Éamon Ó Cuív (Galway West, Fianna Fail)
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Question 7: To ask the Minister for Finance if he will provide details of the proposed new unit in the National Treasury Management Agency which is being established to manage shareholdings in a number of State companies; the way the unit is being structured; the terms of reference; when he expects it to be up and running; and if he will make a statement on the matter. [27639/11]

Dessie Ellis (Dublin North West, Sinn Fein)
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Question 42: To ask the Minister for Finance if he will provide further details on the announced strategic investment fund including the amount to be drawn down from the National Pensions Reserve Fund; the date at which the fund will be established; the date at which it will start funding strategic initiatives; and if the establishment of this fund is consistent with the Programme for Government commitment to establish a Strategic Investment Bank. [27677/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 7 and 42 together.

On Thursday, 29 September, following a decision by the Government, I and my colleagues, the Minister for Public Expenditure and Reform, Deputy Howlin, and the Minister of State at the Department of Communications, Energy and Natural Resources with responsibility for the NewERA project, Deputy O'Dowd, announced the establishment of NewERA and the strategic investment fund under the National Treasury Management Agency.

Dr. Eileen Fitzpatrick, who is currently the director of NTMA with responsibility for alternative asset investments within the National Pensions Reserve Fund, has been reassigned by the NTMA as director of NewERA. NewERA is a commitment in the programme for Government and is central to the Government's plans for job creation and investment and for reforming how the Government manages its semi-State companies. The press release issued on 29 September gives details of the functions of NewERA along with a biographical note on Ms Fitzpatrick.

The policy objective behind NewERA is to modernise the manner in which Government manages its shareholdings in the semi-State companies and oversee the corporate governance of commercial semi-States from a shareholder perspective. In this regard, it will report to the relevant Ministers with responsibility for the ESB, Bord Gáis, EirGrid, Bord na Móna and Coillte. Its operations will be overseen by the Cabinet committee on economic infrastructure. In this capacity, NewERA will have responsibility for reviewing the capital investment plans of these commercial semi-State companies from a shareholder perspective and will identify possible synergies between the investment programmes of the different companies. Where requested by the Government, it will also advise on and, if appropriate, oversee any restructuring or disposal of State companies. It will work with the Minister for Public Expenditure and Reform on the disposal of State assets.

Following appropriate legislative changes to the investment policy of the NPRF, the strategic investment fund, which will be the forerunner of the strategic investment bank, will channel commercial investment from the NPRF towards productive investment in the Irish economy. As well as money from the NPRF, the fund will seek matching commercial investment from private investors and target investment in areas of strategic significance to the future of the Irish economy. It will comprise a series of sub-funds targeted at commercial investment in critical areas of the Irish economy, including infrastructure, venture capital and provision of long-term capital for SMEs. The NPRF will take a lead role in the development and implementation of each sub-fund.

These decisions are an important element in the Government's strategy to create jobs and promote economic growth. Through NewERA and the strategic investment fund we will maximise our resources to enhance growth in the Irish economy and improve key infrastructure to maintain Ireland's attractiveness as a place to do business and to create jobs. In these times of scarce resources, NewERA will seek to offer a new means of facilitating investment in our economy.

NewERA has been established on a non-statutory basis as a shareholder executive within the NTMA. I expect NewERA and the NPRF to come back to me shortly with proposals for establishing the strategic investment fund. NewERA will bring forward proposals by mid-2012 for consideration by the Government of options for moving towards a full holding company status which could own the shares in commercial semi-States.

Michael McGrath (Cork South Central, Fianna Fail)
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Last Thursday's press release raises more questions than answers. Many of the functions NewERA is taking on are already performed quite well by the semi-State companies concerned. Requirements for corporate governance and reporting to the relevant Ministers are already in place and a number of them are already successfully implementing ambitious capital investment plans. It is difficult to avoid the conclusion that NewERA is merely a sales agent for the assets of which the State intends to dispose.

How many staff will NewERA employ? When will the legislation establishing the strategic investment fund be brought before the Oireachtas? Will the new agency be able to access the full amount of money remaining in the National Pensions Reserve Fund? When does the Minister expect it to be up and running?

The press release makes reference to the possibility that it will develop into a strategic investment bank, presumably as a sop to the Labour Party. When does the Minister expect that will happen?

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will appreciate that while we are in the programme with the IMF and EU authorities, we can only borrow enough to meet the day-to-day running of the country and a small capital programme. To get movement in the economy and put people back to work, we need to think outside the box. NewERA is in effect an exercise in thinking outside the box in terms of putting a demand stimulus package in place through the provision of new infrastructure and using parts of what is already in place.

