Richard Bruton (Dublin North Central, Fine Gael)
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Question 29: To ask the Minister for Finance if he has reached a decision on the potential sources of new funding from a pension bond or otherwise for needed infrastructural investments. [27879/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Government is continuing to invest substantial Exchequer resources in capital infrastructure, with €7.3 billion allocated for capital projects in 2009 and some €31 billion allocated for the period to the end of 2013. This investment supports a substantial level of employment, while the reductions in tender prices mean that we can do more with less. Nonetheless, as Deputy Bruton is aware, the Government is also exploring new ways to fund capital investment. The pension funds industry and other institutional investors represent one possible source of additional private sector funding for public private partnership projects.

My officials, together with the National Development Finance Agency and others, have been actively engaged with several interested private sector parties to work through the details of funding proposals that could potentially help to unlock additional sources of private capital for infrastructure funding. The discussions are encouraging, and I hope to make progress on a mutually satisfactory basis. Clearly, the key issue for the State is to ensure that the terms are right and in the taxpayer's favour, that value for money is secured and that the private sector shares the appropriate level of risk to minimise the State's exposure to additional borrowing.

Richard Bruton (Dublin North Central, Fine Gael)
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I thank the Minister for his reply. I am sure the Minister is as acutely aware as I am that we have been losing 1,000 jobs every working day since the beginning of the year and approximately half of those are in the construction sector. Against this background, there is a great deal of urgency in the process the Minister announced on 7 April but today, 7 July, there is no progress to report. What urgency is the Minister giving to this matter? Does he agree that, against a background where he is cutting 40% from his own capital budgets, this process is seriously adding to the difficulties in the sector? Does he agree that we need to consider imaginative ways of funding necessary infrastructural investment? Would he consider the Fine Gael approach which is entirely commercial in respect of certain types of infrastructure?

In respect of PPPs, has he changed the model he uses to evaluate PPPs given that, to use the economics term, the shadow price of labour is much lower now, and the shadow price of capital is much changed for the State because there is an absolute limit on what we can borrow? This very significantly changes the attractiveness of opting for a PPP in this environment. Is the Minister moving the process on rapidly? Is he taking into account the new and horrendous realities in our economy that change the way we should look at these issues?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am optimistic that the private financing options being examined will prove helpful. I would prefer to explore approaches that retain as much of a role as possible for the private sector in providing funding and avoid the setting up of an additional State body if at all possible. The Fine Gael proposal, as I understand it, involves the establishment of a number of additional State bodies.

I remind the Deputy that the Government has responded to the global financial uncertainty in a very decisive way, as our friend Bo Lundgren pointed out yesterday to the committee. My Department and the NDFA, National Development Finance Agency, are working closely together in exploring this area. The team working on this involves not only my Department and the NDFA but also the Central Statistics Office. The principle aim of the team is to devise an infrastructure financing arrangement that meets our requirements. As I have indicated, this means the terms have to be right and in the taxpayer's favour, the investment has to make economic sense, value for money must be secured and an appropriate level of risk must be shared by the private sector involved. Unfortunately, due to concerns about commercial sensitivity, I am not free at this point to discuss the details of any proposal.

Richard Bruton (Dublin North Central, Fine Gael)
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The Minister did not answer the central question. Has he changed the evaluation in the light of the changed circumstances?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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On the PPPs, the answer is no.

Richard Bruton (Dublin North Central, Fine Gael)
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As a member of the Government which created 250 new agencies, to spot the speck in Fine Gael's eye in terms of setting up a holding company to invest €11 billion in State infrastructure that we will need to get out of this recession is biblical in the extreme. Can the Minister give us a deadline against which we will have a decision? An appalling human catastrophe is taking place and we are seeing the meltdown of skills of talented people. We need an injection of urgency both in the way this is done and the speed with which it is done. Three months on from the budget, I do not sense urgency anywhere in the system to make this happen.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I assure the Deputy there is great urgency attaching to this matter. Maintaining a volume of our investment in capital projects, howsoever financed, will ensure we sustain some level of activity in the construction sector and maintain much-needed skills there. I agree with the Deputy in that regard.

There has not been a change of the criteria in regard to PPPs. The question the Deputy tabled relates to an alternative funding mechanism which I had outlined in the budget and which is being actively explored and will be brought to a conclusion as quickly as possible.

Richard Bruton (Dublin North Central, Fine Gael)
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The world has changed and the way of looking at PPPs needs to change. We are budget-constrained now.