restore the ability of the sovereign to raise its own financing again but, by and large, as we have seen, the country is growing again and the policies have resulted in growing employment levels and quite a strong economic recovery. However, there is a huge challenge in repairing the damage that was done from the financial and fiscal crisis, of that there is no doubt, in terms of the State's capacity, in the context of both financial and human resources, to start investing heavily again.

We are eager to support this. Infrastructure projects can be financed in different ways. The traditional approach is sovereign borrowing to finance infrastructure through the public capital programme - the Exchequer finance capital programme - and we are happy to support the Government in doing this. The Irish Government can borrow on the bond markets but we believe there is an advantage in the European Investment Bank, EIB, financing the programme as opposed to doing it through the bond markets, and for the following reasons. As well as cheap financing, we bring technical capacity and advisory support, which can be of significant benefit. Our financing costs are still less than those of the Irish Government, such that we still offer a financial advantage to Ireland when it comes to financing infrastructure as compared to NTMA bond market borrowing. We are also very flexible in terms of the draw downs. When the NTMA borrows on the bond markets, it has to take out a €5 billion bond and if the State is not ready to spend the money, it has to park it in a bank account whereas we will disperse very flexibly only when the projects need the cash.

On Deputy Broughan's second question, on top of traditional Exchequer borrowing, where states are under pressure under the fiscal rules, we can look at alternative structures, particularly public private partnerships. PPPs. We would regard this as supplementary to a normal Exchequer capital programme. It is not displacing it. Public private partnerships offer an advantage in the sense that they transfer a lot of the risk for delivering construction on availability of infrastructure to the private sector, but the disadvantage is that the State has to pay the private sector for the cost of that risk such that the borrowing cost is slightly higher than it is when one borrows from the bond markets. This reflects the fact that significant risk is being transferred to the private sector. In the case of Ireland, that margin for the cost of public private partnerships over the cost of sovereign borrowing is as tight as anywhere in Europe. Ireland is regarded as a very safe, competent location for investment in public private partnerships, largely as a result of the professionalism of the National Development Finance Agency, NDFA, in developing PPP projects. This is an option for Ireland in terms of how to expand its infrastructure programme beyond what is possible under the fiscal rules.

Public private partnerships, PPPs, can be a contentious issue. The devil is always in the detail and much is dependent on a project. We would never advocate PPPs purely as a way of getting around the fiscal rules. The model has to be suited to the project. The fiscal flexibility from PPPs should be regarded as a secondary benefit. The primary motivation should always be that the private sector has the capacity to manage these risks better than the public sector. On occasion, we have had promoters from some European countries coming to us suggesting PPPs in certain areas of public investment but we have refused them on the basis that it would not make any sense to do a PPP in those areas because they represented poor value for money from the private sector. In other areas where governments are financing projects through traditional Exchequer investment, we have suggested that they instead do them through PPPs because the projects were in areas the private sector could easily manage and they could get very good value for money. It depends on individual projects.

In terms of motorways, we have done a lot of the motorways in Ireland through PPPs and they have all been very successful. We have the appetite to do the remaining gaps in the motorway system through PPPs, if that is what the national authorities decide. The advantage of this for Ireland if a public private partnership is available, which means the private sector is taking the risk around construction of the infrastructure but not in regard to the volume of traffic that uses it, is that there is no upfront cash outlays by the State. All the upfront cash outlays come from the private sector, with the State paying a unitary payment over the lifetime of the asset, usually 25 or 30 years. It spreads out the cost of the asset over its lifetime as opposed to all of the pressure coming upfront. There can be other forms of PPPs where there is no impact on the State's finances because the private promoters are not only taking the availability risk, but they are also taking the traffic risk. In other words, the motorway is tolled and the private sector can generate enough revenue from the tolling to pay for the infrastructure. We can help in those projects as well by essentially making them safer for private sector investors.