The staffing of NewERA will in the first place be done through reallocation of staff from the NTMA group of companies and the new director, Ms Eileen Fitzpatrick, was already employed in the NTMA. In regard to the amount of money to be spent, it will be project driven in the early stages and the intention is that the State's investment will leverage a considerable amount of funds from the private sector. In regard to when legislation will be introduced, NewERA will be set up on a non-statutory basis at the outset but we have asked the NTMA and NewERA to bring forward proposals by the middle of 2012 on the establishment of a holding company. That, of course, would have to be established on a statutory basis.

Pearse Doherty (Donegal South West, Sinn Fein)
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Is it envisaged that the €5.7 billion left in the NPRF will be made available to the strategic investment fund? I ask the Minister to enlighten the House as to the remuneration to be paid to the new CEO. Where will the buck stop in regard to NewERA and the strategic investment fund? Given that it is currently located in the NTMA, will the buck stop with the Minister?

Michael Noonan (Limerick City, Fine Gael)
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It is a cross-departmental initiative. Clearly, if a State company comes within the ambit of a particular Minister, he or she will be involved in the consultative process. If it involves the disposal of a State asset, the Minister for Public Expenditure and Reform will have responsibility. The primary responsibility for the NTMA lies with me, as Minister for Finance, and at the end of the day I will be responsible for answering questions on overall policy.

I understand Ms Eileen Fitzpatrick has been reassigned at the same salary. Nothing in my notes would suggest that her salary position is altered given that she was a senior executive in the NTMA. I can supply that information to the Deputy but I do not think an issue arises.

Pearse Doherty (Donegal South West, Sinn Fein)
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I asked about the €5.7 billion in the NPRF.

Michael Noonan (Limerick City, Fine Gael)
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We are not going to allocate a great budget. In the first instance they should come up with proposals and projects they think are worthwhile to grow the economy, provide modern infrastructure and get people back to work and then we will see what the allocations of money are, but they can draw on the pool of money.

Michael McGrath (Cork South Central, Fianna Fail)
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Will the Minister clarify whether the strategic investment fund can begin to identify appropriate investment projects once the legislation has been enacted allowing it to access what is left in the National Pensions Reserve Fund, NPRF, or does it have to await until mid-2012 when the holding company is set up for NewERA? Essentially, when does the Minister expect the fund will be up and running and start identifying appropriate investments which could lead to job creation?

The Minister did not reply to my question on the strategic investment bank. When does he hope the fund will develop into a fully fledged bank, as pledged?

Michael Noonan (Limerick City, Fine Gael)
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It is an evolving situation. This is a significant first step in what we think will be a significant approach to the provision of infrastructure and the creation of jobs. As I said in my reply, the NPRF will come back to me shortly with proposals for the establishment of the strategic investment fund. My understanding of the nature of the fund is that people will apply to it. Entrepreneurs will apply to the fund. Like any investment bank there will be an assessment of their proposal and business plan and they will get an advance of venture capital on that basis.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The question partially relates to an earlier question and also follows on from the Minister's response. Has he carried out any serious assessment of whether bringing in private capital into the strategic infrastructural investment programmes is effective and will lead to higher levels of investment, job creation and growth? The ICTU and UNITE, among others, which studied those matters are strongly opposed to the Minister's plans to privatise in part or in whole companies such as the ESB. They indicate that where State enterprises are privatised elsewhere in Europe once private capital gets involved the level of investment falls because giving a return to shareholders starts to take priority. Has the Minister carried out an assessment in that regard and how can he guard against that likelihood? Do we not have our own history of Eircom and broadband to bear out that fact that once the private sector gets involved, investment in developing infrastructure falls rather than increases which defeats the whole purpose?

Michael Noonan (Limerick City, Fine Gael)
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The principle the Deputy enunciates is not a general economic one. It is one enunciated by people who decide they are against the project and then proceed to do the research to support that theory.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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I am talking about what is happening in Europe.

Michael Noonan (Limerick City, Fine Gael)
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It is not an objective analysis. The principle is that this country is in a bad state. Thousands of our fellow citizens are out of work. There is no money available to the Government to stimulate the economy in the traditional new deal type of roll-out. As a result we are trying to find new ways of doing things. NewERA is a new way of doing things. In simple terms, if we can get €1 billion from the disposal of assets or take €1 billion from the pension fund, if there are willing private sector participants that €1 billion should be able to leverage approximately ten times that amount. It would be normal to leverage by a multiple of ten. Therefore we would get economic work to the value of €10 billion if we could raise €1 billion. That is it. We are not getting into the ideology of it; we are simply trying to get people back to work.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It is ideology.