Sean Barrett (Independent) | Oireachtas source

I am trying to deal with the capital side. We have dealt with the current side and our concerns about competition. This is a problem the Governor of the Central Bank wrote about in his ESRI days. Far too many capital expenditure appraisals in Ireland are part of the PR industry and are prepared by the promoters of projects. The promoters of the project know very well where the Exchequer is for funding the project but we do not have a guarantee of a return.

In respect of the wider problem of our public finances, we do not need just a new Department to deal with public expenditure and reform but a central office of project evaluation that would publish evaluations, leave them for a year and at the end we could see the alternative and examine whether the calculation of costs is rigorous. This was a serious problem with Transport 21. The transport projects within it were not costed and the costings were not published individually. We knew the total bundle amounted to ¤34 billion. This is public money and the institutional framework to ensure it is spent efficiently is that the Comptroller and Auditor General turns up afterwards when it is all over. He acts as a coroner but we need early warning systems and we need to heed the Honohan caution that too many cost benefit analyses are done by promoters of projects.

I saw the cost benefit analysis for the Kildare route project but there are more redactions than pages in the document. Along with the previous Minister with responsibility for energy, I appeared on a programme with Miriam O'Callaghan on the subject of the metro to Dublin Airport. We called it the Tipp-Ex report because so many numbers were covered by Tipp-Ex. Miriam O'Callaghan felt very strongly about it and I only played only a minor part in the debate. This is not good enough. Too much project appraisal amounts to secret subsidy seeking. Projects are not published upfront. We spend money on enough projects but we do not get good projects. There is a mountain of debt in the Department of Finance, which is why we are in trouble financially.

We need stricter criteria for capital expenditure and they should be included in legislation. People ask what Parliament was doing about this but I have tabled an amendment requiring independent appraisal of capital expenditure. According to the IMF last week, even with a reduction, the capital programme remains approximately 4.2% of GDP compared with 2.8% throughout the OECD. It is an extremely large capital programme and has been captured in the past by the construction industry. The beneficiaries think it is wonderful but society as a whole pays the bill. We should be given some undertaking that the benefits exceed the costs and that there is the return from the projects. I support the Minister of State by saying we should have a strict review of capital and a greater role for the Department of Finance before we decide on capital projects such as the Kildare route project. In that case, the number of tracks doubled and the number of passengers decreased. Two additional tracks are not in use at present. There is a record of investments that do not yield a return and the Department must intervene. I have suggested the form in which it should intervene.