Brian Cowen (Laois-Offaly, Fianna Fail)

Provision for public capital investment is set out in the five-year rolling multi-annual capital envelope introduced in budget 2004. This multi-annual commitment of resources, which maintains investment at or close to 5% of GNP or around twice the EU average, underlines the Government's priority to capital investment. The relative priority at programme level is set out in the various multi-annual allocations for Departments within the envelope.

Investment in excess of €36 billion, Exchequer capital of €32.6 billion and €3.7 billion in PPP capital will be made available under the capital envelopes over the period 2005-09 to accelerate the provision of infrastructure to support sustainable economic and social development.

As Minister for Finance, my key role is to advise Government on prioritisation of resources at programme level for capital investment purposes and to set the framework within which capital programmes and projects must be appraised and managed by Departments and their agencies. Departments have extensive delegated sanction within this framework for project level appraisal and selection.

I have, with Government approval, progressed the work commenced by my predecessor on the roll-out of capital envelopes, on revising guidelines for the appraisal and management of capital programmes and projects, and on reform of the rules relating to public procurement and public sector contracts. These initiatives are designed to lead to better appraisal and management of capital programmes and projects and to assist the execution of programmes and projects within budget.

The capital envelopes also incorporate a facility to carry over to the following year savings of up to 10% of Voted capital. This feature is also facilitating better planning and management of capital projects and programmes and discouraging any tendency to rush end-of-year spending on inefficient measures.

The move to fixed-price public construction and construction-related contracts, and the shifting of risks to the private contractor, will result in a closer match between tender prices and final project outturn costs. Departments are already reporting evidence of better management of capital projects, notably in the transport area, where projects are being completed ahead of schedule and within budget.

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