Richard Bruton (Dublin North Central, Fine Gael)
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Question 264: To ask the Minister for Enterprise, Trade and Employment the projects which have been subjected to detailed cost benefit appraisal in the past six months; the benefit cost ratio which emerged from this test; if he is satisfied that projects being selected not only pass this test but represent a better return than competing uses for the same limited funds; and the way in which this process influences the size of the capital envelope for different project areas. [37351/05]

Micheál Martin (Cork South Central, Fianna Fail)
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The current Department of Finance Guidelines for the Appraisal and Management of Capital Expenditure requires that a cost benefit analysis should be carried out in respect of projects with a value of over €50 million.

My Department was not directly involved in carrying out capital projects of this magnitude within the last six months.

Within my Department's agencies, an IDA Ireland project was approved within the last six months where the value of grants exceeded €50 million.

This project related to the establishment of the National Institute for Bioprocessing Research and Training. The decision to make the investment in the NIBRT was made following wide consultation with industry and academia in Ireland as well as in the US and Europe, led by IDA Ireland, which determined that there was a strategic competitive need for Ireland to establish a state-of-the-art, industry-focused centre in biomanufacturing and bioprocessing technology education, training and research if Ireland was to continue to compete for international large scale biopharmaceutical investments.

Given the specific nature and characteristics of this project, it was considered more appropriate to evaluate the investment using an international review panel model rather than carrying out a more general cost benefit analysis. This process involved appointing a panel of international experts to ensure that the project was assessed by people with the appropriate knowledge and expertise. A process auditor was also appointed to oversee the process.

An open call for proposals to establish the NIBRT was held in July 2004 and three proposals were received. The international review panel carried out a very extensive evaluation of the proposals before making its recommendation to IDA Ireland. A UCD-led consortium was selected, based on the international review panel's report.

The board of IDA Ireland was satisfied that there was a clear need for this investment and that clear benefits would accrue to the State in the form of further substantive investment by the biotechnology industry in Ireland, the development of appropriate skills for the biotechnology industry and the development of research in biotechnology techniques and methodologies.

The board approved grants totalling €72 million to this project in May 2005 and Government approval for this project was received at the end of August 2005. The grants will be paid over a period of years on the achievement of specified milestones and with ongoing and annual reviews being carried out by IDA Ireland, with the assistance of appropriate experts. The funding will be paid from IDA Ireland's allocation in my Department's capital envelope.

My colleague, the Minister for Finance, recently announced a number of initiatives to deliver better value for money in both current and capital expenditure. These include a provision that, in future, a full scale cost benefit appraisal will take place on all projects with a value of over €30 million. My Department will be putting the necessary arrangements in place to ensure that this initiative is implemented.